I’d bet, if you were to look to the ecosystem surrounding your work, you’d see some meetups, a local startup group on Facebook, a business or technology journalist at the newspaper as the person known for covering startups, some coworking spaces, and perhaps a distinct innovation hub supported by the City or Chamber, right in the heart of where they perceive entrepreneurs thrive.
In my experience, this is what comprises a startup ecosystem in 90% of the cities throughout the world. Paired with a Startup Week and Startup Weekend, and a locally branded conference along the lines of Hippie Hustlers, the bank sponsors meetups, real estate investors show up for demo day leaving you scratching your head as to why they don’t fund anything and instead keep talking about commercial office space, and everyone hops a flight to San Francisco to raise capital after hosting a booth at SXSW.
My barometer for a healthy startup ecosystem starts with social media, and the already present “City Startup” group or “City Entrepreneurs” twitter, invariably, both are on life support, filled with posts from logo designers offering a free logo and that occasional post from someone willing to clean your air ducts. Indeed, visiting a city and figuring out the lay of the land, where founders might be found, and if there might be a meaningful event tonight, is usually harder than finding a needle in a haystack.
And in my time, I’ve sat in meeting after meeting with local leaders in various cities, “we should build a shared calendar of all the events!” echos the idea seemingly unique to the people in the room. Everywhere hopes to make things easier for entrepreneurs with an event calendar.
Mind you, one of the earliest startups with which I was involved, solved the fact that it’s impossible to find things to do… and 20 years later, not one Event Startup or online calendar has solved the problem nearly half as well as we had.
Point being, what shocks me about startup communities is that the entrepreneurs nurturing the ecosystem never look at the ecosystem itself as a startup. They perceive a problem, such as, “people can’t find what’s going on,” and try to solve it with an existing solution; worse, using something already proven doesn’t work.
It’s like we’ve taken a bunch of supposed startup thought leaders and advisors, thrown them in a room, and the best they can come up with is to try harder. In incubators we call this the problem within the problem; that is, stop solving the problem with what you think is the solution and instead understand why the problem persists without a solution.
What are the best ways for a new ecosystem builder to establish connections and engage into collaborations startup accelerators, incubators, innovation hubs, and VCs?
Which is to affirm by way of a question asked of me, that what people are doing isn’t working. Now, you might feel my intro is critical of good intentions, and yes, I’m being critical of good intentions, because with entrepreneurs shouldering most of the risk in creating jobs and new solutions, good intentions without experience causes problems.
Spinning the wheels of good intentions, at the expense of entrepreneurs
With frustration, I perused others’ answers to that question…
- education (good universities) and the availability of money (from venture capitalists and angel investors
- Have regular (bi-monthly) events that include a social component (speak, meet, greet, eat)
- Be focused on the local
- You need to have gathering places. Coworking places are a common place for that gathering
- Access to funding: Startups need access to capital in order to get off the ground
- Governments can play a role in supporting the growth of startup ecosystems by providing access to funding and tax incentives
Let me stop there because I would hazard a guess that you’re reading my list wondering why I pre-empted the list with a hint of criticism. You might be in charge of startup ecosystem development, in fact thinking that you’re doing a great job of such things being in place.
I want you to consider that characteristics such as what you find in that list are characteristics of a vibrant startup ecosystem; they are the consequences of or the result of having an ecosystem meaningful to founders and investors. Not the cause.
So, you want to start a healthy startup ecosystem? Well, apparently, just fix your university. Easy-peasy!
… “If only Venture Capitalists would show up and fund things, after all, founders need capital to get startups off the ground!” Except, founders don’t get capital to start ventures, VCs fund opportunities already well developed.
I recently covered the 6 components of creating a favorable ecosystem of promotion of entrepreneurship
- Credible and distinct promotion of the city/region as such
- A culture of competition, potential, and creativity
- Reasonable wealth available
- Innovative employers
- Little – no government interference
- Access to startup experienced people
And hopefully from that list, you can see how most of the advice and efforts from individuals hoping to build their startup ecosystem fall short. The work typically suggested you can or should do, is nearly impossible, and the economic development efforts that fuel entrepreneurs often contradict the typical advice. What’s happening is that people are looking at healthy startup ecosystems as they are and suggesting too simply that all you need to do is the same – but their disregarding the impact of the DNA of actual builders: the people passionate about entrepreneurship.
What is the way for a new ecosystem builder to establish connections and engage in collaborations startup accelerators, incubators, innovation hubs, and VCs?
- You must volunteer
- You must keep showing up
Without question, from my experiences in Silicon Valley, Austin, Phoenix, Chicago, and more (we get hired to develop startup ecosystems), nothing else anyone says to you is “best” or in any way helpful, if your ecosystem doesn’t have people FREELY giving their time, with no strings attached, and showing up altruistically, year after year.
In my 15 years in Austin, there are maybe 8 of us left who keep showing up from then.
Don’t misunderstand me Austin friends, I’m not saying there aren’t more than 8 people doing this! I’m saying that over the span of 15 years, there aren’t many that are still doing so.
Were others’ impact helpful? Yeah, sure, but without the people always showing up everywhere, none of it perpetuates. Familiar faces are REQUIRED to get investors comfortable, to reassure the local politicians, to give journalists someone to call, and to remind entrepreneurs that they’re in the right place. Constantly hearkening back to the “people who built this city” is hardly inspiring to entrepreneurs or the new generations of people who have never heard of them nor their tremendous impact thanks to the invention of the positive meniscus lens. Where are they now? Okay, unless they’ve passed on of course.
Familiar faces are REQUIRED to get investors comfortable, to reassure the local politicians, to give journalists someone to call, and to remind entrepreneurs that they’re in the right place. And that last point, “in the right place” is important because can you guess what the people who keep showing up do that is MOST helpful?
We STOP showing up in some places.
Sounds contradictory, doesn’t it?
The thing is, startup ecosystems have a LOT of wannabes. In Austin, it’s so prevalent that people use the word wantrepreneur, not in a positive way.
- You might have “Accelerators” that are really just coworking spaces
- Maybe you know “Venture Capitalists” who are really just real estate investors
- I’m sure you can think of mentors who are actually consultants
- We all know “advisors” who have never spent a day in their life in a startup
For your ecosystem to thrive, you must weed them OUT.
Yes, out.
And how do the people who keep showing help filter what isn’t working? They stop showing up, supporting, promoting, or engaging with, the things that are preying on entrepreneurs.
If you don’t do this, you don’t have a startup ecosystem, you have a community of wantrepreneurs — startup founders don’t show up when their time is wasted, and actual venture capitalists don’t get involved to fund local restaurants or new businesses.
Check this out and then come back here to read the rest of my perspective ecosystem building. This is WHY you must weed out the crap and HOW you know if your ecosystem is still full of it…
Okay, get it? If your ecosystem is still struggling with basic questions, it’s because your ecosystem doesn’t know what it’s doing. And you may have “Incubators,” “entrepreneur studies,” and “angel investors” but I put all that in quotes because just because THEY say that’s what they are, doesn’t mean they actually are.
The way your ecosystem building actually helps is by reinforcing what works and removing what doesn’t, and the ONLY way you can do that credibly, aside from showing up, is doing it voluntarily.
No one should outright trust the direction of someone in the startup ecosystem who is selling a service, funded by investors, or sponsored by members. Those are all biased agendas. And there is nothing inherently wrong with those people existing in the ecosystem, bias doesn’t mean wrong or harmful, it just means biased… which means incomplete or misleading.
To capably build your startup ecosystem you must exist, with others, contributing voluntarily, to the benefit of others. Year after year, to build the credibility, reliability, and trust that enables you (and others like you) to remove the crap and support the good. Fail this, and your ecosystem merely continues spinning the wheels of good intentions, at the expense of entrepreneurs.
How and where might you volunteer? Well, that’s up to you and your style…
- Start the local Facebook group and grow it to 10,000 people by incessantly promoting the good that’s going on. One already exists? Start contributing content!
- Launch a podcast and stick with it (most podcasters quit after 8 shows)
- Write thought leadership and uncover research about the ecosystem
- Run a weekly meetup. Weekly. And stick with it. IF the city already has a weekly meetup, don’t do your own, help the one that exists!
- Run an incubator, develop one or bring one to town… IF your incubator is the same as the one that already exists though, FFS are you not paying attention?? Help that one get it right, or start one that serves a different market.
What comes from these two initiatives (volunteer / keep showing up) on your part is the answer to our question, “What are the best ways for a new ecosystem builder to establish connections?“
Because look, I don’t want to connect with you if you’re just trying to capitalize on startups by selling something or getting a job; while on the other hand, if you’re genuinely helping (as explained here), we’ll easily connect and collaborate. Which answers the second part of our question, “into collaborations startup accelerators, incubators, innovation hubs, and VCs?“ That you don’t want to collaborate with the accelerators, incubators, innovation hubs, and VCs that are actually part of the problem, do you? Yes, “part of the problem,” (the wheels of good intentions, at the expense of entrepreneurs). Efforts that are inexperienced, cashing in, or misleading, are actually causing problems for entrepreneurs, regardless of what they call themselves. You can only engage in effective collaboration if you’re first part of the solutions, so that you might connect and work with the other people are already too.
Here’s where I want you to start, look at your Startup Groups online. Is everything there? I assure you not. Stop celebrating the good intentions and start by stepping up and putting it there for everyone else, or, perhaps better, demanding everyone else stop competing and start collaborating.
Love this!!!
Cheers Jeff McDermott, I’m exploring how we can accomplish this evolution more effectively than consulting, ad hoc community building, and economic development folks giving it their best shot.
Das GreenHaus
We would welcome the opportunity for you to be a guest on The Building Texas Show. Our host is passionate about building these rural ecosystems, and it is a Team sport!
The Building Texas Show I’d be honored. DM me. And we might explore something with Super Dave Quinn, CEcD ? We’ll be chatting about similar things in the coming months.
Paul O’Brien I’ve tried as well, but always run into the same scenarios in different locations.
The ones that do it right are unfortunately not duplicatable primarily due to the people involved.
I arrived in Austin By God Texas in 1980 and left in 2022. I worked for Jack Crosby, the legendary founder of Rust Capital, the precursor of Austin Ventures, the first real VC firm in Austin.
The history of venture in Austin is too long to write here, but it was based on several things you missed.
1. Austin had the good fortune to competer for and get several consortii of tech related endeavors that created the demand for talent.
2. There were several tech companies – IBM, Texas Instruments, Tracor – that also demanded talent.
3. The University of Texas spawned a ton of talent and finally grads could work in Austin outside the hospitality business.
4. There were a number of visionaries who made it their objective folr long and short periods of time to spawn growth in the face of a city political infrastructure that did everything it could do to kill growth.
5. Capital finally came to Austin. I consider the dearth of capital to still be the biggest disadvantage of Austin v Silicon Valley. This in spite of the fact there are thousands of more funders now than back in the day.
The environmental requirements for a startup ecosystem must develop in a crawl, walk, run manner and it must evolve at the same rate the world does.
Martha B., have you seen this?
In fairness, I didn’t miss it, this isn’t an article about Austin’s history. And many are exploring how your 5th point reinforces my entire point; venture capital follows, so if it doesn’t to the same degree, that means something. What it means, I won’t so deliberately posit, but I am exploring it, looking for input from people ?
Absolutely great and useful article! Thanks again for this!
Jeffrey, in fairness, I didn’t miss it, this isn’t an article about Austin’s history. And many are exploring how your 5th point reinforces my entire point; venture capital follows, so if it doesn’t to the same degree, that means something. What it means, I won’t so deliberately posit, but I am exploring it, looking for input from people
Yes to all this. I think it’s very important for ecosystem builders to get down to the big scary and personal questions on their motivations. But sometimes you can see it, smell it & sense it.
Casie Lane Millhouse
There is a certain type of person who has to be an entrepreneur. They can’t help themselves.
Once you have done it successfully, it is a drug you cannot ever kick.
Once you have done it, the second, third, tenth times are infinitely simpler, truly formulaic, and you are still dealing with the same issues, but you’re not scared.
One key differentiator is if an ecosystem member exists to support founders or exploit founders. When you see a group of energetic, optimistic, builders you often see a swarm of ‘providers’ (services, capital, etc.) buzzing around them. If the founder is your market you’re not helping.
Love this. Thanks for sharing Paul O’Brien. Always enjoy learning from your perspective. You definitely stand out from the noise!
Andrew Kazlow cheers. As entrepreneurship has flourished, we have a responsibility to ensure people don’t suffer through lessons we’ve already learned.
Trying to figure out how to fix things at scale
On it. Thank you.
Well said
Everybody works from examples. What has worked previously..founders in the 80s and 90s worked from the success stories of Intel, AMD, mfst, oracle etc (long list). Today’s startups work from Uber and Airbnb, the only two startups founded in the last 15 years that are now ranked in top 500 for market capitalization. See the problem
Dr. Jeffrey Funk Yes.
Market environments change.
Different kinds of companies are needed to flourish in the new environment.
That makes working from examples from old environments a problem.
We’re so busy working from old examples, and so sure it will work, we’re not even searching for the underlying principles that are factors for sucess independent of the environment.
In India startup Ecosystem
None of the High Chairs,Startup Founders,Investors, Investors Advisors have any idea about Startups building, they are all Empty Bag People & Startup Accelerator, Incubator Startups Operators have done nothing related with Startups Building any experience on their own shoulders with their own Hard earned money any meaningful successful experience in Building Startup.
They are all WhatsApp University Graduates who are talking ? kg Lectures Big about Startups Ecosystem as the Speaker in the Paid Main Media, Free Social media platforms including Li.
They don’t know at all,
How the Startup is built ?
What are the actual Pain Points of the Customer, Common People,
What are the actual Pain Points in building Meaningful successful Impactful Startup Founder& Meaningful Impactful Innovation DeepTech HealthTech Startup Founder,
VC, Govt Grants,Government Funding, Funds of Funds,Bank Funding to only their Own Lobby People Startup Funding is given only to their Lobby Founders for mutual understanding &Vested interests.
India Startup Funding is the World’s Biggest Organized Crime
That’s why Startup India is a false hope for Startup Founders & it gives more failure than any benefit to the Nation. Govt cheats us.
Ambassador Mahendra Singh cheers
Much of what I’ve experienced, contributing to what I’m suggesting in this article, is drawn from the stark differences between Silicon Valley and India… or Austin and Ukraine. You can’t just have software engineers in place and call it a tech ecosystem.
An insightful post Kirk. IMHO it’s simply not reasonable to expect to just “rock up” to a shrink wrapped ecosystem and expect to gain a full Rolodex of contacts ready to help. Even those lucky enough to join YC still have to do the hard work of leather hitting the pavement and developing value exchange to build those all important relationships. This article from Mark Somerfield really resonates: https://blog.startupstash.com/the-lean-startup-is-a-con-c626398e077b
Pete Neal precisely. Cities throughout the world are just trying to be the next Silicon Valley, as though you just put pieces in place and there you go.
And yes, Lean Startup has been as damaging as it *can be* helpful. I wouldn’t say the premise itself is a con, it’s that people are selling entrepreneurs on the methodology as though it’s the path to success. Missing entirely from it all, is that it’s based on a methodology flush with resources, a culture, a business model, and an existing solution – everything a startup is not. Can the principals be helpful? Yes, absolutely. But when a founder starts a conversation by saying, “we’re a lean startup,” I know immediately that they’re likely to be doing something else in a year.
Search, terms to find local ones of these?
Start the local Facebook group and grow it to 10,000 people by incessantly promoting the good that’s going on. One already exists? Start contributing content!
Launch a podcast and stick with it (most podcasters quit after 8 shows)
Write thought leadership and uncover research about the ecosystem
Run a weekly meetup. Weekly. And stick with it. IF the city already has a weekly meetup, don’t do your own, help the one that exists!
Run an incubator, develop one or bring one to town… IF your incubator is the same as the one that already exists though, FFS are you not paying attention?? Help that one get it right, or start one that serves a different market.
I’d search on Facebook and LinkedIn for “City Startups” or “City Entrepreneurs”
I find that entrepreneur groups carer to small and local business owners too, which you don’t want, but all the more that if that’s the case, you do what I’m advocating for here and start the “Startups” alternative and keep it curated
Podcasts, search Spotify and YouTube for the same. Frankly, if the podcaster that exists isn’t there, they won’t last long so you might as well be there in any event.
Writing thought leadership, that’s what you Google. Same keywords. But then add something like “blog” or “-news” (to exclude the news sources.
Meetup… search Meetup. Or Facebook. And LinkedIn Events. Again, a *frankly* point, that many people seem to want to us Luma or Eventbrite, or some other new event thing … if they are, their event exposure is impotent so they probably don’t matter. If you do find one, they need to get it on Facebook and LinkedIn, maybe Meetup too.
Incubators, well, if you don’t already know what they are in town, there’s your answer: they suck at what they’re doing, so do something that will actually help.