"I personally feel as if I've ridden a wave — a very vibrant wave," says Stephen M. Goodman, partner at the law firm Morgan Lewis and 40-year veteran of the Philadelphia entrepreneurship scene. In fact, Goodman started working in this field long before that scene even existed.
Goodman seems blessed not only with historical perspective but also with foresight — he is the classic example of someone who can visualize the garden through the early-spring frost. And he planted many of the seeds himself: In a perfect example, a small group of his clients recently founded DreamIt Ventures (read more about that innovative accelerator here).
Flying Kite caught up with Goodman by phone, talking Philadelphia, big dreamers and the entrepreneurial ecosystem's exciting evolution.
The person who recommended we talk to you referred to you as a "guru."
I've been around the hoop with entrepreneurship for over 40 years. I guess that qualifies me as a historian if not a guru.
Tell us a little about your background and how you got involved with entrepreneurship in Philadelphia.
I started practicing law and was fortunate enough to clerked for the Supreme Court under Justice Brennan. I then had the opportunity to join a startup law firm in Washington, D.C. for two years. I got the bug of growing and building things. But I missed Philadelphia, so I came back in 1969 and started a firm with a group of law school classmates. The niche I carved out for myself was representing underserved entrepreneurs — who, at that point, weren't even called entrepreneurs. Basically, what we had was people with dreams, who wanted to start businesses here in Philadelphia.
What was the business climate like in that era?
There was no ecosystem at all. There was no venture funding. There were no incubators, no organizations providing cross-fertilization among entrepreneurs. You were pretty much on your own and hoping to find family and friends to invest. The large law firms didn't pay attention to these people. In a way, I became a community legal services lawyer, and the community I served was the underserved entrepreneur. Some of the young entrepreneurs that I nurtured blossomed and built tremendous companies. My clients were all visionaries. Some of them succeeded; some of them were ahead of their time. With those companies starting to explode, I needed more resources, so I moved to a bigger firm.
I formed a venture development group, which was probably a new idea for large law firms. By that time, some venture firms had sprung up, like the Greater Philadelphia Venture Group. There was the beginnings of an ecosystem. Then, twenty years ago, I joined Morgan Lewis. Along with David King, we built what is now a preeminent Emerging Growth Practice branch within the firm.
Was it important to you that your work have a positive impact on the city?
The Philadelphia region is something that has been part of my DNA. I wanted to help foster more resources for entrepreneurs, so they could build businesses and stay in the region. In 20 years, things have come a long way. There are a lot of seeds that are now planted for this to become a pretty explosive area. That would be pretty major distinction for a city that, 30 years ago, was viewed as Quaker bastion of conservatism in business.
I think a theme across the board in Philadelphia — whether it's the food scene, the development scene or the arts scene — is to stop trying to be like other places and instead try to be our best self. We need to develop our inherent assets.
I believe that passionately. I think we have the seeds. In the last five years, early-stage entrepreneurs have banded together to share ideas and war stories, and help each other with things like Philly Startup Leaders and Mobile Monday. Then you have the incubators that have grown up in the city — Venturef0rth, SeedPhilly, Benjamin's Desk, what's going on at Indy Hall in terms of development talent.
And what's happening at the universities — we are so rich in universities and fine business schools. I'm a Wharton graduate, and very active there, and I think that what's happened in the Wharton Entrepreneurship program, in terms of spawning new companies, has been great. Meanwhile, Jaine Lucas at Temple's Fox School of Business has built programs that foster entrepreneurship. Villanova has initiatives now designed for entrepreneurship. And John Fry came to Drexel and took on innovation as a major objective.
And then you add what's happened with the Science Center as a meeting place and also an organization that now makes grants to proof-of-concept companies through the QED program.
There is an integration and cross-fertilization in this town that, if you're looking at it from a 20 or 30 year perspective like I am, would cause you to feel very, very bullish about the region. And then you have the city coming on board and adding support. And PIDC devoting $3 million dollars to a Philadelphia-based fund (StartUp PHL) managed by First Round Capital. And then you have First Round Capital, one of the leading funds in the country, moving to West Philadelphia from Conshohocken. And you have other venture funds that are also talking about setting up operations here.
What does Philadelphia still need? If you were going to wave your magic wand, what would you give the city to help it take the next step?
Everything that I would want for Philadelphia is evolutionary. It's not going to be a magic wand. A year ago, I would have said, "Wouldn't it be nice if the city provided a fund to investing in early-stage companies?" And they did that. And we have new tax legislation in Harrisburg that is going to give Benjamin Franklin Technology Partners more money to spread around. Would it be nice if Governor Corbett (or another governor of Pennsylvania) set up a slush fund to invest $500 million in venture capital funds, reducing the risk of investing here? Absolutely. But I wasn't born yesterday.
Do you think Philadelphia, as a place to live and work, is increasingly an asset to young companies?
This is a wonderful place to live. The restaurant scene, the cultural scene is all part of the things that foment entrepreneurship. I've had entrepreneurs who have graduated from Wharton and are staying tell me that.
But when the garden grows, it requires manpower. Our reputation as a place for workers to settle — developers and tech workers — has lagged behind the reality. My fear is that companies, as they get to a point where they need 100 or 1000 employees, will go elsewhere for those resources, even if they remain headquartered in Philadelphia. The longterm challenge is having the buzz spread to the extent that if you're a developer graduating from Carnegie Mellon or Stanford, you're thinking Philadelphia.
The University City Science Center has partnered with Flying Kite to showcase innovation in Greater Philadelphia through the "Inventing the Future" series.
