I’ve been holding off on my writing until my new blog is finished (cangialosi.net), but things are taking a bit longer than anticipated. In the meantime, I’ve been accumulating topics that I want to start writing on and figured why wait, everything is going to get ported over to the new blog anyway.
It has been almost 5 months since I sold Blue Sky Factory. Since then, I’ve transitioned myself out of the day to day of the business, spent a month in NYC, traveled for weeks in Italy with my family, spent a ton of time trying to help reboot Baltimore’s local tech council, completed a consulting project, completed a handful of angel investments, and have finally settled back into Baltimore and have begun thinking about whats next. Along the way, I’ve spoken with many entrepreneurs, investors, & visited a bunch of startup accelerators & incubators, and have been thinking a lot about the entrepreneurial cycle, and how it relates to the creation of entrepreneurial communities.
This is a topic that I have been giving a lot of thought to given my recent exit, especially as it relates to my hometown of Baltimore. In Baltimore, we seem to have this void of a truly functioning entrepreneurial ecosystem, yet we have all of the pieces of the puzzle, right here, right now. I’ll add some color to this later in the post.
The Entrepreneurial Cycle:
First, lets define the “cycle.” In my mind, the entrepreneurial cycle is the experience of starting a company, scaling a company, and successfully exiting (selling) a company. These events can be both large and small (both in size and scale of the company, and the financial implications), and take anywhere from months to decades to complete. In some cases, the experience comes with investment, and for others, like myself (this time around), bootstrap with no investment and grow organically. The experience comes in many different flavors.
So, What Happens Next?
Every entrepreneur takes a different path in the cycle of entrepreneurship. However, one of the big questions about the cycle is, WHAT HAPPENS AFTER AN ENTREPRENEUR EXITS?
A few, but certainly not all, of the answers to this question I’ve learned by talking to and watching others who have been through the cycle are as follows:
- They start another company (this is the most likely outcome)
- They start angel investing.
- They get involved on philanthropic or activist levels.
- They start consulting or get a job (unlikely but it happens).
- They tune out and fade out of their community.
In established entrepreneurial communities, this is a bit of the norm for an entrepreneur. However, these actions in non-entrepreneurial communities add value, but can often be a missed opportunity to help create, nourish and sustain an entrepreneurial community. Certainly, starting another company and or investing in other companies are a good thing, but these actions can be much more efficient when there is a proper ecosystem in place. This takes time to build.
What is an Entrepreneurial Ecosystem?
I am talking about an ecosystem that attracts and supports entrepreneur’s at every stage of their growth. A community where there is an abundance of: co-working spaces, startup accelerators, incubators, local and state support, involvement from local colleges & universities, vibrant community organizations, amazing events that celebrate this ecosystem, and clear bridges to the funding community at every stage of a company’s growth.
To me, a functioning ecosystem for entrepreneurship looks like this:
Nucleus Layer: Where idea’s, connections, partnerships, co-creations happen.
Enablers: Co-working facilities, community events (Startup Weekends, Hack-a-thons, meet-ups, association & membership events, etc..)
Innovation Layer: Ideas go from concept to reality. Making things happen.
Enablers: Active angel & seed investing community, startup accelerators, bootcamps, incubators, etc…
Growth Layer: Building the companies in our ecosystem – a pathway to growth.
Enablers: Active regional venture capital investment & local & state participation in financing.
Sustainability Layer: Keeping the entrepreneurial wheel turning.
Enablers: Active & syndicated angel investing, state & local programs to facilitate and stimulate activity. University entrepreneur programs & support networks. Entrepreneurs giving back and feeding the overall ecosystem.
Entrepreneurs that come from entrepreneurial ecosystems help to continuously plant the seeds of the next generation through mentoring, angel investment, assisting in associations or groups that support these efforts, and by ultimately launching another company.
This kind of functioning ecosystem is currently missing in Baltimore. All of this is here, but we still need to connect the dots.
Building the Ecosystem:
Brad Feld said it best in his recent post on building entrepreneurial communities, and that is that there are leaders and there are feeders. Let the entrepreneur’s be the LEADERS, and have the FEEDER’s encourage and support them. Taking the long view (as Brad says 20 years), this is definitely the right approach. This type of community doesn’t happen overnight. However, there are things we can do to accelerate the process.
So, for communities, like Baltimore, that have all of the “raw materials” right here, right now, the best thing we can do to start threading the community together is to give back and focus on the areas that need input and action. Building the layers of that ecosystem and linking them together is the hard work, and the work that takes the time.
In my opinion, this type of activity is not only what Baltimore needs, but is what this country needs, now more than ever. Simply put, the building of entrepreneurial communities keeps the economic wheel turning. On a macro level, I’m talking about economic development, job creation, etc.. We all know these things stem from the entrepreneurs who start companies, innovate in industries, and make things happen. The more support we offer the innovators, the more innovation will occur. How many jobs have been created in NYC or Silicon Valley over the last 5 years? Lots.
There are several entrepreneurial communities that already give back to the ecosystem that supported, nurtured and grew them over time. However, we need this kind of participation on a MUCH wider scale. We need it in the secondary and the tertiary markets just as much as the major ones.
How Am I Contributing Locally?
I’ve always been a doer, and so understanding, at least through my eyes, some of the challenges that we are facing in my hometown of Baltimore, its hard to complete the cycle and just sit on the sidelines to see “what happens next” in our community. There is a lot of blocking and tackling to be done in our city – and I suspect many cities all over the US and internationally.
So, what am I doing to help further develop the entrepreneurial ecosystem in Baltimore? Here is a start:
As of mid November, I’ve officially taken point and am helping to lead the Baltimore Angels group. We are a loose group of angel investors who have been active for the past 2 + years and have done a half dozen or so deals. The group just went through a slight lull in meeting due to great things happening, like the main organizer, Dave Troy, raising almost a million dollars in funding for his new startup 410Labs (disclosure: I’m an investor). The group was in need of some renewed focus and some additional structure, so thats what we are doing. In 2012, the group will be meeting every month and collaborating with other angel groups and growth stage venture capital firms, and other supporting organizations within the region to ensure we have an active angel investing function in the city / region of Baltimore.
One of my passions is being at the intersection of ideas and watching them come into reality. Its a big reason why I named my latest entity Nucleus Ventures. I like to be close to the nucleus of ideas, where the raw energy of making something happen is taking place. The startup accelerator model is nothing new, but has gained traction all over the country and the world. Long story short, we need one in Baltimore and I am working diligently to try to make that happen in early 2012. I am hoping that we will be able to create a space and a program that will attract the best and brightest entrepreneurs to come to Baltimore and make their dreams a reality.
Greater Baltimore Technology Council
I am convinced that now more than ever there is a need and a role for a local technology council. In Baltimore, ours has been going through a large transition. We’ve had leadership changes, staff changes, and an overall change in the need the community has for the tech council. I am a co-vice chairman of the council and have been spending a lot of time helping the staff, along with other board members renew the value proposition and membership model of this organization. My hope is that the tech council will renew its value proposition to the community, and take advantage of all of the amazing inertia points that we have happening in Baltimore. The GBTC is a connector, a facilitator, and needs the support of the local community to thrive.
So, that’s my perspective on entrepreneurial ecosystems, and my take on where we stand today in Baltimore. What do you think? Am I off base? These are the things I feel need to happen in our communities to make them entrepreneurial.
I would love to hear your take. Comment away, and as always, thanks for reading.