I’ve been throwing around the term “entrepreneurial density” for a while and thought it was worth writing about, as I believe it’s important to understand how it can shape an entrepreneurial ecosystem.

Community building is about creating the environment that allows for the entire system to thrive. Tweet This Quote

But first, a link back to some ideas around entrepreneurial communities in general. My partner, Brad Feld, literally wrote the book about this (highly recommended if you haven’t yet read it). The quick summary is that great entrepreneurial communities are built on the basis of a few key tenets, as outlined below. (Brad writes about these in much more detail in the book, which—again—you should read.)

  • Startup communities take time. Think 20 years—and they don’t happen overnight (despite what you may have heard about Boulder, it took plenty of time to develop here, too).
  • Startup communities are led by entrepreneurs. For some reason I still can’t figure out, many VCs get this backwards. However, great entrepreneurial communities are led by entrepreneurs.
  • Startup communities have many leaders and are not hierarchical. Related to being led by entrepreneurs, great entrepreneurial ecosystems have many leaders. They don’t need to be working in a coordinated fashion (but see the next point on being inclusive) but they do need to be working for the greater good of the community. Additionally, these communities are meshed in their network structure versus being hub-and-spoke or centralized. There’s no hierarchy in strong entrepreneurial communities.
  • Startup communities are open. It’s pretty critical in any startup community to be open and welcoming. People come to entrepreneurship from lots of different background and bring a variety of perspectives. They’re also working across the stack of potential problems and forming companies that are varied in their make-up, focus and goals.

With no strong hierarchy, startup communities have many leaders who work for the greater good of the community. Tweet This Quote

It’s funny—I thought for sure I had written about this before, but when I looked, I realized I hadn’t. However, to preface the rest of this post, I have spoken about my thoughts on entrepreneurial ecosystems and startup communities in a few videos (see here and here). Brad has also produced some great content (in addition to his book, which I’ve now mentioned three times that you should really read). Check out these resources if you’re interested in digging deeper.

Now, what does “entrepreneurial density” have to do with this? I’m starting to develop a thesis around the ways in which entrepreneurial communities follow something pretty akin to Boyle’s Law. For those of you who have forgotten high school chemistry, Boyle’s Law describes the behavior of gasses—it describes how the pressure of gas increases as the volume decreases.

When entrepreneurial activities happen in a smaller physical space, things happen faster and serendipity emerges. Tweet This Quote

Startup communities can behave in a similar fashion. The smaller the physical space in which entrepreneurial activities are taking place, the faster those activities happen, the more serendipity emerges and the more that community thrives. This often happens somewhat naturally—startups like to be around other startups, for example. But they can also be encouraged to happen—co-working spaces are good examples of systems trying to create density. Sometimes, enterprise zones can create this effect; often, a group in a particular city gets together and consciously tries to create an area of town that’s particularly attractive to startups.

I lived this in Boulder without really realizing what was going on at the time. In 2007, Foundry moved from an office park on the highway to the west side of town. There were already a number of startups there (our office formerly belonged to Rally Software, Lijit Networks was upstairs, and many more companies were nearby). We moved there because we liked the location and it was close to where two of the Foundry partners lived. Over time, more and more companies moved to that side of town, and we built a little bit of a community within a community where people were constantly bumping into each other on the street, getting coffee, going to lunch, etc. In our building alone, about a dozen of our portfolio companies have had an office at one time or another.

Startup communities take time—they never happen overnight. Tweet This Quote

To be clear, it’s not that density is required to build a great entrepreneurial ecosystem (and I feel passionately about the virtual community that’s connecting entrepreneurs around the work—perhaps with this new lens, creating virtual density as well). But community building is about creating the environment that allows for the entire system to thrive, and creating density in a community is an important way to help speed up that process.

A version of this post originally appeared in Seth’s blog.

Seth Levine

Author Seth Levine

Seth is a Boulder, CO based technology investor and managing director at Foundry Group. His career spans venture capital investing as well as operational, transactional and advisory roles at both public and private companies.

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