startup communities by brad feld (summary)
What does it take to build a great community?
I’ve wondered this while watching:
Jimmy Daly at SuperPath build the Content Marketing Slack Community
Walter Chen and Jan Erik-Asplund build Sacra for new and experienced investors
Ricky Yean and David Tran build Flow Club, a WeWork meets Peloton coworking community where the best work gets done
Shiyan Koh build community through Hustle Fund
I’ve also wondered as I’ve started to build a cycling community through Start Again Today.
For answers, I turned to Startup Communities by Brad Feld, co-founder of Techstars. It shed new light on how entrepreneurship relies on community.
“Entrepreneurs embody the promise of America: the idea that if you have a good idea and are willing to work hard and see it through, you can succeed in this country. And in fulfilling this promise, entrepreneurs also play a critical role in expanding our economy and creating jobs.” - President Barack Obama
about the author
Brad Feld is the co-founder of Techstars. He spent much of his career engaged in startups in and around the Boulder startup community, which has “one of the highest entrepreneurial densities in the world.” At one point, he was on 25 boards. Techstars was born out of the idea of trying to help more startups by investing money, time and mentorship in startups within cohorts to help them succeed.
key ideas
#GiveFirst: mentors and others should help people in the startup community without line of sight to a payout. You should give at least as much as you get. The Techstars Mentor Manifesto (direct quotes):
Be Socratice.
Expect nothing in return.
Be authentic/practice what you preach.
Be direct. Tell the truth, however hard.
Listen, too.
The best mentor relationships eventually become two-way relationships.
Be responsive.
Adopt at least one company every single year. Experience counts.
Clearly separate opinion from fact.
Hold information in confidence.
Clearly commit to mentor or do not. Either is fine.
Know what you don’t know. Say , “I don’t know” when you don’t know.
Guide, don’t control. It’s their company, not yours.
Accept and communicate with other mentors who get involved.
Be optimistic.
Provide specific actionable advice, don’t be vague.
Be challenging/robust but never destructive.
Have empathy. Remember that startups are hard.
Everyone is a mentor: take a long view on mentor relationships, both people involved play the mentor role.
Embrace weirdness: innovation requires eccentricity.
Be open to any idea: but “understand how to fail fast”
Intellectual honesty: “don’t bullshit one another”
“you don’t get stronger and better by people telling you that you are already perfect.”
it’s important to be “direct, blunt and challenging”
not everyone should keep the piece, someone has to be “the asshole”
Go for a walk: change context, get outside eg Steve Jobs
Embrace diversity
“10 ways that male advocates can support technical women and promote diversity efforts in their organization” (direct quotes):
Listen to women’s stories
Talk to other men: practice what you might say in difficult conversations
Seek out ways to recruit women
Increase the number and visibility of women leaders
Mentor and sponsor women
Notice and correct microinequities or instances of unconscious bias: take action when you see bias
Establish accountability metrics
Model alternative work-life strategies
Make discussions of gender less risky
Reach out to formal and informal women’s groups
Startup communities form in areas densely populated with entrepreneurs. It’s possible for them to form in rural areas too but this happens less frequently. Each startup community has subcommunities broken out by vertical. In Boulder, there is tech, biotech, clean teach, natural foods and lifestyles of health and sustainability.
Typical areas: Silicon Valley, Boston, New York, Seattle.
Up and coming: Boulder, LA, Chicago, Austin
Rural: “smaller communities, each member’s actions on the community are greater”
1 job in a rural community may have the impact of 20-40 jobs in an urban community (job equivalency metric)
Introducing tactics from a bigger startup community in a rural community can have outsized impact, from things like tools to management approaches
There is “rural-urban information asymmetry”
Both growth focused and “coffee shop” entrepreneurs deserve space in a startup community. The distinction can hurt more than it helps.
There are many myths:
“We need to be like Silicon Valley! How can we create our own Silicon Valley”
“you can’t, you only think you want to.” - Paul Kedrosky
SV is successful because of things that most people don’t see. Porous boundaries that allows talent to flow is a big part of its success.
Failure is widely accepted in SV which makes it unique.
Every startup community has leaders, feeders and instigators. All players in a community have to be “sincere, constructive and collaborative” or will be ejected from that community. All players in a community should be proud of the community and be cheerleaders for the community and each other.
leaders: entrepreneurs with a longterm view and commitment to building the community who are willing to do the work to set a great example for others and put their community first. They “set the tone and establish a culture of entrepreneurship.” Leaders cannot stop the continued evolution of the startup community so should be open to new things and view others contributions as a value add. Great leaders:
are inclusive: all are welcome, keep gates open for all regardless of race/sexuality etc. Leaders should engage new people quickly to get them deeply plugged into the community through intros to a diverse array of other members, share assignments to get people invested in building the community, grow new leaders in the community and give them existing activities to own.
don’t approach business as a zero-sum game: startup communities are a positive sum game. The better each player in the community does, the better the community does, the more activity that happens.
are mentorship driven: mentor other leaders in the community, mentor entrepreneurs who want a mentor, mentor each other. Mentoring should be flexible to the person you’re helping. Brad Feld spends 20% of his time mentoring, really leading by example.
“embrace porous boundaries”: people are going to bounce around in startup world. That shouldn’t be discouraged or shunned. When people return, welcome them back. Take a long view.
give people assignments: find people who will reliably get stuff done. Give them more as they get work done, challenging them and their ambition gradually. Often, people will show that they aren’t truly committed. Occasionally, people will go above and beyond expectations.
feeders: universities, government, investors, mentors, large companies etc. Too much leadership from feeders can kill the community. Feeders bring new people into the community (esp young people)
The government can make for bad feeders because the pace the government moves at is at odds with the constant growth/change of startups.
If you’re in the government and want to participate in a community, one of the best questions you can ask entrepreneurs is “what do you need?”
Universities can provide “students, professors, research labs, entrepreneurship programs and technology transfer offices.” Universities can infuse new people and thinking into communities.
Investors sometimes think they’re gate keepers, this is not helpful. For a VC/investor to rise to the ranks of a leader of a community they must work diligently over the long term by being as helpful as possible to the entrepreneurs doing the hard work of launching and growing new businesses.
Mentors are described under the #GiveFirst principle above.
Service providers: lawyers, accountants, recruiters, marketing consultants, CFOs, the best of which give their team away for free for early stage companies. Some may sponsor startup events.
Large companies: sometimes shy away from supporting startups because they worry that they’ll lose talent. Large cos can most successfully support startup communities when they:
Convene: Can share a space for connection/events to happen.
Many enterprise level efforts may benefit startups in the short term while being beneficial for the enterprise in the long term. That’s ok; business is not a zero sum game. Self interest is important, and typically centered around geographic, product ecosystem and new product interests. When a big co incorporates a startups product into their product ecosystem it can have a huge impact.
Support: Can create entrepreneurship programs.
All large co efforts should be focused on supporting the startup community.
Large cos may be worried about talent leaving to go to startups. In reality, many startups fail and being close to the large co community can bring some of that talent to large cos. Employees learn from startups which they can bring back to their FT jobs. Restricting interaction will have a negative impact on employee satisfaction.
Consume: can use local startups products/services.
Another way to engage
instigators: individual members of feeder organizations. They can play a critical role in the growth and success of a community.
Embrace failure. The more that failure can be normalized, the more risks startup founders will be willing to take, risks that create breakthroughs. In the Boulder startup community, startup failure is celebrated through a “wake” for the company. Employees exiting a failed startup are often snapped up quickly through the porous boundaries between companies in startup communities. “Failure is part of the process.”
Fail fast: borrowed from “The Lean Startup” by Eric Ries. Let go of the stuff that isn’t working. Be honest when something isn’t making much/any progress. One way to know early how successful something will be is if leaders for projects raise their hands without being selected and really take ownership.
Startup communities succeed because of:
economics: eg external economies of scale improve when multiple companies in a single place can share resources like legal/accounting, driving down the cost of those services per startup
network effects: everyone in the network gets more value as more people join (eg Facebook, Twitter).
sociology: horizontal exchange of information benefits everyone in a community. Silicon Valley prevailed over Boston’s Route 128 because of a culture that encouraged “openness and information exchange” allowing everyone to benefit even more from network effects.
geography: when the creative class in a place reaches critical mass, a geographic advantage is created.
The Boulder Thesis (direct quotes)
Entrepreneurs must lead the startup community: it doesn’t work if feeders/instigators are in charge.
The leaders must have a long term commitment: economic cycles keep the economy and startup world specifically in a constant state of flux. You have to be willing to see past the inevitable peaks and troughs.
You can evaluate someone’s commitment to the community and “separate interest from action” by giving them assignments.
The startup community must be inclusive of anyone who wants to participate in it: openness is a key value; startup communities are not a zero sum game.
The startup community must have continual activities that engage the entire “entrepreneurial stack”: communities grow if there is consistent engagement of both new and tenured entrepreneurs as well as the extended team of players including but not limited to investors, employees, service providers etc. There is a difference between events that encourage networking (eg parties, open houses) and ones that meaningfully create entrepreneurial activity (eg accelerators, hackathons etc).
Startups have lots of problems.
Patriarch problem: old white dudes used to doing things their way, think they run the show. Veteran leaders need to welcome new leaders of all kinds for the startup ecosystem to thrive. If you aren’t welcomed, ignore the hierarchy/patriarchs. Lead.
Capital: there is never enough money to go around. No use complaining about it. Advice from Ryan Broshar at Matchstick Ventures for fundraising in smaller capital markets:
“Start local, then go big”
“Go fishing where the fish are biting”: don’t chase VCs that don’t get your market/model
“Don’t be ashamed of your roots”: being from somewhere other than SV can be a competitive advantage.
“Think and talk big”: show how big the opportunity is! Don’t undersell yourself.
“Get on a plane”: not sure if this still tracks in the post COVID world but the idea of taking the time to meet with investors, really get to know/connect deeply with them.
Over reliance on government: the government doesn’t really get startups. Startup communities are network based, government is hierarchical.
Short term commitment: startups and startup communities are a marathon, requiring intense work day after day.
Bias against newcomers: do the work to welcome and integrate new members.
Feeder control: can really hurt growth by turning off entrepreneurs. Brad sees this a lot with VCs. Important to be leader led and connected to what’s happening in the community.
Playing a zero sum game
Risk aversion: gets in the way of the “embrace failure” principle described above. Most things won’t work, it’s important to try and move on quickly, always learning through the process. Embracing failure encourages others to take risks. People are worried about:
Putting their time into something that doesn’t take off
Rejection
Avoiding people because of past failures
Accelerators allow experienced founder to help new founders.
Techstars specifically values team over market and idea. They invest ~ 118k/team in ~10 teams per location.
Accelerators are mentor driven
Accelerators are not the same as incubators. Incubators charge entrepreneurs and were created for economic purposes. Less competitive than accelerators for this reason.
More work needs to be done on diversity, equity and inclusion: this is quietly mentioned a few times in the book. There was only 1 case study out of ~20 written by a woman, and it was unclear how well represented BIPOC/LGBTQ+ perspectives were.
Community Case Studies
Young Entrepreneurs Organization: Members are founders of companies with more than $1m in revenue + under 40yo
Encouraged to share their challenges and opportunities
Office Hours: Brad holds a day of office hours once a month, dedicating 15m to each person/call to be accessible to his community.
Boulder Denver New Tech Meetup: founding on the guiding principles of “keep it real and keep it moving”
space for people to talk shop and relax with other people in the community + see the best presentations
made Twitter trending list during each event which helped spread the word
created an announcement section of all events so that people could promote tech related stuff
got everyone to spend a minute meeting someone new
resume table to offer help to anyone looking for their next job
message board to post opportunities
had the community work together to solve technical/business problems for nonprofits
micro failures: entrepreneurs would share lessons learned
Under the Microscope: launched a company and then held board meetings during future events
after meeting sessions didn’t work out…lots of stuff didn’t work out. They just kept experimenting.
community changed at 5k, less regular engagement from some of the most tenured members, presentation quality went down.
they had mentors work with presenters to make everyone better presenters and improve the experience for all. Presenters were able to say whether/not a presentation moved forward.
Open Coffee Club
“unmeeting” small gathering on a regular basis
they asked the community what they wanted and they got lots of responses: “recruiting, networking, help with fundraising, hanging out”
they focused on elevating the entrepreneurs and really making it community driven
Startup Weekend
create a startup in a weekend, learn by doing
people get 60 seconds to share their ideas (about 1/3 of people who attend)
voting happens on top 15 ideas, allows people to connect with each other
people work in groups to define problems and get to work, then present what they learned at the end of the weekend
Ignite Boulder
fixed format: 5m presentations, 20 slides, slides change every 15 seconds
no one makes money
lots of shenanigans (intentionally), geeky in a great way
encouraged community members to speak about the things they are passionate about in front of an audience of up to 1.4k people
broadened content, didn’t limit to startup topics
Boulder Startup Digest
Took Startup Digest and made it more useful
Learned a lot about hosting events through taking it over:
Have a topic and a clear agenda
Be specific, make the content good by asking “what would someone working on a startup need or want to know about? will attending this event enrich their startup life and help them move forward?”
Avoid fluff/filler
Schedule events during the day to be inclusive. Startup life is already a hustle, work taking over evenings pushes out other parts of life and makes the community less inclusive for single parents/people with other obligations
CU New Venture Challenge
3 objectives
Bring the campus together
“Create an entrepreneurial launch pad” to help people interested in entrepreneurship get started
Make this a pipeline for bringing people on campus (students, faculty) into startups
Mentor program really helped with this. Mentorship program designed to help in real life on real problems.
Annual cadence. In 2019 they gave away $250k to 119 startups.
Entrepreneurs Foundation of Colorado
Based on what Marc Benioff built at Salesforce.com Foundation to increase altruism in the community. Salesforce Foundation had a model of 1/1/1
1% of time
1% of equity
1% of product
Brad inspired him too with the question “if not us, who? if not now, when?”
Trying to make it easy for startups to “endow the community” by giving 1% of founding equity.
About more than money in the pocket for founders and employees.
Pledge 1% challenge, 6k+ companies now participate
MIT Center for Entrepreneurship
“MIT’s mission is to educate our students and have a positive impact on the real world.”
Goal is to “help students time congress the process of learning critical venture creation skills.”
Bringing students together into a common space allowed them to learn socially, enabling them to learn faster.
They built in incentives for students to hit milestones. Eg they’d get up to $20k in total if they hit their goals across the pillars of startup growth, forcing function for learning crucial skills.
Students convened 2x/week to discuss progress and get help.
The center assigns each student group a temporary board of directors.
Creates: “space, funding, structure, status”\
Silicon Flatirons
Goals (direct quotes)
Support entrepreneurship
Prepare and encourage UC Boulder students to take advantage of opportunities in tech
Raise level of discourse on technology policy
Constant challenge, entrepreneurs are often very busy
Wanted to bring together everyone interested in entrepreneurship at the university to “convene and find value”
CU Boulder, Leeds School of business
focus on “end the gap” initiative to bring more women to the program by building a talent pipeline.
similar programs for other underrepresented groups.
their programs are built with the understanding that if the founding team lacks diversity it’s much less likely that they will focus on attracting diverse candidates as the company grows.
this network enables startups to look beyond their networks for hiring needs.
startups2students
their goal was to integrate CU Boulder students into the startup community
had companies share short 3m presentations, giving students a foot in the door to have longer conversations with startups
their casual events focus on bringing together students and founders of amazing startups. Startups offered internships.
FullContact + Colorado School of Mines partnership
gives students the opportunity to gain real job experience over 6 weeks.
they intentionally treat students like FTEs so that they get big results. Treating someone like an intern makes them less invested in the company/outcomes and less likely to be committed to the company in the longterm.
Catalyze CU
University driven accelerator with the goal of (direct quotes):
Empower founders to be committed, full-time entrepreneurs for the first time on campus while learning from a diverse community of peer founders from different backgrounds, skill sets, perspectives and industries.
Make entrepreneurship more equitable by removing financial barriers.
Provide resources like equity-free funding for the venture, deeply personalized mentorship, dedicated co-working space, and burst the campus bubble.
Act as a “finishing school” for campus ventures.
Startup America
CEO realized that “a bottom up approach was more powerful than a top down approach”
What it takes for a startup community to succeed:
Leadership: “strong group of entrepreneurs who are visible”
Intermediaries: “many well respected mentors and advisors giving back”
Network density: “deep, well connected community of startups.”
Talent: “broad, deep talent pool for all levels of employees in all sectors”
Support services: both available and well priced
Engagement: lots of events, authentic engaged participants
Companies: large company involvement
Capital: financing available through multiple channels
Company Stories
SendGrid: Mark Solon was a mentor when the founders were offered life changing money to sell. Mark thought it was way too early to sell and let the founders know as much but also said he wouldn’t get in their way if that was the course of action they preferred. He asked questions that showed that he put the founders first and led them through a process to figure out on their own that they didn’t want to sell yet:
What did they want SendGrid to become
How did they define success?
Did they feel that SendGrid would be worth more than the offer?
SendGrid was acquired by Twilio for $3bn 9 years after this conversation, 215x what they were originally offered.