Long-term view 'essential' for startup success
A leading startup company veteran from America believes the key to building a successful startup ecosystem is to plan in 20-year blocks, not just short-term success or failure.
Troy Henikoff, who co-founded Chicago-based Excelerate Labs, which grew to become the third largest startup accelerator programme in the world, is in Wellington this week to share his thoughts on how to gain the most from startup companies.
His company has now partnered with Techstars, considered a leading global accelerator programme, which in the past six years raised over $410 million in investment for 212 businesses.
Wellington's Lightning Lab accelerator programme, founded by Creative HQ, holds New Zealand's membership rights to Techstars' Global Accelerator Network.
Last year's Lightning Lab secured $2.15m investment for 40 per cent of the companies involved, and it will run a second programme from March this year, as it looks to continue its growth.
Henikoff said a long-term view was essential to creating a vibrant startup community.
It was important to approach startup creation with a 20-year plan, not with an eye to measuring success in just six months to two years.
He said Silicon Valley was fuelled by a few early successes from which people reinvested in new companies.
"It's sort of like a fly wheel, it's heavy, it takes a long time to get that thing going.
"But today, if you go to Silicon Valley, there are literally hundreds of companies popping up every quarter."
Henikoff said this was because there was now so much capital and intellectual capacity in the community that you could not stop the "fly wheel" from spinning.
"The best ones are entrepreneur-led, and you have to have the people who are passionate about what they're building."
A second feature of a successful start-up community was the need to allow diversity within it.
This meant a network of different sized companies, people who were just starting out and those who had already experienced success, all working together to create "a rising tide that lifts all boats".
"The rainforest is so resilient because it has so many different plants and animals and species big and small and all over.
"No one species dominates because if you did have one specie that dominates and that specie gets sick or whatever, the whole thing crumbles."
This also required an attitude of "give before you get".
He said a successful startup community required collaboration within the network, where there was not necessarily a winner and a loser, and where anybody could start something.
"The way a community works and an entrepreneurial community, in particular, is it's a network, it's not a hierarchy.
"It's not a business; it's a network of individuals who are all contributing to the whole."
While in Wellington Henikoff has led group sessions on how to pitch ideas, financial modelling, building better start-up communities and optimising digital marketing.
He said one thing which would help spur Wellington and New Zealand start-ups and startup communities would be to ensure any successes were celebrated.
"The more the community recognises some of these principals, that it's a network, anyone can join, that the strong nodes are the ones who do more for the other people by giving before they get, that's the way you get things done.
"Just go do it."
Do you feel better off than at this time last year?