Startup ecosystem
A startup ecosystem is formed by people in startups in their various stages, and various types of organizations in a location that are interacting as a system to create and scale new startup companies. These organizations can be further divided into categories such as universities, funding organizations, support organizations, research organizations, service provider organizations and large corporations. Local Governments and Government organizations such as Commerce / Industry / Economic Development departments also play an important role in a startup ecosystem. Different organizations typically focus on specific parts of the ecosystem function and startups at their specific development stage.
Silicon Valley, NYC, Singapore and Tel Aviv are considered examples of global startup ecosystems.
Composition of the startup ecosystem
- Ideas, inventions and research i.e., Intellectual property rights
- Entrepreneurship Education
- Startups at various stages
- Entrepreneurs
- Start up team members
- Angel investors
- Startup mentors
- Startup advisors
- Other business-oriented people
- People from other organizations with start-up activities
- Startup events
- Venture Capitalists
List of organizations and/or organized activities with startup activities
- Universities
- Students
- Advisory and mentoring organizations
- Startup incubators
- Startup accelerators
- Coworking spaces
- Service providers
- Event organizers
- Start-up competitions
- Startup Business Model Evaluators
- Business Angel Networks
- Venture capital companies
- Equity Crowdfunding portals
- Corporates
- Other funding providers
- Start-up blogs and social networks
- Other facilitators
In addition, resources like skills, time, and money are also essential components of a start-up ecosystem. The resources that flow through ecosystems are obtained primarily from the meetings between people and organizations that are an active part of those startup ecosystems. These interactions help to create new potential startups and/or to strengthen the already existing ones. There are a few common mistakes that entrepreneurs make that end up costing them their business, like inability to secure adequate funding, sudden market downturn and a poor scaling plan.
External and internal factors
Startup ecosystems are controlled by both external and internal factors. External factors, such as financial climate, big market disruptions, and significant transitions, control the overall structure of an ecosystem and the way things work within it. Start-up ecosystems are dynamic entities that progress from formation stages to periodic disturbances and then to recovering processes.Several researchers have created lists of essential internal attributes for startup ecosystems. Spigel suggests that ecosystems require cultural attributes, social attributes that are accessed through social ties and material attributes grounded in a specific places. Stam distinguishes between framework conditions of ecosystems with systematic conditions of networks, leadership, finance, talent, knowledge, and support services.
Startup ecosystems in similar environments but located in different parts of the world can end up doing things differently simply because they have a different entrepreneurial culture and resource pool. The introduction of non-native peoples' knowledge and skills can also cause substantial shifts in the ecosystem's functions.
Internal factors act as feedback loops inside any particular startup ecosystem. They not only control ecosystem processes, but are also controlled by them. While some resource inputs are generally controlled by external processes like financial climate and market disruptions, the availability of resources within the ecosystem are controlled by every organization's ability to contribute towards the ecosystem. Although people exist and operate within ecosystems, their cumulative effects are large enough to influence external factors like financial climate.