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BABSON
Entrepreneurship Ecosystem
BABSON
Entrepreneurship EcosystemProjectProject
n ro uc ng
e
n ro uc ng
e
BabsonBabson
Entrepreneurship Ecosystem ProjectEntrepreneurship Ecosystem Project
April 19, 2012
Fostering high growth entrepreneurship ecosystems around the world Fostering high growth entrepreneurship ecosystems around the world
Copyright © 2011, 2012 Daniel Isenberg
1
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r o e c t
c o s y s t e m
a
r e n e u r s
p s on
o
a
Entrepreneurship: An integral part of Entrepreneurship: An integral part of
“ “ ” ”
s o n
n t r e
Copyright © 2011, 2012 Daniel Isenberg 2
4/26/2012
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BABSON
Entrepreneurship Ecosystem
BABSON
Entrepreneurship Ecosystem
But public leaders areBut public leaders areProjectProjectun ers an a y
con useun ers an a y con use
Accelerators?Incubators?Technology
Angel
networks?
transfer?
Microfinance?
Startups vs. life-style business
vs. micro-enterprise?
Clusters?SME loan
guarantees?
Mentor corps?
GovernmentCrowd
funding?
Angel tax credits?
Copyright © 2011, 2012 Daniel Isenberg
4/26/2012 3
VC
fund of funds?policies?
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Policy reforms and
incentives being plannedAccess to regionalmarkets
and multinationals
Venture capital
funds
and
angel investment just startingMost
cities,
states
and/or
Entrepreneurshipeducation
coun r es ave prom s ng
ro rams and
initiativesis starting in high schools
and
universities
oc a norms
ecom ng
pro
‐entrepreneurship
Some initial successes
ome support
mec an sms
forming:
• Incubators
• Angelgroups
• University tech transfer
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4
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BABSON
Entrepreneurship Ecosystem
BABSON
Entrepreneurship Ecosystem
But they typically do notBut they typically do not
ProjectProject
For exam le:
• Angels are investing more, but their investments are not succeeding and the angels are losing money
• Fewer venture funds are forming, and often avoiding risk
• Private capital markets remain irrelevant to entrepreneurs
• Entrepreneurs still find regulation unfriendly or burdensome
• Large companies buy from the same, customary suppliers
• Innovation remains lower than it needs to be
Copyright © 2011, 2012 Daniel Isenberg
4/26/2012 5
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BABSON
Entrepreneurship Ecosystem
BABSON
Entrepreneurship Ecosystem
Initiatives may be too Initiatives may be too
ProjectProject……
… while
non…
while
non
‐‐government
stakeholders
act
government
stakeholders
act
w ou common v s on, goa sw ou common v s on, goa s
Copyright © 2011, 2012 Daniel Isenberg
4/26/2012 6
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BABSON
Entrepreneurship Ecosystem
BABSON
Entrepreneurship EcosystemWhat doesn’t
workWhat
doesn’t
work ProjectProject
• Attempts to copy Silicon Valley – Russia’s Skolkovo; KSA ‘s“TechnoValleys”, Singapore ‘s Biopolis
• Piecemeal (“silver bullet”), isolated policies and programs – Incubators, angel networks, venture capital, education, microfinance, tax
credits, tech transfer
• Top‐down winner‐selection (sectors, companies) – Sector‐based clusters, direct investment
• Confusing high growth and small enterprise policies – SME policies exist side by side with high growth, and micro‐enterprise
• , – Competitiveness, national innovation systems
• Government ‐giveaways
Copyright © 2011, 2012 Daniel Isenberg
– In iscriminate un ing programs
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BABSON
Entrepreneurship Ecosystem
BABSON
Entrepreneurship Ecosystem
What does workWhat does workProjectProjectgrow ng
ev encegrow ng ev ence
• Holistic support of entire ecosystem – srae , a wan, ew ea an , re an , ce an , e
• Engagement of
broad
‐base
of
stakeholders
– Family groups, entrepreneurs, multinationals, foundations, NGOs, education, government, financial etc.
• Common vision and specific objectives – High potential entrepreneurship, 1/100,000 heuristic
• Highly specific (tailored) programs
– Innovation, adaptation, experimentation
, – “Law of small numbers”
• Continual “market tests” – “pulsed” support, matching funds, self ‐liquidation of government programs
• Alignment (synergy)
among
domains
– Need independent, temporary professional agency
• Ongoing, candid public private dialogue – Voice to entre reneurs at all sta es
Copyright © 2011, 2012 Daniel Isenberg
• Highest level support
– Symbolic as well as tangible4/26/2012 8
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BABSON
Entrepreneurship Ecosystem
BABSON
Entrepreneurship EcosystemProjectProject
Entrepreneurship
Entrepreneurship Ecosystem
Ecosystem
ProjectProject
Copyright © 2011, 2012 Daniel Isenberg
4/26/2012 9
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Government
• Institutions • Research institutes
Leadership
•Unequivocal support
r o e c t
e.g. Investment, support
• Financial support
e.g. for R&D, jump start funds
• Regulatory framework
Incentives
e.g. Tax benefits
• Venture‐friendly legislation
• e.g. Bankruptcy, contract enforcement, property rights, and labor
Early Customers
• Early adopters for proof ‐of ‐
concept
• Expertise in productizing
• Reference customer
• Social legitimacy
• Open door for advocate
• Entrepreneurship strategy
• Urgency, crisis and challenge
Financial Capital
c o s y s t e m
aNetworks
’
• First reviews
• Distribution channels
• M cro‐ oans
• Angel investors,
friends and
family
• Zero‐stage
venture capital
• Venture cap ta un s
• Private equity
• Public capital
markets
• Debt
Policy
FinanceMarkets
r e n
e u r s
p s on
o
a
• n repreneur s ne wor s
• Diaspora networks
• Multinational corporations
Success Stories
• Visible
successes
• Wealth generation for founders
• International reputationLaborEntrepreneurship
entrepreneurship
ecosystementrepreneurship
ecosystem
s o n
n t r e
Educational Institutions
Societal norms
• Tolerance of risk, mistakes, failure
• Skilled and unskilled
• Serial entrepreneurs
• Later generation family Culture
Human
Capital
Non‐Government Institutions
• General degrees
(professional and
academic)
• Specific entrepreneurship training
• nnova on, crea v y, exper men a on
• Social status
of
entrepreneur
• Wealth creation
• Ambition, drive, hunger
Infrastructure
Supports
Su ort rofessions
Copyright © 2011, 2012 Daniel Isenberg
• Entrepreneurship
promotion in non‐profits
• Business plan contests
• Conferences
• Entrepreneur‐friendly
associations
4/26/2012 © 2009, 2010, 2011 Daniel Isenberg
• Telecommunications
• Transportation & logistics
• Energy
• Zones, incubation centers, clusters
• Legal
• Accounting
• Investment
bankers• Technical experts, advisors
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Government
• Institutions • Research institutes
Leadership
•Unequivocal support
r o e c t
e.g. Investment, support
• Financial support
e.g. for R&D, jump start funds
• Regulatory framework
Incentives
e.g. Tax benefits
• Venture‐friendly legislation
• e.g. Bankruptcy, contract enforcement, property rights, and labor
Early Customers
• Early adopters for proof ‐of ‐
concept
• Expertise in productizing
• Reference customer
• Social legitimacy
• Open door for advocate
• Entrepreneurship strategy
• Urgency, crisis and challenge
Financial Capital
c o s y s t e m
aNetworks
’
• First reviews
• Distribution channels
• M cro‐ oans
• Angel investors,
friends
and
family• Zero‐stage
venture capital
• Venture cap ta un s
• Private equity
• Public
capital
markets• Debt
Policy
FinanceMarkets
r e n
e u r s
p s on
o
a
• n repreneur s ne wor s
• Diaspora networks
• Multinational corporations
Success Stories
• Visible
successes
• Wealth generation for founders
• International reputationLaborEntrepreneurship
s o n
n t r e
Educational Institutions
Societal norms
• Tolerance of risk, mistakes, failure
• Skilled and unskilled
• Serial entrepreneurs
• Later generation family Culture
Human
Capital
Non‐Government Institutions
• General degrees
(professional and
academic)
• Specific entrepreneurship training
• nnova on, crea v y, exper men a on
• Social status
of
entrepreneur
• Wealth creation
• Ambition, drive, hunger
Infrastructure
Supports
Su ort rofessions
Copyright © 2011, 2012 Daniel Isenberg
• Entrepreneurship
promotion in non‐profits
• Business plan contests
• Conferences
• Entrepreneur‐friendly
associations
4/26/2012 © 2009, 2010, 2011 Daniel Isenberg
• Telecommunications
• Transportation & logistics
• Energy
• Zones, incubation centers, clusters
• Legal
• Accounting
• Investment
bankers• Technical experts, advisors
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r o e c t
being planned
Venture ca ital funds and
Access to regional markets and multinationals
c o s y s t e
m
a
angel investment just
startingPolicy
r e n
e u r s
p s on
o
a
Entrepreneurship
Babson’s Babson’s Entrepreneurship Ecosystem Entrepreneurship Ecosystem ProjectProject
Vision, goals,
strategies,
objectivesVision,
goals,
strategies,
objectives
s o n
n t r e
Entrepreneurship education accelerating
CultureHuman
Capital
Social norms becoming pro‐entrepreneurship
Supports
Copyright © 2011, 2012 Daniel Isenberg
Strong support mechanisms forming
Infrastructure strengthening12
4/26/20124/26/2012 12
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BABSON
Entrepreneurship Ecosystem
BABSON
Entrepreneurship Ecosystem
Babson Entrepreneurship Babson Entrepreneurship
ProjectProject
→ A STRATEGY for accelerating existing processes to foster local
entrepreneurship
ecosystem dynamics
→ A PROCESS for
increasing
stakeholder
collaboration
in
defining
and achieving a common entrepreneurial vision
→ A METHODOLOGY for integrating & leveraging local resources
se
o
an
or
mpac ng
e ecosys em
o attain measurable entrepreneurship objectives
→ A COMPOSITE and customization o lobal ractices
Copyright © 2011, 2012 Daniel Isenberg
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EntrepreneurshipEntrepreneurship
r o e c t “The pursuit, creation, and capture of extraordinary value”
Dr. Daniel Isenberg
c o s y s t e
m
a
Professor, venture capitalist, entrepreneur, angel investor, policy advisor
From forthcoming book, Harvard Business Press
Not only about startups, innovation, technology, or youth
r e n
e u r s
p s on
o
a
Can include spinoffs, spinouts, buyouts, families, in any sector
Not about self-employment, life style businesses
s o n
n t r e
,
Entrepreneurship is an equal opportunity employer , butonly some will succeed in being “extraordinary”
This entrepreneurship has
extraordinar im acts on economies and societies.
Copyright © 2011, 2012 Daniel Isenberg 14
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Each ecosystem is uniqueEach ecosystem is unique
r o e c t
c o s y s t e
m
a
r e n
e u r s
p s on
o
a
s o n
n t r e
Copyright © 2011, 2012 Daniel Isenberg 15
4/26/2012
with no
guiding
handwith
no
guiding
hand
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BABSONEntrepreneurship Ecosystem
BABSONEntrepreneurship Ecosystem
So BEEP helps stakeholders So BEEP helps stakeholders
cultivate self cultivate self ‐‐sustainingsustainingProjectProjectentrepreneurs p
ecosystem
entrepreneurs p
ecosystem
Acceleration wi th BEEP
T
i s h i p
l v e n t u r e s
I
mp
p
i
n
g
P p r e n e u
f h i g h p o t e n t i
p
a
c
tand sto s here
o
i
n
tBEEP starts here E n t r
N u m b e r s
Natural development wi thout BEEP(best case scenario!)
50 10
Copyright © 2011, 2012 Daniel Isenberg
4/26/2012 16
ears(approximate)
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BEEP’s activities to date (incl. pilots, ongoing, starting up)
r o e c t
c o s y s t e
m
a
StartUp America
IstanbulBEEP-
TUGIAD
r e n
e u r s
p s on
o
a
SaudiNatl E-ship
Center
s o n
n t r e
Medellin Puerto RicoPREES
SpainBankinter
StartUpManizales
“Knowled e
Copyright © 2011, 2012 Daniel Isenberg 17
4/26/2012
anzan aCity”
Buenos Aires
Endeavor
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BABSONEntrepreneurship Ecosystem
BABSONEntrepreneurship Ecosystem
What are BEEP’s Ecosystem What are BEEP’s Ecosystem
ProjectProject
• Sustainable (ongoing) entrepreneurship requires a comprehensive, u ‐ y
• Entrepreneurship ecosystems are hyper ‐local (usually city‐based)
• Ecos stems are cultivated b multi le stakeholders, not desi ned by governments
• Ecosystems are (relatively) self ‐sustaining, so government mindset is to catalyze and then let entrepreneurs and interested parties drive
• Ecosystems can be accelerated, fostered , but not designed or created
• Cultivation requires multi‐stakeholder dialog and
learning
• It is useful to define measurable objectives for amount of
Copyright © 2011, 2012 Daniel Isenberg
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In BEEP Projects…In BEEP Projects…
r o e c t
c o s y s t e
m
a
Policy
Finance
r e n
e u r s
p s on
o
a
BEEP creates and
manages a local
s o n
n t r e
CultureHuman
Capital
Entrepreneurship Task Force
Supports
Copyright © 2011, 2012 Daniel Isenberg 20
4/26/2012 20
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BABSONEntrepreneurship Ecosystem
BABSONEntrepreneurship Ecosystem
…that works towards …that works towards
ProjectProjectmeasura e ou comesmeasura e ou comes
100Newly designated
high potential ventures* each year
50*Includes roof of market w customers
Numbers for illustration only
10
20
30 At some point, ecosystembecomes relatively self-
sustaining
Copyright © 2011, 2012 Daniel Isenberg
4/26/2012 21
BEEP projects are KPI/deliverables driven
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BABSONEntrepreneurship Ecosystem
BABSONEntrepreneurship Ecosystem
BEEP Project PhasesBEEP Project PhasesProjectProjector
examp e
on yor
examp e
on y
Permanentcapacity
The
phases
are
an
integral
whole
buteach phase has standalone valueMore entrepreneurship
Robust ecosystem
Phase 2
Execution
Transfer
1 year
‐ Transfer of capacity
New, scalable programs
Phase 1Proof ‐of ‐concept
6‐9 months
‐Program feasibility
5‐8 years (TBD)
‐ Program development
‐ Program execution
‐ Scale up
‐ Ongoing assessment
‐ ur er ra n ng
‐ System development
‐ “Hardwiring”
Common vision
Phase 0Activation
1‐3 months
‐ VIP workshop
‐ High level training workshops
‐ Project organization, team
training
‐ Missioning
‐ Branding
‐ Capital formation
Copyright © 2011, 2012 Daniel Isenberg
4/26/2012 22
‐ Stakeholder ‘clinics’
‐ Public briefings
‐ Project planning
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Leadership
messaging
r o e c t
Venture Finance
Stimulus
(e.g. fund o f funds
matching fund
Finance Lab™)
Senior
Entrepreneurship
policy training
program
policy
c o s y s t e
m
a
Policy
Market Finance High potential
acceleration
Mentoring
program;
r e n
e u r s
p s on
o
a
Babson‐run Ecosystem Task
Force
program
curriculum
audit and
upgrade
s o n
n t r e Human
CapitalCulture
SupportsEcosystem
Acti vat ion
Workshops
Branding
campaign
SourceLinkEntrepreneurship
Media
Activat ion
Copyright © 2011, 2012 Daniel Isenberg 23
4/26/2012
processCenter
(co-location
facilty)
Program
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How to get started:How to get started:Phase 1
Phase 2
Phase 3
r o e c t
Phase 0Phase 0Phase 0
Deliverables• Aligned vision
• Stakeholder commitment
c o s y s t e
m
a
Preparation
• Phase 1 operational plan
r e n
e u r s
p s on
o
a
Follow up and
Phase 1 lannin
VIP briefings
Stakeholder roundtables
s o n
n t r e
Public presentations
Planning & organization
Media interviews
Follow up face‐face
Meetings and coaching
Approximately 3 months
Phase 1 commitment
Copyright © 2011, 2012 Daniel Isenberg 24
Budget range from $60k-$100K depending on plan, travel
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Proof of ConceptProof of ConceptPhase 1
Phase 2
Phase 3
r o e c t
Phase 1Phase 1Phase 0
Deliverables• High potential venture proof of concept
• Project governance and organization
c o s y s t e
m
a
inputs
• o cy pr or es
• Initial culture impact
• Phase 2
operational plan
r e n
e u r s
p s on
o
a
Follow up and
Phase 2 lannin
Stakeholder workshops
Media Activation
Program
s o n
n t r e Project team
Organization/training
Stakeholder involvement
High potential venture
Follow up face‐face
Meetings and coaching
Approximately 6-9 months
Phase 2 commitments
Copyright © 2011, 2012 Daniel Isenberg 25
Budget range from $500K-$900K depending on plan, travel
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r o e c t
c o s y s t e
m
a
r e n e u r s
p s on
o
a
s o n
n t r e
Copyright © 2011, 2012 Daniel Isenberg 26
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Project GovernanceProject Governance
r o e c t Policy Finance
Stakeholders with representation on SteeringCommittee
c o s y s t e
m
aSteering
Human
Ca italSupports
r e n e u r s
p s on
o
a
comm ee (governance)
Executive
s o n
n t r e
comm ee
Babson‐runEcosystem
Task Force
• Babson responsible for recruiting, training, managing, professional decision making• Steering committee’s formal responsibilities are termination and approval of changes in
deliverables
Copyright © 2011, 2012 Daniel Isenberg 27
4/26/2012
• Steering Committee may vest some formal authority in an Executive Committee
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SocialInnovation
Human
Dignifiedemployment
r o e c t
c o s y s t e
m
a
Policy
r e n e u r s
p s on
o
a
nanceMarketsVISION:
VIBRANT, DYNAMIC,
SELF‐SUSTAINING
Fiscal healthPersonalwealth
s o n
n t r e
CultureHuman
Capital
POSITIVE ENVIRONMENT
FOR ENTREPRENEURS
Supports
Copyright © 2011, 2012 Daniel Isenberg 28
ReputationEconomic
growth