A startup ecosystem is a delicate matter. It needs a lot of things in the right places and a fair amount of passion fuel to ignite. But once started, it becomes a chain reaction that replicates success and attracts investments into the whole economy of a country.
To find what defines a startup ecosystem and what are the elements that nurture it we spoke with Fabrice Jakubowicz – Kohen, Community Development Manager EMEA and Jared Dublin, Business & Community Development at SoftLayer, an IBM Company.
They are both our mentors at Startup Spotlight, part of this year’s How to Web Conference 2014 event.
As Community Development Manager, Fabrice offers business development support and serve as advisor, friend, and liaison for early-stage startups in the Catalyst Startup Program offered by his company in Israel and Europe.
Leadership consultant turned entrepreneur, Fabrice is seeking to meet fellow entrepreneurs in multicultural environment to suit his envy of learning, sharing strengths and values.
Results-driven business strategist and entrepreneur, passionate about turning big ideas into realities and willing to do whatever it takes to get the job done, Jared has the role to provide business development support in the same Catalyst Startup Program.
How to Web: From your experience, what are the top tier elements that a young startup ecosystem needs to develop in a sustainable manner?
Fabrice: An experienced person should have an open door policy and stay accessible; ego should be left at home and not brought anywhere else.
The more genuine people you put in charge of the ecosystem supporting the next generation of successful entrepreneurs, the more results they achieve. Ecosystem, startups and families are, 99% of the time, at the base of that ‘founder’ culture. Nobody succeed in hiding feelings and questions in the closet.
Jared: Working within different startup ecosystems up and down the US West Coast, I have learnt a lot about what makes an ecosystem tick and what makes it sustainable. From my experience, access to early-stage capital is one of the most important elements to a young startup ecosystem.
Angel investors and micro-VC’s are essential because they are the ones willing to take the most risk at the earliest stage. Another key element that a young startup ecosystem needs is a network of experienced mentors.
Are these elements different from region to region? What are the most important similarities and differences that you have noticed in these local/regional startup ecosystems?
Fabrice: In Israel, compared to France or London, we are one or two phone calls away to meet the person we want. And even the most successful person in the ecosystem will answer your call and help you, if it’s the right timing.
The size of the ecosystem in Israel makes everything easier when you are genuine, and everything complicated when you are not.
What distinguishes Tel Aviv from its global peers as a startup scene is the huge number of startups – more than 5,000 – and energy the city provides. Everybody seems to be the founder of some new venture.
Israel has the highest density of startups in the world. The country is number one in engineers per capita – in terms of talent in programming, in product, in marketing it is second only to Silicon Valley.
Jared: In Silicon Valley, you have endless angel groups and early-stage investment funds that are willing to invest in Seed and Series A rounds of financing. Similarly, Boulder’s startup community has shown solid growth with the Foundry Group and TechStars prevalent as two investment, mentorship, and acceleration organizations in the startup community.
One of the more significant differences I’ve noticed comparing younger, local startup ecosystems such as Los Angeles and Seattle, is the level of risk-tolerance from young entrepreneurs.
How can startups in ecosystems which lack certain crucial resources find these resources elsewhere without needing to relocate?
Fabrice: Don’t wait in your own ecosystem to execute your vision and validate your assumptions if you are not trusting your ecosystem enough, don’t lose momentum, this is crucial to your success. Up to the time you might change the ecosystem, your kids will be at college.
Jared: Skype, LinkedIn and AngelList are your friends as well as your personal, professional and mentor networks. Use them. Leverage them. It may be more difficult to approach that dream super angel at a conference in smaller ecosystems, but you can still leverage your network and make connections in search of that warm intro.
What are the criteria that a startup must comply with in order to be accepted into the Catalyst program?
Fabrice: They have to be nice people, active in developing their startups and pre-series A. And it’s better if they have an internet dependent based startup, but if they are developing a food startup, I wanna meet them anyway (smiles).
Through the Catalyst program, SoftLayer offers more than just free infrastructure for early-stage startups. How do you help startups gain momentum and grow faster?
Fabrice: I help them by sharing my own experiences, by spending time with them to build a trustful relationship, by being not perfect and provocative and by saying “I don’t know” when I don’t know, by challenging them on everything they are telling me, by being genuine and supportive to their venture, by making sure they dug enough to see what’s the key success factor for them to get to the next step.
Also I help by sharing some relevant contacts, that I have made over the years, when I think it’s relevant and that it could be beneficial to both parties. Basically, I am spending my time asking ‘why’. If you ask why five times in a row it’s a huge help for them (smiles again). But the truth is I learn so much from them too.
Jared: We built this program to surround early-stage startups with the resources they need to grow and scale. Free hosting credits are one key component of the Catalyst Program, but we’re also here to provide technical and business development mentorship for the startups. We’re advisers, sounding boards, friends, and advocates. We’ll talk about their tech stack, infrastructure, pitch deck, co-founder issues, etc. and that’s all part of how we help our startups grow.
Where do you get the most applications for the Catalyst program from? Why do you think that is?
Jared: We get most applications for the Catalyst Program from referrals. Our best advocates are our success stories. We also rely heavily on our affiliate organizations, incubators and accelerator partners. Startups can apply through the website as well, but we tend to see spikes in applications after we go in for office hours at various accelerators and programs around the world.
What type of specialists are involved in Catalyst and how do they contribute to the startups’ evolution while they’re going through the program?
Jared: Catalyst, and the greater SoftLayer team, has a blend of business development, technical, and strategy specialists on board. If it’s a fundraising, scaling, or partnership question, our team makes time to speak with companies and see how we can help.
If we have to jump on a Skype call for a whiteboarding session or a conference call to dive deeper into the problem or obstacle, we’re more than happy to do so!