A startup ecosystem

is formed by people, startups in their various stages and various types of organizations in a location (physical or virtual), interacting as a system to create and scale new startup companies.

Startup ecosystems are springing up in all corners of the world. There are ambitious founders and creative startup teams everywhere, keen to find unique ways to find a great product-market fit and solve the world’s problems.

However, innovative ideas can only amount to action within a system that’s built to nurture them. Entrepreneurs need a supportive environment to launch startups that could one day have an impact not only on the local economy but on society as a whole.

Startups do not and cannot exist in a vacuum. They are born in a specific context as parts of an entity – a network, a system – much bigger than themselves. Entrepreneurs are supported by a community of people, organisations and other startups that surround them. This is what we refer to as a startup ecosystem. 

A startup ecosystem is an interdependent system of communities, organisations, resources, and service providers that support the growth of startups in a particular geographical area.

It is a closed system in which every element is connected and mutually dependent.

The ecosystem is usually divided into three components

The startup ecosystem consists of a group of people, startups, and related organizations that work as a system to create and scale new startups. Startup ecosystems are formed often in a relatively limited area with a center of gravity like a university or a concentration of technology companies. This ecosystem draws together key actors and stakeholders that gravitate towards growth ventures, including new entrepreneurs, mentors, incubators, sources of talent such as universities and corporations, investors and supporting services like startup-savvy law and accounting agencies.

The startup ecosystem supports all individual entrepreneurs. Some startups relocate to new locations simply because the ecosystem there is better. It’s the responsibility of the entrepreneur to be proactive and utilize the benefits of the ecosystem, but if you are proactive you will definitely get support.

The startup ecosystem can, of course, support you with capital from investors and other entities providing funding if you are able to create something that is attractive for them. But we would argue that even more valuable is knowledge and experience the ecosystem entities can provide an entrepreneur. This is especially important for a first time entrepreneur.

The ecosystem also supports failed entrepreneurs. Even though your first try may be a catastrophic failure, it doesn’t mean that you will make the same mistakes again – your next try may succeed, or maybe the one after that. A failed entrepreneur is an experienced entrepreneur. Many startups also prefer hiring entrepreneurs (even if you’ve failed) because in the early stages of a startup all employees should be intrapreneurs.

The ecosystem needs a great number of companies to have a chance to produce success. Startups are such high risk businesses that even the smartest and most skillful team might fail. But if there are for example 20 startups with great teams and ideas supporting each other (and even some other ecosystem entities supporting them), it’s already quite likely that some of the startups will grow to be international successes.

This is why the startup ecosystem should be looked at as a whole and not through individual startups and their success or failure.

 build your local startup ecosystem

1. Step one: research and map. You can start by mapping out your local ecosystem. ...
2. Step two: build and engage. The next step is to start building the community. ...
3. Step three: involve and incentivise. ...
4. Step four: lead from the front.

The startup ecosystem consists of a group of people, startups, and related organizations that work as a system to create and scale new startups. Startup ecosystems are formed often in a relatively limited area with a center of gravity like a university or a concentration of technology companies.

The dynamic interactions between one and another enable us to collaborate and grow together. Successful ecosystems develop processes that cultivate the flow of concepts, talent, and resources. The overall result is that moments of brilliance and invention are more consistent, through networking and knowledge sharing.