How to Build an Entrepreneurial Ecosystem to Create Mini-Silicon Valleys

Unite leaders, develop communities and watch industries soar

Creating a community, connecting community members, creating a space for the community, and fostering the growth of the community is key. Daria Shevtsova/Unsplash

In December 2016, I received a Request for Information (RFI) from Connecticut, which wants to lead the country in advanced manufacturing. The RFI asked for proposals on how to increase young people’s awareness of careers in manufacturing and how to increase the number of people that prize education and career pathways in the sector.

This open-letter invites economic development leaders all over the country and the world to partner on developing entrepreneurial ecosystems. For the purpose of this article, we’ll lead with the stated goal of achieving job creation in advanced manufacturing in Connecticut.

The below is the playbook that I’ve used to build communities throughout my career. For over a decade, I’ve been one of the leading startup community organizers and bloggers, brought together thousands of startups and community organizers, and advised governments on how to implement these policies.

This 10-point plan is meant to be implemented immediately and nurtured over the course of 10 years. This plan will create more entrepreneurship by getting more people interested in the sector you’re targeting, leading to more students pursuing careers in that area, and will have the end result of more entrepreneurship. Entrepreneurship is the gift that keeps on giving; one startup creates jobs and leads to another startup.

According to the leading startup public policy advisor, Bradley Tusk, “There aren’t many elected officials who look at tech beyond a press release or a source for campaign contributions. Other than Mike Bloomberg, I’ve yet to see a politician look at the ecosystem, figure out what’s missing and fix it. If we want to see more Americans get good jobs, we need to look at the problem far more intelligently than we do now.”

The key is to continue telling the story through a consistent social media and press campaign at every step. Every time someone harnesses of any of the programs below, post it on Facebook and ask recipients to share with their networks. The more people that are aware of the project, the more likely it will become reality, and the more powerful the impact.

According to Rep. Ro Khanna, who represents Silicon Valley,We need startup ecosystems across America. Our key challenge is to make sure the jobs of the future are part of the fabric of every city and rural town in this nation.”

Confidence is Key

The startup community is half rabid capitalist and half idealistic artist. Success comes from nurturing entrepreneurs and providing a strong foundation for them to connect, find jobs, raise capital and soar.

The key to building an ecosystem is building confidence in the community. The government cannot make great entrepreneurs. The government can provide a framework to inspire confidence in people to help them achieve their dreams. By building ecosystems, the Midwest can compete with Silicon Valley and New York City. Capital is global, and money is available wherever there is a phone and an internet connection. The key is to build communities everywhere.

“By the early 2020s, the Midwest will have five times the number of startups Silicon Valley does—the ecosystem that underpins Silicon Valley needs to be replicated on a macro scale across key hub cities like Boise, Kansas City, Dallas, Chicago and Denver. By nurturing venture capital, public-private partnerships and enterprise zones, we can lead in this effort, helping develop the next generation tech stars,” says Oz Sultan, Trump campaign digital strategist and long-time startup community organizer.

Step 1: Build awareness. Connecticut is not known for advanced manufacturing. So, you need to build awareness. Celebrate existing entrepreneurs in manufacturing. Create a Facebook page for CAM Nation (Connecticut Advanced Manufacturing). Post videos about existing Connecticut manufacturers.

Talk about innovations from the defense contractors, Yale, United Technologies, and anything else. Make the videos engaging with subtitles. Build an audience on Facebook, first by buying traffic to 1,000,000 likes and then by sharing engaging content. Enlist other social media influencers and publications to share the content as you release it. The key to going viral on Facebook is getting influential people and pages to share your content systematically. Then, to amplify impact, pay large publishers to create and release stories to their audiences.

Support this with mainstream PR and get your entrepreneurs featured in popular blogs and TV. Pay for the PR campaign in exchange for people saying “created in Connecticut” in all of the press.

Step 2: Vouchers. There are a lot of advanced manufacturing jobs available. The easiest way to do this is to sponsor the training. Provide 90 percent training vouchers for students at all levels. Vouchers should be good for accredited and approved non-accredited education such as programs on Udeme.com, Linda.com, General Assembly, after school programs, technical schools, and other programs that sprout up to offer advanced manufacturing training. The government should fund 90 percent of the cost of the programs, asking students to come up with 10 percent so they have some skin in the game. If needed, they can earn the 10 percent by being a TA in the approved program as well. Students of all ages should be encouraged to go back to school. The only cost for the 90 percent grant would be for them to post regular updates on social media so that their followers can learn about the program as well.

Step 3: Mentorship. Create mentoring networks. Reach out to all startup community organizers, events and large employers in the sector and ask people to volunteer to join a mentoring circle. The best way to do this is to have one mentor host mini groups of 3 mentees once a month. This way people meet peers and a mentor can maximize his or her reach. Build a simple website where people can register as mentors or register to find a mentor. The only cost? Sharing on social media that they joined the program.

Step 4: Community spaces. These would be the modern version of a library for makers. In the early days of any new community, you should create community spaces. In manufacturing, create “hubs” in every city, which would be spaces complete with a machine shop, electrical shop, and other tools that make it easy for people to learn how to make things. Offer the space to people who run workshops and after school programs. Market this to all schools in the vicinity and through all startup community organizations. Host meet-ups in the space and invite people from all over. Then, expand these spaces into co-working facilities with machine shops and classrooms. They will probably run at break-even so it will be cost neutral to the state over the long term.

Step 5. Run competitions. Once people are trained, inspire them to create. Run competitions—both online and in person—every quarter in each city to encourage people to come together and build stuff in the community spaces. For example, 3 Day Startup hosts hackathons all over the world. You could partner with them to create Maker-thons in each space. Quesnay runs online competitions, where they recruit teams from all of the world. The competitions should initially happen online and then in person for the final round. Offer incentives to talented teams to stay in Connecticut.

Step 6: Bring it to the people. Provide small grants to schools and universities that implement versions of this strategy locally. The more local groups replicating this plan, the more successful Connecticut will be. Grants can be small. They can help people launch spaces, provide training, and bring people together. Every community should have a space as its community center.

Step 7: Micro-acceleration. Once people are active in the community and trained, some will join companies and find a career while others will become entrepreneurs. Entrepreneurial experience is extremely valuable in the workforce, regardless of success or failure of the venture. Encourage more people to try side-projects and launch ventures. You can do this with micro-acceleration. You can give mentors the ability to give a small sum of money (up to $5,000) to teams led by their mentees. The money provides confidence that someone believes in the entrepreneurs, and this confidence is more valuable then the money. Some will succeed, and others will to add executive level experience to their resumes. Every fourth grader could be a founder!

Step 8: 100 Percent Tax Credits for angel investments in the sector. Pass the Entrepreneur Action Tax Credit (EAT Credits), which is a 100 percent tax write-off for an investment up to $25,000 in a specific sector. The EAT credits help entrepreneurs get off the ground faster by making angel investments essentially free. It also expands the investor base because investors have a maximum they can invest every year. Even if most of these companies fail, it will create an ecosystem effect by giving entrepreneurs confidence to try out new ventures, hire people and get experience in the sector. Make the EAT Credits sector specific to manufacturing.

We can model the program after the angel tax credit in Israel. “Bottom line, we make investments in technological start ups, a deductible expense for tax matters. We consider a venture as a start up for the first four years since its creation and use the tax system to encourage investment in these young businesses,” says Inon Elroy, the Israeli economic minister to North America.

Step 9: Celebrate the ecosystem. Create an annual CAM Week, where events are held every day for a week. This serves as a weeklong celebration of entrepreneurs and employers in the space. Companies will open up their offices and factories to provide tours. Free seminars will be given at the community spaces and events and panels will be held to help people learn about the sector. CAM Week will serve as a cornerstone for the community in the state. According to Sergio Fernandez de Córdova, founder of PVBLIC Foundation and P3 Global Management, “We can build and scale these ecosystems as public-private partnerships (PPP’s). PPPs bring the potential of government framework and unlock innovation by bringing together the private sector expertise to solve key public sector problems, such as creating advanced manufacturing jobs.”

Step 10: Connect the community organizers. The tenth step is to bring together all of the community organizers throughout the state for an annual summit. Call it LIVE CAM. The purpose is to share best practices and connect community leaders so they can help each other and connect their communities. They can share all of the government programs and successes as well as key learnings. In effect, the community will grow stronger, together.

“Ecosystems are tangible real things—we need many more programs to move away from the theoretical, which is disengaging and move into the action,” says Josh Thompson, NYC Mayoral Candidate and former Connecticut government official.

All in all, building an eco-system is hard work but extremely rewarding. By building an ecosystem, new industries will sprout and Connecticut will become the center for advanced manufacturing. Well, until other states copy this plan. Good luck and good-making! What are your ideas for how to build startup ecosystems? Tweet #DreamFWD and share your ideas!

Richard Hecker is the CEO of Traction + Scale, an investment holding company that builds companies transform their industries. He is also the co-founder of SeedingX.org. You can follow him on twitter @RichieBlueEyesDisclosure: 3 day startup is run by Richard Hecker’s former partner, Quesnay has a partnership with his company, and Sergio Fernandez de Córdova is his co-founder of SeedingX.org and FutureNYC.