Tuesday, October 03, 2023

New INC. Magazine column from Howard Tullman

 

The Migrant Crisis Offers a Lesson for Entrepreneurs

Chicago and New York are struggling to handle thousands of new arrivals cruelly dumped in their towns by red state governors. But the proposed solutions show the downside of short-term thinking. As an entrepreneur you can't afford to act this way. 

 

BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS@HOWARDTULLMAN1

 

Right now, the Democratic mayors of every major northern U.S. city are facing a novel, overwhelming, and complicated migrant challenge that has been aggressively and immorally engineered by the governors of Florida and Texas, among others.  Busloads of misled, unprepared, and unsuspecting families of migrants are being shipped north to New York City, Chicago, Philadelphia, and other cities.

Overnight, they're expected to implement viable solutions to process, house, and care for an influx of vulnerable, often ill, and generally non-English-speaking civilians of all ages. In some respects, it's a repeat of the kind of entrepreneurial challenges posed by the pandemic. And there are absolutely no easy answers.

But even the newest and least experienced entrepreneur knows that not every step he takes will be productive and move the business forward. Nor will it be the best and optimal choice possible because no one has yet invented an infallible crystal ball for new business builders. The same concept applies to newbies in government positions of great responsibility -- for instance, being the mayor of Chicago or New York.

The most critical thing to do in these cases -- given the immense challenges and the inevitable uncertainties -- is to not make rapid, stupid, and expensive decisions. If you try to run before you walk, painful and costly stumbles are guaranteed, especially if you lack operating and administrative experience.

Small, slow steps that preserve and often maximize flexibility and optionality usually make the most sense. Whether you're talking about new strategic initiatives,  geographic expansion and rollouts or trying to do too many tough things at the same time, it's smartest to go slow as you scale. Grand and abrupt gestures, quick patchwork solutions, or leaping before carefully looking are sure to fail. You don't test the depth of the pond by jumping in with both feet.

And, given the scarce financial resources and competing demands which are always part of the puzzle, the one inviolable rule is to avoid costly choices and commitments that are certain to be temporary and short-lived and which are not foundational in any sense. Only dummies go deep on disposables or rush so far down a precarious path that there's no turning back.

You can get away with a lot that's not perfect if you can at least show that the actions you took and the funds you spent were directionally correct. And that the enterprise can eventually reuse, repurpose, adapt, or build on top of whatever you've done to date so that it's not a total waste of time and money. The trick is to make your investments and actions incremental, flexible, and additive.  

But Chicago's newly-elected, amateur mayor, Brandon Johnson, who's never built or run any business - much less a massive operation like the City of Chicago -- apparently never learned this lesson. It's already becoming clear that, even though he was an elementary school teacher for a few months, he isn't really interested in learning and that his position isn't one that's well-suited to on-the-job training.

Chicago's latest plan to buy and erect massive tent camps to deal with the surge in migrants being shipped to the city by Red State governors is ill-conceived, ridiculously expensive, impossible to implement and doomed to failure. New York's latest solution - handing these people vouchers to go to stay in other parts of the state is equally wasteful, short-sighted, and unworkable. It's no wonder that the voters in these places, who were never asked or voted to become "sanctuary" cities, aren't pleased to have these enormous concerns and costs heaped upon them as taxpayers.

The best that can be said for these efforts (and the equally ineffective solutions being attempted elsewhere) is that they provide some handy warnings for startups as to exactly what not to do.

The current Chicago plan is to buy tents and house migrant families through the dependably fierce winter in random outdoor locations across the city. Did I mention that the vendor quickly and quietly selected to be paid $29 million to begin this travesty is the same firm that has helped MAGA moron governors move migrants from Texas and Florida to Chicago and New York? You can't make this stuff up.

But the saddest part of the story and the actual lessons for all new business builders are quite simple. There were sounder, smarter, simpler, and shorter ways to do a much better job of attempting to solve this particular problem. Each of the alternatives -- which were apparently never carefully considered in the rookie mayor's rush to just do something -- offers lessons for every kind of entrepreneur.   

First, don't buy anything you can rent or borrow if you only have a short-term need.

The city and state (as well as FEMA and the Illinois National Guard) have rented and deployed large-scale tents for emergency purposes during the pandemic as well as for other natural disasters, and for numerous sporting events, races, and other recurring festivals for many years. While housing thousands of migrants essentially outside is foolish, buying expensive tents for temporary housing and then discarding them is an even dumber idea.  Smart people rent for a reason and try before they buy.

Second, ride on someone else's existing rails whenever possible.

There are hundreds of built facilities throughout the city that could be pressed into short-term service (much as McCormick Place was used as a COVID hospital) including armories, 50 empty CPS schools, libraries and hospitals, or vacant warehouses at far lower costs and more quickly and efficiently than trying to build tent cities across Chicago. Several vacant hotels in the suburbs, which were previously serving as shelters, are already being converted into  housing which may become permanent facilities for the city's unhoused residents.

Third, make the money you do spend matter for your long-term needs and requirements.

There are massive numbers of abandoned or underutilized apartment and industrial buildings in Chicago which could be repaired, rehabbed, and returned to the city's long-term housing and commercial real estate stock using the same funding now being committed to the tent cities. In addition to creating long-term housing, undertaking these projects would provide employment and training opportunities for unemployed residents in precisely the underserved and resource-poor areas which need the most help. Nothing could be dumber or more wasteful than paying these new arrivals (who may ultimately become productive employees and citizens) to go away.

Finally, focus and concentrate on your efforts and concerns; don't spread them out and dissipate them.

While putting tent cities in each of Chicago's 50 wards might be a wise political approach, what the city actually needs is a prudent solution with the best possible permanent benefits. Selecting several primary, large-scale locations where security, transportation, food, and even educational resources could be concentrated and effectively delivered makes far more sense. Put all the wood behind one arrowhead.

Creating a couple of these permanent care and comfort facilities -- as opposed to piecemeal and interim internment camps -- would change the entire perception and purpose of the program. We could be helping with our housing, supporting our newest residents, and rebuilding parts of our city as well.