entrepreneurial ecosystem

Do Entrepreneurs Need Luck?

Startup America logo

This quote from Scott Case, in an article on the new Startup America Partnership, speaks directly to why we started the Business Calendar Network:  to remove the inefficiencies in the entrepreneurial ecosystem.

The problem, says [Startup America] CEO Scott Case, a co-founder of Priceline and an experienced entrepreneur, is that Americans starting businesses tend to figure things out haphazardly. "One thing I was surprised at when I began this job was the startling lack of organized resources for entrepreneurs," he says. "The average startup was finding out about them in a random way. You need luck to succeed in business, but you shouldn't need a lot of luck to get access to tools that allow for better use of Google as an advertising platform or find a good accountant who has experience with startups."

First-time entrepreneurs often know nothing about starting and growing a business.  Every entrepreneur runs into the same problems and makes the same mistakes.  The problems have all been solved a thousand times before, so how can we connect the entrepreneurs with problem with the people, resources, and knowledge they need (which already exist) to overcome the problem.

Rampup

The idea behind the Business Calendar Network is that:

  1. there is an incredible amount of knowledge being shared at the thousands of startup, tech, biotech, and professional networking events
  2. face-to-face networking is the best way for entrepreneurs and professionals to develop the relations they need to succeed
  3. events are a great place to meet the people who matter, but...
  4. there is no easy and integrated way to find the right events. 

That's why we gather the events we find into one central location, provide a common format, give people a framework and the tools they need to find the events that matter to them, and make it easy for organizations to become the connecting point for their region or their industry.

It's not an easy task to build a good calendar, as they quickly get out of date, but we think events are an important part of the entrepreneurial ecosystem. 

 

Lessons from Chile's "Chilecon Valley"

Startups in Patagonia

Given that it was Three Kings Day earlier this week, it was nice to read a post by Steve Gary Blank, author of The Four Steps to the Epiphany.  Blank recently returned from an extended trip to Chile, and he wrote about his mostly favorable impressions of Chile’s effort to become what Blank termed the “Chilecon Valley.”

[Chile has] been thinking hard and smart about the lessons to be learned not only from Silicon Valley, but with only 16 million people, they are also looking for lessons from other small innovation clusters such as Israel, Singapore and Finland. These countries are great models of countries too small to sustain startups of scale on just domestic consumption yet have managed to create innovation with a global reach.

That said, Blank spent most of his time discussing the challenges that Chile must address to achieve its goals.  It struck me that many of these challenges are faced by other countries, states, cities, and regions striving to energize their entrepreneurial ecosystem and become the next Silicon Valley:

Lack of venture capitalists – “Given that great VC’s are much, much more than just a bag of money, this means that startups lack experienced board members with practical experience.”

Weak corporate connections – Having watch the rescue of the trapped Chilean miners, we all know that mining is a huge part of Chile’s economy.  Yet Blank reports that the (largely state-run) copper companies import nearly 100% of the technology they use in their mining operations.  Blank sees this as a missed opportunity to leverage the country’s strength in helping build the future.

Confusion over Small Business versus Scalable Startup versus Corporate Entrepreneurship – as Blank points out, a business founded to remain as a small family-owned business has different needs than one founded to scale quickly to global firm.  Blank relates that Chile is beginning to understand that different types of businesses need different types of support, and that different regions of Chile will want to emphasize one type of business over another.

Inability to attract talent in specific domains – “Saying that you support entrepreneurship and innovation is a start, but the sentence needs to be finished. Entrepreneurship and innovation in what field?  Where will Chile establish technical and innovative leadership?” Blank feels that Chile needs to focus definitively on a few specific domains in order to become a global magnet for talent.

A culture that does not accept failure – Much has been said about California’s ability to see failure as simply an opportunity to learn on the way to the next success.  Chile, according to what Blank saw, lacks that acceptance of failure.  The bankruptcy process, for example, is draconian.  More than anything else, Blank sees this inability to accept failure as THE major challenge for Chile's effort to become a powerhouse of innovation and entrepreneurship.


So, what does this say about your own regional entrepreneurial ecosystem?

  • Are you connecting entrepreneurs with the VCs and other mentors they need to overcome the challenges they face?  (The Business Calendar Network can certainly help with that.)
  • Are you leveraging the strength of your larger industries and companies, connecting their buying power with local sources of innovation?  (The Calendar Network can help bring them together.)
  • Are your entrepreneurial support programs geared for building small businesses, scalable startups, or corporate entrepreneurs?  (The Calendar Network can help you understand the gaps your region might have in its support programs.)
  • Is your area a magnet for talent in a specific domain?  If not, can it be?  (The Calendar Network can accelerate your efforts to achieve “critical mass” in a particular cluster or industry.)
  • Is your culture accepting of failure?  (Well, this is one area the Business Calendar Network might not be able to help you with.)

 

States Where Startups Thrive

As much as we love California, it often breaks our heart to hear people compare themselves and their local startup scene to that of Silicon Valley.  While California is still a giant in the startup world, we now have the numbers and charts to prove that California is just one place where entrepreneurs are alive and thriving.

Thanks to our friends at Technically Philly, who pointed us to these maps of startup fundraising, put together by FormDs.  They show fundraising events for the last year (in the form of Form Ds), broken out by state.  Form Ds are filed by startups and growing companies when they raise money. Since nearly all startups file Form Ds, the idea is that you can use Form Ds to track startups as they are created and grow.

So, this first chart shows that California startups do indeed get the lion's share of the money.  California startups raised $11.5 billion in the past year, more than four times more than the $2.8 billion raised by Massachusetts (its closest "competitor").  Startups in Texas and New York are getting more money than average, and all the other states are plugging along at under $2 billion in funds raised by their entrepreneurs.

Dollars in New Fundraisings, by State

But, California is a big state and Massachusetts a small one.  What happens if you adjust the amounts raised by state population?  This next chart shows that on a per capita basis, Massachusetts entrepreneurs outraised their counterparts in California,  $418 per person to $312.  Note also that we start to see some differentiation among the other states, with Colorado, Utah, Washington, Delaware, and Connecticut coming in between $120 to $240.

New Fundraising Dollars per Person, by State

FormDs has some other charts showing the total number of fundraising events, and the population-adjusted state rankings are also instructive.  Massachusetts and Colorado lead the pack here, with California running third. Other states with a healthy number of funding events are Nevada, Washington, Utah, Connecticut, Vermont, New Hampshire, Pennsylvania, Delaware, Maryland, Kentucky, Florida, Texas, Arizona, Minnesota, North Dakota, Montana, and Oregon.

New Fundraisings per Million People, by State

Mapping the Entrepreneurial Ecosystem

Dave Lerner, Director of the Venture Lab at Columbia University recently posted a crowd-sourced map of the world’s entrepreneurial ecosystem on his blog.

This is a fabulous idea, though a quick look the map of the entrepreneurial ecosystem shows that it covers only investors – venture, angels, corporate investors, and accelerators.  That is only one part of the entire entrepreneurial ecosystem.  To us, the entrepreneurial ecosystem includes:

  • Investors, angels, and VCs
  • Entrepreneurs and their management teams
  • State and local EDAs
  • Financial institutions
  • Media and publishing
  • Landlords and real estate
  • Vendors
  • Accountants
  • Attorneys
  • Mentors and advisors
  • Business associations
  • Foundations
  • Educators
  • University technology transfer offices

Lerner himself writes:

Future releases [of the map] will go beyond venture, angel, corporate investors and accelerators. We will be trying to comprehensively cover as many facets of the entrepreneurial ecosystem as possible in an easy to use manner - all in one place.

As a crowdsourced resource, anyone can add an investor to the map.  What other facets of the entrepreneurial ecosystem should be added to the map, or to what I’ve listed above?  After investors, investors, and VCs are listed, what would be the next most important part of the ecosystem to map out?

About Connecting Entrepreneurs

This blog is about the importance of connections.

I’ve written before about how breakthroughs are a social act.  It’s not enough to have a good idea.  It’s only when you share an idea that it begins to have the power to move people, to change people, to change the world.

Our idea for Basecamp Business is simple:  starting and growing a business is too complicated.  The “entrepreneurial ecosystem” meant to support entrepreneurs is too inefficient.

We see entrepreneurs struggling alone, wondering if anyone else has ever had to face the same problems and challenges in getting their businesses started.

We see VCs and angel investors, wondering how they can help their current portfolio of companies break through to the next level, or how they can find the next great early stage investment.

We see EDAs, wondering how they can make do with less, while still making their region an attractive place to start and grow a business.

The answer is, “Yes, someone else has already faced and overcome these challenges.”  By creating a more efficient and collaborative startup community, we have the opportunity to build on each other’s knowledge.  Breakthroughs are a social act.

Photo uploaded by legend2k

Some of the topics we will be touching upon in this blog include:

  • Exploring ways to make the entrepreneurial ecosystem more efficient.
  • Energizing your startup scene.
  • Regionalism and collaboration
  • Industry Clusters
  • Technology Transfer and Commercialization
  • Entrepreneurism and Community-building


We will also talk a bit about the Business Calendar Network:  how it can help create a more connected entrepreneurial community, new features we are rolling out, and how organizations are using it.

We may also talk a little about events.  We have the opportunity to see events from all across the country, and maybe something that worked well in one part of the country might do well in another.

We welcome your comments and questions.

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