EshipSeries: Startup Ecosystems of the Future

Kicking off Eship Summit hosted by Kauffman Foundation last week, we devoted the first full day to making room for vision. What is the future we want to live in, and — reconstructing from there — how do we get there? The central question “What type of ecosystem do we want to operate in in 2025?” was an open innovation to dream out loud and come up with a wishlist of the world we want to create. And so we let our imagination run wild and draw up the ideal ecosystem for 2025.

What type of ecosystem do we want to operate in in 2025?

My vision of an ecosystem of the future inevitably has social and environmental impact at its core: It’s community-centered, values impact over profit and operates based on a mindset of abundance.

Impact over Profit: Expanding the meaning of value.

I envision an ecosystem that nurtures startup and innovation to have moved beyond simple profit maximization. Entrepreneurs and innovators of the future search for opportunities to real problems in areas that have not yet been disrupted and have therefore led to some of our most challenging problems of the present: childhood poverty, rates of incarceration and recidivism, racism and discrimination, global warming, waste and pollution, unequal access to quality education, population health issues like obesity, diabetes II and cancer… The list goes on.

Healthy ecosystems of the future nurture entrepreneurs and innovators who set out to tackle these problems since they present the biggest opportunity.

They expand the meaning of the term “value” in value creation, it no longer stands for responding to a customer need through a simple purchasing transaction. Innovative entrepreneurs of the future deploy system-wide solutions to complex problems that create not only financial but social, cultural, environmental value for the community they operate in and, ideally, beyond. We are talking about disrupting sectors that are long overdue such as clean tech (housing, transportation, manufacturing, etc.), health, education, and financial services. What makes me hopeful is that an increasing number of startups and entrepreneurs are already underway.

Herb Sih, Managing Partner at Think Big Partners, on his vision of the ideal startup ecosystem of the future.

Community-Centered

To develop products and services that respond our communities; most urgent needs, startup ecosystems of the future are deeply embedded within these communities.

We will do away with gentrifying startup hubs aligned with the brand guide of the sponsoring entity and instead create physical work spaces that are rooted within the culture of the community that startups are looking to serve.

They are neutral and accessible spaces that invite and engage diverse stakeholders. Working at the heart of neighborhoods and related industries allows startups to source locally, co-create with their target group and develop solutions tailored to the needs and desires of their customers.

Mindset Shift

Core institutions of the ecosystem like entrepreneurial support organizations (incubators, accelerators, etc.), organized mentor networks, angel and VC groups and government will have moved beyond the notion that there is not enough to go around (funding, investable startups, partners, mentors, etc.).

Instead, they look for ways to pool and share (call me crazy) resources to get rid of redundancies and increase efficiency within the system.

Engaging in an ecosystem with a mindset of abundance instead of scarcity doesn’t mean that every organization will flourish and survive. On the contrary, it means that competition shifts away from fighting over scarce resources (a time-consuming and toxic process) to a healthier type of competition, one in which the best programs that create the most value to entrepreneurs will prevail, instead of the ones who have rubbed shoulders the most with the mayor, corporates or foundations.

Community

To develop system-changing solutions to deeply rooted and complex societal problems, actors inevitably have to collaborate and build a network, rather than a hierarchy, in which they understand themselves as highly- functioning nodes rather than leaders (Brad Feld). The very same Brad Feld gave advice to ecosystem builders that I think needs to apply to every actor in the startup ecosystem of the future:

  1. Be radically inclusive and humble.
  2. Feed yourself: Make sure you nurture your soul and passion to avoid burn-out.
  3. Take a long-term view.
Brad Feld speaking to his vision of the future of ecosystem building on a panel with Steve Case, Victor Hwang and Julie Lenzer.

In an ideal ecosystem of the future, we teach an entrepreneurial mindset, that of a problem-solver- to everyone interested through cross-disciplinary and experiential learning. The goal is not to turn everyone into an entrepreneur; but the mindset of a problem solver makes for better students, employees, managers, executives, volunteers and yes, more entrepreneurs. This mindset needs to be nurtured in more places that are designed for experimentation, failure and learning. We are talking about physical but more importantly mental space to create a culture in which failure is seen and valued as the fastest way to learning. Actors in the ecosystems adopt a mindset of giving before they get and actively foster diversity but creating a variety of access points to the startup world irrespective of gender, ethnicity, age or political orientation. Last but not least, thanks to the three underlying characteristics of the ecosystem of the future, it will be one that exists in a healthier environment: a thriving ecological ecosystem, smart cities and a mentally and physically healthier population.

And as a cherry on the icing minimizing negative externalities, increasing productivity and building more inclusive startup ecosystems that are community-centered, value impact over profit and lead from a mindset of abundance, we will create healthier and happier communities which reduces expenses in health care, environmental protection, elderly care, and so on. Money that, in turn, can be invested in innovation.

I realize it is a pipedream to achieve any of these goals within eight years as a young, idealist ecosystem builder in a traditional city that is mostly run by the old guard. But as Nelson Mandela said (in his house, to Steve Case, over a cup of tea, we are left to assume): ”Everything seems impossible until someone does it.” And if it weren’t for dreams and hopes for a better future, none of us would be passionate about ecosystem building in the first place.

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