After a long really fun day yesterday at TechStars and StartLabs I wandered over to 34-101 to be on a panel for Joost Bonsen and Joe Hadzima‘s IAP class 15.S21: The Nuts and Bolts of Business Plans. It’s not really a class about business plans rather a class about starting a business and has been regularly modernized by Joost and Joe. On the panel were the two founders of Super Mechanical (creators of Twine) which is an awesome project that used Kickstarter for its initial financing (and that I’m an excited supporter / customer of.) I had a fun day and wish I had found more IAP courses to help teach and participate in this trip.

After the course finished at 9:30, Joost and I wandered over to the Muddy Charles for a beer. When I crawled into bed at 12:30 my head was full of a ton of awesome ideas that came out of our rambling three hour discussion. I’ve been friends with Joost since the early 1990′s when we first met around the MIT 10K competition and have been a huge fan of his ever since.

Among other things we talked about the startup ecosystem in and around MIT and the evolution of Boston as a region. The comments in my post from yesterday titled I’m in Cambridge, Not Boston were great and stimulated additional thinking on this topic, as did Joost’s experience here over the past 20 years. Joost has incredible knowledge and history of the region and of MIT, which occasionally appears in posts like How Kendall Square Became Hip: MIT Pioneered University-Linked Business Parks but is really apparent when you spend extended time with him talking about MIT, how it evolved, what it is today, who has been involved along the way, and the entrepreneurial community that has evolved around it.

About mid-way through the conversation Joost dropped two phrases on me that blew my mind. The first was “Creative Construction.” As we were talking about startup communities and the new book I’m working on, Joost said “How about a play on words on Schumpeter’s “creative destruction” and call your theory about startup communities “creative construction” instead. After I put the exploded pieces of my brain back together and said “that is exactly fucking right” he went on. “Think of entrepreneurship as a tool of mass construction.”

The play on words is just delicious. And right on – we are talking about an awesome positive force in the world and should be using language that represents that. At the core of our conversation was the notion that an entrepreneurial region like Boston is actually a collection of 100,000 person “entrepreneurial neighborhoods” (that’s what Kendall Square is, as distinct from the Fort Point Channel area, or the Leather District, or what’s going on in Davis Square, or …). And the idea that creative construction drives this – and the neighborhoods are part of a broader entrepreneurial community (in the region) is a construct that resonates with me.

I’m off to HubSpot to give a talk, a swing through Venture Cafe at CIC, and then back to StartLabs for the rest of the day. My three weeks in Boston (well – Cambridge) with a side trip to New York is coming to an end. It’s been amazing, enlightening, educational, productive, and a lot of fun.

Over the last three weeks I’ve had numerous people ask me how my trip to Boston has been going. For a while I corrected them and said “I’m mostly in Cambridge” but gave up. Tonight, after hanging out at the TechStars Boston Mentor evening and program kickoff, I got into a long discussion with a Bill Warner and Ken Zolot about Cambridge, Boston, and startup communities. At some point in the conversation I blurted out “I have no idea why we call this program TechStars Boston instead of TechStars Cambridge.” And then something that I thought was important dawned on me.

My entire entrepreneurial view of “Boston” is centered around Cambridge. I’ve been here for two of the last three weeks (I spent four days in New York). I’m staying in a hotel in Kendall Square across from Google and next to MIT. I’ve spent my days walking to meetings at MIT, Kendall Square, Tech Square, Central Square, and East Cambridge including what I refer to as “the old Lotus building”. I’ve had all of my meals in Kendall Square or Central Square. Other than running, I’ve only been physically in Boston four times – first when I arrived at the airport, then when I took the train to New York, then when I returned on the train from New York, and finally when I spent the morning at Fidelity’s FCAT offices at Summer Street.

Now, I know there is plenty of startup activity in Boston. My old neighborhood near Fort Point Channel (I used to live on Sleeper Street in a condo at Dockside Place) is bustling with startup activity. There’s plenty of stuff on 128 and 495. There’s are other entrepreneurs tucked around the city. But that’s not the interesting story, at least in my mind.

The few square miles in Cambridge around MIT is the white hot center of startup activity in the region. One of my basic principles of startup communities is the need for what I call entrepreneurial population density (EPD) which I calculate as the total number of entrepreneurs and employees of entrepreneurial companies divided by the total number of all employees in a region. Then an even more powerful metric is entrepreneurial density, which is EPD / size of region. A large EPD in a small physical region wins.

Part of the magic of Boulder is the entrepreneurial density of the place. And as I wander from meeting to meeting in Cambridge, running into people on the street who I know, or who I met with the day before, or I who I want to know, reminds me of the dynamic in Boulder. For example, I ran into Matt Cutler on my way to Rich Levandov’s office and we walked over together. I bumped into the StartLabs organizers when going to a meeting with Will Crawford. I saw Joe Chung while hanging around StartLabs. I saw 50+ mentors who I knew last night at TechStars and expect to see more today when I’m there. While having breakfast with Michael Schrage at the Cambridge Marriott Joost Bonsen came over and said hello. At Dogpatch meeting with Yesware I saw Dave Greenstein and gave him a hug for his new kid. And the list of moments like this, which happened with 10 square blocks, go on and on. But when I hop on the red line and travel to South Station, the magic disperses.

I remember when the Boston VC community moved from downtown Boston to Waltham. I understood it was an effort to create a “Sand Hill Road” like venture community but the big miss was that an MIT student couldn’t hop on a bike and ride to Waltham like a Stanford student could with Sand Hill Road. And it’s no surprise that downtown Palo Alto, which is even closer to Stanford, is an attractive place for VCs to hang out. The snarky message when the VCs moved to Waltham was that they wanted to be close to their fancy houses and their private golf clubs and the entrepreneurs could come to them. It’s no surprise that many of these firms have relocated to Cambridge, recognizing that they should be in the middle of the entrepreneurial energy.

I’d suggest to the Cambridge and Boston startup communities that they should think of themselves as two separate but related communities. Even within Boston, it seems like there are different startup communities in downtown, 125, and even 495. I think that thinking of it “Boston” is a mistake.

In my world view, the entrepreneurs drive the startup community. Focus on entrepreneurial population density and entrepreneurial density – and make sure your geographic region is small. Over time, linking the critical mass together in a larger region (e.g. Silicon Valley or Boston) is fine, but the real power comes from the startup communities with the largest EPD in small physical regions which are big enough to have critical mass.

I’ve been a big supporter of the Startup America Partnership since its inception at the beginning of last year. The organization is now a year old and is starting to really have some impact. I’m psyched about the groundwork they’ve laid down and their plans for 2012.

One of the initiatives I’ve been very involved in is Startup Colorado which we launched a few months ago. I also gave my first Startup America webinar today to a bunch of entrepreneurs who are members of Startup America Partnership about fundraising. And there’s a lot more coming to entrepreneurs who are members of the Startup America Partnership.

So – sign up now. If you are a Colorado-based company, this will automatically get you into the Startup Colorado infrastructure as well at the Startup America Partnership. If you are in any other state, you’ll be part of the whole Startup America Partnership as well as your state when they launch (if they haven’t already).

My simple appeal to all entrepreneurs in Colorado – please sign up. There is no cost to you. There are tons of benefits. It helps us more efficiently connect with you and engage you in the Colorado startup community and we want to show the world how powerful the startup community is in Colorado. Plus, I’m now in a heated match for the number of startups – competing with David Cohen and the other TechStars Managing Directors (David Tisch, Katie Rae, Andy Sack, Nicole Glaros, and Jason Seats.) You wouldn’t want them to show me up, now would you.

Sign up. And help everyone in America win as we create more and more entrepreneurial companies together.

I’m deep into writing my latest book. For now, the title is “Startup Communities: Creating A Great Entrepreneurial Ecosystem In Your City.” I’m open to different titles – if you’ve got ideas just put them in the comments.

Following is the current table of contents. It’s still pretty dynamic as I’m adding stuff while I’m writing. I’ve also got a bunch of guest sections coming from all over the US (I’ve got a dozen so far) so as they come in, I’m trying to fit them in (which often generates a new, or different section). If you are a leader in your entrepreneurial community and have something you want to add, email me 500 – 1000 words.

I’m looking for feedback on this table of contents. If anything jumps out at you as wrong, unclear, in the wrong place, or missing, please leave me your thoughts in the comments.

My current goal is to have a first draft ready for circulation finished by 12/31/11. I plan to have the book published and available by 2/29/12. I’m self-publishing this one so there will be no delay in getting it out. I also plan to price it low so it has the potential for broad distribution.

Comments of any sort are welcome and encouraged! The table of contents, as of today, follows.

Foreword

The Boulder Entrepreneurial Community

• Boulder As A Laboratory
• Before the Internet (1970 to 1994)
• Pre Internet Bubble (1995 – 2000)
• The Internet Bubble (2001 – 2002)
• The Beginning of the Next Wave (2003 – 2011)

Principals of a Sustainable Entrepreneurial Community

• Led By Entrepreneurs
• Have A 20 Year Commitment
• Welcome Everyone Into The Entrepreneurial Community
• Engage The Entire Entrepreneurial Stack

Leaders vs. Feeders

• What’s A Leader?
• What’s A Feeder?
• Entrepreneurs
• Mentors
• Government
• University
• Investors
• Service Providers
• The Importance of Both Leaders and Feeders

Keys of Leadership Culture

• Inclusive
• Mentor Driven
• Non Zero Sum Game
• Porous Boundaries

The Power of Accelerators

• The Story of TechStars in Boulder
• TechStars Impact on Boston
• TechStars Impact on New York
• How Accelerators Are Different Than Incubators
• Why Incubators Don’t Work

Classical Problems

• Patriarch Syndrome
• Complaining About Capital
• Reliance on Government
• Short Term Commitment
• Bias Against Newcomers
• Feeder Control
• Artificial Geographic Borders
• Risk Aversion
• Fear of Failure
• Zero Sum Game

A Different Example of University Involvement

• Silicon Flatirons
• The Components of CU Boulder
• Why They Don’t Work In Isolation
• Why The Community Matters Most
• The Real Value – Fresh Blood Into The System

Entrepreneurs vs. Government

• Bottom Up vs. Top Down
• Micro vs. Macro
• Action vs. Policy
• Impact vs. Control
• Self Awareness

Boulder’s Great, But What Are It’s Weaknesses?

• Parallel Universes
• Integration With The Rest of Colorado
• Lack of Diversity
• Space

Community Power

• Give Before You Get
• The Power of Apprenticeship
• Everyone Is A Mentor
• Embrace Weirdness
• Be Open To Any Idea
• Be Honest

Myths About Entrepreneurial Communities

• We Need To Be Like Silicon Valley
• Venture Capital Matters
• Angel Investors Must Be Organized

How To Get Started

• Do or Do Not, There Is No Try
• Resources

If your company is interested in joining Startup Summer, please email me and I’ll get you plugged in.

Startup Summer, a new program from Startup Colorado, will bring hard working, passionate college-age entrepreneurs to Boulder to work as summer interns for startup companies. We are looking for a total of 30 Boulder-based early-stage companies to participate as we are going to try to accomodate 30 students from around Colorado in the first year.

In exchange for free housing in CU-Boulder campus dorms, Startup Summer interns will spend the summer in Boulder interning with companies, learning about the world of startups, and building entrepreneurial business skills. We will hold a “meet the applicants” Startup Summer Speed Dating Night in the spring of 2012. At Speed Dating Night, a pre-screened pool of intern applicants will attend an open networking event in which companies will meet the various applicants in rounds of short interviews. Afterwards, Startup Summer coordinators will match company preferences with applicant preferences to match interns with companies.

Throughout the summer, interns will work during the day at the company that hires them; in the evenings, they will attend various dinners, events, and workshops. At the end of the summer interns will go through a TechStars-like Pitch Night during which any company can come hear their pitch about “what I learned about starting a business” which has the subtext of “why you should hire me as your next employee.”

We are looking for the first 25 startup companies who will commit the following to the entrepreneur interns:

1. A decent summer wage (suggest between $10-$15/hr);
2. An intern position with a supervisor/manager who will commit to constructing a meaningful position and spending at least an hour per week supervising;
3. At least an hour every other week, but preferably every week, with you and the other company founders talking about the entrepreneurial experience, the lessons you’ve learned and answering the questions they’ll be bringing from their evening activities;
4. Ideally a few hours during the summer with the person accountable for fundraising to teach the experiences of fundraising; and
5. Ideally attendance at the summer-ending Pitch Night with a few words of introduction of the intern.

In return, Startup Summer will commit to you:

1. The selection of the most passionate young would-be entrepreneurs in Colorado
2. Transportation to Boulder and housing
3. Immersive intern education at night with sessions including “entrepreneurs unplugged”, “topic of the week”, “peer sharing”, “company field trip” and a variety of other evening sessions.
4. A process whereby you have input on the selection of your intern

Startup Summer is organized and run by Tim Enwall, David Hose, and David Mangum; it is one of multiple projects being developed by Startup Colorado, an initiative to spur new company creation and entrepreneurial spirit throughout the Colorado’s Front Range. Startup Summer has hired a CU student, Eugene Wan, as a Program Coordinator to assist with logistics relevant to applicant recruitment, initial application processing (vetting applicants for Speed Dating Night), intern move-in, and intern activities during the summer. Although certain skill sets like computer programming might be particularly valuable, Startup Summer is designed to be open to any student with demonstrated passion, dependability, and learning ability.

Companies such as Tendril, SendGrid, Rally, Integrate, Gnip, Orbotix, Trada, Next Big Sound, LinkSmart, Standing Cloud, Sympoz, NewsGator, and TechStars have already committed so you’ll be in good company.

If your company is interested in joining Startup Summer, please email me and I’ll get you plugged in.

I’ve talked a lot on this blog about the great things about the Boulder entrepreneurial ecosystem. Over the past five years it’s been awesome to see things really blossom. But there are always problems of some sort. And we have a few here in Boulder which – in the spirit of helping understand how entrepreneur ecosystems work over time – are worth pointing out and talking about.

The most visible problem her is that Boulder’s booming businesses are running out of room. Downtown Boulder is not large – maybe 10 blocks by 5 blocks – and very few of the buildings are more than three stories tall. Once you get outside the downtown Boulder core, you get some larger buildings and some office parks, but you are no longer in the core of downtown. If you get in your car and drive to the next towns over, such as Broomfield and Westminster, there is plenty of office space and some larger buildings.

But many companies that start in downtown Boulder want to stay in downtown Boulder. The companies build their culture around being downtown, benefit from the extremely high entrepreneurial density of Boulder, and the dynamics of being in a downtown core rather than in a suburban office park.

Ironically, the Boulder politicians have always seemed to have a bias against “business in Boulder.” I’ve heard about it for the 16 years I’ve been here and experience it periodically. The zoning here is extremely restrictive and the decisions around zoning seem arbitrary. The division between retail, tourism, business, and residential seems in continual conflict. A few real estate developers own and control much of the existing office buildings in town and as a result end up having a zero sum approach to leasing space – specifically they jack rents up as high as possible when the market is tight, only to have them collapse when the market loosens up.

As I’ve watched local Boulder companies grow to be in the 100 to 300 employee range, I’ve watched them struggle with office space. If the trajectory of several of the local companies continues, this struggle will get more severe over the next 24 months. Inevitably, several of the larger companies will have to move outside of Boulder, even though they don’t want to. When this happens, our real estate owner friends will once again have a lot of empty space on their hands which will fill up more slowly with smaller firms as they grow into what’s available.

I’m not sure if this is a solvable problem given all of the different constituents involved. The contraints on Boulder’s growth have many advantages and are part of what makes Boulder as great as it is. But it’s also a weakness – one that is front and center right now as a number of companies who look like they could be long term, self-sustaining anchors of the Boulder entrepreneurial community have to figure out where to house 300 people going on 1,000.

I spent yesterday at University of Michigan with my partner Jason Mendelson (he’s a two time grad – economics undergrad and then law school.) This was my first trip to Ann Arbor and I had a great time. It was fun to have Jason show me his old haunts, our new friend Wes took good care of us throughout the day, and we met a ton of interesting people including a bunch of entrepreneurs.

In one of our early meetings I heard a great line from one of the members of the UM Tech Transfer Mentor-in-Residence program.

The line was “College is like a sandbox if you are an entrepreneur. Falling down doesn’t hurt much.”

This made me think of a brilliant phrase from Alex White, the CEO of Next Big Sound, in his TechStars Demo Day pitch. I can’t remember where in the presentation it was but Jason reminded me that one of Alex’s great moments was when he said something like “We don’t need to raise much money because we are cheap to keep alive.”

Throughout the day we met with a bunch of college students – law school students, undergrads, MBAs, and a few PhD’s. All of them were really lit up about entrepreneurship, were trying lots of stuff, had tons of questions, and challenged us to give them our views and feedback on what Ann Arbor needed to do to create a great entrepreneurial community.

At the end of the day we met with all the members in TechArb. This is the student accelerator – I was blown away by what they were doing. At some point I said to Jason “why doesn’t CU Boulder have a thing like this.” He had an answer that I’m still pondering, but effectively reinforced the initiative that the students and entrepreneurial leadership around the UMich were taking. During this session, I kept thinking “college is like a sandbox – it doesn’t hurt much when you fall down.”

Days like today are incredibly energizing for me. The level of enthusiasm and optimism among the people we met with was phenomenal. Their willingness and interest in learning and trying new stuff was apparent. And their understanding that plenty of things wouldn’t work, but they wouldn’t learn if they didn’t try, was front and center.

To all the folks I met with today, thanks for making my first trip to Ann Arbor really fun and interesting. And, even though I couldn’t care less about college football, good luck against Nebraska this weekend.

We launched Startup Colorado last week as part of the Startup America Partnership. I’m co-chairing this effort with Phil Weiser (Dean of CU Boulder Law School) and Jan Horsfall (CEO of Gelazzi). Dave Mangum (Silicon Flatirons Research Fellow) is the Executive Director and the effort is being sponsored by Silicon Flatirons at CU Boulder.

We’ve got a bunch of great entrepreneurs from Boulder, Denver, and Colorado Springs involved at this point and are reaching out to entrepreneurs in Fort Collins to help us get things up and running there. We’re taking a 20 year view to this effort so rather than create some grand conceptual plans, we’ve chosen six initiatives to go after in the first year. We are building off of the incredible entrepreneurial community that has been created in Boulder and starting by exporting several of the concepts that we know work, while trying some new things in Boulder. The six initiatives are:

1. Export the magic of the Boulder tech community to Fort Collins, Denver, and Colorado Springs by expanding New Tech Meetups, Open Coffee Clubs, and Community Office Hours to these cities.
2. Create an Entrepreneurial Summer Camp in Boulder for talented college students from throughout Colorado. These students will be housed at CU Boulder and work as paid interns for Boulder startups.
3. Support entrepreneurial education in the Front Range by developing a New Venture Challenge business competition for Boulder-area high schools with the goal of seeding the other Front Range cities with leaders to expand the competition throughout Colorado.
4. Evaluate current barriers that entrepreneurs face, including an assessment of what best practices are in place at entrepreneurial communities around the US and world. We’ll start by measuring in detail what’s going on in Boulder and try to create a framework for any city.
5. Engage larger companies in the entrepreneurial ecosystem through commitments to help entrepreneurs.
6. Build the Startup Colorado website to be a thorough database for information and connections.

We are very aware that there are plenty of other cities in Colorado, especially on the western slope, and hope to include them in Startup Colorado in year two. We know that some of the ideas above won’t work and we intend to make mistakes, kill things off quickly, and keep iterating on new ideas. Our goal is to do stuff, rather than just talk about stuff.

If you are an entrepreneur and want to get involved in helping lead the Startup Colorado effort, email me.

I’m about to head out to TechStars New York Demo Day. Our investment in SideTour – one of the TechStars New York companies – was announced yesterday and I’m excited to introduce them along with hanging out with all of the other great entrepreneurs from this session. If you’ve been watching the Bloomberg TechStars series, we are doing the finale tonight where we meet with all of the teams and see where they are six months after the program ended. It’ll be happening live at 9pm ET/PT.

Since I haven’t yet figured out how to be in two places at the same time, I ended up recording a short video for a meeting on entrepreneurial communities that I was invited to. In it, I talk about my first of four principles of entrepreneurial communities, specifically that entrepreneurial communities must be led by entrepreneurs.

Following is the video along with my notes.

Four key principles of entrepreneurial communities
- led by entrepreneurs
- 20 year view from today
- engage the entire entrepreneurial stack
- continually get fresh blood into the system

briefly focus on the first – entrepreneurial communities have to be led by entrepreneurs

entrepreneurial communities have leaders and feeders

feeders include everyone that does things that are inputs into the entrepreneurial community
- lawyers
- accountants
- angel investors
- venture capitalists
- government

leaders are the entrepreneurs
- you don’t need a lot to make a huge difference
- a half a dozen is a great starting point
- but they have to commit for 20 years from today

all of the feeders have a role
- some feeders try to be leaders – this never works
- rhythm is wrong: 20 years vs. 4 of government
- personality is wrong: lead vs. support
- incentives are wrong: job vs. creative act

if the leadership of an entrepreneurial community is co-opted by local government
- there might be short term activity
- but it will fail over the long term to become sustainable

remember: the entrepreneurs need to be leaders

if you are a feeder:
- identify them
- encourage them
- support them

but let the entrepreneurs be the leaders

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?