The St. Louis Region Shouldn’t Define Startup Success by Billion-Dollar Exits
By Greg Prestemon, CEO
A couple of years ago, around the time OPO Startups founder Randy Schilling, the EDC, and a few others were bringing OPO to life, a lot of the talk around startups in the St. Louis region focused on the need for a “billion-dollar” exit. In other words, the ultimate way to measure the success of all the time, resources, and civic energy being put into the St. Louis regional startup scene would be the creation of the next Snapchat, Instagram, or other “unicorn.”
(A unicorn isn’t just a mythical beast. In Silicon Valley lingo, it means a company valued at a billion dollars—but sometimes that turns out to be a myth, too.)
However, while a billion dollars is a lot of money, I thought a billion-dollar exit was the wrong metric for success then.
And in light of this week’s successful $100 million-dollar sale of Confluence Life Sciences to Philadelphia’s Aclaris Therapeutics, Inc., I think a billion dollars is still the wrong metric.
Don’t get me wrong, I wouldn’t begrudge a St. Louis area startup getting sold for a billion dollars. That would be big news, and a handful of people in this region would become very, very wealthy. And, given this region’s longstanding inclination toward philanthropy, there’s a good chance a nice chunk of that wealth would flow back into important local causes and civic organizations.
But ultimately, a billion-dollar exit isn’t what the St. Louis region needs—and it’s not the metric we should use to measure the success of the local startup movement. Instead, we should measure success by our ability to create an entrepreneurial ecosystem that attracts and retains aspiring entrepreneurs and gives them the resources to create a better regional economy.
Over the years I’ve seen numerous examples of companies like this come out of the EDC Incubator.
One of our recent graduates, landscape management software maker The Aspire Software Company, is an example of what we need more of. While Aspire will likely never be sold for a billion dollars, in just a few years it went from being a startup to a company with a national customer base. It might not sound as amazing as a Snapchat IPO, but a business created out of thin air now provides good jobs for 25 employees.
Aspire is a good example of why our regional ecosystem is important. The company used one of the resources available within that ecosystem (the EDC Incubator) before moving into a building of their own. And, while the Aspire founders are focused on landscapes and not the regional economy, they are a perfect example of the type of startups that build the foundation of a real entrepreneurial ecosystem.
It’s the sort of real ecosystem that isn’t dependent on temporary headlines from a big exit.
After all, Silicon Valley didn’t become Silicon Valley because the Bay Area decided it needed a rebranding after the hippies made Haight-Ashbury smell weird. It took decades for Silicon Valley to become the Silicon Valley. That only started to happen when relatively small electronics manufacturers began to attract the talented employees, educators, and funders who eventually created the world’s most-well-known entrepreneurial ecosystem.
In other words, companies like Aspire don’t just create good jobs. They help attract and retain the talent that a strong regional economy depends on.
Maybe one day we really can be a Midwestern version of Silicon Valley.
But that won’t happen tomorrow—Cortex itself was an overnight success that was years in the making. And it won’t happen because a handful of employees and investors in one startup strike it rich. It will happen when entrepreneurs in our region know they have the support of their community.
That’s why what we’re doing matters.
And in the long run, it will be worth far more than a billion dollars.