Traditional understandings of entrepreneurial ecosystems, often driven by underpinnings in economic theory, and business strategy, have tended to highlight drivers such as the individual pursuit of profit, competition, and the need for instrumental, commercial, rational exchanges between organizations. Key players in these types of entrepreneurial ecosystems are mainstream funders, including banks, venture capitalists, and business angels. Proprietary knowledge is held tightly, and protected by patents if possible. Relationships with customers, suppliers, and distributors are understood through an essentially adversarial frame, on assumptions of the entrepreneur to fight to win the best deals she can. The competition are seen through the strategic metaphor of warfare; attacking, positioning, price warfare, invading territories are all common phrases.
Yet modern models of the sharing, or open, economy have focused attention on how an increasing range of entrepreneurial ecosystems operate and organize themselves in ways which are very much in contrast to these traditions. Open innovation systems challenge preconceived notions of proprietary knowledge, as Tesla’s recent opening of all patents to the public domain vividly illustrates. Co-opetition (a combination of cooperation and competition) has emerged as an alternative to competition. Economic motivations and resources have been downplayed as entrepreneurs and their ecosystems strive to achieve social, environmental, cultural, and knowledge goals instead. Peer-to-peer models disrupt institutional norms – whether in funding, like Kickstarter or Kiva, or in consumer services, like Uber, or AirBnB.
In line with these wider understandings of the open sharing economy, recent research indicates that, for many contexts, considerable resources are co-created and held at the network, or local ecosystem level. Indeed, we have found examples of resources, including knowledge, equipment, and contacts, being shared freely between (competitive) entrepreneurial network members. Our own work has provided several graphic examples of these practices, and my aim here is to share some of these, and reflect briefly on them.
In the California punk scene of the 1980s and 1990s, the band Rancid were able to survive and grow, in spite of their lack of economic resources, creating several related ventures in the process. Their first gigs were played in the legendary collective venue, the Gilman, where they’d long been involved as volunteers, performers, and audience. Here, the local ecosystem facilitates the move from “consumer” to “producer”, facilitating fluidity of movement within its network. Both Rancid’s record deals came from within the California punk community. Their second, substantial, deal saw them joining Epitaph Records, a label created by Bad Religion’s Brett Gurewitz. (Theoretically, in business strategy terms, this is an example of established incumbents inviting new entrants into the ecosystem.) Epitaph is also the “home” for Rancid’s own spin-out label, Hellcat. Rancid have seen Hellcat, showcase tours, and radio shows as a vehicle for promoting younger punks, just as they were helped in their turn by the older generation. An almost paternal model is explicitly described by the band. Rancid hand printed their own band shirts for sale, and then did the same for their friends, until their merch enterprise, Machete, grew into a sizable venture. Their early tours followed a route mapped out and documented by Black Flag’s Henry Rollins, and openly shared within the punk community. Again, skills and knowledge are held to be network resources, to be shared within the ecosystem, across and between levels.
I took a recent field trip to explore an urban craft beer ecosystem, with my co-authors, Juliette Wilson and Angelo Bisignano. We’re studying the brewers, craft beer bar and pub owners, importers, and bottle shops in a city in the British Midlands. Especially at the level of head brewer, this ecosystem is hugely characterized by the open sharing of equipment, raw materials and knowledge. When one micro-brewery had a need for a specific piece of kit they used infrequently, another brewer would lend it to them. When one ran out of malt, another would loan them the shortfall to allow production to continue. One very promising young brewery was moving to new premises, and found themselves unable to brew for a few days. The local craft market leader, whose brewery is now quite substantial, and run along formal, professional lines, invited these young mavericks in to use his production line at the weekend, and create a collaborative brew. Read that again. The leading player in the local beer-preneurship ecosystem invited his up-and-coming competitors into his “factory” to make their product there. Sales sharing is also widespread, with micro craft breweries swapping barrels of their beer with each other (with “competitors” in other words), and selling them in their own locality, or through their own pubs. We were lucky to catch a meeting where many members of the ecosystem came together to review a pilot craft beer week they had just run, and to plan next year’s event. Recipe knowledge is also shared freely, even to the extent of Skype conversations with leading head brewers from around the world chatting openly about how they’ve made a particular beer.
In both these cases, some ecosystem patterns can be identified. There is an entrepreneurial generational effect, where older and more established players help out smaller, newer entrants to the field. They explain this as being because they received similar support from the previous generation when they were starting out. This fatherly role is not just felt as a duty, but as a pleasure, a chance to enjoy the collaboration and nurturing of others, as an opportunity to “give back”. How very far removed is this family metaphor from the warlike strategic competition models? There is a strong perception that knowledge belongs to everyone, and should continually be shared, developed, enhanced. The ecosystem, that is, is the repository of shared cultural capital, which is understood as a community resource. Both punk rock and craft beer share a firm foundation in communal historical, traditional, roots, but also welcome constant innovation. Perhaps these community craft ecosystems, with their underpinning family metaphor, are especially well-placed to manage, to celebrate, both the past and the future. Both these ecosystems are very passionate about their “product”, and committed to the continued creativity of their ecosystem, because they genuinely love craft beer, or punk rock. (0r both, in some cases.) There is also a firm tradition of encouraging “consumers” to engage in “production”, whether through the support of home brewing in the craft beer ecosystem, or through punk’s DIY ethos. (“Here’s 3 chords. Now start a band”) It is also instructive to note that both of these ecosystems are explicitly and consciously setting themselves apart from mainstream business ecosystems, whether this is the music industry conglomerates, or big industrial brewing.
These small revolutions bring a challenge against dominant market models, and established ecosystems, with their family metaphors of support, sharing, passion, and engagement. Perhaps it is time we, as entrepreneurship scholars, teachers, supporters, and trainers, also challenge more forcefully mainstream ecosystem models and metaphors. Make peace, not war. Or beer. Which is kind of the same thing.