Thoughts on the Seattle Startup Ecosystem

Just realized that I never actually posted this from last November – good post though 🙂

I recently spoke with Laura Rich from Fast Company about the local startup environment. She is doing a piece on startup ecosystems and has spoken with Fred Wilson, Jeff Bussgang, Brad Feld, Andy Sack, and is making her way around the country to find the things that are special in the growth of startup ecosystems.

We talked about the changing startup environment in Seattle that has grown over the last decade. It was interesting to reflect on the role of Microsoft which has had a major presence in the area as well as our major university in town (UW) and how these have played different roles over time.

Some thoughts that I left with her was that our community is growing and over the last two or three years has really morphed into more of a “startup” place. I use quotes, because in the last decade there have been a huge number of startups that grew up around Microsoft but were only in existence because of the Redmond empire. Most of these kept close to Microsoft and disappeared after a few years of offering a feature the Microsoft missed in one of their offerings.

In Fred’s talk, he attributes the changes in NYC to the people (immigrants, investment focused, creative), the visibility (yes it is New York), and the history of entrepreneurship (again, it is New York). Here in Seattle, I think some of those themes hold true as well. The people coming out of Microsoft, the UW, and Amazon are being accepted with open arms by both the local startups and the investment community just as much as the people coming here for the quality of life and the people who have been here for years doing startups. These are immigrants, business types, and creative types, as well as people who have been trained for years to build profitable products at places like Microsoft. This is different than in the past where transitioning from Microsoft or the UW into a bootstrapped startup was not looked on highly by peers or investors, there was a social norm that restricted the transition of these people. Today, the stigmatism of Microsoft employees being evil is not as great as it used to be. Additionally the number of large tech firms where a young student can be trained in the art and science of profitable software making has grown with firms like Google, Amazon, HTC, T-Mobile, Adobe, RealNetworks, F5, etc all having a large piece of their respective markets and all having a presence here. All of these places are providing a place to learn the tech business, get good with a specific technology, and go build something new.

A major amplifier of this is that now the community is accepting of these people and is happy to talk with and about them. Seattle Tech Startups has been around for a while with it’s unique alcoholics anonymous approach to helping each other is unique to the Seattle ecosystem. Seattle’s friendly atmosphere has extended itself into the tech scene with entrepreneurs always willing to help a fellow entrepreneur because we all know how hard it can be to do. Add to the online support, a number of regular in person networking events like Seattle Lunch 2.0, nPost Events, Open Coffee, GreenDrinks, Hops&Chops, and StartupDrinks the opportunity to meet people to partner with is much better than it was in the past. Add to that the larger events like Seattle 2.0 Awards, Seattle 2.0 StartupDay, StartupWeekend, MindCamp, and all the other various “camps” the accessibility of like-minded people and the accessibility of the best in the industry is much better as is the opportunity to work with those people on a side project.

All of these goings on are now being reported on and talked about by a growing group of local reporters that really like to talk about local tech stuff. The emergence of Techflash, Pomp & Surkanstance, and Seattle 2.0 have given Seattle a much broader platform where we can watch each other and let the world have a peak at us as well.

Of course Fred, Jeff, Andy, and most of the other investment types will talk about how all these things lead to more investments in a particular area. Yes, there are plenty of companies being funded by VCs and Angels, yes this is a good measure of how many companies are growing quickly. However, I disagree that these are the things that really make an ecosystem work. They are contributors but not the only contributor in making a startup ecosystem successful. The community and ability to find smart people to work with is of far greater importance in my opinion. Finding the right person to start a company with or choosing the right third employee are huge tasks for startups and in a sea of talent, finding the right talent can be hard. This is where the community and accessibility show their value and prove to be far more important than how much money you can raise.

Keep in mind….

If you have a crappy team and a lot of money, you can build a lot of crappy products for a long time. If you have a rockstar team and a little bit of money, you can build a small rockstar product in a short amount of time.

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