Creating opportunity
The 1 Thing that Determines Your City’s Entrepreneurial Success
Michael Hendrix | June 29, 2015

This post originally appeared on the U.S. Chamber of Commerce Foundation’s Blog.

TAKEAWAYS

Look to the “tribal leaders” in your city to know if you have a robust startup economy. Who are your leaders?

As we toured cities for Innovation That Matters, 1776’s study of civic entrepreneurship, we found that the answer to this question told us a lot about a city’s future entrepreneurial success.

Every city is a network of people living in community, and within that mishmash of connections are nodes where those links cluster together. These are a city’s leaders, the central players in an ecosystem’s drama. They break into three central groups when it comes to civic and social innovation—like legs of a stool:

                   Startup Networks

All three types of leaders—citizens, entrepreneurs, and civic providers—aim to better their provision of services in order to improve the well-being of those in their community. Citizens want low-cost, high-quality services; entrepreneurs work to grow their businesses; civic institutions look to strengthen their organizations.

Most cities just have two of the legs connected; rarely do they have all three legs of the stool working. Of the three, entrepreneurs are generally the facilitator within a startup ecosystem. In any given city, they are connected to one of the other groups of leaders. And in particular with civic institutions, they increasingly must choose between partnering with government (call it the Opower model) or circumventing it (the Uber model).

Every startup can look to leaders right in their own backyard. Gallup’s Jim Clifton estimates there are 10,000 good “shadow leaders” in every American city.

“All prosperous cities have a self-organized, unelected group of talented people influencing them and guiding them—call them tribal leaders. These are people who care very much about the success of their city: philanthropists, city fathers and mothers, business leaders, and other deeply invested citizens who get things done for the good of their city. … Talented and effective local tribal leaders are essential to cities.”

These leaders mentor and connect; they facilitate the exchange of information, act as cheerleaders, and generally make startup networks denser and thicker. They are critical elements of the sort of hyperlocal community on which startups thrive.

Every city can do better in this regard, but it’s helpful to think first of cities looking to build this sort of leadership from scratch. To do so, they should look for small startup clusters or universities nearby and try establishing concentric circles of relationships out from those nodes. Begin to identify who the town fathers and mothers are and get them thinking about they can invest their time and resources into startups. Get everyone in the room together, and think of local chambers, corporations, educational institutions, economic development groups, and government entities as platforms to build on.

This is just the start, but it’s a great start for startup communities looking to grow.