Startup Communities: Building an Entrepreneurial Ecosystem in Your City

by Brad Feld

In a few cases, like MIT and Stanford, there is a tremendous culture of entrepreneurship among professors and students, which often generates lots of...

CREATING ARTIFICIAL GEOGRAPHIC BOUNDARIES Entrepreneurship doesn’t follow geographic boundaries. It’s one of the key reasons entrepreneurship is so powerful in the United States—city and state boundaries are defined for political convenience and generally don’t impact the flow of people or companies across local geographies.

One of Boulder’s weaknesses, which I’ll discuss later, is lack of office space. Once a company reaches about 100 people, it becomes very hard for it to stay in downtown Boulder. Many of these companies move to the outskirts of Boulder, but once they hit several hundred people, they once again run out of space and often move to one of the neighboring cities like Broomfield. Although the startup communities are connected, these startup neighborhoods proliferate.

PLAYING A ZERO-SUM GAME Once members of the startup community realize that geographic borders are artificial, they often fall into the trap of playing a zero-sum game, where they win at the expense of the neighboring startup community. “Our community is better than yours” starts popping up. Government initiatives to recruit startups from other states appear. Major branding initiatives around demonstrating that “we are the best startup community” emerge. Resistance appears when there is an opportunity to collaborate across geographies.

HAVING A CULTURE OF RISK AVERSION A local culture of risk aversion is another classical inhibitor of startup communities. As I travel around the United States, I often hear from people that they are afraid of investing time in their startup community because they are afraid there won’t be a payoff. This generally comes in two forms: (1) a concern about investing your time in something that doesn’t have impact, and (2) fear of rejection by other leaders in the startup community.

In the first case, I encourage people to take more chances but give their effort time boundaries. Great entrepreneurs try lots of things that don’t end up working. If you have an idea or initiative that is interesting to you, just get started. If, after a few months, it isn’t going anywhere, you’ve lost interest in it, or you’re having trouble getting others to engage, take that as a signal that the initiative isn’t working in its current form. You then have two choices: change it or kill it. In either case, you are moving on to the next iteration of the idea. Rather than being concerned about wasting your time, make sure you learn something from what didn’t work. In the case of fear of rejection by other leaders in the startup community, let it go. The more people in the startup community who step up and try things, the more the startup community will be open to people trying things. If you have a patriarch problem in your community, just ignore the existing hierarchy. If your initiative doesn’t work, try another one. Build a reputation for trying stuff, collecting data, pivoting, and improving. Over time, that’s much more attractive and impactful than a reputation of being afraid to give it a shot. And it’s much better for the long-term health of the startup community.

AVOIDING PEOPLE BECAUSE OF PAST FAILURES I was recently in Iceland for the inaugural Startup Iceland event. Although I had no specific reason to go, my wife, Amy, and I had never been to Iceland and we figured it would be fun to go hang out, see Reykjavik, and meet a bunch of entrepreneurs. We had an awesome time, saw a fascinating country, and met a community of people energized around entrepreneurship, partially as a result of the spectacular economic collapse that Iceland recently had, which caused many people to hit reset and start over.

ACTIVITIES AND EVENTS Up to this point I’ve been giving you a framework and talking in abstractions about how to create a great startup community. In this chapter, we shift to some specific examples of things various leaders in Boulder took on, got going, and turned into fundamental components of our startup community. The impact of each one varies, and individually you might not view any of them as a particularly huge endeavor, but collectively they provide a powerful base that our startup community is built on.

THE POWER OF THE COMMUNITY

GIVE BEFORE YOU GET One of my deeply held beliefs to the secret of success in life is to give before you get. In this approach, I am always willing to try to be helpful to anyone, without having a clear expectation of what is in it for me. If, over time, the relationship is one way (e.g., I’m giving, but getting nothing) I’ll often back off on my level of give because this belief doesn’t underlie a fundamentally altruistic approach. However, by investing time and energy up front without a specifically defined outcome, I have found that, over time, the rewards that come back to me exceed my wildest expectations.

A key attribute of a great mentor is someone who is willing to contribute time and energy to a mentee without a clear expectation of what is coming back.

EVERYONE IS A MENTOR The best moment in a mentor-mentee relationship is when the mentor learns as much, or more, from the mentee. If you ask most mentors why they do it, this is one of the core reasons. If you take a long view on the mentor relationship, it becomes clear that both the mentor and the mentee are actually mentors. If you extend this to the startup community, everyone becomes a mentor.

The culture of widely sharing knowledge, experience, and expertise is incredibly satisfying and self-reinforcing.

LACK OF DIVERSITY Diversity in a startup community comes in two forms: ethnicity and gender. Although the population of Boulder is roughly split on gender, there’s no denying the fact that the city is primarily Caucasian. Within the startup community, although it’s getting better, there still is a meaningful imbalance among entrepreneurs between men and women. Let’s start with gender, because, in many ways, it’s easier since the population is already roughly split between men and women. However, when you wander around the Boulder startup community, you see more men than women. This is especially true when you are in a room of

No community is perfect on any of the measures. Where does your community stack up? Leadership: Strong group of entrepreneurs who are visible, accessible and committed to the region being a great place to start and grow a company. Intermediaries: Many well-respected mentors and advisors giving back across all stages, sectors, demographics, and geographies as well as a solid presence of effective, visible, well-integrated accelerators and incubators. Network Density: Deep, well-connected community of startups and entrepreneurs along with engaged and visible investors, advisors, mentors, and supporters. Optimally, these people and organizations cut

My favorite thing about startups is that they don’t require anyone’s permission. Great entrepreneurs just start doing things. These are the same entrepreneurs who can be the leaders of their startup community.

Although it’s a long, challenging journey to create and maintain a startup community, no permission is needed.