Ecosystem Builders: How Intrapreneurs are Fostering Enabling Environments for Entrepreneurs
As the field of intrapreneurship matures, we are crystallizing our understanding of the ways intrapreneurs drive change. These approaches range from creating new product or service solutions to more disruptive approaches such as business model innovation and whole systems solutions. It is this latter approach that we believe holds particular promise for the field to solve our most systemic challenges.
As part of Global Intrapreneur Week 2021 and with support from the Kauffman Foundation, we dove deeper into this practice of intrapreneurial systems change. In particular, we began to look more closely at intrapreneurs who are working to create healthy ecosystems for entrepreneurs, their kindred spirits innovating from the outside in.
We invited several intrapreneurs to be part of a conversation to better understand why they are investing in entrepreneurial ecosystems, what’s working and what more is needed. Here are some of our findings.
Why entrepreneurial ecosystems?
We celebrate entrepreneurship for disruptive ideas and creative solutions, but entrepreneurship can also contribute to social progress. According to the Kauffman Foundation, entrepreneurship can empower individuals, contribute to improved standard of living, and create jobs, wealth, and innovation in the local economy. While the US has a reputation for entrepreneurial leadership, entrepreneurship rates in the US have stagnated over the past 20 years. What’s more, the investments in and benefits of entrepreneurship are unevenly distributed. (Female founders, for example, received a mere 2.74% of all VC funding in 2019.) New approaches to encouraging and supporting entrepreneurship that are more inclusive of all entrepreneurs and that lead to more equitable outcomes are needed.
What exactly do we mean by Entrepreneurial Ecosystems?
Entrepreneurial ecosystems are the enabling conditions and networks that allow for entrepreneurs to quickly find what they need at each stage of growth. Historically, investment in entrepreneurial ecosystems has focused on solutions such as financial capital, technology, training, incubators or policy incentives.
“This model isn’t enough. We need a new approach. Effective ecosystems require more social capital and trust, more community building, more connectivity, more diversity and inclusion, and more peer learning,” says Andy Stoll, Senior Program Officer, Entrepreneurship, Ewing Marion Kauffman Foundation.
How are intrapreneurs advancing entrepreneurial ecosystems?
Intrapreneurs, who sit within our incumbent institutions, are harnessing the assets of their organizations — be it brand, know-how, finance, technology or relationships — to help advance entrepreneurial ecosystems. The examples below illustrate the diversity of organizations from which intrapreneurs are ecosystem building and includes tech companies (Google and TikTok) banks (Alternatives Federal Credit Union) governments (City of Kansas City) and universities (MIT). We also heard about the importance of libraries in fostering enabling environments for entrepreneurs.
Intrapreneurs can play different roles depending on their organization and position in the ecosystem. Here are a few:
Closing the Distance
Jason Scott, Head of Startup Developer Ecosystem, USA, Google, is using Google’s incredible reach and credibility to close the distance between BIPOC (black, indigenous, people of color) and mission-led startups and the people and resources that can help them.
“You shouldn’t have to move to Silicon Valley to have access to what you need as an entrepreneur,” says Jason Scott, Head of Startup Developer Ecosystem, USA, Google.
They host demo days on Google’s Youtube channel and tap the company’s diverse and vast networks to provide intrapreneurs with access to funding, technology and other critical support.
Jason cites the involvement of google employee volunteers as key to the success of their ecosystem building. “Googlers love startups.” They currently have hundreds of Google volunteers who work with startups to connect them with much needed resources. “When people are intrinsically motivated, great work gets done.” So, for example, when looking to better address funding gaps, Jason and his team trained Google employees on angel investing so they could play a more active role in providing much-needed financial capital for entrepreneurs.
Creating Marketplaces of Support
Alex Amouyel, Executive Director, Solve at MIT, is similarly addressing the network access that is critical to entrepreneurial success. She shared about two specific types of critical connections Solve is brokering that serve as fuel for entrepreneurs.
The first is intrapreneur to entrepreneur. Intrapreneurs working in the private, public, nonprofit and foundation sectors are trying to do good in the world and have access to resources, but they don’t always know where to find innovators. In their quest to find innovations, these institutional processes can lack transparency or may not reach the entrepreneurs who are closest to those communities they are trying to serve.
Solve brokers trust between innovators who are solving real-world problems (“not just creating the next dog-walking app”) and intrapreneurs who have the resources to develop and scale these solutions.
And, intrapreneurs help entrepreneurs to navigate institutional politics, harness resources, and translate the work to their institution to make it easier for entrepreneurs to get the resources they need.
A second critical connection is entrepreneur to entrepreneur connections. Alex cited the example of an indigenous entrepreneur working on revitalizing the Navajo language who Solve connected with an entrepreneur in India who has a digital education platform. Through a collaboration, they are making educational experiences accessible in the Navajo language. While Alex celebrated the power of these peer connections, she also noted the challenge in measuring the value of these relationships when the focus in entrepreneurial ecosystems is often on brokering financial partnerships.
Storytelling
When you think of TikTok, you likely think of dance videos, memes and young people. But, the platform has become a growing source of entrepreneurial creativity and storytelling. Maya Shoucair, Public Policy Partnerships Lead, TikTok Canada, shared about how small businesses are thriving on TikTok; they are able to target micro-communities and are often selling out of their products by going viral. Entrepreneurs are able to show who they are, sharing their authentic stories on the platform and, as a result, are catalyzing more entrepreneurship by inspiring others.
“Being able to see yourself in the story of entrepreneurship can help to catalyze future entrepreneurs.”
Building Understanding through Data
To create healthy entrepreneurial ecosystems requires understanding where your entrepreneurs are and what they need and making this data available to the wider ecosystem. “When I started, we had 2,500 to 3000 people a year coming to get a business license, but we weren’t collecting any data. As a city we were looking from the outside in,” says Nia Richardson, Manager, KC BizCare, part of the City of Kansas City, Missouri. So, she and her team created a data platform to better understand the region’s entrepreneurs and use this data to inform policies and programs.
One key insight that came during the pandemic was the importance of banking relationships in accessing capital and support.
Entrepreneurs who had business banking or business association relationships were 38% more likely to access PPP capital (the US Federal Government relief program) and asked for 8.3 times more money according to those surveyed by KC Biz Care.
Many businesses tapped their savings or friends before they accessed government relief funds. This kind of data enables the wider community of entrepreneur service providers or policymakers to make more informed interventions around closing the gap in relationships.
Innovating in Finance
But, lack of relationships isn’t the only barrier to accessing capital. Institutional and government loan and lending policies pose significant barriers for entrepreneurs. “For so long, money has been inaccessible, especially for micro-entrepreneurs,” says Chris Cain, “a banker who builds neighborhoods and communities.” She recently was involved in the creation of RISE — reimagining inclusive solutions for entrepreneurs — an ecosystem initiative as Chief Experience Officer at Alternatives Federal Credit Union in Ithaca, New York.
“People don’t trust financial institutions, but financial institutions need to be at the table when considering how to support entrepreneurs. How can we use traditional financial tools in creative and innovative ways? How can we couple banking with a civil rights agenda to help people out of poverty?”
RISE integrates character-based lending into the underwriting process. Rather than lending using only traditional inputs like pro formas and credit scores, loans are based on the ‘whole person,’ factoring criteria such as the entrepreneur’s ecosystem (‘Are you surrounding yourself with people who can do the things you can’t do?’) and their impact (‘How are you affecting the community around you with your business?’). Instead of a banker underwriter making lending decisions, loans are decided by a review committee made up of entrepreneurs and leaders of color who live and work in the Ithaca area.
How are they making the case for investment in entrepreneurial ecosystems?
For private sector intrapreneurs, there has to be a business case for investment in the entrepreneurial ecosystem.
“I’m always selling internally. Ultimately, what I sell them on is that it’s not just the right thing to do, but it’s the under-tapped market opportunity,” says Jason about his work at Google. “The same way we talk about the next billion users, we need to be thinking about the next, future businesses.”
Maya at TikTok emphasized the point, “Make sure you are closely aligned to what your business goals are. You can’t solve every entrepreneurial problem. What does your company care about and tie it back into what you’re innovating for in your space.”
Banker, Chris Cain, says she makes the case by saying, “If you want to live in a vibrant community, you have to have a healthy and vibrant entrepreneurial ecosystem. Our bricks and mortar businesses are the soul of our neighborhoods.”
What Next?
As interest in ecosystem building continues to grow, it’s clear there is value from sharing knowledge across organizations. How can we create more spaces for ecosystem building practitioners to share knowledge across regions, ecosystems or particular types of interventions? Additional learnings participants shared, included:
- the importance of asking for advice and reaching out to networks;
- the need to share knowledge and provide generally accessible tools to empower other organizations and individuals to help entrepreneurs;
- the lack of and need for more transparent and informative data;
- the importance of intergenerational learning and digital skills building and reaching beyond the usual spaces and communities;
- and, finally, when in doubt, ask entrepreneurs what they need and how they are doing. “The answers are always surprising and wonderful,” says Alex at MIT Solve.
What’s more, learning will be about much more than programs and policies, ecosystem builders are practicing a new type of leadership.
“Not one individual organization can build an entrepreneurial ecosystem; it takes a team. How do you lead when no one is in charge? Ecosystem building requires collaborative, cross-community leadership,” says Andy Stoll, Senior Program Officer, Entrepreneurship at Kauffman Foundation.
We also see the potential for greater storytelling to help people identify as intrapreneurial ecosystem builders. As Chris Cain put it, “I was doing this work for 10 years but I didn’t know it had a name. I didn’t know I was part of a growing field and community of practice.” Let’s help intrapreneur ecosystem builders to self-identify so they can connect to the tools, resources and communities to build more inclusive and prosperous entrepreneurial ecosystems.
To find out more about entrepreneurial ecosystem building, go to www.kauffman.org. To learn more about intrapreneurship, visit: www.leagueofintrapreneurs.com.
