Thomas Zurbuchen sees the cultivation of an entrepreneurial ecosystem much the same as a soccer game: You need many shots on goal to put one on the scoreboard.
Associate dean for Entrepreneurial Programs at the University of Michigan College of Engineering, Zurbuchen says Ann Arbor is close to having a vital entrepreneurial ecosystem. But without the rapid introduction of new ventures and an increased density of creatives working in the city's urban core, the sprawling entrepreneurial community may wither.
"Size matters in any ecosystem," says Zurbuchen, a native of Switzerland and founding director of the
U-M Center for Entrepreneurship. "How many (new) companies are currently trying to take a shot at the goal? How many teams are actually doing it?" -- "it" being developing a product, creating a customer base, generating orders, and growing a business that truly has scale. "Those are the businesses we're interested in. ... If you look at that metric, how many shots on goal are happening? That is a pretty good predictor of the entrepreneurial attitude of a community."
For a community to adopt an entrepreneurial character, disruptive change and considerable engagement by all sectors is often required, he says.
"Does it require an entrepreneurial revolution to make the switch? It's certainly the fastest way, says Zurbuchen. "I think you can make the switch in other ways by slowly killing off the heritage-type businesses. It's a lot easier and a lot more promising to do it fast. The reason the number (of start-ups) matters is because it changes the whole narrative of the region."
The scope of activity breeds a greater reputation for success, attracting more talent by the abundant entrepreneurial options available.
While universities and governments can support an ecosystem, they can't make one happen, Zurbuchen explains.
Daniel Isenberg, a professor of Management at Babson College and founder of the
Babson Entrepreneurial Ecosystem Project, says that government plays a pivotal role in nurturing and sustaining the startup entrepreneurial ecosystem.
In his article, "The Big Idea: How to Start a Business Revolution," published in the Harvard Business Review, Isenberg notes that "many governments take a misguided approach to building entrepreneurship ecosystems. They pursue some unattainable ideal of an ecosystem and look to economies that are completely unlike theirs for bests practices." Rather, governments need to allow and observe the "messy" experimentation that results in a more organic ecosystem with a better chance of survival.
Some aspects of the Ann Arbor ecosystem are developing faster than others, Zurbuchen says. The U-M's academic development is outpacing the ability of the community to absorb the talent. The university is producing 10 times more entrepreneurial talent than it was five years ago, he says. However, all of them pursue entrepreneurial interests and only a few of them remain in the region.
At the same time, the reputation of the U-M Center for Entrepreneurship is growing, making it easier to recruit faculty from entrepreneurial meccas like San Francisco. For example, the Center's new director, Tom Frank, moved from the Bay area.
Zurbuchen, an aerospace inventor who works in his lab one day a week, is also a blogger who writes extensively about entrepreneurship and
other topics. To expedite entrepreneurial development within the university, he helped establish
M-Cubed, a two-year seed-funding program that enables interdisciplinary U-M faculty teams to pursue new initiatives with major societal impact. The program minimizes the time between conception and successful research results by providing immediate start-up funds for "novel, high-risk, and transformative" research projects.
It remains to be seen whether the community will grow fast enough to keep young talent in the region, Zurbuchen says. "My feeling is that we're really turning the corner. I believe what we're going to be doing over the next three years will be massively important. It's not 10 years; it's really two, three years. Are we really going to take advantage of the tremendous talent we have around here, or are we just going to ship it to the coasts?"
Zurbuchen says there needs to be "a lot more pull" from the local community to nurture the ecosystem. "The question of how fast we go will depend much more on the community than on the university." When Gov. Rick Snyder worked in Ann Arbor as a venture capitalist there was greater pull from the business community, he says. The reason why is unclear, he adds.
"We need to figure out who we want to be. Do we want to be that entrepreneurial center or not? If you want to be that entrepreneurial center, very likely Ann Arbor has to grow. It can't be exponentially increasing its entrepreneurial ecosystem...with a constant population." The community needs to grow its population of young entrepreneurs, "the ones who do not yet have families... and the ones who are no longer in college. That middle tier, in many ways, doesn't feel quite as excited about Ann Arbor."
This tier, in their late 20s/early 30s, needs to feel comfortable and confident in the region's ability to support their entrepreneurial interests. They also need collision. Zurbuchen says that Ann Arbor needs to be a place where entrepreneurs literally walk into one-another on the street or meet up at cafes and bars.
"I start somewhere in the center and I keep walking. How long do I have to walk until I hit the first entrepreneur?... If I have to walk halfway through town until I hit somebody, that's not a very entrepreneurial ecosystem. If I can walk 10 steps and hit somebody -- that means, if I have a crazy idea, within a hundred steps I've talked to five people...my cycle is such that in half a morning I have changed my business idea three or four times. The development cycle went from what other people do in a week to half a day. Which is another way to say it's faster to take a shot on goal."
Beyond the Ann Arbor environs, and a few other urban centers, the Michigan entrepreneurial ecosystem is weak, he says. "In many ways, it gets tougher outside of Ann Arbor because the density goes down except for a few centers such as downtown Detroit and Grand Rapids."
In many respects, the ecosystem is about place. The U-M Center for Entrepreneurship recently conducted a poll of alumni working as entrepreneurs. They were asked about factors that influenced where they established their companies. About 80 percent placed their company in a region where they were raised or went to school. A slightly smaller percentage -- 70 percent -- said they chose communities because of the quality of life.
"This is exactly why Ann Arbor has such a chance," Zurbuchen says. "Having the orchestras, the museums, the great restaurants, the outdoors -- they all really matter for entrepreneurs."
Ann Arbor has another, unlikely competitive advantage: the Midwestern personality. "The one thing I really like about this entrepreneurial ecosystem that I hope we never lose is that it is a Midwest entrepreneurial system. Even though I would like us to talk more about ourselves than we are, being nice to each other, having that as a value is really going to help us. People want to work in places where they are comfortable, where people are nice. It can be at high speed, but let's not pick up all the negatives that other ecosystems have. When we build an entrepreneurial ecosystem here it needs to be strong, taking advantage of the strength that we have around here.
"Why are our Midwestern guys so successful elsewhere? It's because of that. I really believe that. Being determined, being aggressive is all great. But keeping the natural humility as a value is something I hope we never lose. We can be incredibility successful in beating everyone to the punch and still have our natural humility."
Dennis Archambault is a freelance writer and regular contributor to Concentrate and Metromode.