The seven design principles of ecosystem building.

The Entrepreneurial Ecosystem Building Playbook - Kauffman Foundation

At the Kauffman Foundation, we have identified 7 design principles for building ecosystems. These principles need to be top of mind and baked into everything ecosystem builders do to enhance the elements of their ecosystems.

  1. Put entrepreneurs front and center.
  2. Foster conversations.
  3. Enlist collaborators. Everyone is invited.
  4. Live the values.
  5. Connect people bottom-up, top-down, outside-in.
  6. Tell the community's authentic story.
  7. Start, be patient.

Principle #1: Put entrepreneurs front and center.

Ecosystem Playbook Kauffman Foundation

Traditional economic development sees the forest only. But entrepreneurs are like new trees, or even weeds. They are pushing the edge of the forest, evolving to make the forest better. Our job is to focus on nurturing those emerging sprouts.

Let entrepreneurs be leaders.

Entrepreneurs are the heart and the leaders of entrepreneurial ecosystems. Venture capitalist Brad Feld writes, "The most critical principle of a startup community is that entrepreneurs must lead it." Without this leadership, he writes, "the startup community will not be sustainable over time." That doesn't mean they're the only leaders involved, but they are critical.

Design solutions that are entrepreneur-centric.

A thriving ecosystem must be built by entrepreneurs and for entrepreneurs—not for its institutions or investors. Ecosystem builders must remember that entrepreneurs should be the inspiration for initiatives, the most active participants in plans and the ultimate beneficiaries of programs.

Listen actively. It leads to empathy and understanding.

Ecosystem builders need to talk to local entrepreneurs, listen to their stories and ask them about the challenges they face. Experienced entrepreneurs know the challenges and barriers they face. Sustainable solutions come from the understanding and empathy that ecosystem builders develop in conversations with entrepreneurs. Those relationships serve as the foundation for all other efforts.

The Entrepreneurial Ecosystem Building Playbook - Kauffman Foundation

How have you encouraged entrepreneurs in your community to get involved and lead efforts to build a stronger ecosystem? To enhance the level of talent in the community? To change the ecosystem's culture?

What programs, activities or events have you designed or redesigned to be entrepreneur-centric? How have you made sure that entrepreneurs are front and center at your community gatherings?

How have you gathered information from and built understanding about the entrepreneurs in your community? How have you built stronger relationships with those entrepreneurs?

Principle #2: Foster conversations.

Ecosystem Playbook Kauffman Foundation

What is a community? Author Peter Block shares a compelling idea: "The aspect of a community that gives it a new possibility is simply the conversation it chooses to have with itself." In order to foster a more vibrant entrepreneurial community, we need to create more conversations about entrepreneurship and the possibility of entrepreneurial success.

Create interactions among peers.

Entrepreneurial ecosystems are horizontal social structures. That means everyone is a peer. Conversations happen in events, mentor sessions, phone calls, serendipitous collisions in coffee shops and parking lots, and every point in between. These conversations can happen between all different kinds of people, including entrepreneurs and mentors, founders and customers, investors and their friends, or aspiring entrepreneurs and their spouses.

Shift the conversation to hope.

It's not enough to simply increase the amount of conversation. The nature of conversations matters, as each one contributes to the collective story a community tells about itself. As Block says, we must shift the conversations "from one of problems, fear and retribution to one of possibility, generosity and restoration." In the most successful ecosystems, you can feel the joy and passion in the air. Positive conversations build social capital and foster trust and collaboration in the ecosystem.

Bias conversations toward action.

It's also not enough just to have hopeful conversations. The key is to drive action. Human-beings learn best by solving problems together. So instead of just chatting in a conference room, try building a physical prototype, visualizing ideas on a whiteboard, or putting a big piece of paper on the table that everyone can write on. Work toward active solutions together.

The Entrepreneurial Ecosystem Building Playbook - Kauffman Foundation

How have you brought entrepreneurs and others together to create more conversations and interactions? How have you facilitated conversations across silos and sectors? How have you used conversations to work toward active solutions and build relationships?

How have you helped shift the conversations in your community from negative to positive?

Principle #3: Enlist collaborators. Everyone is invited.

Ecosystem Playbook Kauffman Foundation

A thriving entrepreneurial ecosystem has a culture of invitation: everyone is welcome. It doesn't matter whether they have an entrepreneurial idea or don't know much about business.

Be radically inclusive.

Entrepreneurs' age doesn't matter—nor does their industry, the color of their skin, their dress, or the neighborhood they come from. It's not about titles. It's not about hierarchies. It is about where people are going, rather than where they're coming from.

Ecosystems must live and breathe inclusion as a core philosophy. That's because everyone has something to contribute. Ecosystem builders' goal is to unlock the potential value in everyone in the ecosystem.

Enhance diverse connections.

An ecosystem builder acts by inviting. The first inclination for any new initiative should always be to invite new people and organizations into the community, to find new ways for actors to connect, collaborate, co-create, share credit and find mutual benefit. Diversity takes intentional work, but the more collaboration that occurs between ecosystem players, the more entrepreneurs will benefit. Diversity is power.

Be a keystone.

In biology, a keystone is a species that bridges gaps in the ecosystem. The same thing happens in entrepreneurial ecosystems. Keystones cross-pollinate people, ideas and resources across barriers. They don't fear being outshone. In fact, they welcome it. Keystones empower others to lead by inviting and encouraging. The more leadership is shared and multiplied, the more entrepreneurs will benefit from diverse connections and mutually beneficial collaborations.

The Entrepreneurial Ecosystem Building Playbook - Kauffman Foundation

How have you gone out of your way to be more inclusive in efforts to help build your community of entrepreneurs?

What efforts have been most successful in bringing in new and diverse groups of entrepreneurs?

How have you bridged social gaps? Expanded your circle?

How have you broadened the educational efforts in your community to build new and more diverse talent?

Principle #4: Live the values.

An entrepreneurial community is a network, not a hierarchy. So it can't, by its nature, have a strongman at the top. But this doesn't mean an ecosystem doesn't have leaders.

Walk the walk.

Ecosystem builders lead in a different way than we often imagine a traditional CEO or mayor might act. Effective ecosystem builders don't lead by decree. Instead, they lead from behind by convening; empowering others; being thoughtful listeners and connectors; and inspiring (and sometimes coaxing) others to help each other and engage. Because they are visible in the community, ecosystem builders can have an outsized impact on culture by modeling values. It is through our own behaviors that we show others how to behave. We need to model the future we wish to see.

Change values by changing behaviors.

The process of change takes time. As ecosystem builders create a community—whether by connecting people, designing programs or organizing events—they need to focus on how those activities affect behaviors. Over time, the right behaviors will shape the right values. Cultural shifts happen invisibly at first, but as they accelerate they become powerful.

Make social contracts explicit.

Values are like an invisible social contract that guides the behavior of a community. Each community has its own underlying values. It helps to make these values explicit because it's hard for people to follow rules they don't know. For example, the office walls at Facebook still have big signs from its startup days that remind people to "Move Fast and Break Things."

Ecosystem Playbook Kauffman Foundation

What are the cultural behaviors necessary for a thriving ecosystem? The list below outlines some key values ecosystem builders should embed in their work.

Ecosystem Playbook Kauffman Foundation

The Entrepreneurial Ecosystem Building Playbook - Kauffman Foundation

How have you modeled the culture and values you wish to see in your entrepreneurial ecosystem? How have other community leaders modeled the culture and these values?

How have you mentored others in the community?

How have you changed the behaviors of members of your community to bring more people in and help them collaborate more successfully?

How have you helped to make the values you wish to see more explicit for other members of the community?

What bold challenges or experimental projects have you taken on?

What failures taught you most about successful ecosystem building?

Principle #5: Connect people bottom-up, top-down, outside-in.

Community change creates tension. Those doing great work at the grassroots level (including entrepreneurs, artists, community organizers and others) sometimes see things differently than those doing great work in more formal leadership roles and structures (such as large institutions and networks that control resources and possess built-in social capital).

Often, disagreements over priorities and over control of scarce resources sow division and retrenchment. But it doesn't have to be that way. In successful ecosystems, people find ways to overcome parochial differences and connect across traditional hierarchies. Together, they build diverse networks of mutually advantageous relationships.

Bridge social boundaries.

Ecosystem Playbook Kauffman Foundation

The central element of a thriving ecosystem is a culture of trust, collaboration and mutual gain. A divided community with a culture of mistrust doesn't work. The key to building a thriving ecosystem is to connect a community across all its social boundaries: bottom-up, top-down and outside-in. Ecosystem builders must seek opportunities for different groups in the community to come together, learn each others' stories and work together.

Build tribes of trust.

Ecosystem builders need to construct new tribes out of old divisions. The people often seen "at the top" have huge power to leverage existing trust networks and help those "at the bottom" succeed. They can open doors to customers, investors, or other mission-critical help for entrepreneurs. These entrepreneurs, in turn, bring fresh ideas and new energy to communities when they are given a seat at the table. Ecosystem builders need to find ways to bring these two groups together, help them get to know each other, and watch how each can inspire and help the other.

Build social feedback loops.

Creating stronger tribes accelerates the flow of information and enhances social feedback loops, the mechanisms that communities use to reward good behavior and penalize bad behavior transparently. Ideas will flow faster. People will be more accountable to each other. Good actors and bad actors will be quickly called out. And as a result, entrepreneurs will be more likely to succeed.

The Entrepreneurial Ecosystem Building Playbook - Kauffman Foundation

How have you brought together the formal leadership of your community with the entrepreneurs, inventors and creatives that need their help? How have you helped them get to know each other?

How have you helped these groups collaborate to build the community of entrepreneurs, increase the level of talent or improve the community's culture?

How have you encouraged leaders to share relationships and information that will help entrepreneurs?

Principle #6: Tell a community's authentic story.

Ecosystem Playbook Kauffman Foundation

Every community has its strengths. An ecosystem builder's job is to uncover these strengths, publicize them and leverage them to write a fresh positive narrative.

Create stories out of strengths.

Ecosystem builders need to get to know the entrepreneurs in their communities, identify the community resources for entrepreneurs and bring them to light. They must have pride in their communities' cultural strengths and be aware of their communities' limitations—but not be cynical about them. We can discover the entrepreneurial DNA of our communities and learn about their history of entrepreneurship, their native companies (there are always more than we realize), and the positive conversations taking place on the streets and in local cafes. All that knowledge can be used to chart new stories for the community's future.

Every community is unique. It is important to focus on the community's specific story—rather than trying to be the next Silicon Valley or focusing on dazzling industries that are not rooted in the community's own stories and strengths.

Build channels to share those stories.

Stories are transmitted differently in each community. This might happen through local television or newspapers. There might be newspapers or social media channels. Or perhaps information travels through word-of-mouth. Ecosystem builders need to engage those channels of communication to help share new stories. Or they might need to build new channels. For example, many successful communities have their own blogs and ecosystem news hubs for entrepreneurs that provide streams of valuable information.

Elevate role models.

As ecosystem builders uncover the assets of their ecosystems, they will inevitably find successful individuals who can serve as role models for others. Every community has its secret entrepreneurial success stories. Ecosystem builders must recruit those individuals and elevate them as examples for others by highlighting their stories to others.

The Entrepreneurial Ecosystem Building Playbook - Kauffman Foundation

How have you learned more about the strengths and limitations of your community? How have you learned more about its entrepreneurial history and native companies?

How have you seen these stories inspire others in the community?

How have you learned more about how stories are transmitted in your community? How have you shared their stories? And how have you enlisted them to help other entrepreneurs?

How have you identified role models in your community? How have you shared their stories? And how have you enlisted them to help other entrepreneurs?

How have you curated those stories that will have an outsized impact on the community's collective consciousness?

Principle #7: Start, be patient.

Ultimately, we can think about building entrepreneurial ecosystems in just two steps:

  1. Start.
  2. Be patient.

Ecosystem builders need to take a long-term view of change. It might take a decade or two to see any lasting results. That timeframe makes sense because building businesses take a long while, and culture change moves slow before it moves fast. Don't count success only by statistics in traditional economic reports and political cycles. The real change should be happening well before those statistics ever show it.

A program that works in one city might fall short in another. Ecosystem builders must think and act entrepreneurially. They must try things, get feedback and learn. Fail and persist. And try, try again.

The process of ecosystem building is emergent, not linear. And it is perpetual, so it never truly ends. It's a marathon, not a sprint.

You don't need permission to be an ecosystem builder, you just have to care for your community enough to start.

Ecosystem Playbook Kauffman Foundation

The Entrepreneurial Ecosystem Building Playbook - Kauffman Foundation

What are your short-term and long-term goals for your community?

How long has it taken for you to accomplish other goals while building your entrepreneurial ecosystem?

How do you pace yourself for the marathon?