Across the country, unbeknownst to many, there is a growing proactive effort to create and grow “entrepreneurial ecosystems” to dynamically drive innovation, economic development and massive wealth creation. These ten syllables have a strong economic impact and also propel us headlong into the future at an accelerated pace.
Entrepreneurial ecosystems can be viewed as an interconnected network of organizations, institutions, individuals, and resources that support the development and growth of entrepreneurs and their new ventures in a specific region. They provide a supportive and nurturing environment where startup founders can access the necessary resources, talent, knowledge and networks they need to launch and grow their business.
These ecosystems are comprised of entrepreneurs, mentors, investors, educational institutions, businesses, local/state government agencies, and specialized resources and organizations, all under the banner of ESOs – business organizations. support for entrepreneurship. They provide roadmaps and insights that help startup founders find what they need at each stage of their growth and act as catalysts to make things happen.
As Linda OlsonCEO/President of Tampa Bay Wave – a non-profit technology accelerator that helps entrepreneurs turn their innovative ideas into real-world solutions and scalable businesses – further explains:
“It takes a village to create a startup. Emerging businesses cannot thrive alone. They need capital at every stage of their growth. They need educated customers and employees. Academia – whether a single university or a network of universities – in active partnership with the local community can help a region appear attractive to capital and provide a pipeline of talent. You also can’t underestimate the value of startup peers and mentors in helping these startup leaders operate effectively and learn to scale quickly. And then there is a wide range of ESOs to complement the specialist resources, access and knowledge needed to be competitive. So, at the heart is the entrepreneur and the entrepreneurial ecosystem is made up of all the organizations and supporting resources around them to help them grow and evolve.
Components of an entrepreneurial ecosystem
Based in Tampa Bay Synapse – a nonprofit organization that acts as a statewide connector of Florida’s innovation community – has mapped the key components of an entrepreneurial ecosystem that emphasizes community framework and on the fact that innovation is a team sport. Here are the key elements that cultivate fertile ground for entrepreneurs to succeed and scale:
Entrepreneurship Support Organizations (ESO): A diverse set of organizations that includes accelerators, incubators, coworking spaces and other startup development programs.
Innovation facilitators: Include law, accounting and consulting firms offering specialized training, mentoring and business advice to entrepreneurs.
Investors/Financing Sources: Offer essential financial capital and include venture capital firms, angel investors, crowdfunding platforms and banks to provide capital to start and grow businesses.
Government: Local/regional/state financial and support programs that include economic development councils (EDCs), the US Small Business Administration, and government grants.
Educational institutions: Ensure the development of qualified people and, with some universities, also offer incubator and research transfer programs.
Talent: Represents a local workforce with the knowledge, expertise and entrepreneurial spirit to innovate and compete in a dynamically changing business environment.
Companies: Contribute to fostering the development of the activities of startups working on new solutions in areas that can benefit their competitive positioning, their growth potential and their leadership in the industry.
Contractors: Are at the center of this ecosystem, leading the diverse network around them and providing a powerful source of mentorship and mutual support.
Data and recognition
These ecosystem businesses also lead the way in collecting local/regional data and researching patterns to help define and determine the scope and needs of their specific entrepreneurial community and can thus play an instrumental role in building and adaptation of the ecosystem to the needs and objectives of the region. in general. This type of detailed information on entrepreneurial ecosystems is also used to inform government legislators on where they can focus some of their efforts that will have a greater impact. It is based on the thesis that although one can take a macroeconomic view, economic growth begins at the local level. Without healthy local economies and ecosystems, it is very difficult to develop a national economy.
As Claudia Durangeneral manager at Endeavor Miami – a high-impact entrepreneurial movement aimed at driving economic growth and job creation in Florida – further explains:
“We collect data, develop research and release it to the world. Once you have the critical mass of startups, you are able to analyze data, determine successful trends, and share these resources with everyone. It is very important to have real data to understand which economic or market sectors are actually thriving. FinTech? Health technology? Why are all these software-as-a-service (SaaS) companies here? It helps explain the nature of your ecosystem and its commercial potential. And, most importantly, spotlight the high-impact entrepreneurs and startups that are leading the way in these markets in terms of insights and leadership.
Assessing and accelerating your startup ecosystem
Starter genome and their annual Global Startup Ecosystem Report is a good place to go to better understand these ecosystems, because all they do is measure entrepreneurial ecosystems. It is the world’s leading research and policy advisory organization for public and private organizations, advising more than 145 clients in more than 50 countries who are committed to accelerating the success of their startup ecosystem. Through surveys and a substantial collection of data sources, they built a scoring system to compare and contrast the state and health of different ecosystems. This scoring system allows you to assess where you are and what are the next crucial things that you, as an ecosystem, can focus on that will help move your entrepreneurial ecosystem forward.
As an example of their criteria, to move from Stage 1 to Stage 2, you need at least a thousand startups in your ecosystem universe and strong ties to global businesses and resources to support companies planning to do business internationally. The latter generally signals a much stronger acceleration in business growth and the need for increased connectivity within an ecosystem. In general, they found that the stronger the connectivity, the healthier the ecosystem. Their website gives you free access to explore the current size and status of a number of startup ecosystems in the United States and around the world to better understand the nature and scope of entrepreneurial ecosystems.
Context and application for financial services
This discussion on entrepreneurial ecosystems is important for financial services executives and financial advisors as part of their proactive customer and community engagement efforts. Advisors, RIAs and family offices need to be aware that everywhere in this country, no matter the size of an area or region, there are at least the beginnings of local/regional entrepreneurial ecosystems. They need to be supported, not just with money, but also with participation – investments of time, mentoring, and sharing your financial expertise and community networks.
Understanding and deliberately mapping your local/regional entrepreneurial ecosystem could be of great value to a financial services business model and for competitiveness by being able to flag new investment opportunities supporting the local community, providing wealth management financial and business advice throughout the unique cycle of startup growth leading to liquidity events and helping your business clients connect and participate in what may well be one of the greatest catalysts for wealth creation that takes place around them. Overall, participation can further strengthen the positioning of financial advisors as local business leaders and wealth managers for small business owners.
We’ll expand this article into a series of in-depth interviews with these community ecosystem leaders to help guide advisors on where and what to look for, better understand the business growth dynamics unfolding around them and to learn the best way to engage in a practical way. with these essential elements of their local entrepreneurial ecosystem.
THE Institute for Innovation Development is a training and business development enabler for growth-oriented financial advisors and financial services companies committed to leading their businesses in an operating environment of accelerated business and cultural change. We operate as a business innovation platform and educational resource with members of FinTech and financial services companies to openly share their unique perspectives and businesses. The goal is to raise awareness and stimulate open thought leadership discussions on new or evolving industry approaches and thinking to facilitate the next generation’s growth, differentiation, and unique community engagement strategies. The Institute was launched with the support and foresight of our founding sponsors: Ultimus Fund Solutions, NASDAQ, FLX Networks, TIFIN, Advisorpedia, Pershing, Fidelity, Voya Financial and Charter Financial Publishing (publisher of Financial Advisor and Private Wealth magazines) .