Feb 26 2016

Entrepreneurial Density

I’ve been throwing this term around for a while and thought it was worth writing about, as I believe that understanding entrepreneurial how density can shape an entrepreneurial ecosystem is very important.

But first, a link back to some ideas around entrepreneurial communities in general. My partner Brad literally wrote the book about this (highly recommended if you haven’t read it already). But the very quick summary is that great entrepreneurial communities are build on the basis of a few key tenets (Brad writes about these in much more detail in the book, which – again – you should read)

Startup Communities Take Time. Think 20 years. And they don’t happen overnight (despite what you may have heard about Boulder – it took plenty of time to develop here too).

Startup Communities Are Led by Entrepreneurs. For some reason I still can’t figure out, many VCs get this backwards. But great entrepreneurial communities are led by entrepreneurs.

– Startup Communities Have Many Leaders And Are Not Hirearchical. Related to being led by entrepreneurs, great entrepreneurial ecosystems have many leaders. They don’t need to be working in a coordinated fashion (but see the next point on being inclusive) but they do need to be working for the greater good of the community. Additionally these communities are meshed in their network structure vs being hub and spoke or centralized. There’s no hierarchy in strong entrepnreurial communities.

– Startup Communities Are Open. It’s pretty critical in any startup community to be open and welcoming. People come to entrepreneurship from lots of different background and bring different perspectives. They’re also working across the stack of petential problems and forming companies that are varied in their make-up, focus and goals.

It’s funny. I thought for sure I had written about this before, but when I looked it turned out I hadn’t. Brad has some great content up (in addition to his book, which I’ve now mentioned 3 times that you really should read). There are a few videos up (see here and here) where I touch on these topics if you’re interested in digging deeper (they’re long but it’s a meaty topic…). Felt like it was worth prefacing the rest of this post with these thoughts on Entrepnreurial Ecosystems and Startup Communities First.

So how does Entrepreneurial Density have to do with this? I’m starting to develop a thesis around the ways in which Entrepreneurial Communities follow something pretty akin to Boyles Law. For those of you that have forgotten high school chemistry, Boyles Law describes the behavior of gasses – it describes how the pressure of gas increases as the volume decreases.

Startup Commnunities can behave in a very similar fashion. The smaller the physical space in which entrepreneurial activities are taking place, the faster those activities happen, the more serendipity emerges and the more that community thrives. This often happens somewhat naturally – startups like to be around other startups for example. But they can also be encouraged to happen – co-working spaces are good examples of systems trying to create density; sometimes enterprise zones can create this effect, often a group in a particular city gets together and consciously tries to create an area of town that’s particularly attractive to startups. I lived this in Boulder without really realizing at the time what was going on. In 2007 Foundry moved from an office park on the highway to the west side of town. There were already a number of startups there (our office formerly belonged to Rally Software, Lijit Networks was upstairs, many more companies were nearby). We moved there because we liked the location and it was near to where 2 of the Foundry partners lived. Over time more and more companies moved to that side of town and we built a little bit of a community within a community where people were constantly bumping into each other on the street, getting coffee, at lunch, etc. In our building alone we’ve had about a dozen portfolio companies have an office at one time or another.

To be clear, it’s not that density is required to build a great entrepreneurial ecosystem (and I feel passionately about the virtual community that’s connecting entrepnreurs around the work – perhaps with this new lens, creating virtual density as well). But community building is about creating the environment that allows for the entire system to thrive and creating density in a community is an important way to help speed up that process.

An important credit to end this post. I first starting thinking about density a number of years ago when Brad Burnham mentioned it to me. I doubt he remembers that specific conversation but, like many conversations I’ve had with Brad over the years, it was an impactful one.