Note: We’re proud that Eric Matthews is contributing the following post. Eric Mathews is founding CEO and co-president of LaunchYourCity, Inc., a nonprofit that works to empower entrepreneurial action, reduce barriers to success, and build Memphis as a venture city that elevates talent and high-growth startup companies. Eric is also interim Executive Director of EmergeMemphis, a general business and technology-based incubator in downtown Memphis. He and his colleagues are engaged in some of the most important work being done to grow and expand the economy of the Memphis region. Here’s Eric’s post:
While small business is vital to communities, the vast majority of new job creation comes from high growth entrepreneurship, and that is why those of us engaged in tandem with Startup America are focused on building the proper startup ecosystems in our respective communities.
After six years of hard work, other communities reached out asking us for suggestions to grow startup ecosystems. Here I have distilled our ecosystem building effort down to 10 points for other communities to consider.
- 6 Leaders Guiding for 20 Years: Building a startup ecosystem transcends election cycles and flash-in-the-pan leaders. Brad Feld stated it best: you need 6 leaders dedicated to 20 years of work. Losing ecosystem leaders deflates all the momentum. Find leaders that have a long road view of advancing your ecosystem that will not be retired in 20 years and ensure they are entrepreneurs at heart. Give them resources and get out of their way.
- Role of Existing Businesses: Closing a first big sale is everything to a startup. Instead of making it difficult for startups to get access, established firms should seek out local startups. Work to get your business leaders to open their doors to startups and give them an honest look.
- Lift As You Climb Culture: Successful entrepreneurs need to reinvest as cultural norm. In Memphis, we tell our founders that they must “lift as they climb.” Entrepreneurship is learned through apprenticeship and the masters need to participate with time and money.
- Sense of Place: Co-working spaces are startup rally points with intellectual benefits. Better than coffee shops, an early stage startup benefits from a temporary desk, conference room, access to support resources, as well as peers who are also starting up — all co-located and cheap. Build one.
- More Than Capital: We tell founders that money is the least valuable investment. Collective intelligence, accountability, and mentorship are the most important investments we make. Throwing money at entrepreneurs without engaged support is a waste. Emphasize two ROIs: return on investment and return on involvement.
- Beyond Your Community: Worrying about getting local money “off the sidelines” misses the bigger picture that you need resources from all over for scale. Expand your view beyond your region. The resources to nourish startups need to arrive from local sources and those well beyond.
- Stop Startup Drain and Get Some Gains: Explorers used to travel oceans, climb mountains, and go to space. Modern day explorers are entrepreneurs, who now travel to startup. Your talent recruitment and retention strategy needs to start with entrepreneurs. Raise awareness about opportunities for entrepreneurs in your city. Civic leaders and others need to message internally and externally to retain and recruit startup founders.
- Solve Future Human Capital Shortfall Now: Employed individuals are reluctant to work at startups, because they perceive startups as unstable and they are unfamiliar with the rewards. This is going to be a problem when your startups needs to add headcount in a hurry. Be sure to plant the seeds of entrepreneurship in young minds and cultivate talent predisposed to working in your community’s industry specific startup sectors.
- Community Connectivity: In Memphis, about 75% of our ecosystem participants are not founders. These participants are service providers, existing business owners, experts, mentors, investors, and more. Broader participation is critical to value creation and idea velocity. The bonus is these non-founders sharpen business skills and bring innovative thinking back to their day jobs. Create outlets like meetups, camps, and parties where non-founders plug into the activity.
- Change Your Stories: On TV you find a local team won a big game. A local startup gets a big investment and there isn’t coverage. No wonder young people want to be pro sports players and not Bill Gates. To change your culture, you need to change your stories. Your community will be more likely to startup, if local role models are touted on TV and beyond.
Creating a sustainable startup ecosystem is a huge challenge. In Memphis, our efforts are still in progress. However, we are constantly working to scale these principles for change in our community while looking out for other best practices. We are laying the foundations and building on top of it.
There are other strategies that communities should consider. In the comment section here I invite you leave other strategies I left out.