entrepreneur – Looking Forward

March 21, 2017

The Seeds Of Rural Economic Growth

I’ll be speaking at the Rural Summit for Europe to be held in Eindhoven, Netherlands tomorrow — I’ll be writing more about that later. Coincidentally, last Friday, the Aspen Institute’s Community Strategies Group and Rural Development Innovation Group hosted a very good panel on rural entrepreneurship in the US.

In addition to the Aspen folks, the panel consisted of:
• Lupe Ruiz, Co-Owner, Wing Champs
• Ines Polonius, CEO, Communities Unlimited
• Dennis West, CEO, Northern Initiatives
• Jeffrey Lusk, Executive Director, Hatfield McCoy Regional Recreation Authority

There are many potential entrepreneurs in the countryside. If you think about it, the family farm is an example of entrepreneurship.

Even more so today, entrepreneurship is essential for the economic viability of rural areas in the face of the relatively shrinking rural population in the US because the traditional approaches aren’t working well.

Two or three decades ago, some manufacturing plants moved to rural areas to save costs, but then manufacturing shifted further to low cost countries. And now, with the increasing use of robotic devices, factories aren’t big employment generators.

Moreover, the use of incentives to get big companies to move to rural areas has been shown to be of limited and ever decreasing value in helping long term economic development. Unlike multinational businesses that rural areas have tried to attract, local entrepreneurs are committed to their communities.

Ms. Polonius noted that every dollar of sales that go to local entrepreneurs is spent several times over before it leaves the area, whereas sales at multi-national companies in rural areas leave much more quickly. As a case in point, Mr. Ruiz noted that when it came time to build his restaurant, he felt an obligation to buy lumber from another local entrepreneur rather than make the drive to Home Depot or Lowe’s where he might have saved a few bucks.

The panel went on for than an hour, so I can only highlight what struck me as the most critical points.

First, without any prompting from me or anyone else, the panelists stressed the importance of broadband for both local business success and also being able to reach markets beyond the local area. Mr. Ruiz was especially proud of the fact that his small town of Raymondville in the Rio Grande Valley of Texas had better broadband than the state capital of Austin did. The service is provided by the Valley Telephone Cooperative – in yet another example of how cooperatives have moved broadband forward in rural areas as the big telecoms companies abandon those areas.

Second, creativity and counter-intuitive thinking are necessary to turn around rural areas. Mr. Lusk pointed out how his area of southern Virginia had a concentration of some of the longest lasting poverty-stricken counties in the US. Where once extraction industries, like coal mining of the mountains, provide some boost to the local economy, that had been on a downturn since the 1950s. Local people wanted to have factories come there, but highway transportation wasn’t great and the land wasn’t flat – it was the Appalachian Mountains after all, very pretty, but not great industrial territory.

They finally turned things on their head and realized that the thing that was preventing industrial development – the mountains – was the basis for future growth of rural tourism. Mr. Lust described the ingenious ways that the Hatfield McCoy Regional Recreation Authority went from ATV off-road trails to encourage other economic development.

Third is the need for risk capital. Although local business folks often think first of going to the bank for funds, there are many fewer local banks around and banks of any kind aren’t generally in the business of helping startups. So, other sources of funds are needed. That’s where non-profits like Northern Initiatives come in. The non-profit organization proclaims that it

“provides loans to small business owners and entrepreneurs in Northern Michigan that might not qualify for loans from traditional banks for a variety of reasons.”

Fourth, the development of rural entrepreneurship cannot end with the money, also needs training and coaching. Communities Unlimited offers a cash flow tool to keep entrepreneurs on an even keel. And, as with Wing Champs, they provide a variety of other services to help new business get over the inevitable rough spots.

Similarly, Northern Initiatives puts it this way:

“Each one of our loans comes with access to business services which includes a suite of practical trainings, tools, and resources on topics that matter to every business owner.”

And they even provide a coach to each company they give money to.

Mr. West also noted that some coaching comes from modeling – seeing other local people making money by starting businesses provides both encouragement and education to potential entrepreneurs.

Although these efforts don’t have quite the focus on gazelle second-stage growth companies that the Economic Gardening movement does, they share in common the idea that long term economic growth comes from entrepreneurship and entrepreneurs need help.

Here’s the overall lesson of this panel:

The seeds of entrepreneurship are in the countryside already. For economic growth, those seeds need to be fertilized by the combination of broadband, creativity/counter-intuitive thinking, risk capital and training/coaching.

[You can see a recording of the event at https://www.youtube.com/watch?v=lMIjJMEbzsI ]

February 8, 2017

The Virtual Metropolis Moves Forward

The NTCA-Rural Broadband Association held its annual meeting and expo this week in San Diego with more than 2,000 people in attendance.

I was on a panel to discuss the idea of a Virtual Metropolis, a topic I introduced to the Rural Broadband Association and have written about here.

The idea is simple. In the pre-internet days, cities — especially big cities — brought together lots of people. Because these peoople were near each other and could casually interact, these cities became hotbeds of innovation and economic production. Along with increased agricultural productivity, this led to the shift of population from rural to urban areas that has threatened many small towns.

As a sort of last gasp, after World War II, many small outlying towns tried to substitute factories as a source of employment. In the face on increasing automation and cheaper labor markets elsewhere, that strategy crumbled too. In the last couple of decades, the drop in small town and rural population has increased. Many bright, ambitious young people can’t wait to move away to a big city.

And, if you’re an entrepreneur with some great new product or service, it’s easier to start up in New York or Silicon Valley or some other equivalent place. Why? Because no single person has all the skills they need to succeed and it’s easier to find skilled people in those cities than in your small town.

When I write this, you may be thinking about high-tech entrepreneurs. But the historic limitations of small town life affect everyone, even artisans or those in other low-tech businesses.

This all may sound bleak and many people share that bleak outlook. Even some of the members of the Rural Broadband Association can be overwhelmed by this picture.

But what I’ve described is about the past, not the potential for the future. In this digital age, if you’re connected by broadband you can live anywhere. If you enjoy country living and love the quality of life there, you no longer need to compromise your economic prospects by continuing to live in the country.

We’ve seen some of the positive impact that broadband can have on those rural communities who have invested in broadband, but that impact has not been widespread enough for people to take notice.

Partly this reflects the lack of reasonably priced broadband in many rural areas. The Rural Broadband folks are working hard to fix that.

More important, there hasn’t been a digital platform devoted to the needs of people in the countryside that would provide a substitute for the casual face-to-face interactions and the breadth of the skill pool that people in big cities take for granted.

That’s where the Virtual Metropolis comes in. We are building this platform to make it easier for people in small towns and rural areas to see and talk to each other about how they can work together for mutual economic benefit.

Broadband makes this possible because it provides the bandwidth that’s necessary for visual chat. Visual chat is especially critical in helping to establish trust, compared to email, messaging and other forms of communication that are limited to text.

The shared small town experience is also an essential basis for mutual understanding and trust. That common experience gets drowned out in the overwhelmingly urban outlook of much larger social media and job services.

If even 10 or 15% of the people living in more rural areas join in for business purposes, they will be virtually part of a metropolis of more than five million people. In that way, they can achieve many of the same benefits of physically residing in a big city.

(While my focus is on economic opportunity, broadband will also give these folks access to great educational, cultural and medical resources.)

In addition to creating and setting up the technology for a Virtual Metropolis, we need to build a community — to get people to participate.

In part, that’s where the NTCA plays a key role. They can reach out to the early adopters, the innovators in their regions and let them know that the days of isolation are over. Clearly, from a business viewpoint, the Virtual Metropolis provides their customers and potential customers with a strong business justification for increasing their bandwidth.

One of the panelists, Dusty Johnson of Vantage Point Solutions in Mitchell, South Dakota. Despite Mitchell’s selection among the ICF’s Top 7 most intelligent communities in the world, he was initially skeptical as a self-described “cranky old man.” But as he thought about others in Mitchell, particularly his own children and other young people, he realized the value of the idea.

The other panelist, Michael Burke, CEO of MTA, the local broadband provider for 10,000 square miles of Alaska is already an unusually innovative leader. MTA goes way beyond merely providing connectivity in many ways, for example providing customer training on new technology and funding coding classes in the schools.

Mr. Burke quickly championed the Virtual Metropolis. Of course, considering the distance from the lower 48 and the nature of winter in Alaska, the necessity of being part of a much larger virtual community is crystal clear.

[If you’re interested in joining and helping to build this virtual metropolis, please contact me.]

[http://njacknis.tumblr.com/post/156987590937/the-virtual-metropolis-moves-forward]

October 20, 2016

A Virtual Metropolis Of The Countryside

I first wrote about this proposal two years ago. But I’m reposting it, since the idea is even more relevant now, as there has been further development of virtual communications – Skype and Google translators, more varieties of videoconferencing both in the cloud and through services like FaceTime, and even video through augmented reality devices, like Microsoft HoloLens.

If you’re interested in joining and helping to build this virtual metropolis, please contact me.

People who live in big metropolises, like New York, London or Hong Kong, often say that they can always find someone within a few miles who has a special skill they need to complete some project or build a business. I’ve pointed out that the close proximity of millions of people with so many different skills is part of what has made cities successful economic engines during the industrial era.

When the population of your town is just a few thousand, there is a much smaller likelihood you’ll find the special skill you need nearby – and thus you’ll be less likely to achieve what you have in mind.

In the US alone, the Census Bureau has noted in its report “Patterns of Metropolitan and Micropolitan Population Change” that 10% of Americans live in one of the 576 small urban areas (where there is at least one urban cluster of less than 50,000, but at least 10,000 people). That’s about 32 million people.

Another 6% lived in neither major metropolitan areas nor even these small urban areas. That’s just under 20 million people.

In this century, with broadband Internet, physical proximity is no longer necessary for people to collaborate and share their skills in a common project. Yet the small towns of these more than 50 million people are mostly not connected to each other.

So here’s my wild idea for the day: why not create a virtual metropolis of millions from the people in the small towns and communities of the countryside?

Imagine if even half of those 20 million (or 52 million) people who live outside the big metropolises could work together and be combined to act as if they were physically next door – while not actually living in such crowded conditions.

Such a network or virtual aggregation of small towns would offer their residents a much higher chance of succeeding with their business ideas and making a better living. If someone, for example, had the engineering talents to design a new product, that person might more likely find the necessary marketing talent somewhere in that network of millions of people.

Clearly, anyone connected to the Internet can try to reach out to anyone else whether that person lives in a small town or a big city.

But a network of small towns alone might encourage greater collaboration because of the shared background of country life and the perceived greater friendliness (and less wariness) of non-urban residents. In most small towns, people are used to working with each other. This would just be a virtual extension of the same idea.

Initially, of course, people would feel most comfortable with those in the same region, such as within North America. Over time, as people interact more with each other on a global basis, that comfort level will expand.

Whether on a regional or global basis, this virtual metropolis could compete on a more even playing field and even establish a unique brand for the people and companies located there. It would make it possible for rural residents to keep their quality of life and also make a decent living.

[http://njacknis.tumblr.com/post/152069321010/a-virtual-metropolis-of-the-countryside]

January 28, 2015

Managing A Global Virtual Workforce

In many of my presentations, I point out that an increasing number of people will no longer have traditional 9-5 jobs in office buildings. Of course, I’m not the only one to observe that the labor market is potentially global and that entrepreneurs who live anywhere can connect with others who have the skills they need to make their businesses successful.

When I say these things, people generally agree – in the abstract – but they seem not to know how they can actually do this. They just don’t know how to start and sustain a global virtual business.

This is a particularly important problem for entrepreneurs who do not live in one of the half dozen biggest metropolitan areas in this country or their equivalent metropolitan areas elsewhere.

With that in mind, it’s worth noting that last year a book was published that can set virtual entrepreneurs on their way. It’s “Virtual Freedom: How to Work with Virtual Staff to Buy More Time, Become More Productive, and Build Your Dream Business” by Chris Ducker, a serial entrepreneur based in the Philippines. (He’s also responsible for the slide above.)

Ducker starts by describing the feeling that entrepreneurs have that they must do everything themselves because they can’t find others to help them. And, of course, those who are outside of big cities feel even lonelier. But reminding readers of that feeling is really just the motivation for reading on.

“Virtual Freedom” is essentially a practical handbook for managing a virtual global workforce. It goes into some detail about hiring people, compensating them, managing them, etc. It provides case studies and references to tools that the entrepreneur can use.

It’s interesting that the advice in much of the book applies to management in general, not just management of virtual workforces.

Perhaps managing a virtual workforce forces you to think about management more clearly than when you manage in traditional offices. In those offices, people seem to think they know the rules and patterns of behavior – even when they don’t really know.

Some of the advice is common sense, except we all know that common sense is not so common.

For example, he gives examples of entrepreneurs who were frustrated by the poor quality of those they depended on, until the entrepreneurs realized the problem was, in large part, on their side – a failure to communicate clearly and specifically what they were asking for and a failure to verify this was understood by workers who often came from other cultures. But in the diverse workforce in many countries today, this is an issue even in traditional offices.

Along with communicating clearly, he emphasizes that the entrepreneur needs to think clearly about the tasks that need to be accomplished. After all, when you can’t really look over the shoulders of the people who work for you, the only measure of effectiveness you have is what results they deliver.

Of course, such an approach in a traditional office environment is also a good idea – rather than trying to see if “people are working hard”. It’s easy to look busy. Not so easy to get tasks done and deliver results.

Bottom line: if you want to get a quick course in management of virtual staff, read this book.

[http://njacknis.tumblr.com/post/109394419164/managing-a-global-virtual-workforce]