Posts Tagged ‘ethnic’

Invest in me: the Malden experiment

Sunday, October 13th, 2013


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.

I dream of Malden

Saturday, December 8th, 2012

Lately, Malden, Massachusetts has entered my consciousness. I’m not sure why. Maybe it’s because a few of my Yelp friends from Boston have told me this is the “in” place for Ethiopian, Sri Lankan or Moroccan food. Maybe it’s because Business Week has made noise about Malden being a great place for kids to grow because of its diversity. Maybe it’s because a member of my family has some political responsibilities there? Or perhaps I’m just tired or organizing business communities in India, Latin America and Europe and want to come home in the evening?

I don’t yet know how to fit all the pieces in the co-creation puzzle, but I’m eager to figure it out. My typical gig involves finding a central business player eager to orchestrate the development of a mini-economy around itself: a large business, a bank, sometimes a public entity (although a profit-seeking business with a community bent provides the best anchor). Maybe Eastern Bank or one of the local savings banks could play that role? Banks – community banks in particular – can become great community co-creators since they make money by attracting local savings and lending that money back to mortgage customers and businesses. By connecting all the parties with each other around local growth and utilizing the physical branch as a local meeting place, one can drain a lot more savings and generate a lot more loans, often at below market rates, simply because people are passionate about making their community a better place. I have done that in Saint-Etienne, France and Guadalajara, Mexico, for example. Why not Malden? Eastern Bank, you look like a supersized community bank with a great community bent. I’ll bet we could significantly increase the income of your savings and your lending business in your Malden branch if we could make you the center of Malden’s renewal.

On the business front, Malden does not have a lot of manufacturing businesses, but has great ethnic food restaurants that could grow and become anchor points for local employment. Could Malden become the food capital of New England? Could it engender the development of an ethnic food supply chain with ethnic grocery stores and perhaps some local manufacturing or distribution centers from the mother countries? I dream of Malden as a mini-Ethiopia, mini-Sri Lanka, and mini-Morocco, a diversity showcase attracting hard-core Bostonians to eat and shop there. (Malden has the advantage of having the Orange line connecting it directly to the heart of Boston).

Maybe we could get the young foodies from downtown Boston who already come to Malden for food to help us orchestrate the growth of these communities? Many of them are idealistic Generation X and Millennials generating good incomes from financial services, healthcare or service firms.  Maybe we can have a “Food for Thought” program (one of them suggested that name to me), where these idealistic foodies become business activists who help Habesha scale its outstanding Ethiopian restaurant business, or supports Moroccan Hospitality Restaurant in attracting more passionate people to its tagines?

Beyond the business imperative lies a social one: Malden needs help because the poverty rate there is quite high at 12%.  It’s a  neighborhood not far from where some of Ben Affleck’s and Clint Eastwood’s tough movies take place (the Town, Gone, Baby, Gone, Mystic River). Maybe we could get local boys Ben Affleck or Matt Damon to sponsor our Malden business community program?

I dream of this program as a business proposition, however, not a bleeding heart volunteer activity. There is business to be made at the bottom of the pyramid, and it happens to have positive social outcomes. I want the core business that anchors this program to double its profits, the owners of the Malden restaurants to become affluent and the employees who work there to derive good incomes from the new jobs created. I want the politicians associated with this program to become stars and sell the program as a model for other Massachusetts, New England or US towns. Personally, I want my wife and kids to discover what I do for a living and get to sleep in my bed at night.

Malden is the modern version of the American melting pot. It is a microcosm of our future economy, with its huge problems and the opportunity created by its diversity. The future of America does not lie in setting up the right tax rates in Washington, DC. It lies in weaving vibrant business communities at the local level. With politicians, bankers, restaurants, downtown foodies and citizens, let’s go co-create Malden.