Cities assembling the ingredients for a strong entrepreneurial ecosystem should concentrate on the connections between them as well.
That’s the conclusion of a recent study on St. Louis’ emerging startup system by the Kauffman Foundation. The foundation chose St. Louis because of its recent jump in entrepreneurial activity. The report released this fall examined the Gateway City’s connections between entrepreneurs, between support organizations, between entrepreneurs and support organizations and miscellaneous support connections.
It explored the roles of the nonprofit Arch Grants program and organizations such as BioSTL, Lab 1500, the Center for Emerging Technologies and the Skandalaris Center for Entrepreneurship at Washington University. Among the conclusions:
• Connections between entrepreneurs were many and valuable.
• Support organizations coordinated and collaborated to a high degree.
• Support organizations provided two types of support: broad (mentoring, connecting) and financial and functional (incubation, pitch practice, business model assistance).
• Mentorship and peer-to-peer learning was often cited as most valuable by startups.
• Universities were not as great a source of entrepreneurs as often assumed. It was usually students or post-doctoral researchers who commercialized university-based research, not faculty or tech transfer offices.
The researchers were most struck by the importance of interaction between experienced and nascent entrepreneurs:
“Entrepreneurs learn from other entrepreneurs, and from mentors who have entrepreneurial experience. . . Furthermore, this learning process was not exactly knowledge acquired through educational training from universities, but practical knowledge acquired through personal interactions and experimentally applied to a tailored case that each entrepreneurs was facing at the moment,” the study found.
So what can other cities learn from what’s happening in St. Louis?
• Focus on connecting entrepreneurs so they can learn from each other.
• Communicate and collaborate with other entrepreneurial support organizations for regular readjustment of the local ecosystem.
• Cultivate experienced local entrepreneurs to connect them with newbies.
• Support organizations should recruit staff with entrepreneurial experience.
• If a public venture fund has already been established, distribute smaller prizes to multiple startups, rather than one large prize, so that a group of entrepreneurs can become a cohort.
• Reorganize incubators to connect entrepreneurs and enhance peer-learning. Support organizations should be housed in incubators.
Photo by Dave Herholz