Thursday’s conference hosted by Silicon Flatirons titled “Putting the Entrepreneurial Ecosystem in Perspective” featured Governor Ritter’s announcement that the information and communication technologies (ICT) sector would now serve as the 5th pillar of economic development within the state of Colorado. Along with Gov. Ritter’s keynote speech, the conference brought together the stars of the Colorado tech community with entrepreneurial experts from around the country to discuss the Front Range ecosystem and more broadly the foundations of entrepreneurship.
CU Associate Clinical Professor of Law Brad Bernthal began the conference by highlighting the key essentials of an entrepreneurial ecosystem. First, a strong creative class must exist to accelerate the generation and refinement of new ideas. This class is exhibited across the Front Range with Fort Collins, Boulder and Denver all ranking highly in the concentration of software engineers. Second, critical mass is needed to support a bridge between the creatives and supporting talent. To this point, Bernthal noted the service infrastructure of the area and the new edition of the Tech Stars program which attracts and supports young talent. Finally, a networked ecosystem is needed, an attribute Colorado has been able to develop in a uniquely supportive way. To highlight this point Bernthal quoted Rob Johnson, co-founder of EventVue, who said that when you start a business in Boulder “every other startup in town becomes your biggest fan.”
Following Berthal’s introduction to Colorado’s ICT industry, Governor Ritter discussed the role of entrepreneurship in the state’s recovery and his aspirations that Colorado emerge “faster and stronger” from the current recession. With “one of the most educated workforces,” Ritter sees growth in the knowledge-based industries as key to this robust recovery. Ritter specifically spoke to entrepreneurship, saying it “has to be part of our strategy,” and commented on the importance of small businesses to the economy. Ritter also announced that Colorado “officially adopted ICT as the 5th Pillar of Economic Development.” Towards the goal of establishing a vibrant ICT industry, Gov. Ritter highlighted lessons from his recent visit to Silicon Valley which reaffirmed his belief that the best way for Colorado to achieve success as an entrepreneurial community is through developing its own identity. He commented that Colorado is “a place where we do business differently” and that “you beat the competition by being yourself.”
How to Recognize the Development of Disruptive Technologies
- Moderator: Phil Weiser
- David Cohen, Founder of TechStars
- Heather Gates-Massoudi, Director VC Services at Deloitte
- Tom Moore, Founder of WildBlue Communications
- Karl Ulrish, The Wharton School
The first panel of the day focused on reacting to Ulrich’s concept of an innovation tournament. Ulrich began by defining innovation as “a new match between a solution and a need.” In his tournament concept, lots of “raw opportunities” or potential innovations enter the tournament and must pass through a variety of filters through which the exceptional opportunity (i.e. the true innovation) is identified. These tournaments exist both within companies (e.g. considering a variety of models before redesigning a product) and in a broader environment (e.g. VC evaluation of investment opportunities). Ulrich then defined four factors that can be changed to increase the likelihood of finding an exceptional opportunity: consider more raw opportunities, look at better opportunities, increase the variance of opportunities, and increase the accuracy of evaluation.
In response to the presentation, Cohen noted the challenges in accurate filtering as it is “very hard to identify innovations in advance,” providing the personal example that he did not understand the point of Twitter when he first used it. In a similar vein, Moore questioned the applicability of the tournament concept to truly disruptive innovation when “you don’t even know what questions to ask” in order to filter opportunities. Gates-Missoudi took the broader perspective noting the tech scene in Silicon Valley “is an innovation contest.”
Another recurring theme was whether ideas were really the entrants to the tournament or rather the management team accompanying those ideas. Cohen noted that companies “morph and change” and it is “extremely rare” for them to go to market with their initial idea. In commenting on one of his own investments, Moore noted as the initial product plan did not work out he is now betting that the team is “smart enough to navigate through [the changes].”
The Elements of an Entrepreneurial Culture
- Moderator: Brad Bernthal
- Paul Jerde, Executive Director – Deming Center for Entrepreneurship
- James Linfield, Partner at Cooley Godward Kronish LLP
- Jana Matthews, CEO Jana Matthews Group
- AnnaLee Saxenian, Dean School of Information, UC Berkeley
- Michael Zeisser, SVP Liberty Media Corporation
The second panel of the day focused on the Elements of an Entreprenuerial Ecosystem and featured Saxenian’s presentation. Saxenian studied the technology communities that evolved in Silicon Valley and around route 128 in Massachusetts to understand why an ecosystem more conducive to entrepreneurship emerged in Silicon Valley. Several key factors were identified as part of an entrepreneurial ecosystem: venture capital, entrepreneurial experimentation, collective learning, an open labor market, horizontal information flow, collaborative co-design, a local and global search network, and most importantly passion. Saxenian noted that the ecosystem is created not only through the institutions that exist but also the “overlay of social processes” which influence factors such as competition, collaboration and risk taking.
The locally-based panelists looked to apply Saxenian’s taxonomy to the Boulder-Denver area. Jerde cited the importance of a strong university contribution including the importance of engaging students. Matthews focused on the need of successful entrepreneurs to “reinvest and reengage” to create a self perpetuating community. Zeisser noted a need for community organization and a greater sense of collective identity – a unique identity defined by members of the community. Linfield acknowledged that capital may be a limiting factor as about two thirds to three quarters of money invested in Colorado companies comes from out of state.
The Elements of an Entrepreneurial Culture
- Moderator: Jason Mendelson, Managing Director Foundry Group
- Paul Berberian, Co-founder Raindance Communication
- Steve Georgis, CEO ProStor
- Sue Kunz, Founder Solidware Technologies
The final panel of the day brought three successful Colorado entrepreneurs to the stage to discuss their experiences. In commenting on how to identify an innovation all panelists focused on meeting customer need, or as Kunz put it figuring out “would someone open their wallet for this.” Georgis commented never to “trust a single data point” when speaking to potential customers while Berberian advised to “look for certain [strong] language” in such discussions, since people often try to be nice even when not excited about an idea. The panel also focused on the importance of the team to any venture. Georgis called building the team “part of the validation process” as each member must be sold on the opportunity at hand. Berberian is willing to take whatever steps necessary to bring the right people on board stating that “almost any equity you give away is fine to get the right people.” Kunz urged entrepreneurs to “take the time to make the right [hiring] decisions” but to “fix it fast” if a hiring mistake is made.
The panel concluded focusing on the Colorado ecosystem. Georgis liked the size of the community noting it as “big enough to provide talent and resources, but small enough that it’s accessible.” Berberian urged against just trying to become Silicon Valley – as this is not really possible due to sheer size – and not desirable due to Colorado’s unique character: “We’re never going to be Mercedes or GM, but we could be Ferrari – something really special.”
“Putting the Entrepreneurial Ecosystem in Perspective” was proudly hosted by Silicon Flatirons, an interdisciplinary center housed in the CU Boulder Law School. The next Silicon Flatirons event will be an Entrepreneurs Unplugged featuring Sam Zell, on Wednesday April 22nd. Registration information can be located here.
