Startup Communities Depend on Luck and Coffee Shops more than Anything Else

Chris Baggott, co-founder and CEO of Compendium & co-founder of ExactTarget; and Permjot Valia, founder of MentorCamp.ca and co-founder of London-based fund manager Flight and Partners; share a laugh over their unique introductions during TechPoint’s New Economy New Rules panel discussion Nov. 8. Kristian Andersen, founder of KA+A, also served on the panel.
TechPoint President and CEO noted that Permjot has helped entrepreneurs on three continents including the U.S. state of Arkansas, Kristian Andersen commutes between Indy and Arkansas, and Chris Baggott may be the only person in the world who has founded and sold startups to the two largest software companies and then started a corn factory.

Successful startup communities have more to do with coffee shops and luck than they do with government programs, private sector patronage, incubators, marketing, or any other outside forces that may be wishing and willing entrepreneurship to flourish.

Statements like that, of course, strike fear in the hearts of economic developers and community organizers around the globe who are diligently working to spark and support startup hubs in their own communities – including here in Indianapolis.
Let’s be fair, programs like the 21st Century Fund (now Elevate Ventures), tech-related tax grants and incentives, and a swarm of community events, organizations and programs have been invaluable in making Indy’s tech sector and startup community what it is today. Government and community support are important ingredients in the entrepreneurship recipe.
However, would we have developed the aforementioned incentives and supporting infrastructure at all if IBM hadn’t purchased Software Artistry and grown its software development business here? What if brothers-in-law Chris Baggott and Scott Dorsey had-had more passion for improving dry cleaning technology than email marketing technology? Would the sector have grown as rapidly if ExactTarget wasn’t competing with Interactive Intelligence and Aprimo for top tier talent – talent who have gone on to create their own tech firms here?
Three very different startup experts shared their opinions about the “chemistry of communities where companies grow” during a panel discussion at the Nov. 8, New Economy New Rules monthly TechPoint event presented by Barnes & Thornburg and WGU Indiana.
KRISTIAN ANDERSEN, Founder of KA+A
“… There is a lot of serendipity involved and there are a lot of things you can do to position yourself for success as a community. But like Jim Collins says in “Good to Great,” all of those CEOs (in the book) ascribe luck as being a really critical component of their success, and the same thing is true for cities.
“People get tired of me quoting this guy, I think, but Paul Graham says rich people and nerds are what you need for a startup community, those are the atomic elements of it. What we have in Indy that defies that a bit, is that we also have engaged corporate patrons and we have an advantage as far as a talent creation system with our universities, and I think that’s a big reason Indy has accelerated the way it has.”
PERMJOT VALIA, Founder of MentorCamp.ca and Co-Founder of London-based fund manager Flight and Partners
“Examples of where it (startup communities) worked well is where volunteers stepped forward who weren’t necessarily looking to create something for themselves. They weren’t selfishly creating fiefdoms. Startup communities are about being inclusive and having a voice for everyone.
“I’m a big fan of government involvement, but sometimes what governments do is they create monopolies. They say, if you want to do this or if you want to get funding you have to do it this way, and that isn’t always necessarily productive. I think having healthy competition within ecosystems is very productive and good, but you just have to avoid creating monopolies. You want the private sector and government working in competition with one another.
“Serendipity is a great word. Don’t underestimate the huge role luck and coffee shops play in startup ecosystems. There’s this interesting graph that shows that startups’ and coffee shops’ growth seems to parallel each other, and the more opportunities you create for people to get lucky, the more things will happen. There are things you can do ( to encourage serendipity) and universities play a great role in bringing entrepreneurs and students together to get chatting and suddenly they’re building things.”
CHRIS BAGGOTT, Co-founder and CEO of Compendium & Co-founder of ExactTarget
“I think one of the things that has worked for us and is working better now because there are more – back in the day we found Bob Compton, and I don’t know who else had Bob’s credentials, but now there are lots of us who have Bob’s credentials, so there are a lot more of us around. I’ve been hanging out at this place I discovered about six months ago called Henry’s. I see Denver there quite a bit, she’s a neighbor, … but I see lots of people in there and I try to make myself accessible.
“You know Nick Carter and I are in this corn factory business together, and it seems completely off the grid from marketing software, but nick and I got to know each other and started talking about different things and one of the things we share a passion on is the food problem. There’s a lot of technology involved there, but there’s also a huge distribution problem and how do we solve that. Six months later, here we are and we own a factory on the east side of town and were freezing corn and selling it into grocery stores. That all came about from a couple of pretty accidental conversations, and finding some common ground.”
ABOUT THE AUTHOR

Joshua Hall is editor of techpoint.org. He writes about Indiana tech companies, jobs, people & events. @joshua2349