Are we in a startup ecosystem?
A lot of time when I hear people talk about startup business, I wonder if we really have a good consensus of its definition. To me a “startup business” is usually not about how long the company has been set up or how much paid in capital/fund has been raised. Not even about the revenue. It’s more about if the “business” is still in the searching phase of a validated, scalable business model in the designated and targeted segments; and if the “company” has the core to adopt to the market change with its core competitive advantage. Rev, paid in capital (or valuation), and age of the company are the metrics we may use as reference on the surface, and there’re usually many more metrics we should dig into in different segments.
More or less same retrospect for startup ecosystem. Ecosystem, as in the definition on the left, is about the network and the interconnected system. We may be able to describe the main participants, like academics, talents, startups, corporate, service providers, venture capitalist and consumers, and their interaction and connection, however, why should we name a network like this a “startup” ecosystem but not a “corporate innovation” ecosystem, or a “investor” ecosystem?
The key to this might be about the relative importance of the role here as measured by how it drives the network connection. From there, the hypothesis behind the term, startup ecosystem, is more or less clear: we think that the startups are the key driver of the network, and functions as critical nature resources all the other participants rely on to keep the network work and communicate with each other. Thus, as all the startups need to do, a “startup ecosystem builder” should validate that hypothesis if we think startup ecosystem is important and has some pain points/unmet need to start a business around it.
The hard thing might be to see both the blind men who are touching the elephant and the elephant itself in the old parable, before we join the blind men and touch every part of the animal. The main goal for this, is to identify at least below two things:
1. Who is the main driver of the interaction among participants above-mentioned? Specifically, the motivation and the size of the motivation in monetary value.
2. Who is the “info collector” and who is the “decision maker” in each of the participants, and what’s the respective decision-making process, and how effective the main driver influences the decision making process?
From there, we might be able to uncover if the business environment in certain place could truly be named as a startup ecosystem, or has the potential for passionate entrepreneurs to work on it and get impactful result from experience of other proven market like in Silicon Valley.
