Start Up Communities[ an entrepreneurial ecosystem]

A book by Brad Feld

By Mercy Setiawan.Merah Putih Inc.2013

Start Up Community

Brad Feld is using Boulder startup community as an example.

New approach to build a community =

Boulder Thesis.

Principles of a Vibrant Startup Community

Economic Sociology Geography

Economic

Startup s in

common geographic area

Infrastructures

Specialized Legal

Accounting Services

Suppliers

Labor pools

Share fixed costs of these resources

Average cost per startup drops

Direct economic benefit to companies

located within a startup

community.

External Economies Factors

SociologyCommunity with a culture of information sharing across companies & industries (Example: Silicon

Valley)

Densely Networked Culture Successful Industrial Adaption

Horizontal exchange of information across and between companies

Share informatio

n

Adopt new trends

Leverage Innovation

s

Respond to new

condition

Geography

Creative Class

Components Characteristics

• Entrepreneurs• Engineers• Professors• Artists

• Want to live in nice places, • Enjoy culture with a tolerance for new ideas &

weirdness • Want to be around other creative-class individuals

A location with many Creative

Class

Creative class

individual

Creative class

individual

Creative class

individual

Creative class

individual

Creative class

individual

The Boulder Thesis1. ENTREPRENEURS must lead the startup

communities.

2. The leaders must have a LONG-TERM COMMITMENT.

3. The startup community must be INCLUSIVE of anyone who wants to participate in it.

4. The startup community must have continual ACTIVITIES / EVENTS that engage the entire entrepreneurial stack.

Startup Community

Participants in Startup Community

Leaders Feeders

Leader

The leaders of a startup community must be the entrepreneurs.

Characteristics: Long-term commitment Inclusive of anyone who wants to engage with the startup

community Actively involved Play non-zero sum game Mentorship driven Experiment & Fail fast

Feeders

• Government They existed to support rather than to lead

• Universities Great conveyer of entrepreneurship

• Investors VC & Angel Investors

• Mentors Those who help but hope no economic rewards

• Service Providers Lawyers, accountant, etc. who invest their time and

energy for no charge in early stage.• Large Companies

Classical Problem

• Patriarch Problem• Complaining about capital• Being too reliant on government• Making short-term commitments• Having bias against new-comers• Attempt by a feeder to control the community• Having a cultural risk aversion• Avoiding people because of their past failure

Patriarch Problem

Operated as Hierarchy It mattered :- who you were, - where you went to school, - where you had worked, and - who you knew

Operated as a Network The only thing that mattered is :

what you did.

Situation Solutions

Complaining about capital

There is always an imbalance between supply of capital and demand for

capital.

Focus on creating business itself.

Raise the capital they need.

Situation Solutions

Being too reliant on government

• Government = leader.• Government has less money

than people think it does.• No background as

entrepreneurs.• Moves at slower pace

Government operates a hierarchy.

In contrast, the best startup communities operate as

networks:

There is rarely a leader of a network, just nodes that are

interconnected.

Situation Solutions

Making short-term commitments

Building a startup community takes a long time.

It takes a generation of effort to get a startup community up and running in a sustainable

way.

Need to be committed and keep building their companies.

Additional effort to lead the startup community

Situation Solutions

Having bias against new-comers

Many cities ran as hierarchies.

Newcomers had to wait to earn their way into the

hierarchy.

Welcome newcomer.

Invite them to join every activities they want to be

involved in.

Situation Solutions

Feeder want to control the community

Feeders try to control:- VC’s- Government- University

Network should drives an entity, not hierarchy

Use warning sign when you see top-down control over all

activities.

Situation Solutions

Having a cultural risk aversion

A concern about investing time in something that doesn’t have

impact.

Take more chances and give their effort time boundaries. If it fails, change it or kill it

Situation Solutions

Fear of rejection by other leaders in the startup

community.

Just ignore the existing hierarchy. If your initiative

doesn’t work, try another one.

Avoiding people because of past failure

Failed entrepreneurs was being avoided because of his failure

Let go and embrace the failed entrepreneur

Situation Solutions

Shift the culture around failure in a positive way.

Holding Activities & Events

•Organization•Tech Meet-up•Open Coffee Club•Start Up Weekend•Ignite •Startup Week

Roles of University

University Smart Young People

The Power of Alumni

University could leverage the power of entrepreneurial alumni :

▫Bring alumni back to campus ▫Create a mentor relationship with the

alumni and a top student in his area▫Highlight the alumni publicly

Accelerators Vs. IncubatorsAccelerators Incubators

Rigorous Application Process Rigorous Application Process

Provides business resources Provides business resources

Access to investors Access to investors

Shorter period of time Longer period of time

Rapid Growth Nurturing Development

Hands-on mentorship External mentorship teams

Small – seed investment for equity Fee for service / space (sometime s equity)

‘Fail-fast’ mentality Long-term relationship

Improved chance of success Improved chance of success in long term

Community Culture

•Give before you get•Everyone is a mentor•Embrace weirdness•Be open to any ideas•Be honest•Go for a walk•The importance of after-party

To Remember

Great entrepreneurial companies such as Apple, Genentech, Microsoft and Intel, were started

during down economic cycles.

“It takes such a long time to create something powerful that, almost by definition, you will go through several economic cycles on the path to

glory.”

Thank You