Ecosystem Building Principles in Changing Times | #1 Put Entrepreneurs Front & Center

Everything has changed. This is the undeniable fact that every entrepreneurial ecosystem builder in this country must very quickly come to grips with — if we are to continue to have any relevance in the life of entrepreneurs and business owners today. This is not our pre-pandemic economy; yet, due to a government that was (and remains) ill equipped to manage this unprecedented crisis, we are also not yet in a post-pandemic economy and will not be for some time to come. In addition, we face a sweeping national crisis of conscience related to race relations, precipitated by an enduring legacy of systemic racism. We are where we are — and here is where we will stay for the foreseeable future.

So, what does that mean for entrepreneurial ecosystem building, a field that was in just in its infancy leading into the pandemic? It means that we, essentially, need to throw out half of what we know and approach our work with a completely new lens. In order to fully grasp the gravity of our current state of affairs, we must, first, understand the basic building blocks of what makes any economy (or ecosystem) function.

The Nature of Ecosystems | In nature, an ecosystem is, quite simply, a group of living things and their connections to the environment which sustains them. The basic functions of a nature ecosystem are the exchanges of energy and nutrients in the food chain and food webs. Similarly, entrepreneurial ecosystems are made up of businesses existing in connection with the various community stakeholders which sustain them. The basic functions of an entrepreneurial ecosystem are the exchanges of ideas (energy) and money (nutrients) in the economy.

When natural (and unnatural) disasters occur to a nature ecosystem, the flow of energy and nutrients is disrupted. Food chains and food webs break down. Living things are impacted on every level. Some die; some are forever damaged. The connections between them are also compromised, making recovery extremely difficult. That ecosystem will never be the same again.

Facing Reality| This is what has happened to American’s entrepreneurial ecosystems in the wake of the dual crises of the COVID-19 pandemic exacerbated by recent growing awareness of racial violence and inequities against Black Americans. The core building blocks of national and local economies are in a precarious state, to say the least. The natural exchanges of ideas and money have broken down in many ways that no one ever imagined we would have to face:

• Product and service demand has sharply decreased because households are staying home, earning less, and curtailing shopping habits.
• Supply chains are disrupted due to the huge shift in what people are buying and where.
• Businesses are dying or on life support due to forced closings (for safety) and a deeply compromised marketplace.
• A surge in unemployment significantly reduces household income and spending.
• School and daycare status threatens additional employment and economic well-being for parents.
• The commercial real estate market is in deep decline and co-working spaces that created affordable and dynamic places for new entrepreneurs to launch their businesses are threatened by health risks.
• Those that can run businesses and/or work from home face productivity challenges due to stress, children in the home and/or other distractions.
• Due to varying regulations and surges in COVID-related illness and deaths, there is ongoing uncertainty about re-openings and a return to economic normalcy.
• Service, retail, and hospitality sectors (which have a higher percentage of ownership by entrepreneurs of color) have been hardest hit, further exacerbating existing inequities and the digital divide.

Coming Back| How can an ecosystem possibly come back from this? It can’t. We must accept that there can be no more return to where we have come from. Most importantly, we must face the fact that whatever does happen from here, it will not be fast, simple, or easy. A regenerative entrepreneurial ecosystem is one that spurs equitable wealth through transformational and compensatory change in the way it values, develops, and nurtures businesses — and those that create them.

If regeneration is possible, it happens slowly, will require many complex systems working together, and it will require intentional change. New energy creates new nutrients; new connections form to sustain the new system. This is where the ecosystem builder has the potential to fulfill a role that is, in our current zeitgeist, the most essential player — healer.

Healing from the Center | Ecosystem builders have the potential and power to heal local entrepreneurial ecosystems by leaning into the principles that have guided our work all along — with a renewed focus on regeneration. In my practice as The Ecosystem Healer and with the organization I co-lead, Forward Cities, I am guided by seven design principles for building entrepreneurial ecosystems. These principles were collaboratively designated by hundreds of ecosystem builders from around the country at the 2017 ESHIP Summit, an initiative of the Ewing Marion Kauffman Foundation.

You will notice that the first and central concept of the principles is that the entrepreneur or business owner is the center of everything. In his book, Startup Communities, author and venture capitalist, Brad Feld advanced a theory that has become the core tenet of ecosystem builders around the country, that entrepreneurs are, in essence, the catalysts and leaders of entrepreneurial ecosystems. If ecosystem builders are to help entrepreneurs, we must be in constant process of discovery to understand the mindset and needs of entrepreneurs.

Whenever we are making decisions about what do to support entrepreneurs or how to do it, we always go back to these core concepts for the answers. To make them easy to remember, I like the label them with the following terms ‘C’ terms.

1. Catalysts | Put entrepreneurs front and center.
2. Conversations | Foster conversations.
3. Collaboration | Enlist collaborators. Everyone is invited.
4. Culture | Live the values.
5. Connections | Connect people bottom-up, top-down, outside-in.
6. Communications | Tell the community’s authentic story.
7. Commitment | Start, be patient.

In a previous article, Ecosystem Healing: A Call to Action for the Entrepreneurial Ecosystem Building Field, I described the current state of our local ecosystems and businesses in terms of the many levels of trauma that we are collectively experiencing. Since we have all been impacted by these traumas and are facing unprecedented damage to our local ecosystems, in order new regenerate them, we must rethink our approach to these principles. Yes, everything has changed, but we don’t throw them out the window; we open the window to shine a new light on how we see them. Different times call for different measures.

Principle #1 Catalysts | Meet entrepreneurs where they are and take a triage approach. We have no choice but to put the entrepreneur first because they are in the eye of this storm. In the medical field, triage is the assignment of degrees of urgency to wounds or illnesses to decide the order of treatment of a large number of patients or casualties. The sheer volume of businesses and entrepreneurs that need help right now is staggering. In order to be effective, ecosystems and ecosystem builders must take a triage approach to entrepreneurs as a whole, but first, as individuals.

Realize that it can be hard for business owners to even think about recovery, much less the rebuilding an entire business from the bottom up, because they are dealing with their own personal trauma — and it hits them more deeply than others. Maslow’s Hierarchy of Human Needs is a framework that posits that in order for individuals to achieve self-actualization, they must first traverse a journey that meets other and increasingly progressive needs: 1) physiological, 2) safety, 3) love and belonging, 4) esteem, and finally, 5) self-actualization. One of the things that makes entrepreneurs so unique is that they actually take a different path. Many entrepreneurs, under normal circumstances, possess an innate sense self-actualization which often drives their journey, regardless of whether or not they have achieved the other steps. In fact, it is the sense of self-actualization that helps them achieve the others. However, this can also mean their senses of identity, humanity, and well-being are directly tied to their business and its viability.

It is this reality which makes the current pandemic and its negative impacts listed above so devastating to entrepreneurs — on a more profound level than others in a community. In order to support business owners during this time, we must understand how business closures and/or declines impact them on every level and how it creates layers of trauma that must be addressed.

Self-actualization| Entrepreneurs are creators. They take ideas and turn them into products and services that meet the needs of others. They provide the fuel the the economy that allows others to meet their needs. An entrepreneur’s self-actualization is rooted in the dual aspects of becoming the most they can be and sustaining others. When a business shudders or struggles, it creates an instantaneous identity crisis which can crush confidence and have the individual questioning their own choices and life path.

Esteem | Entrepreneurs often measure their own success by the success of their venture(s). They are respected and recognized by what they achieve through their business and the amount of profits they earn. Their self-esteem, strength and confidence come, in many ways, from the personal freedom that entrepreneurship affords them. When a business closes or struggles, confidence wanes or is lost. Regardless of whether they actually lose the respect or recognition of others, the sense that they have can make them feel weak and undervalued, which can be devastating for their mental health.

Love & Belonging | Entrepreneurs often have friendships and connections that are rooted in their business, sector, and ecosystem. Their families, colleagues, (and sometimes friends), also, often develop their own identities and sense of well-being around the business, particularly when they are directly involved as partners, investors, or employees. Business owners also have a heavy weight of responsibility for those they employ, their livelihood and their families; that accountability can lead to hard and seemingly impossible choices. When a business closes or struggles. these complicated dynamics add layers of relational stress and guilt to the life of an entrepreneur.

Safety Needs | Entrepreneurs need money and resources to turn their ideas into products and services. All businesses need the capacity to pay employees and purchase affordable supplies to keep operations going. Brick and mortar businesses need accessible real estate where they and their customers can be safe. Without the these very basic elements, businesses decline and many are forced into closing and all loss of income. This not only impacts the personal security of the business owner, but also, of all under their employ and any investors. The weight and stress of this loss has ripple effects, but the entrepreneur bears the brunt of the responsibility and it can impact their emotional, mental, and physical health.

Physiological | Entrepreneurs depend on their businesses to provide the resources required to meet the most basic of human needs. The profits derived from their ventures pay for housing, food, clothing, and other essentials for themselves and their families. Sometimes it is the only source of revenue for an individual or family. When a business closes or struggles, all of these basic needs are threatened, which can lead to unbearable stress and loss of sleep. In the worst cases, it can lead to the devastating loss of their home, and potentially the taking of their own lives.

Though these layers of impacts are new and sudden for many entrepreneurs, I would be remiss if I did not state that these dynamics create the underlying culture in which underestimated and underrepresented entrepreneurs — most often people of color and women — find themselves every day, regardless of the pandemic. So, it is even more dire for these people groups now.

As ecosystem builders, if we are to take on this new role of healing, we must look at this whole picture. We must see entrepreneurs as whole human beings and recognize all the ways in which we need to help them heal, recover, and regenerate, from the inside out. Here are a few tips to help you keep entrepreneurs front and center during this uncertain and challenging time:

• Community | Join a caring community of ecosystem builders for your own well-being and self-care. Flight instructors always remind airline passengers, that in the event of pressure loss, they must put on their own masks before helping others. The same is true for ecosystem builders; nourish yourself so you can feed others. I highly recommend the Startup Champions Network for its authentic connections and relevant learning opportunities, Ecosystem Builder Hub for the latest articles from across the field, and Social Venturers for inspiring stories of fellow ecosystem builders.
• Affirmation | Do not back down on your level of support. They need you to affirm that entrepreneurship is still a positive pathway. Even if they have closed a business, your support could mean the difference for them in deciding to try again. CO.STARTERS offers a great, FREE Refocus Workshop to help entrepreneurs adapt to their new realities. Of course, personal reflections are best, but here are some great inspirational stories you share that highlight the adversity and triumph of some well-known entrepreneurs.
• Respect | Remind them of their past successes and highlight their current achievements. They are fighting against failure and to retain relevance. Be a sounding board. Share motivational and inspirational thoughts and content — for both existing and new businesses. Right to Start’s Victor Hwang shared a fantastic new trend, Startwarming Parties, which celebrate and support the launch of new businesses.
• Care | Point them to free or affordable emotional, mental, self-care, and or spiritual health resources in your community.These are weighty issues and extremely difficult times. You can help, but they will also need a broader community support network. I highly encourage supporting local entrepreneurial wellness practitioners. If you run an accelerator or incubator, I recommend the offerings of Good Startups, which provides founders a supportive place to learn and implement foundational self awareness tools to better grow, sustain and thrive personally and professionally.
• Relevance | For those still in business, use social media to promote their business and keep revenue flowing. If needed, help them or connect them to resources that will help pivot their business online or shift their business/revenue model for viability. Share your own subscriptions or business resources as you are able. USA Today started the Support Local website which provides a unique way for anyone to support local businesses during the pandemic; share this with your networks!
• Basics | Help them navigate existing or potential losses of basic needs. Point them to agencies that offer basic living and social services. Offer to babysit or provide childcare to assist, when/where safe for all to do so. Help find housing alternatives. Share whatever you can afford to give. The personal touch is always best, but here’s a list of companies that are giving out freebies to support businesses and individuals during this time.

These are all simple, but effective ways that you can lean into supporting your local entrepreneurs and, ultimately, healing your local ecosystem. The most important thing to remember is that before they are entrepreneur, they are a human being. Yes, everything has changed; but ecosystem builders are needed now more than ever. The true value of this emerging field will be measured by how we show up in this time for the catalysts in our local communities.

In the next part of this series, we will explore Principle #2: Conversations.

MAKING INTERSECTIONS

Read on for more insights on this ecosystem building topic:

• Now More Than Ever We Need Ecosystem Builders
• Economic Developers Cannot Just Rely on Corporate Recruitment. They Have to Grow Their Own Ecosystem.
• The Economy Needs Ecosystem Builders

Missed Connections: Know other voices that connect to this story? Link them in the comments!