Small Business Is To Mini-Cooper, What Startup Is To F1

Whenever you talk to people in government involved in economic development, like the SBIC, you realize how little they know about the nature of technology startups as first coined in Silicon Valley.

A startup is technically a small business, like a Formula 1 (F1) racecar is technically a small car on four wheels. The mini-cooper and the F1 car both have engines, brakes, and exhausts, probably why our government programs can’t seem to tell them apart.

Formula 1 racecar

The small business is a mini-cooper, a small car driven by everyday people down a city road getting groceries. A startup is an F1 racecar, driving on a special track driving at times over 360km/h (223mph) to woo the audience.

Many of the inventions conjured up in F1 have enhanced the driving experience of normal cars, such as Carbon Fiber, Paddle Shifters, Kinetic Energy Recovery System, Active Suspension, and Steering Wheel Buttons.

The mini-cooper does not require a lot of capital to get out the gate, a few hundred bucks in gas, insurance, and such per month. An F1 racecar costs $145M annually to drive, equating to $12M monthly. The benefits of driving a mini-cooper are moderate. Driving an F1 racecar generates big bucks.

Producing and driving a mini-cooper does not incur a lot of innovation or risk. Producing and driving an F1 racecar requires people with unique skills to be the best in what they do, with the driver having a fairly high chance of meeting the ultimate failure, death.

I hope you get my point. You do not fund the production of the mini-cooper the way you fund an F1 race team. The risks and outcomes of success are completely different. You do not fund startups with small business programs.

Next time, dear government officials, do not discuss small businesses and startups in the same breath, or risk me telling you you have no idea what you are talking about.

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