There is right now, today, a tremendous opportunity for cities across the US and around the world to effectively recruit and retain the young, hungry, visionary and highly productive talent that impact and accelerate cities. Those progressive folks that make the really big things happen.
The following essay will outline the process I have dubbed Launch City. A for-profit model that leverages this hyper-fertile landscape, implementable in any city with just a few pivotal elements. One that when combined with the goals and resources intrinsic to an emerging city, creates a perfect storm of ambition, advocacy and acceleration, resulting in an efficient, productive and profitable platform for entrepreneurship.
Red Tape Parade
In the course of my work I meet often with the people that make up the entrepreneurial ecosystem of any city. Fellow entrepreneurs, those in private industry as well as academia, local government and philanthropic roles. My curious nature makes it so I ask question at a pace which admittedly borders on disconcerting and as a result, I learn a lot from these conversations. Of all those things I have come to retain from these experiences, the one thing that stands out to me is that most all of these people are intelligent, well-intentioned folks working within existing, complex infrastructures designed long before they came along.
I would wager a guess that a polling of public sentiment would reveal, particularly in the case of local government, that the average person views those in a position to improve those things that make up their experiences as mostly indifferent. This is not true from my vantage point. Frustrated yes, indifferent, no. The truth is that for the most part these people deemed to be in a position of authority are stunted by the same bureaucracy you and I as citizens, customers or students experience in interacting with them.
Those who do venture out of their organisations complexities into the sunshine that is the efficiency of a post-internet world are typically cast away into futile approval processes led by people who would rather do nothing over taking a risk and failing as it is far easier to get fired for failure than for sitting on your hands.
Another matter and one much less subjective to opinion is the systems in which all these of organisations communicate and facilitate around to create products and services for the public at large. This process, evolving over time with what I imagine is a focus on expedience, is a closed loop. To date and perhaps understandably so, the inclusion of the public-at-large into these processes has been regarded as a laborious and as such, community interaction is typically reserved for political campaigning, military recruitment and brand marketing. People, be they regular citizens, benefactors, consumers or students are exempt from the responsibility that is participating as part of the platform that ultimately serves them. Thus creating a less than optimally productive process and in turn, solutions that are too less than ideal.
It is my contention that not only are people willing to participate but eager to do so. It is a matter of designing points of interaction that are in line with their daily lives. Bringing together people in a town hall meeting for example might seem like an obvious way to get feedback on a particular issue but I think you would agree that it is not the most productive option available to us in this day and age.
Fourth Floor View
There are a number of major cities around the world that have begun to open up their usage data. That is all the stats and figures created in the process of managing a city, to outside individuals and entities so they can build tools that might serve to assist the citizenry and/or reduce the operating costs of the supplying municipality. My hometown of Philly is doing some great things with their open data program modelled I believe after the one established in Baltimore. Prior to these programs, this data would be plotted on maps and poured over on City Hall conference tables. Issues isolated on the weighted backs of the loudest protesters with potential solutions not so proactively implemented or at least attempted from within the same bureaucracies that created them.
Providing data to ambitious folks who wish to use it to create utility is a great big step in the right direction but listing data sets on a website will only get you so far. It will attract a specific segment of entrepreneur in developers. My fellow data-geeks who like to create applications because they find it fun.
Be it for a municipality or any big organisation, there is no longer a question behind the validity of sourcing the crowd to create value for those you wish to serve. We are at the earliest stages of this movement with things like open data projects and experience feedback. The evolution of this methodology and one I am attempting to stoke herein is in packaging and more aggressively soliciting the problems you aggregate in the process of sourcing the crowd.
Carrot nor the Stick
The common logic around motivating someone to do something is often described as the “Carrot and the Stick”. This term first used in The Economist magazine back in the late 1940’s is used to describe the concept of reward versus discipline or some semblance of both. This line of thinking is the basis for most corporate and educational tracts. While I will not argue the merits of what has become the standard practice in what we refer to as a capitalist economy, I would be remiss in not pointing to the recent Wall Street crisis as an example of how incentives backed up with enforcement can be a recipe for disaster but I digress.
Dan Pink, an author and former speech writer for then Vice President Al Gore for has an interesting take on the use of incentives as motivation in his recent book, Drive. Mr. Pink argues that the common wisdom, one that suggests that by rewarding a certain behaviour is incentive enough to motivate us and more still, that the more we reward it, the more we will catalyze it, is completely false. He has a number of examples to back up his case and you can see a great video here of his thoughts being illustrated to be more easily and enjoyably consumed. The best selling authors findings backed up by dozens of academic papers in the same vein instead suggest that it is a challenge we seek out and only sustenance we require to dedicate ourselves to the task. That so long as we have enough so to not worry about our survival, we are motivated solely by that which intrigues us. By overcoming the adversities, small and large, in our common path.
In working with entrepreneurs on a daily basis, I can attest to this truth most confidently. The entrepreneur as I know and describe them is an artist. A problem solver. Presented with a challenge steeped in purpose and he/she will prevail inevitably in time given the conditions to make a successful conversion possible.
Be it as a city, company or educational institution, coming to fully understand this distinction between providing rewards for performing a set of tasks and the concept of participating with your community, employees or student body to package problems that you wish to be solved and supplying an environment in which to solve them will most certainly be a productive a profitable one.
Your city has all the moving parts it needs to support entrepreneurial growth. The cogs in the wheel that is regional economical and workforce development. You need not rely on Federal grants and philanthropy alone to incentivise the most ambitious among us to act. Sitting in wait of stimulus funds or private industry partnerships to come and spark the brighter future of your city is a fundamental misjudgment. As is acting under the impression that the city or any institution that exists within an abundance of overly complex systems is best equipped to kindle a market positive movement over those individuals and more agile organisations who exist as current residents to serve this end, albeit most times a bit too disjointed from one another. The city, while perfectly positioned as the collection point for those problems that permeate closest to their communities, must resolve themselves solely and proudly as a centre point of a larger ecosystem. A platform connector for the specialised capabilities of your existing entrepreneurial networks.
Again, the people that make up this platform already exist in and around your communities. They are intrinsically motivated to serve the greater goal but you must look up from your current networks developed for expedience sake to see them plentiful in waiting. In essence you are fishing in the depleted part of the lake, with the wrong bait. You must instead cast a wider, more compelling net.
The Other 95%
It would be difficult to find someone who would argue against the fact that entrepreneurship is at the core of any economic growth and yet, with all the focus on thriving in a post-industrial age, the entrepreneurial ecosystem exists mostly as it has for the last hundred years. The most significant change in recent history has been the advent of the start-up accelerator. First established by Paul Graham, an author and entrepreneur after seeing a need to support ambitious folks looking for an alternative path out of college. These programs, sometimes referred to as incubators help bridge the gap between the entrepreneurs and access to early stage capital. Previously, an entrepreneur would need to conceptualize, build and make consumable their company for angel investors or early stage venture capital firms in order to adequately iterate their product and scale. Now, equipped with supportive mentors and seed capital to cover living expenses, both supplied by the accelerator, a certain segment of entrepreneur, one with some technical expertise and the ability to clearly and concisely convey their idea, has a shorter path to viability. A better chance at a successful conversion. These accelerators serve as a filter for the early stage capital entities and as such, investors are aligning themselves with the best of these programs in ever more creative ways.
I could go on forever about this topic and I do here should you be so inclined to read it but for the purposes of this platform, let’s just say that while accelerators are undoubtedly a net positive for all things entrepreneurial, they also reveal an alarming deficiency in the overall platform that is supporting entrepreneurs to solve problems with market viable ventures. A very small percentage, say 5% of those who would be considered entrepreneurs have the specific assets needed to access these programs. Leaving out the majority of would-be company founders at a time where the cost of entry is plummeting and it is ever more easy to build things on a shoe-string budget.
For the accelerator, it is a simple question of supply and demand. Even with their applicant requirements, most still have an abundance of applicants. Hundreds more than they could take into any given class of new companies. The opportunity for cities lay in attracting the other 95% with problems that need to be solved and supporting them to that end. Incubating and retaining them in your city by leveraging your existing but network of entrepreneur advocates. Provide a real world platform for these individuals and entities to connect along and thrive as a post-internet, entrepreneur-fuelled engine for economic growth.
What I Would Do If I Were You
This is going to sound counter intuitive but it is the most essential ingredient in the recipe that is convincing those ambitious, progressive types you seek to come work and live in your city. You need to market your problems. Not just your assets. See, entrepreneurs like problems. It is that mechanism in their DNA that sets them apart from the masses. They look at a problem and say: I can fix that.
The problems that will compel them to come and the advocacy that will convince them to stay is inherent in your current network of contacts and partnerships. You can attract soon to be start up founders from surrounding markets to build and grow new companies, acting as economic and cultural stimuli without the need for tax-payer subsidy or other market negative solutions. I will show you how.
No doubt you have encountered people at recent conferences and meetings talking about how you should be leveraging the crowd. The act of sourcing the community, be it local or global, can be an immensely productive way to facilitate cutting costs, increasing productivity and discovering new opportunities. Many large companies have taken to the harnessing the crowd and not just for the benefits to their bottom line. Technical expertise and strategic insights are often achieved in this way.
The common theme among those entities whom have success with crowd sourcing is in how they package their offerings. Specifically how the platform is designed. In a way that allows people to participate passively. Asking someone to go through a bunch of hoops to work with or for you only serves to deter them from doing so and still, most examples of community coordination are ones that require an inordinate amount of effort on the behalf of those you wish to have contribute. In order to be most effective in sourcing the crowd, you must enable people to contribute without disrupting existing behaviours. Participate with you in the course of their daily lives. Second, you have to explain why you want them to put forward their time and/or money in a simple, easily consumable way. Last, make it social. Allow them to share through their networks what they care about and contribute to. There are a dozen examples of crowd sourcing platforms in both the for-profit and non-profit spaces that are using these techniques and having great success. Two would be that of Kickstarter and Kiva.
For cities, as it relates to the model outlined in this essay, there is a ripe opportunity for leveraging the crowd to both source problems that need to be solved and raise the funds needed to sustain those working to solve them. There are many different ways to accomplish this but here are cursory outlines on how I would accomplish each without a lot of time or expense spent.
An Actually Urban Think Tank
A friend recently sent me an article on what BMW was sponsoring in an Urban Think Tank deployed in NYC. The website describing the project struck me as a bit self-congratulatory for a venture that had yet to accomplish anything and in reading more about it, I got to thinking about how this type of platform could better serve the community. How without the luxury of a big budget you can effectively source problems from the community and put them into action.
Pop-Up Participation Pods
Pop up a tent like structure with a gas generator to power light electronics. Advertise via posters and radio in the days leading up to an event and have the community come by to eat, drink and talk about problems they face in their locale with advocates trained to ask questions and isolate issues.
A few volunteers are walking in and around the pod talking to residents and getting permission to enter their cell phone number, after which a text message is sent immediately to them asking them to save the local number in their phone under the heading “Participate” or alike. In leaving they are asked to text in problems of any kind as they see them in the course of their daily lives. A reminder goes out to all via SMS once per month to promote the behaviour going forward.
Pre-screened problems are listed on a city branded website where entrepreneurs can view, share via social networks and apply for grants and/or community sourced funds to relocate and build scalable solutions with an eye on procuring capital and building the business-to-be in the same community with the support of a network of entrepreneur advocates local to that city.
Importing Solutions I have spent much of the past few months in an attempt to better understand the inner workings of city governments as they relate to the promotion and support of all things entrepreneurial. Among what I have learned is that city officials, having the best of intentions, seemingly do not understand what drives entrepreneurs. While those mired in bureaucracy are correct in conceding that they are not best suited to facilitate market ventures, by removing themselves just a tad to much, they are missing a prime opportunity to spark economic growth and create new jobs. To attract and retain the most ambitious among us by isolating and packaging up the problems their citizens encounter for those so inclined to consider solutions. By offering a real world platform for entrepreneurs to propose and build market viable ventures while being supported by the start up ecosystem inherent to every city.
It is one thing to provide grants, tax breaks and access to mentors but there is one more crucial piece to the puzzle and to put it in place, you must first understand that the common link among entrepreneurs is that we are all intrigued by the process that is coming to intimately understand a problem and developing a solution. We look at things most people pass by as minor annoyances and think how it can be better.
Any city can import and/or retain hundreds of sought after progressive thinkers but you first need to work with your community to isolate problems, display them for would-be resident founders on a website then provide a clear path to follow towards applying for a program that would consist of relocating them if necessary, making it sustainable to work on their proposed solution for a period of 90 days. A relatively nominal amount of funds can be raised to provide sustenance to the entrepreneur during this time, be it o the form of a grant or better still, crowd funding from the community itself. Raising say 10 thousand dollars in order to focus your attention of building a market viable solution to a problem gets easier when you can source the funds from dozens or even hundreds of citizens inclined to help. In addition to helping facilitate the fund raising, cities need only to assist their importing, soon-to-be founders with logistics and introductions into the existing your network of entrepreneur advocates.
Now that you have the problem, the person tasked with addressing it and a sustainable life cycle to facilitate the same concurrent and indefinitely, you need advocacy and you have it in mass. Each city has an entrepreneurial base. You need only tap it and connect your new resident entrepreneurs with these folks, allowing them to coordinate around the rest.
Here are four things I suggest each city should have in wait for these soon to be founders:
Workspace — A no cost workspace, be it in a University, City owned building or private company, for a period of 90-120 days. Ideally alongside fellow entrepreneurs, this productive workspace will be vital during the development of the earliest iterations of the solution they are there to build.
Relocation — The majority of these entrepreneurs will be coming in from surrounding markets and as such will need a little help getting around and some assistance in finding adequate housing. Logistic as well as financial should that be available.
Mentors — Fellows in various fields. Technical and administrative, these folks should be identified and profiled for their willingness to provide free advice and low/no cost services. I have found that
a few emails can line this people up fairly easily in any city.
Investors — Angel investors and early stage venture capitalists who desire to create a pipeline of young, local companies, while continuing to make decisions based on their own individual perception of market viability.
Seed to Plant Permanently
Now that you have imported, retained or reacquired these most coveted folks to come in and solve problems on behalf of your citizenry. Solutions, that once proven viable, are applicable not only to your city but every city in the country and for that matter, the world. You have proven your city an urban incubator for solutions with global application. You did it all without the need tax-payer subsidy or other market negative solutions and you have created jobs in the process.
Now, in order to create more jobs. Employing more of your citizens and continuing the cycle of entrepreneurs into your city, you must bridge the entrepreneur to the early stage capital market.
This is as simple as making introductions to investors whom wish to invest locally when viable. Providing an initial seed round of capital to prove the venture out in the local market in return for a percentage of the company and in the process, having the entrepreneur in question agree to a residency clause that would keep the company in your city over the long term or so long as it should succeed in market.
That is the long and short of it.
The City using existing infrastructure and professional networks gets a no cost, low hassle way to attract and retain sought after residents turned economic stimulus.
The Entrepreneur gets an opportunity to put their smarts and ambition to good use and take their livelihood into their own hands.
Investors get a pipeline of now locally based companies to make independent investment decisions on while still receiving all the standard fare that goes with early stage investments. Right of first refusal, discounted share purchase options, etc.
Should you want to implement this model or some variation thereof in your city, reach out.
I would be excited to help you.