Collaboration within the tech ecosystem: is it working? Is it enough?
In an article published in November, a tech journalist suggested that institutions within the South African, and African, tech ecosystem operate in silos. The Solution Space at the University of Cape Town Graduate School of Business was name-checked, among others, as institutions that ‘hardly collaborate on matters that advance the interests of the local tech startup eco-system.’
I was disappointed to read this commentary. The narrative is a too-common one that perpetuates an outdated belief that has not been properly tested. At the same time, this criticism provided an opportunity for me to reflect on what might be contributing towards this view and challenge my own thinking regarding whether collaboration is working, and if it’s enough?
As the year also draws to a close, many of us are reflecting on the year past and what we might do differently in the year ahead. The space between one year and the next is, for me, a productive period where we have the opportunity to pause, and combine reflection with resolution for greater results and impact.
Reflecting on 2018 and our local ecosystem
Two significant reports on the South African and Cape Town ecosystem were released during the year, each providing greater insights on the state of our entrepreneurship ecosystem and the priorities and opportunities ahead.
Endeavor Insight’s Evaluation and Network Analysis of the Cape Town-Stellenbosch Tech Sector aimed to address “what is the current state of the ecosystem” and “what opportunities exist to further grow the ecosystem so that it generates jobs and economic value for the region?”. The report recommended the local ecosystem focus on four key areas: 1) developing talent; 2) focusing on helping successful businesses grow; 3) maximising the quality of interactions among new and experienced entrepreneurs; and 4) prioritising feedback from founders of fast-growing companies to identify the most critical constraints of the local ecosystem.
VC4A’s South Africa Startup Ecosystem Report aimed to answer the question “how does the South Africa startup ecosystem add value?” and highlighted specific challenges for the local ecosystem, such as intellectual property exchange control policies, gaps in seed funding, increasing the pool of seasoned entrepreneurs and mentors, and addressing diversity across both startup and investor communities. The report also provides a useful framework for how to assess or measure ecosystem maturity (across four levels) and includes key indicators for the ecosystem, including how to assess collaboration.
A multi-layered ecosystem
While there are currently no definitive models to assess or measure collaboration within the ecosystem, anecdotal evidence from a variety of stakeholders — and from our own experience at the Solution Space — indicates that as the ecosystem matures, collaboration between actors in the ecosystem has increased.
The entrepreneurial ecosystem comprises many different layers and multiple components. For example, sub-ecosystems are communities within the overall ecosystem that focus on specific industries, technologies, or focus areas. Our experience has shown that these sub-ecosystems are incredibly important as the quality of connectivity and collaboration increases where knowledge exchange and networks are the most relevant. It’s important to keep in mind that ecosystems are also products of diverse elements, including the surrounding business environment and investment climate; the individuals, organisations and institutions that interact with each other; and evolving cultures and attitudes.
Entrepreneurs lie at the centre of the ecosystem. Ultimately, it is about them, and about what they need to thrive. The ecosystem needs to have sufficient layers to meet their needs and collaboration is fundamental to enabling entrepreneurs to access the resources that the ecosystem offers. Every element within the ecosystem relies on every other. To create an engaged and active ecosystem, all elements across the core pillars need to work together, delivering a collective strategy supported by adequate resources.
Indeed, collaboration is essential. Without it, opportunities cannot grow.
In a recent Kauffman Foundation report titled Entrepreneurial Ecosystem Momentum and Maturity: The Important Role of Entrepreneur Development Organizations and Their Activities, Ken Harrington writes: “I believe connectivity is the most important factor that contributes to ecosystem momentum. It is also the hardest to measure, because connectivity is happening in so many places and between so many organizations, individuals, and stakeholders.”
Collaboration isn’t immediately obvious, so it is important to ask ‘what does collaboration look like?’ There is a tension between organic and spontaneous versus structured and intentional collaborations. An interaction between ecosystem partners could take the form of a few meetings in which both partners express the will and intent to collaborate, and the development of an ongoing relationship and subsequent conversations which unlock further opportunities and productivity in the overall ecosystem. Is a brief conversation receiving feedback from an investor after our most recent Demo Day any less collaborative than a structured and intentional event such as a headline-grabbing conference?
What does the ecosystem want collaboration to be?
I agree with the article’s view that collaboration is not about the service of a particular, single agenda. Whether it takes the form of a structured conference or informal information sharing, collaboration needs to serve the overall ecosystem.
Harrington goes on to say that: “…the Ecosystem Development organizations and leaders need to intentionally and regularly discuss how to design connectivity into their activities. Entrepreneur Development organizations also need to work together to develop best practices that increase collaboration and connectivity between their entrepreneurs, organizations, and programs.”
At the Solution Space, for example, how might we be more intentional about how we design connectivity into our 2019 plans?
As I reflect on the past year, our approach to collaboration as an organisation has taken on three dimensions. The first is at an operational level, where much of the collaborative work is internal and part of our daily operations. A shared ecosystem calendar, regular catch-up calls with key stakeholders, actively inviting various stakeholders from the ecosystem to participate in our programmes, referring entrepreneurs to other programmes and participating in ecosystem forums are all examples of this. The second is tactically, where we’ve prioritised how we can contribute towards improving ecosystem challenges through working with other partners. An example of this is addressing the lack of early-stage finance by engaging our business school alumni to understand their interest in angel investing and working with partners such as VC4A and ABAN to connect potential angels into wider investor networks. Thirdly, from a strategic perspective, we’ve started to work on longer-term initiatives that have connectivity and scale as core elements. An example here is working with others to bring together a pan-African network of business schools focused on entrepreneurship to collaborate around teaching, research, incubation and ecosystems.
These are just some examples of how we try to create connection points with the wider ecosystem. To assess whether the ecosystem interprets this as an acceptable form of collaboration would require further research and feedback. A baseline tracking our momentum and performance within our overall ecosystem would be helpful, along with identifying best practices for how various ecosystem role players should be collaborating from information exchange, co-ordination to co-production.
The intersection between collaboration and competition
We recognise that most support organisations play a limited but important role in a start-up’s journey.
It is worth bearing in mind that the way that each institution collaborates with others in the ecosystem depends on the role it plays itself. The Solution Space is located within the University of Cape Town’s Graduate School of Business. We focus on early-stage start-ups, aiming to improve the caliber and quantity of local founders within the overall ecosystem and ensuring that innovative ideas receive adequate resources and support to validate and test new business models. Others in the ecosystem focus on scale-ups and support businesses that are ready for investment and growth.
In addition to the individual roles each player occupies, by its nature, the entrepreneurial ecosystem is competitive. There are multiple points for competition between investors and venture capitalists seeking attractive returns; universities and incubators seeking new ideas; and corporates seeking new innovations — among others.
Yes, this competition raises natural tensions. Competition is healthy and necessary. In my experience, though, the players involved generally remain committed to collaborating even if they are competitors. Collaboration should exist even within that competitive environment. This requires each party to have the courage, humility and candour to share, to connect and to give and receive feedback. These are necessary ingredients for collaboration.
A successful ecosystem relies on strong relationships built on mutual trust and respect for the other players — whether they are competitors or friends. Collaboration can thrive in this climate.
Resolutions for 2019 and our local ecosystem
As we look to 2019, our resolutions are twofold. Firstly, on a broad basis for us to continue to engage with the recommendations Endeavor and VC4A made and ensure we are active within the ecosystem to address some of the priorities. Secondly, and more specifically, we will continue with our efforts to work with partners to address the gap in early-stage funding for entrepreneurs. Another key focus for the Solution Space next year will be addressing gender and diversity within the tech and start-up ecosystem. In 2018 less than 20% of our applicants were female. This is an ecosystem challenge, and something that we have been aware of and addressing in a variety of ways. However, we will be placing greater emphasis on this in the new year and look forward to working with others to move the needle on female representation, interrogating the main barriers and piloting interventions to make a significant difference.
Our recent critique has prompted me to dig further into the latest research around entrepreneurship ecosystems and the impact of collaboration. I have begun to collate various frameworks that are used to monitor, measure and evaluate the intention and the act of collaboration across the ecosystem.
I am also heartened by the determination of colleagues in the ecosystem to consider this wider criticism as a rallying cry to, first, provide evidence of how the sector does collaborate and; second, to continue to work together do so in the future.