Entrepreneurship panel says to embrace failure
One of the key messages Wednesday at a conference built around Detroit’s successes was that failure needs to be embraced, or at least redefined.
Panelists at the Philanthropy Roundtable’s “Jumpstarting Entrepreneurship in Your Community” event also told 50 grant-makers from around the country to consider the upside of General Motors’ bankruptcy — and to not always consider hard data.
“As a foundation,” said Jamie Shea of the QL Community Investment Fund, “you can’t think you failed because only one of your investments paid off.”
Elaborating afterward, he offered an analogy: “If your goal is to fund a new advance in cancer, you don’t care which of the 10 projects you funded is a success.”
On stage with Shea at a session titled “Rebooting a Great American City: Philanthropy and the Startup Experience in Detroit,” David Egner of the Ralph C. Wilson Jr. Foundation conceded that entrepreneurs and the foundations that are learning to support them are not natural allies.
“We are the least entrepreneurial people in the world,” Egner said. “You’ve got to feel your way through this. The data will drive you crazy, because the data will lag a decade behind what you’re doing.”
The two-day conference, co-presented by the William Davidson Foundation at the DoubleTree Suites Detroit Downtown, was open to representatives of organizations that give away at least $100,000 per year. Attendees had toured TechTown in the New Center on Tuesday afternoon, and they seemed universally familiar with the New Economy Initiative, the collaboration of 10 foundations that collected $100 million in 2007 (and added $33.25 million in 2014) to bolster southeast Michigan through entrepreneurism.
The initiative is a special project of the Community Foundation for Southeast Michigan, and “it was really survival,” explained president and panelist Mariam Noland.
“This sounds really crazy,” she said, “but the biggest culture change here that helped us was GM going bankrupt.” At that point, she said, it became clear that the usual peaks and valleys of the auto business had become a cliff, and the region couldn’t simply wait for things to get better.
At JPMorgan Chase & Co., said Tosha Tabron, the global philanthropy department has had to reconsider not only how it donates, but how it evaluates impact.
The yardstick isn’t return on investment, she said, but rather the ripple effect of the money it invests. “If another financial institution comes behind us,” or an adjacent building gets refurbished, it’s a victory.
Being “risk-tolerant” is key — and so is being patient, Shea said. With a thriving startup, it typically takes seven to 10 years for the founders to cash out with a windfall.
Then they reinvest, he said, and the cycle of progress starts again.