The conundrum that cities around the world ponder continuously is “How do we build a successful startup ecosystem?" Whole books have been written on the subject, while ‘experts’ are constantly asked their opinion on what it takes to “build the next Silicon Valley” (*groan*).
The ability to attract talent, money coming back into the ecosystem from successful entrepreneurs and simply, time, are all acceptable explanations. However, there’s a key ingredient that’s overlooked every time.
The power of the self-fulfilling prophecy.
You see, most successful ecosystems become so, not only because they believe they will but because they convince others they will be so. I’ve witnessed this in London and Stockholm and I believe we are about to witness this in Lisbon.
However, even with the power of the self-fulfilling prophecy, admittedly, there has to be a key event to kick it off from a local company, for example, a big exit, a big funding round, a tech giant pitching up in the city.
The trick is to then use this key event to get the snowball rolling. Typically, it goes something like this:
- Key event
- Media become interested, coverage and “buzz” follows
- Investors become interested, driven by FOMO (fear of missing out)
- Money is invested, fuelling the local companies
- Propelled by money, several local companies experience moderate success
- Media becomes even more interested
- More investors join the party
- Another key event
- Repeat from Step 2
Essentially, all of this is driven by the medias fear of missing the chance to predict “the next Silicon Valley” (*pukes*) and the investors fear of missing out on promising companies as their core markets become saturated.
Whether us in the tech sector want to believe or accept this, unfortunately it is a reality, and it is one that cities should make work to their advantage.
I accept that this is a very simplified theory, but sometimes things aren’t as complicated as we make them out to be.