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Why You Should Start A Company In Boulder, New York, or Somewhere Else
A few weeks ago Fast Company published an interview between me and Laura Rich titled Why You Should Start a Company in… Boulder. This morning I woke up to Fred Wilson’s discussion of his article Why You Should Start a Company in… New York.
Fred and I did our interviews separately – there was no coordination between us. I was struck by a common theme – startup hubs take a while to develop. Fred says:
“we’re into the second decade now, and what the second decade is really turning out to be is serial entrepreneurs who’ve done it one, two, three, sometimes four times now, who can bring teams together very quickly, often teams that have worked together very quickly, can get on opportunities fast, can get money raised fast, can build companies pretty fast.”
Compare that to what I said:
“You have a lot of those entrepreneurs that had a success. Wasn’t necessarily their first company, but they had a success. And then, they had a failure between the 1998 and 2003 timeframe. So they started another thing or made some investments that got caught up in the bubble. So they had both a success and a failure in that time. So some set of those people started companies from 2004 forward. They were very mature entrepreneurs. They’re entrepreneurs that had success AND failure and understand what was required to both win and also were humble enough to recognize that you could lose.
Then, we both talk about mentors and the engaged cycle of old and new entrepreneurs in building and sustaining the entrepreneur ecosystem. This – as I’m sure you know if you’ve been reading this blog – is a core thesis behind the TechStars program now running in Boulder, Boston, and Seattle. Again – first Fred:
“And now you have role models. So the first time entrepreneurs can find angel investors. It’s exactly what has been going on in Silicon Valley for three, four decades now. Marc Andreessen becomes hugely successful, makes a bunch of money, becomes an angel investor, backs a bunch of people, mentors them, becomes a VC. That migration path is now playing out here in New York, and so most of the investments we do at the first angel-round stage is ourselves and a bunch of serial entrepreneurs in New York who are now making twenty-five- to fifty-thousand dollar investments as angels in these companies, sometimes acting as informal advisers and mentors to the first-time entrepreneurs.”
Now me:
So you had that against a backdrop of, everybody here is at most two degrees of separation away from any other entrepreneur, because there’s only 100,000 of us, right? And that then is great because what you have is this easy access to everybody. And even though there’s competitive dynamics and occasionally friction, and there’s plenty of personalities. More generally, you tend to see that people try to help each other here, especially around the thing that I think is the generator of new entrepreneurial activity, which is young, first-time entrepreneurs.”
Finally, even though both Boulder and New York are actively in the midst of an entrepreneurial renaissance, it requires continual effort to sustain this. I’ve committed the balance of my professional life to this (hopefully at least 20 years) – not just in Boulder, but in other entrepreneurial communities around the United States, including New York (which I love to both spend time in and work in.) See my parting comment:
“I think there’s been a ton of energy by entrepreneurs in energizing Boulder in the last four or five years. And that has to continue. There’s no such thing as resting on your laurels. There’s no such thing as being complacent. The entrepreneurial beast is hungry. And if you want to have a great entrepreneurial ecosystem you have to keep feeding the entrepreneurial beast. And it has to be fed all up and down the chain, from some entrepreneurs who are young to experienced entrepreneurs, and they have to keep caring about the place they live in, their community, and the dynamics amongst them, the people in the community.”
I’m curious to see if Laura picks up similar themes in her other interviews. Knowing some of the people and cities involved, I expect she will.
[...] This post was mentioned on Twitter by Brad Feld, prblogs. prblogs said: Feld: Why You Should Start A Company In Boulder, New York, or Somewhere Else: A few weeks ago Fast Company publish… http://bit.ly/7EFFWr [...]
This is a pretty powerful concept! We all know that these "environmental ecosystems" are awesome creators of jobs and wealth…and as the ingredients and/or prerequisites of growing this ecosystems become obvious and understood, it stands to reason that more people and places will proactively engineer them…
[...] up, I strongly believe they are part of the DNA needed for startup hubs (read also Fred Wilson and Brad Feld on the same [...]
Great post.
As an aside, I wish there was a decent public transit option between the south Denver area & Boulder. Today, travel between these two parts requires almost as much planning as a flight to San Francisco, given the traffic you'll encounter at all the usual choke points along the way.
that last point, that you have to sustain it, is super important Brad. like you, i'm committed to spending the remainder of my career on that stuff too
Good stuff. I think a key point that you both touch on is the role of each previous generation of successes: they become repeat founders, advisors and — most importantly — investors. It's a numbers game, though, and takes time to build the ecosystem. In a demographically dispersed region like CO, the acceleration provided by incubation programs like TechStars is huge.
from some entrepreneurs who are young to experienced entrepreneurs, and they have to keep caring about the place they live in, their community, and the dynamics amongst them, the people in the community.”
completely agree with both of you guys here. for the emerging communities outside the valley, it may take entrepreneurs being more patient & sacrificing their development in order to become a local success story.
fortunately, i think there's a number of communities across the country that have seen dramatic growth over the last couple years, and i can't wait to see what the 2nd generation within the ecosystem will yield
Thanks Steve – you totally nailed one of the key points. It’s also part of what has re-energized other entrepreneurial communities like Boston. Getting the experienced people involved with the first time entrepreneurs is absolutely key.
These ecosystems are vital for democracy, in my view. If you think of it, a "market economy" is a very sophisticated version of Cairo's Khan al Khalili market. For this market to work, it needs products and services made by locals for locals. Modern Entrepreneurs are able to create for local and global consumption, but it is clear local economies benefits tremendously from their work. Almost all product and services we see on the market, were invented by entrepreneurs at some point.
A Kauffman Foundation paper estimates there are over 12 million nascent entrepreneurs at any given time in the US (over 10 times that amount in China and India combined), and that they spend, collectively over $70 billion trying to start their businesses. The report also notes that entrepreneurs invest not only cash, but about ten billion hours of work each year, 2 percent of the total annual hours of work for pay in the United States.
Despite such efforts, research also shows that over 75 percent of these informal, personal investments are made by those that will NOT launch a viable new firm. Having a robust entrepreneurial ecosystem will potentially steer those entrepreneurs that will likely NOT succeed in one of two directions: (a) to stop wasting time and resources and focus on getting relevant experience before starting a company or (b) to find appropriate guidance and resources to make their business a reality.
Finally, entrepreneurs, in my view, are as important as teachers, doctors, firefighters, law enforcement professionals, and all other participants critical for our society to function, because they bring fundamental element to our market-based society: products and services that solve real needs. An entrepreneur is to an economy, as a seed is to a forest. We need more entrepreneurs and we need to focus on true value creation, from all perspectives (ethical, environmental responsibility, social respect and tolerance, inspirational and legacy, etc.) to ensure a healthy society. Money alone should never be the goal, as it is a medium of exchange that enables a society to function. Money quickly becomes worthless in a weak society (see Venezuela, Zimbabwe).
Another fantastic post Brad. Really interesting to watch Boulder and other communities come up through the ranks over the last few years.
Yeah – the middle of 36 is just screaming out for light rail.
And I look forward to spending a lot of that time working with you on stuff!
Thanks Andrew. You’ve been a huge part of it – thanks for everything you do.
Every time I ride light rail from Littleton (still a 10 min drive from my house) to downtown Denver, I think about how very small the whole system remains these many years after the idea was proposed.
Don't even get me started on the lack of rail into DIA.
If you're close to the lightrail in south Denver, the lightrail and B/BX bus usually aren't a bad option at all.
Yeah, I know about the buses – that's part of the issue for me, tho. I've tried that (long time ago) and *missed* the return bus. So, in order to account for all contingencies, I now drive between Highlands Ranch & Boulder.
I realize that this just ADDS to the problem because it puts one more single-person car on a congested route.
Agreed, – creating an "innovation cluster" is key to cultivating a thriving entrepreneurial community in Boulder/Denver. However, just as important as the opportunity for mentorship and building a community of like minded people with whom to share information, ideas and seek out talent is the need to access VC investment. From my observation, the VC community in this region is pretty small and many of the existing firms are struggling in the current economy. Consequently, the scenario that plays out all too often is that of an early stage company that grows to a point where they get funding from out of market VC's who then relocate the company to their local geography. As a result, many of the entrepreneurs who -with success, would be inclined to invest and mentor future companies don't stay here.
So, in the end this seems to be a bit of a chicken and egg quandry. In order to make Boulder/Denver a more vibrant entrepreneurial market what should come first, the money to keep the companies here or the entrepreneurs to stay and fund/mentor the next generation?
Great post and conversation. One underlying trait that makes it possible for teams to form quickly and to operate productively is trust.
Powerful trust emerges through shared experiences in individual enterprises and in a broader community. I stumbled on the importance of trust while coaching my son's soccer team. When the right set of kids were playing together, the team was effective. One bad substitution and things fall apart with players leaving their positions to compensate rather in effectively for the weak player. I’ve seen the same tendency in professional settings.
There is research to support the importance of trust. At the moment, I'm reading Ronnie Lessem's introduction to Executive Leadership a book by Elliott Jacques and Stephen D. Clement. (Thanks to Bernie Daina, Ph.D. for introducing me to Jacques work.) Lessem highlights that the organization development research conducted by Jacques suggests that a “requisite” organization requires four values and begins by discussing trust.
“Mutual trust, confidence, and reliability, embodied in what Jaques terms “mutual recognition units”.
In my view, all of us in Boulder benefit from the trust that we develop and maintain because it makes life better and our entrepreneurial efforts stronger.
[...] Why You Should Start A Company In Boulder, New York, or Somewhere Else (feld.com) [...]
It's a difficult thing to listen to feedback from your initial users, the first 25,000, and do the opposite of what they recommend. You alienate your "support base" etc etc. Tough situation.