babson ecosystem project - guide

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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



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



BABSON


BABSON


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?


4/26/2012 3

VC

fund of funds?policies?



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

4/26/2012

4



BABSON


BABSON


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


4/26/2012 5



BABSON


BABSON


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


4/26/2012 6



BABSON


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


– In iscriminate un ing programs

4/26/2012 7



BABSON


BABSON


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


• Highest level support

– Symbolic as well as tangible4/26/2012 8



BABSON


BABSON

Entrepreneurship EcosystemProjectProject

Entrepreneurship


Ecosystem

ProjectProject


4/26/2012 9



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


• 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



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


• 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



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


Strong support mechanisms forming

Infrastructure strengthening12

4/26/20124/26/2012 12



BABSON


BABSON


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


4/26/2012 13



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.


4/26/2012



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


4/26/2012

with no

guiding

handwith

no

guiding

hand



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


4/26/2012 16

ears(approximate)



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


4/26/2012

anzan aCity”

Buenos Aires

Endeavor



4/26/2012 18





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


4/26/2012 19



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


4/26/2012 20





…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


4/26/2012 21

BEEP projects are KPI/deliverables driven





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


4/26/2012 22

‐ Stakeholder ‘clinics’

‐ Public briefings

‐ Project planning



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


4/26/2012

processCenter

(co-location

facilty)

Program



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


Budget range from $60k-$100K depending on plan, travel



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


Budget range from $500K-$900K depending on plan, travel



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




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


4/26/2012

• Steering Committee may vest some formal authority in an Executive Committee



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


ReputationEconomic

growth

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