Building a new startup hub
Last week, I had a unique opportunity to spend some time in Boulder at the behest of TechStars. It was a great experience to see a relatively new startup hub in action - and thriving. It's easy to take Silicon Valley for granted. The startup scene here can be ostentatious and serve as an echo chamber, amplifying the cool trend of the week into a deafening roar. But there's no denying the level of support for entrepreneurs that we enjoy. I've written a little bit about the origins of Silicon Valley because I think it's important for us to understand how we got here in order to make sure we preserve what is best about our community.
Traveling to Boulder I had the feeling of stepping back in time. It felt like I was watching a new startup hub in the process of being created. The companies I spoke to all agreed that the community there was extremely supportive, especially in the critical ulta-early-stage. That community is, by all accounts, relatively new - less than five years old according to several folks I asked. Even more impressive is that the culture there seems to have been the conscious creation of just a few people.
On my brief visit, the results were impressively on display. If you watch the video/audio below, you'll get to see some of the questions I was asked after my presentation. On the whole, I found them unusually sophisticated - and mostly rooted in the actual practice of entrepreneurship. I also did quite a bit of asking questions myself. I spent most of my time with TechStars, who were my hosts for the trip. Their model looks like a key ingredient in the startup brew there. Every summer, they bring approximately 10 companies to Boulder for an intense "accelerator" experience (don't call it an incubator, or you'll get dirty looks). They don't invest a lot of money; just enough to keep them going through the summer. They take common stock, not preferred, a fact that the entrepreneurs mentioned to me many times. And they expose the startups to a vast network of mentors, none of whom get paid for their involvement.
Some of the mentors are based in Boulder, but many are not. As a result, the companies get a lot of exposure to VC's, investors, and partners in larger, more traditional startup hubs. And, as one entrepreneur put it to me, "we understood that a big part of our responsibility in the program was to make sure the mentors have a good experience, by taking their advice to heart and giving them a feeling of being part of our evolution as a company." As a result, for a lot of these companies, Boulder is just a gateway to San Francisco. TechStars encourages them to go wherever opportunities take them. But even the companies that move on have had a taste of life in Boulder (it looks awfully nice). And every year, it looks as if one or two entrepreneurs from the program decide to stay.
That strikes me as a really smart formula for building a startup hub. First, pick a place that entrepreneurs (and other creative class-types) would love to live. Great weather, a strong university, outdoor sports, cafe culture, good restaurants - you get the idea. Then, create an encouraging environment for early-stage companies. You don't need massive amounts of capital available for VC investment - modest amounts will do. Accept that many successful companies are going to want to be backed by big-name firms in other cities. Instead, focus on getting them ready for that stage. Provide early seed capital, and be the ones to make those introductions. Make your city a gateway to other opportunities, so that entrepreneurs can increase their access by starting there. And do your customer development. If you talk to early-stage entrepreneurs who randomly landed in Silicon Valley, you'll hear just how hard it is to break into the scene here. Because you're not asking entrepreneurs to forsake those bigger cities, it's a no-brainer to give your city a shot.
Anyway, those are my thoughts after having spent only a few days in Boulder. You can see that it stimulated a lot of ideas; you'll have to evaluate the veracity of those ideas on your own. In the meantime, let me keep my promise of some multimedia. I did my best to capture video and audio; a YouTube playlist and Slideshare slidecast are below:
Slides (with audio):
And, as usual, I wanted to share some of the audience reaction with my commentary. These quotes are, as is my custom, straight from twitter.
My biggest thanks goes to the people who generously sponsored scholarships for others to attend the dinner and workshop, Thank you so much!
Here are two more questions that I really enjoyed answering:
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Traveling to Boulder I had the feeling of stepping back in time. It felt like I was watching a new startup hub in the process of being created. The companies I spoke to all agreed that the community there was extremely supportive, especially in the critical ulta-early-stage. That community is, by all accounts, relatively new - less than five years old according to several folks I asked. Even more impressive is that the culture there seems to have been the conscious creation of just a few people.
On my brief visit, the results were impressively on display. If you watch the video/audio below, you'll get to see some of the questions I was asked after my presentation. On the whole, I found them unusually sophisticated - and mostly rooted in the actual practice of entrepreneurship. I also did quite a bit of asking questions myself. I spent most of my time with TechStars, who were my hosts for the trip. Their model looks like a key ingredient in the startup brew there. Every summer, they bring approximately 10 companies to Boulder for an intense "accelerator" experience (don't call it an incubator, or you'll get dirty looks). They don't invest a lot of money; just enough to keep them going through the summer. They take common stock, not preferred, a fact that the entrepreneurs mentioned to me many times. And they expose the startups to a vast network of mentors, none of whom get paid for their involvement.
Some of the mentors are based in Boulder, but many are not. As a result, the companies get a lot of exposure to VC's, investors, and partners in larger, more traditional startup hubs. And, as one entrepreneur put it to me, "we understood that a big part of our responsibility in the program was to make sure the mentors have a good experience, by taking their advice to heart and giving them a feeling of being part of our evolution as a company." As a result, for a lot of these companies, Boulder is just a gateway to San Francisco. TechStars encourages them to go wherever opportunities take them. But even the companies that move on have had a taste of life in Boulder (it looks awfully nice). And every year, it looks as if one or two entrepreneurs from the program decide to stay.
That strikes me as a really smart formula for building a startup hub. First, pick a place that entrepreneurs (and other creative class-types) would love to live. Great weather, a strong university, outdoor sports, cafe culture, good restaurants - you get the idea. Then, create an encouraging environment for early-stage companies. You don't need massive amounts of capital available for VC investment - modest amounts will do. Accept that many successful companies are going to want to be backed by big-name firms in other cities. Instead, focus on getting them ready for that stage. Provide early seed capital, and be the ones to make those introductions. Make your city a gateway to other opportunities, so that entrepreneurs can increase their access by starting there. And do your customer development. If you talk to early-stage entrepreneurs who randomly landed in Silicon Valley, you'll hear just how hard it is to break into the scene here. Because you're not asking entrepreneurs to forsake those bigger cities, it's a no-brainer to give your city a shot.
Anyway, those are my thoughts after having spent only a few days in Boulder. You can see that it stimulated a lot of ideas; you'll have to evaluate the veracity of those ideas on your own. In the meantime, let me keep my promise of some multimedia. I did my best to capture video and audio; a YouTube playlist and Slideshare slidecast are below:
Slides (with audio):
2009 08 19 The Lean Startup TechStars Edition
View more presentations from Eric Ries.
And, as usual, I wanted to share some of the audience reaction with my commentary. These quotes are, as is my custom, straight from twitter.
My biggest thanks goes to the people who generously sponsored scholarships for others to attend the dinner and workshop, Thank you so much!
I'm also excited to share two long-form reviews from actual attendees. I'm always excited to see how these ideas are expressed by entrepreneurs in their own words:ericries: special thanks once again to @fancy_free and @KISSmetrics for sponsoring scholarships for the #leanstartup workshop in Boulder.
petewarden: Another blog post, this one on the @ericries Lean Startup Workshop I attended: http://bit.ly/4UWuf #leanstartupAnd I can never resist sharing some positive feedback. I hope you'll indulge me - I need to have a copy of these testimonials for the record:tmarkiewicz: Notes from the Lean Startup Dinner with @ericries http://bit.ly/80kKW #leanstartup
neilsimon: Thanks @ericries for the #leanstartup tips last night. Articulate, inspirational.jdegoes: Great talk from @ericries last night. Inspiring ideas: real-time biz metrics; safe continuous deployment; A/B split testing. #leanstartupfeverishaaron: @ericries thanks for droppin' facts at the #leanstartup dinner. Learned a lot and enjoyed the discourse.KevinMSmith: Excellent discussion on #leanstartup w/@ericries. If you get a chance go see him. If you don't get a chance , MAKE ONE. He's that good.lmckeogh: Best $50 I've spent in last yr as unempl. prod mgr. #leanstartup dinner Boulder full of useful info that I want to apply [echo @roger_tee]ultimateboy: #leanstartup was the most invigorating event I've ever attended. Thank you @ericries for drastically altering my perception of agile startup
Thank you all so much for your kind words. I was really overwhelmed this time. Now for some actual content:
jeantabaka: Really liked @ericries answer to adding in quality while still a startup #leanstartupIf you want to hear the exact question and answer, check the video. This was a question about how we convinced our investors to "allow" us to invest in quality after we'd shipped the initial buggy version of IMVU. That's always a tricky relationship to navigate, but we found a way to get our investors on board with that program by practicing a form of radical transparency. When they could hear the customers' complaints in their own voice, it became clear when it was time to up the quality level. We also had the benefit of many lean practices that break out of the "time, quality, money - pick two" paradox. (You can learn more about that by reading The engineering manager's lament.)
Here are two more questions that I really enjoyed answering:
roger_tee: At #leanstartup dinner w/ Eric Reis. Asked where I find visionary early adopters who pay 4 buggy beta SW. Killer answer.Ask me. #bdntnbauman: When to split test? Anytime anyone on the team thinks it could make a macroscopic change. Define macroscopic change! #leanstartup
I could recap these - but just go watch the video already!
And one last specific practice that came up at this session:
And one last specific practice that came up at this session:
feverishaaron: UI, design and programmers are all in the same department, all have the same title, and all are evaluated the same. #leanstartupWe organized our engineering team at IMVU to try and maximize cross-functional collaboration. That meant getting designers, programmers, and QA folks to cross-train and work together as peers. By expressing these values as part of the formal structure of our department as well as the formal evaluation system, I think we went a long way towards reducing the usual internecine conflict between these groups.
Let me close with one last thought. I think it speaks for itself:
Thanks to everyone who participated and helped make these great events!peterhoskins: At least have the courage to make new mistakes. #leanstartup
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