©JAXCoE 2015

Development of a Northeast Florida Innovation Ecosystem

Kate Stewart, PhD Jax Community of Entrepreneurs, Inc.

March 2015

The economic potential of entrepreneurs is tremendous, so understanding how

and why innovation ecosystems emerge and what can be done to ensure that

they flourish must be a priority. A suite of interventions, deployed across the

cycle from education to employment, is needed to achieve lasting, substantive

change. Governments, business and academia must work together to tackle this

challenge. Global economies will fail to flourish unless more entrepreneurs are

encouraged to build their ideas into successful businesses.1

The Innovation Ecosystem

“Innovation ecosystem” is a term describing a movement spreading rapidly in U.S. and global

communities and revitalizing U.S. cities.

When we speak of the earth’s ecosystem, we refer to the interconnectedness of diverse species and

elements, creating and sustaining life. An innovation ecosystem refers to the interconnected people

(creators, investors, educators, service providers, policymakers, mentors, etc.) and institutions

(governmental, educational, charitable, economic, etc.) and culture(s) in a geographic area. Like a

healthy biological ecosystem, an innovation ecosystem thrives when diversity, density, and massive

interaction are present.

Innovation ecosystems are popping up in Boulder, Nashville, Cincinnati, Silicon Valley, Kansas City,

Chicago, Austin, Seattle, Miami, Orlando, Sarasota, Gainesville, to name just a few. Most emerge

organically due to the value represented by innovation and the drive of the creative impulse. The

newest trend is to guide ecosystem development using global best practices, so that all stakeholders

derive the most benefit. Jacksonville, Florida is one of the first locations where such intentional growth

is occurring. Intentional growth efficiently creates the most value from innovation while honoring

local cultural practices and attitudes and maximizing inclusion.

1 Report by the Economist Intelligence Unit

(www.economistinsights.com/sites/default/files/barclays_1.pdf)

©JAXCoE 2015

Jacksonville Community of Entrepreneurs

The Jax Community of Entrepreneurs, Inc. (JAXCoE) is a 501(c)(3) created to support intentional growth

toward a healthy, inclusive innovation ecosystem. JAXCoE identifies and leverages existing stakeholders

and assets (such as entrepreneurs, cowork spaces, One Spark and One Spark Academy, Meetup groups,

entrepreneurship classes and programs, service providers, SBDC, Jax Chamber initiatives, angel investors

and venture capitalists). JAXCoE seeks to increase communication among stakeholders, performs needs

analysis, and supports new initiatives. In some cases, JAXCoE develops and/or hosts events but always

seeks to support and not compete with community members.

JAXCoE identifies great value to be gained from strategic partnerships with the more advanced startup

ecosystems of nearby Orlando and Gainesville. Those relationships are rapidly being established.

While focusing on the formation of an inclusive, collaborative entrepreneurial community, JAXCoE seeks

to capitalize on the opportunity to align the needs of local innovators with the larger goals of municipal

and regional economic growth and job creation, downtown revitalization, and the rise of healthy,

diverse communities and neighborhoods.

Within six months of formation, and less than one month after obtaining 501(c)(3) status, JAXCoE has:

Performed a limited stakeholder needs analysis.

Met with key civic, education, and business leaders to understand their strategic plans in the

service of alignment and collaboration.

Performed extensive research to identify existing ecosystems and best practices.

Partnered with #StartupJax, the MeetUp group sponsored by Ignite, Adecco’s innovation lab,

with a mailing list of over 600.

Planned and hosted the first Northeast Florida Angel Summit. Four local startups pitched to an

audience that included over 40 local angels, as well as community leaders and visitors from

other cities. At the request of angels and startups, this connecting event will occur again twice in

2015 and three times annually thereafter. All four startups are currently in funding talks.

Partnered with the Orlando startup ecosystem via Florida Angel Nexus, associated with UNF.

Partnered with the Florida Institute for Commercialization of Public Research, located in the

University of Florida incubator.

Established digital relationships with many leading ecosystem architects globally for mentoring

purposes.

Received local media attention.

Visited and formed a partnership with the Kansas City Startup Village to pursue implementation

of best practices together.

Attended SXSW Interactive to meet key people in the Austin startup ecosystem.

Initiated data collection to create a better understanding of the number and types of startups in

our area, as well as their needs.

©JAXCoE 2015

Has begun planning for a major Innovation Connection conference to be held at the Schultz

Center in October, with plans for 900+ attendees, a nationally-recognized keynote, a panel of

ecosystem experts from other cities, and education/entertainment designed to attract and

foster interaction between the various segments of our ecosystem.

Is participating in One Spark 2015 as a creator to inform the community of the opportunities,

collect data, and showcase successful startups.

Partnered with nonprofits such as Children’s Home Society to provide education and resources

for underserved youth interested in entrepreneurship.

Maintained Tech Founders Jax, a peer mentorship of tech founders limited to 12 members. Due

to the overwhelming interest in the startup community, the TFJ model will be replicated to form

many groups serving the need for mutual support and peer mentorship.

Rainforests, Clearings, and Boulders

Victor W. Hwang and Greg Horowitt of T2 Venture Creation in Silicon Valley coined the term Rainforest

to refer to “…human networks that generate extraordinary creativity and output…The theory of the

Rainforest is influenced by several breakthrough ideas in academia, including insights on sociology from

Harvard, economic transactions from the University of Chicago, design theory from Stanford, and the

latest research in neuroscience network theory, among others.”2

While adopting the tenets of the Rainforest model, JAXCoE also uses the metaphor of the “Clearing.”

The 20th century German philosopher Heidegger describes a lichtung as a space cleared to receive light,

like a forest clearing in which living things can emerge which cannot exist in the vast forest.3 The

metaphor of the Clearing locates the ecosystem designer/architect with regard to the emerging

ecosystem. The task of the designer/architect is not primarily to build anything, but rather to help create

the Clearing where the innovation community members can thrive and create. Human diversity, idea

density, and massive interaction among all stakeholders will emerge in the Clearing of their own accord.

The type of leadership required to support the innovation ecosystem is best described in The Starfish

and the Spider4. The innovation ecosystem, a highly decentralized organization symbolized by the

starfish which regrows when an arm is cut off, is best led by “leaderless leaders”. A healthy innovation

ecosystem consists of “circles” or “nodes” which may reform often and connect and reconnect as

needed by the community and its activities and goals.

2 http://www.amazon.com/Rainforest-Secret-Building-Silicon-Valley/dp/0615586724/ref=sr_1_1?ie=UTF8&qid=1427164033&sr=8-1&keywords=the+rainforest 3 Martin Heidegger, Being and Time, trans. John Macquarrie and Edward Robinson. New York: Harper &

Row, 1962. 4 Ori Brafman & Rod A. Beckstrom, The Starfish and the Spider: The Unstoppable Power of Leaderless Organizations. Portfolio, 2008.

©JAXCoE 2015

JAXCoE is guided by the framework5 developed by Brad Feld, serial entrepreneur and venture capitalist

of the Foundry Group. Known as the Boulder Thesis, the framework has four key components:

1. Entrepreneurs must lead the startup community. While many types of people and institutions

are members of and contribute to the startup community, entrepreneurs are the core. They are

the drivers, the job and value creators. Their success is the primary reason new innovators are

attracted to the community. In order for community growth to be sustainable over economic

cycles, entrepreneurs must be able to focus intensely on their businesses, well-supported by the

facilitating individuals, organizations, programs, providers, and institutions in the community.

2. The leaders must have a long-term commitment. JAXCoE leaders recognize that a 10-20 year

horizon is required for the innovation community to take deep root. As residents of Jacksonville,

we are currently experiencing the enthusiasm and motivation natural when bouncing back from

a recession. However, the innovation ecosystem will face the natural downturns of economic

cycles. Leadership must be committed to sustaining the community and maximizing

opportunities in the Clearing during good times and bad.

3. The startup community must be inclusive of anyone who wants to participate in it. A maximally

healthy innovation ecosystem is not based on competition but on collaboration. Geographic

density of startups and facilitators allows for economies of scale that benefit all. Network effects

result in exponentially-increasing value from co-location in a fashion similar to the networks of

massive numbers of users of Facebook, Twitter, and Craig’s List. Jacksonville’s diverse culture

well supports the benefits and flexibility that different perspectives bring to a startup

community. For the most benefit, a culture of inclusion must be modeled and promoted in all

aspects of the ecosystem. Building a strong innovation ecosystem, with all the economic and

social benefits that result, is not a zero sum game but a collaborative effort.

4. The startup community must have continual activities that engage all segments and members.

Periodic events such as award ceremonies and networking meetups are important but don’t

necessarily (a) engage the whole stack of entrepreneurship and (b) occur frequently enough to

take advantage of the network effect. Thriving innovation ecosystems are characterized by an

abundance of events and activities. Many of these, such as educational and governmental

initiatives supporting entrepreneurs, originate from institutional facilitators. Many more,

however, emerge from the community in response to felt needs to collaborate, support, and

learn from one another. Like the startups they support, many of these activities will fail, but in

entrepreneurial fashion, the community will allow the emergence of new short-term and long-

term activities. A high level of engagement and interaction (sometimes referred to as

“collisions”) between the various members of the community sparks new ideas and

opportunities. The numerous collaborations and commitments to new startups born from the

collisions at One Spark exemplify the value of activities that engage the entire community.

5 Brad Feld, Startup Communities: Building an Entrepreneurial Ecosystem in Your City. John Wiley & Sons, Inc., 2012.

©JAXCoE 2015

JAXCoE Goals

Some of the goals and activities associated with supporting the northeast Florida innovation ecosystem

include:

Creating a sense of collaborative community among the members of northeast Florida’s

innovation ecosystem.

Supporting the economic development of Jacksonville and northeast Florida by promoting

creative activity that will result in future job growth, and by creating a local community that will

attract creators and capital.

Supporting a culture of inclusiveness and engagement of all segments of the startup community.

Building a close network with the innovation ecosystems of neighboring Orlando and

Gainesville.

Encouraging new opportunities for creation and collaboration.

Identifying the needs and goals of individual and institutional stakeholders and seeking win/win

opportunities.

Improving our understanding of the community and how best to support its growth and success.

Providing venues for ideas to be presented, collisions to occur, and new creations to be shared.

Introducing national and global best practices.

Promoting the reputation of Jacksonville as an emerging innovation hub.

Lessons Learned from Innovation Ecosystems Nationally

JAXCoE's best practice research reveals the following:

In order to foster new ecosystems, cities must develop a keen understanding of how, when, and

why different players interact with one another and how an ecosystem evolves over time.

Development of this understanding is far preferable to a blanket approach of injecting missing

elements.6

Activity-based events where entrepreneurs can use and practice the skills needed to grow their

businesses, are most useful. 7

Focus on connecting entrepreneurs to enhance learning between them. This can be done by

injecting catalytic events.8

In St. Louis (which was not formerly known as being an entrepreneurial hub), the strength of the

ecosystem grew as collaboration and local learning increased between entrepreneurs and

6 Y. Motohama & K. Watkins, “Examining the connections within the startup ecosystem.” Kauffman Foundation and Washington University research, 2014. 7 Ibid. 8 Ibid.

©JAXCoE 2015

between entrepreneurs and organizations that provide support, such as mentoring and funding,

to entrepreneurs.9

The most recent research (Kaufffman Foundation, March 2015) states “Research demonstrates

that [public venture funds and incubation centers] often are ineffective at promoting

entrepreneurial activity….these efforts result in little to no benefit to the business or

government….Strategies anchored in investments and incubators have failed to foster

entrepreneurship because the tactics are not suited to the experiential and collaborative

process that characterizes entrepreneurship.”10

The Kauffman Foundation suggests that policymakers embrace an approach that puts

entrepreneurs at the center, creating communities characterized by dense connections among

entrepreneurs and the organizations that support them. Government should foster connections

and collaboration rather than employ a top-down strategy.11

Avoid creating a formal alliance between the city government and various entrepreneurship

organizations, as these strict partnerships rarely have a real effect on entrepreneurs.12

Effective networks can be formed at very low cost, and government over-involvement may

actually harm or destroy existing, functioning networks.13

Go beyond networking by supporting a catalytic format. Hold events with content that inspires

interaction between participants.14

Identify and celebrate successful local entrepreneurs. Dense connections among entrepreneurs

are a requirement of a successful entrepreneurial community, but local entrepreneurs can be

difficult to identify. Work to identify them and plan events such as awards ceremonies to both

celebrate the founders and establish ongoing relationships between successful entrepreneurs.15

Accelerate St. Louis (akin to JAXCoE) is a regional effort to showcase the startup explosion

reshaping the region. Economic development, business, civic, political, and venture capital

leaders are united in supporting the movement. Accelerate St. Louis provides information and

resources to startups, connects entrepreneurs and investors, and helps tell this new St. Louis

startup story as it evolves. 16

The Idea Village, a 501(c)(3) in New Orleans with a mission similar to JAXCoE, went from ideas

on a cocktail napkin in 2000 to currently supporting 3,411+ entrepreneurs. Between 2009 and

2013, they gave 131 startup businesses $2.3 million in seed capital. 80% of the companies are

9 Ibid. 10 “Guidelines for Local and State Governments to Promote Entrepreneurship”, Kauffman Foundation Research Series on City, Metro, and Regional Entrepreneurship, March 2015, pp. 2-3. 11 Ibid, p. 3. 12 Ibid, p. 4. 13 Ibid, p. 4. 14 Ibid, p. 4. 15 Ibid, p. 7. 16 http://acceleratestlouis.org/about/mission/

©JAXCoE 2015

still in business and have created 1,000+ jobs. In recent years, national magazines such as Forbes

have called the city the “Biggest Brain Magnet” and one of the best cities in the nation for jobs.

Inc. calls New Orleans the “Coolest Startup City in America.” This has occurred in spite of the

devastation of Hurricane Katrina in 2005.17

The well-known Kansas City Startup Village fosters the education of entrepreneurs and increases

the number of opportunities for startups to succeed through programming, recruitment, and

knowledge-sharing. KCSV has partnered with JAXCoE and KCSV leaders are helping facilitate

several innovative activities with JAXCoE during One Spark 2015.

By year three, The Downtown Project in Las Vegas created more than 300 businesses and legal

entities which collectively employed more than 900 people. Their goal is to make downtown

Vegas a place of inspiration, entrepreneurial energy, creativity, innovation, upward mobility, and

discovery through the 3C’s of collisions, co-learning, and connectedness in a long-term,

sustainable way.18

The JAXCoE team is committed to working with the various segments of our ecosystem to transform

Jacksonville into an innovation hub. As a broad long-term effort, we recognize that the vision and energy

of our community of entrepreneurs can accomplish that goal while contributing directly to the many

identical and complementary goals of all segments of our innovation ecosystem.

For more information, contact:

Kate Stewart, PhD President, Jax Community of Entrepreneurs, Inc. 512-289-2920 kate@jaxcoe.org

17 http://nationswell.com/idea-village-5-things-can-learn-nonprofit-bringing-startups-new-orleans/#ixzz38UglGoSs 18 http://www.downtownproject.com/about