Cultivating an Entrepreneurial Ecosystem

seedlingI can’t tell you how many meetings I’ve attended recently where I was involved in explaining the importance of having an entrepreneurial ecosystem within which to grow high value technology ventures. Unfortunately it can be hard work explaining why social capital is important when people are focused solely on linear metrics.

Recently I was inspired by a great success story that powerfully underlined my long held belief that building healthy communities and networks is an essential aspect of cultivating an entrepreneurial ecosystem. This is especially so in New Zealand where we are disadvantaged by our distance from the major consumer and capital markets of the world. But that disadvantage can be overcome by leveraging the creative boundaries where local networks overlap with those offshore.

Networks have  multiplier effects, as witnessed by the density of economic activity found in Silicon Valley. By building and maintaining social capital in our local technology sector we are establishing the pre-conditions for new economic life and the basis for small seedlings to grow into very large Kauri trees. But it takes time, 5 to 7 years for a good idea to develop into a viable business and then emerge as a high growth venture. Unfortunately this timeframe can be a problem for sponsoring organisations which rely on political support for their existence.

Investors in technology start-ups typically take a 5 to 10 year view of how much time will be required to launch, grow and then exit a high value business. But securing investment in the entrepreneurial ecosystem that underpins such ventures can be highly problematic because social capital is intangible and cannot be transacted. However, building the ecosystem is about making the pie bigger for everyone. Please consider supporting initiatives such as Unlimited Potential and Global Entrepreneurship Week if we come knocking at your door.

2 thoughts on “Cultivating an Entrepreneurial Ecosystem

  1. This is a great article and very timely for me as we are in the process of trying to build a supportive, collaborative game development community within New Zealand for the same reasons you mention above ( It’s great to hear that others see the importance of building healthy communities and networks in our current environment.

    In these times, the scarcity mentality is a dinosaur – an ugly anachronism that denies the greater possibilities available for us if we collaborate and combine our efforts in overlapping areas.

  2. It’s actually really interesting that most promising looking emerging tech businesses around at present are those that are deeply involved in some aspect of community building or engagement.

    Dan Milward, whose story I linked to, is a case in point. He is currently rallying the WordPress user community to an event this weekend and has even managed to get WordPress founder Matt Mullenweg to front up to give a keynote:

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