What Makes An Entrepreneurial Ecosystem Tick

A private room in a coworking space in Arnhem, NL

Of course you can take a study trip to Silicon Valley, Tel Aviv or Berlin to see what elements make a successful startup ecosystem. It’s fun and inspiring, but it’s hard to get the full picture of what elements are key to a successful ecosystem. Also, it might not be the case that your local economy is best served by focusing on technology startups. Maybe there are different types of businesses that are better suited for your local situation. Still, they probably need support in becoming more innovative to create more skilled jobs and welfare in your city. So, maybe you don’t want a startup ecosystem, but one that focuses more on innovative entrepreneurship. However, whether you want to enable startups or other innovative businesses, it’s good to have different parties working in concert to ensure they have the best chance of success. In any case, it starts with the question: what type of organisations and other elements do we need to make a strong ecosystem?

There are many answers to this question. From all the books, blogs, articles and other information available, I believe there are three ways of looking at it that are most suitable: the Startup Ecosystem ranking of Startup Genome, the ecosystem canvas by Founders Institute and the structure put forward in the MOOC Beyond Silicon Valley by Michael Goldberg of Case Western Reserve University.

To start, I think the people over at Startup Genome do a great job in ranking startup ecosystems every year. If you look at these rankings, you see that they focus on Performance, Funding, Market Reach, Talent and Startup Experience. This is very much geared towards the output of startups in terms of value created, money invested and numbers of users. A secondary focus is on creating a methodology that allows for a reasonably fair comparison of different ecosystems. From their rankings, the conclusion is that the elements of a successful ecosystem are companies that create value (based on valuation and exits), availability of funding, the opportunity to reach a large enough consumer base, the possibility to attract talent and an environment that is hospitable to startups: affordable housing, culture, events, etcetera. The approach of the Startup Genome is very well suited for mature ecosystems.

The Founders Institute has a canvas to assess your startup ecosystem, where the focus is on the journey of a startup. So it focuses on which organisations can help startups during the idea, launch and growth stages. Next to that, there are supporting elements: success stories, evangelists, government and talent. This canvas already has a more generalised approach to what elements should be there for an ecosystem to thrive. It is created as a listing of companies, organisations and services that can help startups throughout their various lifecycle stages. It’s quite extensive, and best suited for ecosystems in their growth stage; ecosystems that already have had some success, but aren’t fully grown to potential, yet.

For early stage ecosystems, I find the approach of Michael Goldberg in his Beyond Silicon Valley MOOC the most practical and maybe it’s the most workable of all, because it focuses on the importantie of elements working in concert. It’s very good for transition ga local and nationale economie. In this approach there are 6 key categories: government, intermediate organisations, philantropy, anchor institutions, capital and the entrepreneur. The MOOC focuser on the case of Cleveland and it is used in many places around the world. Michael even wrote a book portraying 20 practitioners who used the course to help advance their local ecosysteem, including myself.

So, if you plan to define and strengthen your local startup ecosystem, the Beyond Silicon Valley MOOC is the best places to start. I’m developing the Local Power Entrepreneurial Ecosysteem Canvas based on this, a tool to asses the initial state of your local entrepreneurial ecosystem. I will tell more about that another time.

What do you think are good starring point for ecosysteem builders? Please schare your thoughts!

I help small businesses to find their story and tell it through new services and stories. Dad, poet and dot connector. Creator of the Tritriplicata. POM Poet.

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