Last week, I had the opportunity to accompany the Executive Director of the President’s Council on Jobs and Competitiveness to three roundtable meetings in Houston, Texas. We met with over 50 leaders from business, government, and academia. Together, they tell the story of Houston for the last 30 years, from boom and bust to recovery and resilience. Even though I wanted to write a “just the facts” report of our time together, this blog is also a love letter to Houston. I can’t help myself. Houston is an easy city to love. Many thanks to Startup America for providing this opportunity, and for connecting entrepreneurs across the nation.
We were in a small meeting room at the back of the Houston Technology Center, making introductions and killing 15 minutes of time while we waited for an escort to the first meeting of the day. Don Graves, the Executive Director of the President’s Council on Jobs and Competitiveness, and his Associate Director, Danielle Evers, had just arrived in Houston from San Antonio. That evening, they were heading off to New Orleans. We had seven hours together. After pleasantries, I got right to it.
“I’ve been following the JOBS Act,” I said. “From what you can see, what are some of the big challenges to implementing and regulating the crowdfunding provision?”
There was a pause. We let the question hang in the air for a brief moment. Then Mr. Graves smiled and leaned back in his chair. Dr. Evers joked, “Who tipped you off? Are you a plant?”
I laughed, and they began speaking passionately about a variety of ways that crowdfunding can change the nature of fundraising for small businesses, and promote economic development in troubled regions.
At that moment, I realized I was in the room with policy experts, not politicians. They were here to learn about Houston, not to grandstand during the silly season. We had some great meetings lined up. It was going to be an interesting day.
As the Executive Director of the Jobs Council, Mr. Graves provides “non-partisan advice to the President on continuing to strengthen the Nation’s economy and ensure the competitiveness of the United States and on ways to create jobs, opportunity, and prosperity for the American people.” In other words, he and his staff recommend ways to encourage job growth and streamline government.
Mr. Graves and Dr. Evers were in the middle of a four-day fact finding mission. I had about a week to arrange as many productive meetings as possible, and a seven hour window to make it happen. But I wasn’t worried. I’ve lived in Houston for three years. It takes two things to throw a party here: a date and a time. So with the assistance of Marc Nathan, Deborah Mansfield, Greg Wright, Matthew Wettergreen, and Amy Kavalewitz, we arranged roundtable meetings at the Houston Technology Center and Rice University. Afterwards, I got to tag along to a third meeting at the Greater Houston Partnership.
There is a story happening here in Houston. It’s easy to dismiss the city as a mess of brutal summers, treacherous storms, and flying cockroaches. Yet people keep coming here. They come from every state and almost every country. Our newcomers are young, educated, and motivated by quality-of-life issues. Over 50% of our current population moved here in the last seven years. We’ve experienced tremendous job growth for a while now. Our median age is 33.
But no article or ranking can really capture what’s happening down here. You have to see it to believe it.
The Houston Technology Center (HTC) is a not-for-profit technology incubator, supported by over 300 companies and local government. It is a catalyst for commercializing breakthrough technologies coming out of Houston’s enormous scientific community (which includes NASA, MD Anderson, University of Houston, Rice, and many more), and accelerating companies led by promising entrepreneurs. In 2010 alone, its clients raised over $88 million and created almost 3,000 jobs. Our roundtable, curated by CEO Walter Ulrich, included leaders from Fortune 500 companies, established entrepreneurs like Ed Muñiz of MEI Technologies, startup community leaders like Marc Nathan and Javid Jamae, and leadership from the University of Houston Small Business Development Center and Houston Community College.
Everyone had a chance to speak, and everyone had something to say. There were concerns about readying the workforce for a technology-heavy economy. Job training took center stage, as employers see a “skills gap” in recent graduates. Community colleges are trying to respond to the market by adapting into job training centers. In the next few decades, they predict, community colleges will become a source of innovation and entrepreneurship as they prepare the next generation of skilled workers. As a result, these colleges want to deepen their relationships with the business community. Several attendees stressed the importance of looking at successful college/business partnerships as a model for the next generation of job training.
There were also concerns about the government not adjusting to changes in the business of technology. Leaders from government, academia, and industry all echoed a general point: the government isn’t really set up to support early stage technology commercialization. There are lots of ways that this can change. We can support successful organizations that promote good ideas, like Rice Alliance, BioHouston, and the Houston Technology Center. We can expand SBIR and other programs to support new methods of commercialization, administered by people who specialize in early-stage technology. NSF can sponsor more “big prize” contests, modeled after programs like Shell GameChanger. We can use the government as a way to promote groundbreaking ideas, like the State Department’s LAUNCH: Energy Forum, or as a way to encourage growth by creating special tax reinvestment zones for entrepreneurs.
Mostly, we shared good ideas. In a brief but powerful story, Chris Melson of Vendor Safe Technologies talked about a challenge he faced a few years back. When running the numbers, he realized that he could save a lot of money if he outsourced his customer service to another country. But he didn’t like that solution. Instead, he kept working on it, eventually developing a work-study program with a local college. He would employ students as part of the college’s work study program, delivering paid, on-the-job training with college credit to boot. When he ran the numbers again, the student program cost about the same as outsourcing.
As we left the meeting, I was impressed that so many different civic and business leaders, from diverse backgrounds and with different strategic interests, could unite around basic problem solving. They’ve been doing it for years. But more on that later.
Since moving to Houston, I’m no longer in a rush. It’s hard to hurry in 100 degree heat. When the HTC meeting wrapped up, we were running 20 minutes behind schedule. There were some very important people waiting for us at Rice. But we were not going to speed down Fannin Street to make up the time. Instead, we cut through Montrose, a large and historically bohemian neighborhood dotted with old craftsman bungalows, modern townhomes, and boutique office buildings. Then we cruised down through the Museum District, home to a walkable network of 19 museums and countless art galleries.
As we approached Hermann Park and Rice University, Mr. Graves complimented the lush canopy of oak trees lining the streets. “Houstonians love trees,” I said. “Last year, we had a devastating drought that killed millions of them. It was amazing to watch the whole city came together for replanting efforts. In a few minutes, you’ll get to see a product designed by Rice students that makes watering oak trees more effective.”
Because there’s opportunity everywhere – even in the trees.
President Leebron reached up and pointed out, his face serious, like Babe Ruth calling his shot. “Right there across the street,” he said. “We’re curing cancer!”
That “we” refers to Mr. Leebron’s colleagues at M.D. Anderson Cancer Center, the #1 cancer hospital in the nation six years running. It’s possible that he was referring to Rice’s many collaborations with M.D. Anderson, but it’s more likely that he was simply talking about the scientific community in Houston at large. Sharing credit was a recurring theme of the day. Houston’s leaders know that it takes a sophisticated and enlightened community to fuel and support world-changing ideas. In a city where the free market dominates, cooperation is essential.
That theme of community is part of what Dr. Stephen Klineberg has spent his career exploring. The Houston sociological expert and Rice professor sat next to Mr. Graves and listened intently, adding a few important points about job training and workforce development. Dr. Klineberg doesn’t need to explain his work, though when he does, it’s a powerful reminder of how different Houston really is. Dr. Klineberg’s work drives the macroeconomic model of our city, and his impact is recognized throughout government, business, and academia.
We packed into the conference room at the Oshman Engineering Design Kitchen at the edge of campus. The OEDK is a design kitchen that teaches engineering students how to build products that solve important business and global health problems. Dr. Maria Oden and the OEDK staff curate design projects, bringing together interdisciplinary teams of undergraduate engineers and teaching them how to work together using a common language. The teams work side by side in a 12,000 square foot facility, designing infant apnea monitors with $35 worth of materials, or crucial blood testing equipment from the guts of a salad spinner. Every year, the OEDK produces dozens of projects that improve lives.
In that environment, it’s easy to see every incremental innovation having a powerful impact in the world. That was the backdrop of a spirited and optimistic roundtable with Rice faculty and community members. Dr. Marcia O’Malley discussed many of the interdisciplinary projects happening in Houston. Brad Burke advocated the approach and effectiveness of the Rice Alliance, a catalyst for launching startups and the host of the prestigious Rice Business Plan Competition.
Toward the end of the meeting, Bryan Hassin, a cleantech entrepreneur and Rice faculty member, raised a concern about measuring the success of Jobs Council programs simply by looking at job numbers. “When I build a technology company, my goal isn’t to create jobs,” Mr. Hassin said. “But even if a company doesn’t create jobs directly, it can still make huge contributions to the economy in other ways.”
Hassin’s point was a common thread among the entrepreneurs who attended the meetings at HTC and Rice. They all conceded that job creation is a noble goal, but they urged the Jobs Council to find ways to empower entrepreneurs without focusing exclusively on job creation.
We were running 30 minutes late to our next meeting downtown at the Greater Houston Partnership. The GHP are public policy advocates for Houston’s business community. They are a big reason why Houston is known as a business friendly town, and they unite companies and industries around civic initiatives.
If you’re new to Houston, one the first things you’ll learn is that the city entered the recession late and got out early. This is because of factors like consistent job growth, a stable housing market, and community reinvestment strategies, among others. But it wasn’t always this way. Back in 1982, oil prices dipped and Houston went broke. Some have compared Houston in 1983 to present day Detroit — a shattered economy, but also a blank slate for innovation. Many of the GHP meeting attendees played a big part in our recovery during the 1980s, and their insight is especially valuable today.
For example, Cafe Adobe Restaurants CEO Bob Borochoff told his story of entrepreneurship in early 1980s Houston. Mr. Borochoff has owned and operated dozens of successful restaurants over the last 30 years. He talked about the business climate after the oil bust, when credit was playing hard to get. The model for financing new companies was broken. But if you could scrape together enough cash to get up and running without requiring a line of credit, Houston had lots of great opportunities at a fair price.
The staff at GHP presented an overwhelming amount of evidence that Houston, from a macroeconomic perspective, is a unique American city. We have very little zoning. Our city, founded by entrepreneurs, is known as being business-friendly. And when disaster strikes, like it did in 2005 with Hurricane Katrina and 2008 with Hurricane Ike, people open their doors and share with their neighbors. It’s a city full of risk and opportunity, but also full of people who share their success and help when times get rough. After all, you can’t predict the weather.
The Jobs Council isn’t a big government organization. Simply getting on a plane and visiting different business communities face-to-face takes a special effort. I appreciated the opportunity to learn more about how our federal government is trying to address the biggest problems facing our country, and I was very impressed with Houston’s ad hoc response to the visit. At every turn, people were polite, respectful, and grateful to be heard.
But, naturally, everyone wanted to know why Mr. Graves was in town. Could it really be as straightforward as a listening tour? Is the President really interested in what we’re doing down here in Texas? Is there some other motive — something that we can’t see? The answer is pretty simple. Mr. Graves explained: “The President said, Don, get out of Washington. So I did.”