In late March, I had the unique opportunity to get involved in a special project aimed at helping small businesses across Colorado navigate through the economic crisis caused by COVID-19. Little did I know that this opportunity for public service would capture my head, heart, and imagination in such a way that I would ultimately launch and lead Energize Colorado.
I had just landed in Denver from New York City when I got the call from Brad Feld, Managing Director of Foundry Group, co-founder of Techstars, and long-time Colorado ecosystem leader. Because of his reputation as an investor and innovative community leader, Brad had been appointed by Governor Polis to the Colorado Governor’s Emergency Council for Economic Stabilization and Growth (GECESG). The Council’s charter was to develop a set of short-, medium-, and long-term recommendations to help Colorado’s small business sector manage the uncertain economic climate triggered by the pandemic. Would I consider serving on the Small Business team? The answer was an enthusiastic yes.
Prior to Brad’s outreach, public service was top of mind as a potential new professional chapter. After a Midwest tour of duty leading a public-private partnership where I helped catalyze the greater Cincinnati region’s innovation economy, I was eager to roll up my sleeves again and apply my learnings from that experience to a broader state-wide role. Who knew that the opportunity to realize my professional aspirations would manifest during a complex set of crises and economic uncertainties, all defined by a global pandemic?
From the GECESG to the Birth of Energize Colorado
On a Sunday afternoon, with Brad leading the discussion, my new colleagues and I gathered for the first time (on Zoom of course) to dig into the current situation. This newly assembled team—Erik Mitisek, Marc Nager, Abe Sloss, Renny Fagan, and Eric Drummond—carried deep passion for the State of Colorado along with expertise and strong networks across the state among rural and Front Range local business; startups; nonprofits; and women-, veteran-, and minority-led businesses. In the spirit of “Coloradans helping Coloradans” we set out on a journey that none of us had ever imagined.
Over the next months, as we served the GECESG and launched Energize Colorado, the work would demand every ounce of concentration, creativity, and collaboration we could muster. Launching Energize Colorado required speed, flexibility, experimentation, and significant activation across the entire state. We were willing and able to invest our time and talent to this once-in-a-lifetime volunteer assignment because we shared a passion for the State of Colorado’s entrepreneurial heritage and independent spirit. Since May, the Energize Colorado community (including 150+ volunteers) has launched four foundational initiatives:
Mentorship: The Mentorship Initiative connects small businesses looking for advice with those who have been through it before and have come out on the other side. This includes industry experts and certified professionals (CPAs, attorneys, etc). Since April, over 300 small businesses have collaborated with a mentor. We have over 200 mentors in our database that have volunteered to support Colorado businesses.
Mental Health: Our Mental Health Initiative shares relevant mental-health content and services with Coloradans, as well as matches patients and groups with therapists for free or reduced-cost sessions. Since June, we have made over 200 free therapy sessions available and had 500+ viewers of our Wellness Wednesday webinars.
Reopening Guidance + PPE: Our Reopening Guidance and PPE Initiative provides reduced-cost and certified PPE and business templates that offer best practices, direction, and information on how businesses can restart operations safely and effectively. Over 800,000 units of PPE have been delivered to small businesses. Additionally, through the City of Denver we have provided 4,000 free kits to minority-owned businesses.
The Energize Colorado Gap Fund: We have raised $25 million from public, private, and philanthropic sources to help small businesses with less than 25 full-time employees—including sole proprietors, small businesses, and nonprofits—economically impacted by the pandemic. The Energize Colorado Gap Fund offers support through grants and loans, up to a maximum of $15,000 in grants and $20,000 in loans for a possible combined total of $35,000 in financial assistance. Preference is given to underserved small businesses including those that are majority-owned by minority, women, or veterans; those located in rural areas of the state; and businesses that have not been successful in obtaining funds from other federal, state, and local assistance programs.
As we enter month six of Energize Colorado, we are clear that the vision for our work has a trajectory of three to four years. It is not a 90-day “crisis project.” As part of that longer-term vision, I’m eager to share my learnings and inspiration with you. I’ll share how the current complex and interconnected crises we face are impacting our state’s economic ecosystems, as well as how clear values and pragmatism have helped us engage volunteers and deliver impact in a time of unprecedented instability. I’ll also explore how embracing curiosity has been key to effective problem solving and how seeing challenges through a wide lens—taking in diverse inputs—has been essential for our team to overcome the obstacles inherent to building economic resilience and inclusivity during these times.
Thanks for following along. And thanks for sharing your learnings, as well.
I’m an entrepreneur, not an economist. But after a spectacular tour of duty in both industry and startup environments, I’ve grown fascinated with economic vibrancy and the role tech entrepreneurs play in creating it.
First, everyone wants to be a part of economic vibrancy. Our families. Our communities. Our companies. Families want good paying jobs and reasonable costs of living. State and city governments want to keep families in the region. Universities want to educate and motivate their students so they can land a job that will support their passions and ambitions. Companies want talented people to create a culture that moves fast and supports new ideas. Investors want deal flow that produces returns. Entrepreneurs want community, customers, talent, and capital.
For all of these key players to get what they want in a sustained way, we must commit to a growth mindset. Harvard Business Review contributor, Carol Dweck, tells us that a growth mindset takes form in individuals and organizations “who believe their talents can be developed through hard work, good strategies, and input from others.” This is the second major insight I’ve uncovered about economic vibrancy: We must set our eyes on growth. Grow or die. Grow or watch the talent leave the region. Growth is the challenge. Innovation is the answer, and that means being intentional about the culture and conditions that support it.
As an entrepreneur myself, and the former CEO of Cintrifuse—a public- private partnership committed to growing the density and maturity of startups in the Cincinnati region—I firmly believe that startups pursuing big markets with ideas that are likely to attract outside capital and scale, are the way that regions achieve sustained growth. Successful startups with strong, differentiated capability and outsized connectivity to talent, customers, capital, and mentors have the potential to create a new economic engine. For this reason, conversations around economic development have shifted toward startup innovation. In a recent paper for the Brookings Institution, founding director Darrell West adds to this conversation, arguing that “innovation and entrepreneurship are crucial for long term economic development.”
Third—and this is key—all players in an innovation economy must work together. Startups are far more successful when they are connected with big companies, city governments, investors, and universities. These are the key players in our ecosystem, and they must do more than just play well together. They must acknowledge that their needs are interdependent. They must collaborate through sharing power and trusting in their collective abilities. Only then can they co-design solutions that set the conditions for growth. Battle cries for collaboration are easy; executing collaborative work is harder. In my experience, the answer lies in well- funded initiatives and public-private partnerships.
In the fast-changing landscape of economic development, our challenge is to look for talent, innovation, and inclusion—the three key drivers of economic vibrancy. So we start by scanning and assessing the specific drivers that exist in our regions. Then we weave together each of the key players to leverage our core talent, innovations, and values of inclusion towards growth.
LET’S UNPACK THREE DRIVERS OF ECONOMIC VIBRANCY
In the past, when economic development entities discussed the need for a talent pipeline, it was conceptualized as “workforce development.” Uniformity and precision were the name of the game. But now, the future of work is changing everything. Automation and new technologies are
taking over tasks that require precise, replicable outputs. And a historic emphasis on manufacturing is giving way to an economy of services where technology is the enabler of effectiveness and efficiency. This means that talent is now defined by curiosity, critical thinking, and experimentation. It’s less about training people to perform with precision, following rote processes and prescribed activities, and more about developing people to think as innovators. Innovators work adaptably across functional areas, make decisions and experiment in agile and thoughtful ways, and show accountability for the whole performance.
The old way of developing a “workforce” of people that require daily direction from a complicated hierarchy will not work if our goal is to create the culture of a growth mindset. Quartz magazine, a guide to the global economy, reports, “As the speed and complexity of business increases, companies need more people who can connect the dots between business units and draw inspiration from a wide variety of sources.” Economic vibrancy, in other words, demands that we focus on talent by empowering professionals to work between silos and develop interdisciplinary skills.
Techstars and Louisville Entrepreneurship Acceleration Partnership (LEAP) are taking this approach in Louisville, Kentucky. They’re in the process of implementing the Techstars Startup Ecosystem Development program. Its goal is to build a coalition of entrepreneurs, corporate partners, local and national investors, government and academic leaders, and startup enthusiasts who work together to drive Louisville’s innovation ecosystem.
From mainstream, generational, and global corporations to high-profile national nonprofits, every sector needs access to technology to drive growth. Cofounder of Community Table Rachel Happe reminds us that “the world of business and work is changing rapidly as digital channels and technologies become more integrated into everything we do.” When tech is central to everything we do, its innovations touch every dimension of growth.
Recently our civic leaders have been standing tall around diversity as an explicit value and driver of economic vibrancy. Now that we have conceptually embraced the benefits of diversity, we need to understand the next phase: inclusion. Many different players, entrepreneurs especially, need to be invited to the table to accelerate economic vibrancy. When conditions are set to attract, engage, and retain talent, the foundation is laid for an innovative and inclusive economy. At the heart of innovation economy, startups offer a dense and ever-maturing supply of disruptive ideas and technological innovation. A culture of growth thrives when inclusion is prioritized and supported.
THE KEY PLAYERS IN AN INNOVATION ECONOMY INCLUDE:
CORPORATIONS: Demand innovation in order to drive organic growth and internal efficiency.
GOVERNMENTS: Set up policies and programs to accelerate entrepreneurship, activate commercialization of university assets, and engage corporations to actively support economic development activities.
UNIVERSITIES: Accelerate innovation economies by supporting both demand and supply with talent, research, and capability; have to be inclusive in terms of the researchers, faculty, and students that we engage in the build out of economic vibrancy.
INVESTORS: Support and launch innovations with capital; they don’t just bring money to startups, they bring exposure to high quality innovation from their portfolios and best practices of corporations.
SO WHAT’S THE PATH FORWARD?
To create an innovation economy that delivers sustainable economic vibrancy, we must create cultures of a growth mindset, set conditions to attract talent, and build bridges between key players in the ecosystem. We must teach everyone to understand each others’ worlds and be active collaborators to solve shared problems.
That’s why I’m writing this series, Economic Vibrancy. Drawing from interviews, current research, and my own experience, I’m diving deep into each part of a thriving innovation ecosystem: Startups, Corporations, Government, Universities, and Investors. It explores the ways all players in our economy can join a new, networked path forward and leverage the resources to make it happen.
With all the buzz about innovation corridors and startup hubs, nearly every city in America aims to attract more of the risk capital invested on the coasts.
Ecosystem builders are clear about the need for capital to drive entrepreneurial growth. What’s challenging is determining the best strategy to gain access to and develop relationships with the right investors—those who will provide the investment needed to get high-potential businesses and entrepreneurs on the road to product development and fit into the market space. The strategy question is especially important in the middle of the country where decades of growth capital have left once high-potential startups to “flat line” because of lack of growth capital.
With all the buzz about innovation corridors and startup hubs, nearly every city in America aims to attract more of the risk capital invested on the coasts. As ecosystem builders monitor the amount of venture capital entering their regions through self-tools like Pitchbook, and as experts continuously hypothesize where the next entrepreneurial startup hub will be, there’s a lot of pressure for regions to be proactive in creating new strategies and playbooks to attract risk capital. Under this pressure, it can feel like the right approach is to double down on relationships in your region, or that the most viable strategy is to strengthen connectivity and visibility between high potential startups and active angels, angel networks, and early stage seed investors within your ecosystem’s immediate zip codes. But it’s time we consider how this localized approach to ecosystem investing, though it may seem obvious in the short-term, is just not enough to catalyze the growth our regions need long-term. Economic vibrancy is made possible not by building bubbles around our region’s resources, but by looking beyond our own borders for opportunities to build pathways to investors from outside the region, especially given the fact that the cost of early-stage deals and business building on the coasts is skyrocketing.
WHY A HIGHLY ACTIVE, NATIONAL INVESTMENT STRATEGY CAN ACCELERATE ECONOMIC VIBRANCY IN NON-COASTAL CITIES
The vast majority of entrepreneurs that hire employees will need financing to start their businesses—relying on personal or family savings, bank loans, grants, generated revenue, angel investments, or institutional investments (i.e. Series A, B, C rounds) to launch and grow their startups. Yet 83% of entrepreneurs don’t access external private institutional capital at startup—and the likelihood of receiving such capital is far worse for women and minority founders, as well as startups emerging in cities between the two coasts, which offer historically better syndicates and longer track records of successful returns on investment. The density of angels and institutional investors is exponentially higher in coastal California and New York—and the art of raising investments is dramatically different in those regions compared to nearly every other city in America.
For all these reasons, capital for startups has never been easy to come by in the Midwest. But over the last decade—thanks to efforts like Rise of the Rest, and surprising, yet proven growth centers like Ann Arbor and Cincinnati—a light has been shone on the Midwest and the quality of its entrepreneurs. Now institutional seed fund leaders like Matchstick Ventures and Firebrand Ventures are looking to cities between the two coasts as low-cost, talent-rich alternatives to Silicon Valley and New York to source deals.
HERE’S A FUND OF FUNDS STRATEGY THAT WE USED IN CINCINNATI TO PULL INVESTORS IN AND GROW OUR STARTUPS OUT
A fund of funds is a fund that invests in other funds, instead of investing directly in startups. Structurally, it’s an investment vehicle run by a General Partner (GP) who attracts and manages multiple Limited Partners (LPs)— investing their money in high quality venture funds with a proven track record of generating returns from a strong portfolio of startups. Fund of funds have been around forever. They’re a smart way to protect investors from the risk of putting all their money into one startup. But too few cities in the Midwest are utilizing a fund of funds strategy to spark innovation. And those that are using this strategy aren’t always doing so wisely.
WHY FAR MORE MIDWESTERN CITIES SHOULD BE DEPLOYING A FUND OF FUNDS STRATEGY IN A HIGHLY ENGAGED, NATIONAL WAY TO ATTRACT AND RETAIN VENTURE CAPITAL FOR THEIR REGION’S STARTUPS
Before I started my tenure as CEO of Cintrifuse, the Cincinnati Business Committee leveraged McKinsey and Company to understand where our ecosystem compared against its peers and unique strategies we could implement to catch up on the risk capital side. During a visit to Michigan, we were wowed by Chris Rizik’s Renaissance Fund. Inspired by their success, we set out to design a highly unique variation for Cincinnati called The Syndicate Fund: a fund of funds managed by Cintrifuse (GP) that attracts investors mostly from Cincinnati’s top BigCos (LPs) by investing in high-quality early stage venture funds both inside and outside Ohio. You heard that right. The secret of our innovation growth in Cincinnati was our intentional decision to invest regional dollars in early-stage venture funds outside our region and, by doing so, deliver economic vibrancy for all players in the ecosystem.
A short-sighted fund of funds strategy would invest in regional venture funds alone, holding tight to the idea that local dollars are best kept local. This creates challenges in the long-term growth and scale of local startups, who ultimately struggle to unlock new early customers and follow-on capital. The Syndicate Fund was designed with a different philosophy. Along with Fund Manager Sarah Anderson, we hypothesized that investments made to venture firms across the nation with a proven track record and innovations that align with the needs of our corporate LPs would yield the strongest returns and, equally importantly, get us access to the world’s most emergent technologies and time-tested venture capitalists and startup mentors.
Positioning Cintrifuse’s Syndicate Fund as an LP within the best venture funds in San Francisco, Los Angeles, New York, Boston, Boulder, Chicago, Houston and beyond gave us leverage. Leverage for our regional BigCos, who could gain insider knowledge of emergent innovations in their verticals. Leverage for our ecosystem builders, who could learn from the best fund managers and company builders in the nation how to multi- fold increase innovation investments and thereby accelerate ecosystem success. And significant relationship leverage for our local entrepreneurs, who could gain outsized exposure and increased access to risk capital thanks to strong relationships with the highest performing venture funds in the nation.
GETTING FUND MANAGERS FROM SILICON VALLEY TO PAY ATTENTION TO STARTUPS IN THE MIDWEST IS NO EASY FEAT. BUT A HIGHLY ENGAGED, NATIONAL FUND OF FUNDS STRATEGY MADE IT HAPPEN IN CINCINNATI
Let me share a quick case story that reveals what’s possible thanks to this strategy: NaviStone, led by serial entrepreneur, Larry Kavanaugh, is a local Cincinnati startup that was on a solid growth path with a highly differentiated approach to direct mail solutions. It was time for a new round of institutional capital. Because Cintrifuse is an LP in a major San Francisco fund, we were able to communicate the potential of NaviStone to the GP of that fund. Let’s pause for a moment to recognize the incredible nature of this moment. The work that is required for CEOs and Midwestern founders to gain access to VCs can’t be understated. Without the backing of an organization like Cintrifuse Syndicate Fund, one that vets opportunities and ensures that GP time is spent well, startups like NaviStone would have to work significantly harder to get in front of VCs willing to invest. The introduction alone is an example of the leverage that’s possible thanks to a national fund of funds. But this story goes far beyond that. Upon hearing his pitch, the fund manager invested in NaviStone and joined their board of directors. Now, when they come to town for a board meeting, they make it a habit to visit Cintrifuse, where we introduce them to other high growth- potential startups in our region. Today, this one GP alone has mentored many other startups founded in the Cincinnati region, plus pitched startups within their portfolio to our regional BigCos, giving them the opportunity to develop relationships and test one another’s capabilities.
Relationship-building like this was critical to the long-term success of the Syndicate Fund. When we started the fund, we took meetings with hundreds of institutional early seed stage investors. Although we had to be highly selective about the funds we would invest in—we were focused only on seed investors, since most of the startups in our region needed $500-750K investments to validate and scale—we proactively sought out investors who we knew would be active, engaged mentors with investment theses that closely aligned with our LPs’ growth strategies. Even though we couldn’t invest in all 1,500 funds at the start, we took those meetings in order to build a strong national network of relationships with new venture capitalists. Now, innovation events held at Cintrifuse attract VCs from all over the nation who keep their fingers on the pulse of what’s happening in Cincinnati.
More Midwestern cities can and should adopt a highly engaged, national fund of funds strategy. Instead of creating bubbles around our regions and recycling the same resources over and over again, we can intentionally grow relationships with high-quality partners and sophisticated company builders who hold expertise in the tech categories that matter most to our region and mutually benefit our investors, BigCos, and entrepreneurs. As researchers predict that innovation will be increasingly isolated to specific, predicable regions of the nation, it’s more important than ever for non- coastal cities to leverage strong national relationships to open doors that were previously closed.
“We want to find the most sophisticated company builders in the world, bring them to Cincinnati to engage with our startups and BigCo’s, and develop long term relationships with the region to help build our innovation economy. We hope to ultimately work ourselves out of a job when the network effects become organic both for local startups and for our corporate investors.”
– SARAH ANDERSON, MANAGING DIRECTOR AT CINTRIFUSE SYNDICATE FUND
Startup communities are critical. Communities filled with like-minded, passionate, risk-taking entrepreneurs are the heartbeat—the cultural and economic engine—that fuels an innovation economy.
Startup communities are the heart of an innovation economy and serve as the growth engine for long-term economic vibrancy. And economic vibrancy is easier to achieve when all nodes of an ecosystem connect with startup communities and activate on behalf of innovation.
I didn’t always know this truth. Journey back with me to three key places that shaped my view of startup communities, the relationship connectivity that binds them, and the foundation they created for an innovation economy. From Boulder to San Francisco to Cincinnati and back to Boulder again, we’ll follow my learnings from and contributions to these communities.
WHY STARTUP COMMUNITIES ARE CRITICAL
Upon discovering this scene, I became an eager student of venture- backed, early stage startups. I quickly learned that this was not an exclusive club where a ‘secret handshake’ was required to enter. There were no membership fees,” hashtags, or special tee-shirts. Rather, it was a loose, informal circle of highly connected entrepreneurs who gathered around the city to brainstorm new ideas, recruit new team members, share connections to potential beta customers, and exchange introductions to relevant experts and investors interested in supporting new business ideas. The community had unique camaraderie, trust, and openness. The Boulder startup community seemed to “have your back” through the highs and lows of business building, creating a more collaborative than competitive environment.
Communities filled with like-minded, passionate, risk-taking entrepreneurs are the heartbeat—the cultural and economic engine—that fuels an innovation economy. In early 2002, after a wild ride of business building and a lucrative exit, my partner and I moved from Dallas to Boulder. The emotional and financial rewards of my entrepreneurial journey were significant, and with those rewards came an opportunity to kick off a new cycle of life and learning. With a strong university presence, access to nature, a growing creative community of entrepreneurs, artists, and athletes, Boulder had a special gravitational pull. Within the first few months of my arrival, a friend and CEO of Drivn, Christian Heidelberger, introduced me to Brad Feld, a former entrepreneur and highly regarded venture capitalist. Brad was an investor in one of Christian’s first companies and had developed a significant presence in Boulder. Both his own office and co-working space were filled with entrepreneurs
and early stage companies. It was through Brad’s generosity that we were introduced to Boulder’s startup scene. In fact, Brad went on to publish his seminal work on startup communities. In his interview with Quartz, he describes the Boulder thesis, aka the gold standard, of startup communities: “There are four [key elements of a startup community], which I call the Boulder Thesis. First, entrepreneurs must lead the startup community. Second, the startup community leaders must have a long-term commitment, at least 20 years. Third, the startup community must be inclusive of anyone who wants to participate in it. And fourth, it must have continual activities that engage the entire entrepreneurial stack.”
I learned about angel investing, the role mentors play in the early stages, and over time became a board member for several startups. It was both fulfilling and addictive. There’s no experience more transformational than learning from the best and brightest, building lifelong relationships, and having the opportunity to give back to the community that had welcomed me so fully. While Boulder offered the startup knowledge I was looking for, its real gift was opening the door to new relationships with passionate, proven founders and investors who operated according to the relationships they had with each other. My engagement in this active startup scene shifted to a deep sense of community with friends who shared the common goal of building great companies. My takeaway from Boulder? Trusting and connected relationships are the “glue” of sustainable startup communities.
FROM BOULDER TO MENLO PARK
Geography matters. So do portfolios. My experience in Boulder’s startup community was certainly eye opening, especially when it came to bootstrapping and customer growth strategies. It inspired my efforts to extend its “goodness” while learning more about building businesses with venture capital. In 2005, I moved from Boulder to Menlo Park, which is a bike ride away from Stanford, Sand Hill Road, and dense networks of founders, VCs, and mentors, too. At first, this new place was intense and overwhelming. I was an outsider again, looking for a tribe. I was looking to connect to a community of entrepreneurs, not a job or specific role like I had in Boulder. The startup founders I met were wicked smart, laser-focused, and moving fast. There was a deep sense of competitiveness as well as serious pressure to meet, if not exceed, the expectations of investors.
It was clear that tech startups drove economic vibrancy in the Bay Area. Startup founder community First Round Capital (FRC) was explicit in connecting experienced operators, corporate executives, mentors, and early stage investors to tech startups. Rob Hayes, partner at FRC, ensured that his founders and their executive teams could learn from and support each other through their startup journey. While part of FRC’s founder community, I began to invest in, and ultimately lead, Get Satisfaction, a highly regarded online community product. I had a front row seat to how startup communities could be structured, not only by their location, as I saw in Boulder, but deliberately through VC’s portfolios. Beyond their portfolios, venture capitalists’ connections to other early stage investors created fertile conditions for a deeply loyal startup community.
BUILDING STARTUPS IN THE MIDWEST
Rallying cries unite and amplify startup success. In the spring of 2014, I received a call from Spencer Stuart to consider a new opportunity in the Midwest. Greater Cincinnati business leaders had invested in capability to attract, develop, and retain high-growth tech startups—at least that’s what the job spec said. Research indicated that they were behind their peer cities in talent, innovation, and risk capital. Cintrifuse, a public-private partnership, was launched to build a world class startup community. Although I had never lived in the Midwest, I knew of P&G and had worked with the founders of The Brandery, an accelerator in Cincinnati. I had the experience, skills, and knowledge to bring value to the region, but my real education had only just begun. I understood what the business leaders wanted from the startup community: a culture change for the community, access to digital talent and technology, accelerated organic growth, and internal efficiency. It was clear to me that a startup community has a major role to play in a city or region’s aspiration for long-term economic vibrancy.
A significant factor in my Midwest tour of duty was learning from and working with Steve Case, who was leading the Rise of the Rest Movement (ROTR). As serendipity would have it, during my first formal interview with the search committee in Cincinnati, I participated in a panel event with him. ROTR showcased the most promising seed stage companies located outside of Silicon Valley, New York City, and Boston. Given this new assignment, I leaned in to learn more about Steve’s efforts. Anna Mason, ROTR community leader and now partner of ROTR’s Fund became a friend and colleague. She spent 5 years traveling to 43 cities in the Midwest to track the evolution of startup “hubs” where they observed seven components of startup communities that foster connectivity: local government, universities, investors, startup support organizations, large corporations, local media, and the startups themselves. During her travels, she also observed a trend around space as the “front door” to entrepreneurs in a city or a region. She spoke of the importance of developing robust physical spaces that help foster innovation and entrepreneurship; the refinement and evolution of how cities tell their stories and brand their ecosystems; and creative solutions to improve access to capital. I had a lot to learn about the role startup communities played in a region’s economic development strategy. When I asked Anna about this role, she responded: “The fact that startups drive nearly all net new job creation has been well-documented over the years. But equally important is that startup communities typically exude hope, optimism and a continuous drive to make the impossible, possible. When the creativity, ingenuity, and optimism that embodies a startup community can also permeate the broader ecosystem, economic vibrancy can meaningfully accelerate.”
Her observations reflected my experiences with Cincinnati’s startup community. When I first arrived, the startup community was fragmented— they were not connected to each other in a deliberate way. My purpose was clear: to ignite a community fueled by Midwest startup talent. In my early days, I collaborated with Eric Weissmann, VP of Cintrifuse, to establish StartupCincy as a beginning point along the way to building the innovation ecosystem that our business leaders envisioned.
The impacts of this work are reflected in the startup community, its density and maturity, its success in engaging corporations for product validation, pilots, and risk capital. The impact and influence of the Cintrifuse Syndicate Fund and the engagement of the corporates in our effort were strong differentiators. When it comes to startup community building across the Midwest, StartupCincy has become high-profile. The blueprint was recognized in Inc. magazine as the best model for startup success.
“In Cincinnati, we built a kind of ‘coalition of the willing’ for the betterment of the region. It’s like we built a lighthouse on the shore and woke up the next morning and there were 100 ships in the harbor. What we had uncovered was an unmet need for community; a mutually agreed-upon perspective that if we’re all in this together, if all of our oars are in the water at the same time, we’ll get where we’re going faster. If we all agree that we can all stand under one banner, it will help amplify each other’s stories. We agree that it is mutually beneficial to participate and to partner with and to collaborate and understand the objectives and goals of each other inthe ecosystem. It not only makes YOU stronger it also makes your partner organizations stronger. We declared ourselves part of the community. It was a very intentional inclusive effort.”
– ERIC WEISSMAN, VP OF CINTRIFUSE
Now, almost two decades later, I’m back in Boulder and still working with startup communities both here and in the Midwest. We need startup communities. They set the stage for an innovation economy and with the right conditions and support, promise long-term economic vibrancy. To recap: startup communities are not only possible, but are set up for success when there’s a commitment to collaboration over competition and enthusiasm for divergent ideas within a region. And these communities are especially bolstered by physical spaces made for inclusion and interdisciplinary thinking.
My passion to share what I’ve learned led me across the Ohio River to Louisville Entrepreneurship Acceleration Partnership (LEAP), another public-private partnership aspiring to build an ecosystem that connects entrepreneurs, investors, and organizations to strengthen the area’s innovation economy. Louisville is fortunate to have Techstars actively engaged in LEAP’s efforts. Co-founded by David Cohen, David Brown, Brad Feld, and Jared Polis, Techstars began by giving serial startup founders the opportunity to mentor other entrepreneurs. Their efforts increase the probability of startup success and strengthen relationships across the community. Back in 2006, the Boulder startup community that I so loved was shaped by the launch of Techstars’ first accelerator. Their #GiveFirst ethos rang true to those of us in Boulder then, and now in cities like Louisville and all around the globe. Chris Heivley, VP of Ecosystem Innovation for Techstars and co-founder of MapQuest, is applying his expertise building startup ecosystems in Durham, Buffalo, and now Louisville, to countries, regions, and cities. When asked what makes startup communities thrive, he answered: “Fundamentally, there has to be a shared set of values around inclusion and founder-centric support.”
BigCos need to align with, learn from, and use startup talent, products, and services in order to catalyze an innovation economy.
#Disruption is certainly a sexy meme these days for BigCos and startups alike—and it has plenty of merit. But for those leading and building entrepreneurial ecosystems, the best strategy for sustainable engagement and connectivity between BigCos and startups is a collaborative one. Both parties face unique business challenges that new perspectives and solutions can potentially solve. And, ultimately, both can make an important contribution to the community’s growth, diversity, and vibrancy.
So then, how can we break down the barriers to collaboration? The faceted solution involves introducing fresh perspectives that set conditions for curiosity, candor, and connectivity to take hold and flourish.
WHY BIGCOS AND STARTUPS NEED EACH OTHER
Endeavor Insights’ recent report recommends that, for local economies to drive growth and productivity, key decision-makers should “support existing high-value, entrepreneurial companies as they continue to grow.” However, the relationship between big companies and startups is often exclusively seen as one of “corporate social responsibility,” where BigCos sponsor activities or approve pilot projects with startups as a way to show support for their local community. This is a limiting view. Although community spirit is essential, corporations should deeply engage in entrepreneurial capability along the continuum of startup life cycles.
BigCos need to align with, learn from, and use startup talent, products, and services in order to catalyze an innovation economy. In a recent Forbes article, serial entrepreneur Hod Fleishman says that to do this well, “There needs to be more transparency about the problems corporates seek to solve, more agility in trialing solutions, better solutions for investment, and the sharing of IP, and the fruits of success.” The larger goal is for all activity between BigCos and startups to be interconnected and mutually fulfilling. For startups, that means learning how to work with large companies and understanding the challenges that come with operating at that scale. For BigCos, it means learning how to be more open to new, creative approaches and business models, and agile processes that encourage experimentation and speed. But what does this relationship actually look like?
IT LOOKS LIKE COLLABORATION
To illustrate the impacts and successes that can emerge from BigCo and startup partnerships, there’s no better example than CVG Airport and its collaboration with local startup Losant. Brian Cobb, Chief Innovation Officer at CVG Airport, understands the role tech innovation plays in the growth of his organization. More importantly, he recognizes how this growth directly impacts the region’s economic vibrancy. And so does CVG. Even their mission positions CVG as “an essential part of the region’s overall growth and success through teamwork, innovation, and continuous improvement.”
But like most large and established industries, the aviation sector is slow to innovate new business models and source, select, and implement tech innovation. CVG not only acknowledges the slow-moving nature of the industry, but, lucky for Southwest Ohio and Northern Kentucky, it sees startup collaboration as a high-impact way to catalyze innovation.
To CVG, startup collaborations are meant to propel business partnership and community—all with the ultimate goal of improving the CVG Airport passenger experience. With the support of CEO Candace McGraw and a small, aggressive team, Brian builds innovation strategies that align with CVG’s Four Pillars of Innovation: connect (digital solutions for airporti nnovation); clean (waste reduction and environmental sustainability); secure (cyber and campus security); and transport. He wouldn’t hesitate to tell you that active engagement with the startup community has been a key driver of their innovation success.
“No other airport in the region is working with startups in a capacity like this. Selfishly, I would say we’re pretty far ahead of the game, even domestically. Outside the U.S., it’s a different story; (those) in Germany and London see the opportunity, but there’s nothing that says we shouldn’t be playing in that space, too. And we all know the startup ecosystem around Cincinnati is on fire, which is incredibly fortunate for us on so many fronts.”
– BRIAN COBB, CHIEF INNOVATION OFFICER AT CVG AIRPORT
On behalf of CVG’s innovation strategy, Brian has been an active participant in Startup Cincy and Cintrifuse activities, where he connects with local startups like Losant. He found a kindred spirit and collaborator in Losant CEO, Charlie Key, who upon graduating from The Brandery and Techstars accelerator programs became a serial entrepreneur. Now a highly regarded mentor in the Startup Cincy ecosystem, Charlie’s focus has been to create IoT solutions on the enterprise-level with their IoT cloud platform. Together, Brian and Charlie worked to identify a problem and co-design a solution for one of CVG’s key innovation pillars: connect.
The problem they chose to solve was for CVG’s indoor train, which had become a common source of confusion for travelers. CVG found that travelers weren’t sure if they should wait for the train or walk to the terminal. Some passengers mistakenly believed the train would take them into the city. Passengers then opted out of using the train.
To address this issue, CVG’s innovation team and Losant implemented an IoT solution that now collects data travel times and provides passengers with the information they need about the indoor terminal train. This looks like large monitors installed outside of each train boarding station that estimate walking time, real-time train location, and wait times. According to Losant’s Case Study, by installing and connecting train tunnel sensors to the Losant Enterprise IoT Platform, “the airport was able to better inform its customers about how to use the train.” With this solution in place, passengers can now use their time more efficiently and effectively while at the airport.
This is just one example of how large, established organizations can leverage startup talent to create solutions and ultimately transform all involved for the better.
HOW TO SET THE CONDITIONS FOR STARTUP AND BIGCO COLLABORATION
The way ecosystem leaders set the stage for these collaborations is paramount to their impact on the region’s economic vibrancy. A recent report from Innovation Leader found that 85% of companies focus their startup engagement around “meeting with interesting startups.” Unfortunately, these meetings often fall short when it comes to candid business discussions that lead to mutually beneficial outcomes.
A big part of Cincinnati’s ecosystem success is the purposeful effort to build high-value collaborations between BigCos and startups, where BigCos candidly share their business challenges; grant serious interest to learning about startup technologies and their approach to business building; and enable scale-up activities for promising startup products and services. To get to the moment where startup technologies are leveraging BigCos to scale and reach mutually beneficial business goals, ecosystem builders have to set the stage well from the start.
In the early part of my tour of duty as CEO at Cintrifuse, a public-private partnership in Southwest Ohio and Northern Kentucky, we experimented with a stage-setting model that specifically focused on building higher value engagement between BigCos and startups. We started by getting a feel for the technology landscape and where BigCos fell on the digital transformation continuum—including their business models. We took an inventory of large companies in the region (those with $100M or above in revenue), along with the growth dynamics of their sector. From that point of view, we could more clearly identify innovation opportunities and how connections could be made by exposing large organizations to horizontal tech themes that could impact their organic growth or internal efficiency. We also became fans of CB Insights. Their sector research showed examples of how specific industries were being “unbundled” by new technologies. This research caught the attention of some large companies (P&G and Kroger) in the region who were actively looking for a new strategies for organic growth.
This is the true work of an ecosystem builder, where every program, activity, and introduction needs to be delivered intentionally and with a maximalist mindset that sets the conditions for collaboration that builds momentum across the entire ecosystem.
When we started our mission to catalyze startup innovation in Cincinnati, I already knew how impactful creating conversation between large companies and startups could be. But with 150 BigCos in the area, there were too many companies to pair with our startups for one-on-one conversations. The mission of Cintrifuse was strategic and broad yet our team (and our budget) was small.
This is where the idea to host informal, digital transformation “meet-ups” was born. The idea is to invite digital thought leaders and investors from outside the region, or leaders from other parts of the local ecosystem— proven entrepreneurs, academics, and government leaders to name a few—to share their expertise on relevant horizontal tech themes emerging across our region’s BigCos. These informal gatherings were an opportunity for large company leaders to listen to expert insights on their business challenges and the role technology innovation played in that category. From there, BigCos could begin to see startups as potential problem- solvers and collaborators. That’s when the foundation for an innovation economy truly gets set.
In planning these early learning meet-ups, we used a pull strategy, where we leveraged our network of high-profile digital experts, welcoming those from outside the region like industry analysts Michael Krigsman and Ray Wang, to share their insights on top tech priorities to a combined audience of BigCo leaders and entrepreneurs. Large companies could then self-select their interests and then move toward startup innovation—as opposed to a push strategy where companies would have been coerced into the room and prematurely matched with a startup.
For the pull strategy to succeed, we had to experiment with adding value across the ecosystem’s various themes so that both BigCos and Startups would want to engage. We had to bring folks together around a specific theme and get them comfortable talking with each other despite coming from different entities.
For one of our first “meet-ups,” we honed in on “The Future of Work” as the major theme. We invited Ben Casnocha—co-author of The Alliance, venture capitalist with Village Capital, and entrepreneur—along with 50 HR leaders to LPK’s Innovation Center. As a thought leader who has engaged with many nodes of an innovation ecosystem, Ben shared a well-rounded perspective on what new employees look for in relationships with their employers. After his 30-minute talk, the audience got to hear from a panel of startups who had invested and built innovation around the future-of-work trend. Startup founder of Cerkl and meet-up participant, Tarek Kamil, reflected on the experience by describing the high value startups place on honest feedback from corporates.
With ecosystem-building in mind, our small-but-mighty team at Cintrifuse took note of the folks who raised their hands and were most willing to learn from the entrepreneurs in the room. We were looking for leaders who had very specific cultural or digital transformation needs. That way, when the event concluded, we had a path forward to corporate engagement initiatives.
Startup leaders who were ready to engage, like Tarek, could then meet with BigCos to continue the conversation and create mutually beneficial relationships. In fact, Tarek’s team ended up closing a deal with a BigCo within 45 days of the event, and ultimately, Cerkl’s solution tripled employee engagement for that BigCo.
Something truly powerful happened within this single 90-minute event. Ben’s perspective was perfect fodder for natural conversation about the problem of attraction, development, and retention of millennial employees. Combine his research with the audience’s curiosity, and we had a room full of HR directors well-equipped to build relationships with startups. Over time, the startups could position their products and services as solutions to the BigCos’ problems.
THREE PRACTICAL WAYS ECOSYSTEM BUILDERS CAN SPARK COLLABORATION BETWEEN BIGCOS AND STARTUPS:
1. DETERMINE SPECIFIC TECH PRIORITIES THAT ARE RELEVANT TO REGIONAL BIGCOS ACROSS SECTORS AND COMPANY SIZE Identify themes like the future-of-work trends (HR), consumer experience, cyber security, blockchain, robotics, and AI.
2. HOST INFORMAL DIGITAL INNOVATION MEET-UPS THAT ADDRESS SELECT DIGITAL TRANSFORMATION THEMES These events should be small and provocative, prompting candid interaction between the BigCos with problems, and startups who can solve them. These events need to be interactive, iterative, and rich with dialogue that begins to build trust and the connective tissue required for collaboration.
3. ASSESS AND SELECT KEY BIGCO AND STARTUP PLAYERS TO ENGAGE IN MORE INDIVIDUALIZED CONVERSATIONS Take a supportive role with the relationships between the large companies and startups. Be available for support when processes are slow and barriers emerge. Track the relationships and communicate their impact over time to your ecosystem.
BREAKTHROUGHS OCCUR WHEN ECOSYSTEM BUILDERS SET THE RIGHT CONDITIONS
Surveying the landscape to identify horizontal themes. Pulling BigCos and startups into conversation by making the value potential real and tangible. Creating environments that spark high-value, low-stakes organic collisions among BigCo and startup stakeholders. Then, once trust is built, pairing up stakeholders with the strongest impact potential.
This is how an innovation economy evolves into a robust engine for economic vibrancy. Every node in the ecosystem (whether it’s BigCos, startups, universities, government stakeholders, or venture capitalists) has strengths as well as challenges that they face. But they need activation energy and the opportunity to collide. They need the support of ecosystem leaders who operate with a maximalist mindset.
That’s what we do as ecosystem builders. It’s our North Star to craft conditions for collisions among the right players. Because once an idea ignites—so long as entities in the region embrace a collaborative spirit—the region’s vibrancy grows.
When university assets and missions are leveraged well, they can build into and strengthen every other node in an innovation economy.
Universities can play an important role in priming young minds for disrupting the way we traditionally think about the innovation process. Facebook was born at Harvard. Google was born at Stanford. Although many of the highest profile startup stories feature a college drop-out metamorphosed into a successful founder, there’s more opportunity than meets the eye for universities to participate in their region’s innovation ecosystems. Large companies, investors, and startup communities all want access to and can support university students, faculty, research, alumni, and physical spaces. When university assets and missions are leveraged well, they can build into and strengthen every other node in an innovation economy. So how do a region’s entrepreneurs and business leaders access and leverage university assets to cultivate a talent pipeline, develop an environment that nurtures innovation, and create meaningful relationships that drive a local innovation ecosystem?
Recently, I collaborated with two professors-turned-entrepreneurs, Katie Trauth Taylor and Meredith Singleton of Untold Content, to explore how university missions can, in fact, align with the values of regional ecosystem leaders. From diversity and inclusion to the importance of research, we are fierce advocates for leveraging the assets universities offer in innovation ecosystem development: well-known faculty and researchers who are experts in their fields; a commitment to the mission of growing local cities and regions; and students with a passion for entrepreneurship.
INNOVATION IN TODAY’S UNIVERSITY
Historically, universities haven’t had to think like businesses. Funding flowed freely from state governments; students flocked to campuses; and the disconnect between private sector and academia, though weak, was tolerated for the pursuit of well-rounded, interdisciplinary learning. However, cuts in education funding have been made in recent years. According to the Center on Budget and Policy Priorities, states have decreased funding by $9 billion over the last ten years. Institutions have experienced significant decreases in student enrollment—a 1.5% decrease each year for the last nine years. As a result, universities have been forced to rethink how they operate as a business. How do they align degree programs with regional market opportunities? How do they lean into the relevant opportunities for research and innovation? What can collaboration with external partners look like across disciplines? And how can universities position themselves as valuable resources in an economy more enabled by technology than ever before?
While cash-strapped universities answer these emergent questions, the U.S. overall is seeing extreme growth in entrepreneurship and innovation opportunities. A recent McKinsey study shows that innovations in digital technology will have an economic impact of $14 trillion to $33 trillion by 2025. The emergence of innovation successes in fields such as biotech, information technology, manufacturing, healthcare and financial services, have caught the attention of leaders across industries. A recent Forbes article reported that 50% of millennials are aiming to launch their own businesses in the next three years. No longer are they seeking career paths dictated by university degrees. They’re clamoring for something different—a set of skills that position them to become successful entrepreneurs launching, leading, and growing profitable startups. Digital literacy, entrepreneurial mindsets, and business savvy are more important to college-aged students now than ever before.
So, with a new entrepreneurial mindset targeting and serving a new cohort of students, universities are building innovation hubs, research centers, and entrepreneurship programs. Faculty and university leaders are infusing their curriculum designs with entrepreneurial know-how. From assigning more case study readings to producing projects for actual local businesses, more and more university programs are rising to the challenge of preparing students for entrepreneurial life.
Yet, change at the university level is often slow. Ecosystem leaders can help universities participate more actively in innovation economies by proactively reaching out to engage university leaders in understanding talent needs, research questions, and commercial opportunities. And, of course, all collaboration must begin with aligning missions.
ALIGNING UNIVERSITY MISSIONS WITH ECOSYSTEM NEEDS
One such way ecosystem builders can engage university leadership is to highlight where alignment exists between academe and industry. From the jump, leaders are responsible for understanding their regional universities’ expertise. Similar to the research required for functional partnerships between regional BigCos and startups, an initial assessment of assets and interest is necessary for building university partnerships. A region’s innovation strategy should be shaped around the university’s focus areas and relationship to innovation, aligning interests in order to maximize each partner’s strengths and accelerate progress.
When business leaders can make it easy for universities to lean into values they already champion, collaboration opportunities become clearer and universities see their role in sync with the mindsets of local entrepreneurs and startups.
Interdisciplinary thinking. Supporting diversity and inclusion. Examining “why” innovations matter and how they will positively or negatively impact society. These are all areas where ecosystem needs align with university values.
Universities have long valued the strength of interdisciplinary collaboration. Bringing into conversation voices and perspectives from differing backgrounds and interests can result in new ways of thinking and envisioning a region’s future. While there are several factors that can influence a region’s ability to launch and support new startups, the most complex algorithms predicting the success of innovation economies support a focus on people—arguing that entrepreneurship increases when there are more entrepreneurial people within the region.
Each university has a different sense of self, and ecosystem builders have to keep an eye for what sparks organically between innovation initiatives and their regional universities’ focus areas. When they find that place of alignment, relationships with university leaders (i.e. presidents, provosts, and deans) go a long way—building bridges to all of the physical assets and talents housed within their walls.
The most important thing to keep in mind is that, from the university perspective, innovation must mean more than merely making money or embracing the latest buzzword. Universities are and will likely always be wary of “unexamined enthusiasm for the marketplace as a wise referee of ideas.” But that doesn’t mean they’re disinterested. It just means that ecosystem builders have to make the case for collaboration in a way that is meaningful for university stakeholders. Ideally, that means offering space for their research expertise, critical thinking, inclusive mindset, and creative problem-solving to thrive.
HOW UNIVERSITIES CAN PARTICIPATE IN INNOVATION ECOSYSTEMS
There are several ways in which ecosystem builders can leverage university assets and harness the strengths they offer: (1) becoming involved in entrepreneurship programs and curricula, (2) developing innovation hubs as opportunities for mentorship, and (3) commercializing research. Let’s dive into these three opportunities and explore case stories that bring it all to life.
ENTREPRENEURSHIP PROGRAMS AND INNOVATION-INSPIRED CURRICULA
Entrepreneurial training has steadily become an academic expectation. According to a report from the Kauffman Panel on Entrepreneurship Curriculum in Higher Education, in 1985, only about 250 university- level entrepreneurship courses were offered in the United States. Today, more than 5,000 entrepreneurship courses exist across the country.
This is a clear indicator that universities’ have begun to shift their focus toward innovation—starting with their students. Mary Grove from the Rise of the Rest Fund speaks to this shift with enthusiasm: “There’s so much momentum and excitement around entrepreneurship, startups and small businesses as the back-bone of job creation in the U.S. Universities certainly play a very fundamental role in that.”
It takes more than capital to create a company; talent and passion are central to an innovator’s success. And universities can provide talented students and passionate researchers that can support revolutionary ventures. In this important way, universities can cultivate the talent pipeline for startup communities. Universities can also provide support through institutes, competitions, administrative services, and student groups. Recent research found that such efforts can challenge academic cultures that tend to be more risk averse—changing mindsets around innovation.
What’s more: Entrepreneurship programs can prevent “brain drain”—or the tendency of residents to leave the region after college. More leaders are arguing that the creativity and business savvy that comes along with entrepreneurial training can compel students to stay in the region and positively impact local communities. It’s not only about achieving world domination through the creation of venture-backed unicorns. It’s also about growing and developing an entrepreneurial culture that can result in immediate benefits and long-term commitments to local economies.
MIAMI UNIVERSITY’S JOHN W. ALTMAN INSTITUTE FOR ENTREPRENEURSHIP
Dr. Tim Holcomb is fostering the kind of skill-building today’s entrepreneurial students are looking for at Miami University. Before joining Miami as an associate professor of entrepreneurship, he spent 13 years at Accenture, founded four venture-backed startups, and led the $800 million Network Services Division of Flex. Now Director of the John W. Altman Institute for Entrepreneurship at Miami University, where their mission is to prepare tomorrow’s entrepreneurial workforce to be “Job Ready, Day One,” he is making efforts to elevate students’ impact on society.
When describing Miami’s differentiated approach to undergraduate entrepreneurship education, Tim talks about their focus on, “Teaching students to ‘do’ entrepreneurship, rather than teaching students ‘about’ entrepreneurship.” Faculty take this “do” mentality seriously by delivering programs that connect with other nodes in the ecosystem. For example, students and faculty alike engage with key regional organizations like Cintrifuse, Flywheel Social Enterprise Hub, and CincyTech. Annually, students and student-led startups receive mentoring, coaching, and advice from more than 450 angel investors and venture capitalists, accelerator directors, startup founders, social entrepreneurs and others from organizations like Techstars, 500 Startups, and Silicon Valley Bank. From students pursuing initial funding from angel investors to professionals offering guest lectures, Miami’s institute focuses on ways to engage students with other nodes of the ecosystem necessary to fostering entrepreneurship in the region.
As a result of Miami’s innovative, award-winning programming, many students have taken insights from seasoned entrepreneurs, BigCo leadership, and investors to develop their own ideas and grow them into trail-blazing companies. Collectively, Miami student-led companies have raised more than $12 million in venture funding over the past four years. One student-led company, OROS, raised a $2 million seed round led by NCT Ventures with Fengshion Capital in 2016. As a performance outerwear company that designs, develops, integrates, and markets a line of extreme outerwear, they use what’s considered the “best insulation on the planet,” the NASA-inspired and patented Aerogel-based SolarCore technology. Three years after the company’s launch, OROS has generated $10+M from sales of its gear in more than 100 countries worldwide, and its proprietary insulative technology, SolarCore, can be found in highly regarded brand products, such as L.L. Bean’s boots, Cabela’s boots, and John Deere gloves. Cofounders Michael Markesbery and Rithvik Venna were even named to the 2018 edition of the Forbes 30 Under 30 list of top disruptive entrepreneurs in the U.S. in retail and e-commerce. Investing in university programming is just one way to forge connections between university assets and other nodes in an ecosystem.
HOW DOES SUCH A PROGRAM IMPACT THE REGION’S STARTUP ECONOMY?
STARTUPS: 149 student-founders launched 36 startups and high growth companies as part of the RedHawk Launch Accelerator and the Technology Commercialization and Startup Launch courses. Three of the student-led startups raised initial funding and/or landed spots in startup accelerators (Cydekick, Akinda Co., and KCD Cosmetics).
MENTORSHIPS: 498 Miami alumni and professionals from entrepreneurial ecosystems across the nation mentored students/student- led startups and/or guest lectured in entrepreneurship courses.
INVESTORS: 128 angel investors, VCs, accelerator directors, and ecosystem builders from 12 states across the U.S. participated in RedHawk Venture Pitch Competitions held at the end of the Fall and Spring semesters, including California, Florida, Illinois, Indiana, Kentucky, Michigan, New York, North Carolina, Ohio, Texas, Virginia, and Washington D.C.
INNOVATION HUBS AS OPPORTUNITIES FOR MENTORSHIP
Also called makerspaces, innovation hubs are physical locations dedicated to fostering innovative thinking and focused research. They can not only leverage a university’s capital assets, they can provide opportunities to incubate ideas, connect researchers with industry, and create mentorships between participants and university or industry leaders.
According to the IMPACT Index—a comprehensive survey of 248 senior managers of entrepreneurship centers—over 1⁄4 of all innovation hubs in the U.S. are university-affiliated. Their reasons to exist align with both university and regional economic values: to grow local entrepreneurial culture (71%); create jobs (63%); encourage women and minority entrepreneurship (38%); and commercialize university research (23%). Universities can serve as innovation drivers by transferring technology to the local industry and stimulating the development of new businesses.
THE UNIVERSITY OF CINCINNATI’S 1819 INNOVATION HUB At the University of Cincinnati 1819 Innovation Hub, it’s exactly that—a place “where industry meets university.” Institutions and bureaucracies can often create barriers to highest currency: ideas. So instead, students, faculty, and professionals all use the space to bring an idea to the table and use interdisciplinary action to explore growth opportunities. UC’s very first innovation officer and leader of the space, David Adams, says 1819 is “helping faculty and students bring their ideas to life and to market.”
As a result of universities previously operating independently of industry, there was often a disconnect between research taking place inside the institution and a need for innovation research in business. Innovation hubs help innovators connect more easily with researchers, shortening the time to prototype or market. With an interdisciplinary approach, they connect sometimes disconnected disciplines such as healthcare to engineering to technology.
The 1819 Innovation Hub also creates an opportunity for faculty and program directors to connect with business leaders, giving them insights into the employees and skills businesses need in today’s workforce. Physical spaces that bring multiple partners into collaboration create an environment that fosters creative thinking and encourages interdisciplinary approaches to solving problems. Universities are able to understand changes in industry trends and emergent needs; innovators can connect with researchers in a variety of disciplines; and industry leaders can tap into the skillsets of students and graduates, identifying talent and valuable product innovations.
COMMERCIALIZING ACADEMIC RESEARCH
Another approach is a laser-focus on commercialization strategy. Through programs such as on-campus incubators or near-campus research parks, the commercialization of academic research can positively impact regional economies. Clearly stated, if a local government sees a university’s research budget is large, they expect a certain percent of that research to be commercialized. Universities invested in innovation typically develop tech transfer offices where entrepreneurs, or equity owners of an invention, work together to harness discoveries that can bring revenue back to a university. These commercialization strategies have looked like university professors teaming up with entrepreneurs to build business ideas or university research discoveries getting licensed by large companies like Samsung or Humana.
Uniquely, for instance, the Commonwealth of Kentucky is reshaping the way they foster innovation growth that leverages universities in commercializing research. C3, the Commonwealth Commercialization Center, a science and technology nonprofit, serves as a statewide liaison to create partnerships with Kentucky’s public universities and colleges. C3 ensures universities and colleges of all sizes and in all regions of the state have the opportunity to engage in the innovation ecosystem. The key differentiator of C3 is its financial independence and use of state funds to support Kentucky startups and scaleups. C3 provides a continuum of support and capital for growing companies. From SBIR matching grants and direct investments from the Kentucky Enterprise Fund, C3 ensures that ideas and intellectual property transition into products and businesses. In addition to its financial commitment to innovation growth, C3 also offers legal, accelerator, and small business consulting. C3 is a unique, emergent force for the cross- regional commercialization of academic research. Read our case story below to learn how other organizations like University of Louisville’s LEAP are leveraging university and innovation ecosystem assets to promote economic vibrancy.
UNIVERSITY OF LOUISVILLE’S LOUISVILLE ENTREPRENEURSHIP ACCELERATION PARTNERSHIP (LEAP) For the University of Louisville (UofL), a premier research university producing new technology innovations and talent, commercialization strategy directly involves local public-private partnership, Louisville Entrepreneurship Acceleration Partnership (LEAP). With the support of leaders at the Kentucky Cabinet for Economic Development, LEAP was founded with the goal to “build a sustainable innovation economy that will grow, attract, and retain innovative companies, including high- quality startups, by leveraging university innovations and talent, BigCo participation, and venture capital relationships.”
William Metcalf, UofL’s Executive Director of Research Development and Strategic Initiatives, explains how LEAP is focused on “driving a tech- based economy for the region, where each contributor in the system wins. BigCos get access to innovations and talent while entrepreneurs gain BigCo customers. Investors gain access to innovative technologies and build meaningful relationships with talent. For UofL, LEAP provides access into an entrepreneurial network that improves our ability to move inventions out of the university lab and into the market.”
UofL’s entrepreneur-in-residence (EIR) program provides resources to help founders translate discoveries into commercially relevant products and services by acting as a bridge to the entrepreneurial community. EIRs imbue universities with fresh thinking on how to build businesses and access networks of founder and funder talent. In short, EIRs have the opportunity to build back into their communities by helping students and faculty develop business cases for academic discoveries.
“A research university offers a wealth of proven solutions that are ready for market validation. In other words, entrepreneurs should be aware of the opportunities that are sitting on the end of this particular springboard, waiting for someone to launch. Founders would be surprised how willing universities are to work with entrepreneurs to turn research into a startup. Couple that with the expertise the researchers bring with them in their particular field, and a startup is already on first base in terms of knowing the problem and general solution. And one more thing: money! When you build a business through a university there’s potential access to SBIR grants which can fund development of the operation.”
– CHARLEY MILLER, CEO OF UNITONOMY
One of UofL’s current Entrepreneurs in Residence (EIR), Charley Miller, is Founder and CEO of Unitonomy, a startup committed to helping companies improve the efficiency of their internal communications. Miller is using this opportunity to identify ways to use university assets to empower entrepreneurs. With exposure to ecosystems on both coasts and a background in tech, he’s been relishing the opportunity to mentor others on a regular basis as a specific and meaningful way to impact the innovation economy on an individual level. Similar to his fellow EIRs, he offers his experience, business mindset, and professional network to problem solve in new ways and open doors across disciplines and activities. In a recent conversation, he offered his recommendations to those who want to leverage university assets.
In fact, he recently developed the Founder Hunt as a way to get the word out about these opportunities to leverage university assets. This event hosted 180 healthcare entrepreneurs and innovators from 6 different states to inspect the opportunities coming out of the University of Louisville as well as other regional research universities.
SPARKING A REGIONAL CULTURE OF INNOVATION
Universities are nearly always at the heart of innovation corridors. From academic medical centers spawning biotech startups in Boston to Carnegie Mellon’s robotics program catalyzing Pittsburgh’s innovation district, there’s no debate that economic vibrancy is made possible through willful participation of universities in the innovation economy.
When ecosystem leaders engage universities in innovation by aligning academic expertise and strategic priorities with the region’s long-term goals, they can network what were once disconnected nodes in the ecosystem.
Such a commitment creates an environment for local communities to begin distinguishing themselves as innovation corridors, creating additional revenue and job opportunities, and developing a rallying cry around which innovators can unite.
Ecosystem builders are those responsible for leading the entire region to embrace and accelerate innovation.
HOW ECOSYSTEM BUILDERS UNITE THE INNOVATION ECONOMY
Building an innovation economy calls for alignment around a shared vision for the entire region (not just a specific mission of one of the organizations in the ecosystem). It’s the ecosystem builders themselves who serve as a powerful unifying force. They are boundary-pushers and boundary- crossers who inspire regional players (nodes) to play well together. They draw on shared resources and talents, strengths and opportunities, to ultimately accelerate economic vibrancy. Professionals who accept the role and responsibilities of being an “ecosystem builder” need competency in collaboration, knowledge of technology, a mindset of growth, the spirit and influence of a community leader, and deep respect for the unique roles each node has in achieving the region’s vision of innovation as well as the interdependency between them.
Catalyzing an innovation economy is demanding work. On the outside, it can appear as though the only things required for success are a coworking space, a beer tap, a hashtag and a bunch of relationships. But of course none of those small, external signs of a strong startup ecosystem can alone indicate a region’s innovation success. Density and maturity of startups. Number of pilot projects between BigCos and startups. Amount and quality of new product launches. Diversity and inclusion programs and their successes. Quality of entrepreneurial programs within regional universities and the number of new businesses launched from university research. Clear understanding of the region’s risk capital compared to peer cities. These are the actual indicators of innovation success. And all of them require active collaboration between startups, BigCos, investors, universities, private sector stakeholders, and public sector leaders.
At the heart of it all, the ecosystem builder’s work is to understand, leverage, and connect the nodes (i.e. startups, BigCos, universities, investors, etc.). To break down silos. To find alignment in shared strengths. We are the match- makers, the facilitators, the data keepers, the ones looking at the thousand foot level to see where nodes could connect, leverage strengths and tighten dependencies. We, the ecosystem builders, must see ourselves as change-makers and growth-hackers for our entire regions—not merely doing a job. Our region’s success depends on our passion, commitment, and a plan that can be clearly communicated, understood, and executed by a wide range of stakeholders inside nodes and across a range of ecosystem organizations.
After my extraordinary tour of duty as an ecosystem builder working to get Cincinnati on the map as an attractive startup hub and innovation growth center, I learned many lessons about how we—the ecosystem builders—activate innovation by uniting the nodes in our ecosystem. Here is a five-part strategy that ecosystem builders can use to catalyze innovation. This advice represents an innovation-focused dimension of a strong economic development strategy. These efforts can be layered in with traditional economic development approaches to increase regional vibrancy. These final pieces of advice are meant to point ecosystem builders in the right direction. If you’re looking for more detailed insight into each part of the strategy, I link the full article for each regional node inside the advice that follows.
1. GET A LAY OF THE LAND A strong innovation plan starts with an accurate and clear understanding of the region’s culture, strengths, nodes, and assets. So start by conducting a thoughtful assessment comparing your region to peer cities, regions, and states. With a bird’s eye view of key influencers and opportunities, you can then start to strategically build relationships and activate the many nodes in your ecosystem, sometimes one-by-one instead of all at once. Activation is best done in a layered way so you don’t get too overwhelmed by getting every node to participate at once, but you also don’t focus too much on any one node and forget about the others. Be especially wary of the false belief that a thriving startup community is the only important indicator of success. The startup community node is the core economic engine we’re leveraging, but activating only one node in your ecosystem will not foster sustained economic success. That’s why it’s so important to start with a zoomed-out view of the region and to garner financial and leadership support at the state, region, and city levels. The public-private partnerships Cintrifuse in Ohio and LEAP in Kentucky are strong examples of how infrastructure and funding support can accelerate ecosystem growth.
2. STRATEGICALLY INSPIRE BIGCO INVOLVEMENT BigCos, or the large corporations in your region, are hungry for innovation and hold vast resources for validating and scaling new technologies and methodologies. So build a list of influential BigCos and start by targeting a handful of executives who have an innovation role or serve on NFP boards in the community. These players can then network you to others. Invite these “Innovation Champions” to a series of cross-sector activities to better understand their innovation needs and technology priorities—and get experts from venture capital or professional services firms to help facilitate. These activities combined with secondary research will help you identify common innovation themes across companies. From there, you can start to identify and match startups whose capabilities align with BigCo needs. Innovation Challenges and other informal events can help get all of these players in the same room, ideating against shared problems and solutions. The real objective is for these early relationship-builders to result in exchanged value through betas or paid pilots, where business problems are solved for BigCos and revenue plus validation are fueled for startups. This way, BigCos occupy the demand side of the innovation economy and startups provide the supply.
3. ACTIVATE STARTUPS We ecosystem builders need to keep our region’s “taxonomy inventory” of startups—who they are, what they are building and for whom, their key customers, key growth performance data, employee count and investors. This startup innovation supply data is key to ecosystem reporting (i.e. density + maturity, employee growth, capital raised). It enables you to collect insights and success stories, which can then be leveraged to curate even more relationships and introductions to new customers and investors. Establishing and maintaining a baseline of data is essential for long-term ecosystem building.
Overall, ecosystem builders need to be strategic with startup engagement. Startup founders and their teams have to stay focused on product build- out, customer growth, and talent recruitment and retention. Time is their most precious resource. To engage startup founders and their teams, the ecosystem builder must architect consistent value-adding activities that are both low cost and low friction—easy to access, consume, and apply to their business. Outbound communication to the startup database is critical to driving momentum with community building.
The calendar of activities needs to be visible, yet individuals need to be invited and if they can’t engage, they need to hear quickly what value was exchanged from those who did attend. Word spreads fast across startup communities. Satisfaction amongst the startup community builds trust and sets a foundation for attracting and retaining even more founders and talent. Entrepreneurs also want access to specific functional expertise, mentorship, customers, and over time, and if they are high-growth potential companies, they will need investors. Those early stage startups will need introductions to potential funders and mentors—and oftentimes accelerators like YCombinator (California only), Techstars (Global and Cross Sector) and Gener8tor (Midwest and cross sector) that actively recruit from ecosystems.
4. INJECT VENTURE CAPITAL Growth capital is the life blood of an innovation economy. Regardless of the source—whether family, friends, grants, revenue, angels, angel networks, early stage capital, or institutional rounds—growth capital is critical to the health of the ecosystem. Ecosystem builders must have clear paths to capital mapped out for the region. A major part of the role is education and readiness of founders to know what must be true for them to raise outside capital. Creating and strengthening relationships with all capital sources inside the region is important. In addition, based on startup growth and maturity, ecosystem leaders will need to consider building connections outside their city/region with emerging managers of seed funds that are looking for high growth, well-priced deals for their portfolio. Steve Case and Anna Mason of the Rise of the Rest and Cintrifuse’s unique Fund of Funds strategy are powerful examples of how investors can build awareness of new ecosystems. Finally, these efforts must all show metrics of success such as the amount of risk capital raised. These numbers are showcased by a range of ecosystem reports and data that can be pulled from self-reported databases like PitchBook and Crunchbase.
5. PULL UNIVERSITY TALENT Ecosystem leaders can help universities actively participate in their region’s innovation economy by proactively reaching out to engage university leaders in understanding talent needs, research questions, and commercial opportunities. Aligning such efforts with the mission of the universities is a critical first step. When ecosystem leaders can make it easy for universities to lean into values they already champion, collaboration opportunities become clearer and universities see their role in sync with the mindsets of local entrepreneurs and startups. When regions get this right, startup ideas emerging from university research labs can be validated inside BigCos and supported by investors with access to teams experienced in launching successful businesses. Entrepreneurship can be taught at the college level and the startup community can be visibly present to universities as a means of retaining talent in the region after students graduate. Talent and skills developed inside universities can hold direct value to the innovation ecosystem. Miami University and the University of Louisville are shining examples of strong entrepreneurial programs with robust community engagement.
Learn more about activating universities in the full article.
LEADING AN INNOVATION ECONOMY
If we aim to create a sustainable innovation economy, we must work with influential leaders of entities in each node, as well as other ecosystem builders who lead specific entities (such as accelerators, incubators, co- working spaces, and other entities and programs that deliver value to entrepreneurs). We all must align around a common vision, embrace a growth mindset, create conditions to attract talent, and build bridges between key nodes in the ecosystem. We must teach everyone to understand each others’ worlds and be active collaborators to remove real and perceived obstacles to innovation. We have to understand and drive momentum for all the nodes and all the entities engaged in ecosystem building. Startups, BigCos, Government, Universities, and Investors must find shared goals and opportunities, and innovate together. It’s your role as an ecosystem builder to see across institutions, across silos, and across capabilities to connect and unite regional innovators who are taking a deliberate risk to bring to life to new products, processes, and businesses. Economic vibrancy through the activation of talent and innovation is the ultimate shared outcome.
COVID-19 has had profound effects on our lives and our economies. Since March 2020, I have led a team of spirited leaders and innovators from across Colorado’s private, public, nonprofit, and academic communities who are working passionately to mobilize much-needed resources and relief for Colorado’s small businesses, nonprofits, and contingent workforce. That collaborative effort has been formalized as a nonprofit, Energize Colorado, with a mission to help Colorado small businesses stabilize and, over the long term, thrive.
As CEO of Energize Colorado, I apply my expertise as an ecosystem builder to cultivate economic resilience in a critical segment of Colorado’s economy. In fact, local businesses employ approximately 1.1 million people or 48.2% of the private workforce for the entire state. Energize Colorado provides critical funding, education, mentoring, mental health resources, and other support to these businesses and individuals.
BRIDGING THE GAP, SEEDING THE FUTURE
Coloradans are resourceful and innovative, but building economic resilience for the long term will take a deliberate effort to enhance connection and foster engagement across sectors and business types. It will take a diverse and inclusive approach, empowering businesses to thrive through collaborative problem solving and innovative approaches to business challenges. Energize Colorado seeds that engagement, offering mentorship, knowledge sharing, and opportunities for partnership development, among other resources.
Because PPP alone does not provide enough interim support for many of Colorado’s small businesses, one of our first major efforts was to launch the Energize Colorado Gap Fund. The Gap Fund combines private funding with $20 million in federal money designated by the Colorado legislature with support from Gov. Jared Polis and the Colorado Office of Economic Development and International Trade. The fund is open to sole proprietors, businesses, and nonprofits with less than 25 full-time employees, who can receive up to a $15,000 grant and a $20,000 loan for a possible combined total of $35,000 in financial assistance. The fund gives priority to rural, women, and BIPOC owned businesses.
Energize Colorado is a natural outgrowth of my previous work leading regional ecosystem initiatives, advising governments, developing partnerships, and supporting innovation programs that connect businesses, universities, governments, venture capitalists, entrepreneurs, and startup communities to catalyze innovation and increase impact. I’m proud to lead a team of Coloradans helping Coloradans, supporting our diverse business community through the next normal.
For local economies to drive growth and productivity, key decision-makers must invest in entrepreneurial companies. BigCos need to align with, learn from, and use startup talent, products, and services in order to build and strengthen the innovation economy.
The way ecosystem builders set the stage for BigCo-startup collaborations is paramount. Unfortunately, it’s not as simple as putting startups in a room with BigCo leaders. Meetings between BigCos and startups often fall short when it comes to the kind of candid business discussions required for mutually beneficial outcomes.
As CEO at Cintrifuse, a public-private partnership in southwest Ohio and northern Kentucky, I led the effort to build high-value engagement between BigCos and startups with an approach that enabled BigCos to share business challenges, engage with emerging startup technologies, and support the scaling up of promising startup products and services.
MEET-UPS CATALYZE ENGAGEMENT
When we started our mission to catalyze startup innovation in Cincinnati, I already knew how impactful creating conversations between large companies and startups could be–but with 150 BigCos in the area there were too many companies for one-on-one conversations. We needed a different approach.
First, we took stock of the region’s technology landscape, paying particular attention to where large companies (with $100 million in revenue and higher) fell on the digital transformation continuum. We then identified innovation opportunities that could positively impact companies’ organic growth or efficiency.
Our next step was to forge connections. We decided to host informal, digital transformation “meet-ups.” We invited digital thought leaders and investors (entrepreneurs, academics, and government leaders) from outside the region or from other parts of the region to share their expertise on tech themes with regional BigCos.
The informal gatherings were a huge success. Company leaders learned how technology innovation could solve business challenges and they began to see startups as problem-solvers and potential collaborators.
COLLABORATION GROWS THE INNOVATION ECOSYSTEM
Key BigCo-startup relationships formed because my team and I created the right conditions. We sparked high-value, low-stakes organic collisions that fostered trust between BigCos and startups, paired stakeholders with the strongest mutual impact potential, and made the value potential real and tangible.
Our approach strengthened the region’s innovation ecosystem. Today, Cintrifuse has been nationally recognized for its role in developing over 500 startups, connecting more than 16 ecosystem partners, and engaging more than 30 large corporations.
This is the true work of an ecosystem builder: We deliver every program, activity, and introduction intentionally and with a maximalist mindset so that collaborations can form and build momentum across the entire ecosystem.
Universities are often at the heart of innovation corridors. From academic medical centers spawning biotech startups in Boston to Carnegie Mellon’s robotics program catalyzing Pittsburgh’s innovation district, universities play important roles in the innovation economy.
Ecosystem builders can help universities engage in local innovation by aligning academic expertise and strategic priorities with the region’s long-term goals, connecting disconnected nodes within the ecosystem, and, when favorable, developing public-private partnerships.
My ecosystem building work has supported a number of notable university entrepreneurship programs and public-private partnerships. These include Miami University’s John W. Altman Institute for Entrepreneurship; the University of Colorado Boulder College of Engineering and Applied Science; the Louisville Entrepreneurship Acceleration Partnership, a public-private partnership uniting government, universities, private companies, and entrepreneurs; and C3 (Commonwealth Commercialization Center), a public-private partnership focused on state-wide university commercialization strategy, connecting university technology transfer offices and leveraging access to legal, talent, and investment.
SPOTLIGHT ON MIAMI UNIVERSITY’S JOHN W. ALTMAN INSTITUTE FOR ENTREPRENEURSHIP
Miami’s differentiated approach to undergraduate entrepreneurship education is an excellent case in point that proves connecting university programs to other nodes of the ecosystem yields impressive results. From students pursuing initial funding from angel investors to professionals offering guest lectures, Miami’s institute intentionally connects students with other nodes of the ecosystem.
For example, students and faculty benefit from relationships with key regional organizations like Cintrifuse, Flywheel Sociaql Enterprise Hub, and CincyTech. Student-led startups receive mentoring, coaching and advice from more than 450 angel investors and venture capitalists, accelerator directors, startup founders, social entrepreneurs and others from organizations like Techstars, 500 Startups, and Silicon Valley Bank. This strong connectivity has catalyzed entrepreneurship regionally.
STRONG ENGAGEMENT AND GROWTH
As a result of Miami’s innovative, award-winning programming, many students have received insights from seasoned entrepreneurs, BigCo leadership, and investors to develop their own ideas and turn them into trail-blazing companies. Collectively, Miami student-led companies have raised more than $12 million in venture funding over the past four years.
As part of the RedHawk Launch Accelerator and Technology Commercialization and Startup Launch courses, 149 student-founders have launched 36 startups and high-growth companies. Three of the student-led startups raised initial funding and/or landed spots in startup accelerators (Cydekick, Akinda Co., and KCD Cosmetics).
What’s more, the program has attracted 128 angel investors, VCs, accelerator directors, and ecosystem builders from 12 states across the U.S. to participate in RedHawk Venture Pitch Competitions held at the end of the Fall and Spring semesters.
Investing in university programming is just one way to forge pathways between university assets and other nodes in an ecosystem. Such a commitment creates an environment for local communities to begin distinguishing themselves as innovation corridors, creating additional revenue and job opportunities, and developing a rallying cry around which innovators can unite.