Entrepreneurship is a critical component of city-building. You want people taking risks, starting new companies, and creating jobs to grow the overall economy. And to accomplish this, you roughly need a bunch of smart people, access to money, and a culture that accepts failure and risk-taking. Then, maybe, you might get some successful startups.
The key word, however, is maybe.
Here's an interesting essay by Jerry Neumann — a retired venture investor — called "We Have Learned Nothing." In it, he argues that there is no science of entrepreneurship:
Of course, no science of entrepreneurship can be a science in the sense most people think of the term. There are no fixed and universal recipes, no ultimate truth. This may be unsatisfying to the aspiring founder, but any science that guaranteed success would bring us right back to the perpetual money machine. The best we can hope for is a science that makes startups meaningfully more likely to succeed and that is honest about the limits of its own prescriptions. And then, when those prescriptions harden into orthodoxy, we try something different. A true science of entrepreneurship embraces the Red Queen dynamic so completely that it rejects any attempt to permanently systematize it.
The "Red Queen hypothesis" is an evolutionary biology concept that states that one has to constantly adapt and evolve just to survive and maintain a position, never mind make any progress. It follows that as soon as you stop innovating as a company, you don't just stay where you are; you fall behind. And that's because the entire landscape is constantly shifting around you. Neumann argues that this is a better mental model for startups and that it's a fool's errand to try to permanently codify what it takes to create a successful one.
I'm going to take this even further and say that the same is true for cities. It's not enough to just follow "best practices" and copy what has been successful in other places. There is no set formula for urban leadership. Cities are rewarded most for being different, and for doing that different thing first. This is particularly true in a world of increasing global sameness. Creating a replica of the London Eye or New York's High Line will not magically turn you into a comparable global city. It is a recipe for mediocrity.
Cover photo by Laine Cooper on Unsplash
Vietnam has a building typology known as tube housing.
It is characterized by narrow building frontages, often in the range of 3 to 4 meters, and multiple skinny levels. From what I've read, tube housing first appeared in the 17th century in cities like Hanoi. Its ubiquity over the years, however, has been aided by a myriad of factors, including Vietnam's transition from capitalism to socialism. This change meant that far fewer apartment buildings were being constructed, and so households had to take matters into their own hands and build what they could.
I've also read that this building type may have something to do with the way properties were taxed based on their frontage rather than their site area, though I haven’t been able to find a reliable source for this. Whatever the case, the end result is exactly what we discussed in this recent post — The 9-Step Rule: Why Simple, Narrow Buildings Are Good for Cities. Except with these frontages, it wouldn’t even take nine steps if the average building width is closer to 3–4 meters.
What is equally interesting about this housing type is that it represents a ground-up intervention (as opposed to the result of top-down urban design) and it is highly adaptable. It is not uncommon for additional floors to be added to these tube houses as needs change, and for the ground floors to serve as garages, living rooms, thriving commercial spaces, or as all three at once. It is an entirely flexible space that fuels entrepreneurship and allows households to make money.
Just think about how much easier it would be to open your own shop if you already owned the space. Conversely, how many of these ground-floor businesses wouldn’t exist if only there were a single line in the zoning regulations that said: “Nah, sorry, you can’t start and operate your own business here.” That is what I often worry about when it comes to land-use policy: what human potential are we quashing as a result of our decisions?
I was just reading about Simple Ventures. They are a Toronto-based venture builder that has raised $15 million to help create 25 high-growth companies headquartered in Canada by 2030. Some of their investors include TD Innovation Partners, Sun Life, Sobeys, and Harley Finkelstein (President of Shopify).
Now, I'm not a venture capital expert, but this seems to me like a relatively small amount. (They plan to raise another $5 million by the end of the year.) So I would encourage more institutions and rich people to step up with their wallets, because you have to applaud their mission:
“We are coming together to issue a call to action - bring Canadian talent home,” said Rachel Zimmer, exited founder and Co-Founder and CEO of Simple Ventures. “This funding will allow us to build great Canadian Headquartered companies. Now is a crucial time to join our mission to put fire in the Canadian engine.”
Canada still has 100,000 fewer entrepreneurs than it did 20 years ago, despite the population increasing by over 10 million during the same period. At the same time, nearly one-third of Canadian immigrant entrepreneurs move to the U.S., citing limited support for scaling businesses at home. Simple Ventures tackles this problem by sourcing new company ideas, validating them, and pairing them with Canadian leaders to co-create ventures.
There's absolutely no shortage of smart, ambitious, and entrepreneurial Canadians. Where we need to improve is in commercializing and scaling our ideas. And it's crucial we do this as quickly as possible because there are powerful compounding benefits to entrepreneurship.
When a new company scales, it creates jobs, wealth, and knowledge. These ingredients can, and usually are, used to start a growing subset of even bigger companies. Venture capitalist Fred Wilson once referred to this as The Darwinian Evolution of Startup Hubs.
If you study Silicon Valley, what you see is something that looks like a forest where trees grow tall, produce seeds that drop and start new trees, and eventually the older trees mature and stop growing or worse, die of disease and rot, but the new trees grow up even taller and stronger.
If you drill down a bit deeper, you see that the founders, investors and early employees generate a tremendous amount of wealth from these big successes. The later employees don't make as much wealth but they do learn a ton and make enough money that they don't need to work for someone else and so they strike out on their own and are often funded by the folks who made the big money in the prior startup. That's how the seed drops from the tree and starts a new tree growing. This continues on and on and on.
When you think of startups and entrepreneurship in this way, you start to see just how important it is for us to keep growing our forests, instead of chopping down our trees and shipping them to the US. This is an exercise in city and nation building. And so I wish the team at Simple Ventures nothing but success.
LFG, Canada. If you're working on something and would like to pitch SV, click here.