From Potential to Capability: when startup ecosystems hit their coordination threshold
TL;DR — Many startup ecosystems generate increasing activity but struggle to compound results over time. Once ecosystems reach a certain scale, coordination capacity, governance arrangements, and innovation maturity become binding constraints. Without shared learning, progression logic, and institutional continuity, outcomes reset between cohorts instead of accumulating across them.
Summary
- Many startup ecosystems, particularly in Latin America and the Caribbean, show strong entrepreneurial momentum and increasing activity.
- Yet, beyond early-stage growth, outcomes often struggle to compound across cohorts, institutions, and time.
- This essay explores why that plateau appears and proposes a way to interpret it through the lenses of coordination, governance, and innovation maturity.
- Architecture and maturity are presented as enabling perspectives, not prescriptions or guarantees.
Core thesis
As startup ecosystems move beyond early activation, outcomes tend to plateau unless coordination capacity, governance arrangements, and ecosystem-level learning mechanisms mature in step with activity (Stam, 2015; OECD, 2025; CARIBEquity, 2025).
Context and perspective
Over the past twenty-five years, I have worked as an entrepreneur and innovation practitioner—building (and failing) startups, and validating value-proposition hypotheses across more than twenty-five organizations. This experience spans early-stage ventures, pension funds, brokerage firms, government organizations, and three startups of my own.
This experience informs the perspective that follows, but the argument itself rests on observable ecosystem patterns rather than personal outcomes.
The progress achieved across the Caribbean and Latin America deserves recognition. It has been built through sustained effort by founders, investors, public servants, universities, and ecosystem builders—often under constrained conditions. The question explored here is not whether progress exists, but why progress often struggles to compound once ecosystems reach a certain scale and level of complexity.
Why this matters
Signals of momentum
Recent assessments such as the CARIBEquity Regional Ecosystem Report highlight encouraging signals across the Caribbean. In the Dominican Republic alone, twenty-five startups progressed from idea to early traction in a single year (CARIBEquity, 2025). While modest in absolute terms, this represents meaningful momentum within a relatively small ecosystem.
CARIBEquity classifies much of the region as being in an Activation Phase, identifying constraints related to connectedness, early-stage funding readiness, mentorship availability, and regulatory environment (CARIBEquity, 2025).
The compounding gap
Acceleration and early-stage support programs have demonstrated short-term effectiveness. At the same time, similar patterns appear across Latin America: results tend to reset between cohorts, institutions, and funding cycles rather than compound across them. This can be interpreted as a continuity constraint: the issue is no longer activity itself, but how progress is carried forward.
Experiences in countries such as Colombia and Chile illustrate this tension. Programs like Startup Chile generated substantial momentum, yet many startups did not remain anchored long-term within the local ecosystem. This should not be read as a critique, but as an opportunity to revisit ecosystem strategy.
Visual interpretation: activation to continuity threshold
Key arguments
1) Activity scales faster than outcomes
A plausible interpretation is not a shortage of ideas or talent, but weak compounding across programs (Stam, 2015).
CARIBEquity identifies several constraints that plausibly interrupt compounding, including limited ecosystem connectedness, uneven mentorship capacity, early-stage funding readiness, and regulatory frictions (CARIBEquity, 2025). OECD research similarly emphasizes that fragmented incubation and acceleration systems reduce navigability and weaken post-program continuity (OECD, 2024).
Early ecosystems may temporarily bypass this constraint. As ecosystems mature, discontinuity becomes harder to ignore.
2) Coordination costs rise as interdependence increases
As ecosystems grow, coordination shifts from optional to essential.
Historically, ecosystem coordination in Latin America has been largely informal. This approach functioned reasonably well when ecosystems were small and relatively homogeneous.
As ecosystems evolve, actor interdependence increases. Capital, policy, talent, and technology domains increasingly interact, often under conditions of rapid change. Coordination capacity therefore becomes a first-order system property rather than an emergent by-product (dos Santos et al., 2022).
The term hyperconvergence is used here as a descriptive shorthand for accelerated cross-domain interdependence, rather than as a formal theoretical construct. Under such conditions, informal coordination mechanisms tend to lose effectiveness as complexity increases.
Research on innovation ecosystem governance highlights the importance of adaptive and resilient coordination structures capable of operating under uncertainty and turbulence (Könnölä et al., 2021). World Economic Forum analyses further support the view that ecosystems span multiple interdependent domains—markets, talent, capital, policy, and culture—each amplifying coordination demands (World Economic Forum, 2013; 2014).
When coordination costs rise faster than coordination capacity, fragmentation becomes the default equilibrium.
3) Innovation maturity explains discontinuity
Considerable attention is rightly given to founders. However, ecosystem-level outcomes depend not only on startup capability, but on the maturity of the surrounding system.
Here, innovation maturity is used descriptively, as a way to interpret system readiness and alignment, not as a normative ranking or certification. When programs emphasize ideation and early validation without corresponding attention to efficiency, scaling, and continuous improvement, startups are repeatedly asked to re-prove what has already been validated elsewhere.
OECD ecosystem diagnostics explicitly frame ecosystems as input-output systems in which mismatches across inputs—such as finance readiness, connectedness, or institutional alignment—constrain outputs (OECD, 2025). Maturity asymmetries across institutions amplify this effect: progress recognized in one program may be discounted in another due to differing metrics, assumptions, or stage definitions.
In such contexts, apparent success may reflect exceptional founders scaling despite systemic conditions, rather than because of them (Stam, 2015).
From diagnosis to interpretation
Taken together, these patterns suggest that the binding constraint is no longer entrepreneurial activity itself, but how ecosystems coordinate learning, progression, and decision-making as they grow.
At this stage, adding more isolated programs, contests, or events tends to produce diminishing returns. The literature increasingly treats coordination and governance as ecosystem capabilities requiring deliberate design rather than informal emergence (Cao, 2025; Könnölä et al., 2021).
Frameworks as lenses, not solutions
If the challenge is structural rather than episodic, then analytical lenses are required to make structure visible before attempting change.
MicroCanvas Framework (MCF 2.2) provides a shared language for problem definition, evidence, and decision traceability across actors.
Innovation Maturity Model (IMM) supports interpretation of readiness and progression at the system level, conceptually aligned with ecosystem diagnostics approaches (OECD, 2025).
Vigía Futura introduces foresight and sensing to support anticipatory governance under uncertainty, consistent with resilience-oriented governance models (Könnölä et al., 2021).
Together, these lenses shift attention from isolated activities to ecosystem capability as a whole.
What this perspective does not claim
This perspective does not replace markets, capital formation, policy reform, or founder execution. It does not assume centralized control, require new institutions, or guarantee outcomes.
Architecture and innovation maturity are treated as enablers, not determinants.
Conclusion
Many startup ecosystems now appear to be crossing a threshold where coordination, learning continuity, and maturity matter as much as—if not more than—activity.
Recognizing this transition helps explain why momentum sometimes plateaus despite continued effort, particularly when individual success stories obscure systemic constraints. Approaches such as VIF represent one way to think about supporting this next phase—by design rather than accumulation.
References
CARIBEquity (2025). CARIBEquity Regional Ecosystem Report I: Assessment. IDB Lab & European Union.
CARIBEquity (2025). CARIBEquity Regional Ecosystem Report II: Recommendations. IDB Lab & European Union.
Cao, Z. (2025). Toward a Coordination-Centered Theory of Innovation Ecosystem Policy. SSRN Working Paper.
dos Santos, D.A.G., et al. (2022). Coordination of Innovation Ecosystems across Life-Cycle Stages. Redalyc.
Könnölä, T., Eloranta, V., Turunen, T., & Salo, A. (2021). Transformative governance of innovation ecosystems. Technological Forecasting and Social Change, 173, 121106.
OECD (2024). Start-Up Globalisation through Incubation and Acceleration. OECD Publishing.
OECD (2025). Entrepreneurial Ecosystem Diagnostics. OECD Publishing.
Stam, E. (2015). Entrepreneurial Ecosystems and Regional Policy: A Sympathetic Critique. Utrecht University.
World Economic Forum (2013). Entrepreneurial Ecosystems Around the Globe and Company Growth Dynamics.
World Economic Forum (2014). Entrepreneurial Ecosystems Around the Globe and Early-Stage Company Growth Dynamics.