Just as it takes a village to raise a child, I really do believe that it takes a strong startup ecosystem to build a successful business. I’m fortunate to have experienced, first-hand, the tangible and intangible advantages of being a part of a startup ecosystem—and reaped the rewards.
First, let me clarify that I believe that a startup ecosystem operates on two levels: general location and your specific community. Both are important; let’s take a look.
If you start your company somewhere that is a hot-bed of startup activity, there’s an energy that’s undeniable. You don’t need organized events to meet other startup folks; they’re everywhere—sharing ideas, making connections, supporting each other. Hooking into this energy can propel your business—and there’s just something about being in a place that just “gets” the whole startup thing without you having to repeatedly explain and justify your vision.
The other side of the ecosystem equation is your own specific community that you grow—the partnerships that you make for your business: your employees, your lawyers, your bank, your investors, your financial services support firm. Basically, anyone that your company works with is a part of your ecosystem and, as such, can do more than merely provide the services for which you’ve partnered with them—they can help your business in other specific ways, teaching you, pushing you, questioning you, making connections.
To be more specific, here are 5 ways you can use your ecosystem as a stepping stone to greater startup success:
1. Recruiting great talent – Hop on CalTrain, heading from San Francisco to Mountain View—along the Silicon Valley Corridor—and by the time you’ve reached your stop, you have the lead on that Ruby on Rails Developer you were looking for. Within a strong startup ecosystem, stories like this are a dime a dozen. If you’re looking to fill a specific position, everyone you meet is a potential networking opportunity. Put your requests out there, and see what leads you uncover. And definitely attend local events—from free talks to drink nights. There is no cost to advertising your job openings by word-of-mouth or via your social media, so any leads you can get offer you a great ROI.
2. Creating partnerships with key companies and vendors – If you are in the market for a specific service, there are doubtless many options to choose from. How to choose the best one for your company? Check in with your ecosystem. Talk with the CEO of a company within your niche to find out who their lawyer is. Ask your financial consulting firm for their suggestions for potential investors for additional rounds of funding. Get the picture? Use what you have to get what you need.
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3. Fundraising process – As I touched on in my last point, you’ll want to dig deep into your community to find connections to potential investors. There’s another way that your ecosystem can help you raise funds too. In a strong startup ecosystem, you’ll often find an interesting cycle of successful entrepreneurs funding and supporting new entrepreneurs. Successful entrepreneurs understand the process, and they can recognize startup potential from an insider’s perspective. So when you’re talking to other entrepreneurs, there’s always a chance that you are talking to your next investor. Recycling funding in this way, builds and reinforces an ever-growing, thriving startup ecosystem.
4. Guerilla marketing – Think of your startup ecosystem as a low- or no-cost marketing tool. In a way, your ecosystem is guerilla marketing: an unconventional way to introduce your company, communicate your product/service offerings to potential customers, cooperate with other companies, and target your message. Every contact you make within your ecosystem is a form of free publicity so be sure you have your pitch down and your message on-target. With guerilla marketing, keep an eye on your new relationships and profits (rather than just sales).
5. Source advisors – As an entrepreneur, how many times do you hear the warning not to reinvent the wheel? And yet, time and time again, many new businesses wind up making the same mistakes. If you can source advisors from your ecosystem, you can reduce the likelihood of making these same mistakes. These trusted advisors can share their wisdom and real-world experiences with you and help you to make strategic decisions. And if any of these mentors turn into investors, all the better.
In the early stages of starting up your company, it can sometimes feel like you’re charting uncharted territory. In some ways you are: each business is different and has different challenges to face. But, if you can create your business within the structure of a strong startup ecosystem—relying on its innate resources and cultural support—you will automatically have an advantage against competitors who are going it alone.
How do you use your ecosystem to support your business? Tell us about it in comments below or contact Early Growth Financial Services to expand your ecosystem.
David Ehrenberg is the founder and CEO of Early Growth Financial Services, a financial services firm providing a complete suite of financial and accounting services to companies at every stage of the development process. He’s a financial expert and startup mentor, whose passion is helping businesses focus on what they do best. Follow David @EarlyGrowthFS.