Study undertaken by INNOVATHLON Consulting 100 interviews 3 months in Europe & North America

Vincent PRETETvincent.pretet@innovathlon.fr+33 6 83 32 96 94

innovathlon9 Rue André Darbon33000 Bordeaux, France

Cont

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EntREPREnEURIaL ECoSYStEMSat tHE DIGItaL aGE

March 2013

High Growth Companies are easily scalable: they employ a numerous workforce and have a broad geographical reach. They attract venture capital and constitute the shining part of the ecosystem.

Local Companies are not scalable but still profitable. They are much more deeply locally rooted and contribute significantly to the success of the former, through their velocity and their expertize.

Investors Service Providers Large companies Associations Public Organizations

ECOSYSTEM FEEDERS

2 types of companies

EntREPREnEURIaL ECoSYStEM:tHE PILLaRS

StartUp WeekEnds, Digital Festivals, MeetUps, meetings… all events contribute to keep the ecosystem running, to shed a light on what happens. They have a profound impact on the ecosystem since they create opportunities for meeting people.

GaTHERinG pEOpLE

Maximizing ideas sharing. Transferring pieces of information, best practices, ideas within and in between companies. Fostering workforce turnover and building upon creation-destruction-reconfiguration cycles of companies.

SpREaDinG iDEaS

HUMan RESOURCES Entrepreneurs Talented workforce

2 behaviors to foster

inFRaSTRUCTURES Real Estate Transportation Telecom

UniVERSiTiES & LaBS Academics & Scientists Students & Graduates Intellectual Property (IP)

1

aTTiTUDEentrepreneurs give first

before taking

COLLaBORaTiOnbeing partners

rather than competitors

An entrepreneurial ecosystem should be : Entrepreneur driven Long term committed (20+ years) Inclusive to anyone who wants

to contribute

KEY SUCCESS FaCTORS

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Number of inhabitants

Digital ecosystems ranked by increasing dynamics

Silicon Valley

Tel Aviv

Los Angeles

Seattle

New

York City

Boston

London

Toronto

Vancouver

Chicago

Paris

Sydney

Sao Paulo

Moscow

Berlin

Singapore

Melbourne

Bangalore

Santiago

DIGItaL ECoSYStEMSat GLobaL SCaLE

iDEa WORTH SpREaDinGThe entrepreneurial ecosystem dynamics does

not depend on the number of inhabitants but on the entrepreneurial density.

An initiative led by entrepreneurs for entrepreneurs. This place inherits from two symbols: it is named 1871 after the entrepreneurial rebirth of Chicago following the great fire of 1871; it is located in the Merchandise Mart, the heart of Chicago’s trade economy.

square feet of open space located in the very center of Chicago.

people working with passion on a daily basis.

StartUps hosted there 9 months after the launch of 1871.com

Venture Capital Companies having an office on site.

Universities fostering ideas sharing between, entreprenerus, academics and students.

StartUps Accelerators : TechStars for high growth companies and SocialEngine for social businesses.

Big coworking space split into two parts: open and private.

50,000

250+750

5

4

2

1

IntEGRatED ECoSYStEM: tHE ExaMPLE of CHICaGo

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Financial capital is a scarce resource. Having access to it is difficult, everywhere, even in the Silicon Valley where there is a fierce competition between StartUps.

New sources for raising financial capital: Crowdfunding platforms for small equity investments; Prefinancing platforms such as KickStarter where customers

pay before having their service or product been produced.

For more than 7 years companies have been committed to the acceleration of StartUps development. TechStars and Y-Combinator are forefront examples of such companies built by entrepreneurs for entrepreneurs:

pitchStartUps explain their unique solution to a «burning need», burning enough to create value, and seek for investors to scale it more broadly.

The force behind Accelerators: human capital injection leverages

the financial investment.500 investors gathered for the DemoDay

inVESTinG SMaLL MOnEY1 competition every 6 months1 to 5% of teams selected$25k to $50k invested for 5 to 15% equity

inJECTinG HUMan CapiTaLAccelerators’ ManagersNetwork of Mentors

inVESTinG BiG MOnEYDemoDay and Pitch

Starting a business in the web or digital sector requires a much lower amount of seed-investment than in the past. This is the context of Lean StartUp:

Switchpitch®

Large companies explain the (non core business) need they would like StartUps to fix. They then enter into long-term commercial relationships.

Identify a “burning need” Build in short runs with existing

and accessible technologies Launch a Minimum Viable Product (MVP)

Measure the impact on Users Analyze impacts’ data

Refine by iterations

nEW SoURCESof fInanCIaL CaPItaL

StaRtUPS aCCELERatoRSanD tHE HUMan CaPItaL LEVERaGE

StaRtInG a bUSInESSat tHE LEan StaRtUP ERa

attRaCtInG InVEStoRSDURInG bEaUtY ContEStS

$$$

build

measure

refine

MVP

Customers

Fund raising for local companies

Fund raising for high growth companies

Venture Capital

Crowdfunding

Business Angels

Data

IDEa

Prod

uct P

re-Financing Equity Investment

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