Forget ROI; What’s our ROC — Return on Community?
Posted on February 14, 2013 by nina
Published by The Starting Gate
Startup and City have been separate conversations for too long — it’s time to explore their intersection, said Richard Florida, the urban affairs expert. And that’s what happened at Start-Up City: Miami.
When Zappos CEO Tony Hsieh set about to lead a transformation of Las Vegas’ downtown (yes, there is one of those in Vegas), he said he was guided by the 3Cs –collisions, community and colearning. In everything you do, he says, the question to ask is what is the ROC — Return on Community?
“It’s the local entrepreneurs and residents that are suggesting how the neighborhood should evolve. Were pretty anti-top down. Focus on getting people talking to each other and that is how innovation happens,” Hsieh says.
Hsieh says he learned a lot about this building a culture at Zappos. “Culture is to company as community is to a city,” he says. For instance, he believed the company and its 2,000 employees were too spread out over three buildings in the suburbs. He found when exits were shut off so everyone had to funnel through one door, it got people talking. As he moves the company to downtown Las Vegas, the density will be tighter to spur more collisions, he says. For more on Hsieh’s Downtown Project, see a related post here.
Florida says good urban density doesn’t mean just a bunch of luxury towers. it’s mixed-use urban nighborhoods like the Design District and Wynwood.
Here are a few other takeaways from Start-Up City: Miami.
On scaling up and making success stories: Fabre Fernandez, president of Endeavor, said he asked people in Miami and in all communities Endeavor considers entering this question: Can you name the top five entrepreneurs in the last five years? “The biggest problem in Miami is scaling, not starting companies. These are the same challenges as emerging markets we are in.” Juan Diego Calle, CEO of .CO Internet agrees: “When I say I am from Miami I get this weird look. Maybe it’s ego but I want to abolish that. I want to put Miami on the map in technology. We have to build the community, we have to bring back the talent that has left and we have to have a few stars, a few big exits, to show to the world.”
On finding startup capital in one of the wealthiest cities on the globe: “There’s capital here but it is very disorganized. We have to keep creating collision opportunities,” said Demian Bellumio, COO of Senzari and an investor. “The money is here, but it is hiding behind palm trees. The investors here are investing elsewhere,” said Melissa Krinzman of Venture Architects. She said her company is launching the Venture Architects Investor Network this week, which aims to match investors in New York and Miami with companies. Juan Pablo Cappello, a lawyer, entrepreneur and investor, said in the next three to six months, he wouldn’t be surprised to see a big-name VC firm finally putting an office here, perhaps relocating from Brazil, where investors are finding a tougher market than they thought. Once one does, others will follow.
On the opportunities in excess capacity: Think unused real estate, vehicles, spaces at universities. There are opportunities in finding ways to get a return on investment from idled resources, says Robin Chase, co-founder of Zipcar and founder of Buzzcar, a peer-to-peer car sharing service. Take car ownership. We spend maybe 5 percent of our time in them and they sit idle for the rest. Yet they can cost 18-40 percent of our income. Don’t we have better things to do with that money? And where are there other opportunities to employ excess capacity?
About cool ideas: In New York, the iconic phone booths could be artsy tech booths. In Las Vegas, there’s a weekly podcast about everything going on and an ongoing TED-like speaker series. In London, leaders would regularly ask entrepreneurs what do they need to grow, and the suggestions would be funneled to 10 Downing Street. This led to policies such as entrepreneur visas and tax breaks for startups and startup investors.
Tips for entrepreneurs: Find a mentor who was an entreprenuer, says Fabre. Read everything you can, network, attend events, and give back, says Krinzman. Seek diversity in everything you do, homogeneous things fail.
Tips for communities/governments: Open your local government and tourism data to hack on, said Neil Kleiman of NYU. Look at what happened when the weather service did that — all those weather apps.
On immigration: Steve Case, co-founder of AOL and chairman of Startup America, says: “Imigration isn’t a problem to be solved, it’s an economic opportunity,” adding that nearly half of the companies in Silicon Valley were started by imigrants. We need reform to continue winning the battle for global talent, he says.
On disruption: Three industries that are ripe for disruption, Case says, are healthcare, education and transportation.