On August 19, I attended a Senate Small Business and Entrepreneurship Committee field hearing in Manchester, NH, hosted by U.S. Senators Jeanne Shaheen and Kelly Ayotte. As part of that hearing, I was asked to submit a testimony which is posted below.
Good Afternoon, I serve as the Chief Operating Officer for Dynamic Network Services, Inc. (“Dyn”). Dyn solutions are at the core of Internet performance. Through traffic management, message management and performance assurance, Dyn is connecting people through the Internet and ensuring information gets where it needs to go, faster and more reliably than ever before. The crossroads of consumer behavior and enterprise performance is where Dyn delivers.
Dyn was incorporated in 2001 in Worcester, Massachusetts, while its co-founders were in college. When they looked to move their company upon graduation, they were encouraged to go to a more established tech ecosystem like Silicon Valley or Cambridge. However, they believed they could create a thriving company in their native New Hampshire.
Flash forward to today and Dyn provides Internet performance solutions for more than four million active users worldwide, has additional offices in San Francisco and the UK and, in 2012, received a $38 million Series A round of funding. Despite this success, Dyn knows it has not achieved this in a vacuum and that to continue to grow, a healthy innovation economy needs to exist both nationally and in New Hampshire.
A healthy innovation economy exists when a healthy innovation ecosystem is in place, the pillars of which are talent, capital, and community. These areas of emphasis are not new, but the ways in which individuals and institutions in the talent, capital, and community arenas interact with them are changing. State government needs to adjust its approach and focus its efforts to help where it can and stay out of the way when a lighter touch is required.
Both New England and New Hampshire are high-cost areas to do business when looked at from a national and global perspective. Government cannot change this fact; larger economic forces are too powerful. However, government should focus effort on taking actions that help reduce healthcare and energy costs. With respect to taxes, it should be noted that, assuming businesses would receive the same services from state government, all businesses would favor lower taxes. With that said, no business would trade lower taxes for a poor workforce or poor transportation or communication infrastructure. The current state tax environment favors employees and businesses where much of the profit goes to owners in the form of reasonable compensation. When thinking about taxes, government should focus on ensuring the tax climate is predictable and that the taxes that are collected from businesses drive the delivery of services that help the economy succeed (infrastructure, education, etc.)
We view three areas as key areas of focus when thinking about how to enable the growth of the innovation economy: Talent, Community & Capital.
- Increase mobility of talent base by developing a passenger rail. In New Hampshire, that would mean connecting Concord, Manchester, and Nashua to Massachusetts.
- Focus governmental and non-governmental attention and efforts on recruiting and retaining young workers. In New Hampshire, this takes the form of efforts such as those undertaken by StayWorkPlay.
- Recommit the state to providing financial support to higher education, tying that support both to ensuring greater accessibility to students and increasing institutional flexibility so they can be more responsive to the changing talent needs of the state’s business community, specifically STEM graduates.
- Pass comprehensive immigration reform to ensure that, locally and nationally, technology companies can more easily combat existing talent shortages and attract the best talent in the world to help grow the American economy.
- Government should visibly collaborate with and vocally support the non-governmental organizations (e.g., in New Hampshire, the ABI Hub, ICC, Green Launching Pad, NHHTC) that foster and mentor growth businesses.
- Government should focus more on supporting the creation of growth companies in the state and building capacity of businesses to grow and less on business relocation as a tool for economic development.
- Of specific relevance to NH, support marketing efforts that spread the story that NH is not only a tourist destination, but also a great place to start a business or a career.
- Support regional collaborations that focus on innovation ecosystems.
- Appreciate Brad Feld’s four rules for spurring Innovation Ecosystems:
1) The startup community has to be led by entrepreneurs
2) Take a very long term view of success; a twenty year view at least
3) Ensure that the ecosystem is inclusive, not exclusive
4) Create activities that engage the “entire stack” of entrepreneurs (latent, emerging, active, experienced).
- Politicians should visibly collaborate with and vocally support angel and venture capital investment nationally and in New Hampshire. Traditional banking models underserve the innovation economy. This makes angel and venture investment an essential ingredient to ensuring growth companies start in New Hampshire.
- Government should continue to support venture and angel investment as it did with the passage of House Bill 605 in 2011 (sponsored by Rep. Marilinda Garcia, R-Salem, and Sen. Nancy Stiles, R-Concord, among others).
- Support marketing efforts that spread the story that the US and NH are great places to invest in growth companies.