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Entrepreneurial Density Revisted

I’m in San Francisco right now and then New York later this week. When I look at my schedule, and where I’m hanging out, I realize that even though I’m in two very big cities, I’m going to spending most of my time in a very small area.

When asked why Boulder is such a vibrant entrepreneurial community, I talk about a concept I call entrepreneurial density. Boulder is a small town – the city itself is only 100,000 people. Yet the number of entrepreneurs in Boulder is significant. And the number of people working for startups is off the charts. Start with the definition:

entrepreneurial density = ((# entrepreneurs + # people working for startups or high growth companies)) / adult population

My guess is that Boulder’s entrepreneurial density is one of the highest in the United States. I don’t have any empirical data to back this up – it’s a qualitative assessment based on my experience traveling around and investing in different parts of the US.

While population is one measure, I’ve also started thinking about geography as another. In the case of Boulder, the core of the entrepreneurial community is in downtown, which is a 10 x 4 block area. Even though downtown Boulder is small, it has different personalities (yes – we have an east side and a west side), yet you can walk from one end to the other in ten minutes. And, inevitably, when I walk across town I always bump into people I know.

The geography index matters even in places like New York. When I stay in New York, I generally stay within walking distance of Union Square. Sure, I end up in midtown or downtown occasionally, but most of my time is spent in a 20 x 8 block area. The bay area splits similarly – I’m in San Francisco within walking distance or a short drive of many of our bay area companies, but I’m on the other end of the planet from Palo Alto.

As I think more about entrepreneurial communities, I’m starting to expand my definition of entrepreneurial density to include by population and geography. This seems to matter a lot, even in very large entrepreneurial communities like New York and San Francisco.

I’m curious about experiences in other parts of the country, especially entrepreneurial communities that are growing or trying to reinvigorate themselves. How does entrepreneurial density (either geo or population) impact you?

October 3rd, 2011     Categories: Startup Communities     Tags: , , , , , ,
  • http://blog.calbucci.com/ Marcelo Calbucci

    Brad, this is a great concept and it actually explains a lot about Seattle. In absolute numbers there is probably more entrepreneur in Seattle than Boulder, yet, it doesn’t feel like it.

    In addition to your definition of Entrepreneur Density, I would also create a definition of Entrepreneur Buzz Density, and that’s the reason San Francisco is off the charts.

    Entrepreneur Buzz Density = (# Entrepreneurs + # Ppl Working on Startups – # of PPL working on other  non-startup-but-buzz-generating-industry) / population

    Seattle has Microsoft, Amazon, Expedia, RealNetworks, F5, and offices for Google, Facebook, Hulu, Salesforce, Zynga, etc. They suck the air from the entrepreneurial community here.

    • http://www.feld.com bfeld

      Great definition – very appropriate

    • FAKE GRIMLOCK

      IF LOCAL COMPANIES TEMPT STARTUPPERS INTO GET JOB INSTEAD OF STARTUP, NO CRITICAL MASS HAPPEN.

    • Brian Lomeland

      @Marcelo, I reached the same conclusion when comparing Seattle, Boulder and Austin. Seattle felt too spread out. I also looked at co-working facilities density. Austin has a wonderful concentration of startups and co-working concentrated downtown so it’s obvious where the action is. I don’t understand why Boulder doesn’t have more co-working options.

  • http://twitter.com/TransFS TransFS.com

    I’m based in Chicago, where both the entrepreneurial density is quite low (but growing!) and geographical density is greatly dispersed. There are pockets of startups neighborhoods but not more than a few in each. It’s a problem and local enthusiasts have decided to create a more centralized tech center to be a startup hub.

    In addition to FeeFighters, I also run an event series for entrepreneurs called Entrepreneurs Unpluggd. As we look for new markets to enter, entrepreneurial density does not really play a part in having a successful event. What really matters is how active local communities are, and what kinds of resources are at their disposal. For example, when looking at Kansas City, there’s an awesome tech scene there and everyone reads Silicon Prairie News to keep up with what’s going on. As long as the digital entrepreneurial density is there (ie ppl are engaged), i dont think the other two matter.

    http://www.entrepreneursunpluggd.com/blog/4-entrepreneurial-cities-to-keep-your-eye-on

  • http://twitter.com/jandrewrogers J. Andrew Rogers

    The equivalent in Seattle is the Pioneer Square area of downtown. It is a several square block area of buildings overflowing with startups and is the center of entrepreneurial activity in Seattle. So many tech companies from other parts of Seattle have moved in over the last year that it is driving up the formerly low rents that attracted startups in the first place.

    High-density startup districts create one of the essential aspects of Silicon Valley: you can effectively work for the “startup district” instead of any particular company. The ability to move to a startup two doors down at any time, and startups are always looking for more people, significantly reduces the risk of working at startups for the employees. It creates employment stability of sorts. If you want or need to move to a new startup, it is the same commute and similar job with a different email address. 

  • http://twitter.com/startupstella Stella Fayman

    I’m based in Chicago, where both the entrepreneurial density is quite low (but growing!) and geographical density is greatly dispersed. There are pockets of startups neighborhoods but not more than a few in each. It’s a problem and local enthusiasts have decided to create a more centralized tech center to be a startup hub.

    In addition to FeeFighters, I also run an event series for entrepreneurs called Entrepreneurs Unpluggd. As we look for new markets to enter, entrepreneurial density does not really play a part in having a successful event. What really matters is how active local communities are, and what kinds of resources are at their disposal. For example, when looking at Kansas City, there’s an awesome tech scene there and everyone reads Silicon Prairie News to keep up with what’s going on. As long as the digital entrepreneurial density is there (ie ppl are engaged), i dont think the other two matter.

    http://www.entrepreneursunpluggd.com/blog/4-entrepreneurial-cities-to-keep-your-eye-on

  • http://www.rentsavvy.com Mike

    I don’t know the experience of everyone else, but I’d suggest that investment activity has a role to play in entrepreneurial density.

    In Dallas for example, there are plenty of entrepreneurs and startups but the majority tend to relocate once they are able to raise money due to a lack of active early stage investors. Of those that remain, you tend to see each locate close to their home since there isn’t really an incremental benefit to be close to a) other startups or b) investors. Thankfully there are people trying to change this, but for now Dallas is very much in flux.

  • http://twitter.com/BrianFrumberg Brian Frumberg

    @bradfeld:twitter I would bet that your 20×8 block area overlaps pretty closely with Silicon Alley: http://goo.gl/7qzMf

  • Anonymous

    In New Haven,CT there are several pockets around the local universities here. It then follows I-95 or the Merritt like Rt 128 does in Mass. 

  • http://about.me/austinlac Austin Clements

    It would be interesting to take a deep look at the factors that contribute to growth in entrepreneurial density. Anyone know if there has been specific research on this? If not I’ll take a shot at doing my own.

    I started a company in LA, but found it much easier to find other entrepreneurs and developers to collaborate with after coming to New York. But I would love nothing more than to see Los Angeles blossom into what it has the potential to be!

    • http://www.feld.com bfeld

      I don’t know of any specific research on entrepreneurial density.

  • http://twitter.com/kbedell Kevin Bedell

    In Boston/Cambridge, the 10 square blocks around MIT and Kendal Square are one of the densest areas around for Entrepreneurial activity. There are a few other areas — the area around the Seaport in Boston and the Central Square area on the other side of MIT come to mind — but Kendal Sq is and has been the heart of innovation in this area for a long time.

  • Anonymous

    There is a lot of good business literature (I know … BizLit is an oxymoron) on “Industrial Districts,” and the kind of magic that Boulder now shows isn’t unlike entrepreneurial bursts seen historically with tech in Silicon Valley, knit fashion in Treviso (Benetton) Italy, or even things as prosaic as endovascular stents in upstate NY.

    In each case the district assembles a critical mass of specialization, information and labor supply, but the key is then the rise of “industrial atmosphere” — sparks for skill and innovation (there’s a nice summary of this here: http://bit.ly/qnhwnD).

    Boulder has the three core elements in dense exuberance; the question will always be “Can Boulder draw the insanely great dedication and brilliance it takes keep making magic?”  Silicon Valley works because it draws brilliant crazy people from all over the world.    That (Brad) is where you come in — your writings, connections, investments and work have helped make Boulder a magnet for talent and helped drive the density you extol in today’s posting.   

  • http://www.brain-scape.com Andrew Cohen

    Great post, Brad.  I actually wrote a related article a few months ago, comparing New York and Silicon Valley on similar terms: http://bit.ly/mdly7P .  I’d love to hear your thoughts.

  • http://petegrif.tumblr.com/ Pete Griffiths

    Geography is extremely important in trying to get a handle on what is going on in Los Angeles.  IMHO there are at least 3 distinct areas:  (a) Pasadena, clustered around CalTech (b) Santa Monica and environs, and (c) Orange country. 
    The distances are considerable and it does influence community formation and skills availability density.  IMHO Santa Monica is clearly emerging as the dominant geography.  Fairly recently we have had two co-working spaces open and become centers of gravity for events. And in the same timeframe a new incubator program opened in Santa Monica (UpstartLA) and it is extremely active in the community. These locations are enormously important to serve as foci – if only so we can cluster around drinking holes and get to know each other.

    • FAKE GRIMLOCK

      ENTREPRENEURS LIKE URANIUM.

      LOTS OF RANDOM ENERGY. BUT USELESS UNLESS PACKED CLOSE ENOUGH COLLISIONS HAPPEN, ENERGY BUILD.

      • http://www.feld.com bfeld

        Ok – that’s a winner. I love the uranium metaphor – look for it to appear in future thoughts!

      • http://petegrif.tumblr.com/ Pete Griffiths

        True for engineers as well.  Everyone feeds off the energy when it’s concentrated.  Critical mass = BOOM.

  • http://www.21logs.com sriraja

    On a different perspective, a friend of mine commented sometime back that the startup folks in SFO are a lot different from the folks in Santa Clara. The guys in SFO were young, unshaven and wore tees for work whereas folks in Santa Clara/San Jose wore slacks to work. Interestingly a lot of web startups happen in SFO and a lot of chip/hardware startups work their way in Santa Clara/San Jose.

    There is something going on there for folks to do some research on…

  • Catherine Kunst

    You might like this new mapping tool which plots the Innovation Index by community or MSA. Boulder is definitely bright spot on the US map. http://www.statsamerica.org/innovation/index.html (you can compare regions or view a map by choosing some of the tools). 

  • Dale

    Hey Brad,

    Are you fan of Richard Florida’s work? He thinks future economies will be centered around areas with with a high density of creative workers which include people like artists, entrepreneurs, engineers, etc. This will lead to the formation of economic mega-regions that will have more in common with each other than other areas in the same country (London and San Francisco will have more in common than San Francisco and Nebraska). 

    Thoughts?

    -Dale

    • http://www.feld.com bfeld

      I’m a huge fan – The Creative Class is a super important book.

  • Anonymous

    This is absolutely the case in Santa Monica, California and San Diego – the geography and density is what makes those two towns particular hotspots for technology in Southern California.

    btw, rough map mashup of Boulder’s entrepreneurial world here, reflecting your observations above:
    http://www.techrockies.com/intelligence/map/nboverview.php?iradius=10&istartlong=-105.282&istartlat=40.0163&company=The+Foundry+Group

  • http://arnoldwaldstein.com awaldstein

    Interesting.

    NYC has a bunch of individual entrepreneurial hubs, Williamsburg and DUMBO specifically. They may be even more dense than Union Square area for start ups.

  • http://resumecvservice.com/ resume help

    what a great post! thanks to the author or sharing this information with
    us! appreciate it! 

  • DaveJ

    A few other thoughts to put in the mix:
    - In the 80s and early 90s, venture-funded entrepreneurial companies were not so geographically dense. The two biggest hubs, Silicon Valley (the original one, i.e., San Jose, Cupertino, Sunnyvale, not San Francisco) and Boston’s Rt 128 (and 495) were all about office parks. They were still fairly close by, but not walking distance.
    - Sand Hill Road and Page Mill… what’s that all about?  Why are *VCs* geographically dense? (yes, that’s a pun)
    - There might be some lessons from general economics – after all, economic activity generally has high-density areas (city downtowns) and low density areas.

  • Anthony

    Great post. There is significant talent centered around the downtown core in Toronto, as well as in Liberty Village. I think the fact that in most major cities tech talent tends to gravitate towards a certain location within a city lends itself to collaboration and mind-sharing-this approach can only lead to more creativity. And less time wasted on running around to meetings etc.

  • mjpence

    An additional variable to entrepreneurial density might be the economy of the city when certain sectors dominate, i.e. Houston, TX.

    May be Houston is an anomaly or a perfect example of your expanded definition. In any case, entrepreneurs certainly do exist in Houston. Chance are though, they have been heavily influenced by the economy of Houston more than the geography or population. 

    The economic variable of the host city might have an impact determining which communities exist or thrive. As an entrepreneur in the information technology sector, I can attest that the availability of resources for an information technology start-up in Houston are slim. The resources that do exist in Houston have been mostly commandeered by the other three prominent and highly financed sectors that include energy, life sciences, and NASA originated technology. Of course there have been exceptions, but it has been a long time. The economy undoubtedly plays a role here. 

  • Scott Perlman

    Interesting article. Boulder can further be divided into the following sub categories: High Tech, Green, and Social enterprises, each with their own density and infrastructure, e.g. attorneys, accountants, developers, advisors and funders who support the communities. I find that the dense community leads to more opportunities for all involved.

  • John M. Mueller

    Brad, does mentor density factor into the formula?  And if so, how? – JM

    • http://www.feld.com bfeld

      I haven’t really thought about mentor density as a driver. It could be, but it seems like more of a consequence. But I’ll think about it more – it’s an interesting suggestion.

      • FAKE GRIMLOCK

        MENTORS MAINTAIN INFRASTRUCTURE FOR LITTLE ENTREPRENEURS TO GROW IN.

  • Jvin248

    It’s a fun exercise … but I think you’ll find a lot of entrepreneurial density around major universities (young, educated, risk-taking), large successful corporations (money floating around the community, well as the tools to build tools, and the ability to take risks in your free time).

    I had one engineering professor say that all the important enabling inventions to what is now Silicon Valley were started in the mid-west and once to a certain size they said “let’s move to where the weather is nicer”.  His point was that the weather plays a lot in entrepreneur’s success.  Cloudy/rainy/unpleasant weather leads to staying inside and innovating.  Sunshine and beaches leads to recreation and entertainment instead.  

    • http://www.feld.com bfeld

      I disagree with your assertion on weather – it runs counter to my own experience where weather is not a dominating factor.

      • FAKE GRIMLOCK

        MOVE TO PLACE WITH BIKINIS VS. MOVE TO PLACE WITH NO BIKINIS IMPORTANT CONSIDERATION.

        • http://www.feld.com bfeld

          Hah. But many people wear bikinis under their clothes. Does that count?

          • FAKE GRIMLOCK

            ONLY IF CLOTHES COME OFF.

          • http://www.startupboyo.com/ RichardF

            I’m surprised that robo dinosaurs don’t have x-ray vision

          • FAKE GRIMLOCK

            UNWRAP HALF THE FUN.

  • FAKE GRIMLOCK

    ME, GRIMLOCK, LEAVE MIDWEST BECAUSE NO DENSITY MAKE IMPOSSIBLE TO CREATE STARTUP.

    NO CAN RECRUIT, NO CAN FIND MENTORS, NO CAN GET VC, NO CAN BUILD CULTURE.

    DENSITY FIX THOSE THINGS. 

    • http://www.alearningaday.com Rohan Rajiv

      Ah! Grimster! now i see you. I was wondering why I didn’t notice you on any of the posts. So, I thought I’d double check. 

  • http://twitter.com/Silverborne Steve De Long

    Hey Brad, Had to comment on San Diego where we have a pretty vibrate community these days. But things are pretty dispersed.  Downtown, Sorrento Valley, University City/Torrey PInes, and Carlsbad being the key locations although there seems to be a lot of momentum towards the Downtown region with Flud, Mindtouch, and TastyLabs (OpenCandy) located in that area.  In addition, the EvoNexus incubator is opening a second facility downtown to expand their program.  A lot of good stuff happening here.

  • http://leighhimel.blogspot.com leigh

    We have the centre for social innovation in Toronto – not exactly start-ups in the way you mean it but i have some friends who have taken up spaces in there and love the interactions, networking and resources avail to them.  What i like about what i see there is less about density, but more about diversity – skills, types of companies, etc etc.  If you ever come to Toronto, you should drop by and get them to give you a Tour.  Interesting approach for sure.  

    http://socialinnovation.ca/

  • http://twitter.com/davidhhendricks Dave Hendricks

    Density makes sense, but you need key elements to make something dense, specifically gravity or a ‘center’.

    Boulder had some startups when I was a MessageMedia back in the day, but what’s been the catalyst? If there is a periodic table, what are the elements that contribute to entrepreneurial density and can they be manufactured/synthesized or must they be organic?

    • http://www.feld.com bfeld

      I’m working on a book about this with some specifics around how Boulder evolved. Fundamentally the driver was a dozen or so entrepreneurial leaders who decided to spend 20+ years building on the foundation that was already in Boulder dating back to the 1970′s. Then, there are a handful of key attributes that I’ve talked about on other posts, and will elaborate more on in future posts (and the book).

      1. Entrepreneur led
      2. 20 year view
      3. Activities that engage the entire entrepreneurial stack
      4. Continuous fresh blood into the system

  • http://www.startupboyo.com/ RichardF

    Being on the right continent helps.  There is nowhere in the world like the US that has such an amazing start up ecosystem. 

  • http://www.charliecrystle.com Charlie Crystle

    it’s why I’m moving back to NY (almost full time). 

  • http://twitter.com/defrag Defrag/Glue

    after a day in Key West history museums, I think your point on entrepreneurial density is right on. At one point, Key West was probably the biggest center of entrepreneurialism in the U.S. (1850-1900), and was the highest per capita wealth….because it’s an incredibly small place FILLED with entrepreneurs. I’m working up a blog post….interesting stuff.

  • DC

    Brad,

    Check out Maryann Feldman at UNC-Chapel Hill she has conducted some interesting research on the geography of innovation specifically how North Carolina has evolved from agriculture to technology. 

    • http://www.feld.com bfeld

      Thx – good suggestion – will do.

  • http://petegrif.tumblr.com/ Pete Griffiths

    Recommend this Paul Graham piece wrt this topic:
    http://paulgraham.com/hubs.html

  • http://www.vegasstartups.com John

    I just had to throw out Vegas as an interesting place to look at the development of entrepreneurs and tech startups.  It’s still quite early in the development of the tech startup scene in Las Vegas, but there’s been some really great momentum that’s happening lately.  I and others intend to do as you describe and be the entrepreneurial leaders that stick around for 20+ years.

    More to your point, there’s already begun an interesting discussion happening around the Fremont East area of Vegas which Zappos and Tony Hsieh are working to transform the area and those that live in the burbs of Vegas.  I’m pretty sure that Fremont East will become the major tech hub of Vegas.  Plus, it’s like a 15-25 minute drive to get to Fremont East from most parts of Vegas.

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Brad Feld

Hi, I'm Brad Feld, a managing director at Foundry Group who lives in Boulder, Colorado. I invest in software and Internet companies around the US, run marathons and read a lot.

 
 
 
Startup Communities - Chapter 3