Community Entrepreneurship Capacity Building

It’s hard to read a business paper, listen to an economist or hear anything about the economic state without also hearing about job creation, entrepreneurs, rates of business success and innovation. The reality is that the economy is stimulated by the job creation that, for the most part, new ventures create. In fact, roughly seven out of every ten new jobs are created by small or medium-sized enterprises – likely a business that was started and is run by an entrepreneur. The question becomes: Who is teaching and supporting this economically-critical segment of our population how to start and run great businesses? In many cases Colleges/Universities are pitching in, in some cases Government led (or backed) agencies are filling the void. In many communities, entrepreneurs (current and former), venture capitalists and angels are doing their part by building accelerators and incubators– some would say less altruistically, but in most instances more effectively than others. In some dire cases there is no support, or at best disjointed and unorganized pockets of support more worried about competing for funding than supporting start-up and business growth activity. Regardless of the state of entrepreneurship capacity, a community must gauge their support system against best practices around the globe on an ongoing basis. Whether the capacity exists within one domain, or it’s distributed across many, there are critical elements necessary for success:

Leadership – First and foremost, there needs to be defined and palatable support for entrepreneurship capacity building within the community, including business leaders, entrepreneurs, Colleges & Universities, service providers, funders and elected officials (who at minimum must commit to getting out of the way business building, if not whole-heartedly support by providing funding, cutting red tape etc.) As with any major project or initiative, if there isn’t proper leadership support, it will be doomed for failure. “Failure” can manifest itself in two ways: 1) immediate (i.e. it never gets started); or worse yet falls in to the category of many initiatives, 2) it starts and functions – giving the illusion of success, but isn’t either effective or relevant. Next, the actual leader or leaders of the initiative or cluster of entrepreneurial initiatives is key. S/he (or they) must be uniquely qualified as someone who is intimately familiar with entrepreneurship and building the conditions and factors that lead to entrepreneurial success. Important point of clarification: a successful entrepreneur isn’t always able to replicate their success nor are they guaranteed to be able to “facilitate” entrepreneurial success for others. The right individual must have the experiences and lessons learned AND be able to pass this knowledge on to others. Let’s not forget that they will also need to be able to run the “business” of supporting entrepreneurs – skills like project management, fund raising, management, negotiating, etc. are critical.

Funding – There are two parts to funding: first, sustained and sufficient funding for the operations of the initiative(s); all successful projects require appropriate capacity. It’s not enough to want success – you have to pay for it. Support initiatives need stable, sustained funding. Unfortunately, many important initiatives are trapped into yearly funding cycles that take away from service delivery and places resources on chasing funding, reporting, writing funding applications etc. etc. These are all important and necessary elements of the process, but often too burdensome for the initiatives to successfully fulfill their mission.

Second, funding to support the actual start-ups and businesses is a key ingredient and should likely include some combination, or all of: micro financing programs;
access to angel and venture capital networks; and, seamless path-finding to available grants and loan programs. Easy access to debt and equity capital is a major issue for most communities and is not an easy challenge to solve; there is much work to be done here in most communities. It is by far the biggest stumbling block for early growth companies. Part of the solution is to ensure that entrepreneurs and those running support initiatives understand the realities of funding, as well as have a clear and realistic understanding of what types of funding is appropriate, achievable and when. Many myths and illusions exist about the likelihood of obtaining things like grants and venture capital. Most entrepreneurs simply need to build and sell products, growing the old fashioned way – one customer at a time.

Community Engagement – Key to the success of any new venture is access to relevant communities which might not be otherwise accessible. Many entrepreneurs don’t have experience with, or connections into essential groups such as quality service providers, supplier, client and partner networks. Formal and informal networking opportunities are required to link entrepreneurs to, and learn from, potential clients, collaborators, strategic partners, professionals and suppliers. Clubs, associations and related peer networking groups need to be leveraged locally and internationally. The service provider community while easy to access and engage must be dealt with very carefully. They must be qualified, active and willing participants with strong motives to support entrepreneurism and ultimately economic development first, with personal profit and business development motives a close second. They also need to be there to add real value and not just there as a professional development exercise to learn at the expense of the business.

Mentoring – Linked to community engagement, but important enough to have its own category, is mentoring. As with industry and professional networks, early entrepreneurs don’t often have deep connections to the key individuals who can guide them along the entrepreneurial path. Formal mentor programs are essential to a fulsome program and provide great opportunity for veteran entrepreneur involvement, ex-pat and broader community engagement.

Incubation/Acceleration – While a physical incubator or space is not essential, the benefits are very attractive. A formal incubator or co-location space provides an opportunity for like-minds to benefit from the energy, synergies, competition and peer learning that often spurs great innovation. Many great examples (Y Combinator, TechStars, etc.) have demonstrated the value of such initiatives. However, I’d be remiss if didn’t also note that their “secret ingredients” may not be easily replicated and an incubator/accelerator for your community must be custom-built based on your community’s assets and strengths with a clear understanding of weaknesses and unique attributes. There is only one Silicon Valley, one Boston; they won’t be replicated, don’t try.

Education and Professional Development – Let’s first start with education. Where many communities fail is in the promotion of entrepreneurism as a viable career path and the development of critical entrepreneurial skills from a young age. What’s interesting to note, and important, is the number of entrepreneurship-focused courses that are offered within a community, both k-12 and post-secondary. While most of us can’t dictate or control what is being taught in our education system, we can identify gaps and work to fill these with supplementary programs such as those offered by organizations such as Junior Achievement, and others. What is important to note when doing this analysis is that entrepreneurship courses are different than business courses. Entrepreneurs can greatly benefit from business courses and vise versa but let’s be clear – there is an important distinction between traditional business courses and entrepreneurship courses. Entrepreneurship courses cannot just be re-purposed or rebranded business courses. Also vital to a healthy entrepreneurship ecosystem is the non-credit learning that comes in the form of personal/professional development, guest speakers and activities & competitions that provide learning and skills development opportunities.

Celebration and Promotion – Well understood, often taken for granted, the promotion of the available opportunities and capacity, as well as the public celebration of success is key to long term sustainability of any (entrepreneurship) program. Existing entrepreneurs, potential entrepreneurs, entrepreneur veterans, private sponsors and donors all need to have a clear understanding of the brand, value proposition and successes. This can’t be overstated. Internal and external stakeholders need to be well informed and engaged in the ongoing successes and activity of the initiative. Proactive promotion, communication and celebrations are vital for an ongoing and healthy entrepreneurship continuum.

To agree, disagree or add to this list, contact us at: info@agawacorp.com or leave your comments below.

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