Dan Taylor at the GPAEDC recently challenged me (in a friendly way, of course) to qualify a statement I made via my Twitter account:
All of this just wouldn’t fit in 140 characters, so we now have a blog post. Here goes:
Personally, I believe that great startups spring from great relationships. Sure- the 5Ps of marketing are essential (product, place, price, promotion, people)… but without the great relationships which forge great founder teams, those never get off the drawing board. In tech (especially internet and mobile technologies), the barriers to entry for entrepreneurship are much lower than say, mining or manufacturing. Low overheads and low capital requirements to create tech products are among the reasons why so many young entrepreneurs are focused in this area (not to mention a natural affinity for the space). In mining and manufacturing, you need several million dollars and VC backing to get into the game; whereas in tech you need a PC, internet access, a smartphone, and someone who knows how to write code. A natural attraction to coffee shops with free WiFi and a burning love of all-nighters doesn’t hurt either.
Back to why startups tend to form around post-secondary communities. Relationships. If we think about the socio-demographics of ‘life stages’ and how people tend to progress through life in western societies, this becomes clearer. Typical life stages, of course, are:
birth | youth/physical growth | education | workforce entrance | marriage and/or creation of a family unit | child-rearing | retirement | departure
The stages are far more nuanced than this and their progression is unique to each individual… some people may skip a stage or experience them in a different order… but ceteris paribus, this is how the general progression goes. By the very nature of these stages, we can eliminate some of them as ideal entry points for entrepreneurs (yet, there are always exceptions that prove the rule- I’m sure most of us can even name a few). The first two stages; birth and physical growth, can be eliminated simply because people have neither the intellectual or legal capacity to create a business organization (for sake of argument, let’s define youth/physical growth as spanning ages >0 to 18). Stages five through eight, we can also eliminate as ideal: when starting a family, that tends to be your focus. And love it or loathe it, bootstrapping a startup eats into your time like nothing else (more than once, I’ve often looked up from the workstation in my kitchen and realized that the wee hours of the morning snuck up on me). Child-rearing creates similar constraints- raising children takes an enormous amount of energy and dedication, as any parent will attest to. As a parent, would you rather be with your family during off-time, or embarking on a hare-brained journey to start a business (let’s face it, starting a business requires just enough insanity to be able to push past the self-doubts and heightened risk of personal financial calamity that are inherent to the process). By retirement, the focus tends to shift to enjoyment of the good life in reward of all your many years of sacrifice and hard work (as it should). There’s also the ’empty nest’ stage between child-rearing and retirement, and many entrepreneurs take the plunge here, if they didn’t do so earlier in life… but entrepreneurs who take root in stages three and four far outnumber the empty-nesters (in tech, anyway).
So, stages three and four… education and workforce entrance. In many cases, entrepreneurs will build the necessary skills and relationships in the first of these stages, and then implement them in the second. The average student and recent graduate is in their early to mid-20s, and people of that age tend to form most of their personal relationships through classes and the social networks created and maintained by post-secondary institutions and its culture. By ‘social network’, I refer to that of the physical world… the term was around long before Facebook sprung into existence, and in fact, Facebook is modelled after this university culture of relative interpersonal social networks.
The highly intelligent, ambitious, game-changing minds come together with others of similar and complementary characteristics at college and university. Natural attraction brings these people together inside of their own (and relative) social networks. The truly entrepreneurial ones recognize strengths and weaknesses in others which are complementary to their own, and a high-value entrepreneurial relationship is born. The formation of these ideal relationships isn’t a common occurrence, of course- probability is stacked against it. Ergo, this is purely a numbers game. If you throw enough spaghetti against the wall, something will stick. Where else will someone in their early to mid-20s be exposed and immersed in a homogeneous (on the macro level) culture with thousands of people who share socio-demographic characteristics with them? There are, of course, numerous cultural pools within this environment that run along the lines of religion, preference, and a variety of other factors. The critical constant here is that cross-interaction between these pools is forced by the physical proximity on campus and the dynamics of the learning environment within each classroom.
All of these factors make university and college campuses a highly-effective breeding ground for entrepreneurship. I believe that universities and colleges within Ontario would do well to recognize and foster entrepreneurship on campus (many are; but as a whole, the post-secondary education system could be doing so much more to integrate it into the administrative culture and consider it directly in planning initiatives).
For those of you who have the entrepreneurial bug, but are no longer a student- you can still form those relationships. Here’s how:
Go looking for them.
You have one advantage that many third year business students don’t. You know what you want, and what you need. Many young entrepreneurs stumble into complementary relationships and THEN decide to pursue entrepreneurship (that’s how it happened for me). Think long and hard about who you need to balance your traits in order to improve the whole unit. Then, go do some networking. Wade through LinkedIn, Twitter, and any other social network aggregation platforms that you happen to be using. Also make sure to do it the old-fashioned way: attend networking events through your local Chamber of Commerce, or other business-friendly organizations. Meet and talk to people. Ask every single person you interact with if they’re interested in entrepreneurship. Many won’t be, but odds are that they can point you in the direction of someone who is… and perhaps even introduce you. As elitist at it sounds, sometimes it really is all about who you know.
Hit the lecture circuit.
Call, email, or write every organization you can think of which sponsors events and offer (perhaps even for free) to give a talk on what you know and what you do best. Not only will you build your own personal brand and reputation as an authority, but you’ll inevitably meet movers and shakers (complacent people don’t attend lectures), as well as decision-makers and their gatekeepers. People will engage you, ask questions, and take your business card.
Go back to school.
Not for another four year degree or diploma, who has the time for that? Unless you’d planned on doing an MBA or other graduate-level degree anyway… in which case, no time like the present (I would argue that the probability of meeting other entrepreneurial-minded people is even higher in graduate programs than in baccalaureate ones). But if that’s not in the cards for your immediate future, then audit a class. Preferably in something related to what you do or want to do, but in which you’re not an expert- you’ll meet people who are experts, or are well on their way to becoming so. Worried about being turned down? Don’t be. Since your tax dollars partly fund these institutions, you’re entitled to audit a class whenever you like- provided that there’s space for you, and that you receive permission from the course instructor and/or admissions department (few will turn you down if you demonstrate a genuine interest in the subject matter, and promise to be respectful and participative- sometimes there’s also a nominal fee involved). Keep in mind that you often won’t be permitted to turn in coursework for evaluation, and that you won’t receive credit (if you want these things, inquire about formally enrolling).
The dirty little secret of volunteering is that it’s often used as a great way to network with like-minded individuals and go-getters. I’d love to be able to say that volunteerism is purely a selfless act, but the reality is quite different. Some companies place mandatory volunteering components into their employment contracts (as a part of a social responsibility plan) or encourage employees to volunteer with incentives. But, there are also business people who volunteer out of a genuine desire to give back to the community. If you’re involved in volunteerism long enough, you’ll be able to spot them in the crowd. These individuals often make great angel investors if you can demonstrate to them that their money will help generate jobs in the community, and even return a buck or two in the process. And trust me- if you want to make a serious go as an entrepreneur and create a great company, you’ll need an angel or two on your side (unless you hit the lottery jackpot, have a trust-fund, or a knack for robbing banks and not getting caught).
Want to talk about your experiences in entrepreneurship and what it’s like for you? Leave a comment. Or post to Twitter with the hashtag #startuplifestyle.
Disclaimer: don’t rob a bank. That’s just plain not cool.