Just getting back from the Boomstartup Opening social. A big thanks to John Pestana for hosting the first party of the BoomStartup program. I can imagine it’s a bit stressful to invite 20-30 strangers to your very nice home.
I had a great time talking with fellow founders and the mentors and getting a better idea of what they are working on. One conversation stands out in particular. I had a chance to discuss business development and entrepreneurship with John Richards. Our discussion revolved around how entrepreneurs in the technology space create innovative products that result in good paying jobs and how it’s important for cities, counties and states to encourage that type of development. Unfortunately, it’s all to often easy to try and bring in another Walmart or Home Depot (with their poor wages and lousy benefits) because they bring in immediate revenue via sales taxes.
I had a great chance to talk Lego and toy trains with John Pestana. I had assumed he was starting ExactRail because once you’ve hit a home run like Omniture you can do whatever you like and why not build a company aligned with a favorite hobby? I was wrong. Sort of. John likes trains, but his vision for that company in the space is extraordinary and will likely revolutionize how the industry builds and markets trains.
The energy in the room was exciting. Everyone there was optimistic about the future and clearly believes that their idea will revolutionize their space. It’s fun to hang out in an atmosphere like that.
I contrast that with a story I heard listening to NPR on the way back to Salt Lake. It was a series of interviews with politicians, business owners, business development organizations and employees. In one of the interviews 5 candidates were interviewed at the same time to determine whether or not they were worthy to make $10/hr (with benefits) to work in a call center. The job sounded terrible. They monitor your every move. If you go to the bathroom you clock out. If you have any down time them how will you fill it to benefit the company. Basically, can we program you and turn you into a human regurgitation machine since customers prefer to talk to a live body. I sensed all creatively being drained from each of this individuals all so they could earn 20k per year.
That’s not the kind of job growth I envision for this country.
Another set of interviews occurred at a business development conference which the interviewer described as a bunch of cordial thieves. Basically, if you are an economic development officer, your job is to lure companies into your area. You usually do this through a combination of sales pitch (our people are awesome) and tax breaks. The only problem with this process is that there are no net jobs created. Once place simple steals jobs from another place.
That reminded me of a TechCrunch article from a while back that asked the simple question: who’s responsible for job growth, startups or big business? Not surprisingly, according to a study from the Kauffman foundation the net job creation in this country comes from startups. Big business moves jobs around to take advantage of better tax breaks, etc, but overall they don’t really generate a lot of new jobs. That begs the question, why do all of these economic development offices put so much of our tax money into luring companies when they should instead focus on the talent they already have, nurture it, and build new opportunities – the 100k per year jobs instead of the 20k call center sweat shops?
I think programs like BoomStartup and similar programs throughout the country focus on what they economic development offices have missed. It’s true that not all the companies coming out of these incubator programs will turn into the next Twitter or Facebook. Some may fail. However, many will turn into impressive corporations that contribute significantly to the economy. I look forward to finding out which kind we’ll be. My bet is that we’ll be one of the success stories.