The Wrong Way to Think About Competition in Entrepreneurship

If you�re an entrepreneur looking to launch your startup, should you locate in Paris or Berlin? San Francisco or Boulder? Santiago or Bras�lia?

It�s a trick question. As I tell my students, the second rule of entrepreneurship is always make sure you are answering the right question � which is not necessarily the one being asked.

(Rule number one is that all rules are optional to entrepreneurs.)

The question of Paris or Berlin presupposes that choosing an entrepreneurship community is like a World Cup match, with clear winners and losers. The idea is that each time one region gets better, another gets worse, so after a certain amount of time, there will be a handful of �good� places and a bunch of �bad� places for startups. Avoid the bad places, stick to the good, and your startup will be all set, regardless of industry.

Far from it.

A collaborative entrepreneurial network that spans regions lifts all boats. When I teach at MIT, my goal is not for 100% of my students to stay in Cambridge, Mass. after they graduate. I train them to be great entrepreneurs making great products, and to improve the communities they become a part of, regardless of geography. The MIT Regional Entrepreneurship Acceleration Program (MIT REAP) is based around a similar concept, bringing several regions together over a two-year period not just to learn MIT best practices based on faculty research, but from each other�s experiences.

Entrepreneurs should consider all entrepreneurs as friends, not enemies. There are two enemies of the entrepreneur and neither of them involves other entrepreneurs. One is the underutilization of our young people through unemployment or underemployment. This scenario has them growing up without hope, pride or rigor in their lives. The other is Wall Street, which would take our best and brightest and use their skills to create more synthetic collateralized debt obligations, rather than new, innovative products and new, fulfilling jobs. Imagine a brilliant youngster, unemployed or lured by Wall Street, who is told they cannot become an entrepreneur because they live in the wrong city! That is a mistake.

Cities have comparative advantages. In certain industries, there are seemingly clear advantages to locating in certain places over others. And I encourage regions to leverage their comparative strengths when building their entrepreneurial communities but also look to integrate with the adjacent or broader surrounding entrepreneurial communities. But even when World Cup teams compete for the title, they are continually learning from each other new strategies and tactics for practicing and player health, making the teams as a whole get better and better. Athletes today are stronger and smarter than ever before. Even the World Cup, despite its winners and losers, is not truly a zero-sum game.

Don�t focus on who wins this round of �World Cup Entrepreneurship.� Instead, focus on learning from and supporting your fellow entrepreneurs and your absolute index for entrepreneurship will go up. That�s how we, as a global community of entrepreneurs, defeat the naysayers who prefer unemployment or derivatives to fulfilling, innovative new businesses.

Bill Aulet is the managing director of the Martin Trust Center for MIT Entrepreneurship and a senior lecturer at the MIT Sloan School of Management. His first book, �Disciplined Entrepreneurship: 24 Steps to a Successful Startup�, is due out in the first week of August. He is on Twitter @billaulet.

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