Successful startups emerge from having the right idea, at the right time, in the right place, and any sensible entrepreneur will tell you that a healthy dose of good luck certainly plays a role in these factors coalescing. I believe that while it is impossible to manufacture a scenario where these three factors coalesce, it is possible to encourage it by cultivating serendipity. By this I mean an eagerness and willingness to be exposed to plethora people, ideas, and learning opportunities.
It is not just entrepreneurs who can cultivate serendipity. The people, and organisations that make up the entrepreneurship, innovation and startup ecosystem (the startup ecosystem henceforth for brevity) can also achieve this by ensuring that diverse opportunities, funding sources and types, mentorship, and support mechanisms are in place. By cultivating serendipity broadly within the startup ecosystem we are maximising the potential for a wide variety of different ideas, teams, and business models to emerge, grow and succeed.
Supporting the startup ecosystem is a growing priority for societies all over the world. How such support is realised varies immensely but typically looks to harness entrepreneurs and investors (in their many forms) and leverage the support of a key triumvirate of organisations; namely Industry, Academia, and Government. Support from these organisations typically manifests itself as grants, educational programs, and opportunities for trials and collaborations.
While such organisations might have a historical tendency to systematise, centralise, and processise, these actions stand at odds with the need to cultivate serendipity. Reassuringly, in the early days of these ecosystems it is typical to see broad and disparate programs, opportunities and activities emerging form these organisations, leading to the emergence of diversity in the nature and form of funding and support services for entrepreneurs.
As the startup ecosystem matures three things typically happen.
- Programs, opportunities and funding tend to become less broad and instead specialise around supporting a key phase of the startup process.
- A pipeline of programs, opportunities and funding emerges as a result of the specialisation above, and as organisations focus on offering support that leverages their key skills and experience.
- Other organisations who have an interest in participating in the startup ecosystem are able to identify opportunities to participate by servicing stages in the pipeline that are unfilled, or under serviced.
The outcome of these three actions is the formation of a pipeline of programs, opportunities and funding that supports the growth of the startup ecosystem. As in any market, competition that emerges between organisations servicing the startup ecosystem hopefully drives innovation, and further diversifies, the programs, opportunities and funding that they are offering to the startup ecosystem.
In larger ecosystems the larger number of providers typically provides this competition, leading to the overall growth and diversification of programs, opportunities and funding being offered to the startup ecosystem and thus accelerating the emergence, growth and success of startups in this region. Conversely, in smaller ecosystems there is a risk that over-optimisation of the pipeline can emerge as organisations return to their historical tendency to systematise, centralise, and processise. This arises from:
- Organisations jointly and separately looking to conserve valuable resources.
- Organisations whose participation in the startup ecosystem is inappropriately subsided based on a perceived ability to deliver value to the startup ecosystem.
- Organisations looking to increase their influence in the startup ecosystem by servicing more stages of the pipeline than they can reliably service based on their resourcing, skills and expertise.
Such over-optimisation typically reduces diversity in the programs, opportunities and funding being offered, potentially damaging the emergence, growth and success of startups in this region. This over-optimisation is thus fundamentally bad for entrepreneurs and startups, even though it may happen with the best of intentions.
Reducing the diversity of organisations servicing the startup ecosystem naturally leads to the emergence of gatekeepers, people or organisations who control the programs, opportunities and funding on offer, and the ability of entrepreneurs and startups to participate and access them. Gatekeepers can inhibit the growth of ideas, entrepreneurs and startups who are atypical, or who are targeting industries or demographic that they do not understand. In an extreme scenario the emotions and relationships of gatekeepers influence their decisions, deeply impacting the ability of certain entrepreneurs and startups to access the support services they need to grow and succeed.
This outcome is simply avoided by preventing over-optimisation of the pipeline and encouraging diverse participation from people, and organisations who can service the startup ecosystem. This decentralises and diversifies programs, opportunities and funding, and encourages market-based (i.e. proper) competition between organisations servicing the startup ecosystem. Losing control of an ecosystem because it overflows with ideas, opportunities and people is surely what we are trying to create. An ecosystem where everyone works to cultivate serendipity.