Entrepreneurial Ecosystems Require a Knowledgeable Community
One of the fundamental components of a strong entrepreneurial ecosystem is a knowledgeable community. This is one of the weird things that we have discovered over time. In our opinion a knowledgeable community is one where citizens understand the fundamentals of starting a business, the challenges that may be presented, the way that they can help, and the means to have conversations with clearly articulated diction. Most communities in the United States cannot do this for a number of fundamental reasons.
But, first a thought exercise to put you in the frame of mind. Imagine attending a child’s PTA meeting in the Bay Area. At this meeting, a conversation occurs in the corner between two parents about one of their spouses being part of a venture-backed startup that recently raised a Series A round. In this conversation, both parties understand the rules of the conversation and at least having passing information and knowledge about the terms used. They know what venture capital is and how it is different from a loan from the bank. They know what a Series A round suggests – wherein the startup process a company is. They know about the stress and opportunity for the family to be associated with this type of potentially high-growth business.
Now imagine having that same conversation at the same PTA in the Midwest. The reality is that it is likely both sides do not understand, but less simply one side. Being married to a business owner, being a business owner, and having frequent business conversations at the dinner table makes me aware of how we talk about business differently than many of my other family members and how my children learn about what we are doing. It is not uncommon, for example, for my wife to discuss a perplexing business problem with me with our eleven-year-old daughter sitting nearby. The eleven-year-old often asks questions about cash flow or marketing during these talks. This provides her with useful knowledge that she will ultimately be able to contextualize into the working world.
So, building a knowledgeable community is critical because it makes the friction of the system less, but it also creates a way for our community to help each other more. For example, today we had a conversation on a call about packaging, and one of the participants said, “oh, my sister-in-law does packaging for a big company, and she also does it on the side for startups.” This is super important, but it requires openness and context to find out about our various worlds and connections. Today, we hide people from understanding startups – because our newspapers don’t write about them, our schools (including universities) don’t teach about them, and our parents don’t work within them. Thus, it is no surprise that many students and new workers simply don’t know that starting a business is a possibility.
Here are five ways that we are working to solve this knowledge gap:
1. We are putting words of the week on our Instagram channel. These are intended to provide startup definitions for words that entrepreneurs say and others might not know what they mean. Follow us here.
2. We are working with multiple organizations to improve the path for veterans to start businesses or translate existing skills into language that businesses find coherent. The military is a place that trains and upskills people around this country, but many veterans cannot find similar labor because they don’t have a “degree” or “certificate”. This is a perfect example of a knowledgeable community gap.
3. We provide multiple trainings a year regarding entrepreneurial ecosystems and how to measure the healthiness of these ecosystems. Our next one launches on June 8th. It is expensive because it takes time and energy to do the training – but it is extremely helpful to ecosystem builders to contextualize their own efforts.
4. We train tens (if not hundreds) of entrepreneurs and students per year on how to understand a term sheet and other investment terminology. We find that venture information is not well-known in the Midwest, and so, we spend a significant amount of time training and teaching people about how these investments work and the blocking-and-tackling of investment decision making.
5. We write a lot of blogs on various topics – including for Silicon Prairie News, the Nebraska Tech Collaborative, our own blog, and Mug.News. These blog posts virtually always include a shout out to a new reader to better understand a topic. So, we might explain cloud computing or define a challenging term. Our goal is to always sprinkle in some education to our writings.
These are important components of our strategy and long-term thought process. In order for the environment to improve for startups, the level of knowledge, communication, and story-telling must also increase. We recognize that we play an important role in this, but many of our readers do too. Here are a couple of things that we think are important.
1. Can you name five startups? These are companies with less than one million in revenue and have been in existence for less than five years. They should be exporting a product or service to outside of the region. Thus, this excludes most small businesses and scale-up businesses such as OpsCompass or Retail Aware.
2. Do you know someone in your family who is an entrepreneur or works in a startup? If so, have you ever asked them if they need help with something? We find that many times connections to customers are some of the hardest to find components of the startup’s work. Helping to facilitate those connections is extremely important.
3. Have you purchased food from a local startup or small business during the pandemic? For example, have you purchased meat from a butcher or masks from a gig worker? Knowing that your dollars can be spent locally with startups or small businesses is a critical part of a better understanding of why knowing more about the startup ecosystem is important.
4. If you have done the above three things, you are probably thinking that you got it nailed. But, I would then ask – have you advocated for these groups at the expense of something that is easy? For example, have you advocated to drive across town to buy something that is right next door at a big box? While it is often easier to shop conveniently, that purchase exports dollars outside of the Omaha area. You are building wealth for Fayetteville, Arkansas or Cincinnati, Ohio. And there is no shame in that if that is the best course of action for you or your family. But, I would ask you to consider your actions in the context of building an ecosystem and considering a visit to a local coffee shop over Starbucks or a local donut shop over Krispy Kreme.
Building a knowledgeable community is not just about academic knowledge or knowing what words mean, it is about knowing that the actions of you as an individual have an impact on your ecosystem. Some of this is reactive – knowing what a neighbor is talking about – but some of it is a proactive choice to help local businesses – small or exporting – to succeed.