Do-ocracies, battling pessimism and lessons from the Rainforest: Day 2 at Startup Phenomenon

Apologies for the all the time since the last post, but I had so many pages of notes, I wanted to make it all a bit more digestible.

Here is my report from Day 2 of Startup Phenomenon (NOTE: This piece is cross-posted on the Startup Portland Blog)

If you missed it, here is my report from Day 1.

I was pretty excited about day two, because the day was being kicked off with author Brad Feld, who’s Startup Revolution book series, was the catalyst behind the entire conference. It is fair to say that his “Boulder Thesis” has fundamentally disrupted the way people think about startup communities across the world.

All morning, I sat next a group from Chile who were part of Startup Chile. My mother was born in Chile and I’m familiar with Startup Chile, so I was pretty excited to speak with them and hear about their efforts. For instance, they described the challenge they faced building a network of angel investors. Angel investing is a foreign concept to their culture, so they were talking to as many people as they could about ways to affect that paradigm to take back with them.

Anyway, Brad’s talk was fantastic, but three things I want to highlight:

First, he rejected the notion of a meritocracy as the condition for successful communities, with the notion of a “do-ocracy.” Meaning that those that “do” add the most value, and get the most value from the community.

That relates to the second highlight, which is that these efforts are successful only with the right “whos”. Not the fancy people with titles, but the doers. He talked about how building these communities change traditional hierarchies forever, especially since there is no “director of membership” for the startup community.

And lastly, the four rules of successful communities. They…

  • must be led by entrepreneurial folks;
  • must be totally inclusive;
  • must take a long view (20 years);
  • and events and programs must engage the entire entrepreneurial stack.

Brad is a prolific writer on this topic.

The next presenter was Jennifer Brady, co-author of the Metropolitan Revolution. She emphasized that our traditional notion of a federally-led effort for economic growth is being turned on its head so that now it’s a city-led model. If you download the iPad app you can see all sorts of examples where cities are leading the way. Jennifer showed this great video on how to turn our process upside down with a focus on growth.

For the next two hours a series of speakers from around the world spoke about the culture of their local startup communities. In rapid succession, speakers from Shanghai, Edmonton, Iowa, Louisville, Boulder, New Zealand, Cambridge (England), Tel Aviv, and Moscow, all highlighted programs, initiatives, challenges and successes their community faced and achieved. Here are some quick hits from them:

  • Shanghai: Kelly Lu told us about China’s deep focus on youth entrepreneurship by connecting existing entrepreneurs (i.e. think Jack Ma from Alibaba) with students. She described whole elementary-age schools focused on entrepreneurship.
  • Boulder: Ingrid Alongi told us that it is all about the doing. Building a diversity of events and programs, and being inclusive. The difference in Boulder is that there are more “doers” and ways for them to be involved.
  • Cambridge, England: Alan Burrell from Cambridge University emphasized the importance of intermingling disciplines and experimenting with ways to drive a culture of “join-upness.” He proudly reported the diversity changes in their community, too. They’ve gone from 2 percent non-white twenty years ago, to more than 30 percent.
  • Tel Aviv: Gal Antman from StartIsrael talked about their ability to connect entrepreneurs to the resources they need to grow. They have a program called Start Base that uses the Internet to do just that.
  • Louisville: Tendai Charasika, the executive director of EnterpriseCorps, described their effort to grow their startup community via the Chamber of Commerce and traditional economic development organizations.
  • Edmonton: Ken Bautista, CEO of Startup Edmonton, talked about the importance of spaces (even multiple ones in a city) as “lighthouses” for activities, the community, and entrepreneurs. Their program “student-to-startups” is also helping to build their community deep within the ranks of education.
  • Iowa: Andy Stoll, co-founder of SeedHere Studio, talks about how Iowa has built itself into an anchor tenant of the Silicon Prairie. Using tools like the Silicon Prairie News to tell the stories about the people behind the companies, not just the companies themselves. Building the culture, and using events to showcase their entrepreneurs and companies, like Creative Week.
  • Moscow: Tom Nastas, who Skyped into the conference from Kazakhstan, talked about the challenges of creating a culture of entrepreneurship where taking risk is not allowed.

Building the culture of your Startup Community came into sharper focus during the next presentation by Greg Horrowitt, co-author of The Rainforest: The Secret of Building the Next Silicon Valley, and principal at Global Connect. Greg described how the presence of the right culture is the difference between a collection of organized resources in an area and a growing, robust, startup community. He explored the roots of how culture really affects change. He described the process of change with this formula:

BELIEFS à BEHAVIORS à ACTIONS à OUTCOMES

Greg’s work focuses on affecting the beliefs and behaviors at the root of the change process. For example, he questioned the fear of failure. He urged us to look deeper, reminding us that no one likes to fail. Failure is essentially the pursuit of opportunity. How does that fear of failure get reframed in our beliefs – we need to focus on the heart/mind connection. The opposite of “fear” is hope.

Greg also emphasized that successful cultural change for communities that he’s worked in all over the world is the ability to move away from an “egosystem,” a highly-permissive system, towards an actual ecosystem – like a play, where every actor is important regardless of how many lines he/she has. It was very much in line with Brad’s notion of “do-ocracy” versus hierarchical system.

Greg used an agricultural metaphor to illustrate the successful cultural conditions for startup communities. There are two models: traditional agriculture (planting all of one’s crops in long lines, underlying fear of scarcity, an overly structured system) and the seemingly disorganized rainforest model. In the traditional model, something that doesn’t meet the existing condition is a weed (those things that spring up between the rows). Reminding us that Facebook and Google were seen as abnormal (like weeds) when they started, he emphasized that it’s how you treat the weeds in your startup community as the difference-maker for success. It was a fascinating presentation.

At lunch, many of the speakers spent time with different groups of attendees discussing their presentations. I sat at a table with Greg Horowitt, and Andy Stoll from Iowa. I sat next to another person with a fondness for Maine, Tim Godzich, a healthcare entrepreneur from Buffalo, N.Y., who founded QBHealth, and someone who had good friends that worked for Hannaford in Scarborough.

Our conversation revolved around something we tackle in Maine: The challenge of a pessimistic culture and how it affects the jump to entrepreneurship. We traded anecdotes from our respective areas that have caused some, frankly, to replace hope with skepticism. I talked about all the great Maine companies, but described my worry about the other “want-trepreneurs” who, willing to start and grow, face a paradigm of “don’t do it.” We talked about the ways we think we could help change the hearts and minds of our fellow citizens.

Tim mentioned the well-intentioned work by the State of New York to drive innovation and entrepreneurship, but how little change he felt as an entrepreneur in this negative paradigm – an instinct to protect what one has instead of look to the future with hope. We agreed that getting others to join the effort to seize their economic future for themselves by growing a culture of entrepreneurship, innovation and creativity was key. Our table-mates all agreed.

Right after lunch I attended a panel called “Attracting Money: Startup Communities and the Finance Chain.” The panel included the founder of RocketHub, Brian Meece; Elizabeth Kraus, the co-founder of the Impact Angel Group; and Peter Adams from the Rockies Venture Club (and author of Venture Capital for Dummies). It was a great panel that spent the bulk of its time discussing the new crowdfunding rules and the positive disruption it will cause in the funding world. Part policy debate, it confirmed my belief that crowdfunding is an incredible opportunity for communities, like Maine, where venture deals are still in development.

One other interesting piece that came up, vis-à-vis measuring the growth of startup communities, was tracking the growth of “accredited investors” in one’s community as a metric. One concern raised by the venture folks was that startups would dilute their ownership value even before seeking more substantial rounds of funding. I will say that this was quickly dismissed from the folks from RocketHub. I think folks in Maine who are working on growing Maine’s crowdfunding participation, especially Don Gooding, are really onto something.

Next was a panel on the role of Corporations in Startup Communities. This is something that I’m particularly interested in for Maine. We have so many interesting companies, but sometimes getting them invested in growing the startup community, can be a struggle.

Interestingly, this group really focused on the role of corporate venture funds. Admittedly, I was pretty unfamiliar with this topic, so I found the panel super interesting. There were folks from the Mayo Clinic Ventures; a partner in Vista Ventures, Lisa Reeves; and the former CEO of Compaq, who now sits on the board of Cisco Systems, Michael Capellas.

The speakers wound their way between topics like what venture funds looked for; how corporations interacted with local innovation communities; and how corporate funds have non-obvious benefits for parent organizations.

Jim Rogers, from Mayo Clinic Ventures, discussed how they used their fund to recruit talent to the relatively remote area of Rochester, Minn. They offer them funding and participation in a local accelerator program, but they’re required to move to Rochester. Got me excited about the possibilities of doing that in Maine.

They also discussed the importance of getting corporate buy-in beyond simple sponsorship of programming. Michael Capellas, described Cisco’s efforts to build relationships with the innovation community. Cisco opens its doors a couple a times a year and invites in local entrepreneurs, problem solvers, and innovators. They present to this group a series of challenges or opportunities they face in the market and look for opportunities to partner with folks to addresses those. As solutions develop, Cisco uses its venture fund, acquisition strategy, and supply-chain partnership strategies to bring that innovation in-house for their own benefit.

The final discussion panel of the day tackled the issue of physical spaces within startup communities. Ari Newman of TechStars started the panel off by proclaiming that if your performance metric is how much your clients raise, you need to get out of the business. Teju Ravilochan, founder of the Unreasonable Institute, called himself the ultimate outsourcer for his client’s growth plans. Finally, John Clippinger from the MIT idea lab told the audience that he found the best mentors to be those who have failed, not those who’ve only been successful.

The day’s penultimate event was Brad Feld‘s interview of Jim Collins, author of From Good to Great. So many things were covered. They talked about the parallels between great companies and great startup communities. Jim reiterated the importance of having the right people “bouncing off each other.” He said that gathering the right “whos” is the critical part of success. It was a great session that left me thinking even more about connecting with the “whos” in Maine.

I got invited to head out to dinner with an incredible group of folks from Boulder, Denver, Edmonton, Las Vegas, Chile, and Okanagan (Canada). A vibrant group, trading stories about companies they were supporting and programs they were trying. I learned about this interesting program kicking off next spring in Denver called 10.10.10. As explained to me by the other co-author of Venture Capital for Dummies, Nicole Gravagna (also the project director), the program’s theory is that better “starts” equal better companies when effectively leveraging the experience of serial entrepreneurs.

Generally, 10.10.10 will identify 10 opportunities in the market ripe for entry into (using their deep research resources). Then they will select 10 serial entrepreneurs from their applicant pool from all over the world and everyone will be flown in for 10 days of discussion in Colorado to discuss the opportunities. Those serial entrepreneurs who want to make a go of it will have direct opportunities for significant resources to start, upwards of $10 million.

By the way, I found out that the founder of 10.10.10., Tom Higley (CEO of Vokle), has a strong Maine connection. It turns out that Tom owns sixty-acres up in Turner, Maine, has spent much time all over the state and still has family in Portland. I made sure, when I met him, to invite him to interact with Maine’s startup community the next time he comes through.

10.10.10. is just another example of the amazing innovators and thinkers at this conference. It was a fascinating conversation and I’m eager to hear about the results when it kicks off in the spring. However, dinner was the end of an incredible Day 2 at the conference.

Jess Knox

About Jess Knox

Jess Knox is a former political consultant and high-ranking SBA official who is passionate about entrepreneurship and Maine. These days he helps companies manage growth through his firm Olympico Strategies.