Russ: Hi I’m Russ Capper and this is The BusinessMakers Show coming to you from Downtown Houston right now, specifically in the offices of the Greater Houston Partnership. And I’m very pleased to have as my guest Jon Nordby, Vice President of Talent and Innovation at the Greater Houston Partnership; Jon welcome to The BusinessMakers.
Jon: Thanks for having me Russ, thanks for being here.
Russ: You bet. Talk about a title man, tell us about that.
Jon: I just kind of made it up. No, so I started with the Partnership a couple of years ago to run one of our strategic initiatives which was talent attraction and that was really born out of the need to attract more young Millennials in the STEM fields to Houston for jobs. So at that time, even with the energy downturn, we were producing around 2 jobs in the STEM fields every year for one graduate at a local university, so we had this big supply and demand problem. Being born and raised in Houston this problem wasn’t as prevalent to me but outside of Houston we don’t have the best image as a place for young people to move to after college.
So that was the Talent Attraction Initiative was to create some tools and resources to help recruiters bring this young talent to Houston. And then what was kind of interesting is out of the research that we did around that and then the conversations that we had with the recruiters, some interesting things that we found out was that young talent tends to be attracted to places with a high quality of place obviously, but they tend to choose where they want to live before they choose the company or the industry they want to work for.
And one of the big elements that leads into a high quality of place is access to – or at least the perception of – a very innovative culture of strong startup communities, things like that; basically a place where people can go have a creative outlet in the afternoons or the evenings after work. So that kind of gave us a little bit of the feel to really start to look at the Innovation Initiative, which we just launched this year, and that’s really about growing the startup ecosystem with the goal of strengthening the innovation economy as a whole and just adding into the quality of place message; creating more jobs, more opportunity, things like that.
Russ: Okay, and it’s kind of interesting that you first targeted Millennials and then decided innovation, and for some reason the innovation, there’s quite a bit of it that takes place here but in the end it doesn’t have a reputation for that and particularly compared to some of these places like Austin and Boston and Palo Alto and Seattle; why is that?
Jon: You know I think it’s the type of innovation, right? So if you walked into any of these folks downtown, these Fortune 500 headquarters – the oil and gas companies, NASA, the Med Center – there is innovation all over the place. I mean things like fracking and the artificial heart don’t just come out of nowhere, right? I think a couple of the issues are around the perception though is that one, the innovation that we produce in Houston doesn’t tend to be sexy.
Russ: That’s true.
Jon: We’re not going to have somebody that creates a grilled cheese delivery app and gets $2 million – that’s a real case out of San Francisco – we don’t have the type of innovation that gets a lot of press. A lot of times when these companies that are in the energy business or aerospace or healthcare they grow up and they get acquired; it’s not really making headlines right.
And so we’ve had this interesting dichotomy where at a corporate level, at kind of the highest levels of innovation, these things are prevalent, they’re happening all over the place, but there is this missed opportunity in our startup ecosystem. You have these young, really smart, digital-born companies that get to around 5 or 6 employees in Houston, see the opportunity, but they just kind of struggle to either find the funding or the talent or whatever it is to grow to the next level, and being that we’re so close to Austin or it’s so easy to get out to San Francisco they tend to siphon those off from us. So that’s the gap that we’re focused on right now.
Russ: Well I think it’s a gap but I also think it’s a challenge.
Jon: It’s definitely a challenge.
Russ: And you’re the man that’s assigned it. But I mean even when you look back historically and you look at innovation and technology Houston is the home of the fastest, most successful technology startup in the history of mankind, Compaq Computers. And there’s quite a few stories like that too. So I love the idea that the Greater Houston Partnership and you’ve kind of become partners with Station Houston and Accenture as well to really investigate and do something about this; talk about that a second.
Jon: The background here is when you’re building a community versus building a company it has to be a collaborative effort and there has to be a kind of give first mentality in terms of how do we build things together and involve everybody within the community, so that was kind of the first mentality. So we started about 2 years ago now the Partnership put together a group to look at why we weren’t perceived as a very innovative culture or economy outside of Houston. That group went through several iterations and then summer of last year we pulled together what we call the innovation round table and that consisted of leaders from places like HTC and Station and TMCX, various venture capital firms like Mercury Fund and Unconventional Capital; community leaders, the corporate venture capital folks.
And to my knowledge it was the first time, at least in a very long time, that you had this sort of diverse set of opinions kind of around the same table that were able to really express what they saw in the ecosystem. And so based on that we took a lot of feedback from those folks, we compared that to some of the research we had done internally and we knew that we needed to validate what some of the challenges were and kind of what the next steps forward were so we engaged with an organization called the Startup Genome Project out of San Francisco.
Now they publish the Global Startup Ecosystem ranking report every year, they have since 2013, and we really like them because they were a really solid data site that was not so ambiguous. They had a lot of data that went into their rankings that was really verifiable, it wasn’t just we think Houston should lead in construction or smart cities because you do a lot of construction. But it was more along the lines of here’s the level of talent that you have in the city, the types of funding that you have, the numbers of startups, what their board looks like, what their advisors look like and what the success rate of those companies looks like.
Russ: And they didn’t rank Houston very high either did they?
Jon: No, so we actually didn’t get ranked and so that’s why we engaged with them is they published the report in 2015 and we reached out to them based on that report. Because they did the top 20 and when I called them and I said hey, we’re just curious if you have any data on Houston after the giggle kind of subsided it was we don’t have anything substantial because Houston was never on our radar.
So that’s why we engaged them and we said look, we want to be a part of this, we want to understand where we sit and so for the report in 2017 now, which we ‘re a part of, they still only rank the top 20, but there was 55 other cities that they benchmark in there. So it gave us a really good data set and some really interesting facts and things that we already knew like we rank pretty low for seed-funding. But some interesting facts were things like once we get a company to a series A we actually have a really high success rate of that company going on to a series B, C, etcetera and we actually lead the country in that.
Russ: Oh wow.
Jon: So there were some really interesting findings out of that but the point of Startup Genome, and we continue to contribute to that data set and continue to be a part of that benchmarking is so that we can measure over time the changes that we’re making to the ecosystem, if they’re having an effect and then we can also see what’s happening in other ecosystems and the changes they make. So that was one important aspect and that was kind of the outside validation that we needed to say it’s not just a group of us sitting here thinking we could do more, now we have kind of a data set to go on.
Around the same time we knew that Accenture was opening their Innovation Center here in Houston, they had just made a huge commitment to Houston and they saw a big opportunity here so they were a natural fit to do a study for us really within the local market to interview people, to do the research and say here’s how these things grow in other cities, here’s the opportunities that Houston has and how we leverage those and so we’re extremely excited to have that study and that strategic plan completed now.
Russ: All right, well we’ve had Brian Richards on the show already too and they’re excited over there about it too but when I look at these things, once again I applaud you guys for doing it, but at the end of the day what specifically can you do that actually impacts this that makes us rank better?
Jon: So that’s a good question. I think one of the concerns that we had going into this is it’s not really about the ranking. There’s a million rankings out there and it’s good to kind of judge against whether or not we’re making progress, but I think the ultimate goal is that we have a ton of smart people in this town, Brookings Institute ranks us as a knowledge capital of the world. We’ve got a lot of capital in the city and not just monetary capital but a lot of natural assets that could be put to use in various ways.
I think what we’re lacking though is – and we see this in other cities – is an organization that can take the leadership stance and say here’s 4 or 5 things that we can do collectively as a community to really help coalesce all these assets that we have and create a stronger startup ecosystem. And the point being that that startup ecosystem, the more you do to affect that it tends to have a ripple effect on the rest of the innovation economy; so things like research dollars, university research, public policy, those kinds of bigger elements.
So I think where the opportunity is, is to have an organization that can take the strategic plan, really execute against it, really pull together people from the government, from corporations, the investors, the startup community, the founders; all these various elements that contribute to this ecosystem and have them all kind of working in the same direction together.
Russ: I agree but I can’t help but think about what you said in the very beginning of the interview, it was kind of more in your prior job, there’s still a need to attract Millennials here. They’re a huge part of that and I believe there’s sort of hurdles there. I mean I think the city is just not understood outside of here by Millennials. Now international Millennials I think do and they come here too but we need…
Jon: That’s a funny thing because when we bring people to the city to show them off we try to avoid the rodeo. And I love the rodeo, no offense, I love the rodeo but this is the stereotype of what Houston is. But when it’s international rodeo week’s awesome for us, they love it. So it’s this – you have to know your audience a little bit and you have to bring them in. And I think it’s two-sided; there’s a lot that Houston has to offer that people just don’t know about and we haven’t done a great job historically of branding Houston as a place to live. And that’s kind of what our image campaign here The City of No Limits was all about. We’ve seen a lot of great results from that.
We talk to employers now that say we’re talking to students out of University of Miami or University of Ohio or whatever and when we say Houston they say oh, the city with no limits, which is great. So they’ve seen the branding, they’re starting to understand it, that’s a long process though to brand a city and to brand a place, so we’re still working on that actively. The second piece is though it’s not just talking about it, it’s actually building things that people want to be a part of. When I mentioned earlier that we’re not going to do this grilled cheese delivery app, Houston doesn’t necessarily build like the sexy consumer technology, but if you want to build things that are going to change the way we consume energy for the next 100 years or change the quality of healthcare in people’s lives or whether or not we get to Mars, these are pragmatic, really important things that people want to be a part of.
And I think that’s going to be the message going forward is the more we do to grow those opportunities and expand the ability for somebody to show up to Houston work in a startup or work in a corporation or work for a government institution – and all these things kind of work together to where there’s this really interesting mix of pragmatic innovation with possibly corporate stability or whatever it is that is going to be important to folks when they move, we want to be able to build that infrastructure up so they have something to plug in to.
Russ: Really cool. So I’ll tell you what I want to do, I want to stay in touch with you as these plans roll out, have you back on the show for an update because I’m pretty sure our audience loves what you’re doing and wants to see it be successful and wants to help as well.
Jon: And we could absolutely use their help and yours and this is definitely a community effort so yeah, we would love to have you back.
Russ: Great. Well thanks a lot Jon, really appreciate it.
Jon: Thank you Russ.
Russ: You bet. And that wraps up my discussion with Jon Nordby, the Vice President of Talent and Innovation at the Greater Houston Partnership and this is The BusinessMakers Show.
brought to you by