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Which came first, the chicken or the egg? Great football players make great coaches or great coaches make great football players. I call these circular arguments but they are actually causality dilemma’s and they drive people crazy.
In startup communities I believe the same argument or dilemma exists but with another anchor to the circle. Great companies.
My circular argument goes like this: Great leaders build great companies which build great Communities which build great leaders which build great companies.
For some of you this makes a lot of sense. You are probably the more vision & abstract type of thinker. For those of you who skew to a more precise and factual point-of-view, your head probably just blew up.
“You want answers! I want the truth! You can’t handle the truth.” (Insert Tom Cruise and Jack Nicholson in A Few Good Men or Rudy Giuliani, “truth is not truth”).
Well I have a little surprise for you. While laying out this framework I have tricked you by getting you to eliminate the things that are not necessarily catalysts for a great startup community (space, capital, government programs or even Startup Weekends – all of which can help tremendously).
The one catalyst for a startup community are the entrepreneurs themselves.
I have a pet phrase I use every day, “no entrepreneurs – no entrepreneur community”. They are the center pivot for everything. Without them the rest is just noise. Without them the rest of us are useless. I think it’s funny and sad when I hear community leaders working hard to help spawn, grow and accelerate their startup community and never once spent more than 15 minutes with a local entrepreneur.
Let me repeat – everything starts with the entrepreneur. Serve them. Build your community around them. And when you are conflicted with multiple choices of what to do next, ask yourself this one question – “what action of mine would help the entrepreneur the best”.
Careful which game you chose to play as you tell stories about your community.
When selling anything, the first tool you utilize is the tool that showcases the benefits of your offering. Seems like a no-brainer, right? Resumes attempt to do this for you. Brochures or sell sheets emphasize the benefits of your product or service. As you begin to tell your community story, the first task at hand is to identify your unique community strengths. Playing to your strengths is a vital and obvious tool to use for many community building goals.
But, I see community leaders get this wrong all of the time. I find this exacerbated in smaller communities. Let’s call this the community asset theorem.
The basis of the theorem is that the biggest company in your small community is by default your biggest asset and as such one believes that this is a unique asset of your community as compared to other communities. (We will discuss the compare community theorem at another time.)
The first trait of the theorem I find myopic. Myopic in that you assume your asset is unique as compared to everywhere else because it is so vital to your community. The local healthcare system is a perfect example. Decent size cities (1M population) have a dominant healthcare facility with some decent research component attached. They are typically the largest employer in town. And they are staffed with super smart people. Community leaders then develop an asset list based on the fact that they have a sizable and leading healthcare ecosystem in their community and as such this should be the basis for a unique startup community.
As compared to who?
Do you know that every city with a population of 500,000 has one of these if not more? Do you know that there are 34 cities in the US with this population or larger? What is unique about that? I think it is a fundamental flaw to think your healthcare system could be the basis for a robust startup community.
The implication in this line of thinking is that you can build your community by recruiting entrepreneurs, capital and generate general attention to your area because of this unique asset.
When I hear community leaders highlight their local dominant company and then leap to assumption that they can build a unique startup community around this a number of red flares go up.
Instead of taking this naïve and myopic view, why don’t you go find your local coworking space or the expensive but hipster coffee shop and talk to a bunch of entrepreneurs. Find out what they are all working on and build your unique community value proposition around them.
A few years ago, Brad Feld outlined in a blog post the notion of density as a primary factor in the maturity of a startup community. His observation was that when visiting Boston, he ended up never leaving Cambridge and that in turn meant that Cambridge was a great place to do everything startup. Though a specific ratio was never outlined, the idea is that there is a flywheel effect that comes from having a robust amount of the startup tribe (as compared with the general professional population) in a specific geographic area (building or neighborhood).
Think of this as the watercooler effect for a city.
A few weeks after that post, I was meeting with Adam Klein (one of my Raleigh/Durham community leader friends) and I brought up Brad’s post and the implications for our work in trying to build our startup community. From that meeting, Adam and I set a goal of 200+ net new entrepreneurs in our downtown location.
Underlying Brad’s notion of density is the idea of what I call the Aspirational Founder Stack. I believe that every founder at whatever part of the journey they are on, derives comfort and knowledge from the founder/company that is operating at the next higher level.
So, if you are just starting something and you are a one-man band, you look at the group with 3-5 people and aspirationally long for a future when you are that big. When you are the 3-5 person company, you imagine a day that you have raised more than $1M and have 10-15 employees. You get the idea.
Great community density comes when all of the actors in the stack are easily visible and accessible to the others actors in the stack.
We all agree that this is more of a team game than a solo sport and to that end, we gain a level of psychological comfort and even inspiration from seeing someone just like you achieve what you are trying to achieve.
As community leaders, it is really important to create/facilitate as much founder density as possible. Yes, bring in as many first-time or seed-stage founders, but also recruit as many of the more mature companies to the same building or neighborhood.
That aspirational founder stack around the same daily watercooler will create an energy that will in time organically recruit others founders, investors, and community supporters.
Building and maintaining your network is important but is that everything?
A community is made up of all of the actors in the region and us community geeks call this a network. The first step in community building is to make sure you get all of the nodes (people not organizations) mapped out. The second step is to try and see who is already connected and to connect those not yet connected to each other. This can take months if not years.
To do this effectively you need a number of leaders/influencers to actually work at this daily. Some may call this a form of networking and for now let’s refer to this as community networking.
As you begin to build out your community network, it is essential that you don’t stop at mapping and connecting the recognizable actors. Which means you have to work at finding and connecting with Net New players.
If your idea of managing your network is simply reaching out to old professional friends to get an update on what they are doing over a coffee or beer, then I would argue that you are operating at a “B” level. Congrats on actually reaching out to connect – it is still critical and obviously better than not reaching out at all.
There is another gear for optimizing your networking time. I would argue that you need to add NET NEW people to your network for you to be operating at a level “A”. Of course, this is more difficult and does not necessarily feel as good as connecting with old friends.
NET NEW contacts expand your network power in so many ways.
First, you get to tell your story to a person who does not know your story. They are now enabled with you, your story and your mojo. If they are local, you get to reinforce your position in the community. If they are not local you just created a new seed in a weaker networked area. The real value is then reached when they then tell your story within their network. (This is why you always ask what you can do for them and then do it.)
The second benefit is that you have just added a resource to later utilize for you and/or your community. Every NET NEW person expands an industry niche, a functional skill, or a seasoned experience that you can lean on later.
Found some time to network this week? Think about how you can meet 5 NET NEW people to connect with and share stories. Your network thanks you in advance.
Just about every city has one, what options do you have?
It turns out that startup communities are no different than any other community; there are good actors and bad actors. One of the bad actors I label as the community bully. In this day of #metoo it should not surprise anyone that startup communities have the same type of bad actor.
There is no room for the community bully in the same way there is no room for the gender, racial, sexual preference bully.
The one definition of a bully that I prefer is a person who, “uses superior strength or influence to intimidate (someone), typically to force him or her to do what one wants.” In startup communities, it is the influence that bully’s use to intimidate.
Some examples of startup community bullies include:
- Investors who use their monetary power to extract outrageous terms and unproductive behaviors from founders,
- Entrepreneurial leaders (and their organizations) who force entrepreneurs to secure real estate (office space) to get access to their organization,
- Advisors or mentors who only share their experience and network through a “pay to play” arrangement,
- The grizzled business or government leader who hoards information, convenes secret meetings and generally exhibits “old-boys club” behaviors,
- Corporate executives who bring their old-school corporate aggressiveness (compete, shouting, take-no-prisoners) to their interactions with new founders.
Community building is more art than science. It is more support than burn bridges. Great communities recycle people every day. Bully new founders and they will find a new place to start their company. The best entrepreneurs quickly recognize bully behavior and vote with their feet. No entrepreneurs – – no entrepreneurial community.
So, what to do with your community bully?
Cut off their access to the community. Investors need deal flow, stop making introductions. Create alternative co-working arrangements with companies that have some extra space. Stop inviting them to meetings. Don’t put them on a panel or invite them to speak to your program. Establish a code of conduct amongst the good actors and share that across the community through social media.
Good actor leaders also hold responsibility to privately address the bully one-on-one. Though this feels confrontational, the spirit of the conversation should be more like, “we need you as an integral part of our community but not the way you are doing it today”.
Giving is sometimes easier than asking.
#givefirst is the aspect of community building where you as an individual help someone else without any expectation of getting something in return. No quid pro quo transaction approach here.
For many of you, you provide elements of #givefirst every day. You take a coffee meeting with a friend of a friend. You make an introduction on someone’s behalf. Or you simply listen to someone pitch their idea and give them some much needed feedback.
For others, the notion of hoarding all of your gold (time, energy, experience) just for your own benefit makes total sense. (I would like a chance to convince you that a little #givefirst will pay major dividends in ways you cannot even imagine – email me and let’s talk.)
But this post is not about #givefirst. It is about asking for help. I sometimes refer to this as the other (darker?) side of #givefirst, and in many communities, people are simply afraid to ask for help.
Asking for help has its roots in self-awareness and radical self-inquiry. The best entrepreneurs give time to understand what factors and emotions are driving the hundreds of decisions required in a startup. A significant outcome is the ability to ask for help.
Immature communities may frown upon a more public presentation of needing help with the belief that is shows weakness. Startup founders are supposed to know everything, be in command of their ship and can weather any issue that confronts them. Hogwash.
I see this as a signal of community maturity and firmly believe that leaders have to show 1st timers that asking for help is as much part of the success journey as fundraising, hiring or developing a great product.
Leaders lead by showing others that certain behaviors or mindsets are acceptable. Every panel discussion, every blog post, every tweet are opportunities to nudge your community’s beliefs.
Looking for a way to help your startup community? Network, baby!
It is imperative of you as a business leader that you fully understand the difference between a contact database and your network. Get this wrong and it’s like running with only one shoe – you can do it but it makes things a lot harder.
Seeding, nurturing, and harvesting a network will provide you and your business with a lot more horsepower then simply building a database of your contacts.
Full disclosure, I am a Malcolm Gladwell “connector” and have been for about eight years. Truth is, I had always been good at keeping a contact database up to date as I moved through my life and changed jobs. But I did not fully realize the power of a network until that point eight years ago.
Your contact database is just that – a structured collection of information that you can query for a variety of reasons. Most of us use the contact database to call people, or email them, maybe send a text message. Some of you may have this database tied to an email service so that we can send out large bulk messages. Regardless of what tools you use, the concept here is a one-way communication from me to one or many.
A network is something much different. The core concept of a network is the idea of interconnectedness. I think a lot of people miss the full idea of the network where nodes are connected to other nodes not just one node (the me as the center of my database view). We fundamentally understand this more today with the advent of social networks like Facebook and LinkedIn. But you don’t have to view your network solely through the eyes of these tools.
There is power and potential in how you help bridge connections between nodes in your network.
A few years ago, I considered getting involved with a new opportunity, which would drive this existing business into the future. Their current operational thinking has roots that date back over 30 years. When considering this opportunity, I many times saw examples of their activities as contact database building versus activities that encouraged, facilitated or supported interconnectedness. They have a database not a network.
As you consider improving your position or your company’s position, take a few moments and assess whether you are building a database or facilitating a network. Morph your thinking to full network and you will reap the benefits for years to come.
Want to up your network activities? Try these two simple tasks:
- Every day introduce 2 people in your database to each other with the simple sentence, “I thought you two should get to know each other.” Do this for 3-4 pairs.
- Convene a lunch or a late-in-the-day beer social where you invite 8-10 people who don’t already know each other. Hold no agenda other than getting the group to share who they are and what they do. (One simple trick is to have everyone share something silly like, “share one unique fact about yourself”.)
Each of these two tasks can be started tomorrow. You don’t have to buy lunch or the beers, everyone is on their own. We all enjoy these get togethers (for the most part) and are always waiting for someone to be the organizer. Be that person and you will yield the benefits for years to come.
Creating meaningful connections can be difficult at any age.
You remember how you felt in 7th grade at the dance with the girls clustered in groups on one side and the boys clustered in groups on the other side of the gym? Even the most confident still had a strong sense of fear of what was going to transpire next. They just hid it better.
The basis of that fear – a fundamental fear of the unknown. What do we say? (I don’t want to look stupid.) What is the first move? (Should I ask her to dance or just talk to her.) Who should I approach? (The girl that I like or the girl that keeps looking at me.)
The sheer memory of that night (my memories might have lasted until college, by-the-way) remains close to the surface as adult events many times evoke the same awkward set of questions and unknown answers.
Nascent startup communities are often like those middle school dances where there is awkwardness around what to say and who to talk to.
Entrepreneurs feel awkward talking to government officials. (Do we have anything in common?) Corporate executives feel awkward revealing departmental vision to entrepreneurs. (Fear that the startup might steal something.) Investors are always walking a tight rope. (Let’s not disclose what deals we are doing or about to do.)
The result of this awkwardness are communication silo’s that prohibit healthy connections to flourish. It is clear that many communities exhibit clusters of like-minded people that are not connected to others in their community. This is a big problem. Why?
The secret sauce of the mother-of-all communities (Silicon Valley) is the ability to quickly and effortlessly connect with the resources needed to start and grow a company. The valley is the quintessential flat network. This was mapped excellently in the work that Zoller & Feldman did around dealmakers in their research of 12 US cities in 2012.
One of our community-development principles here at Techstars is that emerging or nascent startup communities can advance quicker when they work to connect their clusters. Sometimes local dealmakers can make this happen. Sometimes an outsider has to facilitate these connections.
Bottom line – startup communities can’t advance at the dance unless everyone starts dancing together.
Everyone has some level of motivation, what is yours?
I have argued that there is room for everyone at the proverbial startup community leader table. Though we believe that you need 8-10 entrepreneur leaders on the team, most communities have a cadre of non-entrepreneurs stirring the pot. The issue is that non-entrepreneur leaders sometimes fade away after some initial participation.
To that end, what are you going to do once your initial involvement fades away?
Most non-entrepreneur community leaders are motivated first by their job. Examples include a:
- city staff who are driven by the notion of job growth in their city,
- angel investors who yearn for better deal flow,
- corporate executive who realize that a thriving startup community helps their company,
- real estate leader who sets up a coworking space,
- lawyer who holds group meetings and gives away free advice to first time founders,
- economic development executives who now have an entrepreneur charter,
- elected officials (at any level) who see a growing role for more entrepreneurship.
Let me be the first to thank you for joining us entrepreneurs to create a better future for our community. We need you in order to create a more inclusive discussion. And we need the resources you bring to grow smarter, better and faster.
I recognize that your initial motivation is your job, I also recognize that you bring a level of passion to this community-building effort and even give much of yourself during non-working hours. Again, thank you for your #givefirst attitude.
But now that you have a new job, or got really busy, or achieved your near-term job goals, what are you going to do now?
My partner Brad Feld reminds us that community-building is a 20-year effort that restarts every day. He also reminds us that community leaders need to be involved for 10+ of those years.
When you as an important leader in the startup community make your mark at any given stage of the journey and then fade away, we miss your leadership. You leave a void. And the community just slips back a little (or a lot).
My ask, don’t fade like a light switch; fade a little over time (like years). Show up at a few meetings, personally and publicly support others in their projects (which help foster the next generation of leaders), and maybe even join just one more project (instead of the 3 you were involved in previously.)
The overly-simplistic measurement tool provides bad signals to good people.
Investments made or capital deployed are the typical measure of success for a community. There are many reasons why capital is used and I will delve into that in another post. Today, I argue that using capital as the primary measure of a community’s success is the wrong view to base your entire community building strategy around.
But Chris, isn’t capital the most telling characteristic of a community’s health?
No, community measures like total capital invested provide no underlying insight into what is actually happening in your community.
Let us take a look at two different communities.
- Population of 800,000+
- Diverse general population but not entrepreneurs and working silo’s
- 100-150 active, full-time growth companies
- Long tradition of business building (not necessarily entrepreneurship)
- Raised $20M this last quarter ($15M from one breakout company (led by a regional VC) and $3M from another).
- Population of 250,000
- Not a diverse population but a diverse set of entrepreneurs who work together
- 50+ active, full-time growth companies
- No record of sustainable business building of any kind
- Raised $10M this last quarter (over 15 companies and only 1 at $1M).
When we take a high-level flyover and compare these two communities in a ranking of all cities, we would naturally force ourselves to think that community #1 is 2x more active than community #2. Even more so, we would look at the $10M raised from the breakout company as an indication that this community can scale companies. Next quarter or next year we should see this again with the company that raised $3M right behind them.
I am going to take a contrarian view and argue that community #2 is in a much better position to build a great startup community over the long run. They are building a base for the future. Community #2 has found 15 companies this quarter and I might see that there are multiple investors with different interests putting money into different companies.
On the surface community #1 has raised 2x the amount of money.
But community #2 has invested in 2-3x the number of companies.
Which community is doing better?
Our simple media approach to create and digest Top 10 lists and look at overly-generalized statistics to quickly tell a story does not truly reveal the startup activity or health of a community.
At best capital is a lagging indicator and a signal of the power of a handful of actors. At worst, measuring only capital creates a signal from which actors make poor community building decisions that ultimately derail the best efforts of well-intentioned actors.
What other measures can you use to benchmark your progress?