San Diego Entrepreneurial Ecosysem Sparks Debate

Published in UT San Diego, April 22, 2013

Rule No. 180

Sometimes you need to go into your closet and throw out the clothes you don’t wear or that don’t fit.

Be careful what you wish for. You may get it.

The recent visit to San Diego by entrepreneur and investor Brad Feld has ignited a vigorous debate in the innovation community about incubators, accelerators, money, angels, venture, leadership and the current entrepreneur organizations that serve the ecosystem, and all of these sacred cows are being looked at in a new light.

Feld, the author of “Startup Communities: Building an Entrepreneurial Ecosystem in Your City,” lives in Boulder, Colo., where he cofounded the Foundry Group, an early-stage venture fund, and TechStars, a 90-day accelerator program that currently operates in 10 locations around the world. Participation in an accelerator is like going to entrepreneur boot camp (think Marines, not Boy Scouts).

You get a little bit of money, a place to work, active coaching, workshops and support services, and you work night and day to build your product in order to get additional funding and/or customers. And TechStars has rocked the entrepreneurial community.

In his book, Feld first discusses three well-known frameworks that explain why some places are hotbeds of entrepreneurship.

The first one focuses on the benefits of a concentration of startups. The second emphasizes horizontal networks, specifically a culture of openness and exchange, and the third explanation is the idea of the “creative class,” a concept made popular by Richard Florida, who says that these kind of individuals want to live in communities with culture and a tolerance for new ideas — and most importantly, with each other.

From his experience in helping to build the Boulder ecosystem, Feld adds four more components.

1. Entrepreneurs must lead the startup community.

2. The leaders must have a long-term commitment.

3. The startup community must be inclusive of anyone who wants to participate in it.

4. The startup community must have communal activities that engage the entire entrepreneurial stack.

In the same week, Brant Cooper, who runs the San Diego Tech Founders monthly meetup and curates the San Diego edition of the Startup Digest, posted a blog that criticized some of the region’s “legacy” organizations for not being relevant to entrepreneurs. He contended that they “compete for a limited supply of the sponsorship dollars that keep their doors open. The sponsors have become the customers, not the entrepreneurs.”

In addition, he said that while “the mentors are mostly well-intentioned, many are looking for C-level gigs, board seats and consulting work. Many have never worked at startups, let alone founded one.”

Cooper lit the bonfire, and serial entrepreneur Rick Valencia, now a Qualcomm executive, chimed in: “I’m uniquely qualified to comment on this article because I’ve personally experienced every side of the issues you raise. I’m an entrepreneur who built a company in San Diego and benefited from most of the organizations you disparaged. As a result of their support, I raised angel money in San Diego, venture capital in Silicon Valley and created hundreds of San Diego jobs. … Trashing good people and organizations doesn’t solve the problem. Tell us what you’re going to do to be part of a real, meaningful and lasting solution. If you have a good plan, you’ll likely be shocked by how many of the people you just trashed, (who have nothing to sell and no agenda other than to help local entrepreneurs) will step up to support you.”

Another comment came from Gabriela Dow, vice president of strategic initiatives for Startup Circle. She said San Diego has often looked to Silicon Valley as a model and for all the answers — which she contends is a mistake. In a positive move, she said that the region is now more focused on “defining and promoting what is unique and competitive.”

Startup Circle has been instrumental in bringing Silicon Valley accelerator Plug and Play to San Diego. Finalists will present to a panel of judges in early May, and the winners will participate in a five-month program split between Silicon Valley and San Diego.

Every business and organization must continually reinvent itself in order to stay relevant and insure continued success. We welcome and encourage this dialogue because it can only result in making San Diego’s entrepreneurial community stronger.

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