Ecosystem-building: Getting the ingredients to work together
Refocusing from heroes to ecosystems.
A helpful blog post from Paul O'Brien, an angel investor based in Austin, Texas Paul O'Brien, started me thinking about ecosystems and how they widen opportunities.
The link to Paul’s blog is below, but first a few thoughts.
In the debates around startups and entrepreneurship, we've tended to focus on the role of heroes - archetypically male, tech, white, privileged, but always the libertarian maverick "risk-taker".
VC Eric Bahn satirised this Silicon Valley profile in an epic Twitter thread (Link) in which he shared his own privilege (affluence), but also a moving story about how his Korean parents had needed to "Europeanise" their name to fit it soon after migrating to the US. Eric's key point is that risk is always relative to where you are and that for too many, entrepreneurship is too big a risk relative to their savings, chance of success, size of networks, and the loss of security. Migrants, of course, play a key role in fuelling entrepreneurial ecosystems the world over.
The need to open up opportunities for all is why thinking about ecosystems is so crucial for the long-term vitality of entrepreneurship. Entrepreneurship can't succeed by a few heroes engineering their way to Mars. While, to some extent, it's inevitable that the usual suspects always get a head start, a healthy ecosystem holds the door open for others, reduces the risks of starting up and increases the chances of success for all market participants.Â
By tilting the playing field and setting the ground rules, ecosystem builders can create value at scale and, in relative terms, be good allies to those from marginalised or less privileged backgrounds. :Â
Facilitate networks and connectedness
Early identification of talent
Sharing of folk wisdom
Disseminating education
Amplifying success (not just financial!)
Fostering mentoring and experience-sharing
As you might expect, given the scale and maturity of the startup scene in the US, ecosystem-building has been recognised as a professional role, and a networking body has emerged to support it. EHSIP (link) has emerged from a collaboration between the Kauffman Institute, universities, city development agencies, and technology accelerators; and has been catalysed most prominently by Norris Krueger, a globally recognised University educator. I am not aware of anything similar in Europe or Asia. Anyone?Â
EHSHIP has built a code of ethics, a competency model and a conference platform to help develop professionals and administrators working in entrepreneurial ecosystems. This work has now gone global across the OECD and EU.Â
Building ecosystems is a hard thing to get right. Gravity plays a key role, such as in London, where the city's sheer size attracts capital, talent and ideas, often at the expense of other parts of the country. Getting the ingredients right requires skill and a knack for collaboration. Too much finance and you end up like Frankfurt, dry as a bone, with no juice. Too little money and you end up like Liverpool, with lots of talent, innovation, music and free-flowing creative juice, but no money to scale sustainable ventures. Sorry Frankfurt, by all means come back at me on this!
Ecosystem building requires thinking at a macro scale. There's significant evidence that simply focusing on startups alone can decrease the availability of talent as it migrates to the city, but still increases inequality for those who stay behind. So there's a broader set of questions about startups' role in an economy and how the gains from a few successes re-energise the struggling areas. Here's a useful link to Birkbeck CIMR research on this: link
In this context, Paul's blog post makes a good contribution and will be particularly useful to readers outside the US, where we are less used to thinking in these terms. Blog post: Startup Development Organisations
Dr Andrew Atter