You’ve all heard it said: “It takes a village to raise a child”.
But what does it take to raise tech startups? This question has been all the rage since the dotcom bubble of the 1990s made it clear to everyone that something was happening in Silicon Valley. Indeed, it wasn’t happening, at least not to the same extent, in the rest of the world.
Beware the conflicts of interest.
Many people who rush to answer that question don’t really have the startups’ interests at heart. More often than not, they have a different agenda. It’s a corporate executive who needs some PR around innovation, or it’s a politician trying to buy the votes of young professionals and who’d like to cut the ribbon at a shiny incubator in a gentrified neighborhood nearby.
Founders, on the other hand, don’t ask themselves that question.
They’re too busy growing their business and making sure that the product they’re building is something people want. Therefore the conversation around what startups need is dominated by non-entrepreneurs, and the resulting environment ends up being unfit for startups. Ambitious founders don’t care about that partnership with a big corporation. And they don’t really need that shiny incubator.
You could argue that it doesn’t matter.
“Let corporate executives and politicians do their thing, the startups will grow anyway.” But that’s not true. As a founder, you can’t extract yourself from what surrounds you: the business practices, the regulations, the mindset, the culture. If you let others take charge, what you end up with is toxicity: what they’re building—without even asking you—becomes a problem that impairs your chances of success.
This is why startup communities are so critical.
The concept of a “startup community” was first introduced by investor Brad Feld, who then clarified it even further in a book co-written with my friend Ian Hathaway. There’s a distinction between a startup community (“the beating heart of entrepreneurship in a city”) and the related entrepreneurial ecosystem (“a generalized structure that wraps around and depends on a startup community to give it life”).
The sequence matters: the startup community has to come first.
As written by Brad and Ian,
Cultivation and support of leaders that emerge from the startup community are essential to consistently produce better entrepreneurs and startups. As entrepreneurs succeed, actors in the broader entrepreneurial ecosystem will engage more effectively with the startup community, and a virtuous cycle will develop that draws in more people, resources, and support. This is similar to the entrepreneurship concept of product/market fit, so we call it community/ecosystem fit.
The bottom line?
The environment in which you’re building your business matters. As a founder, you should be involved in shaping that environment. To that effect, you should be a part of the local startup community—one that is by entrepreneurs, for entrepreneurs. Only when that community is strong enough can all the other players (investors, law firms, investment banks, big corporations, government, universities, think tanks) join the dance and work with founders to build a vibrant entrepreneurial ecosystem.
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