6 Pillars Needed to Build Successful Startup Ecosystems
Entrepreneurs need a proper startup ecosystem to nurture and thrive. A startup ecosystem is formed by several components that come together and interact to form one system. This unified system creates and sustains startup companies.
To be successful, a startup ecosystem has to be highly developed in all areas of its components.
Ecosystems that aim to become self-sustaining units of innovation, create jobs and generate economic growth need to be based on 6 pillars. These supporting pillars help ecosystems grow sustainably.
Access to human capital is vital for ecosystems. Ecosystems need a good quantity of high-quality workers with exceptional skills and competencies.
Human capital is made up of individuals starting, joining, and guiding startup companies.Human resources are defined by certain quantitative and qualitative criteria. This includes level of education, number of graduates, fields of specialization, and level of professional expertise.
English communication skills are also important for entrepreneurs aiming for global expansion, since English is now considered the international business language.
Having knowledge resources dedicated to a startup ecosystem is a fundamental success factor.Working to increase the knowledge generated and distributed within the ecosystem is essential. Universities, innovation labs, and mentoring and network programs all push startup ecosystems to thrive.
Access to funding opportunities is a fundamental pillar for a successful startup ecosystem.Funding sources can vary from venture capital firms, loans, angel investors, grants, and accelerator programs to the 3 ‘F’s: Friends, family and fools.
Choosing the wrong source for funding may be detrimental to a startup’s growth. Founders must be very diligent when raising capital for their company.When evaluating this pillar, it’s important to examine not only the amount of available funding as lump sum, but also how that amount is spread over the different startup growth stages.
A successful ecosystem is one where a promising startup at any stage of growth can raise intelligent money.
Governmental regulations and policies can make or break a startup ecosystem.Having laws and regulations that support businesses being created, as well as having investors that fund them, move ecosystems in massive strides.
Access to affordable office spaces, co-working spaces, high-speed internet, mobile, and utilities are not only needed but required for successful startups.
The lack of infrastructure may be detrimental to forming a worthwhile startup ecosystem. Incubators and accelerators tend to provide some, if not all of these needs to prospective startups.
The city’s infrastructure, such as transportation and good standards of living, is also a crucial factor for the ecosystem’s success.
Markets and networks
Finally, markets need to be large enough to sustain startups’ businesses. If a market is not growing and expanding, it could turn away investors and entrepreneurs.
Markets and networks as a pillar refers to the local market size and dynamism, as well as access to other considerably-sized markets.