Startup Iceland

Brad has a guest post by Jerry Colona in his Startup Communities Blog. Jerry talks about his experience in Slovenia. In the post he writes about the 7 things that are needed for a sustainable entrepreneurial ecosystem: To paraphrase Jerry – “ My thoughts about what makes a startup community grow from a Silicon Valley-wannabe into a vibrant and integral component of local economy aren’t particularly earth shattering or unique. They stem, though, from having had the good fortune of sitting beside people like Fred Wilson and the dozens of others who helped grow this community in NY into something expansive and exciting.“

Put simply, the entrepreneurial ecosystem needs seven things:

• Opportunities
• Entrepreneurs
• Staff
• Government Support
• Universities
• Local Capital
• Elders

I think the first 5 are more or less available in most places in the world. I think in the context of Iceland I can say that there are a couple of things missing, more specifically #6 and #7. It is understandable why the local capital is risk averse in Iceland given the devastation that has been left behind by the financial collapse. I believe the biggest challenge is that trust in investing has been hurt. I am of the opinion, investing is work, if you want to deploy capital you need to work on it and it is even harder when you are deploying someone else´s capital. I also believe capital is like water, it always finds it way to deployable assets or in some cases crazy assets. Iceland has fantastic infrastructure. Which made me write my investment thesis based on the work done by Carlota Perez. Every bubble leaves infrastructure which moves into deployment phase and monetization phase. I believe that Iceland provides all the ingredients to make this experiment work and function. Never the less, how does one attract local capital to be invested into companies that are leveraging this fantastic platform, I don’t believe in democracy in investing ideas. I like ideas that are scalable and something unique about it that solves a problem, the problem or pain needs to be acute and/or chronic to make my interest level go up. I also like disruptive business models that take established order and make them more efficient, convenient, mobile or remove barriers. I also believe that we need to have a threshold of people who believe in these things. I think there is a reason why Jerry has put Local Capital and Elders next to one another, because I believe Elders or Mentors bring with them wisdom and experience and usually warrants some risk mitigation that attracts capital.

Lets talk about Elders or Mentors, I find it strange that Investors in Iceland don’t want to spend time to be mentors. IMHO, there is no other way. If you are an investor in early stage companies you need to make the time to work with the team and get to know the team. I don’t want to dilute Jerry message about Mentors it is “But, most of all, it needs Elders. That is, Mentors, coaches, Angel Investors; people who can serve informally and formally as guides. Their roles vary…from providing the seed capital to germinate ideas to providing a steadying, calm demeanor making the roller coaster of the startup experience just slightly easier to bear. “An Elder,” I say in my talks on the subject, “isn’t merely someone with grayer hair. It can be the CEO of the company next door who is two months ahead of you in their fundraising process. It can be the CTO of that failed company whom you bring in not just for their technical capability but for their experience in having lived through a failure and knowing that there’s life after failure.” I can see some in Iceland thinking that they may not have the necessary skills to be a mentor to them I just have the following quote:

” Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our light, not our darkness that most frightens us. We ask ourselves, Who am I to be brilliant, gorgeous, talented, fabulous? Actually, who are you not to be? You are a child of God. Your playing small does not serve the world. There is nothing enlightened about shrinking so that other people won’t feel insecure around you. We are all meant to shine, as children do. We were born to make manifest the glory of God that is within us. It’s not just in some of us; it’s in everyone. And as we let our own light shine, we unconsciously give other people permission to do the same. As we are liberated from our own fear, our presence automatically liberates others.”