Wednesday, May 2, 2012

Brad Feld and Thoughts on Startup Communities

Fresh off a 90 minute conversation with popular Boulder-based entrepreneur-turned-VC Brad Feld, 150 people, many of them entrepreneurs, chat about the entrepreneurial ecosystem in Durham. Yes, there is a buzz about Durham, and we've all known it for far longer than the outside world. And Brad says that's just fine and dandy. Or, in his more exact words, "who gives a $#!7." What matters are the results and how the community views itself. Those of us that live and work here know that this region has results.

Durham is building an entrepreneurial community. Yes, many folks have taken note. Our friends with Downtown Durham, Inc. and at the Durham Chamber launched the Smoffice (which, by the way, opened its doors yesterday on Main St.) which was picked up by Fast Company, the NY Times, and TechCrunch. Last October, The Atlantic stopped through Durham last summer on their search for the next Silicon Valley. We have the buzz. We also have our own identity, our entrepreneurial neighborhoods, and our culture.

Durham isn't Silicon Valley. Neither is the Research Triangle region (though we do have a significant number of recent exits). We never will be, and what's more, we don't need to be. We're Durham, we're Raleigh, we're a startup community with our own network, our own connections, and a ton of extremely valuable assets. We're also not 100% self-reliant, and we don't need to be. Our startups do business locally, nationally and globally. Our entrepreneurs travel to Atlanta, Boston, New York, Boulder, Seattle, and yes, the Valley to engage with investors, peers, present at conferences and events, and to feel the entrepreneurship vibe in those cities. What we feel is that entrepreneurship is back. It's once again "cool" to be an entrepreneur, and to work in the entrepreneurial community. (Here's a secret: for many of us here in Durham, entrepreneurship never left.)

Feld, though, cautioned his audience. The nation seems, at times, to be obsessed with entrepreneurs, said Feld, but it means nothing without solid entrepreneurial communities. All the press means nothing without action, without results. As entrepreneurship continues its upswing and rising popularity, we can't sit back in our chairs, patting ourselves on our back. We've got to do the opposite: act.

The following is a brief summary of Brad Feld's 4 critical steps to form a startup community. I've added some commentary from his conversation at Square 1 Bank. In laying this out, I'm assuming that enhancing and accelerating the startup community in Durham and in the Research Triangle is valuable for the region and those that live and work within it. This is how it is, and here's the proof.

1. Entrepreneurial Communities Must be Led by Entrepreneurs

Pretty simple. If the community is to grow both deep and wide, and we are to enhance our entrepreneurial density, we must allow entrepreneurs to lead the charge themselves. This isn't about being the "King" of the startup scene, it's about leading by example. It's about fundamentally changing the conversation surrounding entrepreneurship from quick exits and the incredibly rare astronomical success stories and taking a long-term approach at developing the community. As Feld says, there are "leaders" and there are "feeders." Feeders include everyone whose actions provide inputs into the entrepreneurial community, including lawyers, accountants, angel investors, VCs, government organizations, accelerators, universities, and support organizations. Though the feeders are extremely valuable and important for the ecosystem to evolve, develop, and thrive, they aren't the fuel that runs the entrepreneurial fire.

Which gets us to point two.

2. Leaders Must Have 20-Year View

Government cycles are either 2 or 4 years, for the most part. Universities have a slightly longer cycle, closer to 7 or 10 years. Yet startups grow over a significant period of time. 20 years ago, Red Hat didn't yet exist. Cree had just started, as had SAS. These companies developed over a long period of time from their entrepreneurial roots. Let's face it, entrepreneurs must be committed to their businesses for the long haul. There are no easy wins, no magic wand, and you must work incredibly hard to get your company to an exit. Rarely does this happen quickly.

Likewise, the leaders of a community celebrating entrepreneurship must take a long-term approach. It's not about ownership of the process, it is about contributing and enhancing the experience for new entrepreneurs. CED has always relied upon the leaders in the entrepreneurial community to extend the network, enhance the density of entrepreneurs, and promote the entrepreneurial culture. We will continue to do this work, and we need leaders, entrepreneurs, to step up and take responsibility for enhancing our community.

3. The Community (and Leaders) Must Be Inclusive -- For Anyone Who Wants to Engage

Feld noted that the concept of inclusion is "very powerful, especially when entrepreneurship is vibrant, but equally as important when entrepreneurship is in a down cycle." Why? Inclusion demonstrates openness and acceptance of ideas. Sure, not everyone has a $1mm idea, and many don't even have $100,000 ideas, but they may be interested in entrepreneurship. The community grows only if it grows wide, attracting students, researchers, professors, corporate employees, lawyers, Realtors, and those with a dream idea.

This does not mean that the community leaders need to engage them. Big difference here, said Feld. It's up to those individuals who seek you out to follow through on specific actionable items that they can do in order to help build the overall community. "Give assignments," said Feld, even if they're small assignments. That's how engagement builds--slowly.

4. Create Things that Include and Engage Everyone Within the Community

Brad loves Startup Weekend. Loves it. And not just because the idea came from Boulder. He loves it because it provides a low-risk opportunity for anyone interested in the community to engage in a weekend of innovation, camaraderie, and a heck of a lot of coding. It brings people together.

Incubators and accelerators work because they force entrepreneurs to focus on becoming efficient and places them in an environment where they are surrounded by their peers, all of whom are working hard to build their young businesses and bring them to market. It's the sole-focus concept backed by a community of people who "get it."

CED strives to run programs and events that pull together the community. This is why we're a proud organizer of Triangle Startup Weekend. It's why we work our tails off to bring more than 80 local companies to the CED Tech Venture Conference to showcase their products and meet investors. It's why we leverage our network to ensure folks have the opportunity to hear from Brad Feld, and Noel Fenton at Investor Brown Bags. It's why we support AfterHours, and host Member-Only events. Getting people together in a room matters. It's how relationships form. CED exists to accelerate entrepreneurship in the area, and one of the best ways we can do that is by getting entrepreneurs into the same room together.

Conclusions: Where do we go from here?

At this point, if you're still reading, I'm straight-up assuming that you accept the basic premise that forming network-dense startup communities is a viable and valuable growth strategy for a town, city or region. I assume you'd also agree that an enhanced startup community is beneficial for you, your startup business, and the region. And I thank you for these beliefs. CED shares these beliefs as well, and it is our mission to identify, enable and promote entrepreneurship in the Research Triangle and North Carolina, and to accelerate the entrepreneurial culture. We strive to do this every day, yet we cannot do it alone. We cannot do it without our entrepreneurial members and leaders in our community. Here's where we go from here: upwards. We're committed to the growth of entrepreneurship in our region and in our state. So, how do you / will you support the entrepreneurial community in our region?

This post written after the Brad Feld Investor Brown Bag event, hosted in conjunction with Square1 Bank, by Jason H. Parker, the Associate Director of Marketing Communications and Digital Media at CED.

1 comment:

  1. I completely agree with all of Brad's points. In fact, I believe Cleveland is putting his ideas to the test... Over the past 9 years, Cleveland's civic and philanthropic leaders have invested in entrepreneurship in order to build an entrepreneurial community and transform the region's economy. We’ve played to our strengths, including healthcare, advanced materials and manufacturing and have seen hundreds of startups innovate in each of those areas with the support of local experts and institutions. We’ve also engaged the entire entrepreneurial community in events ranging from presentations and conferences to casual get-togethers and investor pitch sessions that include not only established entrepreneurs but university students as well. And, we’ve done a good job of getting fresh blood into our ecosystem, mostly out of the universities. It’s easy for those young innovators to connect with other entrepreneurs and investors. And it’s also easy for them to engage with mentors around the community.

    But, while we’ve had a lot of success over the past decade or so, over the next 10 years, our region still needs to focus on attracting and retaining the talent that will support the success of startups. And over time, I believe the culture will change as well to one that's more accepting of failure. None of us sets out to fail, but often failure provides entrepreneurs with the necessary learning and experience that’s essential for future success.