The other day I had the opportunity to speak at NextBank’s Sydney conference and outline some of the things we are doing at the Tyro Fintech Hub. I was asked to speak on Lessons in Building an Entrepreneurial Ecosystem. Here’s some of what I said*:
The first lesson is that the leaders of any entrepreneur ecosystem must be the entrepreneurs themselves – if they aren’t then it’s unlikely that the community will be sustainable. Initiatives for the community need to come from within the community, as must the leaders.
The flipside of this is that those feeding into the ecosystem, — let’s call them feeders — be they banks, advisors, investors, VCs or government, although they play an important role, shouldn’t lead. These feeders often have different cycles, for instance the four year cycle of government in NSW, or they may have differing motivations. What can result if they lead the community is a misalignment.
Entrepreneurs building an ecosystem need to take a very long term view, and their motivations are very different to the various motivations of the feeders. Let me be clear, feeders are important to the success of an ecosystem, but the ecosystem needs to be led by entrepreneurs.
With that in mind, Tyro’s Fintech Hub is seeking to bring together a handful of key fintech entrepreneurs to provide leadership for the whole ecosystem – to meet regularly, take the temperature of the ecosystem, and help plan its long-term future.
The second lesson is that, although there may be competition between individual fintech companies, the fintech community must be defined by a strong sense of collaboration and a philosophy of “giving before you get”. That can create a tension though.
Just last week I chatted with a fintech entrepreneur, interested in moving into our hub, but also wary of any direct competitors who may share the hub with them. This is perfectly understandable, and although our tenants sign an agreement between each other to help allay such fears, some level of fear will always remain.
But the strength of clustering outweighs the risks. One plus one will equal three.
The final lesson — building an ecosystem takes time, and so requires a long-term commitment. A two year effort won’t cut it, the horizon needs to be more like twenty years. And over twenty years governments will change several times, bank innovation strategies will wax and wane and maybe wax again, but dedicated startup entrepreneurs will remain, and must remain, leading their ecosystem.
And so at Tyro we’re taking a long term view. Our strategy is to drive disruption by giving startups a home, a place to work and learn — and, for a few startups each year, access to our in-depth banking knowledge and co-development resources.
But that kind of disruption will take time, and we know we need to stick with it if we’re to see real change in Australia. Our hub doesn’t need to turn a profit, but it does need to drive disruption, and that’s what we will be measured on.
Australia’s first dedicated space for fintech startups — The Tyro Fintech Hub — is well and truly open for business. If you’re a fintech startup then you belong here. Come and check us out. http://tyrofintechhub.com.
*I would like to acknowledge Brad Feld’s great influence on our thinking, particularly his book Startup Communities.