Steve Jobs and the Entrepreneurial Ecosystem

Jeff  Carter
Posted: Oct 07, 2011 12:01 AM

America, and the world, lost a great entrepreneur in Steve Jobs. The day he decided not to go into work anymore was the day we really lost him. It’s fitting that his last name was Jobs, because he created more jobs than any government administration.

A broader question needs to be asked, “Could Steve Jobs have done what he did in any other place?” I don’t think he could have.

As Paul Graham aptly pointed out in his blog, Silicon Valley is a special place that cannot be replicated in exactly the same way.

In most places, if you start a startup, people treat you as if you’re unemployed. People in the Valley aren’t automatically impressed with you just because you’re starting a company, but they pay attention. Anyone who’s been here any amount of time knows not to default to skepticism, no matter how inexperienced you seem or how unpromising your idea sounds at first, because they’ve all seen inexperienced founders with unpromising sounding ideas who a few years later were billionaires.

In most other cities, the prospect of starting a startup just doesn’t seem real. In the Valley it’s not only real but fashionable. That no doubt causes a lot of people to start startups who shouldn’t. But I think that’s ok. Few people are suited to running a startup, and it’s very hard to predict beforehand which are (as I know all too well from being in the business of trying to predict beforehand), so lots of people starting startups who shouldn’t is probably the optimal state of affairs. As long as you’re at a point in your life when you can bear the risk of failure, the best way to find out if you’re suited to running a startup is to try it.

In Chicago, I am one of many, many people trying to grow a small entrepreneurial ecosystem and make it a large self sustaining one. Silicon Valley is like the Seven Seas to our small backyard pond.

But, we are growing. One day we will be a lake, and then a sea, and hopefully an ocean. It’s important to note, oceans don’t compete with each other. They are symbiotic even though they have different forms of life and different water temperatures.

Another thing that happens in the Valley is very random. You can’t ever plan for, or underestimate it’s effect: “Chance”.

Chance meetings produce miracles to compensate for the disasters that characteristically befall startups. In the Valley, terrible things happen to startups all the time, just like they do to startups everywhere. The reason startups are more likely to make it here is that great things happen to them too. In the Valley, lightning has a sign bit.

Because the Valley is thick with successful entrepreneurs, you have a higher probability of running into one of them. However, they are starting to migrate. Some are even coming to Chicago.

Tonight I am attending the Chicago Entrepreneurial Center awards dinner. They are honoring Brad Keywell and Eric Lekofsky of Groupon. Surely you have heard of Groupon, but have you heard the two initial investors story?

Their first company needed an office. They received office space in return for equity from a guy named Sam Zell. That’s chance. These two guys would probably have been successful anyway. But the random meeting with Sam Zell gave them a mentor early on. Zell would be a great mentor to have.

Groupon is an example of a company that probably wouldn’t have gotten started in the Valley-but the DNA in Chicago was a perfect environment for it to grow and succeed.

We are beginning to get more mentorship and successful start ups in Chicago. In the valley, mentorship is ingrained in the culture. Jobs mentored the Google founders. Jobs himself had mentors along the way that he found useful.

The iconic mental image people have is a cowboy entrepreneur striking out and taking on the big bad world on their own. But, those cowboys still need someone to support them. Even in old westerns, lonesome cowpokes had someone they could lean on.

Apple ($AAPL) is the quintessential American start up story. But, thousands of American companies are start up stories. McDonald’s($MCD), Ford ($F), Hyatt($H), Hewlett Packard($HP), Goldman($GS) and many others started with an idea. It’s really hard work and takes a great amount of intestinal fortitude to bring that idea into the mainstream. Only the market can validate if you are successful or fail.

So, what do you need to try and replicate that Silicon Valley ecosystem?

First, you need a lot of people-specifically talented people that can do things and have vision. In the beginning, Silicon Valley had talented people.

Second, you need successful people that are willing to share and mentor the younger people. Silicon Valley had that as well. The labs and universities there created a collegial, collaborative environment.

The third thing you need is a pool of money that is willing to take risk on the ideas of talented people. Silicon Valley had that too. The more success you have, the more money that is attracted to the area to try and cash in on the next big thing.

What you don’t need is government intervention.

Rules, regulations, directed government investments, high taxes, lots of services, and public/private partnerships. Inventors and investors are the best decision makers for both ideas, and what ideas get funded. Recent case in point, Solyndra.

The sooner government officials understood that, the sooner we will create more Silicon Valleys.

Advice for the ages:


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