Alan Hall, standing in striped suit, at a Grow America competition.
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The adventure of new ventures.
When Alan Hall saw a hardworking neighbor fall asleep at a meeting, he knew something was wrong. The man, Mr. Hall learned, had been laid off and taken on three new jobs – newspaper delivery in the morning, accounting in the afternoon, managing a convenience store by night – to support his family.
“He was barely keeping his nose above water,” said Mr. Hall, a co-founder and managing director of Mercato Partners, an investment firm. So Mr. Hall asked a company in which he is an angel investor to hire the man, who holds an M.B.A., and offered to cover his starting salary. More than a year later, his neighbor is still at work and thriving.
Mr. Hall said the experience made him wonder: “How many millions of Americans in the United States today are unemployed or underemployed and going through the same stress that Phil was? What can I do to help?” With a windfall behind him – Mr. Hall had sold MarketStar, a global sales and marketing firm he founded, to the Omnicom Group in 1999 – he’d also amassed the resources to attempt a solution.
In March, Mr. Hall unveiled a new company, Grow America, with the stated mission of creating jobs by spurring entrepreneurship and bolstering new ventures. Mr. Hall’s program doesn’t invest money in companies; it gives them money. A pilot program, now underway in Utah, is on track to give away $1 million in cash and services through a series of pitch competitions culminating in January. At that time, Mr. Hall says he intends to expand his contests – along with mentoring, marketing and networking help – across the country.
“Our goal is to help 100,000 businesses next year, with the idea that they all grow and hire employees,” Mr. Hall said, adding that his competitions will be open to ventures across all industries, so long as they’re at one of three stages: initial idea, start-up or ready to grow. As for the program’s potential success, he added, “I will measure it in how many people now work who didn’t before.” We caught up with him to ask a few questions:
Tell us about your plans.
This January, we’re launching our national initiative with an online competition. We’ll invite people from around the country who have ideas for start-ups, along with founders of new and growth-stage companies, to participate as contestants. We’ll give away $4,000 to a single company every two weeks to get the ball rolling. That totals $100,000 a year.
If the time comes when we’re able to encourage sponsors and our numbers go up, then we would clearly start to do more, with cash around various categories.
The money we give away is really just a token, but it gets people introduced to the other things Grow America can provide.
What else can you offer?
There are three other areas where we can help: mentoring, marketing and networking. The entrepreneurs we work with, they all want advice, they want counsel. They want someone to tell them what the right next steps are and how to avoid pitfalls. They like to share experiences and to talk with one another.
We’ve also developed an online platform for entrepreneurs to gather insight, information, knowledge that helps them with the various steps of their business. We’ll have podcasts for them, webinars of all sorts.
Grow America is a for-profit firm, but you’re giving away money, rather than investing it. How does that work?
I’m coupling philanthropy with capitalism, which I believe are the two most powerful engines that move things along in the economy. In this case, I give money to companies and seek no return whatsoever. It sounds strange. But the idea is that, when I give money away, somehow I make money on the other side more abundantly. It’s almost a scriptural thing for me.
How will Grow America make money?
We’ll invite sponsors to join us. It’s good P.R. for them. They believe in the vision and, obviously, at some point in time they might be able to help some of the entrepreneurs with their products and services.
Beyond my money, let’s say we have a sponsor, like a Microsoft, an Intel, a bank, whoever. We would be taking a portion of those sponsor dollars, applying them back to overhead, then applying the rest to the competition awards, with the hope that, at the end, there’s a small profit so we can maintain what we’re doing. But we’re giving most of that money away.
Have you tried anything like this before?
For the last six years, we’ve offered a program here in Utah called Grow Utah, holding contests and educating entrepreneurs, and those things have been very successful. We did that in every community here in the state. We’ve seen 7,000 new people employed and more being hired because of that initiative. Utah is a small state, but seven thousand is a pretty good jump in a state like this. I thought, “Let’s take this Grow Utah model and put it on steroids.”
The Utah program was funded with my money coupled with sponsor money; the other sponsor here locally has been Zions Bank. For each of the past last six years, it’s been about a half a million — split between the two of us — per year. So about $3 million, or $1.5 apiece.
Is there a company you’ve funded so far that stands out to you?
Keep in mind: I don’t vote. I don’t judge. I don’t do anything. I just hand out money. But one company we’ve funded that I thought was singular was CompleteSpeech. It makes a speech-therapy device that allows immediate, visual feedback on how to pronounce the right sound. It’s obviously a company that can be profitable, but here they are helping people with speech impediments in a most miraculous way.
They’re going to price the device so any family in the United States could have it, any therapist could have it. We were just pleased as can be to give them $100,000 to move their company forward. They’re now in the process of adding people and putting dollars into their marketing efforts. They already have customers — they just needed additional staff to ramp up.
Will you still be able to seed it at a national scale?
No, no. I wish I were John Rockefeller. My piece will be much more modest compared to what others will give. I’m still part of it, but my end goal is to find others who are like-minded and want to keep this initiative going for the good of the country.
We’re making what we call thousands of small bets. We don’t know which businesses are really going to take off. We’re saying, “We don’t know who will succeed, but let nature take its course. When someone takes off and starts hiring people? Happy day.” We have to get as many people into the pipeline as we possibly can, connect them with resources. We believe if we get everybody thinking about this and working on it, something good will come of it.
You can follow Jessica Bruder on Twitter.
Article source: http://boss.blogs.nytimes.com/2012/11/13/grow-americas-unusual-approach-to-spurring-new-ventures-and-creating-jobs/?partner=rss&emc=rss
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