The Startup Community Way

Evolving an Entrepreneurial Ecosystem

Brad Feld, Ian Hathaway

• Publisher: Wiley
• Year: 2020
• ISBN:
  9781119613626
• Edition: 1
• Topic: Business
• Subtopic: Entrepreneurship
• Index: Business

The Way Forward for Entrepreneurship Around the World

We are in the midst of a startup revolution. The growth and proliferation of innovation-driven startup activity is profound, unprecedented, and global in scope. Today, it is understood that communities of support and knowledge-sharing go along with other resources. The importance of collaboration and a long-term commitment has gained wider acceptance. These principles are adopted in many startup communities throughout the world.

And yet, much more work is needed. Startup activity is highly concentrated in large cities. Governments and other actors such as large corporations and universities are not collaborating with each other nor with entrepreneurs as well as they could. Too often, these actors try to control activity or impose their view from the top-down, rather than supporting an environment that is led from the bottom-up. We continue to see a disconnect between an entrepreneurial mindset and that of many actors who wish to engage with and support entrepreneurship. There are structural reasons for this, but we can overcome many of these obstacles with appropriate focus and sustained practice.

No one tells this story better than Brad Feld and Ian Hathaway. The Startup Community Way: Evolving an Entrepreneurial Ecosystem explores what makes startup communities thrive and how to improve collaboration in these rapidly evolving, complex environments.

The Startup Community Way is an explanatory guide for startup communities. Rooted in the theory of complex systems, this book establishes the systemic properties of entrepreneurial ecosystems and explains why their complex nature leads people to make predictable mistakes. As complex systems, value creation occurs in startup communities primarily through the interaction of the "parts" - the people, organizations, resources, and conditions involved - not the parts themselves. This continual process of bottom-up interactions unfolds naturally, producing value in novel and unexpected ways. Through these complex, emergent processes, the whole becomes greater and substantially different than what the parts alone could produce.

Because of this, participants must take a fundamentally different approach than is common in much of our civic and professional lives. Participants must take a whole-system view, rather than simply trying to optimize their individual part. They must prioritize experimentation and learning over planning and execution. Complex systems are uncertain and unpredictable. They cannot be controlled, only guided and influenced. Each startup community is unique. Replication is enticing but impossible. The race to become "The Next Silicon Valley" is futile - even Silicon Valley couldn't recreate itself.

This book:

• Offers practical advice for entrepreneurs, community builders, government officials, and other stakeholders who want to harness the power of entrepreneurship in their city
• Describes the core components of startup communities and entrepreneurial ecosystems, as well as an explanation of the differences between these two related, but distinct concepts
• Advances a new framework for effective startup community building based on the theory of complex systems and insights from systems thinking
• Includes contributions from leading entrepreneurial voices
• Is a must-have resource for entrepreneurs, venture capitalists, executives, business and community leaders, economic development authorities, policymakers, university officials, and anyone wishing to understand how startup communities work anywhere in the world

CHAPTER ONE
INTRODUCTION

The last decade has been a transformational one for entrepreneurship throughout the world. The confluence of ubiquitous high-speed connectivity with inexpensive, powerful, and remote computing has dramatically lowered the cost of starting a digitally enabled business, allowing entrepreneurs to start new ventures in more places. In some parts of the world, capital available for startups is plentiful. In many others, it is still lacking. Consider Boston versus Orlando, or London compared to Caracas. Talent and technology are ubiquitous, but tangible opportunities are not.

The growth and geographic proliferation of innovation-driven startup activity is profound, empirically verifiable, and global in scope.¹ Today, we understand that communities of support and knowledge-sharing go hand in hand with other inputs and resources. The importance of collaboration and a long-term view has gained broad acceptance by entrepreneurs and startup community builders. These principles are at the forefront of the leadership behind many startup communities around the world.

Startup Communities: Building an Entrepreneurial Ecosystem in Your City, published in 2012, is a significant reason for this shift in thinking. Using the example of Boulder, Colorado, Startup Communities provided practical guidance for entrepreneurs and other stakeholders to improve the startup community in their city. Unlike most other works on the subject, Startup Communities stressed the behavioral, cultural, and practical factors that are central to a collaborative system of local entrepreneurship.

Although we’ve made progress in recent years, much more work is needed. A great deal of startup activity is still highly concentrated in large, global, elite cities. Governments and other actors such as large corporations and universities are not collaborating with each other or with entrepreneurs as well as they could. Too often, these actors try to control activity or impose their view from the top down, rather than supporting an environment that is led from the bottom up, principally by entrepreneurs. We continue to see a disconnect between an entrepreneurial mindset and that of many individuals and organizations who wish to engage with and support local startups. There are structural reasons for this, but we can overcome these obstacles with appropriate focus and sustained practice.

Our aim with this book is to get all relevant parties better aligned—from founders to governments to service providers to community builders to corporations and beyond. We hope this book will be transformational while building on top of the foundation created by Startup Communities and the work done by people in startup communities everywhere.

THE NEXT GENERATION

The Startup Community Way builds off of the success of Startup Communities, going more in-depth in some areas while correcting foundational mistakes in others. This book isn’t an update or a second edition to Startup Communities. Instead, it is a sequel, picking up where Startup Communities leaves off. It benchmarks progress made, develops new areas of inquiry and exploration, makes adjustments, and takes the content in a new direction.

In Startup Communities, Boulder is the basis for a framework for building a startup community. Here, we broaden both the geography and the stage, shifting to a worldwide view around existing startup communities. We try to make the concepts more generalized, especially when addressing the question: Now that we have a startup community, what should we do next? We emphasize that no two startup communities are the same, have equivalent needs, or operate on a comparable time frame. For each example where something worked in one city, there’s at least one other city where it didn’t. That’s the nature of these systems.

When I wrote Startup Communities, there was little substantive content on the topic of startup communities. The phrase was new and has become the canonical one for naming the phenomenon. In the past eight years, a great deal of exploration and progress has occurred around startup communities. However, we have observed that, as with many things, the advice and tactics around startup communities, especially as they evolve, has become overly complicated and inaccessible to many who just want practical guidance to get started. In conversations with many people over the last few years, we’ve heard many variations of this: “My startup community is following the Startup Communities Boulder Thesis, but we don’t know what to do next.”

In this book, we try to address this hurdle while creating a new conceptual framework for startup communities, differentiating them from (and integrating them with) entrepreneurial ecosystems, and providing substantive examples along the way.

OUR APPROACH

We have taken both a pragmatic and researched approach to cultivate the material presented in this book. As co-authors, we’ve forced each other out of our natural comfort zones. By coming at the problem with different perspectives, we have been able to challenge each other to see the entire picture, rather than get anchored on our frames of reference. While we each had more context than the people in the parable of “The Blind Men and the Elephant,” by using different experiences, perspectives, and skills, we have been able to continuously challenge each other’s thinking as we developed the ideas in the book.²

We collectively bring decades of experience to the practice and study of startups, startup communities, and their impact on local societies and economies. I have been a technology entrepreneur and venture capitalist for more than three decades. I’ve co-founded two venture capital firms, including the Foundry Group, the firm where I have been a partner since 2007. I also co-founded Techstars, the worldwide network that helps entrepreneurs succeed. Through that work, my writing, and my involvement in numerous entrepreneurial nonprofit endeavors, I have been involved in the cultivation of startup communities around the world.

Ian has a wealth of research and writing experience in the areas of entrepreneurship, innovation, cities, and economic growth for leading think-tanks, universities, and policy institutions. He also has a background in management consulting around analytics, strategy, innovation, and public policy. He began his entrepreneurship journey as a researcher, writer, and educator, but over time that has also evolved into the role of practitioner—first as a startup employee, then as a founder, and today as an advisor, mentor, and investor.

Our collective experience and knowledge are just a starting point as this book stands on the shoulders of many who came before us. Over many years, and intensively during the last few, we have reviewed thousands of pages of analysis and writing that covers a wide range of topics relevant to startup communities.³ These sources span academic papers, business and policy research, practical and theoretical book content, case studies, and informal commentary on blogs and websites. For those who want to go deeper, these resources are carefully referenced throughout and detailed in the back of the book.

Together we have spoken with thousands of entrepreneurs and other startup community participants around the world. Their experiences and learnings informed our thinking immensely.

In this book, you will encounter four types of sidebars. The first is a short description of a principle of The Startup Community Way, which will appear at the beginning of a chapter. You’ll find the second type sprinkled throughout the text. They contain examples written by entrepreneurs and startup community builders that are relevant to the immediately preceding text. Third, you’ll encounter “Values and Virtues” sidebars, where we try to explain a specific set of behavioral characteristics that are crucial to the long-term health of a startup community. Finally, there are short essays we wrote that are relevant to that section but are distinct from the flow of the main text.

A DEEPER MOTIVATION

We both share a fundamental belief that every human being on the planet should be free to live wherever brings them the most joy. They should have opportunities to engage in meaningful work in those places. When such opportunities don’t exist, they should have access to resources that allow them to create meaningful work for themselves. We believe they should be able to do this in a relatively stable, peaceful, and just society where basic human rights, the rule of law, and individual freedoms exist for everyone.

We have a long way to go in achieving that goal. Currently, around 10 percent of the world’s population lives in extreme poverty, though that is a marked decline from 35 percent, which was the rate less than three decades ago.⁴ More than half ...

Table of contents

• COVER
• TABLE OF CONTENTS
• FOREWORD
• PREFACE
• CHAPTER ONE: INTRODUCTION
• PART I: INTRODUCTION TO STARTUP COMMUNITIES
• PART II: STARTUP COMMUNITIES AS COMPLEX SYSTEMS
• PARTIII: FROM THE BOULDER THESIS TO THE STARTUP COMMUNITY WAY
• PART IV: CONCLUSION
• ABOUT THE AUTHORS
• ACKNOWLEDGMENTS
• INDEX
• END USER LICENSE AGREEMENT