{"id":122,"date":"2020-07-25T00:11:31","date_gmt":"2020-07-25T00:11:31","guid":{"rendered":"http:\/\/localhost:8080\/?p=122"},"modified":"2021-05-04T17:10:37","modified_gmt":"2021-05-04T17:10:37","slug":"online-microbusinesses-economic-development","status":"publish","type":"post","link":"https:\/\/www.godaddy.com\/research\/online-microbusinesses-economic-development\/","title":{"rendered":"Online microbusinesses can be an easy economic win for local governments"},"content":{"rendered":"\n

Karen Mossberger worked on creating economic \u201cempowerment zones\u201d for Detroit\u2019s city government in the mid-1990s, to help aspiring entrepreneurs overcome decades of urban decay by starting their own companies. The results were disappointing, weighed down by several chronic problems: lack of access to capital or suitable physical spaces to set up shop, and lack of local demand in one of the poorest cities in the nation. Too many people concluded it was too risky to quit their day jobs.<\/p>\n\n\n\n

Today, and billions of internet connections later, Mossberger sees a world that can sidestep some of those physical and financial limitations. She now studies a source of economic development that many policymakers never see: the tens of millions of microbusinesses that sell online, many without the overhead of a storefront or the pressure of an all-or-nothing bet on their financial futures.<\/p>\n\n\n\n

\u201cOne rule of economic development is to look for the easy wins,\u201d says Mossberger, now a professor of public affairs at Arizona State University. \u201cHelping more people build microbusinesses is definitely one of them.\u201d<\/p>\n\n\n\n

These \u201cventures\u201d have developed without specific help from policymakers or local governments. Three years ago, GoDaddy started Venture Forward<\/a>, a multi-year research project, to study the impact ventures have on the U.S. economy. We\u2019ve partnered with social scientists at ASU, including Mossberger, and Caroline Tolbert of the University of Iowa. A key finding: Adding more ventures in a community raises the household median income for everyone, reduces unemployment and leads to greater recovery from economic downturns.<\/p>\n\n\n\n

“One rule of economic development is to look for the easy wins. Helping more people build microbusinesses is definitely one of them.”<\/p>Karen Mossberger, ASU Professor of public affairs<\/cite><\/blockquote>\n\n\n\n

We\u2019ve seen this in the unprecedented moment we\u2019re living through now. According to our recent data on the COVID-19 crisis, ventures have helped communities withstand the impact of shuttered shops and lost jobs.<\/p>\n\n\n\n

\n
See the latest Venture Forward data<\/a><\/div>\n<\/div>\n\n\n\n

An emerging formula to help these online ventures both multiply and grow is beginning to take shape among policymakers. \u201cIt\u2019s led to a lot of conversations about what they need from us, and how we can create an environment where they can flourish and be a catalyst for new ideas and growth,\u201d says Jenn Daniels, mayor of Gilbert, Arizona, a large suburban town just south of Phoenix.<\/p>\n\n\n\n

The programs that make the biggest difference are a departure from the traditional economic development plans focused on tax breaks and other incentives. It turns out that helping ventures succeed is more about providing local mentors, skills training and networking opportunities. The end goal is to create a local culture of \u201cventuring,\u201d where more people feel comfortable trying to turn their good ideas into commercial efforts that can generate revenue and create jobs<\/a>.<\/p>\n\n\n\n

\u201cUltimately what holds most people back from starting their own ventures is themselves,\u201d says Daniels.<\/p>\n\n\n\n

\n
Read how ventures are helping Gilbert, Arizona<\/a><\/div>\n<\/div>\n\n\n\n

What ventures need<\/h2>\n\n\n\n

Venture operators need training and a community of coaches, peers and partners to help them get started but also to prosper. Among the most pressing of their needs, according to our surveys, is marketing. These entrepreneurs may be experts at making candles or providing lawn care services, but they often struggle to draw attention to their efforts or make clear what makes their venture special.<\/p>\n\n\n\n

Better business training is part of the answer. But while there are lots of programs on how to start an online venture, only 25% of these offer in-depth courses on marketing, says Stacy Cline, GoDaddy\u2019s director of Corporate Social Responsibility who oversees our Empower program that provides support services for would-be entrepreneurs.<\/p>\n\n\n\n

Finding talent is another oft-cited problem. The COVID-19 shelter-in-place orders<\/a> are causing many people to re-think whether they need to live close to work. Creating an entrepreneurial climate could help local communities also attract workers from more expensive urban centers, says Dre Thompson, executive vice president of Startup Tucson, a nonprofit that\u2019s used Venture Forward data to rethink how best to accomplish this goal.<\/p>\n\n\n\n

\u201cI\u2019ve talked to hundreds of talented people who say \u2018I\u2019m so sick of San Francisco or New York or Austin,\u201d she says. \u201cMany of them have gotten over the hump that they need to live near work, so why not consider a place like Tucson that\u2019s gorgeous, has a really low cost of living and a rich cultural heritage.\u201d<\/p>\n\n\n\n

\"\"
Scenes from an entrepreneur event in Tucson, Arizona<\/figcaption><\/figure>\n\n\n\n

How Tucson is helping ventures<\/h2>\n\n\n\n

Whether this diaspora of talent happens, Tucson provides a case study for what\u2019s required to build a venture-friendly culture. The city, not far from the Mexican border, has long struggled economically, and nearly a quarter of its residents live in poverty, says Thompson.<\/p>\n\n\n\n

In 2017, Startup Tucson and other groups began working with local entrepreneurs, especially early transplants from the tech sector. By early 2020, an \u201cinnovation sector\u201d was starting to take shape downtown. Revenues from tech-related companies had grown 90%. Three coworking spaces had opened, and Thompson\u2019s group had raised $25 million in funding to do more.<\/p>\n\n\n\n

Then COVID-19 hit, slowing the economy to a crawl. In two months, unemployment rose as much as it had during the three years of the Great Recession of 2008. Especially hard hit were the dozens of farmers, fruit growers and crafts makers who depended on local farmers\u2019 markets and large festivals. Only 13% of these purveyors had a digital presence.<\/p>\n\n\n\n

Startup Tucson and other groups quickly developed a website where residents could find and support these businesses. And, after reading about the Venture Forward project, Thompson contacted Mossberger, who spoke to local entrepreneurs about the impact that ventures have on communities. Thompson\u2019s organization then set up a mentoring system where entrepreneurs could get help from ASU professors with expertise in particular aspects of business.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Providing skills to help ventures prosper is only part of the challenge. Perhaps more important is to remove the obstacles that prevent people from starting one in the first place.<\/p>\n\n\n\n

One of those obstacles is fear of technology. While it\u2019s become far easier to stand up a website, people who haven\u2019t done it before don\u2019t know that to be true. Similarly, many sites don\u2019t have e-commerce capabilities. So Startup Tucson is working with partners including GoDaddy to create a totally turnkey technology stack, called LockBox. All an entrepreneur will have to do is pick from a few templates to develop the look and functionality of their site.<\/p>\n\n\n\n

\u201cWe have a lot of people who just don\u2019t think they have the time or the funds to build a modern website,<\/a>\u201d says Thompson. \u201cSo let\u2019s just take that off the table for them.\u201d<\/p>\n\n\n\n

Together, Thompson hopes these moves will help Tucson weather the economic storm ahead.<\/p>\n\n\n\n

\u201cWe want as many people as possible thinking about entrepreneurship and doing entrepreneurship,\u201d says Thompson, of Startup Tucson. \u201cA lot of communities, when they think about economic development, think about attracting an Amazon. To us, that\u2019s kind of like hunting, but what we\u2019re doing is farming.\u201d<\/p>\n\n\n\n

\"\"
Scenes from an entrepreneur event in Tucson, Arizona<\/figcaption><\/figure>\n\n\n\n

Or in Ben Forbes\u2019 case, ranching. He\u2019d built his 4-year-old Forbes Meat Company into a successful one-man show, selling high-grade, locally sourced meats at farmers\u2019 markets and to local restaurants. But when talk of a local lockdown started in late March, he hired a friend to build an e-commerce site. Online sales started on April 1, and quickly soared to 75% more than what he made before.<\/p>\n\n\n\n

Since then, he\u2019s hired the son of a customer to wrap meats and clean, and another friend who\u2019d been laid off in the wake of the pandemic. Now, he\u2019s building a full-blown \u201cvirtual butcher\u2019s shop,\u201d with a wide selection of cuts to buy. He\u2019s already looking to lease a bigger plant, and if all goes to plan, he\u2019ll need 15 employees a year from now.<\/p>\n\n\n\n

\u201cWe had a decent business before,\u201d says Forbes. \u201cBut we\u2019re definitely going to keep rocking the e-commerce thing.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Promoting these microbusinesses requires mentoring and other hands-on support<\/p>\n","protected":false},"author":15,"featured_media":417,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[15],"tags":[12],"class_list":["post-122","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-opinion","tag-home"],"acf":[],"yoast_head":"\nOnline Microbusinesses: a New Source of Economic Development | Venture Forward<\/title>\n<meta name=\"description\" content=\"While the cost of starting a business is out of reach in many cities, online microbusinesses are emerging as a new source of economic development.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.godaddy.com\/research\/online-microbusinesses-economic-development\/\" \/>\n<meta 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