Entrepreneurship Takes a Village

Entrepreneurship is not just about starting companies. It’s about giving individuals the means to take charge of their economic destinies.
The makers, doers and dreamers must be empowered to grow our economy sustainably and to improve the lives of millions of Americans. Communities must work together to eliminate barriers to entrepreneurship and instead, create and nurture entrepreneurial ecosystems.
Recent research demonstrates that the creation of more startups leads to higher productivity, wage growth and quality of life. New businesses not only support individual entrepreneurs, but lift surrounding communities, contributing to a new model of economic development that infuses more entrepreneurship into the economy.
For this to happen, ecosystem builders and community leaders should consider the following design principles when constructing entrepreneurial communities:

  1. Put entrepreneurs front and center: Innovators must be the most active participants.
  2. Foster conversations: Peer-to-peer interactions increase the vibrancy of an entrepreneurial ecosystem.
  3. Enlist collaborators: Inclusion is a core value of community.
  4. Live the values: The right behaviors shape the right ideals.
  5. Connect people bottom-up, top-down, outside-in: Overcoming parochial differences and collaborating across traditional hierarchies creates diverse networks of mutually advantageous relationships.
  6. Tell the community’s authentic story: Focus on its unique strengths instead of trying to be the next Silicon Valley.
  7. Start, then be patient: Ecosystem building is a long process and real change occurs well before statistics ever show it.

Visit the Kauffman Foundation Entrepreneurial Ecosystem Building Playbook to learn more about these principles, and leave your stories and feedback in the comments.
Your thoughts will help shape future iterations of the playbook — and help grow a more inclusive economy.
This content was produced in partnership with the Ewing Marion Kauffman Foundation, which works in entrepreneurship and education to create opportunities and connect people to the tools they need to achieve success, change their futures and give back to their communities. In 2017, the foundation hosted its inaugural ESHIP Summit, convening 435 leaders fighting to help break down barriers for entrepreneurs across the country.

Supporting Startups in Montana’s Wide-Open Spaces

When your husband works for the U.S. Forest Service, you’ll find yourself frequently moving to places “where there are a lot of trees and not a lot of people,” says Christina Henderson, a marketing executive who knows firsthand. She and her family would often land in rural communities where the local economy had been based on natural resource extraction and was now declining — communities like Missoula, Mont., where she moved in 2011.
But instead of giving up on these hard-hit areas, Henderson was more motivated than ever to help them, primarily by embracing anyone with an enterprising spirit. “I love the promise of entrepreneurship, what it can create, and what it can mean for a rural community,” Henderson says.
It wasn’t long before Henderson got onboard with a new initiative called the Montana High Tech Business Alliance. The organization’s main goal? To support local tech entrepreneurs — and tell the story of their unlikely success in an unlikely place far from the bubble of Silicon Valley. In June, Henderson, who says she wants to show people that the Montana startup scene isn’t “all taxidermy and saddle shops,” attended the Kauffman Foundation’s inaugural ESHIP Summit for ideas on further developing her community’s entrepreneurial ecosystem.

High Tech In The Rural West

The idea of a thriving startup scene out in Big Sky Country may come as a surprise to outsiders, but Henderson believes the state is benefiting from three broad trends. The first is the way that technology has eliminated geographical barriers. “It’s been a real equalizer for rural communities,” she notes.
The second trend boosting Montana’s local ecosystem is the creative class’s increasing focus on quality of life. “The kinds of people who come to Montana value other things besides climbing [the corporate] ladder,” Henderson says. “They’re still hardworking and ambitious, but we also value things like work-life balance.”
Henderson credits the $1.8 billion sale of RightNow Technologies to software giant Oracle in 2012 as the third prong sparking Montana’s startup ecosystem. “It’s essentially a unicorn in the middle of Bozeman,” Henderson says. “It changed the minds of Montana entrepreneurs in terms of how big you can scale a company in Montana.” RightNow helped create a pool of high-quality talent in the state — people who had experience growing a startup to scale. More than a dozen former RightNow employees have spun off or created new companies, and the headline-grabbing sale also helped draw the interest of venture capitalists. “It’s hard to underestimate the impact of that one success story,” she says.

Overcoming Barriers

Of course, the state still has plenty of challenges, namely access to talent and capital, Henderson says. “For decades, the story you get told when you graduate from college in Montana is that you have to leave the state to get a job.” And changing that notion will take time. While investors’ perceptions of the state are also changing, that shift is fairly recent.
Political divides — and a heightened partisan climate nationally — can also be a difficult bridge to cross in this purple state. “We have people on all sides of the political spectrum,” Henderson says. “One of my challenges is to maintain a nonpartisan association that brings people together around this common goal.” It’s crucial that political differences don’t ever block an entrepreneur from making an important connection or accessing the resources they need.
In a state that’s almost 90 percent white, building a diverse entrepreneurial ecosystem that’s welcoming to all is also a barrier. “We have candidates come to Montana who are of color, and they get off the plane and look around and go, ‘I don’t know if I can do this,’” says Henderson, adding that the ESHIP Summit helped her connect with other people around the country facing the same issue. “I really value underrepresented groups being included in entrepreneurship,” Henderson says. “I deeply care about that, and it’s not easy, and the people who have been trying to do it are really frustrated.”

That Small-Town Feel

As the executive director of the High Tech Business Alliance, Henderson’s main job is to support networking among entrepreneurs and would-be entrepreneurs. “Folks who are launching a company need access to mentors, legal and financial help, and information about exporting,” she says. Companies with fewer than five employees can join the organization for free, attend events, and meet established entrepreneurs who can offer advice and practical help.
Montana’s small-town atmosphere makes this networking easier. It’s the fourth-largest state geographically, but with roughly the same population as Delaware. Entrepreneurs and investors are increasingly willing to travel relatively long distances to help each other, and elected officials are personally cultivating relationships with local entrepreneurs.
The rugged wilderness of Montana attracts people seeking adventure and risk rather than a comfortable existence. One local entrepreneur put it this way, Henderson says: “‘I’ll go backcountry camping for weeks at a time — I’m already willing to endure hard things to do what I love.’” That spirit of adventure matches up well with entrepreneurship, Henderson says. “It’s a bit of a harder life. There are bears in the wilderness. It attracts a heartier person, and I think that lends itself to entrepreneurship.
“You have to be a little entrepreneurial if you’re willing to live in Montana,” she adds.

_______

This content was produced in partnership with the Ewing Marion Kauffman Foundation, which works in entrepreneurship and education to create opportunities and connect people to the tools they need to achieve success, change their futures and give back to their communities. In June 2017, the foundation hosted its inaugural ESHIP Summit, convening 435 leaders fighting to help break down barriers for entrepreneurs across the country.
Correction: A previous version of this article stated that companies with fewer than 500 employees could join High Tech Business Alliance for free. NationSwell apologizes for this error.

When Entrepreneurship Is the Only Option

It was a childhood lie that sparked the entrepreneurial fire in Geraud Staton and set him on a path that would eventually transform his community.
When he was 14, Staton’s older cousin bragged about how he’d been creating comic books and selling them at school for a dollar. “I thought, ‘He’s making money. I can do the same,’” recalls Staton, who now mentors other aspiring entrepreneurs in Durham, N.C. There was just one problem, though. “He told me later that he was absolutely lying — he was just trying to impress his little cousin,” Staton says. But the idea had been planted in Staton’s mind, and by the time he finished freshman year he had his first taste of entrepreneurial success: buying candy in bulk and reselling it to his classmates for a profit.
People who succeed in launching businesses typically have unfettered access to advice and support from a parent, a grandparent or an uncle who was an entrepreneur themselves, he says. “But there are people in communities, including mine, who did not have that. I wanted to be that uncle,” says Staton, whose mission to help what he calls “entrepreneurs of necessity” led him to found the Helius Foundation, a nonprofit that provides free coaching and mentoring to under-resourced small business owners in Durham who have struggled to find living-wage jobs.
“It’s incredibly hard to be an entrepreneur,” says Staton, who attended the Kauffman Foundation’s inaugural ESHIP Summit in June, where NationSwell caught up with him. “But it’s even harder for this particular group of people to find dignified jobs.”

Paying It Forward

Staton credits the early support he got from adults like his teachers and principal with having an outsize impact on his future. “I assumed at the time that everyone had the same encouragement and opportunity,” Staton says of his younger self. As he matured, however, he realized that for many of his peers — Staton grew up in a predominantly lower-middle-class African-American neighborhood in Durham — that simply wasn’t true.
Many of the minorities and women Staton works with have marketable skills but lack business sense. “These are people who can’t afford to fail, starting businesses that are often the first to fail,” he says. To remedy that, the Helius Foundation provides them with free coaching and mentoring services, helps them develop a strategic plan, and teaches them marketing basics.
Though Helius has a short history, having launched in 2015, it’s already given several program participants a much-needed leg up. One mentee, Connell Green, had worked in restaurants until an I-beam fell on him, temporarily paralyzing him. After the accident, he lost his family and his home. “He used baking as a way to heal and focus his attention, and help get some of his mobility back,” Staton says. Now he’s the owner of a successful bakery.
Another mentee is Ayubi Easente, who at just 14 years old is running a thriving business refurbishing high-end sneakers. “He doesn’t know if this is what he wants to do for a living,” Staton says, but Easente is gaining skills that will serve him throughout his life no matter what he eventually pursues.

From Obstacles to Opportunity

The Helius Foundation is based in Durham’s Hayti district, an area that used to be home to a flourishing African-American community with many black-owned businesses; it was once known as the “Black Wall Street.”
But thanks in part to the construction of an interstate that divided Hayti in the early 1960s, the community suffered a serious decline. Today, 46 percent of African-Americans live at or below the poverty line, Staton says, and fewer than 18 percent of local businesses are black-owned. “Those numbers are just horrifying,” he says, adding that changing them “would be huge for our city.”
But building a local ecosystem that supports entrepreneurship is a challenge. When you ask residents what the community needs, Staton says, “jobs” is always the answer. But he doesn’t believe that a large corporation relocating to the area is the best solution to the region’s challenges. “If we can get 1,000 people to start a small business and hire one or two people, we get the same number of jobs, but more sustainability,” he points out. “That money gets to stay inside our community.”
A large part of what Staton does is simply encourage people to try entrepreneurship. “I’ve got people who come in and still believe that they can’t make it,” he says. “I’m having to do a lot more psychology than I thought I would.” In a sense, he’s passing on the gift his cousin gave him: “Someone told me I could do it, and I went out and did it,” he says. “We have a lot of entrepreneurs who just don’t know they can do it, so my job is to show them they can.”

_____

This content was produced in partnership with the Ewing Marion Kauffman Foundation, which works in entrepreneurship and education to create opportunities and connect people to the tools they need to achieve success, change their futures and give back to their communities. In June 2017, the foundation hosted its inaugural ESHIP Summit, convening 435 leaders fighting to help break down barriers for entrepreneurs across the country.

10 Ways to Break Down Barriers for Entrepreneurs in Your Community

How do you build a thriving community of entrepreneurs? At a time when the doors of economic opportunity seem to be shutting out so many people, entrepreneurship is crucial to local neighborhoods. The Kauffman Foundation’s inaugural ESHIP Summit brought together more than 400 diverse entrepreneurial community leaders from all over the country to answer this question.
Below, these entrepreneurial ecosystem builders — people who build communities to support entrepreneurs — share their top tips for energizing entrepreneurship in their communities, no matter where in the world that is.

1. Find Common Ground . . .

Participants came to the ESHIP Summit from 48 states, the District of Columbia, Puerto Rico and 10 countries, each facing their own challenges. But as attendee Alistair Brett of Rainforest Strategies in Washington, D.C., says, “What works in one place may not work in another, but the core of this kind of work is the same for everyone.”

2. . . . But Don’t Copy Silicon Valley 

Despite its huge concentration of high-tech startups and venture capitalists,the Silicon Valley model has its weaknesses, particularly when it comes to diversity and inclusion, says Kate Stewart, the executive director of JAXCoE, a network of entrepreneurs and supporters in Jacksonville, Fla. “The more inclusive a company or an ecosystem is, the more robust it is,” she adds. Philip Gaskin, the director of entrepreneurial communities for the Kauffman Foundation in Kansas City, Mo., agrees: “As the demographics in the nation are changing, you need equal representation in your businesses, in your leadership and on your boards to reach your customers and understand their needs.”

3. Unearth Potential 

“The capital of economic development is no longer businesses moving from place to place; it’s talent moving from place to place,” Sly James, the mayor of Kansas City, Mo., told the Summit. Many communities also have massive untapped potential in populations that haven’t previously had access to the resources needed to start new businesses. “Women in our state are just now beginning to find their footing” and connect to the support they need, as are minority entrepreneurs, says Shannon Roberts, program manager at the Arkansas Small Business and Technology Development Center.

4. Get Ideas Out of the Lab

Professors and students are conducting cutting-edge research and generating innovative ideas. But the town-gown gap can be hard to bridge. The key is understanding how the motivations of academics differ from those of traditional entrepreneurs, says Lydia McClure, vice president of scientific partnerships at the Translational Research Institute in D.C. Researchers tend to be driven by the impact they can have and aren’t necessarily as interested in creating the next big startup. Everyone involved should be asking themselves, “What do I have to offer?” McClure says.

5. Challenge Stereotypes 

What does the typical entrepreneur look like? Accion, an organization that provides microloans to small business owners, often works with low-income minorities who are opening businesses to provide for their families. But no matter the scale of a business, “entrepreneurship is a source of income, job creation, asset generation, and products and services that create value for the community,” says Anne Haines Yatskowitz, Accion New Mexico’s CEO. And with their tenacity, resourcefulness and perseverance, she says, “entrepreneurs can be incredible role models.”
[ph]

6. Reach More People 

Preston James, the CEO of DivInc, a startup pre-accelerator that supports entrepreneurship among people of color and women, is trying to solve a problem he sees in the otherwise thriving startup ecosystem in Austin, Texas. “What we’re doing in Austin is expanding the ecosystem by being more inclusive of a broader audience,” James says. DivInc connects underrepresented entrepreneurs with mentors, educational opportunities, domain experts and other resources that help lay the foundation for successful new companies. “Some of the other hubs that are up and coming, the sooner they can do that, the more successful they will be — faster.”

7. Consider Your Impact 

“I have a fundamental belief that business’s role on the planet is to make life better for people,’’ says Kim Coupounas, the director of B Lab, an organization with offices around the country that supports businesses aiming to be a force for good. Coupounas believes companies should think about their social impact from the beginning. “A huge source of innovation is when companies really consider how they impact their stakeholders,” she says. Ecosystem builders should be thinking about how they’re affecting the world around them too, she says. “It’s not just about creating jobs; it’s about creating good jobs.”

8. Keep It Simple

One successful company can jump-start an entire entrepreneurial ecosystem, and just one connection can help information flow more freely through it. “If one tiny connection fails in your computer, it won’t work,” says Alistair Brett. “But if you make that one tiny connection, it’s back to working.” Adds Wayne Sutton, cofounder of Change Catalyst in the Bay Area, “It’s not rocket science. We’re not talking about going to Mars; we’re basically talking about working with people. You just have to put in the work.

9. Forge Connections — and Friendships

“Entrepreneurship is a lonely experience without community,” says Scott Phillips of Civic Ninjas in Tulsa, Okla., a nonprofit whose network of coders strives to solve societal ills through technology. So is trying to support entrepreneurs, particularly underrepresented ones who are up against real economic, political and cultural barriers in their attempts to access to opportunities. “It’s very isolating sometimes to fight something that seems as big as this is,” adds Geraud Staton, founder of the Helius Foundation, which mentors and coaches entrepreneurs in Durham, N.C. The power of connecting with other people doing similar work can’t be underestimated.

10. Focus on the Future 

“Entrepreneurship, to me, signals taking responsibility for how the future develops,” says David Witzel of RASA, an organization in Oakland, Calif., devoted to regenerative agriculture. Keeping an eye on the future makes this work meaningful. “I have two young grandchildren,” says John Bost, the president of the Clemmons Community Foundation in Clemmons, N.C. “They need a future they can grow into, and it won’t be the past I’ve lived out of.”

_______

This content was produced in partnership with the Ewing Marion Kauffman Foundation, which works in entrepreneurship and education to create opportunities and connect people to the tools they need to achieve success, change their futures and give back to their communities. In June 2017, the foundation hosted its inaugural ESHIP Summit, convening 435 leaders fighting to break down barriers for entrepreneurs across the country.