If startup ecosystems were a fashion statement, most cities would look like clip on necktie that everyone admires for the good intention of dressing it up. In reality, we’ve overserved accelerators that don’t accelerate, misunderstood venture studios as glorified R&D departments, push university IP commercialization on a market that doesn’t want to license, and host investors who don’t write checks at demo days for 6-week-old startups.
Let’s untangle the mess. Let’s talk bow ties.
Article Highlights
The Left Side of the Bow: Developing Ideas
Picture the bow tie. On the left, we have Labs and R&D in the bottom corner, Corporate Ventures in the top corner, and Venture Studios in the middle.
Labs & R&D are where discovery happens, but not entrepreneurship. Research labs exist to prove what’s possible, not to build a market. They’re funded by grants, corporations, or universities, and their incentives are academic or internal: publish papers, file patents, improve internal capabilities. Expecting labs to birth startups is like expecting NASA engineers to start SpaceX while on the clock. It’s not that they couldn’t, it’s that they’re don’t. But what they do is invent, inspire, and solve problems.
Corporate Venture Arms, on the other hand, are the innovation departments with expense accounts. They scout technology and startups to secure early access or future acquisition opportunities. When they invest, they usually bring distribution, credibility, and immediate traction, because they themselves are the first customer. That said, unless you’re obligating broader support of your ecosystem by these corporate entities, they’re not “ecosystem building,” it’s strategic procurement with equity upside. And that’s fine, so long as no one pretends otherwise and allows [Corporate] for Startups to take advantage of the entrepreneurs by merely showing up and trying to sell their services.
Then there’s the Venture Studio, sitting in the middle of the left side because a Venture Studio is doing both the research and the development while having the resources and expertise available as a corporate entity could be considered. Unlike the far left, the Venture Studio is more entrepreneurial, with the intent of developing and spinning out new ventures. A good studio builds companies from scratch, combining capital, talent, and operations under one roof. They’re the grown-up children of both R&D and entrepreneurship: owner, operator, and investor all in one. The danger? Studios that act too much like labs (chasing experiments no one values) or operating too much like corporations (building only what suits their internal strategy). When they forget that they’re supposed to serve markets, not themselves, they become sterile innovation factories.
I’m painting the left a little critically so let me back off that a bit before clarifying why I’m doing so. These are critical pieces of your ecosystem! Invaluable partners and players. Where we fail the left is that let corporate ventures work in isolation without demanding more active participation in everything, we either ignore labs (as startup engines) or we’re satisfied that commercializing their IP is the only option. As for Venture Studios, they’re under served by public funding, as cities leaned in on the popularity of the word “Accelerator” to the neglect of the model that developing ideas into opportunities with more purpose.
The Right Side of the Bow: Developing Startups
Now move to the right side of the bow. Here we find Incubators, just right of center, Accelerators in the upper right, and Angel Investors in the lower right. This is where we stop theorizing, move beyond developing, and start launching companies and creating jobs.
Incubators are the classrooms and labs for entrepreneurs. They’re about human development, not product development. A good incubator helps founders validate ideas, refine business models, and survive their first few rounds of rejection. Their business model often relies on ecosystem sponsors (hence my Corporate Venture characterization), small equity stakes, or coalition building with government, university, or VC, to underwrite the costs of an incubator. They’re local, educational, and community driven. When done well, incubators are the glue that binds startups to the broader ecosystem; training future accelerator graduates and connecting them to real mentors.
Accelerators are where momentum kicks in and I want you to visualize them in the upper right of our bow because that’s the expectation you should have of them – taking the entrepreneurs who have run through the gauntlet in the middle and accelerating them: up and to the right. Their purpose is not to “help startups” but to amplify those already working. They should take developed startups through partnerships, exposure, and investment. The successful accelerator looks less like a classroom and more like a Formula 1 pit crew: short, intense, and brutally effective. If an accelerator isn’t driving growth, customer acquisition, and funding, it’s not an accelerator, it’s a co-working space with a logo problem.
Finally, Angel Investors, the lifeblood of the right side. Angels fund the chaos before institutions can stomach it. They provide experience to the earliest of ventures because they themselves should have been there and done that. Their capital bridges the gap between ideas and seed rounds so I have it lower on purpose: they’re foundational. Unfortunately, too many “angels” today are just rich professionals playing Shark Tank. They invest like bankers, not founders, demanding forecasts and collateral instead of risk and resilience. When angels misunderstand their role, startups start acting like small businesses, optimizing for revenue instead of learning. When investors won’t behave as Angels should, you need to be pushing them to be LPs in venture capital funds when a team is more capable of good decisions. Without doing this, innovation dies, founders fail, and startups are little more than wasted efforts, because the investment class is misleading.
The Knot That Matters: Entrepreneurs
First let’s acknowledge that a proper bow tie isn’t the black clip-on you got for prom. A bow tie is messy, unique, and not easy to tie until you’ve practiced a few times in the mirror.
The far left and right sides rarely play well together directly but through that knot in the middle, and effective support of the entrepreneurs, both sides thrive. Labs and corporates want IP and control. Angels and accelerators want returns and speed. Somewhere between them, Venture Studios and Incubators could hold it all together; with infrastructure in place to enable the entrepreneurs.
Imagine this alignment: Venture Studios as the private, sector-focused partners; Incubators as the public, open-access programs. Studios develop what they know is valuable, leveraging deep expertise. Incubators amplify that work, teaching entrepreneurs in the same domain and expanding the network around those emerging companies. We find entrepreneurial people in both Venture Studios and Incubators and it’s those people who are most meaningful to both sides: Corporate Ventures and R&D as well as Accelerators and Angels – they put in the work that transitions ideas and opportunities into ventures.
What might that Civic infrastructure be?
What I find in most cities is that they lack even an active Facebook Group for founders. Now, I’m not saying start a Facebook Group, but for crying out loud, when your city proclaims to serve entrepreneurs, but that community can’t even connect, find help, or get advice, with readily available infrastructure, how long do you want to keep fooling everyone? I hear of startup events AFTER they’ve taken place, with ecosystems even lacking the fundamentals of infrastructure that announces and promotes what’s going on. My point being, a Facebook Group is freely available, and with most people using Facebook in some way, you aren’t even using that to help everyone?? Again, not that you actually should, Facebook Groups are rather impotent these days.
I’m talking to you cities, that’s why I called this civic infrastructure – when you leave the community to put this in place on their own, they’ll do it with their own self-interest, spin up dozens of different versions, and merely fracture everyone into silo’s that harm more than help.
- Do you have a CRM of all the mentors in your community? Come on, Hubspot is free.
- Are you providing everyone running incubators or startup programs to use a tested and validated methodology? Founder Institute is in 200-some cities and can be used to put programs on it.
- A centralized platforms for startup–investor relationships, deal flow management, and transparency? Turn on Gust or Visible Connect
- Why isn’t there data infrastructure for mapping, tracking, and benchmarking the local startup ecosystem – give policymakers and investors visibility into what’s real with StartupBlink or Dealroom
- Do you even have a Slack or Discord with everyone on it? Odds are, you don’t because you left that to some local community builder to try, when the reality is that you could allocate some public funding to maintain it better and keep it accessible to everyone.
- Where is your local Eventbrite or Meetup Pro? Not the city or local accelerator using Eventbrite, where is the City Funded Eventbrite that hosts everything related to startups? A shared public calendar infrastructure for all entrepreneurship-related events.
- We should even be bridging government, academia, and entrepreneurs for funding and workforce access so set up OpenGrants
Now, imagine that stack of infrastructure being in place for everyone right under our knot. All entrepreneurs, mentors, and advisors, with ideas and IP funneled in from the left, while developed opportunities emerge to the right to be picked up by Angels and Accelerators. An optimized ecosystem would have Venture Studios and Incubators working hand-in-hand, perhaps even working together (why wouldn’t a Venture Studio space host the same-sector incubator so that the domain expertise of the Venture Studio team is right there for the other founders developing startups??). A studio that runs an incubator doesn’t just gain deal flow, it gains a feedback loop. The incubator brings ideas, talent, and energy; the studio provides focus, capital, and operational know-how. This partnership turns startup development into an ecosystem engine, not a series of one-off events.
Why We Keep Failing to Tie It Right
The failure comes from confusing roles. Governments fund accelerators to create jobs but ignore that accelerators need startups ready to scale as well as startup experienced mentors and advisors who know how. Corporations build labs but don’t let the inventors own their ideas. Angels demand five-year forecasts from founders who still live on ramen. And everyone forgets that innovation ecosystems aren’t supply chains, they’re symbiotic systems – or necks that need a bow tie (though granted, my analogy falls a little short here).
If you’re an accelerator bragging about how many ideas you get from universities, you’re mistaking research for readiness. An Angel Investor showing up for the award show before returning to their law firm isn’t being pushed to be active as needed. That Company Startup program is a PR stunt and if you’re not demanding more from them, you’re letting them pretend to be innovative and supportive at the expense of the entrepreneurs. And if you’re an economic development office funding programs because a consultant told you it’ll “attract innovation,” congratulations: you’ve hired McKinsey to tell you how to breathe.
The bow tie metaphor doesn’t just look handsome, it’s diagnostic. The left side produces knowledge and potential; the right side commercializes and scales it. Studios and incubators tie them together. When any side dominates or misunderstands its role, the knot unravels like a prom date at the after-party: the ecosystem collapses when the party runs too long.
Great illustration!
Ha . Wonderful post.
Kenny, it’s the bow tie. Makes everything look better.
Paul O’Brien nice chart. I’d also say governmental support and NGO’s are key (thanks Washington State Department of Commerce, Seattle Office of Economic Development, Washington Maritime Blue, WTIA, CleanTech Alliance) as well. Thinking of great/active Slacks/Discords: 9Zero’s (Seattle/SF) and Work on Climate’s are both active. Know any other good ones on the West Coast?
Michael Waggoner exactly! Government support and NGOs should be underwriting the infrastructure in the middle, tying everything together.
To be frank, I’m not aware of anywhere doing everything I’ve outlined here. Hope to hear from others if anyone is getting it close.
And yet, with all these organizations working to generate successful startups, we still suffer from a 5% success rate. Dont’ get me wrong, I applaud EVERYONE who supports startups and small businesses. And, I wholeheartedly agree that Incubators should be focused on human development – because THAT is where the CAUSE of failure lays. Entrepreneurs, themselves, lack a propert mindset, which leads to a lack of self-education, which then leads to a lack of sufficient planning (and execution). In my experience, that’s where we need to work (and why we’re focusing on it). Love your articles.
Rupert Meghnot thank you. There isn’t much we can say with certainty when it comes to startups but I can say with certainty that what most cities are doing isn’t helping. We have decades of research now about the right types of people, the priorities that matter, and we have the infrastructure and tools available – it’s that people don’t or won’t (or don’t know how to) put it in practice.
Love this perspective! How do you see these left-side components best synergizing to actually accelerate? Your bow tie metaphor is brillant.
The left side (Labs, Corporate Ventures, and Studios) accelerates best when it stops trying to be startups and instead fuels the right side that is. Labs generate knowledge, corporate ventures validate markets, and studios commercialize what’s proven. Their “synergy” isn’t about speed inside the lab, it’s about passing the baton cleanly to incubators, angels, and accelerators who turn invention into growth. That handoff is where most ecosystems stumble.
Love this Paul. I’ve seen a few private studios that use accelerators as deal flow creation. The studio itself, makes offers to the best startups in the accelerator to join the studio program. This has the same feel and is positioned as a strong public-private partnership.
Matt when the infrastructure (platform) to do this readily available, I really fail to see why a Studio wouldn’t.
Accelerator makes some sense and yet, I went with Incubator here because of all my criticism of most Accelerators being little more than co-working spaces with events; Accelerators should align with later stage development – AFTER a Venture Studio or Incubator has done the early work. Would be easy for a Venture Studio to host idea stage entrepreneur development as deal flow, and brand and market development
Paul O’Brien the chart is iconic. Founder Institute has been a big help for us Stream Disc. We are going after the 8m indie artist and 2b paying listeners around the world. I commute from San Antonio to attend at the Austin Chapter Fall 2025 cohort. We met during the first few classes. Our primary focus is to ship code all day every day and stay focused on our customers voice through all the noise. We are currently building to launch while the beta signup list continues to grow. The company is 100% boot strapped by me as the founder and CEO. Definitely not an easy thing to do. As one of many US Army combat veterans, I remember the challenges we faced and overcame. I use those lessons to build our company. I’m sure everyone has faced a challenge at sometime in there life and remember what it took to beat those challenges. That’s entrepreneurship. The county, city and state will eventually develop more effective and prosperous programs over time. Primarily because of people like Paul O’Brien who relentlessly advocate. So whether we have to bootstrap the whole way, find an investor or seek help from the local community the fact still remains that we must get it done.
In my experience, the definition of entrepreneur isn’t someone who starts a business, it’s the person who is driven to make a difference, incessantly and unable to stop.
Terry it’s words like this that motivate me. Thank you. Simply knowing it matters. And I’m honored to know you, knowing that you’re going to deal with how artists are in a tough time financially
Great perspective on bits and bytes of civic progress!. I believe collaboration and growing the pie is the answer to everyone’s sustainability problems.
PPPs (public private partnerships) where entrepreneurs being the key is one way to structure and create an innovative / progressive ecosystem.
Like we do in DC with Office of the Deputy Mayor for Planning and Economic Development and Golden Triangle Business Improvement District
Guc Ozenci what you’re doing there is the better part of what got me to consider this
But who in the municipal government should take the lead? It’s a political limb they will be putting themselves on, so who would benefit enough to make the risk worth it?
Adam Lupu it seems, EDO (Economic Development Office). This is economic infrastructure, and yes politics can get in the way so the entity responsible for economic impact, manages the various offices that also need to be involved.
Paul O’Brien honestly the Bay and Boston both do it very well (I’m jealous of the massive ecosystem in the Bay, and the significant corporate engagement in Boston). I have been spending a lot of time in Seattle and think the underlying pieces are here, we just need to make them a little easier to find and a little more interconnected work. Am working on a resource map with 9Zero to help. Two things I like about are: 1. “small town feel” – easy to get to know real players and build relationship. 2. Red/Blue dynamics – significant funding from environmentalists are on the table, real tech and aerospace industry (expensive but effective) and low cost on East side of state (ag and packaging). I have found the Republicans in WA great to discuss practical sustainability here.
Great insights and awesome list of resources here, Paul. I can personally vouch for Founder Institute being one of the best Accelerators in the world. Have been a Startup Advisor working closely with this organization for 8 years now. Their curriculum, structure, and massive community of incredibly supportive and knowledgeable mentors, ecosystem partners, and investors are what makes it so special and successful. Guc Ozenci, who runs the Washington, DC Cohort can also confirm this.
Cold honest information and truth!
Truly, thank you for sharing. I’ll be reposting this to my page, bringing more awareness to your message.
v . Thank you! I got your connect too, need to clean up my network a bit and I’ll confirm us
This is a perfect illustration of the problem stalling innovation in the USA. It’s the entrepreneurs making connections and feeding the systems, while striving for change and visibility in a landscape built on attention gathering and backchanneling.
Ernest you might love my next then. Curious what you think: https://www.linkedin.com/pulse/when-markets-learn-faster-than-governments-paul-o-brien-d9kfc/
I love this stuff! This is a great resource for AcceleratorCON
John (JR) Reale
Absolutely true!
I’m a sucker for frameworks!
The hard truth is, there’s no real collaboration because everyone’s competing for their own foot in the door, with funders, founders, or visibility.
Each “ecosystem player” is trying to secure their slice of the pie instead of asking who’s actually baking it.
And since most of this work relies on unpaid volunteers, the result isn’t collaboration, it’s quiet burnout disguised as community spirit.
People have bills to pay. Goodwill doesn’t scale infrastructure.
We knowingly and intentionally mistake passion for policy. The people doing the real work are expected to build systems on empty pockets, while institutions sit on budgets “strategically exploring partnerships.”
And in countries, like South Africa, where governments are already struggling to manage their own systems or service their debts, it’s a tall ask to expect them to fund and sustain startup infrastructure. That’s why it keeps falling back on the private sector and well-meaning do-gooders, which might work for a season, but it’s not a long-term plan.
Until collaboration comes with a paycheck and a mandate, it’ll stay a buzzword.
Keshni Morar such a good observation
Paul O’Brien great catching up and great post. A number of groups are trying to “build” the perfect interface with their ecosystem….when bluntly there are 80-90% tools that can be pushed out tomorrow and allow the actual work to get done. Good stuff.
Heath Naquin yep, the tools exist. And nothing will work as all-in-one, no one wants to be committed to one solution for everything at the opportunity cost of using what’s best for each use case.
One problem is that the people who fund the infrastructure today are, most often, not trying to educate or support founders, they are trying to sell them something (e.g. capital, professional services, working space, software tools). If the infrastructure were free of these ulterior motives there would be more benefit and trust for all. This is a role supportive cities can play – even if they upset VCs, lawyers, CPAs, co-working spaces, big tech, etc..)
Steve Jennis precisely
And so a city claiming to serve entrepreneurs (selling that they are) and not doing this, should be evidence that they too have an ulterior motive, and really just want to appear to be helping.
By not doing this, investing in infrastructure as relevant as broadband, a government is effectively neglecting it, and allowing the service providers selling something to take advantage of the circumstances.
They should upset the VCs, lawyers, coworking spaces, etc. providing it now, because none of them are doing it well, or even sufficiently. A city can send the signal that they’re serious about entrepreneurship and will provide what others charge for.
Skin in the game
C’mon! What you are encouraging to do is communism, not a free market. And communism never works. History shows 🙂
Piotr Boulangé you’re going to have to help me out here. What part of this is communistic?
Paul O’Brien letting govemrnets regualte the market behaviors.
Piotr Reread the article, I’m actually pushing very hard for the opposite. This my latest, pushing harder: https://www.linkedin.com/pulse/when-markets-learn-faster-than-governments-paul-o-brien-d9kfc/
[…] building that. IP doesn’t commercialize itself; you need bridges to entrepreneurs such as my Bow Tie scenario or what NJII is […]
[…] building that. IP doesn’t commercialize itself; you need bridges to entrepreneurs such as my Bow Tie scenario or what NJII is […]