UGBT Memphis: Let's Play to Our Strengths, Guys

I have a lot to say about the past few days I've spent touring the various nooks and crannies of Memphis and its entrepreneur scene. And as luck would have it-- I finally have a few hours to say it, er write it. A theme that has consistently cropped up during this tour is what each city means by entrepreneurship, and what they want to get out of building their own culture to give rise to it. Increasingly, it's the cities who never really tried to be Silicon Valley in the late 1990s that seem to really have an exciting and burgeoning scene. Why? Because they were forced to play to their strengths.

I'd put Omaha in this category. Omaha's entrepreneur scene is totally nascent and who knows what will come out of it. But it's endemically Omaha-like. Same with Portland, to a degree. And, I think, that's even more pronounced in Memphis. (More on that in a second.)

The corollary would be Austin or Seattle, cities that have followed a more Valley-like model with varying success and failure. The success is obvious: More venture capital money, more jobs from what big or mid-sized companies have emerged. But is there really a sustainable culture around entrepreneurship? Or is it about being a Valley-satellite? And frankly-- which would a city rather have? Because you can argue the first brings in more jobs, prestige and money.

But I argue, there's something great about a city that at its core has its own unique, scrappy entrepreneurial drive.

I guess I'm talking about "entrepreneurial" with a lower-case "e." Not "Entrepreneurial" meaning you try to play the Valley game. Recently I've gotten in a snit with some bloggers from Nashville because I said Memphis was more deeply entrepreneurial, and this is what I was talking about. Memphis is a city full of people living on the edge, improvising and just getting by. It's not terribly different from why Isreal breeds some of the world's best entrepreneurs. There's just something scrappy in the water here. Think of it like the movie "Hustle & Flow." Terrence Howard IS Memphis in that movie. He has a dream and it seems absolutely nuts and everything is stacked against him. But he constantly improvises and scraps and does what he has to to make it happen.

I made this rather weird analogy when I was meeting with the Memphis BioWorks Foundation guys last week and I have to say the executive director Stephen Bares-- looking every bit Memphis old boys network central casting-- looked at me like I was a little insane when I compared him to a pimp. (To see what I mean, watch this.)

Bioworks is doing a lot of things right. It's a multi-year effort, taking in hundreds of millions of dollars from Memphis companies, individuals and local, state and federal government. "I'm a pig at the trough and proud of it," Bares said in our interview. They are building a huge facility to give wet lab space and incubator room to fledgling companies, and they've got a seed fund to identify and spin them out of companies and universities in Memphis. This is a long-haul project. It actually started just after I left Memphis in 2000, and is only now starting construction. But I was blown away by how dead-on the mindset of Bioworks is.

Bares came from California and knows that University of Memphis and UT Medical are not Stanford or Harvard. He knows the next great drug discovery or Web company isn't going to come out of Memphis. Sure, good ideas can hit anywhere. But if they hit in Memphis, those entrepreneurs will likely move once they get traction. They have a duty to their investors to put themselves in a market where risks to their success are removed. Some cities get around this by forcing companies to stay in Memphis if they want to take funding from a city-sponsored incubator or fund. But that just sabotages everyone.

Instead, Bioworks is focusing on companies that would actually benefit from being in Memphis. Companies at the intersection of logistics (FedEx is based here, and it's the largest cargo hub in the world), bio-agriculture (Memphis is the urban hub for one of the largest farming belts in the US, heavy with cotton and soybeans), and certain branches of life sciences (Memphis is home to St. Jude and has a lot of non-for-profit medical research, plus several big medical device companies.)

Ironically, this is similar to what Memphis did well in the 1990s. Back when I started covering entrepreneurship at the Memphis Business Journal, the city moaned seeing smart entrepreneurs flee to Nashville, Atlanta or even the Valley to start their companies. It seemed like a great loss. But I'm hard pressed to remember a single one that left and actually became a huge business. They were mostly dotcom roadkill, if I'm being honest. Meanwhile, Memphis did get something more sustainable-- huge warehouses for distribution and logistics for all those dotcoms. In other words, it was forced to play to its strengths and avoided a lot of the carnage as a result, and cemented itself as the place for doing what it did best.

Bioworks has loads of funding and has no problem finding good ideas. The biggest struggle that will make or break this effort is talent, according to Bares and Ken Woody, the head of his seed fund. Here's hoping some great entrepreneurs like BBQ enough to move or just stick around the Bluff City and make a true difference in a unique community.

Memphis: You are lucky to have these guys.