New research from Kim Saxton and Todd Saxton identifies the “X Factor” in successful venture ecosystems
Popular press and prior academic research are fascinated with founders, focusing most attention on entrepreneurs themselves. We love to talk about the maverick founder who breaks all the rules and goes it alone in a quest for disruption. But little attention has been paid to the other key players that make for a successful venture community, and the essential role they play in lubricating the wheels of a vibrant ecosystem.
In an article titled “Venture Advocate Behaviors and the Emerging Enterprise” recently published in the Strategic Entrepreneurship Journal, Kelley Indianapolis professors Todd Saxton and Kim Saxton, along with their colleague Curtis Wesley of the University of Houston, explore the importance of and motivations for the “Venture Advocates” who help startups move forward.
Kim Saxton notes that new ventures face uncertainty on a number of fronts – developing the technology and product offering, identifying the right market segment and finding customers, recruiting talent and funding their efforts.
“Many questions related to these challenges cannot be addressed by a solo entrepreneur or even a deep, veteran founding team,” says Kim Saxton, who is a clinical associate professor of marketing. “Particularly in the early stages, entrepreneurs need input and feedback from knowledgeable supporters and advocates who can also connect them to additional help and funding. As an entrepreneur, you shouldn’t be just shopping for money. You should actually be shopping for help. Here’s where to look for help; here are the people who are going to help you, and here is how you solicit their assistance.”
Why do people help entrepreneurs through this journey? Who engages in these close encounters of the entrepreneurial kind, and why do they provide assistance? The Saxtons’ article addresses these questions and reveals that a norm or shared value of reciprocity plays a key role.
“Venture advocates may be paying back for help they received early in their own entrepreneurial efforts—or paying forward in the hopes that they or others will provide help in the future. It is almost like karmic credit. We invest effort in each other to help the whole ecosystem survive and thrive. But these exchanges are not accompanied by dollars or equity,” says Todd Saxton, an associate professor of strategy and entrepreneurship and past president of the Board of Directors for Venture Club of Indiana.
The central Indiana venture community is rich with individuals who help and inspire current and future entrepreneurs. Kelley Evening MBA alumnus Mike Hatfield contributed from afar in California to help launch the Indiana Venture Center, an early hub of entrepreneurial activity and venture advocate behaviors. Scott Hill, co-founder and executive chairman of Perq (formerly CIK), inspires future entrepreneurs by sharing how he co-founded two Inc. 500 companies. Kristen Cooper, vice president of corporate development and operations at Sticksnleaves, recently launched the Startup Ladies to help women entrepreneurs. Chris Baggott moved from communication software space to help create a wave of food entrepreneurs; he is the co-founder and CEO of ClusterTruck and Tyner Pond Farm. Successful serial successful entrepreneurs and investors like Michael Cloran of DeveloperTown, Scott Dorsey of ExactTarget, Dave Wortman of Diagnotes and Oscar Moralez of VisionTech are among many others who served as inspiration for the Saxtons’ research.
“Most or all of the efforts of these folks do not have direct payback in the transactional sense,” notes Kim Saxton. “Certainly, universities try to do our part. IU and Purdue, as well as other colleges and universities, have efforts to help support innovation and entrepreneurship in Indiana. Organizations like the Venture Club of Indiana, Verge, TechPoint, Launch Fishers, DeveloperTown and The Speak Easy promote and enable venture advocacy—and should be targets for founders seeking help.”
“We believe venture advocates could be the X factor in why some regions—and cultures internationally—successfully establish and sustain their venture ecosystems, leading to new companies, jobs and wealth,” says Todd Saxton. “Central Indiana has a healthy base to build on. Much of it is on the shoulders of these unsung heroes. Let’s celebrate them and find ways to promote similar advocacy.”