Create for a Cause

Recently here in Salt Lake City we had the opportunity to have Eric Schmidt, CEO of Google visit. While I didn’t have the chance to see it, reading about it, he seemed to talk about a common worry I hear throughout this State. Here in Salt Lake City and around the area we have a lot of successful businesses! From my Uncle’s Freeservers.com, to Omniture, to Mozy, to Novell, Wordperfect, and many others, there’s no shortage of success in this area. It’s a hotbed of talent and technology the world doesn’t give enough credit for. The problem is that we have no Yahoos or Googles or Facebooks or Microsofts to give us credit for that success. We have no home-grown success story that didn’t eventually sell out for big bucks to one of the big West Coast companies.  I think this is a common problem for many areas.  Why is this?

Eric Schmidt tried to come up with his own reasons in response to Utah Senator Orrin Hatch, who (Hatch) stated, “We get a corporation going and it has some tremendous ideas and all of the sudden someone comes up from Silicon Valley and buys it and takes it back there.” Schmidt responded, saying, “I don’t know whether [improving the situation means] globalizing the business. I don’t know whether we need more venture capitalist presence in Utah or maybe just more experience building the businesses from the startup. It’s not that businesses aren’t getting started, it’s that once started they aren’t growing the businesses fast enough.” So what is it that keeps the Googles or Microsofts from staying in Utah (and other states) rather than staying here and growing to compete with the big guys?

I’ve suggested the PR problem before. That’s just one problem Utah has – a lack of enough tech bloggers to get the word out to Silicon Valley. One other common problem I see in Utah is we get greedy. I’m not even saying that’s a bad thing. Too many Utah startups are focused on the money rather than an underlying cause that motivates their revenue stream. That’s part of the reason Utah businesses have been successful – we have some of the smartest business people in the world right here. Even Eric Schmidt confirmed that, stating that “Utah is one of the best places to do business.” We know how to make money! Unfortunately that’s what differentiates us from the West Coast companies like Google however.

I argue it all revolves around cause. Let’s look at Eric Schmidt’s company itself, Google. Everything they do centers around one central cause, “Do no evil”. It doesn’t even matter if they have purpose. Everything they do must be done “the right way”, even if they lose money from it. Some even argue this has become a PR pitch for them as well. Google is willing to lose money for their cause, yet they are also making money because of it. It’s an amazing strategy.

Facebook also does this well. I’ve done a lot of work with Facebook with 2 books on the company and several apps written around their platform. When you interact with them and their employees, you get a common theme from them: They are doing all they can to enable people to share in bigger and better ways. Their vision is to help you share without risking privacy. Everything they do revolves around that – their revenue model is built around their cause.

Twitter is building “the pulse of the internet”.  They want to enable better communication between anyone in the world. They’ve forgone revenue to ensure that takes place (yet they’ve been able to raise a ton of capital, I realize, but I argue that’s part due to their cause).

I see the same thing from company to company in the Bay Area and even up in tech hotbeds like Seattle (home of Amazon, Microsoft). These guys all drive revenue based on purpose! While there are currently a few exceptions, I don’t quite see this in Utah and other states, especially amongst the larger startups. It’s all business.

Eric Schmidt also stated that “It’s not an attitude problem, it’s an availability problem. To me, it’s recruiting new talent into the state and growing new talent. It’s really people and expertise and that’s the way to make it happen.” Guess what drives and keeps talent? Motivation. If people have cause to work for they come, and they stay, and they work hard at it.  I remember at BackCountry.com (a Utah company), our mantra was “We use the gear we sell”.  Employees loved that because all kinds of incentives were given to get employees using their cool gear, and the employees loved that!

80% of Utah’s population is in the Salt Lake City area. Schmidt suggested this was an incredible opportunity for people to connect. I think we just need motivation to encourage that connectedness. Motivation is what makes the Googles and Facebooks and Microsofts of the world.

If you’re a startup, anywhere, what are you building on top of? Where are your foundations? Are you building for money or for purpose? I know as I build my business I’m going to be thinking much, much more about changing the world and less about the money I make as a result of that. The money will come naturally. That is how you build Google, and keep it there.

What’s your cause? What businesses do you think do this well? Please share in the comments.

EDITORS NOTE: 2 Companies in Utah that I think are doing really well at this are Phil Windley’s Kynetx and Paul Allen’s FamilyLink.  When you interact with them you can sense their cause.  It bleeds through the company.  People are sacrificing time and money just to be sure their cause is getting through.  As a result, Paul Allen’s company was recently ranked one of the fastest growing companies on COMScore, and recently, according to Compete.com, surpassed his old company, Ancestry.com in traffic.  Cause eventually pays off!  I encourage you to learn what they do – they won’t be going away any time soon.

Source of Eric Schmidt Comments: http://www.sltrib.com/news/ci_13630231