This four-part series addresses why tracking and measuring the activity of your entrepreneurial ecosystem is crucial to its long-term sustainability and the economic success of your community. Part 1 of this series covers why measurement is important, Part 2 discusses what to measure, Part 3 provides insights into how to measure, and Part 4 delves into how to report your data.
Part 3: How to Measure
Ongoing measurement of an entrepreneurial ecosystem’s health is pivotal for strategic decision-making. But before you can dive into the array of tools and approaches available for measurement, it’s important for ecosystem builders to lay the groundwork. As we’ve addressed in the first two articles of this series, defining key questions, identifying the stakeholders who will rely upon your reporting (i.e., entrepreneurs, economic development professionals, investors, elected officials, etc.), and determining the key metrics important to those stakeholders paves the way for effective data collection. The metrics you choose will help guide your selection of data-gathering tools and methods.
Several other factors also influence the choice of measurement methods: the number of metrics, the desired timeframe for results, data availability from other sources, and resource accessibility and allocation are key considerations.
In the third article of this series, we examine some of the tools and methodologies available for collecting your ecosystem data: delving into surveys, one-to-one conversations, online platforms, economic/statistical databases and reports, and other tools. Furthermore, we will discuss approaches that elicit candid responses and provide accurate insights for ecosystem builders.
Surveys: Revealing Quantitative Insights
Surveys provide a structured approach for gathering quantitative data from a sizable potential participant pool. Ecosystem builders often design surveys to capture a broad spectrum of information, from startup demographics to specific challenges entrepreneurs face. Survey tools abound (e.g., Survey Monkey, Google Forms, Mailchimp, etc.), but crafting effective surveys requires a delicate balance. Surveys must be designed to be comprehensive without overwhelming respondents or leading respondents in a specific direction. Response rates are best when you already have some kind of relationship with the audience.
To optimize survey effectiveness, consider the following:
- Tailored questions. Craft questions that resonate with the specific stakeholders you are surveying within the ecosystem (e.g., entrepreneurs, investors, mentors, and policymakers).
- Accessible information. Questions should relate to your desired metrics. Keep in mind, however, that requests for data your stakeholders have on hand or that is easily accessible increase the odds of survey completion.
- Confidentiality. Ensure respondents feel comfortable sharing their honest opinions by guaranteeing anonymity. Doing so fosters candid feedback, allowing ecosystem builders to address issues transparently.
- Regular polling. Implementing a schedule of periodic surveys helps identify trends and shifts over time.
One-on-One Conversations: Capturing Personal Insights
Although surveys offer breadth, one-on-one conversations provide depth. Engaging in meaningful dialogues with entrepreneurs, investors, and other stakeholders builds trust and encourages the sharing of candid insights that reveal both challenges and opportunities.
To make one-on-one conversations more effective, be mindful of these elements:
- Active listening. Actively listen to participants, valuing their experiences and perspectives. This can lead to nuanced insights that foster a deeper understanding of the ecosystem’s intricacies.
- Building relationships. Establishing strong relationships with key stakeholders creates a more open and conversational environment. This can be achieved through networking events, mentorship programs, and community-building initiatives.
- Incorporating diverse voices. Ensure conversations include a diverse range of perspectives from demographic groups within your ecosystem. Doing so captures a more complete view of the entrepreneurial landscape. It also helps identify potential blind spots and ensures inclusivity.
Forums and Online Platforms: Gathering Real-Time Feedback
Online forums and platforms (including social media) provide a virtual space for entrepreneurs to connect, share experiences, and seek advice. Ecosystem builders can leverage these platforms to gauge the pulse of the community, identify emerging trends, and uncover shared challenges. Monitoring discussions on online platforms offers access to real-time and organic feedback from your ecosystem’s stakeholders.
To effectively use online platforms:
- Create a private online community via Facebook, LinkedIn, etc. and invite stakeholders to share experiences.
- Actively participate.
- Encourage feedback.
- Use social media monitoring tools (e.g., Hootsuite, Google Alerts, etc.) to track conversations more easily.
Economic/Statistical Resources: Harnessing Public Data
Evaluate existing economic data such as job creation, GDP contribution, and innovation indices to gauge the overall impact of the ecosystem on the local economy. Some of these resources include:
- Census information, especially the Annual Business Survey. In addition, the County Business Patterns report breaks down information into smaller data pieces.
- National Federation of Independent Business (NFIB) surveys and reports. These are available at the state level.
- U.S. Small Business Administration (SBA), including small business economic reports conducted by the Office of Advocacy.
- Patent information released from the U.S. Patent and Trademark Office.
- Pitchbook, which publishes venture capital, private equity, and mergers and acquisition data.
You’ll notice that the face-value data you glean from these multiple sources may not seem to align. For example, one source may provide a number for new business starts for your area that is different from what another source reports. There are numerous reasons for these differences, including when the data collection was done, differences in the geographic area accessibility to young firms, etc. The important thing to keep in mind is whether the numbers from the various reports trend in the same direction. Observe patterns in how the various data streams come together and then track them over time. Understanding both the macro and the micro impacts will give you a more comprehensive picture of your entrepreneurial ecosystem.
Other Tools and Metrics: Beyond Traditional Approaches
In addition to surveys, one-on-one conversations, and forums, there are other tools and metrics that can contribute to a more comprehensive understanding of an entrepreneurial ecosystem:
Network analysis. Mapping the relationships between key ecosystem players identifies connections and potential gaps in your network. Mapping also allows you to see density of resources (whether it’s overlap within the ecosystem or concentration in a certain geographic area). Many cities throughout the country use SourceLink’s Resource Navigator to build a partner network and refer those resources to entrepreneurs. The Resource Navigator helps ecosystem builders understand what entrepreneurs need and then connect them on a just-in-time basis to the resources available in your ecosystem.
Dashboards, spreadsheets, and other technology resources. Some communities track their data in an Excel spreadsheet; however, such tools do not allow you to track your ecosystem’s progress over time.
Dashboards such as those used by Sparkyard at the Health Science Center (HSC) at the University of North Texas in Fort Worth allows teams to not only track their ecosystem’s progress over time but also to compare their progress with entrepreneurial ecosystems in other cities.
Cameron Cushman, assistant vice president, Innovation Ecosystems at HSC, said, “By looking at a variety of standardized entrepreneurial ecosystem metrics, we can analyze the entrepreneurial ecosystem of Fort Worth/Tarrant County and see how our ecosystem compares to other cities in Texas and nationally.”
Many ecosystem builders also use SourceLink Pro CRM to survey stakeholder clients and track their loans, contracts, investments, and other critical metrics. The tool is key to making fact-based decisions and being able to share impact with stakeholders via custom-generated reports.
For example, when Digital Sandbox KC was awarded an EDA Build to Scale grant to accelerate the commercialization of new ideas in the Kansas City area, they were required to report and track more than 70 different entrepreneurial metrics. Digital Sandbox used the SourceLink Pro system to create a new public-facing online application process and to streamline the process for entrepreneurs to report their data. As a result, Digital Sandbox KC was able to build profiles for 900 potential/current clients, partners, and stakeholders. They streamlined the entire process by tracking client interactions, impact metrics, survey responses, and event attendance in one place.
Additionally, SourceLink offers SiteConnex, a website which gives ecosystem builders a platform, or central resource hub, for entrepreneurs in their region.
Data stacking. Entrepreneurial ecosystem measurement increasingly has become more sophisticated, says Maria Meyers, vice chancellor and executive director of the UMKC Innovation Center.
“There is a growing interest in outcomes, or what happens to clients and a community, as a result of ecosystem activity,” she notes, “taking measurement beyond simply job creation and whether those jobs are contributing to a change in a community’s wealth.”
To measure and track these types of trends, data stacking is employed. It involves combining various data sets.
Michael Carmona, senior director of MOSourceLink, said: “Data stacking is tough, but possible.
“One thing people attempting to do this need to be mindful of is to make sure they’re not telling the wrong story by combining data sets that aren’t totally related. In the case of entrepreneurship as a tool for violence prevention, for example, there are ways to connect reports supporting the two, but having the process written is important for the people viewing the data.”
Approaches for Candid and Accurate Responses
The approach you use matters as much as the tools you use to gather the information. There is an art not only to the intake process but also to the referral and follow-up processes. If you construct the process correctly, you will gather insights about a company and where they are that you would not necessarily get if you simply surveyed them. For example, as you’re doing intake, ask several questions at the front end of your engagement (e.g., How many employees do you have? Can you give me a sense as to your overall sales?). By doing so, you establish benchmarks that allow you to track the evolution of the businesses in your ecosystem over time.
Here are some tips to consider:
- Anonymous feedback channels. Create platforms for stakeholders to provide feedback anonymously, fostering a safe space for expressing concerns and critiques without fear of repercussions.
- Neutral facilitators. When conducting one-on-one conversations or focus groups, consider using neutral facilitators who may not be directly affiliated with the ecosystem. This can promote unbiased discussions and encourage participants to speak openly.
- Continuous feedback loops. Establish mechanisms for ongoing feedback to enable adjustments based on evolving needs, promoting a culture of continuous improvement.
Measuring the health of an entrepreneurial ecosystem requires a multifaceted approach. Surveys, one-on-one conversations, online platforms, and other tools collectively provide a comprehensive understanding of the dynamic relationships within the ecosystem. To ensure candid and accurate responses, ecosystem builders must prioritize anonymity, active listening, and diverse representation.
Further, Carmona at MOSourceLink cautions that ecosystem builders must have a system in place as they collect and analyze data.
“Regardless of the tool, there should be methodologies in place, along with a basic key for the various indicators being used,” he said. “One error I see so many people make is not archiving the original documents they used to produce the final data or not being able to demonstrate the steps/methodology for how the final numbers were produced. This hurts because it misses the opportunity to help teach others how to navigate data and pull reports. Obviously, it also makes it harder to pass a data audit.”
As stewards of innovation and growth, ecosystem builders play a pivotal role in shaping the future of entrepreneurship. By embracing a holistic measurement approach and fostering an inclusive and transparent environment, you can foster positive change, address challenges, and create a thriving ecosystem that nurtures the next generation of entrepreneurs in your community.
Part 4 of our series on entrepreneurial ecosystem measurement covers how to analyze and report your ecosystem’s data to stakeholders and the larger community.