Ep. 231 - Martin Babinec, Co-founder of TriNet & Author of More Good Jobs on Building Startup Communities

Inside Outside Innovation

On this week's episode of Inside Outside Innovation, we sit down with Martin Babinec, Co-founder of TriNet and author of the new book More Good Jobs. Martin and I talk about the importance of community dynamics, and the creation of new businesses and the changing trends, that are affecting building startup communities outside the Valley.

Inside Outside Innovation is the podcast to help new innovators navigate what's next. Each week we'll give you a front row seat to what it takes to learn, grow, and thrive in today's world of accelerating change and uncertainty. Join us as we explore, engage, and experiment with the best and the brightest innovators, entrepreneurs, and pioneering businesses. It's time to get started.

Interview Transcript with Martin Babinec

Brian Ardinger: Welcome to another episode of Inside Outside Innovation. I'm your host Brian Ardinger and as always we have another amazing guest. Martin Babinec is the co-founder of TriNet and author of a new book called More Good Jobs: An entrepreneurs action plan to create change in your community. Welcome Martin.

Martin Babinec: Thanks Brian. Glad to be here.

Brian Ardinger: I wanted to have you on the show. As a lot of our audience knows, part of the stuff we talk about in innovation, it's not just about startup innovation or corporate innovation, it's about community innovation. And your book around how do you create jobs and how do you create new innovations outside of the traditional tech hubs, was quite interesting to me and obviously up my alley, as far as what we've been doing here in the Midwest as well.

You're an entrepreneurial by nature. A few years ago, you started TriNet back in Silicon Valley and grew that to a, a major company, but you've got some interesting things about how you did that. Not only did you create it in Silicon Valley, but you commuted back and forth from your residence in New York. So, take us back to the early days of starting a company from scratch in Silicon Valley, and then we'll eventually progress to talking more about the book.

Martin Babinec: I'm a very lucky guy because when I began my entrepreneurial journey in 1988 and living in Silicon Valley at the time, I didn't realize how valuable it would be to be starting a company in what would be considered the most entrepreneur supporting place on the planet.

I had no appreciation for it at the time. It was a struggle. And when Tri-Net began, since in the late eighties, you couldn't say the words HR and outsourcing in the same sentence and have people understand what you were talking about. We're talking pre worldwide web. So, we didn't have the connectivity that we take so for granted today. And like most entrepreneurs, I began with only the vision of trying to create a small business. I was tired of working in a larger organization. I wanted to be more in control of my destiny. And that's a very common thing that prompts people to start companies. But what I did not understand is that the very nature of what we were creating a TriNet would depend on economies of scale.

And so as an entrepreneur, once I began trying to start this business and sell to other small businesses as a business to business kind of approach, we were not successful. And we were on the verge of going out of business, when I kind of made the decision to really do something counterintuitive.

Even though this is an economies of scale kind of business, it required having lots of scale for it to be successful. It was waning our direction towards saying we're only going to sell to emerging world technology communities. It really changed my life and outlook as an entrepreneur. And then became for TriNet to over the entire 20 years of, as the CEO, that was the focus of our business initially in Silicon Valley and then on, from, as we expanded to other markets, still retaining that very tight focus.

And by doing that, it brought me into the world of Silicon Valley in ways that made me appreciate how important was to get support from the community. And it wasn't till I moved my family from Silicon Valley to my hometown in upstate New York, which is more like the Midwest in terms of culture. All right. It's 210 miles from New York City and a small community.

And I spent 10 years commuting from my Mohawk Valley home in Little Falls, New York. Back to Silicon Valley while still running the business. And it wasn't supposed to be that long, but that's how it turned out. And over that 10 years of commuting, I really began to think hard about the difference between my two valleys and Mohawk Valley and Silicon Valley.

And that's what prompted then this journey to, how do we take the assets in a place like upstate New York or in a lot of places in the middle of the country that have a lot of intellectual capital that is underutilized. And how important is it of a supportive community to help entrepreneurs start and grow companies? And that's ultimately what led to the start of our nonprofit Upstate Venture Connect, which in turn led to writing this book More Good Jobs.

Brian Ardinger: This conversation has started about the rise of the rest and startup communities outside the Valley and that. What do you think started some of that conversation early on to even think about the fact that companies can be created outside the traditional tech hubs and that there was a yearning and a desire to actually create these ecosystems?

Martin Babinec: National recognition through Steve Case's Rise of the Rest was illuminating for some, but for me, it goes back much earlier. As I talk about in the book, in 1995, my good friend, Brad Feld moved from Cambridge, Massachusetts, a hotbed of startup activity in the nineties, he goes to Boulder, Colorado. And at that point in time, Boulder was not a place VCs were flocking to, to find the next big thing. All right. Nice college town, but not a whole lot of action.

And here, even by 1995, TriNet's businesses is a hundred percent focused on emerging tech. Brad Feld moves to Boulder and not much going on there, but I decided to open a TriNet office just because Brad Feld moved there. That's how much confidence I had that this was going to be a game changer.

And lo and behold, those people that follow Brad Feld and are aware of his book Startup Communities that talks about how did Boulder transform to a community that then rose in the ranks to be second in the country on the metric of venture capital investment per capita, trailing only the San Francisco Bay area. I mean, how did that happen in a period of call it 10, 15 years, which is not a long period of time when we think about major transformation of a local economy.

So I had a ringside seat and watched that unfold. And meanwhile, still growing the company and it was long before I started the journey of trying to learn from Brad's experience and the experience of TriNet in many markets where there was lots of startup activities since that was the focus of our company.

I was taking in a lot of what I saw elsewhere and all the times thinking about someday, somehow, you know, if I had the time and more resources, I could put into it, what could I, as one guy do to help bring about some transformational change in an area that I really love? Not just in my hometown, but more broadly, the more difficult challenge of how could we leverage the assets that are dispersed geographically across the broader region? Because that for me is what made ...