Regional Startup Ecosystem Model
Create durable local growth by cultivating many startups and collaborators
- Difficulty
- Expert
- Time to result
- ~ongoing to results
- Steps
- 6
- Confidence
- 97%
The Regional Startup Ecosystem Model replaces the conventional economic-development hunt for a large corporate headquarters or factory with a portfolio approach to company creation. Local leaders first identify the region's genuine assets and weaknesses, then convene founders, investors, universities, corporations, government, and community organizations around those strengths. They expand access to seed capital, mentorship, talent, customers, and public attention so many new companies can start and scale. Some ventures will fail, but successful firms can become durable employers rooted in the community. Repeated successes create belief, retain talent, attract outside capital, and generate experienced founders who reinvest locally. Unlike bidding against another state for an existing company, this process can create net-new national value and a more resilient local economy.
Origin
Case developed this model through Startup America Partnership, Rise of the Rest tours, and observations of cities such as Detroit and Pittsburgh. Extracted from Masters in Business.
Core principles
- 01New companies are major creators of future jobs
- 02Recruiting an existing corporation is often zero-sum
- 03A portfolio of startups is more resilient than one subsidized employer
- 04Collaboration and local possibility are core ecosystem ingredients
- 05Some startup failures are an expected cost of durable renewal
How to run it
- 1
Diagnose regional assets
Identify the industries, universities, institutions, talent, infrastructure, and cultural strengths that can support distinctive startups.
Pro tip Use an honest external assessment to expose weaknesses as well as strengths.
Watch out Do not imitate another city's ecosystem without local advantages.
- 2
Convene the ecosystem
Bring entrepreneurs together with investors, civic leaders, universities, established companies, media, and foundations.
Pro tip Create recurring working relationships rather than a one-off summit.
Watch out Visibility without sustained collaboration produces little structural change.
- 3
Build early-capital capacity
Develop local angel, seed, and regional venture networks capable of funding companies before coastal investors notice them.
Pro tip Invite experienced outside investors while strengthening permanent local funds.
Watch out Do not make founders dependent on a single government grant or investor.
- 4
Back a portfolio of startups
Support many promising companies aligned with regional strengths, accepting that some will fail while others become major employers.
Pro tip Diversify across founders and business models while preserving strategic regional themes.
Watch out Judging the ecosystem by one failed startup creates the wrong incentives.
- 5
Create visibility and belief
Showcase founders, host pitch events, and publicize credible success stories to signal that entrepreneurship is possible locally.
Pro tip Use specific companies and outcomes rather than generic city branding.
Watch out Do not overstate progress; trust depends on verifiable momentum.
- 6
Compound local success
Encourage successful founders, employees, and investors to mentor, fund, and launch the next generation of companies.
Pro tip Track whether talent and capital are being recycled within the region.
Watch out An isolated exit has limited ecosystem value if all expertise and wealth leave.
In the wild
After losing much of its population and entering bankruptcy, Detroit developed a vibrant downtown startup culture. Entrepreneurs, a strong mayor, foundations, and investors worked together, with companies such as Shinola and StockX helping demonstrate a new path to renewal.
→ Collaborative startup formation helped put Detroit back on a growth trajectory.
Pittsburgh moved beyond its historical identity as a steel capital by leveraging Carnegie Mellon and its robotics expertise. New companies, including Duolingo, emerged from the university-centered ecosystem.
→ Local institutional strengths supported a new generation of technology businesses.
Common mistakes
Buying one headline employer
Large relocation subsidies can be zero-sum and expose the region to severe damage if the employer later leaves.
Ignoring local strengths
Generic startup programs struggle when they are disconnected from the region's institutions, industries, and talent.
Expecting every startup to survive
A healthy ecosystem is a portfolio in which individual failures coexist with companies that become major future employers.
Is it for you?
Best for
It is best for cities, universities, investors, foundations, and civic leaders seeking long-term regional renewal.
Not ideal for
It is not ideal for leaders seeking one quick announcement or guaranteed short-term job numbers.
From the transcript
“the real way to do that in a sustainable, efficient way is actually to launch new companies, some of which would fail, because that's the…”
“So it's way better to focus on the new companies.”
“How do we create the next Amazon in our communities?”
From the episode
Steve Case on Startup Entrepreneurship
Steve Case