Posts Tagged ‘economic development’

Invest in me: the Malden experiment

Sunday, October 13th, 2013

Invest-in-me

If diversity is valuable, why aren’t we seeing millions of dollars directed toward it?

For many of us, a strong philosophical belief in the value of diversity translates into a trickle of charity contributions and perhaps some support for diversity-oriented government programs. But if we believed in diversity the way we believe in, say, new technologies, we should see massive amount of private capital finding its way into businesses that rely on diversity for their markets, their work force or their suppliers. And we’re not seeing that. Not even close.

What gives? Either people controlling financial resources do not believe in diversity as a competitive weapon, or there is some inefficiency in the resource allocation system. There’s arguably a bit of both. Many investors are skeptical that diversity matters economically and in all fairness, nobody has yet made a compelling data-driven case for the return on investment (ROI) of diversity.  And for those who believe in diversity, there are few investment vehicles that leverage diversity as a strategy.

And so diversity devolves into this oatmeal of bland corporate statements about the merits of a diverse work force as the firm’s most valuable asset, mandated corporate diversity programs attended by yawning managers eager to return to their daily operational tasks, or minimalist corporate charity programs aimed at diversity-owned businesses.  And so, at the end of the day, business people relieve their guilt by contributing some personal money to causes that may include diversity.

After many years of advocating for co-creation as an economic model from the comfortable perch of my teaching, consulting and public speaking platform, I’ve finally decided to put some of my money where my mouth is (literally, the project is about food). I have become a small-scale venture capitalist. I’ve rallied a few similarly-minded friends and together, we’ve decided to invest a bit of our money in the development of a diversity project. My tougher capitalist colleagues still marvel at being called angel investors. As the place for our proof-of-concept, we have picked Malden, MA, a suburb of Boston with a rainbow of ethnic groups comprising its population and strong business and political leadership. Because there is a budding food tradition there, we have decided to start an industrial kitchen that will house food trucks serving the greater Boston area, an event space that we hope will attract both local youth and foodies from downtown Boston, and we are starting a kitchen incubator that helps local youth become food entrepreneurs through education and financing. This is not a charity, mind you. We want to prove that we can earn an above-market rate of return while helping employment locally and fostering greater sustainability of the local food chain.

This has brought a new joy to my life. In some ways, it is a project like any other, with its cohort of cash-flow statements and competitive analysis, with a new layer of personal financial anxiety. The primary difference, though, is that the people I work with are real, from young high-school immigrant kids applying for the incubator, to heavily tattooed food truck drivers working 14 hours a day, to middle-aged cooks who view us as an opportunity to finally create their own business. I dream of convincing some of the owners of long-established Malden businesses, often with a strong Italian or Irish heritage, to invest with us in the latest generation of Haitian, Moroccan or Jamaican immigrants because they remember how they or their parents did it. I dream of giving local Republicans a platform to demonstrate they can be both good business people and have a social sensitivity, and of allowing Democrats to demonstrate that they also know a thing or two about business development. I want Malden to become the prototype of new economic development for the nation, with business as the primary driver of success, in the great American tradition that attracted me to this country in the first place.

The problems we face are equally real. We’re struggling to find both women and ethnic representatives for our angel investment group. It is not easy to find a suitable building that meets zoning and environmental requirements. Finding financing of the scale we require has its challenges. And bringing together a team of such eclectic background into a common vision for the business is a daily grind.

Perhaps the most gratifying part of the Malden project is that I feel whole again. As Stuart Kauffman describes it, I now feel at home in the universe. It does not get much better than that.