The Importance of Place in Entrepreneurship:
Research on How Ecosystems Provide More Than Resources.
They Define Entrepreneurial Culture.
By Heidi Neck
Associate Professor of Entrepreneurship
Jeffry A. Timmons Professor of Entrepreneurial Studies
Despite the ubiquity of digital technology and increased mobility both physical and virtual, entrepreneurship remains very place-based, according to our E-Lab research (see "Research Methodology"). 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 the 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.
Ecosystems by nature are place-based. In thinking about ecosystem development, the focus is often on institutions and resources, but the less tangible notion of culture is equally, if not more, important. To cultivate an entrepreneurial culture, the ecosystem needs to be local, visible, and accessible in the day-to-day interactions of entrepreneurs.
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. And, entrepreneurs are very aware that it takes generations who succeed and fail, and who reinvest in their local ecosystem to build the appropriate culture.
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 and 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 them creating a culture of competition.
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 who assess, catalog, and disseminate information on the existing organizations and resources within a place provide a clear picture of the local entrepreneurship ecosystem and a platform for enabling 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?
In a few places, entrepreneurial culture is quite visible whether it’s seen on the backs of people wearing t-shirts that advertise startup programs or at cafes who gladly accommodate entrepreneurs and their meetings, or in startup storefronts and highly covered events. (Images clockwise: University Café in Palo Alto, CA, Groupon billboard seen on US 101 towards San Francisco, startup storefronts in Mountain View, CA, Startup Weekend t-shirt seen in San Francisco and co-working sidewalk advertisement in Seattle.)