#FillTheFunnel

by Andrew Smith | May 30, 2017

At the St. Louis Regional Chamber, we are increasingly taking a “systems view” of innovation.  Our local ecosystem has matured to the point where it has a steady stream of startups entering the “top of the funnel,” or the ideation and initial product development stage.  Programs like Arch Grants as well as groups like Missouri Technology Corporation, Arch Angels, and our network of accelerators have done a tremendous job of stimulating entrepreneurship, so much that the region ranks at or near the top among peer cities when it comes to capital availability for early-stage startups. This is something worth celebrating.

But the same systems analysis developed by Dane Stangler (former VP of Policy Research at the Kaufmann Foundation, now head of policy at Startup Genome) shows that we can’t afford to become complacent – we have a serious funding gap at the post-seed stage.  Companies starting in St. Louis are at risk of either dying on the vine or leaving for greener pastures when they get to the point of needing $250K-$500K in growth capital. This won’t serve our long-term interests if the next Square, Twitter, or Express Scripts is born here only to move to San Francisco or Boston as it achieves scale.

Over the next several months, expect to see the Chamber and its ecosystem partners make some major moves to address this funding gap. But in some ways, this still represents a defensive maneuver.  To shift to an offensive mindset, St. Louis must go to the very roots of its innovation culture.

The true “top of the funnel” begins long before ideation, business plan writing, and seed funding.  It begins in primary school.  This is where core habits of mind are formed, and where kids learn the basic skills and values that will stay with them for a lifetime.  Here, too, there is some good news.  Our public schools were recently recertified and there is a growing willingness to think strategically and experimentally about how primary schools prepare kids as the future workforce.  But Missouri is at risk of falling behind more forward-thinking competitors.

Consider Arkansas, which recently mandated computer science and technology education throughout primary schools. In 10 to 15 years from now, Arkansas schoolchildren will enter higher education and the workforce with a significant advantage over kids who are not exposed to technology education.  These kids will not only create the great companies of the future, they will help those companies fill key jobs. Great ideas go nowhere if they aren’t married to a skilled workforce.

Iowa is also making long-term investments in computer literacy for its children. Working with Code.org, Iowa is rolling out computer science education in primary, elementary, and high schools across the state.  Through a public-private partnership, Iowa has managed to leverage a minimal investment by taxpayers (just $250,000 for teacher professional development) into one of the most innovative education initiatives in the country. By the time these kids graduate, many will be ready to enter the workforce as developers or entrepreneurs. Iowa will win big by retaining its native talent and companies.

If Missouri wants to go on the offense, it needs to start playing the long game. We must fill our funnel by investing in science and technology education at the primary school level. The Chamber’s Regional Education Commitment lays out a series of guiding principles and metrics designed to align regional stakeholders around long-term goals.  Few things would have a greater impact on our competitiveness, inclusiveness, and quality of life than ensuring every Missouri child is fluent in the language of innovation by the time they graduate high school.