What It Takes to Create a Start-Up Community

/// What It Takes to Create a Start-Up Community

April 26, 2013  |  Blog

Entrepreneurs exist everywhere, but start-up communities don’t. Some rise up organically and others are created deliberately — or at least people try to create them deliberately. Many hope to create the next Silicon Valley.

Brad Feld, who is known for helping to turn Boulder, Colo., into a robust start-up hub, which he wrote about in his book, “Startup Communities,” said entrepreneurs lead a community’s creation and everyone else feeds it. Those feeders include government, universities, mentors, investors, service providers and large companies. Start-up communities also need a steady supply of talent — engineers, yes, but designers, scientists, sales and marketing experts, management consultants and investors, too. Another essential is density — lots of people sharing ideas and collaborating — and lots of places for entrepreneurs to network and share ideas.

One recent example of a burgeoning community is a segment of Los Angeles that is becoming known as Silicon Beach. With a steady supply of engineering, business and creative talent from Hollywood studios and major universities like U.C.L.A. and U.S.C., plus lots of meet-ups, co-working spaces and start-up events, Silicon Beach — which includes the beach communities of Santa Monica and Venice, as well as downtown L.A. and Hollywood — has become a haven for start-ups that blend technology and media, especially gaming companies.

Richard Florida, co-founder of the Atlantic Cities blog, and an urban studies professor at the University of Toronto and New York University, said Silicon Beach is part of an interesting evolution happening in entrepreneurial activity — it’s moving from the suburbs to the cities. “During the Industrial Age, a lot of activity moved to the edge of cities and to the suburbs,” he said. “And we believed then cities had been supplanted. High tech was happening in suburban areas of Silicon Valley, and outside of Boston, Seattle, in the Austin suburbs, in Research Triangle. But in the past several years we’ve seen an incredible, accelerating shift in start-up activity back to urban centers.”

Population density, he said, allows for the serendipitous encounters that inspire creativity, innovation and collaboration. “Entrepreneurs are competitive,” Mr. Florida said. “But they are also looking for people to partner with, people they resonate with.” Boulder is an unusual example of density. The city has only about 100,000 people, but Mr. Feld has hypothesized it may have more entrepreneurs per capita than any other community in the country. “The number of people working for start-ups is off the charts,” he wrote in a 2011 blog post.

According to Mr. Feld’s site, Startup Revolution, Boulder has 191 start-ups today, six accelerators, three incubators, 35 investors (including angels, seed investors, venture capitalists and corporations), five meet-up groups and a host of events like Ignite Boulder, Startup Weekend and TEDx Boulder. The area has attracted lots of engineers as well as sales, marketing, management and finance professionals.

Mr. Feld told DealBook in December that the city’s start-up community has grown because Boulder is a place where people wanted to live, so they built a life around it. But can you create a start-up community in a place like Detroit or even Las Vegas? Both cities lack density, but they do have evangelists — someone with a vision.

Detroit has Dan Gilbert, founder of Quicken Loans. In Detroit today, the median house price is less than $60,000, household income is around $25,000 and the number of people living in poverty is more than three times the national average. Talent is leaving in greater numbers than it’s arriving — which runs completely counter to what a start-up community needs. But as you can read in this recent Times story, Mr. Gilbert has already spent $1 billion to try to change all of that.

Meanwhile, Tony Hsieh, the founder of Zappos, is investing $350 million to revitalize Las Vegas, with $50 million going to tech start-ups through the VegasTech Fund. (The Times Magazine wrote about Mr. Hsieh’s efforts in 2012.) Drawing start-ups to economically challenged cities like Detroit and Las Vegas is hard enough but once there, those start-ups still face the usual challenges — finding investors, hiring talent and connecting with their communities.

Those connections are essential, said Scott Case, chief executive of Startup America Partnership, a private-sector initiative that aims to encourage the development of high-growth start-ups. Mr. Case said that is one thing his organization is focused on, recruiting and making its members visible. And that’s why the presence of accelerators and incubators, as well as events like meet-ups and pitch fests, are vital for a community’s growth.

Over the next several months this blog will take a closer look at a variety of start-up communities nationwide — those that are established and that that are emerging, or perhaps even struggling — in an effort to learn more about what makes these places work.

Do you think it’s possible to create start-up communities deliberately? Or do they have to happen organically? And which communities would you suggest we look at?

Link: What It Takes to Create a Start-Up Community

The New York Times Small Business – Eilene Zimmerman

Do Good Better 2014 vertical banner

Leave a Reply