Jobs: a Fortune 500 Epic Fail

Photo from Shane Morris Photography (Flickr)

Last Friday’s Bureau of Labor Statistics’ report was brutal: a scant 18,000 jobs were created in June. Many look to big business for answers — especially those corporate leaders who joined President Obama earlier this year for his job summit.

Unfortunately, they are looking the wrong people.

According to the WSJ, Big Business slashed 2.9M domestic jobs in the 2000s while creating 2.4M overseas. In fact, all of the net job growth in the last 35 years did not come from Big Business. Those jobs came from entrepreneurs.

This later claim came from a great article from Henry Nothhaft: “What if they Listened to Entrepreneurs?” He makes a compelling call for politicians to start listening to entrepreneurs on job creation, and not captains of big business.

Nothhaft has serious street cred. As a serial entrepreneur, he created 6,000 jobs and return $8B back to investors over his 35-year career. He last founded Danger, the creator of the T-Mobile Sidekick which was later acquired by Microsoft for $500M.

Plainly put, Nothhaft is rightly irked at the Fortune 500’s whitewashing in Washington DC on job creation:

“Entrepreneurial startups are the sole source of net new job growth in the U.S.”

So what can government actually do to spur job growth? Nothhaft first points to the underfunded US Patent Office:

“Simply clearing the [1.2 million patent] backlog and properly funding the patent office would create as many as 2¼ million jobs over the next three years.”

But he holds his greatest criticism on the US’ shrinking manufacturing base. Citing the lack of funding support from both VCs and the US government, Nothhaft zeros in on the critical link between manufacturing and R&D:

“The NSF reported that in 2008 $58 billion, or one-fifth, of total R&D spending by U.S. firms took place overseas…A nation that no longer makes things will eventually forget how to invent them.”

His arguments are some of the most compelling for states and DC to start paying attention to entrepreneurs. Consider this article required reading for politicians and their economic development staff, and forward it accordingly.

An observation

Focusing on a target market in a mere 54 hours.

I had a great opportunity to mentor some of the teams at the recent Startup Weekend Twin Cities 2. While I’ve worked with many entrepreneurs and startups over the years, there’s something magical about seeing a rough idea turned into a functioning product in 54 hours. Products and strategies quickly evolve over hours not weeks.

One team in particular reinforced the value of focus for any start up. Their original idea was to use movie theaters to raise money for nonprofits. While I challenge them to reconsider a few key points, I came back the next morning to see that they narrowed their target market focus.

Instead of focusing on all nonprofits, they decided to focus on schools only. That simple step turned a good idea into a very compelling selling point.

School funding has become tighter over the years, and many of them no longer offer critical programs like music or the arts. If you have or know kids, chances are that you know how schools fill in those funding gaps: they sell candy, candles and other crap.

Since kids don’t want to sell it, parents don’t want a haul it, and you don’t want to buy it, SitforSomething.org hosts movie fundraisers within the community. Without going into the specifics, they offer a persuasive method for schools to raise money without worrying about inventory, processing orders or other pains.

Entrepreneurs tend to hedge their bets by focusing on too many markets and in the end of rarely become successful within any of them. So kudos go out to the SitforSomething.org team for they managed to resolve a critical issue that has tripped up hundreds of entrepreneurs before them.