Legacy Blog

Open Innovation and the 5 Pillars of a Startup Community


In a world, where every company has to become (more or less) a software company, it is necessary to promote the transition from closed innovation (R&D centers) and open innovation models (crowdsourcing portals) to innovation ecosystems (like Cintrifuse in Cincinnati).

In innovation ecosystems, startups communities take on a strategic role. How do they work? And more important: is it possibile to design and deploy them? To find an answer, we first need to recognize that innovation ecosystems have 5 pillars:

Financial Capital. Of course you need money, but this is not enough. Every time governments have put money on the table to encourage entrepreneurship, they have wasted it and have obtained nothing except corruption and no return on investment for the community. Before adding financial resources, it is necessary to grow intellectual and relational capitals.

Intellectual Capital is the all the knowledge you need to create new products and services. That means higher education, software education and the know-how necessary to transform an invention or an idea in a something the a customer wants to buy (lean methodologies).

Relational Capital is needed to have ideas and competences circulate in the community. Innovation is an incremental process: you need occasions to share ideas, share knowledge and build trust. Techniques to grow the relational capital are very well described in Brad Feld book, Startup Communities.

Innovation Ideology. You cannot innovate, if you do not think that what you do has a positive impact on the future. The Silicon Valley has produced an ideology around three main ideas: the exponential growth, the presumption that the future is predictable and the belief that technology creates a better world. It is not very different from XIX centuries ideologies: there is a status quo to disrupt and a bright future that is waiting for us.

Finally cultural heritage. This is a very neglected aspect: it’s a matter of fact that a startup community is not born in a vacuum, but in a specific geographic area and in a specific historical moment. And this determines its chances of success. One of the most interesting analysis on the impact of cultural heritage on the formation of a startup community is contained in the book Startup Nation. Reading the book, many focus their attention on the Israelian Fund of funds, forgetting that most of the book describes the role of the military service, social cohesion and the insolence (chutzpah) of the Jewish people as key factors in starting a community of people dedicated to technological innovation. And of course this is true also for Silicon Valley, as America describes itself as the land of freedom and opportunity, a place where you can have success if you work enough to achieve it.