Startup entrepreneurs have become shiny new toys in volatile and uncertain economic times.
People are fascinated with the lifestyles of successful business owners, the potential to become an entrepreneur, or to work for one.
The community around startups sometimes takes a secondary role, but in some respects, entrepreneurs thrive when they are nurtured by a strong support system. Without it, they operate in isolation.
Those interested in how these communities develop, evolve and sustain themselves, a new book by entrepreneur and venture capitalist Brad Feld should be a must-read. Startup Communities: Building an Entrepreneurial Ecosystem in Your City is about how any urban area can create an environment that helps entrepreneurs lead and succeed.
Mr. Feld, who was in Toronto last week to speak and promote the book, says there are four key ingredients in a healthy and vibrant startup community:
- Entrepreneurs must lead the way. It seems obvious, but Mr. Feld says community building has to be led by people in the startup trenches rather than “feeders” such as government, investors, universities or service providers. If feeders try to control or lead a startup community, Mr. Feld explains, it makes it more difficult and challenging for a strong community to exist.
- There has to be a long-term view. While we love to talk about overnight startup success stories, the reality is they are anomalies or lottery-ticket winners. Mr. Feld contends sustainable startup communities exist when people have at least a 20-year outlook, which takes into account the cyclical ups and downs that will happen
- Everyone should be allowed to participate in the community, whether they’re leaders or feeders. “If someone wants to get involved in a startup community, you need to make it trivial for anyone to get engaged,” Mr. Feld says. “You need to make it easy for them to connect and do it in a way where there is no friction.”
- There has to be constant activity – be it conferences, meet-ups, free events, demo camps or community gatherings. This makes it easier for people to connect, nurture new relationships, and grow their networks.
Mr. Feld, who has been investing in startups since the mid-1990s, likes startup accelerators but he has little time for incubators, which he argues add little value other than free real estate and basic office services.
He is also a big advocate of mentors who can provide startups with strategic and tactical counsel. In an ideal world, he says, mentors learn as much from a startup as the startup learns from a mentor. When asked about the difference between a mentor and an adviser, Mr. Feld explains an adviser is happy to help if he or she is given something in return, while a mentor always asks "How can I help?"
Perhaps the most valuable insight Mr. Feld delivered was that every startup community has its own unique characteristics. "The worst thing Toronto could do is to try to be like Silicon Valley," he says.