The word ‘startup’ is scarcely used without the word ‘ecosystem’ and there is a reason behind this closely-knit relationship. Startups need an ecosystem to breathe and thrive. Successful startup ecosystems need to have a strong vision and mission to take the company forward. Startups thrive in an environment where they get support from their community. A strong community is what forms a startup ecosystem.
It’s a combination of several internal and external factors that helps create a vibrant startup ecosystem. They are useful not only because they help a startup grow but also because they form hubs of innovation that create opportunities not just for the founders of the startup but also for others benefiting from the product or service.
It is said that if a country’s startup ecosystem is growing, many talented people would choose to invest in their country rather than look out for better opportunities”.
Impact of Startup Ecosystem on Country’s Economy
Startup ecosystems can also have a long-standing impact on the country’s economy. One of them is obviously job creation. There is no doubt that startups thriving in a successful ecosystem accelerate job creation. This in turn helps contain brain drain.
It is said that if a country’s startup ecosystem is growing, many talented people would choose to invest in their country rather than look out for better opportunities. It can also help retain a highly-skilled workforce within a country.
And lastly, all these factors help improve the economy of the country and do a great service towards the image-building of a particular country. This can also help attract a lot of foreign investment in the long haul.
It would be interesting to understand certain elements that help build this startup ecosystem:
Core Elements of Startup Ecosystem
As the name suggests, there cannot be an entrepreneurial ecosystem without a visionary entrepreneur at the centre of it. Therefore, it is considered as one of the key elements in the understanding of the nuances that build the entire ecosystem. Entrepreneurs not only pump up the ecosystem with their immense contribution to their community but also are people concerned with the growth and prosperity of themselves as well their country. And more the competition, more is their hunger to get to the top.
They inspire others to grow the ecosystem and themselves support those who have already embarked upon their entrepreneurial journeys. An entrepreneur is at the core of it all for the kind of employment opportunities he/she provides, the kind of growth that he/she envisions and the kind of difference he/she aims to make in the lives of their customers.
This is one of the most important elements of a startup ecosystem and probably even the most under-rated one. The importance of good mentorship has time and again been acknowledged by some of the most famous entrepreneurs globally. When one is starting out, a helping hand from experienced mentors can make a world of a difference. They help create a realistic outlook towards a tedious startup journey and help new entrepreneurs in shaping up their vision and mission.
Experienced individuals can share important life-changing lessons that also help accelerate the journey of a startup. There is nothing more valuable than an exchange of ideas for young entrepreneurs. This will also lead to fewer mistakes and more nuanced decision making. Mentors are an important element that helps turn an entrepreneurial community into an ecosystem.
What is a startup without its pool of talent? And talent is something which is not only limited to entrepreneurs running the company and core team involved in the foundation process but also the people who take care of other important things for the company. There is a variety of talent and experience required to run a company. Those people form an important part of the ecosystem. This includes talent on the sales, marketing, design and human resources side. People skilled in industries like these can be a great asset to an organisation, especially when a startup is looking to hire employees that will help it grow and thrive in a competitive ecosystem.
If used well, talent can be one of the most important elements of building a startup ecosystem because at the end of the day, companies are run by people and they make all the difference in how it’s going to perform in the years to come. There’s no doubt in the fact that employees are indispensable for an organisation and more so for startups.
There is a thin line of separation between them being an asset and a liability. Nothing better than having the brightest minds in town working towards a common goal. The key challenge is to find people who can make a difference to your company. It is important for human resources to look out for people who are willing to learn, have an inquisitive nature and are zealous towards working to further a successful startup ecosystem.
If one thinks at a fundamental level, then education and talent are inter-connected. Talent pool and skillset is mostly crafted at educational institutes. Although, that’s gradually changing with the advent of digital in every aspect of life, including education. But traditionally, there were a couple of educational institutes that recruiters would swear by while looking to hire new talent.
More often than not talent is sought at a local level using these learning centres. These institutions can have latest technological advancements and can help prepare the talent for the real startup life. Many institutions have entrepreneurship cells and incubation centres that help hone the skills of students wanting to work for a startup in future. This can be instrumental in enhancing the entire ecosystem as students, if honed well, can prove an asset to a startup.
A positive culture leads to happier employees which in turn results in more productivity and more profits.
As mentioned above, incubators and accelerators have a special place reserved in the startup ecosystem especially because they help one start young. It is an important tool that works because it’s a combination of talent, education, entrepreneurship, networking and mentorship. A business incubator or an accelerator effectively brings all these factors together and may be extremely beneficial to run a startup.
Incubators help in providing a centralised program to draw in more talent. It is a great way to concentrate talent under one roof and helps provide the requisite education and mentorship to wannabe-entrepreneurs. It catches them young and it is a great way to help entrepreneurs accelerate growth into the market while making sure they avoid making silly mistakes early into their careers.
Networking is considered to be one of the most popular ways to build a startup ecosystem. No wonder there are so many networking events all-round the year focussing on building a stronger ecosystem. It helps in sharing of new ideas which in turn helps make that ecosystem stronger. It helps in getting in touch with like-minded individuals and forming ideas more readily.
Earlier physical locations were an impediment as many people were restricted by location. But COVID-19 has changed the way people look at networking events. Virtual meets, conferences and e-meets are slowly replacing physical events. But their purpose remains the same. It helps provide a common ground for entrepreneurs to meet and greet and take the entire ecosystem forward.
This is one of the most essential requirements for a startup to sustain itself and many early-stage startups can’t do without it. Local funding is an important component of a thriving startup ecosystem. However, entrepreneurs can also self-fund their businesses. Be it in any way, funding is the fuel that runs a successful startup ecosystem and it is essential that an entrepreneur figures out his/her funding and financing options well before taking the plunge.
Resources and access
Why do some startups succeed and some don’t despite having most elements in place? Many startups lack the knowledge and resources needed to find success. Strong ecosystems are known to allow entrepreneurs to quickly find these knowledge and resources that improve their chances of success by a lot. These resources may include a website, for example, which acts as an online resource where people can go to find a listing of events or what coworking spaces, accelerators and incubators are available in that particular region. This can be a more localised and well-targeted resource to help grow the ecosystem. Young entrepreneurs need to know where that exists and what resources are available to them.
An ecosystem can get much stronger if there’s a listing of the Venture Capitalists and angel investor funds in an area or a directory of local startups for reference. Something like this can quickly help entrepreneurs to find that missing piece of the puzzle. Startup ecosystems can be a great means to “engineer serendipity” between all the other elements. This can help in creating opportunities where intersections between people, ideas, and resources can take place. This can take years to develop but entrepreneurs and other members of the ecosystem can work towards it. Meanwhile, in the short term, there can be a lot of ways one can build resources and access for other entrepreneurs to thrive. For example increasing the number of pitch competitions, conferences, startup meets, online events, etc are some of the places to begin.
One of the most famous words to be associated with startups is culture. Many people believe that culture is one of the most important things that makes an ecosystem come alive and that is why culture is one of the most important words associated with startups. But what is a startup culture and why is it important? One can define startup culture as the energy of the community working towards turning a startup into a success. And that culture is not built overnight. It takes years to figure it out and a lot of hits and misses to finally understand what a startup stands for.
There’s a culture behind everything that goes behind the scenes in a startup. It is basically the energy and the attitude behind entrepreneurship and it can make or break the deal. Some of the most successful startups in the world credit their success to its culture. It is not only a matter of pride for the proprietor of the company but also its employees. A positive culture leads to happier employees which in turn results in more productivity and more profits. Culture is the bit that is often ignored while one talks about some of the key elements of a startup ecosystem but it is in fact of the most essential ones.