What are the pathways that successful entrepreneurs pursue to move from start up to successful high-growth venture?  Do they seem to be changing in our current marketplace? If you are at all interested in these questions, I suggest taking a look at a new SignalFire study of the background of the founders of AI-focused unicorns (i.e. firms with valuations exceeding $1 billion).

Let’s start with a quick summary of the “Unicorn DNA” report, which surveyed 2000+ founders who were engaged in starting around 800 new AI ventures. The big finding is that the level of unicorn company formation is at its highest level in three years. The survey also finds that the nature of new founders is different. The young hot shots working from their dorm rooms are no longer; today’s founders are older, better educated, and highly credentialed.  The report survey finds that these founders have anywhere from 8-14 years of experience and tend to come from a small group of prestigious technical universities, but not always Ivy League schools.  Around 25% of these founders hail from outside of the US.

The authors suggest that we are starting to see a new entrepreneurial pathway in the US where technology and operational expertise trump street smarts, savvy, and energy as keys to success. Basically, they seem to be recognizing the growing importance of deep tech entrepreneurship, where firms and founders develop “innovations that surpass technological benchmarks and push the boundaries of current technology. These companies tackle substantial scientific or engineering challenges, aiming to provide solutions that have a significant impact on society.”

For economic developers, the main lesson is “know your market.”   If you are working in AI or other deep tech sectors, it’s important to understand the unique backgrounds, assets, and needs of these sophisticated technologically savvy founders and companies.

To some extent, the jury is still out on how American small businesses will fare under the new policies of the Trump Administration.  Yet it’s also the case that the early signs are concerning.  The latest example comes from a new Brookings Institution dive into the state of Latino-owned small businesses.   The headline take-away is pretty straightforward.  Federal policy volatility is bad for business, and it seems to be especially bad for America’s Hispanic business owners.  The pattern we witnessed during the COVID 19 pandemic—where minority-owned firms faced the worst business headwinds—seems to be repeating itself due to the chaos we’re all living through today. 

These early economic distress signals are not limited to certain industry sectors or specific regions.  They are hitting all regions, including places like Texas and North Carolina, that regularly tout their business friendliness.  While we still lack good data on what’s happening in the field, early signs in Texas are alarming.  Construction employment in the Rio Grande Valley was down 5% last quarter, and overall statewide construction activity is declining.  Meanwhile, overall business uncertainty levels have reached pandemic era benchmarks.

The bottom line is clear:  to be business friendly, states and localities must also be business stable.  As the report concludes, “policy volatility is becoming a competition problem.”