Dissecting the Startup Ecosystem

Learning from within to build a new foundation for innovation and technology

What is an ecosystem?

An ecosystem is a network of interconnected stakeholders, engaging in collaborative community-building sustainable practices. Through cultivation, these networks help drive innovation and economic growth beyond industries and geographies.

How does an ecosystem work?

Here is a simplified way to understand how an entrepreneurial ecosystem functions. It is best to start by analyzing the initial design of the business ecosystem. Think of it as a “blueprint” mapping everything from the value proposition, goods and services to key role players.

If you want to know who the consumers are and how they're linked to suppliers, the blueprint helps you connect the dots. If we're looking at it from an economic development standpoint, this helps to understand the drawbacks and benefits of the existing system, and how to encourage others to join the ecosystem, assessing who is responsible for the success of said space and of course sustainability levels.

This interconnected system includes government initiatives, venture capitalists, angel investors, higher educational institutions, and service providers to support the growth and success of new businesses.

How do you build a business ecosystem?

Think Silicon Valley, for obvious reasons. No, I do not think we need to re-create "Silicon Valley" in OUR communities to fuel technology and innovation. We can learn from existing models and examples to build equitable opportunities that can benefit everyone.  I think we need to use a “communal approach” to developing our local economies, while driving technology and innovation. Here’s how:

Start by assessing your local business ecosystem

We need to take a step back and redesign our business ecosystems which requires a true system design perspective. The design must include value creation, and delivery models that considers all members of the ecosystem. I don't see the point of recreating a complicated, hierarchical controlled ecosystem that only benefits those controlling resources and capital who are part of the problem rather than the solution. Can business ecosystems be entirely planned? That remains to be seen. I definitely believe ecosystems can emerge- adaptability can strengthen and increase the chances of success.

Analyze the data 

If we deep dive into the data of existing business ecosystems across the nation and do an analysis of successful and failed ecosystems across sectors and geographic markets, we can find that the ecosystem design challenge can be addressed by:

✅️ Asking ourselves what problem do we want to solve?

✅️ Who needs to be part of the ecosystem?

✅️ What should the initial governance model look like?

✅️ How do we capture the value of our ecosystem?

✅️ How do we ensure adaptability and long-term viability?

 

Compare successful and local business ecosystems that are still growing. 

What does a “failed” or under developed tech/startup ecosystem look like? Let’s take a look at Oakland, CA.

Oakland, CA has the potential to become a tech hub. It is literally 25 minutes away from San Francisco (i.e. Silicon Valley). Oakland has a very diverse economy. The healthcare sector employs more than 35,000 people in Oakland and contributes more than $2 billion to Oakland's Gross Regional Product. It is the city's largest sector by number of employees and has seen significant job growth. In fact, Oakland is expected to lead the East Bay in healthcare job growth.

Oakland has one of the most skilled workforces in the U.S. Oakland's population has grown 7% since 2010, from 391,000 people to 420,000, while the number of working Oakland residents has grown almost 20% from 170,000 to 215,300.

The Oakland Metro Area is a fertile intellectual environment. Approximately 100,000 students attend local universities and colleges such as:

·        University of California-Berkeley

·        California State University-East Bay

·        Samuel Merritt University

·        Mills College

·        Patten University

·        Holy Names University

·        Expression College for Digital Arts

·        Lincoln University

Oakland is home to major companies such as Pandora, Safeway, Clorox Company, Kaiser Foundation Health Plan, Hospitals, and Kaiser Permanente Medical Group.

What is holding the city of Oakland back from further developing into a thriving tech hub?

Well first of all, incubators and accelerator programs are nonexistent. Meaning entrepreneurs have to look outside the area for startup expertise and sometimes capital. This makes access to capital, educational resources, mentorship and programs inaccessible in the city.

The existing startup ecosystem is fragmented and siloed much like the entrepreneur community outside of the tech industry. Ask any small business owner what it's like to navigate the existing ecosystem, then compare that to the experience of a tech founder.

The city’s leadership has failed to establish proper support, guidance, and policies that meets the demands of what could be a growing industry.

The city of Oakland needs to build a strong ecosystem to bring more exciting opportunities to the city, navigate regulatory hurdles, and create accessible opportunities for startups to gain access to expertise, capital, create more jobs and markets thus strengthening our local economy.

While many cities across the nation are pushing to create the next "big tech hub", city leaders must meet the needs of entrepreneurs to facilitate growth, economic development and supporting job creation.

Have a clear vision along with objectives

It starts with having a clear, structured vision, including examining existing resources, networks, the roles of banks, support services, individual contributors, local government, venture capital, accelerators and incubators. Laying out a clear picture of what and how each entity contributes to the ecosystem helps to determine the size, scope, and impact of these organizations in our communities.

An approach that may help with visualizing what a thriving ecosystem looks like, think if it as if you’re building a “neighborhood” from scratch. What would attract all of the entities listed above to the neighborhood?

First, you look at what the city has to offer to each contributor of the business ecosystem. This can range from affordable housing, tax incentives for large and small businesses, to entrepreneur programs. 

Next, connect and network with the business community. There are solo founders and startup companies running businesses in your cities right now. Host a town hall meeting or some kind of event to discuss what founders are looking for in their respective cities.

What is missing from the existing ecosystem?

What could make building a startup easier for them?

During these discussions, what is one of the more important aspects that appears to be a common theme for founders? 

Consider all of the feedback from the meetings with founders as a starting point, to building out your business ecosystem. Work with ecosystem builders to connect the dots. Many of us have relationships within the community and can assist in various ways.

The true value of ecosystem builders is that we use a holistic approach to building strong entrepreneurial ecosystems, which requires strong collaboration and alignment for desired outcomes.

This takes an incredible amount of work and skills might I add. Our jobs entails community building, networking, administrative tasks including creating reports, surveys and compiling data to help facilitate the economic development of our communities. All of these variables help us identify needs and gaps in the ecosystem while finding new ways to address those needs and gaps. 

I personally think this should be a coordinated effort across sectors. By breaking down the needs of each city, we can create a plan of execution, including list of organizations, collaborators, community leaders to help facilitate with developing initiatives and projects. We can approach local corporations with opportunities to connect and network as well.