The Startup Ecosystem

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Changing Nature Conditions and The Startup Ecosystem

When talking about entrepreneurship and the changing ecosystem, it is important to keep in mind that business language borrows terminology from many different sectors.

For example when conducting “defence strategies” against rivals, one talks about territory “dominance” or expansion “targets”. People who do hot sale are called “hunters” and those who manage existing customer relations are called “gatherers”. Some companies have teams known as “raiders”. Companies build up their IT systems with security networks, “Great Walls” and “Ramparts” against attacks.

Among all this terminology, there is a very important term we mention sometimes, but don’t really think upon: Ecosystem!

Entrepreneurship ecosystem can be a cold and rocky surface like this as well…
You might come across a warm and humid entrepreneurship ecosystem as well…

We use the term ecosystem especially when mentioning entrepreneurship. The reason why is worth thinking on.

There is a hint in this word that allows understanding the big destruction in entrepreneurship. This destruction came with technology and things that were rebuilt in this space. There is a secret logic within this word that describes the future to us.

Let’s take a step back and look at what ecosystem means. Ecosystem is defined as “biological organisms in interaction and the environmental conditions that they exist in”. There are two phrases in this sentence that we’ll focus on. Biological Organisms in Interaction and Environmental Conditions. Let’s start with the first one.

  1. Environmental Conditions

Look at a flat land.

Look at the colours you see.

And look at the vegetation, the density of the grass, the trees, the variety of animals.

Even if you cannot see it, you could deduce the climate of this land. You can do this correctly by looking at how green it is, whether it has scrubs or trees, the size of trees, and whether the trees have needle or broad leaves. You can even correctly know the humidity rate of the area, how much rain and sunlight it gets, what season it is and even its latitude (if you are a true expert in this).

This situation can be explained through the simplest cause effect relationship. If we assume the soil is also fruitful, the weather conditions sets the vegetation in the area. Think of the small and big companies, giant holdings and new startups in today’s business world as trees and vegetation. And think of the opportunities technology offers, new ways of organization, internet platforms, means of live communication, objects’ internet, artificial intelligence, natural language processing, and many other technological trends as “weather conditions”.

Today’s company structure wasn’t possible 300 years ago in the history. We had an order that was based on agriculture, artisanship and small businesses where the actors were feudal lords and empires. This was the vegetation of that time. And the weather conditions causing it were the technological and commercial possibilities of the time.

Industrial Revolution changed the weather conditions.

(In both the metaphorical meaning we are talking about here and the physical result that causes air pollution.) Changing weather conditions created different institutions and establishments, and different ways of commercial organisations.

When mentioning Industry 4.0 and the New Technological Revolution, we’re actually talking about the balance change in these environmental conditions. These new environmental conditions now lend a hand to more mobile, more dynamic, more need-determining companies similar to startups that are based on entrepreneurship ideals. Surely some of the companies lined up in 35-floor buildings and holdings will keep their place. But they have lived through their golden age. Today’s ecosystem – today’s weather and environmental conditions – are creating businesses compatible with itself.

These businesses will be individual companies, or startups of 3-5 / 20-30. Their total number and value in economy will increase daily. Because this weather condition is their golden age.

  1. Biological Organism in Interaction

Biological organisms in interaction are essential for an ecosystem. Imagine every company as a biological organism. All commercial relations these companies have with one another are their interaction. A company might provide services to another, receive products from them, transfer employees and know-how, shape their own products and services through competition or make collaborations. We can think of all these as the interaction of the biological organisms within the ecosystem.

Some of these means of interaction have become advantageous while some lost their advantage in the reality that these changing environmental conditions have created.

In the period between the Industrial Revolution and today’s Technology Revolution, information was the most important thing and the cost of reaching it was high. In this world, the most advantageous means of interaction was to compete. Of course, companies could gain something from collaboration as well. But the characteristic companies of the time (automotive, medicine, telecom, finance) had built all their business models around information privacy. Ford’s most precious asset was its motor design that worked more efficiently. Medicine sector’s most valuable asset was their original medicine molecules that they kept secret and spent millions of dollars for their Research and Development. Their value is still high and they will never be worthless. But they are no longer the most efficient for interactions of this kind.

Reason?

The most valuable thing now isn’t information, or reaching information. All this is possible with the internet costing 10 Pounds a month. Today, the most important thing is the ability to combine information in a way that is creative and “that answers the needs of people in products and services”. So, to be able to SYNTHESIZE. The shortest way of doing this is collaboration. This is now a world of endless opportunities where brand new business models are possible. In this world, cooperation is the most efficient and profitable interaction companies (and free-business individuals) can have with one another. It is possible to see the strength of this model by looking at all the companies exemplifying sharing economy.

Conclusion

Just like environmental conditions determine the vegetation of a land; technological environmental conditions will determine the future of companies, corporations, and individuals. One needs to make the right partnerships, have good business ideas and working discipline. But the same importance needs to be put in observing the ecosystem that allows enterprise.

If you want to succeed in this ecosystem, or work in succeeding companies, you need to consider this point of view when planning your future.

(I recommend Reid Hoffman’s TED Talk, who is one of the leading people to be followed in entrepreneurship.)

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