Putting the Entrepreneurial Ecosystem in Perspective

Gov. Bill Ritter helped mark the University of Colorado’s inaugural Entrepreneurship Week on April 16 by announcing information and communications technology (ICT) as a pillar of the state’s economic-development strategy.

by Eric Schmidt

Gov. Bill Ritter helped mark the University of Colorado’s inaugural Entrepreneurship Week on April 16 by announcing information and communications technology (ICT) as a pillar of the state’s economic-development strategy.

Ritter delivered the keynote address at a conference titled “Putting the Entrepreneurial Ecosystem in Perspective” at University of Colorado Law School. The event brought leading academics and business people to campus to discuss entrepreneurship as a horizontally-integrated “ecosystem,” in contrast to the traditional top-down structure of corporate America.

The governor committed to promoting Colorado’s Front Range as a national hub for technological entrepreneurship, noting that the area has one of the country’s most highly educated populations, as well as high concentrations of software engineers, aerospace workers, and university researchers. Ritter’s Innovation Council recently traveled to California’s Silicon Valley, where they met with technology companies and venture capitalists to explain the advantages of doing business in Colorado, including a relatively low tax burden, attractive quality of life, and a pending FICA tax credit for companies creating new jobs.

“The pieces are there for Colorado to innovate out of the downturn,” Ritter told the audience at CU, adding that the goal is not to become another Silicon Valley, but to market Colorado as a specialized alternative. “You can’t beat the competition by trying to be the competition. You beat the competition by being yourself.”

Ritter said his administration initially identified bioscience, aerospace, energy, and tourism as its four priorities for economic development, with ICT as an overarching link between all of them. But he said it soon became clear that ICT could not be ignored as one of the stand-alone “pillars of the 21st century economy.”

“ICT is a critical component to the future of Colorado, and we think entrepreneurship is the key to ensure that this industry continues to grow,” Ritter said.

Entrepreneurship Week began April 13 with a luncheon on starting companies at CU and culminated April 17 with the announcement of winners of the CU New Venture Challenge, the university’s first business-plan competition for students and faculty. The week was a campus-wide initiative comprising the Silicon Flatirons Center, the Deming Center for Entrepreneurship, the ATLAS Institute, the Interdisciplinary Telecommunications Program, the Engineering Entrepreneurship (E-Ship) Program, the University of Colorado Technology Transfer Office, and numerous students and faculty members.

The teams competing in the New Venture Challenge provided a window into the exciting, high-caliber innovations and business ideas emerging from CU. Eight teams presented their plans before a panel of judges, made up of investors, entrepreneurs, corporate executives, and service professionals in the community. Four teams were chosen to continue to the finals.

The finalists, ranging from a nonprofit, a biomedical firm, a social networking venture, and a venture surrounding a smartphone application, gave presentations to a panel of four judges and before an audience of individuals from CU and the outside community. The judges on the panel were Paul Berberian, co-founder and former CEO of Raindance; Catharine Merigold, general partner of Vista Ventures; Ryan McIntyre, managing director of the Foundry Group; and Nancy Pierce, co-founder of Carrier Access. The judges awarded first prize to the non-profit organization Knova Learning, which aims to operate and manage public charter schools; second prize to 3QMatrix, a biomedical company developing products to heal wounds based on patented material from CU; and third prize to Fetcht, a social networking venture that intends for its users to create targeted networks for knowledge gaining purposes. A special computer science award was given to TechoShark, Inc., which is developing a mobile smartphone application surrounding social networking, and honorable mention to Ap.igy, which will provide customizable application programming interfaces for businesses. A most innovative award was given to Conifer Quantum Technology based on its plan surrounding efficient solar energy conversion devices.

The April 16 conference also included presentations of academic research and discussions by panelists who ranged from professors to serial entrepreneurs.

The first panel focused on how to recognize “disruptive” technologies that change the marketplace. Participants included moderator Phil Weiser, professor of law at CU and executive director of the Silicon Flatirons Center; David Cohen, co-founder of TechStars; Heather Gates-Massoudi, director of venture capital services technology, media, and telecommunications for Deloitte Services; Tom Moore, president
of Viasat Satellite Holdings and founder of WildBlue Communications; and Karl Ulrich of the Wharton School at the University of Pennsylvania.

Ulrich discussed his upcoming book, “Innovation Tournaments,” which compares the process of successful innovation to a competition where numerous raw ideas are filtered for quality until only the best remain. To increase the quality of innovations, Ulrich said, entrepreneurs can either expand the pool of potential opportunities by looking for more ideas, or increase the mean quality of that pool by finding ways to focus in on the best ideas.

A second panel on the elements of an entrepreneurial culture featured moderator Brad Bernthal, associate clinical professor of law at CU; Paul Jerde, executive director of CU’s Deming Center for Entrepreneurship; James Linfield, a partner at Cooley Godward Kronish LLP; Jana Matthews, CEO of the Jana Matthews Group; AnnaLee Saxenian, dean of the School of Information at the University of California at Berkeley; and Michael Zeisser, senior vice president at Liberty Media Corporation.

Saxenian presented her research on elements of entrepreneurial ecosystems, which she described as a shift away from a model of corporate hierarchies to one of regional communities where careers are specialized, flexible, and likely to span across many different companies. Elements of successful entrepreneurial ecosystems include the availability of venture capital, collective learning through trial and error, horizontal sharing of information, and a passion for experimentation, she said.

In the global economy, ecosystems such as Silicon Valley, Boston, Tel Aviv, Taipei, and Bangalore each offer their own areas of expertise, Saxenian said. She said Colorado should not try to copy any of them, but rather develop a complementary ecosystem with its own specialized focus.

“This is really a global world, but the ecosystems still matter,” she said. “Those who create the right ecosystem are the ones who will succeed in this environment.”

The final panel discussed how – and how not – to capitalize on innovation, featuring moderator Jason Mendelson, managing director at the Foundry Group; Paul Berbarian, co-founder of Raindance Communications; Steve Georgis, CEO of ProStor; and Sue Kunz, founder of Solidware Technologies.

The group of serial entrepreneurs traded war stories about hiring the right – and wrong – employees, borrowing money from relatives, and sleeping on the office floor while working 20 hours a day to get a company off the ground. Kunz observed that it’s important to have trusted advisors who can offer honest criticism and “poke holes” in an idea before any entrepreneur takes the difficult steps of securing financing and bringing a product to market.

The group agreed that successful innovation is about understanding and solving customers’ problems, not just inventing new technologies for their own sake.

“There’s a gut feeling – ‘that’s bitchin’,'” Berbarian said when asked how he knows when he has created something innovative. “But the real test is the checks from the customers.”

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