“The angel layer of capital is critical because it allows high risk capital to come in very early in the life of a startup, and I don’t actually think that will ever change… geographies matter, because at the end of the day, building companies is about people, and you need a density of people – and capital – to create startup hubs.”
- Fred Wilson, Union Square Ventures
The Tampa Bay Partnership, in their Regional Business Plan for Economic Development in the Tampa Bay Region, report what stakeholders describe as three major “cracks” in the region’s economic foundations:
- The traditional reliance on “place” as the defining attribute used in regional promotion and the accompanying lack of clarity about a cohesive, forward‐looking regional identity.
- The fragmentation and gaps within the region’s innovation and entrepreneurship system.
- The tendency to look outward for business expansion (i.e., recruitment to the region), rather than nurturing and growing businesses with existing footholds in the region.
In short, the solution to a stronger Tampa Bay economy is a thriving entrepreneurial community. And an important note is that all three – identity, cohesion, and nurturing – are all philosophical shifts, not infrastructural (yet). In their best-selling book Switch: How to Change Things When Change Is Hard, the Heath Brothers clearly explain that “for things to change, somebody somewhere has to start acting differently.” Fortunately for our community, we know exactly what has to happen to nurture and grow our community.
Brad Feld (managing director at Foundry Group and co-founder of TechStars), in his posts Building Entrepreneurial Communities Is A 20 Year Journey and Entrepreneurial Communities Must Be Led By Entrepreneurs, outlines his four key principles of sustainable entrepreneurial communities:
- Entrepreneurial communities must be led by entrepreneurs
- It takes at least a half dozen people that are committed to provide leadership over 20 years
- You have to do things that engage the entire entrepreneurial community
- You have to continually get new first time entrepreneurs into the entrepreneurial community
Entrepreneurial communities, of course, are built by entrepreneurs, who, in parallel, are building scalable startups, matching elegant solutions to big problems. Steve Blank (serial entrepreneur and entrepreneurship professor at U.C. Berkeley, Stanford University and Columbia University), in his seminal book The Startup Owner’s Manual, described scalable startups as such:
“A startup is not a miniature version of a large company. A startup is a temporary organization in search of a scalable, repeatable, profitable business model. Scale requires external venture capital investment in the tens of millions to fuel rapid expansion. Scalable startups make up a small percentage of entrepreneurs, but their outsize return potential attracts almost all the risk capital (and press).”
Therefore, a thriving entrepreneurial ecosystem, replete with scalable startups, is dependent upon developing two key elements – talent and capital – whose convergence generates more startups, and thusly, more scalable startups.
Our goal is to increase the number of net new scalable startups in Tampa Bay by developing talent (net new job creation) and capital (net new equity investment).
Ultimately, the end result of Phase I should be a sharp increase in total startups, leading, naturally, to an increase in scalable startups – and that is the intended goal of Phase I of this 6/20 Plan.