Fanning the Innovation Ecosystem Fire in the Sacramento Region -

Fanning the Innovation Ecosystem Fire in the Sacramento Region

Photo Credit: Greater Sacramento Economic Council

By Terry Daffin

It’s been an exciting time for the entrepreneur community in the Sacramento region.

  • It started with an announcement that the Founder Institute will officially launch its newest chapter in Sacramento based on the overwhelming response to the open house events they have hosted targeted at startups in the Greater Sacramento area.
  • As part of their Extend Your Runway campaign, Mayor Darrell Steinberg; Barry Broome, President and CEO of the Greater Sacramento Economic Council; and a host of Sacramento entrepreneurs, venture capitalists, and local government innovation proponents infiltrated the heart of Silicon Valley to pitch a group of local entrepreneurs that Sacramento is the place to be for startups and innovation. Citing the benefits of direct access to talent via UC Davis and CSUS, cost of living efficiency (over 50% less than Bay Area), and access to the entire mega-region competitive marketplace (12.2 million people), Mayor Steinberg stated that Sacramento has the “attitude” to become one of the nation’s great locations for innovation and entrepreneurial startups.
  • Kevin Nagle, one of area’s most well-known entrepreneurs and partnership owner in both the Sacramento Kings and Sacramento Republic FC, spoke to a group of entrepreneurs in Davis at a Startup Grind Sacramento. Nagel relayed his own journey as an entrepreneur, sharing with the audience that he, along with other venture capitalists in the area, are interested in investing in startups here in the Sacramento region and encouraged them to stay in the region as opposed leaving for the Bay Area and Silicon Valley. He said that these venture capitalists were small in comparison but that he and other investors were planning to build a fund starting with $100 million that could reach as much as $250 million with the addition of other investment dollars from the area. This, he said will, “light a fire that has already been lit and make it go faster.”

So, what is this “fire” Nagel alluded to and how do we keep it burning?

In my view, the fire is the innovation ecosystem that has been sparked by creatives in many industries in the Sacramento region such as the arts, food and agriculture, and tech, among others. It is exciting to see and feel the energy and momentum the region has going right now. While a transplant from the Deep South, I have been a resident in Sacramento for 30+ years and have never been more encouraged by growth and opportunity than what is happening in our city and our region.

So, what will it take to fan the flames of this fire? Here are three things that I believe in combination will help the fire burn faster:

  1. Entrepreneurs: We need entrepreneurs to both stay and relocate to our region, and take up residence in business and in life. The entrepreneur is where the innovation begins. This fire is a nonstarter without the startup small business entrepreneur.
  2. Incubators and Accelerators: We need these institutions here in our community to help entrepreneurs mature not only the product they are selling, but the business that produces the product. Yes, the entrepreneur can probably figure these things out on their own, but studies have shown that the 5-year survival rate of business nurtured by incubators is 87%. By comparison, the survival rate of those entrepreneurs who do it alone without the support of incubators is only 44%.
  3. Venture Capitalists and Investors: When you ask seasoned and serial entrepreneurs, “What was the biggest challenge you faced during the startup of your business?”, you will most often hear “funding” or “under capitalization.” Sacramento has a short list of investors and venture capitalists who have publicly announced that a large percentage of their investment portfolio will be for companies in the Sacrament region. That is truly a huge benefit to local small businesses.

If we want our ecosystem for innovation to achieve success and become sustainable and scalable, these three things need to occur in combination. We need all three logs on the fire so others will see the smoke, come to investigate, and join in the excitement. Let’s keep this fire burning Sacramento!

About the Author: Terry Daffin is an Executive Consultant within KAI Partners. He has worked in the IT industry for more than 30 years and has over 25 years of project management experience. As a public sector consultant in the health care industry, Mr. Daffin has assisted in the development and implementation of Project Management Offices that include project management, service management, lean agile and traditional product development lifecycles, and governance processes. He has been an innovation advocate and evangelist for 15 years and has implemented innovative processes for projects that he has been engaged on since 2001. He has worked with the California Medi-Cal Management and Information System (CA-MMIS) division of the Department of Health Care Services, California Franchise Tax Board, Commission on Teacher Credentialing, California Department of Consumer Affairs, California Board of Equalization, and California Department of Water Resources. Mr. Daffin is currently working on a project for KAI Partners to expand an existing coworking organization into an innovation incubator/accelerator focused on connecting innovative start-ups and the public sector.

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