I’m in San Francisco right now and then New York later this week. When I look at my schedule, and where I’m hanging out, I realize that even though I’m in two very big cities, I’m going to spending most of my time in a very small area.
When asked why Boulder is such a vibrant entrepreneurial community, I talk about a concept I call entrepreneurial density. Boulder is a small town – the city itself is only 100,000 people. Yet the number of entrepreneurs in Boulder is significant. And the number of people working for startups is off the charts. Start with the definition:
entrepreneurial density = ((# entrepreneurs + # people working for startups or high growth companies)) / adult population
My guess is that Boulder’s entrepreneurial density is one of the highest in the United States. I don’t have any empirical data to back this up – it’s a qualitative assessment based on my experience traveling around and investing in different parts of the US.
While population is one measure, I’ve also started thinking about geography as another. In the case of Boulder, the core of the entrepreneurial community is in downtown, which is a 10 x 4 block area. Even though downtown Boulder is small, it has different personalities (yes – we have an east side and a west side), yet you can walk from one end to the other in ten minutes. And, inevitably, when I walk across town I always bump into people I know.
The geography index matters even in places like New York. When I stay in New York, I generally stay within walking distance of Union Square. Sure, I end up in midtown or downtown occasionally, but most of my time is spent in a 20 x 8 block area. The bay area splits similarly – I’m in San Francisco within walking distance or a short drive of many of our bay area companies, but I’m on the other end of the planet from Palo Alto.
As I think more about entrepreneurial communities, I’m starting to expand my definition of entrepreneurial density to include by population and geography. This seems to matter a lot, even in very large entrepreneurial communities like New York and San Francisco.
I’m curious about experiences in other parts of the country, especially entrepreneurial communities that are growing or trying to reinvigorate themselves. How does entrepreneurial density (either geo or population) impact you?
I spent the day in Kansas City yesterday at the Kauffman Foundation for my first Startup Weekend board meeting. I’m very stingy with my non-profit board activity after deciding in 2005 to get off any non-profit board that wasn’t focused on entrepreneurship and until yesterday the only non-profit board I’m on is the National Center for Women & Information Technology.
I was at the first Startup Weekend in Boulder in July 2007. It was created by Andrew Hyde (he was the Community Manager for TechStars at the time). While I didn’t stay the entire weekend, my partner Seth Levine and I spent a bunch of time there on Saturday, had a blast, met some new people who became long term friends (my first extended experience with Micah Baldwin where Vosnap was created), and paid for a bunch (all of?) the food, which I recall included a lot of beer, chips, and bagels. In was a completely awesome experience.
Andrew ran about 80 Startup Weekends around the world before selling Startup Weekend to Marc Nager and Clint Nelsen in 2009 who were quickly joined by a third partner Franck Nouyrigat. Marc, Clint, and Franck turned Startup Weekend into a 501c(3), got a bunch of smart people involved as advisors such as David Cohen (TechStars CEO), expanded rapidly, got a grant from the Kauffman Foundation, and are now launching an even broader effort called the Startup Foundation.
My view is that the goals and behavior of Startup Weekend, going back to the very beginning when Andrew Hyde conceived it, are completely aligned with my view that entrepreneurial communities can be created in many places and a key attribute is activities that engage the entire entrepreneurial stack from aspiring entrepreneurs through experienced entrepreneurs and include all of the various constituencies around the entrepreneurial ecosystem. I saw that in Boulder in July 2007 and I see that when I hear of other people that have participated in Startup Weekends around the world.
I’m psyched to join some other super smart people on the board, which includes Carl Schramm, president and CEO of the Kauffman Foundation; Steve Blank, serial entrepreneur and author; entrepreneurship lecturer at U.C. Berkeley and Stanford University; Greg Gottesman, managing director at Madrona Venture Group; Laura McKnight, president and CEO of the Greater Kansas City Community Foundation; and Nick Seguin, manager of entrepreneurship at the Kauffman Foundation.
If you’ve never done a Startup Weekend, try one. I bet it changes your life.
This afternoon in Boulder I’ll be on a panel as part of the White House Startup America Roundtable. If you weren’t invited to the event, there is a web site called Reducing Barriers to Innovation that you can participate in.
Over the past few years, I’ve spent some time thinking about how the government can help entrepreneurship. It started with my role as the co-chairman of the Colorado Governors Innovation Council which was my first involvement in any formal way with any government initiative. More recently, I’ve focused my energy on the Startup Visa movement and the Startup America Partnership.
When I was reviewing the agenda for the Reducing Barriers to Innovation program, the goal of the program was pretty clear:
“The Startup America: Reducing Barriers event is a regional platform that allows federal agencies to hear directly, from entrepreneurs and local leaders like you, how we can achieve our goal of reducing the barriers faced by America’s entrepreneurs. Senior Obama administration officials need input on what changes are needed to build a more supportive environment for entrepreneurship. “
On my run yesterday, I mulled over the big activities that I thought the federal government could do to “build a more supportive environment for entrepreneurship.” I came up with five things that I think are relatively easy to measure over the long run. Following are short thoughts on each of these areas with one specific idea (in italics) that I think would materially impact entrepreneurship in America in a positive way.
Tax Policy: Incent people to invest in startups. While there are several well understood tax policies that could be implemented, the simplest is to provide long term tax breaks for individuals to invest in new startup companies. As with anything tax related, there are endless politics involved and many of the things that actual get rolled out are so obscure that they either never get implemented or are to difficult for investors to understand. Make it simple – eliminate capital gains if an individual (who is an accredited investor) invests equity (i.e. risk of 100% loss of investment) in a private company with less than 100 employees.
Immigration Policy: Make it easy for foreigner entrepreneurs to come to the US, or for foreign students to stay in the US, and start companies. This is the essence of what we’ve been trying to solve with the Startup Visa movement. The new Startup Visa Act of 2011 has plenty of improvements over the 2010 Act (which was introduced but never went anywhere) but still is stuck in Congress. If the White House wants to make a difference here, it should prioritize the Startup Visa separately from “broad immigration reform” and help get it passed since the Startup Visa is much less about immigration and much more about entrepreneurship, innovation, and jobs.
Regulatory Policy: Cut as much paperwork and bureaucracy out of the system. While this one is talked about regularly by the people in government that I know, the regulatory environment just seems to get more and more complicated. The solution so far has seemed to be “hire more people to process more paper faster.” This clearly hasn’t worked – how about taking the opposite approach and cut 20% of all jobs within various government agencies responsible for regulatory activity? I don’t care if you pay the fired people for two years – give them healthy severances and incentives to go work in the private sector. Necessity will drive efficiency.
Investment: Focus investment in university research. Then open source the results. The federal government has been a historically successful investor in innovation and the creation of new technologies, often through funding university research. If you want a good example of this, read Bright Boys. Unfortunately, this has gotten really messed up recently due to our byzantine patent system and the evolving dynamics of university technology licensing organizations. The government should allocate even more money to university research programs, but the results of this research should not be able to be patented and should be free for anyone to license. This would drastically change the technology licensing game by simplifying it and shifting economic incentives aggressively to companies that actually commercialize (or productize) this research, rather than simply claim ownership to the “intellectual property.”
Customer: The federal government is an enormous consumer of products and services. While it claims to want to do business with entrepreneurial companies and so far pays its bills in a predictable manner, it’s a miserable customer to deal with. The procurement process is painful, many entrepreneurial companies have to work through government contractor gatekeepers (who take up to a 30% tax for doing nothing other than being the contracting party), and often the execution and implementation process is a disaster. Unfortunately, I don’t really have a suggestion for how to improve this since there are so many rules and regulations around this – I guess the answer is “see regulatory policy” above.
I’m continuing to think through this and refine my thoughts on it, so as always I’m open to any and all feedback, including “Feld – you are such a knucklehead – that’s a stupid idea and will never work, but try this.” Fire away.
If I’ve learned one thing in my life, it’s that nothing is static.
Periodically the meme surfaces that “the only place you can create a great software / Internet company is in the bay area.” While I think the bay area is a special place, anyone that knows me knows that I strongly believe there are several great entrepreneurial communities throughout the US and the potential for many more.
Boston has always been a great entrepreneurial community. Sure – it’s had it’s ups and downs, but when I lived here from 1983 to 1995 the entrepreneurial vector was awesome. I started my first company (Feld Technologies) here in 1987 and made my first angel investment (NetGenesis) here in 1994.
When TechStars opened a Boston program in 2009 there was definitely new energy around the software / Internet startup scene in Boston and TechStars was excited to be part of. When I say “Boston”, I actually mean “Boston/Cambridge” where the center of mass is really near MIT in Cambridge. The venture capital community has finally realized this (again) and much of the physical location of the VCs is shifting to the Cambridge / Kendall Square area with a little in Harvard Square (a 10 minute cab or train ride from Kendall Square.)
I spent the day at TechStars Boston yesterday meeting with all of the TechStars Boston 2011 companies. They are halfway through the program and are stunning. Three months ago I was super psyched about the quality of the TechStars NY 2011 companies as they were halfway through the program. The Boston program, under the leadership of Katie Rae, has taken it up another notch!
Last night at dinner I met a bunch of the TechStars Boston mentors. Katie has recruited some folks I’ve never met before and I asked her to put together a dinner with the people I didn’t know. It was just awesome – super food at Evoo, great conversation, and really impressive people. Tonight we have a TechStars Boston mentor happy hour so I’ll get to see a bunch of old friends and the rest of the TechStars Boston mentors.
At the end of dinner, Matt Lauzon, the founder/CEO of Gemvara, told me about this thing he and some friends had created called #RubyRiot. It’s a “pay-it-forward” event where everyone that comes asks for an introduction to one person (anyone on the planet) and everyone in attendance works together to make the introduction happen. Matt asked me if I’d sponsor the event – Fred Destin piled on and said he’d put up $1k if I did, then Reed Sturtevant did also, and Gus Weber from Dogpatch finished us off. I’m an easy mark so I jumped in the boat.
As I walked back to my hotel, I was buzzing from the day. I believe to my core that the entrepreneurs create and sustain entrepreneurial communities. Everyone else, including VC’s like me, are participants. And it’s just awesome to see the next generation of Internet entrepreneurs reignite the fire in Boston (well – Cambridge) and drag the last generation back into it.
I strongly believe that entrepreneurial education and community building is not a zero sum game. So when Jim Franklin, the CEO of SendGrid (one of our portfolio companies and a TechStars Boulder mentor) asked if I would write a post about the Founder Institute program in Boulder, I told him that I’d give him control of my blog to write a guest post on it. I have enormous regard for Jim and Jon Nordmark, his co-host of the Founder Institute Denver program and want to be supportive of anything they are involved in. So – following is Jim’s view on the value of Founder Institute, how it differs from TechStars, and a call to action if you are interested in it.
If you read Brad’s blog, you probably have some connection to the world of startups. Do you dream of starting a company, but you just can’t quit your day job right now? I may have just the thing you are looking for.
Last summer Founder Institute held its inaugural class in Denver. Jon Nordmark, CEO of usingmiles.com and founder of ebags, was the host. Jon brought in dozens of CEO/founder mentors and graduated a class of 15 companies including BookBrewer, JetJaw and CipherPoint. Also, the graduating founders have gone on to do joint projects together such as LocVox, which GlueCon recently selected for its “demo pod.”
What the graduates tell me is that they thought the education was worthwhile, and the camaraderie among the group is worth even more. Starting a business can be a lonely venture, and these graduates all have a meaningful connection to each other.
I had the opportunity to mentor a number of the participants and developed several great relationships in the process. I was impressed by the quality of the founders that we have in Denver and Boulder, and I’m looking for big things from graduated companies like BloomWorlds, and ZebraMinds.
For this year, I’ve joined Jon as co-host. We look forward to working with the generous mentors as well as another great group of founders. Founder Institute is a great way for Jon and I to ‘pay it forward’ and help the next generation of entrepreneurs to make Colorado a great place to start a business.
Because I am Boulder-based and also a TechStars mentor, I am often asked about the differences between TechStars and the Founder Institute. Scott Yates, an FI graduate and founder of BlogMutt, wrote an excellent post on this topic last year, and tells me that looking back as a graduate he thinks his analysis still holds up.
The key difference I see between the two programs is the overall goal: at TechStars your team will be in Boulder full-time and demo your work at Investor Day. All TechStars participants form an operating company by the end of the program. With the Founder Institute you will get an education on what it means to be a founder from others who have been there and done that. Most of the participants are operating a new company by the end, or shortly thereafter, but some just keep working their day job until the moment is right for them.
In addition to TechStars, we have many resources for entrepreneurs in Colorado, and all of them have their differentiating points. Here’s what I see as unique aspects of the Founder Institute:
If you are ready to commit 15 hours a week for 14 weeks to get your next business ready to launch, I look forward to helping you do more, faster (although, not too fast!)
And whether or not you launch your business, you will be a much better-informed founder when the time is right.
I’d like to thank Brad for the chance to blog in his space, and I’d like to thank Jon for his continuing effort to help the Colorado entrepreneurial ecosystem, because we all benefit when we have more, better founders in our universe.
Apply before the May 1 and let me know if I can help you with launching your business in 2011.
I’m back home in Boulder about to head out for a long run in the mountains. As I was catching up on email from last week (not quite done yet) I was reflecting on the awesome week I had in New York. I had a couple of board meetings, spent a bunch of time at TechStars, gave some talks, had a pair of really fun late night dinners, had two strong runs (including one amazing one) along the east river, and stayed up until 1am drinking scotch with my partner Seth one night who was also in New York for a few days this week.
On Thursday night I gave a talk at NYU Startup Week. I followed Nate Westheimer, who runs the incredibly vibrant NY Tech Meetup. Nate led off by asserting that NY was the best place in the world to start a company and hypothesized that in the past year I had probably spent more time in NY than in the bay area. Since I track where I sleep every night (and have since 1/1/09), I was able to quickly answer this question going back 29 months.
And the winner is – New York – by seven days.
In the endless “where is the best place to start a company” argument, I think many of the ones on this list (Boulder, New York, Boston, San Francisco, and Seattle) are amazing places to create a company. They all have different strengths and weaknesses but reinforce my belief that many cities in the US can build long term durable entrepreneurial communities.
On Wednesday and Thursday I spent two awesome days with my long time friend Martin Babinec (the founder of Trinet), his partner at Upstate Venture Connect – Nasir Ali – and about 1000 members of the Upstate New York entrepreneurial community.
Martin and I first met around 1991 when we were both building our first companies. We were participants in the inaugural Birthing of Giants class sponsored by Inc., Young Entrepreneurs Organization, and the MIT Enterprise Forum. It was a four day retreat at MIT’s Endicott House for entrepreneurs who were under 40 who had founded companies doing over $1 million in revenue at the time. I had barely crossed the threshold (Feld Technologies has 12 employees and was slightly bigger than $1m) and for the first time as an entrepreneur I spent a concentrated chunk of time surrounded by 50 of my peers. Looking back, it was a remarkable collection of people including my roommate at the program Alan Treffler (CEO of Pegasystems) and Ted Leonsis (then CEO of Redgate – acquired by AOL – where he was then vice-chairman for many years as he worked closely with Steve Case to turn AOL into the amazing company it was in the 1990’s.)
Enough reminiscing – when Martin came to Boulder last year to learn more about TechStars and tell me how he was planning to help rejuvenate the Upstate New York entrepreneurial community with his newest venture Upstate Venture Connect, I immediately committed to come spend a day or two with him talking about entrepreneur communities when I had some time. I don’t remember thinking hard about the early February date when we set the date last fall, but on Tuesday I found myself on a train from New York City to Albany as an effort to get to Upstate New York before the impending snowpocolypse.
Since Upstate New York had gotten so much snow so far this year, everyone was freaked out and all of the events on Wednesday were turned into conference calls that I was going to do from Martin’s house. Martin and I woke up Wednesday morning to a mild overnight snow and the gang involved hustled to get everything back on track. Over two days, I participated in nine meetings in Syracuse, Ithaca, and Rochester and met around 1000 people involved in Upstate New York’s entrepreneurial community, including entrepreneurs, angels, a few VCs, students, university people (profs, admins, and entrepreneurial leaders), more entrepreneurs, and a bunch of local and regional government folks.
When I do things like this, I don’t have a standard presentation. I hate giving powerpoint presentations – I think the world has already had too many of these, so I try to understand the audience in advance and tailor my talk to them. I try to do half talk and half Q&A so if I miss the mark there’s still plenty of time to go where the audience wants to take me. Plus I get bored listening to myself talk and want to just do random questions after a while.
Martin and Nasir arranged an incredible group of people. The two main themes were “building entrepreneurial communities” for events where there weren’t students and “Do More Faster: The Entrepreneurial Life” for the events with students. While I did plenty of storytelling about Boulder, TechStars, The Startup America Partnership, Do More Faster, and random entrepreneurial experiences I’d had, I found the dialogue and Q&A around building entrepreneurial communities to be extraordinary.
I’m a believer that there is the potential for over a hundred entrepreneurial communities across the United States. While Silicon Valley epitomizes an entrepreneurial community, there are natural resources everywhere in this country that can support continuous entrepreneurship – especially high growth entrepreneurship and innovation – over many years. I encouraged everyone to take a long view – 20 years from today – as they went about building their entrepreneurial communities. I also hammered home the point that entrepreneurs have to lead the entrepreneurial communities and that its a collaborative effort across all constituents, not a zero-sum game of one organization vs. another, and the entrepreneur has to be at the heart of it.
I came away optimistic about the potential for the Upstate New York region. I hadn’t realized that there were 500,000 students in Upstate New York universities (about 100,000 new students, or “fresh meat for the entrepreneurial community”, every year), which is a tremendous natural resource to build on.
Martin, Nasir, and everyone else who hosted and met with me while I was in Upstate New York – thank you for the hospitality. I had a blast and hope it was useful for you. As our friend Arnold once said, “I’ll be back.”
On Tuesday, I spent the day at TechStars New York. After spending Monday in Washington DC for the launch of the TechStars Network, it was really fun to spend the day and go deep with the first TechStars NY class.
By the time I got to NY on Monday night I was exhausted. My day started at 5am with email, followed by a run, a few conference calls, and then the big announcement at the White House. Several other meetings followed with a final event at the Case Foundation. David Cohen and I then hopped on a train, cranked on emails and interviews all the way to New York, and then I finished the night (after some more email) with a one hour lecture by Skype to a class of San Diego based students.
I usually have no trouble getting up at 5am, even when I’m tired, but on Tuesday I couldn’t pry my eyes open so after a few tries I just slept until I had to get up for my first call. By 10-ish I was at TechStars. I then spent 20 minutes with each company doing what I call the “top of mind drill.”
Having met with every TechStars company at least once, I’ve found that it’s not terribly useful for me to have the team members spend the 20+ minutes we have in our first meeting introducing themselves. I’m already familiar with the companies through the selection process and I just want to get into the mix with them. It’s week four so by now they’ve had tons of mentor meetings (my understanding is that at least 70 mentors have rolled through the TechStars NY offices at this point – thank you mentors!) So – I look for a quick under five minute introduction (“just explain what your business does and how it works”) and then spent the next fifteen minutes talking about whatever is top of mind.
I love the top of mind drill. It starts off with the simple question from me: “What’s on the top of your mind?” Some of the TechStars founders get it immediately and dive into a very specific issue that they are wrestling with. Others ramble around for a few minutes at which point I stop them and suggest they focus on what they think their biggest current issue is. They almost always get it the second time and we end up with ten solid minutes on one or two things that I can give them actionable feedback on.
I was planning to come back on Friday but I decided to detour to Miami Beach to spend the weekend in the sun with Amy. As a result, we cranked through all 11 companies during the day. I bought a purse on ToVieFor (don’t tell Amy – it’s a surprise), agreed to be an early alpha publisher for OnSwipe, and overall had a great time. I’m super psyched about all the teams I met – it feels like the TechStars New York program is very high quality and off to a great start.
We finished up with me giving a talk and doing some Q&A. Given that I had just been at the White House for the Startup America Partnership, we talked about that some. I gave my view of the overall cadence of the TechStars program now that the first month was coming to an end, and then I finished with a story about one of my biggest failures (Interliant) and some of the lessons that I learned from that experience.
I’m writing this from a plane Thursday night heading to Miami where I’m going to try to catch my breath after four deliciously intense days. You’ll hear about the other two – my whirlwind tour of Upstate New York – in a future post.
On Monday I was at the White House to help announce the Startup America Partnership. As part of this, TechStars announced the TechStars Network, an affiliation of TechStars-like programs across the country along with our commitment to the Startup America Partnership to help 5000 experienced mentors work with 6000 entrepreneurs to create 25,000 new jobs by 2015. For an awesome description of Startup America, please read Aneesh Chopra’s (the United States CTO) post on TechCrunch titled Startup America: A Campaign To Celebrate, Inspire And Accelerate Entrepreneurship. By the way, I think it is awesomely cool that the CTO of the United States blogs on TechCrunch!
Over the past eighteen months I’ve gotten to know a number of people in the executive brand of our government, especially at the Office of Science and Technology Policy and the National Economic Council. In general, I don’t engage that much with government, but I have with issues that I care deeply about like the Startup Visa and entrepreneurship. In this case I’ve been blown away by the intelligence, thoughtfulness, tirelessness, and capability of folks in OSTP and the NEC. When I was first involved in discussions around entrepreneurship that later evolved into the Startup America Partnership, I was originally skeptical about what I was hearing. Nine months, and a bunch of discussions later, I think the White House has approached Startup America in a very smart and powerful way and I believe that everyone involved has a major clue about entrepreneurship, the importance of it to our economy and our country in general, and how to help celebrate, inspire, and accelerate entrepreneurship across America.
When I was first approached to talk about how the White House could help entrepreneurs, I focused most of my comments on trying to help the folks I talked to understand the difference between high growth entrepreneurs and small business people. They are both important to our economy, but have very different needs and until recently I didn’t feel like the White House, or other branches of government, really understood the difference between the two.
Fortunately, the White House listened to a number of smart people, including the amazing folks at the Kauffman Foundation. I worked closely with the Kauffman Foundation in the mid-to-late 1990’s both through their partnership with the Young Entrepreneurs Organization as well as being an “entrepreneur-in-residence” (a fancy word for “one day a month consultant”) where I worked with a team on better understanding high growth entrepreneurs. I continued to spend time with the Kauffman Foundation over the past decade, but lost touch with many of the people I’d worked with as the organization evolved. In the past few years, under the leadership of Carl Schramm, the Kauffman Foundation has reasserted itself as the most significant organization thinking about, researching, and advocating for entrepreneurship as part of its mission to accelerate entrepreneurship in America. I’ve gotten to see them in action first hand through work that I’ve done with Lesa Mitchell, Paul Kedrosky, and Bo Fishback and I can confidently say that Mr. K’s legacy is in great hands.
Along with Kauffman, Steve Case, the co-founder of AOL, his wife Jean and the Case Foundation, has been working hard to help the White House craft a public / private partnership to shine a bright light on entrepreneurship and help accelerate it across the country. I’ve never worked closely with Steve but have always admired him from afar and love the leadership team of Steve and Carl heading up the Startup America Partnership.
As David Cohen and I talked about the idea for the TechStars Network over the past few quarters, it became obvious to us that it would be a natural part of the Startup America Partnership as we both strongly believe that mentorship is a core attribute of growing entrepreneurs and entrepreneurship. We both believe that TechStars like programs can existing in over 100 cities in the US, covering many different industry segments (not just software and Internet), and the value of coordinating the mentor, entrepreneur, and investor activity across the entire country is extremely powerful. We had already identified over 100 different accelerator programs in the US that were modeled after TechStars and had helped a number them get started, so as we put together the original members of the TechStars Network, we were psyched that 16 high quality accelerator programs joined us at launch.
It’s important to realize that each of the TechStars Network member programs will be locally owned and operated. We strongly believe in the power of a network model in the construct of expanding entrepreneurship, not a hierarchical centrally owned and controlled one. We think entrepreneurship across the US is not a zero-sum game and we want to play our part in expanding it. TechStars will still run programs that it owns and operates in Boulder, New York, Boston, and Seattle, but we’ll continue to aggressively expand the overall network across the US as well as the world.
I’m extremely excited to play my small part in the Startup America Partnership. For those of you out there questioning how government and entrepreneurs intersect, I encourage you to give the Startup America Partnership a chance. Start by looking at the 27 private organization commitments to the partnership. And, if you want to engage in any way, just email me and I’ll try to figure out how to get you plugged in.