You can’t help being overwhelmed by the natural beauty and Swiss-village-like charm of Boulder, Colorado. With a population of just under 99,000, you wouldn’t expect it to be the home of a Silicon Valley-style tech center complete with hundreds of Internet and software startups. I was certainly impressed with the vibrancy of its tech community when I visited Boulder in March 2010. The local cafés were as much a beehive of entrepreneurial activity as those San Francisco or Palo Alto, and the culture of risk-taking and information-sharing was very similar. In April of that year, I wrote a feature story for BusinessWeek in which I outlined why Boulder is “America’s best town for startups.”
This is the type of tech center that government officials dream about building. They often invest hundreds of millions of dollars in creating top-down clusters. Rarely do these efforts show any results. Boulder wasn’t the result of a government effort. Rather, it grew organically and resulted from the efforts of a handful of entrepreneurs who got together and decided to foster entrepreneurship in the region. It already had a nascent software industry in 1995 when entrepreneur Brad Feld moved to the area after reaping a fortune through the acquisition of his software startup, Feld Technologies, in Boston.
Vivek Wadhwa is Vice President of Innovation and Research at Singularity University and Arthur & Toni Rembe Rock Center for Corporate Governance at Stanford University. His other academic appointments include Harvard, Duke and Emory Universities as well as the University of California Berkeley.
Brad Feld, managing director of the Foundry Group LLC, talks about his investment strategy. He speaks with Emily Chang on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)
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Feld eventually teamed up with local entrepreneurs, including David Cohen, Rep. Jared Polis (D-Colo.) and David Brown, to launch TechStars, a business boot camp for startups. TechStars became the nucleus of Boulder’s startup community. Feld has documented his journey and the lessons learned in a new book titled “Startup Communities: Building an Entrepreneurial Ecosystem in Your City.”
He starts by discussing a common problem in tech communities: the chasm between investors and entrepreneurs. Investors are highly selective about whom they work with. They usually settle on a small group of people, many of whom they have worked with in the past and trust. This means it is nearly impossible for new entrepreneurs to get funding. And entrepreneurs don’t respect investors, leading them to bootstrap and try to do everything on their own.
Feld lists four things that are critical to the creation of a long-term, vibrant entrepreneurial ecosystem. He calls this the Boulder Thesis.
1. Entrepreneurs must lead the startup community. They are the leaders and everyone else—government, universities, angels, VCs, lawyers, accountants, and big companies—are feeders. Both roles are important, but they are different.
2. The leaders must have a long-term commitment. It takes a long time to create a startup community that sustains itself—at least 20 years. If you don’t have a long-term commitment, you will find yourself subject to macro-economic cycles, rhythms of the feeders such as the 2-to-4 year cycle of government, and a lack of sustainable momentum that comes from short-term activity.
3. The startup community must be inclusive of anyone who wants to participate in it. It must have a “give before you get” philosophy that is core to being an effective mentor. You have to give, without any expectation of what you are going to get back. You have to be inclusive of anyone who wants to get involved at any level. You have to view the creation and development of the startup community as a non-zero sum game — where everyone can win through collaboration.