Entrepreneurial Communities

At Foundry Group, while we live and office in Boulder, Colorado, we invest all over the United States.  In the last 18 months, we’ve invested in companies based in Seattle, New York, Boston, Los Angeles, San Francisco, and Colorado.  My partners and I are regularly exploring new entrepreneurial communities, thinking about what makes them unique, and trying to figure out what makes them sustainable over the long term.

Last week, Jason took a trip to Ann Arbor, Michigan – the home of his alma mater.  He spent a couple of days talking to folks throughout the university and the community about entrepreneurship.  He summarized his trip in his post titled Entrepreneurship in Ann Arbor, Michigan and Mark Maynard of the University of Michigan TTO wrote a comprehensive post on Jason’s talk titled Building an Entrepreneurial Community: Lessons from Boulder, CO.

While Boulder (and Colorado) have gotten a lot of things right around building a sustainable entrepreneurial community, I believe that there is always a huge opportunity to learn and grown.  As part of this, I’m co-hosting a trip to Silicon Valley for Colorado Governor Bill Ritter, Don Elliman (the head of Colorado’s Office of Economic Development), and Michael Locatis (Colorado’s CIO).  We are meeting with a number of IT / software / Internet companies and a bunch of entrepreneurs throughout Silicon Valley over the next two days to discuss what is special about Silicon Valley and what we can learn from it in Colorado.  I’ve been adamant that Colorado’s goal should never be “to be like Silicon Valley”, but instead we should listen and learn what works here and figure out how to apply some of the chocolaty goodness while avoiding all the traffic jams.

I believe that the future of most economic development and growth comes from entrepreneurship.  Plus, it’s a ton of fun.  More later.

  • Brad, I look forward to reading your observations. I would propose that two bay-area entrepreneurial ingredients missing from many US communities:

    1. An existence proof of a successful start-up that spawns the next generation of entrepreneurs. Examples: Dell in Austin and Qualcomm in San Diego.

    2. Perceived safety net. The Silicon Valley culture perpetually encourages people to take risks with a shared belief that if your start-up folds, you will have another job in days…..hours in some cases. In cites like Phoenix, Sacramento, Dallas, etc. the belief system dictates that if you lose your job, you must either work for a giant (Intel, TI, etc.) of move your family to another city.

    • Both great comments that we’ve heard echoed throughout the day today.

  • Brad, great to see people branching out from the belief that Silicon Valley is the only model for building entrepreneurial communities; replicating the processes and tactics of the Valley wouldn't lead to the same results elsewhere.

    Silicon Valley certainly isn't the only model; let's remember it's still a fairly recent model for entrepreneurial economic development and that there is a significant opportunity for cities throughout the US and abroad to innovate entrepreneurial community-building.

  • This is an incredible initiative – I'm originally from a very manufacturing-heavy city in Ontario, Canada which is gradually shutting down as a result of the recession. The only way it'll bounce back is if the city welcomes entrepreneurs and a new wave of innovation. It's happened in Kitchener/Waterloo, Ontario – home of RIM.

  • One of the issues I have tried to stress when having this conversation locally is that each city needs to build on its core strengths. No other area will recreate what Silicon Valley or Boulder has but if you can accentuate the things that make your area unique and attractive to entrepreneurs you can build a culture around that uniqueness. I think learning from areas that have built a strong entrepreneurial culture, you will find them playing to their strengths. I look forward to what lessons you and Governor Ritter glean from your experience.

  • "…instead we should listen and learn what works here and figure out how to apply some of the chocolaty goodness while avoiding all the traffic jams."

    Amen. Yell if you need help with the chocolaty part.

  • Mike Schmidt

    Brad, an excellent initiative and educational effort for Colorado Communities. I hope the trip produces some good ideas and takeaways… As a former resident of the Bay Area, (1965-1981) I grew-up in the Silicon Valley area, (Sunnyvale, Mt. View, Santa Clara, etc) got my first corporate job at Intel, (New Fab Engineering) and absorbed the "Entrepreneurial Culture" before I joined my first video conferencing start-up company in Southern California in 1981 and have not looked back since. Since my return to Colorado in 1994, I think the the two things we need to focus on for further developing Colorado Entrepreneurial communities is; (1) solving the "micro-capital" investment problem, ($100-$250K capital raises) for small developing stage companies that can't seem to get on the radar of larger VC firms. This seems to be an amount that is out of reach of casual investors, and is a real "Dead-Zone" of capital raising that a small company with say 1-3 people can't seem to close with conventional approaches, (banks, friends and families, etc.) but is the real "juice" that is needed to move a company aggressively forward in a new market or opportunity. And (2) we need to get our existing "Small Business Support Agencies and Services" to better focus on the needs of local small business, (like local EDC's or Chambers, State Agencies, etc.) and get them to work together with local venture groups or angel investors instead of just trying to convince out of state companies to move here and create jobs. This is obviously a necessary evil to balance the scales of relocating companies moving out of CO, but it seems to be a big waste of time and money when there are so many deserving companies and entrepreneurs locally who could use the help and capital. I have heard too many stories about local support entities who "protect their funding sources" and do not share or attempt to reach out to other groups or services in a collaborative fashion. We need Kiritsu baby! Good luck and I look forward to your follow-up report.

  • Mike – I could not agree more regarding the micro-capital challenge. During this down-turn we can fuel start-ups with $50-250K seeds and rounds that could have huge returns, but small funds and small rounds don't fit the traditional VC model. I have no need to lunch off of the carry; as an investor and mentor I'm happy to be rewarded upon success. Maybe I'm just naive.

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