How to Build Your Startup Ecosystem: A Live Video Chat with Adeo Ressi

Hello everyone, I hope you're well. My name is Ade Aresi, CEO of the Founder Institute, and I'm here to talk to you today about building your startup ecosystem. So let's see how many people we have. We have 8 of 24, so more people will be joining in. Let me quickly introduce myself and then we'll dive into the topic today. I'm going to give you some advice, right? So we'll talk about some big misconceptions that happen when growing your ecosystem, some ways that you can help to grow your ecosystem, and then how the Founder Institute can help. So very quickly on me, I've been a serial entrepreneur for almost 25 years. I've had the joy of creating about 10 companies and creating directly $2 billion of shareholder value and through the Founder Institute, creating another approximately $25 billion of shareholder value. And again, working at the Founder Institute and operating, as you might see behind me, in approximately 200 cities around the world, we see a lot of we see a lot of startup ecosystems and we see a lot of different ways to build and help them. So one thing of note, as I talk, I'll be monitoring the chat. Feel free, chat should be on the right-hand side of your screen. Feel free to type things in the chat, type questions in the chat. It's great if you introduce yourself and then we'll try and answer and address as many questions as possible. So you can literally bring up questions at any time. Especially if they're related to what I'm talking about. I'll weave it in. If it's not, I'll bring them up at the end. But don't be shy. Introduce yourself. Ask questions. That's why we're here. All right. So again, misconceptions, way that you can help and way the Founder Institute can help you. Those are the 3 things we're going to cover. Let's talk about some of the misconceptions to get started. There is something that I hear all the time because we operate, as you can see in the map behind me, in almost every inhabited time zone. We're working on— I think we need some small islands in the Pacific to get to every inhabited time zone. And obviously, we have all different kinds of ecosystems. So, you have places like Silicon Valley, New York, and London that are very developed. Then, you've got some up-and-coming areas in South America and other parts of Europe. And then you've got some really raw markets that are brand new to the startup world, like Kabul, Afghanistan, some places in Africa, and frankly, many parts of the world. But they just don't have as much development in their startup landscape, if you will. And what you most commonly hear, whether it's a developed market or a new market, is that, hey, we need more money in order to create great companies, right? And so, there's this thought that's permeating the world that ecosystems need money. And it's a misconception, right? Hi there. I can hear you on the line and there's some background noise. So, if you can mute, thanks. And by the way, everyone, I'm not seeing a lot of talk in the chat. So if you have questions, you want to introduce yourself, please do. So, so back to this misconception about requiring money. The reality is, and it's a chicken and egg question, right? Is money required first or are great companies required first? And the truth of the matter is that Money follows great companies, not the other way around. And therefore, this idea that you need money in your ecosystem is actually incorrect. It's a misconception. What you really need is great companies. And I can point to this and examples of this all around the world where once there is a great company, then suddenly you see angel investors, venture capitalists spring up to support those companies. And specific examples, we entered Vietnam quite a while ago, over 5 years ago when we first ran chapters in Hanoi and Ho Chi Minh City in the country of Vietnam. There wasn't much of a startup ecosystem. There certainly wasn't a lot of capital because it was a, and still is, a communist country. And now fast forward a few years later, 30% of all seed and Series A deals in that country went into Founder Institute graduates. And when we started there just a few years ago, there were no seed and Series A deals. I mean, maybe one or two companies had raised money from outside of the country within the country. But within the country itself, there was barely an angel market, barely a venture market. You know, some funds were looking at opening satellites there. Fast forward a few years later with a lot of good companies being created, and now there's a thriving angel market, there's a thriving seed market, and there's a thriving venture market. Relative to the size of the country. So first step first is build those great underlying businesses and the money will come. You know, in terms of if there are some other misconceptions, does anyone have questions, by the way, on that or any other misconceptions that permeate around today? Okay, none yet, but I'm here waiting happily. So I'll give you another common thing that I hear on the other side of the spectrum. So we talked about, you know, requiring money. Another thing that I commonly hear on the other side of the spectrum is, oh my God, there's too many things in my market. It's too crowded. And that's a real issue for us. And the reality is that about 2% of humanity is well-suited to launch an entrepreneurial endeavor, particularly a high-stress entrepreneurial endeavor like a technology company. And I can assure you that if you go country to country, city to city, far less than 2% of the population is working on technology businesses. So my point there is that, in fact, there probably isn't enough resources in the city to help the entrepreneurs build. Entrepreneurs need help. They need support. They need programs because launching a business is very challenging and can lead to failure. So there can really never be too much. Right? If a larger percentage of the population is capable of creating a technology and not enough of them are creating a technology company, that's an issue. Okay, so we have a couple questions that have come in and came in through email as well. How important is the niche regarding building an ecosystem? And I'm not— so, in terms of niche industries and things like that, let's talk about that for a minute. So, each city, each country has certain skills and industries that are more popular than in other cities. So, for example, New York is really well-known for finance. Silicon Valley is really well-known for tech. Los Angeles is really well known for movies just here in the US. So obviously, if a startup ecosystem starts flourishing in your city, it's likely that businesses are going to emerge surrounding the expertise in the city. So for example, back to New York, where finance is a big industry, you might see a lot more fintech startups. And that's a niche within startups based on the strengths of the city. And, you know, Snapchat, which is a media business, is based out of Los Angeles. And Los Angeles, with the movie industry, is a big media town. So you tend to see things like that happen and in the different markets. And so you can look at the strengths of your city and help to inspire companies and entrepreneurship that tie into the strengths of the underlying city and market. Okay. So again, back to some misconceptions to wrap up there. We talked about, one, money being required, and that's a misconception. You actually need great companies first. Number two, we talked about, hey, there's too many programs, too much opportunity. And with respect to that, as I mentioned, that's a misconception as well because I promise you that the 2% of people that should be technology entrepreneurs are not. So more programs are going to help rather than hurt. Let's talk a little bit now about different things that you can do to help build your startup ecosystem. And, you know, they're different. There's a variety of different things. And if anyone has questions, I am reading the chat. So I'm going to go through 5 steps. Okay. 5 things you can do. I'll try and cover them really quickly. But again, if anyone has questions along the way, I'll answer. So number 1, the first thing you need to do is start with a collaborative mentality. And I see a question coming in from Damian. But how could someone at 16 years old gain experience towards starting working in business? Okay, let's, let's talk about that. So Damian was asking, how can a younger founder or a younger person who's aspiring to found or get started. So, I can tell you my own story and it might be useful. So, I was in high school, so about 16, 17 years old, and I joined a program here in the United States called Junior Achievement. And Junior Achievement actually pushed me to create a business at that age. And this was 30 years ago now. I might be dating myself a little bit. In fact, I pretty much am dating myself. And so, back then, you wouldn't necessarily start a technology business because the internet really didn't exist in a commercial way. So, I started a t-shirt business at 16 years old and we printed, sold t-shirts. So, There's really no age limit to being inspired to do something and start a business and start making money. We actually printed t-shirts for— there were these books called Cliff Notes. We made Cliff Notes t-shirts, which is kind of an oxymoronic thing because Cliff Notes was a way to sort of cheat in school. And they sold like crazy. I mean, everyone we printed sold immediately. We would sell them on the street sometimes, they would sell out. We would sell them in school, they would sell out. Just people found it very funny that we made a t-shirt about how people kind of cheated to do less homework. And, they were a smash success. And, that got me very early on thinking, "Wow, I can make something that people really want," and inspired me to pursue entrepreneurship further. Okay. So, let's go back to the 5 things you can do to help build your startup ecosystem. So the first thing that you can do, and similar to what I just did with Damian, is you have to have a collaborative mentality where you're trying to help people. The world is not a zero-sum game, right? If you have, um, um, 5 people— and remember I said sometimes you go in a startup ecosystem, you say it's really crowded. Okay, well, if you have 5 people running coworking spaces and you want to, let's say, launch a coworking space, instead of being like, oh my God, I'm competing with these guys and every time they get a client, I lose a client, you might want to get together with the different people in the ecosystem and discuss ways to collaborate in order to grow that ecosystem and make it better. So, you get together with the other 5 coworking spaces and you talk to them, hey, how can we make our coworking spaces more successful in this market? And so, you know, understanding who's out there in the startup ecosystem and then working with them to make the startup ecosystem stronger in a collaborative way is very important. We have something called the ecosystem canvas, fi.co/canvas. I can, uh, it's pretty easy, fi.co/canvas. I'm pasting it into the chat. And so the idea there is that you can actually map your own startup ecosystem, look at all the different players in your startup ecosystem, and then start to bring them together. So, uh, you know, you could bring them together by hosting an event, you can bring them together by getting on a call. You can bring them together in a variety of different ways, but the point is to collaborate. And if anyone has questions, please keep going. And, you know, as part of bringing them together, you do want to map the market, which is step 2 with the ecosystem canvas. So understanding who all those players are and really mapping it out and putting it on a piece of paper. And we try and do this. And we're— the Founder Institute is operating in approximately 200 cities around the world. And we try to create that ecosystem map in every city where we operate. Now, we don't get to everyone, as you'll see. We're in probably— we have a smaller number of ecosystem canvases available today. But because it takes time and some effort. But it's important if you're going to be an ecosystem leader to think collaboratively and map the market. Now, Kathy is asking, are all ecosystems collaborative? Unfortunately, no. I wish they were. So right now, and it's not black and white, it's not like this one is collaborative and that one is not. You definitely have a spectrum, right? So I'll give you an example. Like Mexico City is a fairly cutthroat place when it comes to startup ecosystem. So you can tell the health of a startup ecosystem very easily and how collaborative they are by how people talk to one another. So if I'm One of the people comes up to you and you say, "Oh, what do you think of this organization?" "Oh, that organization, not very good. And I think they're kind of bad people." You can tell that they're not being collaborative, right? Because that's sort of a negative mindset where they're not saying, "Oh, this person's trying to help and doing good things and here's some problems," but they're overall good people. If they're like, no, they're bad, and they're, you know, that's generally not a good sign. Now, inevitably, in any startup ecosystem, there are going to be good players and bad players. There are some predatory players in startup ecosystems, even in Silicon Valley. And so, you know, there are sometimes people come up to me and say, hey, I want to go get funding from so-and-so. And I'll say, hey, listen, that I don't recommend that, they don't have a very good reputation. But if you ask me then about someone else, I'll be like, oh, they're great, right? So you're always going to get a little bit of negative feedback. But if you're consistently hearing from people that everyone else in the startup ecosystem is bad or has some problem, then generally that's a sign that it's not a collaborative ecosystem. And depending on how frequently you hear it, it could be really negative. Or somewhat in the middle. So, going back to Mexico City, Mexico City is an example leaning towards negative. Silicon Valley, on the other side, is leaning way towards collaborative. And you see this at differing spectrums throughout the world. You know, generally speaking, a new ecosystem starts out being a little bit hostile and then, and less collaborative and grows to be more collaborative over time because smart people like on this webinar try being collaborative, try mapping the ecosystem, trying to bring people together. And by doing all that stuff, that creates a more collaborative environment. And as the Third thing I mentioned is the third step, which is bringing people together, gathering people. So again, getting that collaborative mindset, mapping it out, and then bringing people together. So events are a super effective way to bring the ecosystem together and inspire people within the ecosystem to do great stuff. So for example, you might want to host an event at a local pub or a local coffee shop and literally invite the organizers of all the key coworking spaces, all the key incubators or accelerators, all the key early-stage funds, and just say, hey, why don't we grab coffee at 8 AM at this convenient location. You know, I'd love to bring the startup ecosystem together. So events are a great way to, especially if it's a coffee or a drink, it's not like a big formal thing for the different players in the ecosystem to get to socialize and know one another and then start collaborating on making that ecosystem as strong as possible. So, there are a lot of great platforms. Meetup.com is a great platform. If you go to our meetup, which you can see at founder-institute.meetup.com, last I checked, and I almost want to pull it up, but I'm talking, we have something like 360,000 members to our meetup worldwide. We are the largest meetup organizer in the world. But there's a lot of other platforms, Eventbrite, et cetera. And you may even want to use a local platform to organize the gathering of these ecosystem leaders because bringing that group together is really going to create that collaborative mindset that's needed to grow. Now, I'm going to bring something up as step 4 that seems a little counterintuitive, but it's also very important. You know, looping in government officials, whether it be the mayor or any other person in government that's interested, such as a governor, senator, whatever your country has that's interested in entrepreneurship, is important. And there's a lot of different reasons why. And at Founder Institute, we're going to be launching in the not too distant future some initiatives to help government officials, but governments control a lot of, government officials and governments control a lot of things, right? They control incentive structures for funding. They control various immigration policies for talent. They control various regulations that allow corporations to be formed. So you want the government to be in support of your startup ecosystem and they move really slowly, right? It doesn't matter. I mean, the fastest moving government in the world is Singapore and it still moves comparatively slowly to business. In business, a series of executives can turn the ship in a matter of days, even large businesses, a matter of weeks or months. Governments operate in the timetable of months and years. So startups in hours and days, big companies weeks and months, governments months and years, right? So the sooner you can get these government officials engaged, you can start looking at funding incentives, immigration ideas, and corporate formation needs taxes, etc., that are required to help your startup ecosystem grow. I'll give you an example of something that's super important. In a lot of countries around the world, Argentina, Brazil, etc., they're rolling out now legislation. I see your question, Kathy, and Neil's, so let me get to them in a second, but let me finish this. So in a lot of startup ecosystems around the world, incorporating takes a really long time. So if you want to set up a business, it can take months. Okay, that's terrible for a startup ecosystem, right? I want to create a company and start selling apps in days. So if it takes 2, 3, 4, sometimes as long as 6 months to incorporate, you're by default stifling the startup community. So Argentina, Brazil, a bunch of other countries around the world have been releasing lightweight incorporation mechanisms to allow startups to flourish. And so the role of government in these areas is really important. And Niels was asking, can you define ecosystem? Sure. So, well, I think we can all Google what startup— what an ecosystem is. A startup ecosystem. Again, if you go to fi.co/canvas, which should be in the chat, right below Neil's. That's a map of what a startup ecosystem is. And essentially it's a group of entities and individuals that are helping to create technology businesses in a city, region, or country. So you can have a startup ecosystem in a city, you can have a startup ecosystem in a region, and you can have a startup ecosystem in a country. Right? And a place like Singapore, the region, the city, and the country is one. And a place like the United States, there's the global US startup ecosystem, but the US is a very big country. So then, you can go to, let's say, California, but California is a very big state. So then, you might go to Silicon Valley, which is also a region because Silicon Valley is comprised of many cities. You've got two big cities, San Francisco and San Jose, but then you have a lot of small cities and towns like Palo Alto's a town, Mountain View's a town, blah, blah, blah, that are incorporated within that region. So startup ecosystem is a group of individuals and entities that are committed to helping create startups in a city, region, or country. And you can map those resources using the Canvas link that is in the chat. Now, Kathy's saying, I'm part of an international research team exploring entrepreneurship innovation ecosystem that enables support women. Is there any insight you have on this topic? Sure. So thank you, Kathy, for that question. And sorry to answer it second versus first. So, I have two daughters and they're amazing and really lovely in every way. And I want to see— they're young though, they're under the age of 15, so they're not quite yet ready to start a business. But by the time they are ready to start a business, I want to see that they have the same opportunity as every man. That they won't be discriminated against by any funding resources and that they have every opportunity afforded to men to successfully launch and grow a business. Now, unfortunately, that's not the reality today. There's a lot of reports of misogyny within funding. There's a lot of reports of double standards in terms of access to resources in the startup world among women. And that's really unfortunate. So almost 7 years ago, the Founder Institute launched something called the Female Founder Initiative and the Female Founder Fellowship, where we provide incentives and other opportunities for women to become entrepreneurs through the Founder Institute program. As a result of those initiatives, which are now approximately 7 years old. Our recent statistics indicate that we're graduating 40% women-led businesses and all on average in all the cities that we operate. As you can see behind me in the world, I move my head a little bit there. There are a lot of cities. So and some things have popped off the map. So we're in about 200 cities Over half of them have operated this year so far, and some more are launching. And we'll have created about 1,000 companies in 2017. We'll create about 2,000 in 2018. And 40% of those companies are led by women. So, you know, this is an issue that I take very seriously. Now, the reality, just to to elaborate a little bit further is there's still a lot of double standards and mistreatment of women within the technology realm. But, if we're able to produce 40% women-led businesses, that will eventually permeate the entire industry and fix many of the problems because right now, it ranges between 5% and 15% of tech entrepreneurs entrepreneurs are women. But if we keep putting 40% through at high volume, more women will become successful entrepreneurs, more women will become mentors, more women will fund other women-led businesses, etc., etc., etc. So we're pushing up high-quality women-led businesses from the bottom of the pyramid up and up and up. And so eventually, you know, we can look around the world and hopefully we get to 50% of all businesses working in technology are led by women. And then, you know, the whole ecosystem of startups will have coworking spaces led by women, accelerators led by women, angel funds led by women. At a higher and higher percentage. Now, so we talked about working with the government, and I'm gonna give you one last piece of advice, number 5. So again, collaborate, map the market, start running events, get the government involved because it takes them a long time to work on stuff. And last but not least, you need to be really honest. Okay, and this is hard because humans often are polite, right? You don't want to say, hey, that's a really dumb idea, because you want to be nice to people. But the problem is if you don't tell someone that they have a dumb idea, then guess what? They're going to go work on their dumb idea, and that's ultimately going to hurt your startup ecosystem, right? What you want to do is, you know, you can still be polite, but you need to be honest. If someone's doing something that isn't helpful, or they're being predatory, or, uh, their idea isn't very good, you need to be honest with them. And that honesty will help, uh, the ecosystem grow. Honesty and meritocracy is the core values of Silicon Valley, everyone here is very— if you have a bad idea, mark my words, they're going to tell you. You may not even have a bad idea. Like the famous investors of Silicon Valley, when I said, hey, I'm going to launch a global accelerator with chapters all around the world, they're like, that's stupid. Why don't you just do it here? There's way better founders here than everywhere else in the world. And I was like, I don't think so. I think there are great founders everywhere. And they're like, okay, that's dumb. And, you know, I think I was right. I mean, we're in 200 cities. We're seeing billions and billions of dollars a year of value being created. And it's not all in Silicon Valley, right? It's all around the world. So, you know, when the Founder Institute has a billion dollars a year in exits, hopefully at some point in the future, I'll prove them all wrong. We've been doing very well to date. So, I think that I was right, they were wrong, but they were honest with me with their opinion and that I appreciate it to this day. And because they were honest with me, by the way, I was like, "I think you're wrong. So, I'm just going to go work even harder to show that my thesis of the world is correct." So, honesty really helps. Now, if you have any other questions, we're gonna wrap up here with some ways that the Founder Institute can help you. So look, we are very good at helping aspiring founders create great technology businesses. As I opened with on the first point earlier in the talk about, the Vietnam chapter, 30% of all seed and Series A deals in the country of Vietnam went into Founder Institute graduate companies. The reality is the Founder Institute produces far less than 1% of all the companies in Vietnam. So we're very good at going into cities, finding raw talent, and turning them into amazing entrepreneurs. Those amazing entrepreneurs will go on and then help raise money from local angels. And then as they gain more and more success, venture funds and other things will spring up around them. And eventually you'll see a situation like Vietnam. And so we really are there, and there's some question, is this being recorded? Hopefully, yes. Kim will hopefully record it for you. But we're really there to help anyone who's looking to start a business get that business off the ground in the right way. And I'll throw some quick stats out for you. Of the almost 3,000 businesses that we've created worldwide, Approximately 80% of them are alive, approximately 65% of them are doing very well, and over half of them have received funding. And we're operating in some pretty rough and tumble places around the world. So, it's not like all these companies are coming out of Silicon Valley. These companies are coming out of Dhaka and Côte d'Ivoire and all sorts of various cities in Pakistan, etc. You know, we can take aspiring strong founders, turn them into businesses that you're proud of, and they can help grow your startup ecosystem. And our process of doing that brings together the ecosystem and really carries forth all the values and goals that we talked about before. So we're collaborative by nature. We help you with an ecosystem map. We have with the ecosystem canvas I discussed, we host a lot of events that bring mentors and people together, other organizations together. And we oftentimes work with the government and we're very, very honest with founders about how they perform. So I, I'm wrapping up here. If anyone has a question, now is the time. If you're interested in learning more about being a director or working on stuff in your startup ecosystem, you can go to fi.co/lead. There's a bunch of information there that you can read, and hopefully I got that link right. Yeah, I did. And you can also then fill out a brief, you know, it will take you 2 minutes, enter your email and some information. And you can apply to be a director. I can tell you I'm a director. In fact, I have my session tonight. It is one of the most rewarding and fun things that you can do because you're taking this group of aspiring founders and walking them through the steps to build a business. And you kind of get a sense as it goes along because they really get better every week. That these companies are gonna be meaningful. And then they go on and sometimes build $100 million or even billion-dollar companies that you can turn around and say that you have had a heavy hand in helping. Okay, so I haven't seen any questions come in. This was lovely, everyone. Thanks for your time today. Again, my name is Adeo. If you're interested in learning more about leading a chapter, fi.co/lead. Thanks so much for your time today, and we'll be doing other webinars. And so keep, keep us on the calendar, and I hope we can work with you on launching a Founder Institute chapter in your city. Thank you, guys. Bye.