We’re in the basement, learning to print
All of it’s hot
$10–20–30 million, ready to be spent
We’re stackin’ them against the wall those gangster presidents
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I posed a scenario, similar to the following, to my economist brother last fall.
What if, instead of spending millions of dollars on an ill-fated fast ferry to Toronto, Rochester did the following?
Hire 50 sharp, young thought-leaders/entrepreneurs and guarantee them a $90K annual salary for two years to move to Rochester. To gain entre to our glorious city, each is required to write a compelling business plan. For the next two years, each individual is given the resources to execute the idea including a $100K additional investment annually to start their business (i.e., while fully employed).
There would be say $500K in annual operating funds set aside for the building lease, maintenance, overhead, equipment, etc. And shared resources will be allocated (copiers, entrepreneur in residence).
Successful plans may be eligible for incremental investment (e.g., on average, an additional $2M in funding for the top 10% of the plans assuming they met pre-established metrics); others can attempt to limp along on their own, if they so desire, or pack it in (their choice).
Overall, $30M would be spent over two-plus years to gain what, if anything, in return? I wonder how many long-term successful businesses would be started.
My brother’s response: bad investment. In short (whereas his answer was actually long, detailed and well articulated), free markets (e.g., venture capitalists) tend to make much better decisions from determining what to fund to overall fiscal management and cutting funds as soon as necessary on under-performing ventures.
And now, hot off the presses, is a May 2008 working paper from the National Bureau of Economic Research that backs up his claim: “The results indicate that enterprises financed by government-sponsored venture capitalists under-perform on a variety of criteria, including value-creation, as measured by the likelihood and size of IPOs and M&As, and innovation, as measured by patents.”
So where is the long-term hope for our fair city when our young talent is reportedly fleeing the area? Does it lie in what I term the “giant magnet effect” (i.e., where a great number of us, for whatever reason, come back years later)?
The problem as I see it with the magnet model is that, upon return, many of us are labeled “overqualified” and we trade in a high salary for a presumably better way of life or we leave again. For a city that boasts a talented workforce yet simultaneously decries the loss of talent, it’s a catch-22. Do you want the talent to stay in the area or don’t you?
For my uber-talented designer friend Todd who came back to Rochester after 25+ years in NYC and subsequently had to move to Dodge (seriously!) for a great job at Land’s End because he was “too talented for Rochester,” my sincere apologies on behalf of our entire city.
I don’t ever want to hear that phrase again. I would rather do everything in my power possible to change that commonly uttered phrase to “not talented enough for Rochester.”
But how?
