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2015 Meeting of the Minds

U.S.SourceLink Convenes
Meeting of the Minds

(April 28, 2015)

“Environment matters. Japanese koi grow to 2 feet in a lagoon versus 2 inches in a goldfish bowl.”

—Nido Qubein, president, High Point University

“You can’t achieve outcomes unless you’re willing to change your view of the world.”—Chuck Wolfe

The call for entrepreneurship is clear: entrepreneurs strengthen local economies.

But the action required to spark and support those entrepreneurs is a little mysterious. How can cities and regions best attract, develop and retain entrepreneurs—and how can they create the network of resources necessary to fuel their ideas and scale their companies?

Unfortunately, many cities and regions answer that call with a haphazard string of unconnected and often fruitless initiatives aimed solely at starts rather than economic sustainability. They try, but their efforts rarely delivery the results they wanted or the resources—training, funding, talent, corporate engagement—their entrepreneurs really needed.

Last month, U.S.SourceLink invited 17 of the best and brightest minds in entrepreneurial ecosystems to Kansas City’s Ewing Marion Kauffman Foundation to start a dialogue about the best practices, tools, programs and actions that will help communities spark ideas, support entrepreneurs and fuel entrepreneurship.

The resulting conversation was dynamic and intense. Here’s just the tip of conversation.

on COMMUNITY READINESS

on ECOSYSTEM BUILDING.. 

on MEASUREMENT

on COMMUNITY READINESS

  • What does an entrepreneurial community look like?
  • How do you know if a community is ready to build an entrepreneurial ecosystem?

To build a vibrant entrepreneurial ecosystem and get results, communities have to be honest about where they are, where they want to go and who will champion their efforts. The first step to readying a community: assess it. What are the assets? What is the vision? And whom will you invite to the table?

ASSESS THE ECOSYSTEM.

What entrepreneurial assets does your ecosystem have? Most of our thought leaders agreed, before you can start to fortify an ecosystem you have to know your strengths and your gaps.

“‘Who are the entrepreneurs?’ That’s often the most difficult question communities have to answer about their own ecosystems. Often, they don’t have a good sense of that. They know their businesses, they know their key industries, but they’ve never really looked at the landscape of innovators, of creators, of the people who are starting companies.” – Deb Markley

SET A CLEAR (AND UNITED) VISION.

Once you know where you are, you can map a vision for where you want to grow—and how to measure it. But that starts with the hard work of getting the community—as a whole—on board with a clear and united vision.

“Coppola said the difference between making a good movie and bad movie is that when you make a good movie everyone is making the same movie. Our work starts at that conversation, at the aspiration. What does the community want to do . . . realizing that the present tools are only going to get us to where we already are.” –Jay Connor

INVEST IN IT.

Communities that are ready to build an entrepreneurial ecosystem are ready and willing to invest in it—to lend the time, talent, money and resources to set the vision, connect the resources and support entrepreneurs.

 

BE INCLUSIVE.

The usual suspects will deliver the usual results. Expand the conversation to the larger entrepreneurial community. Talk to the organizations entrepreneurs already trust, talk to those who aren’t at “the table.” Talk to entrepreneurs of all types—high growth and Main Street.

“It’s all about working with everybody across the spectrum of entrepreneurship, not just second stage, not just tech. We’re focused on anybody who is motivated to be an entrepreneur and grow a business. It’s a big tent definition of entrepreneurship. We leave too much on the table if we just focus on high end.” –Tom Lyons

“There are unique challenges for entrepreneurs of color. Many programs in existence don’t seem to be culturally sensitive and focused on business support. We need to bring the two together. African American, Latino, Native American, don’t lump them together. Communities need to develop a set of tools and resources to support those specific entrepreneurs. ” – Linda Fowler

“Good ideas don’t care where they come from. How can we help empower people to transform communities and create opportunities?” –Henrik Scheel

ENGAGE CHAMPIONS.

A set of goals or even a plan on paper won’t do much if you haven’t engaged the right people on the ground who can make the connections and realize the vision.

“Finding the people who will execute on the project is important at the city level. Develop an internal tiger team of early adopters in government who are willing to be a little risky. Find them, work with them. [And then] . . . get out of city hall and see what's happening in the community. . . . Once you get people out of their comfort zones and expose them to people who want to care and want to give back, just create the bridge for them to engage.” –Jeremy Goldberg

“It’s not just about getting the right people on the bus, it’s figuring out how to get the wrong people off the bus.” –Norris Krueger

TALK TO THE ENTREPRENEURS.

Get the full 360 of the issues—what the city wants, what the entrepreneurs need—and use that to define where your ecosystem is and where it needs to go.

“Entrepreneurs look at a community differently than economic developers. It’s almost like you’re not talking about the same city.” – Penny Lewandowski

REMEMBER WHY YOU’RE DOING THIS.

Remembering Pakistani activist Sabeen Mahmud, “We are grateful live in a place where we can do this kind of work and not feel like our lives are in danger.”—Philip Auerswald

 

on ECOSYSTEM BUILDING

  • What are answers to the silo mentality that's found in most every community?
  • How do you help convince traditional economic developers and community leaders that there are new and different ways of looking at growth, i.e. the recruiting versus grow your own strategy?
  • Do you invest in business or entrepreneurs? Do you focus on high-growth entrepreneurs or take a broad approach?

Turf wars and talent wars—so much of communities’ inability to break down the silos to fully collaborate and build an entrepreneurial ecosystem stems from fear of competition: of losing money, businesses, talent and jobs to other organizations or neighboring regions.

But those communities that have built vibrant ecosystems have proven that when you rally around a common goal, when you work from your strengths rather than your fears, you can build something impactful and sustainable.

RALLY AROUND A COMMON GOAL.

Whether it’s a common threat or an opportunity, when entrepreneurs and support organizations, government and corporations, startups and second stage companies rally around a common and united goal, change happens.

“The whole community—not just youth or startup entrepreneurs—needs to develop an entrepreneurial mindset. Engage second stage companies, engage youth, build existing businesses.” —Steve Radley

“When the larger corporate community aligned around entrepreneurship and connected to grassroots entrepreneurship, things began to change.” –Maria Meyers

“In big cities . . . it’s harder to get people who are your champions. People don’t think of it as a big city but as smaller neighborhoods. My goal: start little fires and create a conflagration.” – Tom Lyons

FIND THE GAPS.

When you know the assets of your community—and its gaps and needs—you can pull people out of their silos to build collaborations that fill the void.

“Find the gaps and then build collaboration to build impact. That’s what funders want to fund.”—Maria Meyers

INVEST IN ENTREPRENEURS.

Do you focus on the top performing entrepreneurs and help them accelerate? Or do you try to raise the tide for all boats? That depends on your goal. But all thought leaders agreed, communities need to focus on building their region’s entrepreneurs rather than recruiting them.

Invest in entrepreneurs, not businesses. “We should be measuring the skills and potential of entrepreneurs. I don’t know how to pick winners. It’s a slippery slope when you try to and you don’t have the tools to do it.” –Tom Lyons

When looking at second stage companies, there are two types: internal and external. “Internal market entrepreneurs sell within the region. They bring personality to the region. Think restaurants, boutiques. It’s tough to grow jobs with these companies. External market entrepreneurs are focused on outside markets, and bring new money in to your region. They focus on new markets and new wealth—and that’s the only way to grow a region.” –Penny Lewandowski.

HIT A SHORT-TERM MILESTONE.

Communities get tired quickly. Attach a short-term milestone to your efforts to give communities the quick win that in turn feeds your long-term vision.

“Keep people engaged. Set achievable milestones in short time horizons, so people won’t get tired and lose sight of the big goal.”—Chuck Wolfe

BUT FOCUS ON PATIENT GROWTH.

The thought leaders agreed that communities need to steer away from the quick fix program and focus on layering strategic initiatives that build sustainable growth for their entrepreneurial ecosystems.

“Patient growth isn’t as sexy as cutting the ribbon, but it has much more stickiness. . . . We’re on a mission to make patient and sustainable sexy because that’s how you develop economic stickiness in a community.” –Penny Lewandowski

BUILD (SOCIAL) CAPITAL.

Most thought leaders agreed that investors invest in people—not in businesses. For that reason, in those regions that have vibrant funding mechanisms—Silicon Valley, for example—the concept of failing (and failing fast) doesn’t carry the stigma it would in smaller communities. For regions that can’t feasibly build their own funding continuum, having angel or VC connections outside of their own communities is key to helping their entrepreneurs accelerate.

“If you fail fast, you tried, you made the attempt, you figured it out, and then called it quits [when you recognized it wasn’t working. For many in Silicon Valley] . . . that’s the kind of person I want to hire.”
–Matt Kaufmann

“It’s more important to recognize, ‘Here’s the outcome we didn’t want to go toward.’ In that sense, failure is a success, it’s a decision.” –Nathan Kurtz

 

on MEASUREMENT

  • Is there any way to get beyond counting jobs as the sole source of measurement?
  • What are communities using as metrics?
  • How do you know when you have succeeded in creating an entrepreneur ecosystem?

What you measure depends on your goals—jobs, funding, retention and growth of talent, new starts, spin offs, sector density, high-growth firms, program connectivity, accessibility of resources, corporate engagement, increase in media stories, etc. To demonstrate impact, it’s important to tie diverse metrics to the end game.

An entrepreneurial ecosystem is an actual living system. “The network map is like capillaries that allows us to chart the flow of nutrients in an ecosystem.” But that entrepreneurial ecosystem “also needs consciousness and life. Something has to come alive.”— Philip Auerswald

BENCHMARK ENTERPRENEURIAL IMPERATIVES.

Maria Meyers of U.S.SourceLink outlined six strategic initiatives for entrepreneurial growth:

  • Increase available capital for startup and growth businesses
  • Engage the broader corporate community
  • Create a strong entrepreneurial pipeline
  • Build entrepreneurial talent
  • Maximize entrepreneurial support resources
  • Tell great stories in the media

MEASURE VIBRANCY.

In Measuring an Entrepreneurial Ecosystem, Dane Stangler of the Kauffman Foundation proposes four indicators of ecosystem vibrancy:

  • Density
  • Fluidity
  • Connectivity
  • Diversity

The report defines those indicators along with metrics to benchmark them.

MEASURE VITALITY.

Communities tend to focus on jobs and starts, but what are the measures for a thriving company? What are the measures of increased aspiration? Thought leaders also considered how metrics could benchmark market diversification, customer growth, regional exports and entrepreneurial inspiration—measures of effect and quality in addition to effort and quantity.