'New' Startup Hubs Rely on Deep Roots
Thriving entrepreneurial hot spots do not just pop up overnight. It takes more than a few growing startups to turn a city intro a hub of entrepreneurial activity. This thought is confirmed by a new Kauffman Foundation white paper entitled “Path-Dependent Startup Hubs – Comparing Metropolitan Performance: High-Tech and ICT Startup Density”.
What researchers have found is “new startup hubs actually have been fostering a culture of entrepreneurship for some time. Many of these cities have a history of strong technology sectors or experienced strong growth among technology startups over the past two decades.” This idea is not ground-breaking. We’ve come to realize the long road it takes to create an entrepreneurial community. As Brad Feld says, “It’s a 20-year journey to build a prosperous startup community, but not just from today. It’s 20 years from tomorrow, and the next day and the next month. It’s a never-ending goal.”
What this paper does clarify is the idea that milestones, such as the installation of something like Google Fiber, is not a foundation for entrepreneurship, but rather a catalyst that ignites the logs that have been building the startup hub fire. So new programs to promote and foster entrepreneurship have actually been made possible by the underlying strength of the tech sector that has been mounting for several decades in cities like Seattle, Boise, Portland and Kansas City. This combined with the talent of the region have made things such as 1 Million Cups, the Big 5 Initiative to make “KC America’s Most Entrepreneurial City” and the Kansas City Startup Village possible and accepted in the metropolitan area.
The paper further notes that these cities’ emerging ecosystems owe a lot of their success to “years of spinoffs and entrepreneurial spawning”. This means a lot of startup activity can be attributed to already existing companies that have generated startup spinoffs and innovative ventures over the past decade. Economic geographer Heike Mayer shows us this in her research of spinoff regions, mapping the likes of Seattle, Portland, Boise and Kansas City.
Does this account for all startup activity? Of course not. But it does make sense considering the average age of an entrepreneur is somewhere between 35 and 45. Yes, this breaks the stereotypically thought of hoodie-wearing, college grad or drop out norm, but is in fact true and explains age distribution in the report when you think that the spinoff startups are likely founded by someone with a “previous job in a big company or institution”.
Rome wasn’t built in a day. And neither is a great startup hub. It takes time and dedication by both the existing corporate structure and innovative newcomers and champions of the entrepreneurial culture. Together, on a united 20 year journey, a hub can start to form, propelled by milestones and catalysts of new technologies and opportunities.