What makes a good entrepreneurial ecosystem? Entrepreneurship is the foundation of the ecosystem, but the ecosystem is the support around that entrepreneur to help ensure success. What is an ecosystem? It is how an extended family or better stated a relational network and its property and assets are organized as a wholly integrated system with the vital parts working together synergistically so that everybody benefits. Obviously, the working of the whole is impacted by the proper working of each individual part.
One of the things that we found is that the vital parts almost always exist in an ecosystem, except they’re not connected. Ecosystems must be geographically bound and are built around resources within them.
Let us look at an example of the ecosystems. Entrepreneurship ecosystems serve to educate, finance, regulate, inspire, and lead entrepreneurs. They connect all the different pieces.
What makes a good entrepreneurial ecosystem? Ecosystems can be geographic or relational. We’re dealing with local geographic ecosystems but there are also global and national ecosystems that are relational. This would be a different kind, and we can connect them all.
It’s about relationships and resources. I love again, Ken Harrington (Kauffman Foundation) statement, “we need to set more aggressive ecosystem development goals, wanting to 20%-30% momentum per year is not enough. The very nature of our future may depend on it.”
Some of the thought leaders involved in ecosystem development today include
- Kauffman Foundation
The Kauffman Foundation is in 180 US cities. They do new events, like the 1 Million Cups, weekly events in many cities in the US.
- Global Entrepreneurship network (100+ Country Reports)
The Global Entrepreneurship network is a global community that looks at entrepreneurship within countries. They have 100 different Country Reports. The Global Entrepreneurship network is global.
- Endeavor. Org (10+ Country Studies)
The Endeavour group has done 10 different country studies.
- World Economic Forum. (8 Pillars)
The World Economic Forum has eight pillars.
- Babson College ( 12 and 6 Domains)
Daniel Eisenberg has 12 and 6 domains that he uses as models.
Entrepreneurship Ecosystem Domains
What makes a good entrepreneurial ecosystem? We have taken a lot of the thought leaders and what they’re doing with ecosystems and created the entrepreneurship ecosystem domains model. It has six domains which are similar to the six domains out of Babson College but add in the eight pillars of the World Economic Forum.
1| Leadership & Policy
The first domain is leadership and policy where we can look at many things like:
- Entrepreneurship strategy
- Promotion, support, legitimacy
- Problem and crisis support
- Regulatory framework incentives
- Venture Friendly Legislation.
All these are part of an environment that is supportive to the entrepreneurs’ ecosystem. These domains are about finding resources and the environment to support entrepreneurship start-up and growth.
The second domain is markets and market access:
- Domestic Market Access
- Foreign Market Access
- SME to Large Company & Government Customers
Small to medium enterprises all the way to large companies and government customers. How do we get access to that? We need large companies to buy products from smaller startup companies to encourage that startup growth.
- Early Adopter Proof of Concept
We need early adopters that can help with the proof of concept.
- Distribution Channels
All of these are resources to help entrepreneurs grow their businesses.
3| Human Capital
The third domain is human capital.
- Universities Promote Entrepreneurship
We need universities promoting entrepreneurship.
- Entrepreneurship – Specific Training
- Serial Entrepreneurs
We need serial entrepreneurs and experienced entrepreneurs joining the ecosystem because they bring expertise and startup and growth because entrepreneurship in startups is different than in established companies. Entrepreneurship startup experience is different than working in a regular company.
- Experienced entrepreneurial talent
- Management And Technical Talent
- Outsourcing Support
All of these deal with human capital.
4| Support Services
We need a lot of different kinds of support services, for example:
We need infrastructure for entrepreneurship, like energy and transportation, Farm to Market roads, logistics, telecommunications, and manufacturing. All these are very helpful to be able to launch and grow entrepreneurship initiatives within your local ecosystem.
- Entrepreneur Networking
The ability to network entrepreneurs.
We need platforms for that networking to occur both virtual as well as in the real world, all very important.
- Incubators & Accelerators
We need incubators and accelerators; incubators where they can get support services and accelerators where people will come alongside and walk them through the startup.
- Coaching and Mentoring
Coaching and mentoring, which is a big piece of the environment.
- Professional Support Services
Professional support services like a fractional Chief Financial Officer or a fractional chief Operations Officer because you can’t afford a full one at the time, legal services, all these become very important.
- Contests, Conferences, Events
And, lastly, contests, conferences, and events.
All these things are support services that support the entrepreneur.
5|Culture & Media
When it comes to culture and media:
- Risk and failure tolerance is a big issue.
When it comes to culture issues, we have to deal with these head-on. Every culture has strengths and limitations. We want to promote the strengths and address the limitations head-on.
We want to identify limitations and look at what we need to replace those limitations with. Then build focused activities to begin to shift that culture.
- Research and innovation
- Aspiration, Ambition and Drive
We have cultures that don’t have a lot of drive, because of the way the economics and the history has been in that region. We want to shift that because entrepreneurs solve problems. We want to unlock and unleash them to do that.
- Success Stories and Role Models
Success stories and role models are two of the greatest tools to begin to shift the culture to show other people that it can be done and who’s doing it.
- Entrepreneur Positive Image
The entrepreneur’s positive image, the ability to create wealth, all of those are keys that we have to deal with.
Then in the financial realm, we have:
- Angel investors, family, and friends,
- Debt financing
What makes a good entrepreneurial ecosystem? Private equity and venture capital, opportunities to do pitches, and share pitch presentations. All of these things are critical to developing the local entrepreneur.
These are the six domains that are part of an entrepreneurship ecosystem. Some of the people that get involved in helping launch this ecosystem would be a coordinator or a coordination team; the actual champions that can help bring people in; the influencers and the visionaries that proclaim it.
Then we also have the logistics people, the operations people, coordinators, champions, and conveners that work together to help manage and promote this ecosystem. Along with ecosystem builders, which is everybody involved, anybody, that cares about the ecosystem, is an ecosystem builder.
Global Entrepreneurship Alliance
All of the local ecosystems are connected through what we call the Global Entrepreneurship Alliance. That is the place to connect with the global ecosystem. The Global Entrepreneurship Alliance:
- Is a free collaboration platform.
- Provides common structure, framework, and language
- Connecting geographic and relational entrepreneurship ecosystems globally
- Creating a flow of information, talent, and resources across and within ecosystems
What makes a good entrepreneurial ecosystem? A good ecosystem is one that allows free flow of information and communication, provides a common structure and optimum utilization of resources. It supports entrepreneurs all the way from idea generation, the launch of a business, growth, scaling up to exit.