On Digital Sabbath #5, I read Tech and the City: The Making of New York’s Startup Community. I got through half of it on my flight home from New York on Saturday morning; the balance laying on the couch next to Amy on Saturday evening.
I gave a talk with Alessandro Piol on Tuesday night at the Apple Store on Prince Street that was sponsored by the Women Innovate Mobile accelerator. We had a fun hour long talk with Q&A, a lot of it about Startup Communities. I hadn’t read Alessandro’s book in advance (but I did have it on my Kindle) so I was inspired to gobble it down this weekend.
It was excellent. If you are involved in the New York startup community, this is a must read book. If you are interested in startup communities in general, it’s a substantive history and current explanation of what is going on in New York.
One thing that jumped out at me that Alessandro segmented the New York startup community into six neighborhoods.
If you’ve heard me talk about startup communities, you’ll recognize this as the same approach I take when talking about larger communities like New York, the Bay Area, Los Angeles, and Boston/Cambridge. In these cases, the startup neighborhoods look similar to a startup community like Boulder – there is an incredible density of startup activity in a small geographic area. In a city like New York, rather than having everything in one place, you have a series of neighborhoods that have this entrepreneurial density, but are connected together to form the overall startup community.
I experience this all the time in New York. But I got a new taste of it on Thursday. I went to Brooklyn after an early meeting near Greeley Square Park. I started off at 20 Jay, saw NYU Poly Incubator, went for a long walk around DUMBO with Charlie O’Donnell, had an awesome lunch with Chad Dickerson (Etsy CEO), and then walked to MakerBot and hung out with the team there for a while. I did all of it on foot – including the back and forth from Manhattan.
The last third of the book is forward looking, talking about where things can, and are, going in the New York startup community. Finally, while there are plenty of VCs and government folks involved, it’s very clear that this is an entrepreneur led phenomenon, and Alessandro does a good job of balancing all the players.
Oh – and Digital Sabbath #5 was excellent. Even though I was on a plane for four hours, I woke up Sunday once again feeling refreshed and as though I had a weekend stretching out in front of me.
This article originally appeared online at Inc.com in an article titled Government Shouldn’t Be In The Accelerator Business. I talk more about this and lots of other topics in my recent book Startup Communities: Building an Entrepreneurial Ecosystem in Your City.
As a co-founder of TechStars, I’m a huge believer in the mentor-driven accelerator model. But I don’t think government should be funding these accelerators, nor do I think they need to.
A good accelerator can be run in any city in the world for $500,000. Entrepreneurs with a compelling track record and approach should be able to easily raise, or even provide this capital. As evidence of this, there are already hundreds of accelerators in the U.S., without government funding, being run as entrepreneurial ventures for profit by entrepreneurs.
When we started TechStars in 2006, the idea of an accelerator was brand new. We funded the first TechStars program in Boulder in 2007 with $230,000. There were four investors – me, TechStars CEO David Cohen, David Brown, and Jared Polis. All four of us had been successful entrepreneurs and we decided to try TechStars as an experiment to help create more early stage start-ups in Boulder. We figured out the downside case was that we’d spend $230,000 and end up attracting 20 or so new, smart entrepreneurs to Boulder.
That first program went great and has already returned over two times our invested capital with several of the companies still having future value. We ran the second program in 2008, expanded to Boston in 2009, and adopted a funding strategy for each local program which we continue to use to this day. TechStars surpassed our wildest expectations and now runs over 10 programs a year for over 100 start-ups around the United States. We’ve begun expanding internationally with our first program running this summer in London. And there are many other accelerators around the world using the TechStars mentor-driven model that are members of the Global Accelerator Network.
All of this is privately funded. We’ve never taken a dollar of government funding, nor do we plan to.
While the amount of money required to run a program has increased from the original $230,000, it’s still well under $1,000,000 per program cycle. As a result, the amount of capital we need to raise to run a TechStars program is modest, and since we run it to make a financial return, it is actually an investment, rather than an expense. And, by being focused first on the financial return as well as playing a long-term game (we expect to be running TechStars accelerators for a long time), we are very thoughtful about how we allocate capital.
If entrepreneurs can’t figure out how to fund it, why should the government do it? That just seems like a situation where capital is going to be allocated poorly and the incentives won’t be tightly aligned.
This first appeared in the Wall Street Journal’s Accelerator series.
A few our entrepreneurial heroes work on more that one company at a time. Steve Jobs (Pixar, Apple), Elon Musk (Tesla, SpaceX), Jack Dorsey (Twitter, Square), and Reid Hoffman (LinkedIn, Greylock). And we regularly hear of entrepreneurs who are working at companies that acquired their first company who are now working on new companies while still at their acquirer.
It’s takes an extraordinary talented entrepreneur to be able to do this. So, should you try to emulate this? “Mostly” no.
If you are working on your first company or you don’t have a clear track record of success, put all of your energy into your first venture. Go all in, unambiguously. Your employees will expect, and respect this. Your customers will hope for this. Your investors will require this. And, the likelihood of your success will increase.
That said, I encourage every entrepreneur to have their own equivalent of Google 20% time, where you spend 20% of your time on something other than your primary company. If you are a first time entrepreneur, invest this energy in things that directly benefit your company. Find a peer group like Entrepreneurs Organization and invest time and energy in learning from and giving to your peers. Invest some of your 20% time in your local startup community, taking lessons from my book Startup Communities: Building an Entrepreneurial Ecosystem in Your City, which will have immediate positive impacts on you and your company’s reputation in your local ecosystem. Or invest actively in your own personal development as an entrepreneur through reading, spending time with other entrepreneurs, and actively engaging with accelerators like TechStars.
Once you’ve had some success, even if you are still running your first company, start expanding the definition of what “mostly no” means. I encourage every CEO I work with to serve as a director on another entrepreneur’s board. If you’ve made some money, don’t be afraid to make some angel investments in other companies. But stay focused on your business or else you might find yourself in a position where you suddenly don’t have the success you think you do.
Once you’ve sold your first company, or taken it public, you can start diminishing the definition of the word “mostly.” Some entrepreneurs love to be involved at the inception stage but don’t want to run companies. Others like to have a portfolio of companies they are working on at the same time, with one being the primary company. An example of this is my long-time friend and entrepreneurial collaborator Rajat Bhargava. We’ve now done nine companies together, with four of them currently active. Rajat is CEO of one of them (StillSecure) and a major shareholder and board member of three others that he’s helped co-found that I’ve funded (Yesware, MobileDay, and SafeInstance.) But this is an exception, build on a collaboration between entrepreneur (Rajat) and investor (me) over almost 20 years.
While it’s often tempting to start multiple companies, especially as you start to have some early success with your first company, resist this temptation, mostly.
David Cohen just put up The Hitchhiker’s Guide to the Boulder Startup Community. It’s a short presentation that you can look at below and is a great way to get a lay of the land in the Boulder Startup Community.
This will be an organic document so if you are doing something that you want us to add, just leave a note in the comments and we’ll update the doc.
When I created Startup Revolution and began writing Startup Communities, I insisted with Wiley (my publisher) that the word be “startup” and not “start-up” or “start up” or even “StartUp”. It took a while to (a) get everyone to agree to that and (b) expunge the efforts of the copy-editor to reintroduce some gross variant of “startup” but I finally got it done.
Today I noticed a post from Andrew Hyde titled Washington Post Style Guide Now Includes “Startup” as A Word. Awesome.
We had a similar conversation when Startup America Partnership was formed in 2011. After some back and forth we all got it right.
I’m glad that “Startup” is making its way into the style guides of the old media world.
I don’t think I’m breaking new ground by saying that book publishing is going through a rapid transformation. I’ve learned a lot about traditional publishing after working with Wiley for the past few years on Do More Faster, Venture Deals, Startup Communities, and Startup Life. I’ve also experimented with self-publishing with HyperInk for the book Burning Entrepreneur. And, as I continue to publish books in the Startup Revolution series, you’ll see a lot more experimentation from me, both around the writing and publishing process, as well as with regard to engaging with everyone reading these books.
Recently, I starting pondering what would happen if a book wasn’t simply static content, but an actively-engaging, community-building platform? What if a class could read and share notes, an executive team could collaborate around a book, or a community of readers could interact within the text itself?
I recently found a social reading technology called BookShout!, and, after spending some time with them, think they are addressing a lot of things I want in my current book reading experience. As a result, I’ve launched Startup Communities: Creating an Entrepreneurial Ecosystem in Your City on BookShout!
If you download the book and join the community, you not only get the book, but you can also connect with me, see my notes, invite others to join you, and create robust communities and in-line conversations inside the book.
To help entrepreneurs worldwide, Startup America is also using its full resources to reach out to millions of entrepreneurs so that we can all read the book together. Leaders of Startup America, including Steve Case (the founder of AOL) and Scott Case (the CEO of Startup America) are going to read and share their notes as well.
We listen to music together and go to movies together – now we can read books together. I hope you’ll join me, participate, and give me feedback on what you think.
SPECIAL OFFER: Thanks to BookShout! and Startup America, I’m giving away 250 free digital copies of Startup Communities on BookShout! The first 250 people to create an account at Bookshout.com and send an email to promos@bookshout.com will get a copy. All I ask in return is that you make notes on areas that help you, invite others, and engage with me, give me feedback on what you think.
I just found out that Startup Communities: Building an Entrepreneurial Ecosystem in Your City made the Amazon Top 10 Business Books of 2012.
I’m not a huge “made that list person” but as a writer this is a very cool thing, especially when I look at the other books, and writers, on the list. I’m downloading all of the other books right now and taking them on my two week vacation which is coming up.
I’m at Defrag this morning listing to Kevin Kelly explain how the global super organism already exists and why it is different than the Kurzweil defined Singularity. Awesome – and extremely consistent with how I think about how the machines have already taken over. Kevin’s intellectual approach is clearer and deeper – which I like, and will borrow heavily from. Kevin’s book, What Technology Wants, is also in a swag bag and I’ll be reading it next week.
One of the powerful concepts is that the “city is the node.” As I’ve been talking about Startup Communities, I’ve been explaining the power of “entrepreneurial density” and why everyone is congregating around cities again (intellectually referred to as the reurbanism of American). It’s really cool that he’s using the Degree Confluence Project to “show” (rather than simply “tell”) this.
A few of the books on the Amazon Top 10 Business Books of 2012 touch on this theme – I’ll be looking for it as I read a lot on the beach the next few weeks.
When I wrote Startup Communities, my mission was to provide a framework for building a thriving entrepreneurial ecosystem in any city in the world. I am excited to announce that I have partnered with Cojourneo to take this mission to the next level by launching a free online workshop for Startup Communities.
By participating in this workshop, you’ll receive exclusive videos I created that expand on the content in the book. You’ll also be able to interact with me directly via “Office Hours” and “Ask the Guide.” Even more importantly, you’ll actually begin the process of building startup communities by connecting and collaborating with fellow entrepreneurs near you and taking steps together towards making this book a reality in your city.
I’m very excited about this partnership with Cojourneo. Their mission, ”help people to help people,” is at the heart of this book and what entrepreneurship is really about. So, if you’re interested in building (or growing) a startup community in your city, I encourage you to register today for the workshop before it fills up.
Every day someone shows me a Kindle and asks jokingly if I can sign Startup Communities for them. This is one moment when I wish I always carried a sharpie or a paperclip with me. I adore Kindles too much to actually ruin them, but the thought crosses my mind every time I hear the question.
There is however a way for me to sign Kindle versions of my books. It’s a super cool app called Kindlegraph. Simply go to it, authenticate with Twitter, and search for “Brad Feld” or “Startup Communities” (or just click on the preceding links.)
As an author, there’s something emotionally satisfying about signing a book you’ve written. I guess it creates another connection with the reader, which is bidirectionally powerful. I’m glad I can now do it on the Kindle as well as on physical books.