The term ‘startup ecosystem’ was famously defined by Paul Graham, founder of Y Combinator – one of the world’s biggest VC funds – as “rich people, geeks and a city they both want to live in”.
Attempts to translate this famously minimalist Silicon Valley definition to the UK initially resulted in adding the word ‘Silicon’ to a location, giving rise to names like ‘Silicon Roundabout’ and ‘Silicon Glen’.
However, it quickly became clear that UK ecosystems needed more than a name to thrive – they required a richer blend of ingredients. But to create real flavour, these ingredients must be combined in the right way.
This is where ecosystem builders step in, orchestrating the connections, resources and opportunities that turn potential into reality.
What do the ingredients of a UK startup ecosystem look like?
In the UK, creating a successful startup ecosystem is not as simple as bringing together investors (the ‘rich people’), and founders (the ‘geeks’).
Several additional components are necessary to achieve sustainable growth:
• Academia: to create the ‘geeks’ in the first place.
• The state: to ensure contracts are respected, and kickstart innovation with small or matched grant funding.
• Corporations: to act as first customers, often through proof-of-concept contracts.
• Relevant mentors: to help first-time founders with real-world insights, ‘see it to be it’ moments, and ambition inspiration.
These six ingredients – investors, founders, academia, the state, corporations and mentors – are present at different levels of maturity across the UK.
While some cities boast more startups, prestigious universities, or a higher concentration of angel investors and experienced mentors, others work with fewer but higher-quality resources.
Even a rare ingredient can have a significant impact if it is of exceptional quality.
What does a good ingredient look like?
In a successful ecosystem, each ingredient has a high degree of self-knowledge. There is a clear understanding of strengths, weaknesses and roles. When this self-knowledge is shared across all ingredients, collaboration becomes seamless, duplication is avoided, and zero-sum competition is minimised.
More often than not, this dynamic doesn’t exist, or if it does, it is by chance rather than design. That is where the ecosystem builder steps in.
The ecosystem builder, bringing the ingredients together
An ecosystem builder plays a difficult but crucial role in bringing the ingredients together and promoting collaboration. This role involves:
• Exposing the different ingredients to best practice playbooks for their roles.
• Enabling different ingredients to connect and communicate effectively.
• Providing education on the latest iterations on ecosystem thinking.
• Helping each ingredient to do more, faster.
• Connecting ecosystems internally and externally to encourage shared learning.
When an ecosystem builder is present, the network effect – the true superpower of an ecosystem – is activated. Each ingredient functions more effectively, and the ecosystem as a whole becomes greater than the sum of its parts.
More opportunities arise, more founders emerge, more jobs are created, and the flywheel of growth begins to spin.
Network effects
But what does this look like in practice?
• For founders: access to programmes mentorship, and ‘see it to be it’ moments through international connectivity and introductions to investors.
• For investors: identification of promising startups, academic ideas, and bringing together corporate and investment trends.
• For universities: inspiration of entrepreneurial thinking in academics to educate founders into existence, supporting spinouts by connecting them with current operators in their space, business mentors and potential customers.
• For corporates: scouting for innovation partners, sourcing relevant startups, assistance with digital transformation and dealing with disruption.
• For government: act as an agile fast-moving partner, connecting policymakers with the latest technology trends, and offering thought leadership.
Ultimately, ecosystem builders act as catalysts for growth. They bring the different ingredients of an ecosystem, enabling them to function better.
When local economic development is being considered, thinking of the area as an ecosystem is a great starting place. Thinking about the contribution of an ecosystem builder is even better.