What Makes Start-Up Accelerators Work? The Ecosystem, Stupid.

I was sitting on the patio enjoying a few caffeinated beverages with my buddy, Drew Fleck, an organizational systems design & development consultant. Drew is always raving about the importance of start-up ecosystems and railing against all the Y Combinator clones popping up in places that have no chance of replicating the success of Y Combinator. After a few sips of his iced, venti, four splenda, Americano, his third one of the day (yikes!), Drew went off on the following rant (and I took notes): 

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What Is an Entrepreneurial Ecosystem? 

It’s the natural support network for entrepreneurs, or the environment in which entrepreneurship tends to thrive. Click here for WIKIPEDIA’s definition. 

How Do You Build Entrepreneurial Ecosystems?

One of the best examples of ecosystem building is the Babson Entrepreneurship Ecosystem Project (BEEP), directed by Daniel Isenberg.

 

BEEP Ecosystem Holistic Approach

 

So much pressure is put on the entrepreneur, but the pressure should also be on the support system.  For example, Y Combinator succeeds because they can just focus on their piece of the puzzle since the appropriate ecosystem is already in place for them; this is not necessarily the case for Y Combinator clones, especially for accelerators outside of Silicon Valley.

 

Stop emulating Silicon Valley! Even Silicon Valley could not create itself today if it were starting from scratch.– Daniel Isenberg

 

You Can’t Just Focus On Entrepreneurship Training

You can’t just offer training courses if the support systems are not in place.  A great example of this is the ecosystem Israel built over the last several decades, as highlighted in the book, Start-up Nation. Instead of simply training entrepreneurs, Israel takes a holistic approach to entrepreneurship. The following quote sums up the Israeli Start-Up ethos: 

People prefer remembering to imagining. Memory deals with familiar things; imagination deals with the unkonwn. — Shimon Peres, Israeli President

 

Or, to put it in Drew’s words, “people prefer maintenance mode vs. creation mode because it’s easier.” Most of our economic infrastructure is built around the industrial age, so everyone is in maintenance mode, instead of creation mode. So, just training people in “entrepreneurship” isn’t going to change the culture and infrastructure around them. 

Government Doesn’t Make Ecosystems, Entrepreneurs Do

Drew makes the point government plays a role as one of many stakeholders, but cannot drive entrepreneurship. It takes a whole community to create conditions under which entrepreneurs and the ecosystems can flourish. Government plays a role, but it is not the key driver.  Steve Blank sums it up this way in his blog post, Why Governments Don’t Get Startups:  

I’ve spent the last week reviewing several countries’ ambitious attempts to kick-start entrepreneurship.  After poring through stacks of reports, white papers and position papers, I’ve come to a couple of conclusions…They sure killed a ton of trees…Unless the people who actually make policy understand the difference between the types of startups and the ecosystem necessary to support their growth, the chance that any government policies will have a substantive effect on innovation, jobs or the gross domestic product is low. 

 

Drew’s last point is the entrepreneurial ecosystem is an emergent process; it’s not going to happen linearly or by decree. 

 

Drew Fleck

 

You can catch up with Drew via his consulting firm, Active Praxis, which helps businesses achieve escape velocity.

 

 

There you have it. I bet you wish we hadn’t drunk so much caffeine and it’s a good thing Drew wasn’t fully caffeinated.

What are your thoughts about the entrepreneurial ecosystem in your community? Let me know in the comments section, below. 

 

P.S., here are some additional resources on entrepreneurial ecosystems from around the globe: 

Brad Feld is writing a new book titled, Startup Communities: Creating A Great Entrepreneurial Ecosystem In Your City

Other cities working to create viable start-up ecosystems are Memphis, Omaha, and Chattanooga, to name a few.  Even foreign countries like India are getting in on the ecosystem action.

Ciao for now!

 

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