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Feb 19 2019 by

How We Accidently Create Negative Community Outcomes

The worst thing is we frequently don’t realize the negative impact we created.

Startup communities are made up of many different actors with many different personality styles (kinda like a family).  And like families many of those connective tissues are dysfunctional. There is no judgement here, it is simply our personalities exercising their right to shine.

What are some of the more common community personalities or  archetypes?

  • Community Cheerleader – always happy and thing are up and to the right
  • Community Curmudgeon – we are doomed
  • Community Gadfly – shows up at every event; involved in every new activity
  • Community “Expert” – they know everything, just ask them
  • Community Frump – somewhere between the cheerleader and the curmudgeon
  • Community Connoisseur – has good knowledge and pontificates about that knowledge
  • and too many others to mention.

Full disclosure – I am a community cheerleader and one of those glass half full guys.  It is my personality and general state of mind.

What is a community cheerleader and what role do they play in the community?

Let me share my definition of a community cheerleader through my own experiences:

  • I hold weekly open office hours with founders
  • I blog and share my thoughts weekly
  • I network like crazy and always spend part of each day connecting people
  • I am a storyteller and many stories are others (did you know that . . . did you hear about . . .  )
  • I talk about our community with energy and passion with anybody who wil listen
  • I guest speak at local colleges, universities, high schools, key events (or anywhere they will have me)
  • I tour interested leaders motivated to find out how we do things here (Raleigh/Durham NC)
  • I smile a lot
  • I share my energy with others

The archetype that I don’t understand is the Community Curmudgeon.  Without them knowing it, they accidently poison the community well. This has a direct negative impact on the direction of the community. You see, we influence our friends’ friends without us even knowing it.

Combine the community curmudgeon with a passionate group of first-time entrepreneurs and we have a recipe for disaster.  First time entrepreneurs are the lifeblood of a growing community. By definition, they are susceptible to the influence of others as they fill their brain with best practices. Fill that brain with negative thoughts – “we have no good investors”, “our mentors are stupid”, “this is no place to grow your company” – and don’t be surprised with negative outcomes.

What would you do?  I would move somewhere else where the attitudes were less toxic.  Big negative outcome for the community.

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Nov 6 2018 by

New Evidence on Fostering Productive Startup Communities

Last week, Endeavor Insight (the research arm of Endeavor Global) teamed up with the Bill & Melinda Gates Foundation to publish a new report on fostering productive startup communities. The report was authored by Rhett Morris and Lili Török of Endeavor, and I think it is one of the best pieces of empirical work I’ve ever seen on startup communities.

Why such a strong endorsement? Because it helps fill a pretty big information gap for two of the most important principles for building startup communities—networks over hierarchies and entrepreneurs as leaders. At present, the evidence-base is thin, due to the fact that there are no shortcuts to doing this type of work well (building network maps with vital information about the nodes and relationships among them)—it requires painstaking, on-the-ground data collection, which is expensive to do and requires a lot of time (it took Endeavor 18 months to complete the study). Thankfully, Endeavor has done the work in two cities so that we can all learn from it, and more importantly, use to help persuasively state the case for bottom-up community-building.

The research takes a case study approach, studying in extensive detail the startup community networks in Nairobi and Bangalore. To do this, the authors collected information on the individuals and organizations involved in the startup communities in each of these two cities, and mapped the relationships among them. The main result: Bangalore’s startup community is more productive (more high-growth firms and companies at scale) because the network is denser and because the biggest influencers are themselves entrepreneurs; the opposite is true in Nairobi.

***

The report begins by setting context on the importance of entrepreneurship, by demonstrating that a relatively small number of high-growth companies create most economic value in jobs. This is true in most countries and cities, and as we can see here from the report, is more the case in Bangalore versus Nairobi.

In other words, most businesses don’t produce much in the way of jobs or output, but a small number create a lot of those things, and they drive economic growth. Displayed differently, the report shows that Bangalore’s high-growth business sector is much more productive than is Nairobi’s.

In other words, Bangalore has been better at producing businesses that achieve very high rates of growth and reach a large scale.

That of course leads to the question of why in one city but not the other? There are a number of factors that could affect this, but central to this study—and two in which I mentioned before are often neglected due to measurement challenges—are networks (relationships) and leadership.

More specifically, Nairobi not only lacks the network density of Bangalore, but it critically lacks the right type of influencers. As the network graphs below make clear, the most influential people in the Bangalore startup community are successful entrepreneurs—those that have guided companies to scale—and non-entrepreneurs are not very influential. In Nairobi, the opposite is true.

Pretty impressive right? I encourage you all to read the report itself—it’s not too long and it’s written very well (succinct yet weighty). The report summarizes the following five findings, followed by a graph explaining the differences between on bottom-up, network-based approaches to startup community building (recommended) versus top-down ones (not recommended).

Finally, the report concludes with some recommendations, which I’ll spell out here.

  1. Avoid the myths of quantity (ie, quality over quantity any day—something I call the More of Everything Problem)
  2. Follow local founders who have reached scale
  3. Listen to leaders of the fastest-growing firms to identify the most critical constraints in the local entrepreneurship community
  4. Expand existing mechanisms that leaders of companies at scale use to influence upcoming founders
  5. Invite leaders of companies at scale to positions of influence at existing support organizations

Couldn’t agree with that more. Well done, Rhett, Lili, and your team.

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