Putting the Entre in Entrepreneurship
Regardless of the entrepreneur or her idea, having access to the right network of contacts can often be as important as having capital or being lucky (which few people like to acknowledge, and is definitely a thing). In fact, being shown the code that leads to entrepreneurial survival can often hinge
on whether the entrepreneur is a part of the right ecosystem of mentors, vendors, funders, and peers.
It works both ways, of course: fruitful entrepreneurial clusters—such as Silicon Valley, the City of London financial district, or Hollywood (yes, Hollywood; one of the most successful entrepreneurial clusters in the history of commerce)—depend on the right mix of tangible strengths (universities, livable spaces, rich people and smart people), intangibles (vibe and feel), and the constant influx of never-say-die entrepreneurs.
For the intrepid entrepreneur, it can be a lonely, sometimes scary existence. Having the right support system to help show you the way, and help you gain entry to the right people, is key.
Much has been written recently regarding efforts by governments to spur entrepreneurial ecosystems. Russia is touting a Silicon Valley-type cluster outside Moscow, and Dubai is attempting to spur a high-technology cluster to develop semi-conductors and microprocessors. In the U.S., the Maryland suburbs of Washington, DC, are home to a growing cluster of biotech companies, and of course there’s Research Triangle Park in North Carolina, and numerous other current examples building on entrepreneurial passion in nanotechnology, information technology, robotics, life sciences, and much more. Many examples abound in Europe and the UK, as well as a number of new attempts at spurring entrepreneurial innovation in China and the Middle East.
A recent and quite fascinating article in The Economist magazine (The View from Liverpool, March 13th, 2012) highlights the history of Liverpool’s entrepreneurialism:
Liverpool was once one of the most enterprising cities in Britain, a shipping superpower with a thriving network of insurers and trading houses. Liverpool invented financial derivatives, in the form of cotton futures. It created Britain’s first underwriters’ association, its first accountants’ institute, and its first intercity railway (to Manchester). In 1800 two-fifths of the world’s trade passed through the city. At various points over the next century the empire’s second city was wealthier than its first, London.
But in the 20th century, as Britain’s trade swung away from the Atlantic towards Europe, the city got into the habit of resisting innovation rather than embracing it. Liverpool became a hotbed of militant trade unions, which hastened the decline of the shipping industry (by striking against containerisation, for example) and almost wrecked the municipal government. It also lost most of its best and brightest: the Beatles may have revolutionised the music business with the Mersey sound but they soon migrated to London. Liverpool’s story has been repeated endlessly across the world: think of Detroit or Buffalo or Cleveland in the United States. And there is no reason to think that it will not be repeated again in the information age.
Alas, the entrepreneurial flame is easier to put out than to light or relight. Governments across the world are determined to promote high-growth companies and the other accoutrements of an entrepreneurial society: can it be long before Kim Jong Un announces a North Korean venture-capital fund?
This is all quite important, you see, because, as mentioned above, in business who you know can be as important as what you know. And who you know, even in these days of digital social connecting, is still a function of geographic location.
Reluminati knows a bit about all of this because we’ve been s fortunate enough to have been a part of two different entrepreneurial clusters, of sorts: Washington, DC and Detroit, Michigan.
The first is the vibrant yet mostly unacknowledged Washington, DC-based renewable energy and energy efficiency (EERE) ecosystem. It’s been so important to us that we established our company here and have decided to stay.
When we founded Reluminati in Washington in 2004, little did we know that it was the perfect place to start-up a company in the EERE space. Why was it so? Because DC has a complex and ever-expanding ecosystem of tangibles that includes trade associations (solar, wind, efficiency and others), advocacy groups (Greenpeace, Carbon War Room, NRDC, etc.), think tanks (Worldwatch, Think Progress), government agencies (Department of Energy, EPA, the Department of Defense) and even a few private investment groups, all of whom interact and support each other in one way or another in the effort to develop a clean technology-based future.
DC is also the home of a number of intangibles, including multiple colleges and universities, great neighborhoods, and many, many smart, educated, progressive-thinking people who not only recognize the importance of saving the planet, but the wealth that can be created by doing so.
In the past 10 or 12 years, the Washington, DC area has been the home of companies working in solar power, wind power, hydrogen, ocean power, and innumerable consulting, engineering, and advisory firms. Names include SunEdison, Verdant Power, Skybuilt, the DC offices of SolarCity, and of course Reluminati.
The importance of being in a new and growing ecosystem of like-minded people cannot be understated: It’s invaluable. Quite honestly, we’re not sure we could have done what we’ve done if we’d been based anywhere else besides maybe New York or San Francisco. To be able to build our business by tapping into a cross-pollinated network of scientists, academics, government experts and entrepreneurs has connected us to people and taken us to places we could have never imagined in 2004.
Our second entrepreneurial ecosystem is that of Detroit, Michigan, a place with a storied history and, we think, bright future.
No major city in America has experienced the economic and demographic extremes of Detroit. Even before the global economic recession that began in 2008, the city had been in a near death spiral for decades. In the 1950s, its population was around 2 million; today it is less than 750,000.
Detroit, though, has an Ace up its sleeve in the form of a population with generations of engineering and manufacturing experience. Detroit builds stuff. If you want to make something—and I’m not talking about a product made up of 1s and 0s, but a product with moving parts—then you should consider Detroit. The tacit knowledge in the Detroit area related to how to develop and make products is without equal.
Recently, Reluminati’s founders saw the strength of Detroit up close when the product we incubated (the ReGenerator) and the company we founded to commercialize it (ZeroBase Energy) moved from Thomaston, Maine to downtown Detroit. We were immediately impressed by the reception given us by NEXTenergy, the Detroit incubator where our R&D facility is housed, and by the talented people brought on by Pegasus Capital (the New York-based private equity fund who now own ZeroBase and is in charge of making the company a success), including Chief Product Officer Jaron Rothkop, and CEO Kousay Said.
Detroit is quickly becoming a magnet for renewable energy companies. Names in the area include Dow Solar, PowerPanel, A123 Batteries, and many more. As one company arrives, it brings with it a stable of talented people and adds its mass to the areas network of suppliers and supporters. We have no doubt that Detroit is going to be an EERE entrepreneurial ecosystem on par with clusters around the world focused on equally important business spaces.
So as we work to make our current and future ideas a reality, we’re going to be sure to plug into the networks that will help us make them a success. We suggest, whether you’re based in Abu Dhabi, Naples, Oxford, Mississippi or Oxford, England, you find your own matrix of allies and do the same.Tags: Renewable Energy, Startups