The Importance of Place in Entrepreneurship
Despite the ubiquity of digital technology and increased physical and virtual mobility, entrepreneurship remains very place-based. Many people start up and practice where they live, drawing from whatever resources exist within their local area. Others choose location with intent, based on a place’s entrepreneurial reputation or its feel.
We can draw a circle around the interactions of people, organizations, and infrastructure and look at how they combine to heighten or diminish entrepreneurial activity. In any particular place, there might be several of these circles or ecosystems.
By nature, ecosystems are place-based. In ecosystem development, the focus is often on institutions and resources. The less tangible notion of culture is equally, if not more, important. A place’s entrepreneurial culture is defined by its ecosystem. To nurture an entrepreneurial culture, the ecosystem needs to be local, visible, and accessible in the day-to-day interactions of entrepreneurs.
Creating Culture
Around the country, entrepreneurs cited numerous examples of what makes for a great environment. Along with networks, capital, and mentorship, all mention cultural aspects of the place where they’re building their ventures.
People need to see what’s possible. In places such as Silicon Valley, San Francisco, and Austin, the culture of entrepreneurship is visible in the environment. In Mountain View, California, the fast food and retail signs you’d expect to see on the strip are replaced with startup names. In Austin, coffee shops cater to entrepreneurs by setting up communal conference rooms with self-service sign-up sheets.
In Omaha, co-working spaces advertise on the street to those looking for a place to join others as they work outside of the established system of jobs and employment. Entrepreneurs like a place with a density and proximity of entrepreneurial communities. In some locations, entrepreneurs literally bump into each other in the street. In other locations, the event scene provides multiple opportunities to meet and network with other entrepreneurs.
A sense of affiliation is important. Places where starting a business is the norm create a strong sense of community, identity, and purpose. Entrepreneurs are very aware that building the appropriate culture can take generations who succeed and fail, and who reinvest in their local ecosystem.
The Multiplicity of Ecosystems
Entrepreneurs form communities organized around sectors or knowledge areas that have different needs and behaviors. For instance, in a particular region there might be entrepreneurs working in life science, gaming, and food. Developing a strong gaming ecosystem, a life-science ecosystem, and a food ecosystem creates a density of entrepreneurs within a place.
While different communities do have different needs, there is value placed in some degree of cross-pollination. The strongest ecosystems support healthy connections across a variety of communities.
Entrepreneurs often move between cities and regions. Ecosystems that provide seamless entrepreneurial services and support at city, region, and state levels are tremendously helpful. Laura, a social media entrepreneur, found this out when she moved her startup to Cambridge, Massachusetts, from Boston because public transportation issues were making it impossible for her employees to get to work. Rather than the cities working together to support her and her company, she found they competed with each other.
Look at What You’ve Got
Working within a system that’s short on people, organizations, infrastructure, and culture, can make entrepreneurship a very isolating experience. Early on, Mark, a founder of two e-commerce startups turned VC, felt that others around him in Omaha were immersed in a culture of success through employment. The norm was securing a high-level position in a big corporation. Others found his entrepreneurial behavior to be highly risky, if not borderline crazy.
Entrepreneurs and other stakeholders can provide a clear picture of the local entrepreneurship ecosystem. Assessing, cataloging, and disseminating information on the existing organizations and resources within a place enables people to easily see and access these myriad resources. In the process, entrepreneurs and other stakeholders in the system learn to be collaborative, transparent, and proactive in growing their unique ecosystem.
When Hall launched the Austin Entrepreneur Network, his goal was not to create an entrepreneurial network from scratch but rather to catalog and connect the existing organizations and resources within Austin. Another stakeholder in the Austin community, Bijoy, visually mapped the scene and used this map to link particular resources to components of the entrepreneurial process. And, in Nebraska, the founder of a fan analytics application recalls how the entrepreneur community in Omaha was galvanized by a single person taking the initiative to connect isolated elements within the ecosystem. What has been your experience with ecosystems?
About This Research
The Babson Entrepreneur Experience Lab is a partnership between Babson College and the Business Innovation Factory. It is a research platform that puts the voice and experience of real-world entrepreneurs at the center of an ongoing effort to design, develop, and experiment with new education and support solutions that will help shape future generations of entrepreneurs.
More than 250 entrepreneurs launching ventures in the United States were interviewed, offering a glimpse into their everyday lives. We hope their experiences will begin to evolve our understanding of entrepreneurship—to tell new stories that can shape new realities for entrepreneurs of all kinds.
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