Digging for the Pony
“Ultimately, innovation is what allows an economy to grow quickly and create new jobs as old ones obsolesce and disappear.”
– Don Peck, “How a New Jobless Era Will Transform America” (The Atlantic)
I was still in college when my dad—who retired from the West Bend Company in 1989—said that “manufacturing is leaving the U.S. and is never coming back.”
He wasn’t being a fatalist; he was making an observation about the demand for cheap labor and our country’s inability to supply it compared to other places in the world. Our family felt this first-hand beginning in the late 1970s when dad’s layoffs were becoming more frequent.
As an economist, I’ve learned to see this as “creative destruction.” As an entrepreneur, I think of it this way: when the economy gives you a room full of horse shit, you start digging for the pony.
Madison’s headlines are focused mostly on the horse shit: the slow economic recovery, Gov. Walker’s proposed cuts, and the usual mud-slinging that accompanies races for city and county leadership.
But the pony is here, too. If we start digging.
Out of every recession arise a new generation of entrepreneurs, adjusting to and maximizing economic realities.
Take Madison’s own Murfie.com as an example.
To understand Murfie, you need to answer this question: Do you have a bunch of CDs lying around?
Of course you do.
The brainchild of Preston Austin and Matt Younkle, Murfie is a new way to buy, sell, trade and digitize your CDs.
Here’s how it works (I’ve done it myself):
Step 1: Go to Murfie.com. Register (for free), and ask them to ship you a box (also free) for as many CDs as you want to send ’em.
Step 2: Your box gets delivered to you from Murfie. You pack up your CDs following their simple instructions and send your box full-o-CDs back. (Again, free.)
Step 3: Sell, trade, or digitize your CDs using Murfie.com.
In addition to meeting a basic need—getting the soundtrack of my life out of my garage—Murfie serves a public good: it recycles all that unwanted plastic.
But if Murfie—or any of the other sixty-some startups that meet monthly under the Capital Entrepreneurs banner—are going to survive and create jobs and prosperity for our region, many of us must think and act a little differently.
Here are some ideas.
Policymakers: Business innovation should be declared a public policy objective. Nobel Prize winner in economics Edmund S. Phelps wrote for the Harvard Business Review about the demise of a dynamic U.S. economy: “Dynamism depends on multiplicity: variety among new ideas, a pluralism of beliefs among financiers, and diversity among consumers.” By enabling this dynamism we create fertile soil for more Murfies.
Investors: Stop acting like lemmings. Funding by Madison investors currently goes something like this: You get a call from a buddy who says, “Hey, get in on this investment. My other buddy, a venture capitalist, is doing it and you should, too.” Stop. Right. There. Remember what Phelps said a paragraph ago: We need a pluralism of beliefs among financiers. Investors, spread your investment love. Check out Slow Money Wisconsin and other local investing options. It’s smart for your portfolio and great for Madison’s new economy.
Media: Stop heaping headlines on those who get funding. As Preston Austin quips, “Getting funding just means you have a giant debt.” Right-o. Great stories—beyond funding—are out there … if we’re just willing to dig a little deeper.
Capital Entrepreneurs estimates that in 2010, their members hired seventy-three full time employees and employed over 250 people. It’s not “Epic” in the Judith Faulkner sense of the word, but it’s epic in the holy-crap-we’ve-got-a-good-thing-going-here sense of the word.
As TechCrunch wrote last summer: “Led by a tidal wave of mostly young entrepreneurs, Madison, Wisconsin is staking a claim as the startup capital of the Midwest.”
Rebecca Ryan was a young entrepreneur ... once. She’s the founder of Next Generation Consulting and the author of Live First, Work Second: Getting inside the minds of the next generation.
Read more NEXT columns here.