Startup Communities: Building an Entrepreneurial Ecosystem in Your City

BEING TOO RELIANT ON GOVERNMENT

Although government can play a constructive role in startup communities, a reliance on government to either lead or provide key resources for the effort of building a startup community over a long period of time is a misguided view.

Earlier, I talked about government’s role as a feeder. When a startup community starts relying on government to be a leader, bad things happen. First, government often has less money to apply to things than people think it does. As a result, there’s often a big mismatch between expectation and reality when it comes time to actually fund something. Next, very few people in government have a background as entrepreneurs, and, as a result, they don’t really understand startups in any depth. Consequently the language, the activities, and the interactions are awkward and often ineffective. Government also moves at a much slower pace than entrepreneurs and, when it’s in a leadership role, it stifles the individual leadership that emerges. Finally, government runs on a very different time cycle—typically two to four years—than entrepreneurs do.

Think back to the difference between a hierarchy and a network. Government operates as a hierarchy: There are clear roles, chain of command, approval and resource allocation processes, and bureaucracy. In contrast, the best startup communities operate as networks: a broad, loosely affiliated set of leaders and organizations that are working in parallel on a variety of different initiatives. ...