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After COVID-19 stalled innovators, they're headed to new locations

Scott Kirsner, CEO and Co-founder of Innovation Leader told Yahoo Finance what's next for innovators after an overly stagnant year.

Video transcript

ADAM SHAPIRO: Let's bring into the stream Scott Kirsner. He's the CEO and co-founder of Innovation Leader. And we want to talk about whether companies are investing in innovation. And I remember, it's at least 10 years ago. It was an All Things D, the old All Things D conference. Elon Musk was criticizing all the tech folk that had gathered for this thing. And he held up an iPhone. And he said, you haven't done anything new since you brought me this. And they still don't appear to have done anything new that's truly innovative. Are you finding that as you look at companies?

SCOTT KIRSNER: Well, we are. I mean, I obviously think that you have pace car type of companies like Tesla and like SpaceX, Apple, Google that do seem to feel the impulse and the drive to continually bring new things to market. I think you can ask the question with Apple specifically, have they been doing that regularly enough?

But what we were looking at and kind of this idea of the innovation deficit is that a lot of companies over the last 15 months of the pandemic have kind of been in fire drill mode. You've reported on a lot of this stuff, right? Supply chain disruptions, the microchip shortage, lots of issues around closing offices, now trying to reopen offices, closing retail stores, bringing retail stores back online, deciding what locations to close.

And so that fire drill mentality really has taken a lot of the global 1,000 companies off of the cutting edge, really. And I think it's going to create a huge opportunity for venture capital-funded startups to really be the driving force of innovation in 2021.

SEANA SMITH: Well, Scott when we look to the driving force of innovation, now we have more and more employees heading back to the office, it seems, if not right now then over the next couple of months. Do you think that's going to help the investment innovation, at least in the short term?

SCOTT KIRSNER: I think it depends on the size of company, actually. When I talk to startup founders, they're the ones who are most eager to be back in-person, collaborating, and brainstorming around the whiteboard with their colleagues. I think big companies, actually, are more conservative and are probably going to stay remote for potentially a few more months longer.

I was talking with startup founders last year in the thick of the pandemic who were having backyard meetings and driveway meetings and park meetings, any way they could get their teams together. So I actually think that big companies are going to be a little bit slower to get back into that creative, let's create some new products, let's think about what the next big growth driver for our business is.

And I think that a lot of the innovation is going to be emerging from the startup world, which, as you know, has just been know enjoying this tremendous surplus of venture capital funding in 2020 and this year.

ADAM SHAPIRO: When we talk about the startup world, you talk about cities where we're seeing startup growth, Miami, Austin, Boulder. Is this a those lose and others gain, or is this the kind of thing where everybody is going to keep gaining in the startup world?

SCOTT KIRSNER: I think that not everybody is going to keep gaining. As startups are getting back together in person, as you have these ecosystems coming back to life, where founders want to meet with investors, and they want to meet with executives from big companies and go to conferences like the one you mentioned and all kinds of meetups, we are going to see kind of the return of city-based innovation.

I think the big thing that has changed over the pandemic is it's no longer pick one of these four cities, Boston, New York, San Francisco, and maybe LA. And that's where all the action is. I think you are seeing it spread to-- Miami and Austin have been super-hyped, Austin in part because Elon Musk has been moving his companies there. Oracle moved there. It's just been a phenomenal story of companies from Silicon Valley and elsewhere picking Austin as its headquarters.

But I do think you're going to see some kind of lesser hyped cities like Provo, Salt Lake City, the Research Triangle area in North Carolina, maybe even like a Cleveland, a Columbus. Atlanta's midtown area is turning into a really great startup ecosystem. So I think you're going to see a shift from some of these really high-priced cities where people felt like their life was spent commuting and all their money was spent buying a house or renting a house to a whole bunch of more affordable places.

SEANA SMITH: Scott, is it going to be tough for some of these startups then, to attract the top talent? You mentioned Provo, North Carolina, I believe Kirkland, Washington, are people, do you think, going to be willing to move to those types of places?

SCOTT KIRSNER: I think people are reevaluating everything about where they live. I don't think it's a story where people are just going to move to their favorite ski town or their favorite hiking destination and hope they can find a job. I think there are the cities. You mentioned Kirkland, Washington a second ago, where you have big Amazon offices, Google offices. You have GoDaddy there.

But I think people really are willing to be open-minded about where they go as opposed to, pre-pandemic, feeling like, hey, if you're not in New York, if you're not in San Francisco, if you're not in Boston, you can't have a successful career. You can't be upwardly mobile on the pay scale. I think there's a lot of decisions around quality of life and the quality of house you can buy and the quality of education that your kids are going to have that really is getting people to reevaluate things.

ADAM SHAPIRO: OK, you said Cleveland. And I love me some Cleveland because I lived there for 10 years. You can get a huge mansion, I'm not kidding, on Fairmont Boulevard for a half million bucks. And you don't need it. We're talking about these old, 1900s, 10-room mansions. You can get a nice house for 250 in Cleveland. But will innovation go to cities? For instance, Cleveland has water. Texas, Austin, they're having an electricity problem. So are startups, the innovators are going to have to look at those kinds of issues as they go forward?

SCOTT KIRSNER: I do think they will. I'm a big fan of Cleveland and cities like Portland, Maine, the other Portland, which is also on the water and really affordable and great quality of life and just kind of needs a little bit more startup mojo. In the bill, the Innovation and Competition Act that the House just passed, this giant, $250 billion, let's help the US compete with Canada initiative, some of that money is going to be spent to basically try to spread the wealth to other cities, possibly the Portland, Maines and the Clevelands and the Columbuses of the world.

They're going to look to create 18 sort of new regional innovation hubs with some of the money in that bill, which is about to be signed into law. So the federal government is getting behind running the experiment of, can you spread innovation around a little more equally around the country, as opposed to having sort of like the haves and have-nots among cities.

ADAM SHAPIRO: Scott, you hit all the cities I love. My mom is from Portland, Maine.

And before I let you go, the team wants to know, because your glasses are an absolute spectacular hit, are those lime or yellow? They want to know the color.

SCOTT KIRSNER: I think of them as chartreuse, you know? And as I get older, the glasses get brighter. That's my position.

ADAM SHAPIRO: I picked these because they remind me of the '50s and '60s. And I figured, I'm a middle-aged guy, it's time to go there. Appreciate your being here, Scott. Next time, let's talk more about Cleveland, Portland. We got to throw in there Sarasota, Florida, where we're all destined when we turned 80. Thank you.