Is there a right or wrong way to build a startup ecosystem?

​The digital age offers new hope in communities across the world. A recent speech by Paul Graham and a well thought out book by Brad Feld describe some of the ways cities can build on this opportunity. These ideas are a great start. But more innovation is needed. Every community can find its own way to meet its own goals. This should be an ongoing and passion filled debate. This article shares my ideas and questions. What do you think?
 
Paul Graham gave a talk recently in his home town of Pittsburgh. His theme was how rust belt industrial city with a great heritage could nurture a startup ecosystem to rival Silicon Valley. I live in Glasgow. A city with a comparable past from its days as the second city of the empire. And the shipbuilding capital of the world. So Paul’s analysis got me thinking.
 
The focus was on demographic and cultural factors. This is in contrast to Brad Feld’s excellent book Startup Communities. A book allows for more depth of course. But the approach is different as well. Brad looks into the proactive things various stakeholders can do to make startups happen. 
 
These are two smart guys who I admire. I must admit that Paul’s thinking sits a little more comfortably for me. That is a just a personal thing though. Both sets of ideas have merit. I suspect neither covers the whole story.

The Scottish startup example

Scotland is the example I know best. We are by definition small, peripheral, cold and Northern. Comparisons to Pittsburgh only go so far. Yet we are experiencing some success. We have two unicorns (Skyscanner and Fanduel). Not bad when the whole country only has 5 million people.
 
We also have a good number of strong businesses. Led by great entrepreneurs with fantastic teams. Many of these are somewhere between Product/ Market fit and the ability to scale. Supported by a diverse and well organised Angel community. Larger VC investors are also starting to take a growing interest.
 
Proactive Government (at EU, UK and Scottish levels) and Universities are also a feature of our scene. In a way which is not at all like either Paul or Brad’s models. And there are signs of successful startup communities from Trondheim to Nairobi. With an almost infinite range of circumstances and heritage. 

Startups offer hope for all our futures

​But this is not a review of startup Scotland. Or any other ecosystem.
 
At the same time, we live in a world where economic progress is fragile at best. Many, many millions live in abject poverty. And/ or in war zones and despotic failed states where the situation is desperate. The “better off” working and middle classes in the developed world are disaffected. And disillusioned with their rulers and their lives. 
 
Mobile and digital technology are a beacon of hope in this landscape. Not the whole answer but a big part to play. Tech provides a potential outlet for restless, energetic and frustrated youth. Products and solutions that can the world for the better in many ways. And an accessible and available economic route to build or rebuild communities. Maybe even whole countries.
 
Paul identifies some inherent attributes that Pittsburgh enjoys. And I wish them every success in leveraging those factors to build a great startup ecosystem. I attended the celebration dinner for Scotland’s Digital Technology Awards this week. the event shows how this kind of heritage can work. Held in a refurbished Victorian Fruit Market but with cutting edge video and a fun atmosphere. Well done to everyone involved.

​But it can’t just be about places like Pittsburgh and Glasgow. Nor is everyone striving to emulate Silicon Valley a realistic or desirable goal. I don’t have answer, only questions. Yet I believe that everyone should be able to grasp the opportunity. Otherwise why are we using mobile to spread across the globe? Communities need the chance to do things their own way. Build their own futures. And make a real difference to their own lives.

Some ideas and questions to get started

​I think this should be a running debate. With far smarter people than me contributing and developing ideas for years to come. Let me kick off with some ideas and questions that I have been kicking around. Some of these might even work!
 

• Why try to build what already exists in California? Why not ask ourselves what our community has that Silicon Valley doesn’t have. And build on our positives to create something different and better.
• Investment is a common theme and the talk of the steamie here in Scotland. Yet I wonder if there are models for growth that work without investors in place? Not least because there are few obvious sources of investment in some parts of the world.
• Are we creating a risk of “survival hazard?” Can Government or institutional support make it too easy for struggling businesses? Allowing the poor to get started and the weak to linger?
• The biggest ideas are going to disrupt and educate the world. Is there a better way of building global co-operation to solve global problems?
• Linked to this, it is obvious the opportunity is global. Yet it feels that few locations have real open access to global markets. Even in the developed world breaking global is tough. How do we become genuinely open and inclusive?
• Are competitive pitches the best way to attract investment and support? Does this result in efficient allocation of available resources?
• Defence spending is well known as one of the early catalysts for the Silicon Valley tech boom. In most economies today health is the big spender. Are their ways where Government spending on health could become the foundation of innovation? Rather than its biggest obstacle. Could the NHS do for Scotland what the US Navy did for the Bay Area?
• Skills and talent are also important. Should Government and Academic institutions play a role in pushing this forward? Or rely on the economy to pull us up? This article from Wendy Gullies CEO of the Kauffman Foundation argues the case for the former.
• Small is sometimes beautiful. Scale and reach will always build massive business. But could unique or exclusive quality businesses emerge from various places. The luxury goods end of the software market?
• How do we help bring the benefits of networks to more isolated or early stage startup ecosystems? Neither Paul nor Brad mention this. Yet there is no doubt strong networks are one of the main assets of established startup locations.
• How can we increase the benefits that advisors and mentors bring to startup? I know many people who are happy to help. Sometimes the best route is not clear.

 
For Scotland, the first priority is to remember what is great here. We have wonderful people and a great social and cultural environment. Our country stretches from historic and vibrant cities. To some of the most beautiful true wilderness in Europe. The legal and financial systems are stable, clean and supportive. And our Universities have global academic standing and nurture a big pool of talent.
 
These are global advantages. Not all are unique but much is world leading. Our success depends on leveraging what we have. Not on dwelling on the things we lack. 
 
How do we maximise this opportunity? What works for other, diverse communities around the world? They are endowed with their own talents and qualities. We can learn from leaders like Paul Graham and Brad Feld who are generous enough to share. But we also need to innovate on for success. 
 
This should be a passionate and energising debate. I would love to hear what you think.