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Economic development already has CRMs. What's the ecosystem approach?
Ecosystem building, which prioritizes collaboration and growth among local entrepreneurs and organizations, is increasingly being recognized as a key regional economic development strategy.
To serve that industry, EcoMap is launching a tool that’s similar to a traditional CRM in that it facilitates data sharing and collaborative tracking — but in this case, to track entrepreneurial support efforts across multiple organizations.
EcoMap's ERM may help formalize regional ecosystem building as a measurable discipline, potentially expanding the economic development software market beyond traditional boundaries.
Modern client relationship management software emerged because of technology changes. In the early 2000s, cloud services, mobile computing and the recurring monthly payment model defined CRM as a business category, and made Salesforce its original standard-bearer.
“It’s meant to facilitate collaboration, data sharing, and ultimately track and measure the impact of ecosystems at large — and of specific elements within that ecosystem as it relates to supporting entrepreneurs,” said Sherrod Davis, the CEO of the startup founded in 2018 by Johns Hopkins University graduate Pava LaPere.
The $100 billion CRM category thrived because technical capacity finally met a long-standing need for sales and marketing teams to better track deals. EcoMap’s ERM is a bet on “ecosystem building” continuing its journey from business metaphor to established discipline. That discipline encompasses what its industry calls place-based, tech- and entrepreneurship-led economic development.
Economic development is no trivial target market. US states and local governments spend at least $90 billion on business and talent attraction annually, according to a McKinsey analysis. Billions more are spent on IT solutions, data analysis and myriad workforce and economic development programs from a range of government, quasi governmental and nongovernmental organizations at the local level. Not to mention the hundreds of billions of dollars of federal fundinginjected into tech- and entrepreneurship-related programming in the Biden administration.
The challenge, and opportunity, for an entrepreneur like Davis is that the industry he’s selling into is fractured and beset by incumbency.
Economic development is big enough, and CRM standard enough, that several tools focus on it. Existing approaches follow a familiar use case: Help a government or civic organization track relationships across a sales cycle, such as a business owner expressing interest in relocation and an economic development following that prospect.
But the logic only works inside a single, existing organization, such as a chamber of commerce, or a business attraction agency.
EcoMap is attempting to carve out an ecosystem approach that would span multiple collaborating organizations — and has raised enough outside investment that it looks like a big fish in what remains a small pond. Davis needs the pond to grow.
Creating a new category in relationship management
Ecosystem building is an at-times quaint alternative to the sharp-elbowed economic development of the late 20th century.
Back then and still often now, policymakers and site selectors squabbled over tax incentives and industry marketing to attract corporate offices and manufacturing facilities. Even in a single market, many overlapping organizations inconsistently coordinated their efforts. Ecosystem building as a concept is a “grow your own” first strategy, in which a stack of services help entrepreneurs and workers develop in a community alongside more established businesses and organizations. As many as two-dozen conferences have “ecosystem” programming across the country this year, according to a Technical.ly analysis.
“You’re seeing the professionalization of the field,” EcoMap CEO Davis said. “Folks in more traditional positions of power — state and local governments, universities, funders — are recognizing ecosystem building as a mechanism for economic development.”
LaPere started EcoMap by doing what a lot of us (and here I very much include myself) were doing in the 2010s: listing, or mapping, the providers in our hometown that provided at-times redundant services for fledgling tech and startup communities. From spreadsheets to early software, EcoMap started selling itself as a way for any local ecosystem to track what resources it had.
Now comes the ERM.
“It’s about creating digital connective tissue,” Davis said. “Most of the interactions in an ecosystem are inter-organizational. Historically, CRM tools were built to manage relationships within an organization. But ecosystem builders work across organizations.”
The ERM allows different entrepreneur-support organizations (ESOs) to collaboratively manage founder case files — tracking referrals, milestones and support provided across institutions. It might remind of Philadelphia-founded Crossbeam, a startup with a “data escrow” platform that lets firms share intelligence. Here EcoMap is betting they can help entrepreneur support organizations collaborate.
EcoMap faces at least two obstacles. One is that the ecosystem approach fails to overtake the established economic development practice. The other is that even well-intentioned economic development pros struggle to collaborate across teams.
Davis says early use cases have worked. The Indiana Economic Development Corporation coordinates navigators across multiple ESOs that use EcoMap to serve more than 20,000 stakeholders a year. Now, with ERM, those navigators can track not just who got help, but what kind of help — and whether it worked.
“Six or twelve months later, we can say: ‘That referral led to a new market, or investment, or product launch,’” Davis said. “We can start to tell the impact story.”
That moves ecosystem building out of the realm of good vibes and nice panels into something more durable. It also could help Davis, who has investor demands on his shoulders, widen the focus further: from economic development as a category (call it a $150 billion market) to local economies as a whole (perhaps $2.3 trillion in size).
Like what CRM once did for sales, or what “customer success” software did for SaaS teams, ERM attempts to create a category — and with it, a shared language and set of expectations.
“This is about ecosystem intelligence,” Davis told me. “Just like Google Maps didn’t just digitize the atlas — it changed how we move through the world.”
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