Entrepreneurs are notoriously busy. You spend most of your time developing your new exciting business or working on one of your existing projects. Despite your hectic schedule, you should allocate time and resources to build the ecosystem surrounding your company.
Sounds crazy, doesn’t it? Why would you want to develop an environment that competitors can thrive in? Well, it’s much tougher to secure funding, attract the best talent and keep pace with innovation if you’re the only start up in town.
In this blog post, we look at why it’s important to have a start-up ecosystem, the steps you can take to build your ecosystem and how the Ye! Community can help.
What is an ecosystem?
Ecosystem is one of the most popular buzzwords in the business world. James Moore was the first to coin the term in 1993.
It refers to all stakeholders – including suppliers, competitors and distributors – that are involved in the delivery of a specific project. Similar to biological ecosystems, successful business ecosystems rely on both cooperation and competition.
The age-old adage, ‘survival of the fittest’, applies here. The intertwined nature of ecosystems means that each participant influences and is influenced by the others. So, in order to survive members must become flexible, adaptive and open to change.
It’s worth noting that ecosystems are tilted to benefit certain players. An uneven or unbalanced ecosystem means that some businesses will thrive and others falter.
Why is it important?
Ecosystems have transformed the way organisations view economic value. It’s no longer about customer trends and best-selling products or services. Now, there’s greater scrutiny on changing circumstances with other significant players, such as vendors, employees and government policy makers.
In a nutshell, ecosystems tell us that individuals are significant. The dynamic interactions between one and other enables us to collaborate and grow together. Successful ecosystems develop processes that cultivate the flow of concepts, talent and resources. The overall result is that moments of brilliance and invention are more consistent, through networking and knowledge sharing.
Examples of successful business ecosystems
In the last decade, Chicago has emerged as a major player in the tech industry. The development of a successful business ecosystem is one of the main reasons for the significant growth. Key players in Chicago – including the City Government, the universities and community development organisations - have worked together to create the perfect conditions for start-ups to thrive.
Chicago’s Small Business Center (SBC) embodies the City’s ecosystem. The SBC is a hub of services and resources expertly curated to help entrepreneurs and small business owners. The format is similar to networking events and aims to connect business owners with consultants and experts.
Chicago also launched the Chicago Microlending Institute (CMI) in 2010. The purpose of the CMI is to loan capital to start-ups and small businesses. In 2014, the CMI provided $1 million in loan funds to 126 start-ups and small businesses situated across 54 Chicago neighbourhoods.
Across the Atlantic Ocean, Manchester has built an impressive ecosystem. Key players in Manchester believe the ecosystem is essential to the City’s success and growth, particularly in the technology and healthcare sectors.
Over the last five years, there’s an increased appetite for knowledge sharing and networking in Manchester. Schemes such as the Tech Manchester Initiative help to connect successful entrepreneurs and start-ups in mentoring and thought leadership programmes.
In the healthcare industry, Manchester has developed a network that brings together academic expertise, local SMEs and international pharma companies. The ecosystem delivers a friendly environment that enables stakeholders to innovate, develop and deploy health solutions.
Recent studies have positioned Beijing as one of the world’s leading start-up hubs. In fact, some even go as far as saying Beijing will soon eclipse Silicon Valley as the world’s top start-up hub.
Similar to their Silicon Valley counterparts, Beijing’s impressive ecosystem provides the perfect conditions for tech start-ups to thrive. The well-known district of Zhongguancun is home to many of these start-ups – as well as, venture capitalists, investment firms and entrepreneurial experts.
To support Beijing’s ecosystem, the central Government created a $6.5bn start-up fund. The Government also committed to reducing taxes, providing research and development support and offering $100,000 to eligible tech start-ups.
How to build an ecosystem:
Based on the examples above, we’ve compiled four of the most important factors to consider when developing an ecosystem:
- Inspiration – use local media to advertise networking and thought leadership events. Start-up blogs and publications, targeting entrepreneurs, are really effective tools to connect likeminded people.
- Education – reach out to local academic institutes to help nurture and attract the best talent. Organise best practice events to facilitate knowledge sharing.
- Team building – provide services that help to connect start-ups and successful entrepreneurs.
- Investor networking – organise demo days to connect start-ups and local entrepreneurs with professional investors and venture capital specialists.
Business ecosystems are important for start-ups. With innovation on-the-tip of everybody’s tongue, the world’s leading cities are allocating more capital and resources to help entrepreneurs and small businesses.
As a young entrepreneur you’re responsible for contributing to your region’s ecosystem. Although it may help your competitors thrive, you can also reap the benefits of more investment opportunities, knowledge sharing and networking events.
How can the Ye! Community help?
The Ye! Community is an initiative of Child & Youth Finance International. Our purpose is to enhance the entrepreneurial ecosystem and increase the support for youth-led enterprises. Collectively, we believe this will help to reduce youth unemployment globally.
It’s difficult to start a business – particularly for young people! Unlike the examples above, most young entrepreneurs are unable to access capital from financial institutions or investors, unable to access networks and unable to access resources and information to support the growth of their ventures.
The issues listed above can create huge problems for the global employment rate. Why? Well, on average young entrepreneurs hire up to 11 other youths in their enterprises. So, it’s important to teach young people that entrepreneurship is a viable career path.
This is where we can help!
Ye! works to connect and convene key stakeholders around the topic of youth entrepreneurship. We organise events with key stakeholders and policymakers, such as Ye! Country Awards and the Ye! Global Awards. The purpose of these events is to showcase successful youth-led enterprises and raise awareness on the need for policies and initiatives which support young entrepreneurs. We also work with young entrepreneurs to create Ye! Chapters - localized support networks where they organize events like meetups, workshops, and trainings to enhance the capacities of their peers.
We aim to create and support ecosystems around the globe where young entrepreneurs are inspired, connected and educated on where to find the resources and information they need be a successful entrepreneur.
Some say it’s all about funding, but it’s more than that. Without a supportive ecosystem, funding youth-led enterprises is a band-aid fix which seldom supports more than a few select individual ventures. It doesn’t address the root of the problem. In contrast, ecosystem building goes to the core and seeks to change the entire system.
Image source: Pixabay
Parmvir Singh is currently working as a marketing coordinator at a B2B software provider called Wax Digital. His main responsibilities include writing blogs, social media marketing and CRM maintenance.