One of the hurdles for the Puerto Rico small business community is growing beyond the three and a half year mark. According to the Global Entrepreneurship Monitor, an annual assessment of the national level of entrepreneurial activity in various countries –and the only global index where Puerto Rico is visible– the island is doing well at launching new ideas.
This launching of new ideas creates what are called ‘nation businesses’. They’re new ideas that are starting out as businesses. What the island is not doing so well is at converting ‘nation businesses’ into ‘new businesses’, those in which the founders can effectively live off their new business, and sustaining operations beyond three and a half years.
“Entrepreneurs are makers, doers, dreamers…they create products and services that respond to problems, creating value where there was none before and building generational wealth,” Dennise Rodríguez, Executive Director at Colmena66 said, while also acknowledging that entrepreneurship isn’t necessarily for everyone because of the high risk involved.
Officially launched in 2016 in partnership with the Puerto Rico Science, Technology, and Research Trust, Colmena66 is a system integrator, an organization that provides a system of support for entrepreneurs while creating an ‘entrepreneurship ecosystem’ or, in other words, a community of support for people looking to build a business.
Colmena66 specifically focuses on data and the power it provides in tracking entrepreneurs’ success, allowing the organization to identify areas in need of improvement and highlight and share successes with the wider business community. One of Colmena’s goals in tracking data is to ensure everyone has equitable access to the resources needed to be successful in launching and maintaining a business.
Their most recent report ‘The State of the Entrepreneurial Community in Puerto Rico’ exposed trends and areas in need of improvement from the past year highlighted by data.
“One of the things that really surprised us was how we track entrepreneurs’ journeys in a way that shows a roadmap of how you start and grow a successful business in PR and who can help you along the way,” said Rodríguez, in an interview with THE WEEKLY JOURNAL.
How government can facilitate entrepreneurial growth
There are a few pillars that make up the entrepreneurship ecosystem: access to capital, culture, support, human capital, markets, and public policy. Better public policy, at the local, state, and federal levels, can make a big difference on the success of young companies.
“We can do a lot more to gear our public policy and our resources towards supporting entrepreneur-led economic development. We need to diversify our economy and our economic development strategy. Diversification is key because we are an island,” Rodríguez emphasized.
America’s New Business Plan, a policy guide to create a more inclusive economy, tracked net job creation by age of the firm and found that most new jobs are created by companies with less than five years of operations, while companies 10 years and older are quicker to lay employees off in times of crisis.
“[We should] not only support multinational companies coming to Puerto Rico, but equally support our local entrepreneurs because what we’ve seen through data tracked in the US, is that entrepreneurs drive almost all job growth. New businesses create almost all new jobs in an economy,” commented Rodríguez.
Underrepresented groups in the entrepreneur community
According to the report, fewer women –along with other underrepresented groups such as Afro-Caribbeans, veterans, and LGBTQIA+ entrepreneurs– have access to capital, limiting opportunities to launch a new business idea.
“Through this report on the status of the entrepreneurial community, we shed light on data where there are inequities. Then, we share this data with organizations that can provide support and take action,” Rodríguez said.
Taking action can look like evaluating existing programs through a different lens. For example, one of the entrepreneurship support programs ran on the weekends, assuming that most attendees work a standard eight hour shift on weekdays. For parents, the responsibilities of taking care of the children often fall on the mother, this assumes they have some sort of childcare option available and accessible. Thus, there is a need to diversify scheduling options for classes to suit a variety of lifestyle needs.
Parallel18 is another of the programs that Colmena66 works closely with that promotes Puerto Rico start-ups while simultaneously connecting the founders with potential investors. Colmena66 aims to diversify gender participation in investing by informing and educating high net-worth women on the opportunities that these startups present, increasing overall access to capital.