The Path Forward to Economic Vibrancy: How Ecosystem Builders Unite the Innovation Economy

If you’ve followed my blog series on Economic Vibrancy, you already know that regional innovation is sparked by many players (or what I’ve referred to throughout this series as “nodes” in the ecosystem). Startups. BigCos. Investors. Universities. In addition, many times there are a range of ecosystem builders from both public and private sectors who run specific entities, build systems, collect data, lead initiatives, host events, and open pathways between the nodes in the ecosystem. 

Ecosystem builders are those players tasked with the responsibility of leading the entire region to embrace and accelerate innovation. 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. To 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 co-working 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 builders work 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. So for this last post in my series, I’ll share 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 toward 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.

Learn more about activating BigCos in the full article at https://medium.com/@wendyslea_18435/economic-vibrancy-bigcos-e6a4638052b4.

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, 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. 

Learn more about activating startups in the full article at https://medium.com/@wendyslea_18435/https-medium-com-wendylea-economic-vibrancy-startup-communities-dcd99d63520a.

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. 

Learn more about activating investors in the full article at https://medium.com/@wendyslea_18435/how-a-national-venture-capital-strategy-can-spark-economic-vibrancy-21ed75200fb5

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 at https://medium.com/@wendyslea_18435/economic-vibrancy-universities-5e61fc9c1430.

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.