We’re beginning to see an interesting phenomenon occur with the success of Startup Communities. Readers are extrapolating the lessons within the book and are raising some interesting questions about the drivers, best practices and key components of startup communities. Recently, Dan Moore, a local Boulder IT consultant, wrote a blog post questioning the lasting impact the personnel of a former employer had on the local startup community. His blog post raises an interesting question.

How many startups have been birthed as a result of personnel from a former startup?

In his own case, Mr. Moore was an employee of XOR, (Internet technology, Systems, IT) and according to his experience some 23 companies were formed as an off fall of its sale, one of which includes the company he currently works for. This information has spurred the team here at Startup Revolution to wonder if we could put together a data set that would depict the general impact startups have on their communities.

So we decided to begin the process of sourcing information regarding such matters and are now putting together a data set on the long term residual effects of startups; no matter their outcome. Whether they failed or succeeded we want to know the impact startups have.

So we’ve got a favor to ask…we need you to fill out the form below providing us with important information on the number of companies that were spun off as a result of either the sale or closing up of a former employer.

Simply fill out and submit the form below and we’ll start building the data set.

Thanks for all the help!

-The Startup Revolution Team

Guest Post By Kent Oyler – OPM Financial – (President)

Not long ago the guys from Awesome Inc arranged for startup guru Brad Feld to speak at the Kentucky Center about the Boulder, Colo., startup phenomenon. Somehow Boulder has attained the mythical entrepreneurial status we also attribute to Austin, the San Francisco Bay Area and Research Triangle.

Now back in the post-Nam days, when I was a longer-haired undergrad at CU-Boulder, the only local entrepreneurs I can recall utilized baggies to distribute their product. Gnarly for sure, but definitely not a global hot spot.

So, I wondered, what changed since the late ’70s, besides the merciful death of disco? How had the most liberal college town in America transformed itself into one of the preeminent entrepreneurial communities in the world and a birthplace of TechStars?

Maybe Feld’s speech would provide some answers, so I bought a ticket (and later, his book).

From Boulder to Louisville

In Feld’s TED-style talk, he used a flip chart to quickly lay out what he calls the “Boulder Thesis” (which he stretches to 200 pages in his book, Startup Communities). In short, Feld’s Boulder Thesis states that a vibrant entrepreneurial community must:

1. Be led by entrepreneurs who
2. Have a long-term commitment, and
3. Be inclusive of anyone who wants to participate in it, and
4. Continually engage the entire entrepreneurial stack.

Understand that Boulder, which is fondly referred to as “eight square miles surrounded by reality,” sports five major research labs and the most degreed population in the United States. So it’s a pseudo-Oz, and whatever they do or (now legally) smoke out there might not translate to Kentucky.

But what if it does? What if our most ambitious people self-organized into the best job and wealth creation machine this side of the Rockies?

I’m here to proclaim that the soul of the Boulder Thesis is, indeed, beginning to trend right here in the Bluegrass. Granted, we don’t yet match their 2013 Rockin’ Mountain High community, but (cue Journey) we are at least in the ’80s, or maybe even (fade to Pearl Jam) the ’90s in Boulder time, edging ever closer to the so-2009 Black Eyed Peas’ “I Got A Feeling.” (Way to remix those metaphors.) 

My point is that this region is slowly but surely crafting its own energetic entrepreneurial community under flag bearers such as Phoebe Wood, Doug Cobb, Bob Saunders, Kimberly Nasief-Westergren, David Jones, Charlie Moyer, Tendai Charasika, Mark Crane, Greg Fischer, Adam Fish, Alex Frommeyer, Kris Kimel, Brian Raney, Suzanne Bergmeister and many others.

This isn’t a planned and managed affair; it’s organic and authentic. It’s like cat herding. It’s highly inclusive and spans the “stack” from investors to entrepreneurs to supporters. It includes long-standing groups such as Venture Connectors, KSTC, Nucleus and Enterprise Corp.; alongside rogues like Forge and Startup Weekend.

With the Gil Holland-led re-entrepreneurization of NuLu, the community even has a homeland.

From Louisville to the Commonwealth

To paraphrase Brad Feld, we are witnessing the birth of not just the Louisville Thesis, but the Kentucky Thesis, which I might point out is miraculously overcoming basketball rivalries and connecting with like-minded clusters of entrepreneurial diasporas from Paducah to Lexington to Covington.

A good thing? I damn well think so, and cheer on all comers who are willing to pitch in, whether by starting a company, investing, working, sponsoring or just showing up. We don’t have to become Boulder.Who needs weed dispensaries and 300 days of sunshine anyway? We just need to be ourselves and stick with it.

We have strengths in logistics, healthcare, food and manufacturing combined with that bull-headed Kentucky long-rifle sense of independence – hey, not every region is so blessed. We have plenty of bright people and ideas. And nobody sees us coming.

Granted, it was probably a hair easier to grow a vibrant entrepreneurial community in progressive, highly educated, uber-cool Boulder. But when we do it here, Mr. Feld will have an even better book to write.

Or maybe we’ll just write it ourselves.

Related articles

• Brad Feld: Humble, generous and just plain smart
• Announcing TechStars in London
• Do You Need A Board Chairman?

Guest Post By Anthony Reinhart – Communitech – (Writer)

(Photo: Anthony Reinhart)

It wasn’t a long time, but it was certainly a good time when Brad Feld dropped by the Communitech Hub Thursday.

Feld, the 47-year-old Foundry Group managing director, TechStars co-founder, author, marathoner and all-around good guy from Boulder, Colo., was on his first visit to Waterloo Region.

Over about six hours at the Communitech Hub, he toured the space, met entrepreneurs, spoke about how to build a great startup community and helped judge a sold-out Startup Smackdown before returning to Toronto for an early-morning flight out.

Feld left us with much to mull over and plenty to be proud about, which I’ll expand on here in due course. For now, I’ll leave you with what he told me at the end of a long day.

Q - So, what did you think of your day here?

A - I thought Communitech was awesome. I had a great day here.

I didn’t really know what to expect because I hadn’t been to Waterloo before, and I thought the community was extremely vibrant.

There’s a huge amount of people who are working on the right kinds of things, and the energy level is off the charts, which is really, really fun to see.

Q - Did anything in particular stand out from what you usually see in startup communities?

 A - I think the concentration of all of the different activities, including the accelerator, the university incubators, co-working space, event space, a bunch of entrepreneurs, the community space, is very powerful.

You see it in some other places, and it’s starting to appear in a more structured way in Chicago at 1871, or in D.C. at 1776, those two buildings. But this is a really mature example of it; it feels really built-out and not just well-organized, but extremely well-run.

It was nice to see, because I think there are a lot of people who aspire to have this at the core of their startup community, but it’s very hard to do, and it’s clear that this has been a lot of hard work over a number of years.

Q - So if you got home and (your wife) Amy asked, ‘How was Waterloo?’, what would you say?)

A - I’d say I had a great time.

I would tell her that I spent the entire time inside one building, so I didn’t really see Waterloo, but I saw Communitech, and I thought it was really cool.

Related articles

• Public Events for 2/25/2013 – 3/3/2013
• Startup Life by Brad Feld and Amy Batchelor
• Announcing TechStars in London

Guest Post By: Jeff Keen – Accelerate Okanagan (CEO)

I heard so much about the incredible Startup Community developing in Boulder that I decided to take a trip there to witness it firsthand.  Since my return, many people have asked about the trip, about Boulder and our experience.  For those of you who like to cook, you could draw a parallel of my Boulder visit to reading a cookbook versus taking a hands on cooking class from world class chefs. The intended results are the same but there is nothing quite like being there, witnessing how it’s done, and immersing yourself in the culture to truly appreciate and get the most from the experience.

During our visit, we had the opportunity to meet with many community leaders and learn about the evolution of Boulder as a Startup Community.  Everyone is actively involved and committed to making a difference.  We had 12 meetings in just over 2 days, each starting and ending the same way “how can I help?” and “is there anything else I can do to help or people you would like to meet?”  Awesome.

We participated in Meet-up events, Entrepreneurs Unplugged at CU Boulder and were invited to a small group dinner with community leaders and entrepreneurs.  We visited Techstars, were welcomed into several co-working spaces to hangout and catch-up on emails.  We were the beneficiary of many pay-it-forward introductions – no questions asked.  Entrepreneurs are everywhere in Boulder and the entrepreneurial energy is infectious. One afternoon at a local establishment, our server asked why we were in town and then proceeded to spend the next 30 minutes talking to us about her Startup.  Sidebar: Another great experience during our visit was the prevalence of “Happy Hour”. For a beer loving Canadian entrepreneur could Boulder be any more perfect?

If you read Brad Felds book “Startup Communities”, he talks about the Entrepreneurial eco system and the importance of it being led by entrepreneurs, the ”give before you get” attitude,  network versus hierarchical structure, inclusive of all who want to be involved and the necessity to be in it for the long term – 20 years from any point in time.  There are many other important discussions in the book, but these were my key impressions and our firsthand experience in Boulder.

The only negative about our Boulder visit was that it ended too soon. It was very inspiring and motivating to hang with people that are all working together to make a difference, led by entrepreneurs and supported by the community – everybody “all in”. Cool.

On the trip back, I was thinking about our experience in Boulder.  How could we tap into that culture, the infectious energy and continue to learn about successful Startup communities on a go forward basis?  The concept of the Entrepreneurial eco-system being a network not a hierarchy was resonating with me – the power is in the network.  Could we expand the network and get entrepreneurs connected to and from other regions? Perhaps we create a “Startup Communities Network”, a network of like minded entrepreneurs from other communities committed to the ”give before you get” culture – the impact could be very powerful; entrepreneurs helping entrepreneurs through a boundless, non-regionalized support system, making the right connections at the right time, reducing risk and accelerating business growth.

Interested in discussing the “Startup Communities Network” concept in more detail?  I look forward to your feedback and getting connected.

A big shout out to Brad Feld and all the amazing people from Boulder for making us feel welcome and for sharing your time and experiences with us.  We are returning to the Okanagan with many great community building ideas to share and look forward to visiting Boulder again in the near future!

Related articles

• The Hitchhikers Guide to the Boulder Startup Community
• Asking The Right Question: How Can a City Create an Environment Where Startups Thrive?
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• How Boulder Grew Into a Hub for Start-Ups
• Get on the Startup Map (by Ian Kuliasha)

Guest Post By Tom Nastas – Scaling up Innovation – (VC, Mentor, Blogger)

Tom Nastas a 25 year VC veteran in US, int’l and emerging markets wrote a series for Startup Rev on the ‘spark’ which sparked the startup of Russia and how the development of start-up communities in emerging markets are shaped much more by the cultures of risk vs. what we investors and entrepreneurs face in the USA. An interesting read, below are the individual posts and content for each one.

Last time I introduced the questions as topics for answers in this five part post series:

1.)   What is the ‘spark’ that ignites the startup of start-up communities?
2.)   How does the ‘start-up’ of startup communities differ—emerging markets vs. developed countries?
3.)   Why is the US entrepreneurial model of experimentation, trial and error and pivoting a death sentence for entrepreneurs in the emerging markets? And what you can do about it.
4.)   How does the culture of risk and failure in emerging markets impact investor DNA—what they finance and what they won’t
5.)   What is Clonentrepreneurship, where is it spreading from and to, and why is it a model for more—innovation, startups, and venture investment?

Read the introduction here.

I conceived this series for StartUp Communities, the blog of venture investor Brad Feld (Foundry Group, Boulder, Colorado, co-founder of Tech Stars, blogger Feld Thoughts).

Subjects covered in this post include:

1.)   First—Three Definitions
2.)   The Russia Tech Scene
3.)   Growth in Russia
4.)   What Changed for Growth to Emerge
5.)   The Spark that Ignited the Start-up of Russia

You might be unfamiliar with this phase ‘start-up community.’ So here’s a short intro to what it is and why it’s important to every country on Planet Earth.

A start-up community is a place where entrepreneurs with ideas come together to start new companies, and can actually find the money and the talent to get their start-ups financed, staffed and launched.  Most start-up communities offer appealing lifestyles, are cool places to live, to work, to have fun and do more—faster.  Over time as more and more start-ups are created and financed, an entrepreneurial ecosystem takes root with success begetting success leading to a thriving start-up community.

In the world of venture capital (VC), entrepreneurship and start-up creation, Silicon Valley is the quintessential start-up community in the United States, with the MIT/Boston area as #2.  The term start-up community can be attached to a country as Dan Senor and Saul Singer did in their 2009 book Start-Up Nation: how Israel became a start-up ecosystem with sixty-three publicly Israeli companies traded on the NASDAQ stock exchange in the United States, more than any other foreign country.

Start-up communities attract and breed entrepreneurs.  Entrepreneurship drives economic growth and development, new jobs and of course, wealth creation. It’s this prosperity that cities, states, regions and countries around Planet Earth are trying to create, attempting to replicate—duplicate, to get things going; for their survival and renewal, by inspiring wannabe entrepreneurs to take the leap into the unknown and supporting resident entrepreneurs.

I craft two other phrases in this series, Clonentrepreneurs and Clonentrepreneurship; words put together from Clone-Entrepreneurs and Clone-Entrepreneurship (but without the hyphen).

Clonentrepreneurs are entrepreneurs that clone a business idea or a business model of a company and implement it too, sometimes with improvements, sometimes not.  While the word clone may be a 21^st century phenomena, clones have been around a long, long time.  Over the years these two companies have taken different paths to growth, but over 100 years ago it was “Coke or Pepsi?”

Startup Genome recently published research on the most active start-up ecosystems around the world. It listed Moscow as #10.

It’s great to see Russia’s largest city rocket into this spot, given that in 2001 less than $100 million/year was invested in Russian seed and early stage tech vs. billions of dollars of private equity money invested in fast moving consumer goods, real estate, construction, wholesaling, retailing, natural resources and other sectors that lifted a post-Soviet economy into the 21^st century.  Ten years ago only a handful of emerging growth tech companies existed in Russia includingYandex, Ozon, Mail.ru, Abbyy and Kaspersky to name five.  The first three served primarily the Russian speaking market, the last two—international customers around the world.

In the latter half of the decade, innovation became a priority of the Russian Government to diversify the economy from oil/gas with its investments in the Russian Venture Company(fund-of-funds with ? $1 billion under management) and the Russian Corporation of Nanotechnology (Rusnano, ? $10 billion under management, making fund, project and international investments in nanotech). Even with these efforts, the needle of tech investment crept up ever so slowly to $200 million ± 10% for seed and early stage investments in all sectors.

But everything changed in 2010; investment in seed, start-ups and early stage companies more than doubled from 2009 and in 2011, doubled 2010 results.  In 1Q 2012 the top Internet 10 investments raised over $80 million. Some pundits claim that investment will exceed $1 billion by end of 2012.

What caused this acceleration in investment in just two years, and what are the take-ways for your start-up community; to increase the # of start-ups in your country and entrepreneurs making the commitment to new projects, the amount and velocity of venture money invested with the ‘Scaling Up’ of entrepreneurship, risk-taking and innovation for more?

Growth in Russia

Certainly as the Russian economy rebounded from the lows of the global financial crisis, consumers and businesses were in the mood to spend. Russians increasing lived and breathed on-line with entrepreneurs serving up Internet models to capture their eyeballs and wallets.

Online video advertising in 2011 doubled to $37 million from $15 million, Russian contextual advertising jumped to $430 million in the first half of 2011, an increase of 60% from 2010, Russian Internet advertising clocked in at $1.4 billion, up 56% from 2010 with display (banner) advertising’s 2011 spend up 45% to $510 million from 2010.  GP Bullhound an investment bank based in the UK estimates that only 18% of the 53 million Russian internet users shop online, with online advertising consuming only 9% of Russian ad budgets.

All of this growth translated into increasing revenues for Internet and Web companies withForbes.ru listing the top 30 Russian Internet companies by their 2011 sales.

Such growth attracts investors as honey lures bees.  But it’s the nature of the deal flow that better explains the huge jumps in VC investment in less than two years and the wave of new entrepreneurs doing start-ups.

What Changed for Growth to Emerge

2010 was a ‘tipping point’ for the start-up of Russia through two liquidity events and underlying forces in the country. First was the acquisition of the Russian Groupon clone called Darberry by Groupon.

From their formation in February 2010 to its purchase by Groupon in August 2010, Darberry showed the investment path for entrepreneurs and investors in Russia, business models with a real shot at attracting capital.  While a handful of clones existed in Russia, Darberry’s sale was a major inflection point for more Russian entrepreneurship.

The second event was the minting of a few billionaires and dozens of new millionaires from the IPO of Mail.ru (valuation—$5.71 billion, November 2010).  After this new wealth splurged on cars, clothes, homes and travel, it financed new start-ups.

Since these liquidity events, dozens of new start-ups raised hundreds of millions of dollars in 2010, 2011 & 1Q2012 with capital invested by new Russian funds formed to finance mainly e-commerce, social and gaming startup clones with US and European venture capitalists co-investing since they had experience with these business models in the West.

Prior to 2008 the Russian tech scene had no role models, no ‘mojo’ and little connection to the world other than oil/gas.  It was widely known that Russia had deep human talent in mathematics and the physical sciences, yet few knew the route to exploit these assets for commercial ventures.  Some took the path of outsourcing (India model) or system integration to build enterprises like Luxoft, IBS and TerraLink to name three.  A few others walked a different road like Acronis and Parallels:  creation of gamechanging technology for global customers (Israeli model) with R&D conducted in Russia and headquarters located in the United States.

Neither of these endeavors generated the velocity of new start-ups being formed nor an explosion of venture capital investment.  Yet if these were not the paths forward for the creation of a start-up community, then what was—since there was no clarity to what business models would capture the wallets of Russian customers and the cash of Russian investors?

The Spark that Ignited the Start-up of Russia

Certainly the creation of several dozen angel investors with tech experience was an impetus to the start-up of Russia as the market lacked ‘smart’ money. But that money has to find a home, and that’s where clones showed the way forward.

Darberry demonstrated that cloning established Western Internet business models and localizing them for the domestic market captures growth. While profits eluded Darberry, it scaled quickly with revenues multiplying exponentially day-by-day.  This was the signal that Russian investors needed to open their pocketbooks and finance the start-up of Russia.

From Sept. 2010-2011, 20+ new start-ups and development stage companies raised over $400 million.  Most are clones and a small sample of these seed and early stage companies which raised capital is shown below.

New capital continues to flow into clones.  KupiVIP (clone of USA shopping club Gilt Groupe, itself a clone of French deep discounter Vente-Privée) grew from launch (October 2008) to $200+ million revenue by 2011 with $65 million of new capital raised in 1Q 2012.  In May 2012, Avito.ru, the Russian clone of Craigslist raised a whopping $75 million.

Ok, so, uhm—what’s so revolutionary about entrepreneurs cloning the ideas of others and investors financing the start-up of clones?

For Next Time—Part II:  The Cultures of Risk

To answer this question I’ll examine how the cultures of risk—developed vs. developing countries—impact the DNA of investors and their willingness to finance seed and early stage tech business models, with some investors ‘buying’ opportunity while others ‘buy’ risk.  A preview of the subjects in Part II:

1.)   The Cultural Divide:  What Investors ‘Buy’
2.)   What Investors Fear
3.)   The Culture of Venture Capital:  Friend or Foe?

Comments, opinions and questions are welcome here or send directly to me atTom@IVIpe.com.

Be well and be lucky.

Tom Nastas a 25 year VC veteran in US, int’l and emerging markets wrote a series for Startup Rev on the ‘spark’ which sparked the startup of Russia and how the development of start-up communities in emerging markets are shaped much more by the cultures of risk vs. what we investors and entrepreneurs face in the USA.  An interesting read, below are the individual posts and content for each one.

Bart Lorang – the CEO of Full Contact – just put up a review of Startup Communities titled Want to build a startup ecosystem? There’s a book for that. I love love love working with Bart and Full Contact. And it’s just awesome what Bart is doing for both the Boulder startup community and the Denver startup community. Dude – you are a total star – and the gang you are building is awesome.

David Cohen, the CEO of TechStars, spent the day in San Diego on Thursday and Friday. He wrote a great summary of a talk he gave – that sounds like it was more of a discussion than a talk – titled San Diego and Entrepreneurial Communities. If you care about this stuff, wander over and take a look at the seven things he said to the dinner group to spur the discussion.