Keynote talk at the TechChill Startup Ecosystem Summit, 2018 Riga, Latvia. The terminology of the “startup ecosystem” has long become commonplace. Yet how often do we consider what an ecosystem actually is, and how to sustain it? A startup ecosystem is more than a venue where startups and their teams are located. It is a dynamic system of people, institutions and practices sustaining eachother and contributing towards the greater goal of building an enabling environment for entrepreneurship. This dynamic system is embedded in a larger landscape of startup cities, highlighting how connections between these ecosystems are not only meaningful, but necessary. Cities and communities have long looked toward successful models like Silicon Valley for a road map to discern the ingredients required to produce great startup ecosystem. While this model has not been replicated, it is not necessary to. In today’s digital economy, one size, or one model does not fit all, especially when startup ecosystems build meaningful connections to one another. These connections create the opportunity for every community to become meaningful venues within the global startup ecosystem—and to magnify their impact. Here, we discuss several of the vital elements—funding, institutions, message, sustainability and inclusivity – to illustrate how all actors within the startup ecoystem —from startups, to corporates, to community builders, to enthusiasts, play important roles in ensuring their local ecosystem’s success. We discuss how these characteristics impact one another, and how community builders can troubleshoot challenges and highlight their ecosystem’s unique added value.

1. The system of the
STARTUP ECOSYSTEM
N A T A L I E N O V I C K , E U R O P E A N S T A R T U P I N I T I A T I V E &
U N I V E R S I T Y O F C A L I F O R N I A , S A N D I E G O

2. WHAT IS
AN
ECOSYSTEM?

3. WHAT IS
AN
ECOSYSTEM?

4. REASONS WHY
ECOSYSTEMS
DON'T WORK

5. 01
02
03
LACK OF EXISTING
INSTITUTIONS MAKE
EXCHANGE INEFFICIENT
AS ECOSYSTEMS GROW,
DEMANDS ON INDIVIDUAL
COMMUNITY BUILDERS ARE
HIGH AND RESOURCES MAY
BE LIMITED
STAKEHOLDERS ACT
RATIONALLY (SELF
INTERESTED), AND FEW
MECHANISMS EXIST TO BUILD
TRUST

6. LACK OF INSTITUTIONS
This is a new space. The startup
landscape is (largely) less than 20
years old. Existing institutions built to
support traditional entrepreneurship
is not well suited to startup needs.
Rather than growing
together, startups have
leapfrogged traditional
support organizations
New organizations created to support
startups must learn to build
connections with existing institutions.
Because players are nascent, doing
due diligence can be difficult.

7. LIMITED RESOURCES
Communities are propelled by
individuals and organizations.
Smaller ecosystems with fewer
support organizations place higher
demands on individual actors and
community participants.
Demands on key
community actors
depend on the size of
the community & who is
participating in it
Larger startup communities have
the chance to offer more to their
participants and the threshold to
participate can be lower. Smaller
ecosystems have do more
for everyone (less choice).

8. COMMUNITY EXAMPLE

9. COMMUNITY EXAMPLE

10. SELF INTEREST
& TRUST
Building community in an
entrepreneurship ecosystem is
difficult because business is a rational
activity. Two coworking spaces in the
same area will become competitors,
rather than collaborators.
Because few institutions exist and
many partners are new (and some
separated by geography), it can be
hard to trust prospective partners.
In conditions where trust is low/hard
to come by, we revert back to old
biases or stereotypes.

11. WHERE WOULD YOU
RATHER STAY?
With the absence of platforms like these to build trust,
consider how you can communicate reliability

12. BUILDING
BRIDGES

13. INSTITUTION
BUILDING
Institutions are "stable, valued, recurring
patterns of behavior". They help to orient
participants and regularize aspects of your
community.
Institutions help:
Build trust in your community, inside and out
Develop networks that pave the way for future
partnerships, funding and incorporation.These
networks increase the size of your community
and lowers costs on individual actors creating
opportunity for repeated exchange
Support ecosystem branding and communicate
your community's unique value offerings

14. BRIDGING
ECOSYSTEM
CHALLENGES
Funding
Organizations/
Existing institutions
Sustainability
Message
Inclusivity

15. ORGANIZATIONS
Who do you want to
partner with and why?
How can both sides gain
through the partnership?

16. Building meaningful partnerships with outside
organizations can be difficult as both partners
may have difficulty trusting or understanding the
benefits collaboration can bring.
While difficult, greater collaboration with
corporate partners, universities, funding
agencies and government institutions can bring
great value to your startup community.
Create trust by being transparent with what you
can offer, and what you are looking to achieve
with the collaboration
Work to understand the motivations of your
partner organization and find areas of common
ground
Follow through on your promises
Organizations

17. MESSAGE
What message do you
want to convey?
What message is
transmitted currently?

18. Working to develop a consistent, coherent and
accurate message, allows you to manage
perceptions and build your community from
within.
A strong message:
Communicates your unique values and strengths
(funding, incorporation, sustainability)
Builds trust in your ecosystem from outsiders
through transparency (incorporation, funding)
Creates opportunities for new
actors/organizations to become involved
(sustainability, incorporation)
Supports cohesion, local network formation
(sustainability)
Message

19. SUSTAINABILITY
How often are
participants engaging
with the community?
What stops them from
participating?

20. Sustainability is the extent that community
participants continue to engage and participate,
no matter how successful they have become.
Encourage sustainability by building institutions
so participants can get involved easily and
continue to get involved. This could be through
regular events or activities.
Sustainable startup ecosystems:
Encourage strong network formation and talent
retention
Communicates the value of your unique
community, and creates incentives for
participating
Provides opportunities for organizations to
become involved with later stage companies
Sustainability

21. FUNDING
What barriers exist in
funding your ecosystem
and how can they
be addressed?

22. Funding is usually the community quality that is
in highest demand due to scarcity. New
mechanisms make this landscape more diverse,
and it is worth recognizing how different funding
types may influence your community
Support a more diverse funding landscape:
Help to share different pathways companies
have found success beyond VC funding
Be creative in engaging partners in funding
schemes (Colorado Startup Community Fund,
Rising North Fund)
Take away the mystery for international funders
through strong, coherent messaging
Build institutions that allow unique access points
to your community for prospective funders. Help
remove inefficiency and improve openness.
Funding

23. "Venture capital is rocket fuel,
but you really do sell your soul to
the devil in some ways"
- Diane Hessan (Harvard
Business), president and CEO of
C-space Corporation, ex-CEO of
Startup Institute

24. INCLUSIVITY
Does everyone have a
place in your
community?

25. Inclusivity is the degree to which anyone feels
welcome in your community. Growing
ecosystems cannot afford to exclude anyone.
Inclusive communities are more sustainable,
engage more partners, and lower the costs of
participation. Inclusive communities create an
open opportunity for exchange, find strength in
diversity and insulate against groupthink.
Support a more inclusive community:
By being transparent with your values, goals, and
orientation (code of conduct, or similar)
Work to engage outside partners and those that
are not actively participating in your community
Engage with organizations that address
misrepresented groups and consider how you
can combine efforts
Inclusivity

26. “A lot of people in our industry haven't had
very diverse experiences. So they don't
have enough dots to connect, and they
end up with very linear solutions without a
broad perspective on the problem. The
broader one's understanding of the human
experience, the better design we will
have.”
― Steve Jobs

27. Companies in the top quartile for gender
or racial and ethnic diversity are more
likely to have financial returns above their
national industry medians. Companies in
the bottom quartile in these dimensions
are statistically less likely to achieve
above-average returns.
(McKinsey and Company 2018)
Have your community support the pipeline.

28. IF YOU WANT TO GO QUICKLY, GO
ALONE.
IF YOU WANT TO GO FAR, GO
TOGETHER