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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Sprache: Englisch
First published in 2012, Startup Communities became a blueprint for what it takes to build a supportive entrepreneurial community. Now regarded as a classic, the "Boulder Thesis" created and popularized by Feld within the book generated enormous media attention nearly a decade ago. At that time, Boulder was an emerging startup laboratory--a hub of innovation building new tech businesses. It quickly accelerated into a world class ecosystem for entrepreneurs. Boulder's entrepreneurial density, combined with the geographic concentration of entrepreneurial activity around the Boulder downtown core, made it a hotbed of startup activity. Feld was and is still there, as a keen observer and one of its leaders. As he notes simply in the new edition, humans are wired to start things. In a sense, that short Feld-ism accurately describes the startup revolution still taking hold throughout the world. Boulder is proof that innovation can happen anywhere, in any city. Thanks in part to the book, what happens in Boulder now leaves Boulder. Rapidly growing startup communities in Atlanta, Detroit, Denver, Kansas City, Nashville, and Indianapolis are just a few examples. Over the last decade, Feld has dispelled the myth that startups can only thrive in Silicon Valley. Startup communities continue to pop up across the U.S. and around the world, prompting fresh new revelations and stories from Feld about what's happened over the last decade. Startup Communities 2e describes what makes a startup community ecosystem first click, then hum, and in time, excel. From Boulder to Beijing and beyond, entrepreneurial ecosystems are driving innovation. Startup Communities 2e discusses and the necessary dynamics and pre-conditions of building communities of entrepreneurs who can feed off each other's talent, creativity, and support. In Startup Communities 2e, Feld will help you understand: * The core principles of a vibrant startup community, re-examining his Boulder Thesis and exploring other historical frameworks. * The attributes of leadership in a startup community that can help it thrive along with the classical problems any community will face during development. * The importance of a university in a startup community, and how large companies can engage effectively with entrepreneurs. * The importance of continuous improvement so growth does not stagnate. * The common myths about startup communities. * The opportunities to build startup communities in non-urban, or rural, places that are much less populated.
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Table of Contents
COVER
FOREWORD
INTRODUCTION TO THE SECOND EDITION
PREFACE
AUDIENCE
OVERVIEW OF THE CONTENTS
CHAPTER ONE: INTRODUCTION
THE EXAMPLE OF BOULDER
HOW THIS BOOK WORKS
CHAPTER TWO: THE BOULDER STARTUP COMMUNITY
BOULDER AS A LABORATORY
BEFORE THE INTERNET (1970–1994)
PRE‐INTERNET BUBBLE (1995–2000)
THE COLLAPSE OF THE INTERNET BUBBLE (2001–2002)
THE BEGINNING OF THE NEXT WAVE (2003–2011)
AN OUTSIDER'S VIEW OF BOULDER IN 2012
THE NEXT WAVE (2012–2020)
CHAPTER THREE: PRINCIPLES OF A VIBRANT STARTUP COMMUNITY
HISTORICAL FRAMEWORKS
THE BOULDER THESIS
LED BY ENTREPRENEURS
LONG‐TERM COMMITMENT
FOSTER A PHILOSOPHY OF INCLUSIVENESS
ENGAGE THE ENTIRE ENTREPRENEURIAL STACK
CHAPTER FOUR: PARTICIPANTS IN A STARTUP COMMUNITY
ENTREPRENEURS
GOVERNMENT
UNIVERSITIES
INVESTORS
MENTORS
SERVICE PROVIDERS
LARGE COMPANIES
THE IMPORTANCE OF LEADERS, FEEDERS, AND INSTIGATORS
CHAPTER FIVE: ATTRIBUTES OF LEADERSHIP IN A STARTUP COMMUNITY
BE INCLUSIVE
PLAY A NON‐ZERO‐SUM OR POSITIVE‐SUM GAME
BE MENTORSHIP DRIVEN
HAVE POROUS BOUNDARIES
GIVE PEOPLE ASSIGNMENTS
EXPERIMENT AND FAIL FAST
CHAPTER SIX: CLASSICAL PROBLEMS
THE PATRIARCH PROBLEM
COMPLAINING ABOUT CAPITAL
BEING TOO RELIANT ON GOVERNMENT
MAKING SHORT‐TERM COMMITMENTS
HAVING A BIAS AGAINST NEWCOMERS
ATTEMPT BY A FEEDER TO CONTROL THE COMMUNITY
CREATING ARTIFICIAL GEOGRAPHIC BOUNDARIES
PLAYING A ZERO‐SUM GAME
HAVING A CULTURE OF RISK AVERSION
AVOIDING PEOPLE BECAUSE OF PAST FAILURES
CHAPTER SEVEN: ACTIVITIES AND EVENTS
YOUNG ENTREPRENEURS ORGANIZATION
OFFICE HOURS
BOULDER DENVER NEW TECH MEETUP
BOULDER OPEN COFFEE CLUB
STARTUP WEEKEND
IGNITE BOULDER
BOULDER BETA
BOULDER STARTUP DIGEST
CU NEW VENTURE CHALLENGE
ENTREPRENEURS FOUNDATION OF COLORADO
CHAPTER EIGHT: THE POWER OF ACCELERATORS
THE SPREAD OF TECHSTARS TO BOSTON AND SEATTLE
TECHSTARS EXPANDS TO NEW YORK
TECHSTARS TODAY
ACCELERATORS ARE DIFFERENT THAN INCUBATORS
UNIVERSITY ACCELERATORS
CHAPTER NINE: UNIVERSITY INVOLVEMENT
SILICON FLATIRONS' NETWORKED APPROACH
ORGANIZING THE COMPONENTS OF UNIVERSITY ENTREPRENEURSHIP
OTHER CAMPUS INITIATIVES THAT AFFECT STARTUP COMMUNITIES
THE REAL VALUE—FRESH BLOOD INTO THE SYSTEM
CHALLENGES AND RESPONSES FOR UNIVERSITY ENTREPRENEURSHIP PROGRAMS
THE POWER OF ALUMNI
CHAPTER TEN: CONTRASTS BETWEEN ENTREPRENEURS AND GOVERNMENT
SELF‐AWARE VERSUS NOT SELF‐AWARE
BOTTOM UP VERSUS TOP DOWN
MICRO VERSUS MACRO
ACTION VERSUS POLICY
IMPACT VERSUS CONTROL
CHAPTER ELEVEN: HOW LARGE CORPORATIONS CAN HELP
START BY LINKING TO CORPORATE INNOVATION INITIATIVES
SUPPORT, CONVENE, CONSUME, AND ENGAGE
SELF‐INTEREST IS GOOD
THINK ABOUT TALENT APPROPRIATELY
REINVESTMENT IN YOUR COMMUNITY
CHAPTER TWELVE: THE POWER OF THE COMMUNITY
GIVE BEFORE YOU GET (#GIVEFIRST)
EVERYONE IS A MENTOR
EMBRACE WEIRDNESS
BE OPEN TO ANY IDEA
BE HONEST
GO FOR A WALK
THE VALUE AND COST OF AN AFTER‐PARTY
CHAPTER THIRTEEN: BROADENING A SUCCESSFUL STARTUP COMMUNITY
PARALLEL UNIVERSES
INTEGRATION WITH THE REST OF COLORADO
LACK OF DIVERSITY
PHYSICAL SPACE
CHAPTER FOURTEEN: RURAL STARTUP COMMUNITIES
DEFINITION OF A RURAL STARTUP COMMUNITY
A BROADER DEFINITION OF ENTREPRENEURSHIP
ENTREPRENEURS BEFORE CAPITAL
BEYOND TRADITIONAL CAPITAL MODELS
RURAL + URBAN, NOT RURAL VERSUS URBAN
CHAPTER FIFTEEN: MYTHS ABOUT STARTUP COMMUNITIES
WE NEED TO BE LIKE SILICON VALLEY
WE NEED MORE LOCAL VENTURE CAPITAL
ANGEL INVESTORS MUST BE ORGANIZED
CHAPTER SIXTEEN: GETTING STARTED
GETTING STARTUP ICELAND STARTED
BIG OMAHA
STARTUP AMERICA PARTNERSHIP
DO OR DO NOT, THERE IS NO TRY
ABOUT THE AUTHOR
ACKNOWLEDGMENTS
FOREWORD—FIRST EDITION (2012)
INDEX
END USER LICENSE AGREEMENT
Guide
Cover
Table of Contents
Begin Reading
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BRAD FELD
STARTUP COMMUNITIES
SECOND EDITION
BUILDING AN
ENTREPRENEURIAL ECOSYSTEM IN YOUR CITY
Copyright © 2020 by Brad Feld. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.Published simultaneously in Canada.
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Library of Congress Cataloging‐in‐Publication Data
Names: Feld, Brad, author.
Title: Startup communities : building an entrepreneurial ecosystem in your city / Brad Feld.
Description: Second Edition. | Hoboken : Wiley, 2020. | Revised edition of the author’s Startup communities, [2012] | Includes bibliographical references and index. | Description based on print version record and CIP data provided by publisher; resource not viewed.
Identifiers: LCCN 2020024518 (print) | LCCN 2020024519 (ebook) | ISBN 9781119617792 (epub) | ISBN 9781119617822 (adobe pdf) | ISBN 9781119617655 (cloth) | ISBN 9781119617655q(cloth) | ISBN 9781119617822q(adobe pdf) | ISBN 9781119617792q(epub)
Subjects: LCSH: Entrepreneurship. | New business enterprises—Environmental aspects. | Communities—Social aspects.
Classification: LCC HB615 (ebook) | LCC HB615 .F45 2020 (print) | DDC 658.1/1—dc23
LC record available at https://lccn.loc.gov/2020024518
LC record available at https://lccn.loc.gov/2020024519
Cover Design: Wiley
To Len Fassler, who has taught me more about entrepreneurship than anyone else on this planet.
FOREWORD
I was honored when nearly a decade ago, my good friend, Brad Feld, asked me to pen the foreword to the first edition of Startup Communities. At the time, the country was recovering from a recession, and the role startups play in creating jobs and driving economic growth was not well understood. At the time, the conventional wisdom was that the only startup community that mattered was Silicon Valley. In that original 2012 foreword, I asserted that the startup revolution should not be limited to coastal tech hubs and that we needed more work, and continued leadership from innovators like Brad to encourage the growth of nascent entrepreneurial ecosystems all across the country.
Shortly thereafter, I decided to hit the road to put that advice to the test. Revolution, the investment firm I started in 2005, launched Rise of the Rest, an effort to shine a spotlight on startup communities in cities all across the United States. So far, we've traveled 11,000 miles to visit 43 cities showing real momentum as innovation hubs, including Denver, Atlanta, Detroit, St. Louis, Nashville, and Indianapolis. Our focus was on understanding what was happening in each city and doing what we could to encourage greater collaboration, encouraging and amplifying a sense of optimism and possibility.
We also invested in at least one startup in each city. The momentum we saw led us to create Revolution's Rise of the Rest Seed Fund, backed by some of America's most successful entrepreneurs (including Jeff Bezos, Eric Schmidt, Tory Burch, Sara Blakely, and Howard Schultz). To date we've invested in more than 130 companies in more than 70 cities—and we're just getting started.
Fast forward to 2020 and—thankfully!—we've seen remarkable change. In recent years we've seen what some have dubbed “flyover country” give birth to dozens of very successful companies. Silicon Valley icon Salesforce acquired ExactTarget in Indianapolis, and doubled down on the city; indeed, it's now Salesforce's second largest office, with more than 2,000 employees. Minneapolis‐based Target acquired Birmingham's Shipt to power its ecommerce expansion. Healthtech powerhouse Epic Systems has grown to more than 11,000 employees, mostly by expanding its Madison headquarters. Ann Arbor–based Duo Security was a multi–billion‐dollar acquisition for Cisco. And some of the hottest IPOs have been in places like Salt Lake City, the home of a number of enterprise software companies, including Pluralsight and Domo.
Progress has been made on other fronts. More mayors now recognize the pivotal role startups play in revitalizing their cities. More governors have begun shifting their economic development agenda from luring big companies to launching small companies, some of which will become the big companies of tomorrow. More investors are finally paying attention to startups outside of Silicon Valley. And more entrepreneurs are increasingly able to decide where they want to start a company as they are now increasingly able to attract talent and capital to nontraditional tech hubs.
Even the political dialogue has changed. It is now broadly understood that there are societal drawbacks when the benefits of technology accrue to too few places. Given that startups are key job creators, there is a growing recognition of the need to encourage their growth across the country, especially as worries about automation and globalization multiply.
Brad, a pioneer in encouraging the development of startup communities, seeded the momentum more than a decade ago that we're seeing now. His personal efforts transformed Colorado into a startup hub, and then his leadership—including the launch of Techstars, Startup Weekend, his series of Startup Revolution books, and countless other initiatives—has been instrumental in building a national startup movement.
Because of this, Brad's thinking on the best practices for developing strong and sustainable startup communities is now more important than ever. This updated and expanded book, rich with case studies, will guide readers on what it takes to create a stronger entrepreneurial economy. It can help show us the way as we seek to build a startup economy that is more geographically diverse as well as more inclusive. Indeed, Startup Communities is a must‐read for anybody who cares about the future of their community and their nation.
While the progress we've seen is encouraging, we still have a long way to go. In 2018 more than 75% of US venture capital went to just three states—California, New York, and Massachusetts. The other 47 states fought over the remaining 25%. That data is sobering, but for me, it's déjà vu all over again. When I co‐founded AOL in 1985, only 3% of people were online, and the conventional wisdom was that the Internet had limited appeal. It took a while to convince people there were benefits to getting online, but we finally broke through. I am fond of saying that AOL was an overnight success ten years in the making!
Similarly, the startup revolution that is being unleashed all across the country, and all across the world, will take time. And it will take the talents of many—business executives, civic officials, and university leaders, and, most of all, entrepreneurs—all coming together to strengthen and propel their startup communities. I have no doubt that Brad's book will serve as an invaluable blueprint for those on that important journey.
Steve CaseChairman and CEO, RevolutionCo‐founder, America OnlineFebruary 2020
INTRODUCTION TO THE SECOND EDITION
The first edition of Startup Communities was published in 2012. As a society, we were emerging from the global financial crisis, and entrepreneurship was starting to be discussed more broadly around the world. The transition from an industrial, hierarchical, top‐down economy to a digital, networked, bottom‐up one was underway.
Economic pundits and politicians started to refer to this time as a jobless recovery since traditional employers had stagnated and jobs were scarce and unreliable. As young, talented people began looking for work, three digital technologies converged: ubiquitous high‐speed internet, smartphones, and cloud computing. Consequently, starting a digitally enabled company became much cheaper and easier to do, and it could be done anywhere. All that was needed was an internet connection, a laptop, and an imagination.
Suddenly, people around the world wanted to learn how to apply the phenomenon of entrepreneurship. What felt different about this era when compared with the hysteria of the dot‐com bubble in the late 1990s was a sense that people wanted to get things right. Instead of just making money, they wanted to understand what was going on and how to effectively build vibrant startup communities in cities around the world.
Prior to the publication of the first edition of this book, the phrase “startup community” didn't exist. Geographic areas with a concentration of innovation and entrepreneurial activity were often labeled entrepreneurial ecosystems, innovation parks, or research clusters. The word startup was often hyphenated, much to my chagrin. As I was working on this book in 2010 and 2011, I was searching for another way to describe the thing that I felt that I was involved with in my hometown of Boulder, Colorado. One day, the phrase startup community jumped out at me.
The publication of Startup Communities in 2012 provided a framework and practical guidance for startup community builders through the lens of my experience in Boulder. In the mid‐1990s, Boulder didn't have much in the way of a startup community. While there was plenty of startup activity occurring in isolation, there wasn't much bringing people together in a coordinated way. Slowly this began to change over time because of a small group of dedicated entrepreneurs who created an organic, bottom‐up movement that built a startup community.
A lot has happened in last eight years. The phrase startup community is now well‐defined and distinct (but related to) an entrepreneurial ecosystem. The Boulder Thesis, which I first described in 2012, is a common and straightforward set of principles being followed by entrepreneurs, startup community builders, and participants in startup communities all over the world. Entrepreneurship is front and center as a new generation of entrepreneurs and companies drive innovation forward in cities everywhere.
When I sat down to update Startup Communities with a second edition, I though hard about the approach to take. I was in the middle of writing a sequel to Startup Communities with Ian Hathaway called The Startup Community Way that was published in July 2020, and I wanted to link the two books together on a continuum, without diminishing the importance or relevance of either of them as a stand‐alone book.
After reflection, I decided to refresh Startup Communities without rewriting history. I carefully read through the 2012 edition and felt that many of the ideas in the book were still highly relevant. I knew there were a few things I wanted to fix that I felt like I had gotten wrong, along with several things I wanted to add. But I wanted to leave the core alone, even if some of it was from my perspective eight years ago.
I've regularly gotten feedback that the examples are a valuable part of this book. I wanted to stay true to the context from 2012, so I left most of the original sidebars untouched and instead added short summaries at the end, describing what ultimately happened with the initiative or the example. I added a few new sidebars and put a parenthetical date at the end of each one—(2012) or (2020)—indicating when the sidebar was written. In a few cases I updated an old sidebar with permission from the original author or removed a sidebar at an author's request. When the author has a different job than in 2012, I indicate this with a parenthetic “(now newcompany).”
For several of my books, I've now written multiple editions (for example, Venture Deals: Be Smarter Than Your Lawyer or Venture Capitalist is now on its fourth edition). I found this updated edition to be particularly tricky since I wanted to preserve the historical context from 2012 while updating it with some new ideas and examples and yet allowing it to stand alone as a prequel to The Startup Community Way.
Hopefully I've done that. I encourage you to use time travel as your friend and think back to where you were and what you were doing in 2012 as you read this book. I continue to be amazed as how quickly time passes, while simultaneously being fascinated by how slowly some things change. Ultimately, some ideas endure, while others don't. I hope I've managed to keep and extend the enduring ones, while eliminating those that are no longer relevant.
PREFACE
In the fall of 2008, the world financial markets were rocked in an unprecedented way. The global financial crisis that ensued created massive uncertainty across our society and resulted in extraordinary actions by governments and companies throughout the world.
In a parallel universe, something else was happening. Entrepreneurial companies such as Facebook, Twitter, LinkedIn, and Zynga were growing at an equally unprecedented rate. While these companies and many others were emerging from Silicon Valley, cities across the country were brimming with startup activity. My hometown of Boulder had become known throughout the world as a great startup community, but cities like New York, Boston, Seattle, Portland, Chicago, and Austin were also seen as nexuses of startup activity.
As the macroeconomic impact of the financial crisis was felt throughout 2009 and 2010 and society tried to readjust to the new economic reality and constraints generated by the collapse of many traditional and well‐established institutions, the startups kept being born, growing, and adding jobs.
In early 2011 the world started to notice. On January 31, President Obama acknowledged the importance of entrepreneurship to our global economy through the launch of Startup America. He stated:
Entrepreneurs embody the promise of America: the idea that if you have a good idea and are willing to work hard and see it through, you can succeed in this country. And in fulfilling this promise, entrepreneurs also play a critical role in expanding our economy and creating jobs.
—President Barack Obama, @BarackObama (2011)
Suddenly entrepreneurship was at the forefront of the discussion. While entrepreneurs continued to toil away building their companies from scratch, it became clear that entrepreneurship was a global theme—one that impacted every geography, industry, market, and demographic throughout the world. Overnight, everyone started talking about entrepreneurship as the way to revitalize our global economy.
Entrepreneurship was no longer limited to a small set of risk takers located in a few specific cities. States and local governments became interested. Universities dusted off their entrepreneurship initiatives. Angel groups visibly reemerged, venture capitalists (VCs) became popular again, and large companies created new startup programs.
All of this activity has created an enormous amount of noise that runs the risk of drowning out the powerful signal that is entrepreneurship. It won't matter in the long run, as entrepreneurs are going to do what they do, which is create new things (products, companies, jobs, and industries) out of nothing, but it occurred to me that there were powerful lessons that we could learn from the experience I'd had in Boulder. From this came the Boulder Thesis, a new framework for creating and building a startup community in your city. I have a deeply held belief that you can create a long‐term, vibrant, sustainable startup community in any city in the world, but it's hard and takes the right kind of philosophy, approach, leadership, and dedication over a long time. Hence, this book, whose goal is to help you understand how to do this and give you the tools to create an amazing startup community in your city.
AUDIENCE
This book is aimed at anyone who wants to be involved in creating, building, and sustaining a startup community in their city. Because entrepreneurs are at the heart of every startup and every startup community, this book is for every entrepreneur.
Startup communities consist of many more participants than just entrepreneurs. Government, universities, investors, mentors, service providers, and large companies play key roles in the development of a startup community. This book is for anyone in those organizations interested in entrepreneurs and startup communities.
Startups have employees who are critical participants in the startup community. Some of these employees will go on to become entrepreneurs and start their own companies; others will work for a range of startups over their careers. They, too, can benefit from many of the ideas in this book.
There are many people studying entrepreneurship, economic development, and innovation, both in government and university settings. Whether you are doing research, creating policy, or just trying to understand what is going on, this book is for you.
Recently, the media has once again become infatuated with entrepreneurship. Unlike the late 1990s when there was relatively little critical thinking in the mix, this time around many journalists and writers are trying to really understand what is going on below the pretty, glossy surface of rich, famous, and successful entrepreneurs. I hope this book will help.
I've been talking about the ideas of a startup community for a number of years and have lived them as an entrepreneur, one of the leaders of the Boulder startup community, and a participant in many other startup communities. By codifying my thoughts and ideas in this book, it forced me to think deeply about them. I hope you benefit from this effort as you explore your own startup community.
OVERVIEW OF THE CONTENTS
After a brief introduction, I'll spend some time exploring the Boulder startup community. I'll go through a brief history, dating back to the 1970s, and include several perspectives besides my own.
I'll then go deep into the principles of a vibrant startup community. I will explore several historical frameworks, describe the Boulder Thesis, and explain the various components of it.
I'll then explore the different participants in a startup community. I separate the participants into three categories—leaders, feeders, and instigators—and I'll describe in depth the characteristics of each and what they can do to help, as well as hinder, the startup community.
Given an understanding of the participants, I'll discuss the attributes of leadership in a startup community. I'll follow this with a thorough exploration of a set of classic problems that startup communities encounter.
I'll then give a bunch of examples of activities and events that drive the startup community. Many of these examples will come from the people in the Boulder startup community who helped created the activities. My hope is that these examples will help generate a better understanding of the leadership dynamics around startup communities. I'll wrap this up with a detailed look at the power of accelerators to a startup community, using my experience with Techstars as an example.
I'll shift gears and explore the involvement of the university in a startup community. With help from Brad Bernthal, I'll use a set of examples from Boulder to help create a better understanding of what's actually going on and how a university can participate effectively. I'll then spend some time on the contrast between entrepreneurs and government and how this often plays out in the development of a startup community, along with how large companies can engage effectively in a startup community.
Near the end of the book, I'll describe a set of clear approaches that generate real power throughout the startup community over a long period of time. I'll use some of Boulder's weaknesses to explore how a successful startup community can continue to improve and grow. With the help of Paul Kedrosky who was at the Kauffman Foundation in 2012, I'll explore some common myths about startup communities.
Finally, with the help of my Foundry Group partner, Seth Levine, and friend, Marc Nager, I'll talk about how you can build startup communities in non‐urban, or rural, places, which are much less populated. I'll finish with a few examples of how to get started, from Iceland, Omaha, and the Startup America Partnership, along with Steve Case's powerful Rise of the Rest initiative, hopefully leaving you with the belief that you can create a vibrant startup community anywhere in the world.
CHAPTER ONEINTRODUCTION
Startups are at the core of everything we do. An individual's life is a startup that begins at birth. Every city was once a startup, as was every company, every institution, and every project. As humans, we are wired to start things.
Today, we are in the midst of a massive shift from the hierarchical society that has dominated the industrial era to a networked society that has been emergent throughout the information era. The internet is ushering in a post‐information era, one in which the machines have already taken over and are waiting patiently for us to catch up with them. This post‐information era is one in which man and machine are interwoven.
In this era, the network dominates in both the online and the physical world. Throughout the network are nodes, each of which began as a startup. Nodes are continually emerging, and a rigid, top‐down hierarchy is no longer effective. The energy, activity, and innovation in society is diffused across the network and concentrated in unexpected places that often didn't exist until recently.
In the physical world, much of this energy, activity, and innovation occurs in small geographic regions, which I call “startup communities.” Academics call them “clusters” or “ecosystems,” and there are several theories about how they were created, what caused them to grow and evolve, and what happened as they matured.
These startup communities are appearing everywhere. They are no longer limited to historically well‐known entrepreneurial regions and large cities such as Silicon Valley, Boston, New York, and Seattle. Startup communities in cities around the United States, both large and small, such as Boulder, Los Angeles, Chicago, Portland, and Austin are seeing incredible activity and growth. Although many of these cities have a history of entrepreneurial activity, their growth, development, and importance in this economic cycle is unique.
The way startup communities are created and evolve has changed profoundly as a result of our networked society. It is critically important to understand this shift as it relates to economics and innovation because it's not slowing down anytime soon.
In this book, I'll discuss a new approach to building a startup community, which I call the Boulder Thesis. I strongly believe that startup communities can be built in any city, and the future economic progress of cities, regions, countries, and society at large is dependent on creating, building, and sustaining startup communities over a long period of time. This book will show you how, both in theory and in practice.
THE EXAMPLE OF BOULDER
Through this book, I use the Boulder startup community as an example. Since I've only lived here since 1995, this is not intended to be a comprehensive history of the Boulder startup community. I don't mean any disrespect to all of the other people who have helped make the Boulder startup community amazing, or who were involved before I moved to town. However, by not trying to create a history, I can cover enough ground to give you a feeling for how things evolved while I focus on the underlying principles that you can apply to building your startup community.
As I'll discuss in a later chapter, Boulder actually has five startup communities: tech (software/internet), biotech, clean tech, natural foods, and lifestyles of health and sustainability (LOHAS). These five startup communities exist in parallel universes. My time and expertise have been focused on the tech segment. I periodically have intersection points with the other startup communities through friends, events, and an occasional personal investment in a company outside of tech, but my understanding, experience, and engagement with these other segments are limited.
Throughout this book, I've asked others to give their perspective on the key events and activities around the startup community. It will be clear whenever the example is in someone else's voice. I've also brought in several examples from other startup communities when there were activities in Boulder that touched them in a meaningful way, such as Techstars.
My hope is that you do not view the use of Boulder here as “Boulder tooting its own horn.” I use Boulder as an example of a lasting and vibrant startup community because I know it extremely well (at least one segment). This approach is called “synecdoche,” where the part stands for the whole. There are many things the Boulder startup community can do better and many more for it to discover as we continue on our journey. My hope is that, by exploring it in depth, it helps you with your journey in your startup community.
HOW THIS BOOK WORKS
I'll start with a story, then get to the principles of a sustainable startup community. I'll break it down into small pieces, and I'll give you a full set of tools to work with. I'll try to keep it light along the way with plenty of examples. Although this book is not a textbook, nor is it an academic treatise laden with footnotes and references, it is a serious book. My goal is to give you a framework and tools to create and enhance a startup community in your city.
CHAPTER TWOTHE BOULDER STARTUP COMMUNITY
In November 1995, I left Boston and moved to Boulder. I'd gone to college at MIT and had lived in Boston for 12 years. However, Boston wasn't my home; I'd grown up in Dallas, and my wife, Amy Batchelor, had grown up in Alaska. When I sold my first company at age 28, I promised Amy that we'd leave Boston by the time I was 30. Two months before I turned 30, Amy told me she was moving to Boulder, and I was welcome to join her if I wanted to.
We'd both been to Boulder and loved Colorado. Neither of us wanted to live in the Bay Area, which was a logical choice given the work I do, but we wanted either ocean or mountains wherever we lived. Because we were both attracted to the western United States and the Rocky Mountains, we figured we'd give Boulder a try, and if it didn't work out, we'd just keep heading west.
After six months, we loved Boulder and never looked back. When we moved here, we knew only one person, and he and his wife moved away a few months later. However, within a year we had already found a community of friends and entrepreneurs and were quickly learning our way around town. Twenty‐four years later, I can't imagine a better place to live.
BOULDER AS A LABORATORY
Boulder is a small city. In 2012, there were less than 100,000 actual residents, and by 2020, this number had only grown to 107,000. The extended metro area, which includes the neighboring towns of Superior, Broomfield, Lafayette, Longmont, and Lyons, was only 250,000 people in 2012 and is now only slightly over 300,000 people. Boulder is small enough that you can get your mind around the whole place but big enough to be interesting. As a result, I've come to think of Boulder as my laboratory for thinking about startup communities.
Boulder is a smart city. The University of Colorado Boulder is located right in the middle of town, and students, faculty, and staff comprise about 30 percent of the population of Boulder. The presence of several national research labs, including the National Oceanic and Atmospheric Administration (NOAA), the National Center for Atmospheric Research (NCAR), and the National Institute of Standards and Technology (NIST) add nicely to the number of PhDs around. Other alternative educational institutions, such as Naropa, call Boulder home.
Boulder has one of the highest entrepreneurial densities in the world. I define entrepreneurial density as follows:
Boulder's entrepreneurial density, combined with the geographic concentration of entrepreneurial activity around the Boulder downtown core, makes downtown Boulder a hotbed of startup activity.
Finally, Boulder is an incredibly inclusive community. Although there is some competition between companies, especially over talent, the community is defined by a strong sense of collaboration and philosophy of “giving before you get.” If you contribute, you are rewarded, often in unexpected ways. At the same time, especially since it's a small community, it's particularly intolerant of bad actors. If you aren't sincere, constructive, and collaborative, the community behaves accordingly.
Before we dig into the principles of a sustainable startup community, let's spend a little time on the history of Boulder, so we can understand how the community evolved.
BEFORE THE INTERNET (1970–1994)
I moved to Boulder in 1995. This, however, was not the beginning of the rise of the startup community in Boulder; the seeds were planted a long time ago, and there was a significant amount of entrepreneurial success in and around Boulder between 1970 and 1994. I've asked Kyle Lefkoff, a Boulder resident and venture capitalist since the mid‐1970s, to describe what he saw happen during this time frame.
It was not by accident that a university town nestled at the base of the Flatirons would emerge as the densest cluster of technology startups in the world—it was the result of a generation of entrepreneurs drawn to the region first by business necessity, who stayed by choice. Were it not for the foundational success stories in data storage, pharmaceuticals, and natural‐foods brands, Boulder's thriving ecosystem would not exist. But the success of these anchor tenants presaged the growth and success of today's Boulder startup community.
The data‐storage landscape was shaped first by IBM's decision to locate its tape‐drive division in Boulder in the 1960s, and then, by the success of its first spin‐off, StorageTek, in 1975. Led by its visionary founders, Jesse Aweida and Juan Rodriguez, StorageTek was Boulder's first big VC‐backed high‐tech success story, and it spawned a storage and networking industry that grew to dozens of companies by the early 1990s, including billion‐dollar success stories such as McData, Exabyte, and Connor Peripherals.
The pharmaceutical industry had its roots in the science laboratories of the University of Colorado's Boulder campus, where a biotech cluster was born from the labs of Marv Caruthers, who founded Amgen and Applied Biosciences, and Larry Gold, who founded Synergen. Together, these successful companies spawned an industry of home‐grown biotech companies to compete with Syntex, which based its manufacturing in Boulder, and Ciba‐Geigy, which had acquired Geneva Generics, a local generic pill manufacturer. Based on the work of these entrepreneurs, additional pharma successes in this period included Hauser Chemical Research, Somatagen, and Nexstar Pharmaceuticals.
The natural‐foods industry began in Boulder with Celestial Seasonings, an herbal tea brand that sprang to national prominence under the leadership of Mo Siegel and Barney Feinblum, who would each go on to play an important role in nearly every other major brand success in the 1980s and early 1990s with Boulder roots, including Alfalfa's, Wild Oats, Whole Foods, Earth's Best Baby Food, Horizon Organic Dairy, and Silk.
A small but devoted group of venture capitalists stood behind these early entrepreneurs and helped put Boulder on the national map of startups. John Hill, a former StorageTek investor, and Carl Carman, a longtime IBM executive, teamed up in the 1980s to form Hill Carman ventures, which backed many of the technology successes in the region. Merc Mercure, the founder of Ball Aerospace, and Bill Coleman, who ran the Syntex facility in Boulder, together formed Colorado Venture Management, the city's first seed fund. Finally, Jim Roser, a renowned East Coast investment banker, moved to Boulder in the 1970s and provided a critical link to capital for a number of local companies. Together, these five individuals pioneered the venture capital industry in Boulder.
Kyle Lefkoff, Boulder Ventures (2012)
PRE‐INTERNET BUBBLE (1995–2000)
When I first arrived in Boulder, I had no work expectations. At the time I was investing my own money, which I made from the sale of my first company, in startups around the country, and I was spending my time in Boston, New York, San Francisco, and Seattle. Because I was already crisscrossing the country, I figured that having a home base in the middle of the country would make my life easier. Amy and I found Boulder to be beautiful, and, within six months of moving there from Boston, we bought a house just outside of Boulder behind Eldorado Springs State Park. We lived there until the fall of 2013, when we moved to Longmont, a city bordering the other end of Boulder.
As I got to know Boulder better, I realized it was perfectly configured for the entrepreneurial revolution that took place around the first wave of the commercial internet. It was a college town, full of smart, independently minded, and intellectually curious people. As I sat in a bar talking to the one person I knew in town, waiting for Amy to join us for dinner, the guy sitting next to me overheard our conversation and said, “I have a friend who is starting an internet company. Would you like to meet him?” I did! That person ended up being Andrew Currie, a local entrepreneur who was starting a business with Brian Makare that became Email Publishing, my first Boulder investment. Andrew introduced me to a few of his entrepreneurial friends, and before long I was getting to know the local scene.
I discovered that there was a big divide in Boulder between the entrepreneurs and the investors. Many of the entrepreneurs I met didn't have a lot of respect for the local investors, and as a result, there was a large number of bootstrapped companies. The local investor options for these entrepreneurs were thin as there were only a few small VC firms and these investors tended to be highly selective about who they worked with, often preferring to work with entrepreneurs they'd worked with previously. The newest generation of entrepreneurs who emerged in the mid‐1990s had a fierce bias to just do things themselves.
In 1996, I co‐founded the Young Entrepreneurs Organization's (YEO) Boulder chapter. I got introductions to a local lawyer, Mike Platt (Cooley), who I still work with today, and a local accountant. I asked each to send out a letter with me to Boulder entrepreneurs they knew to invite them to an inaugural meeting of YEO Boulder. About a dozen people showed up, including Terry Gold (Gold Systems), Paul Berberian (LinkVTC), and Tim Enwall (Solista). Suddenly I was part of a group of a dozen entrepreneurs who were meeting monthly.
