Last year, I wrote about Elinor Ostrom, an American political economist, who was awarded the 2009 Nobel Prize in Economic Sciences for her work on cooperation and collective action. Ostrom studied how rural communities self-organized to sustainably share scarce natural resources in the absence of formalized governance structures. In her Nobel acceptance speech, she described her work in the following way:
“Carefully designed experimental studies in the lab have enabled us to test precise combinations of structural variables to find that isolated, anonymous individuals overharvest from common-pool resources. Simply allowing communication, or “cheap talk,” enables participants to reduce overharvesting and increase joint payoffs, contrary to game-theoretical predictions.”
In other words: we tend to cooperate with people we know, trust, and frequently engage with, while we find it easier to defect or play zero sum games with people we don’t. This thinking is central to building healthy startup communities (or ecosystems), where the flow of ideas, talent, and capital are made possible by informal norms and relationships built on trust, reciprocity, and stewardship. For that reason, I awarded her the Nobel Prize in Startup Communities (credit goes to Victor Hwang for originally connecting Ostrom’s work to startup communities/ecosystems).