The hidden costs of a rising star entrepreneur leaving your city are much larger than we think.
The buildup and subsequent launch of your startup idea is a perilous period in an entrepreneur’s journey. If done well, that segment of your company’s maturity is full of acquired knowledge and experiences. Behind those obvious aspects is an equally valuable bucket of significant stuff which includes a network, connections, personal credibility and standing, and positive community noise.
In under-developed startup communities, many founders reach a point of diminishing ecosystem returns.
At this point they have a choice to stay and fight through it or to leave for a more mature ecosystem that can better support their company. Many times, the founders who stay, HAVE to stay for reasons outside the business (family, heavy switching costs, etc.). Unfortunately, this places an even heavier burden on the founder and their company.
For the founders who leave their city – really their startup community – they take with them much more than themselves. They also take with them obvious items like:
- Future jobs
- Outside capital
- Future recycled capital
But, even more alarming are the hidden costs that they take with them including:
- Excitement for their company that creates local confidence
- Their personal credibility that raises the collective credibility of the ecosystem
- A personal network of fellow founders, investors, and supporters both inside the local ecosystem and as important outside the local ecosystem
This bucket of social capital is actually the gas that makes the local startup community work and grow. Every member has an exponential value to the whole. The corollary is that every exited member has that same amount of lost value and a detrimental impact to the community.
Interested to read more? I just released my new book: Build The Fort – The Startup Community Builder’s Field Guide.