Brad Feld: There is no playbook for building the next Silicon Valley

11 Dec 2020

Image: Brad Feld

At Future Human, investor and author Brad Feld explained why start-up communities are complex systems that can’t be replicated by simply copying Silicon Valley.

Brad Feld first expounded the concept of start-up communities in his 2012 book, suitably titled Startup Communities. This was followed up in 2020 with The Startup Community Way: Evolving an Entrepreneurial Ecosystem, written in collaboration with analyst and strategic adviser Ian Hathaway.

While he has written many more books, Feld is best known as an investor. He co-founded the venture capital firm Foundry Group in Boulder, Colorado, where he lives with his wife, Amy Batchelor.

“We didn’t move to Boulder for work, we just moved to Boulder for a place to live. And that created a deeply held belief of mine, which is: you choose where you want to live and then you build your life around it,” he told Ann O’Dea at Future Human 2020.

This belief gave context to the virtual fireside chat that followed, where Feld explained how start-up communities can be built around any location with a few key ingredients.

‘There are many other types of capital. There’s intellectual capital, human capital, natural resources capital, network capital, social capital’

In The Startup Community Way, Feld and Hathaway separate start-up communities from the broader entrepreneurial ecosystem, and offer a framework for building them.

“In the first book from 2012, I set up the basic principles of what a start-up community was,” Feld explained. “At the time, the phrase ‘start-up communities’ didn’t exist and entrepreneurship was really starting to emerge again globally, coming out of the global financial crisis.

“By 2017, 2018, clearly entrepreneurship is a global phenomenon. It’s no longer [the case that] if you’re serious about starting a tech company you’ve got to go to Silicon Valley. And the dynamics of how to think about this were still puzzling to a lot of people.”

When O’Dea asked if the magic of Silicon Valley comes down to a simple recipe that this region had that other start-up communities must replicate, Feld noted that this is not the case.

“For starters, you have to recognise that Silicon Valley has grown and developed over a long period of time,” he said.

“There’s not this magic moment where Silicon Valley had A, B, C, D, therefore to be successful we need A, B, C, D. And then if we run the following playbook over the next 100 years, we’ll have Silicon Valley here. That’s not going to happen. That’s not how it works.”

What is required to seed a start-up community, Feld said, are a few favourable conditions and strengths to play to. However, it seems that many community-builders focus too narrowly on just one element.

“You’d hear over and over again from entrepreneurs, investors, people in government: ‘In our city there’s not enough capital. That’s why we don’t have start-ups. That’s why we don’t have companies. We just need more capital here.’

“And the mistake is that we eventually realised that people were referring to capital in a very singular way. They just meant money. ‘There’s not enough money here.’ And, really, money and financial capital are the same but there are many other types of capital. There’s intellectual capital, human capital, natural resources capital, network capital, social capital.”

In their book, Feld and Hathaway define seven varieties of capital a location may have to leverage.

“In any place on planet Earth you are likely going to be in a position where you have meaningful amounts of one of those seven capitals, and probably meaningful amounts of two or three of those seven capitals,” Feld said. “And the interesting thing about a complex system is that they evolve, so what you do is you put energy into the capital that you have and that attracts the capitals that you don’t have.”

Elaine Burke is the host of For Tech’s Sake, a co-production from Silicon Republic and The HeadStuff Podcast Network. She was previously the editor of Silicon Republic.