Wednesday, August 14, 2013

Anarcho-Startups

The MIT Technology Review has published a super interview with Brad Feld, a partner at the Foundry Group, a venture capital firm that invests in startups. Not only is Feld excited about the opportunities for entrepreneurial adventures in Detroit, but he's also a market anarchist at heart.

Feld's principles for growing an environment for startups centers around the notion that a small core group of entrepreneurs can incubate a startup sector in just about "any city from Detroit to Cape Town." Feld says this about entrepreneurial communities:
Clusters or hubs are words that have very negative connotations to me. They describe things that governments try to create, and the vast majority of those efforts have not been successful. They are actually antithetical to what I believe in. So I’ve tried to focus on the idea of communities—it’s the notion of creating startup communities, which is a very bottom-up, very entrepreneur-led, organic phenomenon. It’s a profoundly different approach.
If you’re in a city where there’s no clear startup community, the goal is not raise a bunch of money to fund a nonprofit, the goal is not get your government involved. The goal is start finding the other entrepreneurial leaders who are committed to being in your city over the next 20 years. Then, as a group, get very focused on knowing each other, working together, being inclusive of anyone else who wants to engage, doing things that help recruit people to that geography, and doing selfish stuff for your company that also drives your startup community.
Feld goes on to talk about how governments are feeder units, wasting energy on bringing large, inflexible companies to relocate to their cities via tax teasers and political favors without creating any meaningful job environment. He also notes that these hierarchical, top-down organizations - such as a Boeing - are stale and toxic, while network-driven startups supply versatility, creativity, and innovation. Feld, as a partner in a firm that funds startups, looks for entrepreneurs with a low time preference who favor a bottom-up structure that challenges the status quo. He focuses on great leaders and their long-term commitments to communities, as opposed to stale and meaningless metrics that are mindlessly communicated by the financial talking heads in the media.
The thing that you hear all the time is, well, were there more jobs in Q1 2013 than in Q1 2012? Were there more financings in Q2 than Q1? That shit just simply doesn’t matter. And that’s the problem with so many organizations around entrepreneurship. They’re driven by metrics that don’t matter.
As to Detroit, he notes the following thoughts that I have been documenting on this anarcho-Detroit blog throughout 2013:
Think about what happened to a place like Detroit. A hundred years ago, Detroit was an incredible startup community. And a lot of why it’s been in decline has to do with culture and hierarchies and lack of innovation and all of the classic problems that happen when companies become very large incumbents. Part of the power of having startup communities is it continues to challenge the status quo. So for many of these cities that were once very important and powerful, that today are struggling, startup communities are a way for them to rejuvenate themselves.

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