City Ventures -- My Proposed Program for Creative Venturing

Synopsis: For the cost of one job saved in Shelby County, Tennessee by the American Recovery and Reinvestment Act ($1,381,502.90), City Ventures could empower ~100 individuals to make their own creative industry job in film, music, visual art, or high growth business startup by becoming entrepreneurs. These entrepreneurs would, on average, create 4 additional jobs in each of the next 5 years as their business expands. Beyond the economic impact, the social and cultural impact for the city would be profound. Exemplars, data, and other indicators show that small investments in creatives coupled with cohort experiential programs, do far more for a city’s future than other methods. Extensive research shows that entrepreneurs are made, not born.

Description: City Ventures would be the first experimental city venturing program that focuses emerging creative talent on constructing their own economic opportunity in four areas: film, music, visual arts, or high growth business startup. Learning by doing, prototyping, and other experience-based approaches produce real returns, but are often discouraged due to fear of failure. This fear stifles innovation, entrepreneurship, and cultural activity. We can reverse this trend, embrace risk, and enable our creative citizens to build entrepreneurial ventures for the first time in their lives with an inexpensive investment of money, resources, education, and systemic accountability. The short-term return is cultural vibrancy. As creative individuals learn to monetize their creative product, the long-term outcome is economic productivity and retained talent in a city that faces creative talent erosion.

In Practice: City Ventures would employ a cohort program of industry specific milestones, mentoring, peer collaboration, culminating demonstrations and unveilings, along with entrepreneurship lessons in each of the 4 creative focus areas. The participants will make real products appropriate to their industry (i.e. filmmakers make films), while learning and implementing strategies for monetizing their products in the real world. Too often economic realities, such as paying rent, can derail entrepreneurial action. To insure that participation is unfettered by these issues, small monetary stipends or investments are coupled with the “tough love” program -- approximately $15,000 per creative venture plus a system of accountability. There are strong indicators that small investments with cohort programs act as a major catalyst in technology and arts entrepreneurship programs (TechStars, Y-Combinator, Bizdom U, CreateHere). City Ventures extends these successful models.

The Math: To run this venturing program in each of the four areas would be comparatively cheap with high economic impact:

4 Areas of Creative Entrepreneurial Action

x 10 Groups of 1-3 People per Area

x $15,000 per group

$600,000 in Total Direct Investment

+ $600,000 Program Operating Cost (Estimated)

$1,200,000 Total City Ventures Budget

or Less than the cost of one saved job in Shelby County

On average, City Ventures would impact ~100 individuals in each year of operation and empower them to “be their own boss,” while pursuing their passion. After 3 years, the ~300 creatives would have a major cultural influence, while simultaneously contributing economically. Every dollar invested is expected to return ten or more in economic impact.

“New School” Economic Policy: Economic development policy that focuses on persuading existing businesses to relocate or enticing a big studio to film in your city is good PR. However, such a policy ignores a much bigger opportunity: transforming creative talent into home-grown creative businesses/industries. Transforming existing talent into creative entrepreneurial ventures provides lasting social and cultural returns, and utilizes the human capital that is already present in our cities.

Shelby County, Tennessee has received nearly $478 million in ARRA funding. The number of jobs saved to date with this money is 346 (Memphis Business Journal). That equals $1,381,502.90 per job saved. For the cost of one job saved, City Ventures could empower approximately 100 creative, entrepreneurially minded individuals to create their own jobs and as their business grows, to create even more.

The City Ventures’ model is based on over 30 years of economic data, which proves that individuals betting on themselves, and the city in which they live, will create more jobs with remarkable efficiency, especially when public and private systems invest in individuals. Extensive research by the Kauffman Foundation has shown that entrepreneurs are in fact made, and not born.

National Facts (Kauffman Foundation)

Fact 1: Over the past 30 years, young companies (0-5 years old) have accounted for more than two-thirds of all net new jobs.

Fact 2: Each young company creates an average of 4 jobs every year.

Fact 3: Since 1977, without startup companies, net job creation for the American economy would be negative in all but a handful of years (meaning we would have lost more jobs than we created over the past 30+ years).

Memphis Facts (Smart City)

Fact 1: On average three to five 25-35 year olds including our creative talent leave Memphis each day searching for a better opportunity or lifestyle.

Fact 2: On average three middle income families leave Memphis each day as they look for cultural and economic opportunity that builds hope for all citizens.

Fact 3: Contributing to a loss of hope: 35% of Memphians are unemployed or have been without work for so long that they have stopped looking.

Fact 4: Cost of Loss of Hope: A Year in Prison ($30K+), A Year of Welfare ($20K+)

Fact 5: ~$14K: Average startup costs in film, visual arts, music, or high growth business

Why Memphis? Why Now? Every citizen desires a chance to do something great with their life, yet few cities provide outlets that empower individuals to be bold in art, film, music, or high growth business startups. The greatest economic tool ever invented is applied entrepreneurship, regardless of industry. Entrepreneurs in the creative industries don't just do it to become rich; they do it to build creative products that can influence their community and society.

Closing Summary: City Ventures will enable emerging talent to bet on themselves, their city, and their innovative ideas, without fear. Creative entrepreneurship will yield positive social, cultural, and economic returns for the city smart enough to empower its citizens.

"Why not start a city creative capital venturing fund – virtually unheard of in other cities.”

– Eric Mathews, LaunchMemphis – eric <@> launchmemphis.com