Sadly, no matter how much you might want it, you can’t will an innovative eco-system that generates new companies into existence, you have to let one grow. As Dave ten Have said recently, entrepreneurial activity doesn’t come from central planning. So, while it seems like a lot is being done, in my opinion at least, it is mostly splashing and thrashingand not much forward momentum for the people that all of this is supposed to be helping.
I agree with virtually everything stated in this article. Some particularly good parts to expand on:
Both incubators and accelerators have good definitions.
It's exactly what I've always said about incubators - a sheltered, safe place to grow is not the right environment for startups, who need to learn how to fight for their lives. The various options on how to fund incubators are all problems I've looked into.
The starting accelerator phrase is "Accelerators are the exact opposite of incubators. They are all about speed!" - yep. As well, the issue of "local" accelerators vs. Y-Combinator / TechStars / the very very few top tier accelerators is stated well:
Unfortunately for local programs, as more smart founders realise they can do this it just accentuates the problem by further lowering the volume and quality that they have to select from.
Everyone applies to the top tier programs as well as local programs. If you don't get in to the top tier, then you look farther afield. By definition, every program that isn't top tier will get at best second-class teams.
On government funding:
- Government programs fund the wrong thing/team: "I have no issue with pouring fuel on existing fires. Unfortunately, most of the time, it’s the exact opposite."
- Jumping through the various hoops and paper work is a waste of time: "the best founders often don’t bother to apply because the benefit doesn’t justify the time spent"
- Risks and rewards need to be aligned: "Not to [have the government as a shareholder or creditor] is to privatise profits and capital gains but socialise the up-front risk."
What should the government do? At this point, I can't think of anything other than get out of the way. I am not smart enough about policy or tax programs or whatever to figure out what this means.
I have had some serious discussions around whether it is worthwhile to help build a better startup ecosystem in Vancouver / Canada. This quote also stands out for me:
Rather than trying to solve meta-problems, like how to create an eco-system, why not get your hands dirty and help directly?
I will continue to advise a small number of startups, and to take a lot of no harm / no foul coffee meetings to try and help make introductions and connections that can help startups move.
I am largely un-interested in building an ecosystem beyond introducing people, and supporting people who want to do events, or build community, or do meetups that they would be interested in doing anyway.
In short, actively building an ecosystem is likely a waste of time. You need to build an environment in which smart, motivated people want to stick around and build things in, that they have a competitive advantage in in some way.
This can happen by having great companies grow / anchor here - which will attract smart people, some of whom will spin out and do their own thing, attracting more smart people: some with tech skills, some with money for funding.
This can also happen by getting behind startups that are winning, and having them succeed - with follow in funding, with growth to become an anchor, and yes, with acquisition. All of these items put money in the pockets of founders (first time or otherwise), who can then go on to become the next generation of angel funders and serial founders.