Building Effective Startup Ecosystems...Source: Kraut and Egido, Bell Communications Research, and Galegher, University of Arizona, 1988. PROXIMITY IS THE KEY Innovators must be physically

Building Effective Startup Ecosystems

Presented by: Tim Rowe

February 16, 2017

WHAT IS INNOVATION,REALLY?

Not innovation: water bicycle

Never employed by society

Real innovation: hybrid electric engine

To be real innovation, an idea must be used by society, at large scale

WHY SHOULDWE CARE ABOUT INNOVATION?

INNOVATION FIXES THE WORLD’S PROBLEMS

Example: DNA therapy

INNOVATION MAKES AN ECONOMY HEALTHY

The Importance of Startups in Job Creation and Job Destruction, T. Kane, The Kauffman Foundation, July 2010 http://goo.gl/eMSqeThe Importance of Startups in Job Creation and Job Destruction, T. Kane, The Kauffman Foundation, July 2010 http://goo.gl/eMSqe

The Importance of Startups in Job Creation and Job Destruction, T. Kane, The Kauffman Foundation, July 2010 http://goo.gl/eMSqeThe Importance of Startups in Job Creation and Job Destruction, T. Kane, The Kauffman Foundation, July 2010 http://goo.gl/eMSqe

The Importance of Startups in Job Creation and Job Destruction, T. Kane, The Kauffman Foundation

Japan must re-engineer its economy to create more new enterprises

New Jobs Created by Startups vs. Existing Companies

HOW DOES INNOVATIONHAPPEN?

Nikola Tesla’s lab in Colorado Springs

IN THE PAST, INNOVATION HAPPENED LARGELY IN ISOLATION

Walt Disney’s garage

Hewlett and Packard’s garage

Steve Jobs’ garage

Innovation works differently today

Innovators from different organizations work together, in central locations

“Innovation Hubs” create constant opportunities for innovators to teach each other

Innovation hubs allow young entrepreneurs to learn from experienced entrepreneurs

HOW CAN A SOCIETY BUILDA CULTURE OF INNOVATION?

You have to build “innovation infrastructure” to bring people together

THERE IS A SIMPLE FORMULA FOR FOSTERING INNOVATION

In innovation hubs, people connect, like amoebas

Source: Kraut and Egido, Bell Communications Research, and Galegher, University of Arizona, 1988.

PROXIMITY IS THE KEY

Innovators must be physically close to each other in order to collaborate.

Frequency of Collaboration Is Principally Driven by the Distance Between Researchers

office location

Same corridor 10.1%%

Same floor 1.9%

Different floor 0.3%

Different building 0.4%

% collaborating

Source: “Does Colocation Inform the Impact of Collaboration?” (2010)

RESEARCH FINDING: NEARLY ALL RESEARCH IS DONE BY PEOPLE WORKING CLOSE TOGETHER

Proximity causes collaboration

The Distance Between Principal Authors is the Key Driver of Scientific Collaboration

RESEARCH FINDING:THE QUALITY OF RESEARCH IS HIGHLY IMPACTED BY PROXIMITY

Source: Collaboration: the mother of invention (2011)

We believe the same patterns apply to startup innovation.Proximity is the key.

Researchers Close to Each Other Produce Scientific Papers That Receive More Citations

# of citations

In innovation hubs, entrepreneurs learn how to take risks

INNOVATION HUBS ARENOT A NEW IDEA

109 Court St, Boston

Kendall Square in 1969

Kendall Square Today

We have helped transform Kendall Square into an innovation “mecca”

$100,000,000

140X increase in VC in Kendall Square

1999 2016

$14,000,000,000

Half ($7B)

based in CIC

VENTURE CAPITAL HAS GROWN DRAMATICALLYSINCE KENDALL SQUARE BECAME AN INNOVATION HUB

Creating a dense cluster of startups attracts venture capital

Innovation in Massachusetts is now highly concentrated

RICH MINER, ANDROID

SUCCESSFUL INNOVATION HUBS DRAW WORLD-CHANGING ENTREPRENEURS

Android co-founder Rich Miner grew his team in Massachusetts’ hub

“The Bay Area has more startups and the venture capital that gives them life than any other U.S. metro region, but the study said entrepreneurs in Boston cite stronger connections with educational and other institutions locally as well as with everyday citizens. Those factors helped vault the Hub, which also has

almost as much entrepreneurial capital, to No. 1. “

$458

Source: “The Global Cities Where Tech Venture Capital Is Concentrated“, The Atlantic

THE INNOVATION CONCENTRATION IN MASSACHUSETTS MAYHELP EXPLAIN ITS SUCCESS

$534

Avg investments per capita in CA vs. MA (last decade)

Confidential - Presented 16.12.20.001

“The newly constructed District Hall is the hub for Boston’s Innovation District, facilitating networking and idea-sharing.”

“Who delivers innovation districts? Economic cultivators such as the Cambridge Innovation Center and social networking programmers, such as Venture Café Foundation.”

“Cambridge’s Kendall Square is today’s iconic innovation district.”

“CIC has helped develop the modern concept of coworking while encouraging entrepreneurs and startups in its high quality environment. Firms at CIC have attracted billions of dollars of seed funding and later-stage investment.”

AND THIS “INNOVATION DISTRICT” MODEL IS INCREASINGLY RECOGNIZED AS A SUCCESSFUL APPROACH TO SUPPORTING INNOVATION

Source: Brookings Institution 2014

Innovation hubs are attractive magnets for innovators

GOVERNMENTGOVERNMENT

UNIVERSITIESUNIVERSITIES

SMALL INDEPENDENTACCELERATORS



LARGE TECH COMPANIESLARGE TECH COMPANIES






INNOVATION CAMPUS

COMMUNITYBUILDING

NON-PROFIT

STARTUP CENTER

SPECIALIZED INDUSTRY HUBS

INNOVATION ECOSYSTEMCLUBHOUSE

INNOVATION DISTRICT / CITY

LARGE TECH COMPANIES






INNOVATION CAMPUS

COMMUNITYBUILDING

NON-PROFIT

STARTUP CENTER




PUBLIC INNOVATION HALL







INNOVATION CAMPUS

COMMUNITYBUILDING

NON-PROFIT

STARTUP CENTER





CORPORATES







INNOVATION CAMPUS

COMMUNITYBUILDING

NON-PROFIT

STARTUP CENTER





CORPORATES

VENTURE CAPITAL FUNDS







INNOVATION CAMPUS

COMMUNITYBUILDING

NON-PROFIT

STARTUP CENTER





CORPORATES


GLOBAL CONNECTORS







INNOVATION CAMPUS

COMMUNITYBUILDING

NON-PROFIT

STARTUP CENTER




CORPORATES


GLOBAL CONNECTORS


COMMUNITY PARTNERSGOVERNMENTGOVERNMENT





INNOVATION CAMPUS

COMMUNITYBUILDING

NON-PROFIT

STARTUP CENTER




CORPORATES


GLOBAL CONNECTORS







INNOVATION CAMPUS

COMMUNITYBUILDING

NON-PROFIT

STARTUP CENTER




CORPORATES


GLOBAL CONNECTORS







INNOVATION CAMPUS

COMMUNITYBUILDING

NON-PROFIT

STARTUP CENTER




CORPORATES


GLOBAL CONNECTORS







INNOVATION CAMPUS

COMMUNITYBUILDING

NON-PROFIT

STARTUP CENTER




CORPORATES


GLOBAL CONNECTORS







INNOVATION CAMPUS

COMMUNITYBUILDING

NON-PROFIT

STARTUP CENTER




CORPORATES


GLOBAL CONNECTORS







INNOVATION CAMPUS

COMMUNITYBUILDING

NON-PROFIT

STARTUP CENTER




CORPORATES


GLOBAL CONNECTORS







INNOVATION CAMPUS

COMMUNITYBUILDING

NON-PROFIT

STARTUP CENTER




CORPORATES


GLOBAL CONNECTORS







INNOVATION CAMPUS

COMMUNITYBUILDING

NON-PROFIT

STARTUP CENTER




CORPORATES


GLOBAL CONNECTORS


COMMUNITY PARTNERS

City of St. Louis

Thank you!

Thank you!

Documents

Building Effective Startup Ecosystems...Source: Kraut and Egido, Bell Communications Research, and Galegher, University of Arizona, 1988. PROXIMITY IS THE KEY Innovators must be physically