Developing a startup community is a Holy Grail for many countries. Despite having huge potential for power, most fail miserably in creating a functional startup ecosystem. Endeavor Insight conducted research on Bangalore and Nairobi, a couple of the world’s top tech startup communities, to get some insights on fostering productive entrepreneurship communities. Some findings are as follows:
- Not all the communities will walk in the same path of development. Depending on the steps taken by decision makers, entrepreneurship communities can develop a unique set of characteristics. In the case of Bangalore and Nairobi, both of them had some similar and dissimilar characteristics and patterns. However, Bangalore’s development has been far-reaching, based on the apt decisions taken by their decision makers. Point to be noted is that the cities, having different models, had different results. While both communities have demonstrated the potential to generate productive tech businesses and products, one of them has realized much more of its potential than the other.
- Development of the productivity of any entrepreneurship community depends on having comparatively smaller number of companies that reach scale. Four trends can be glimpsed in the cities studied along with other entrepreneurship communities.
- Low-productive microbusinesses hold a larger ratio among entrepreneurial companies.
- The most productive companies are the ones that reach scale.
- The reason for more productivity of the entrepreneurial communities are the companies that reach a significant scale.
- Companies reaching significant scale are likely to develop much faster than others in their startup years.
- Leaders of the companies that reach scale provide support, mentoring and investments to the fastest growing companies.
- The growth of entrepreneurial community depends on the roles played by influential people. Influential people tend to encourage its network to act like them. Like Boomerang, the founders have received education abroad, but started their tech startup after graduation in Bangalore as they have seen the growth in Bangalore.
- When people who have led firms that scaled are more influential in communities, it empowers entrepreneurship communities to be more productive. Experience, support and investment from leaders of scaled companies is one of the explanations of Bangalore’s far reaching growth compared to Nairobi’s.