Wednesday, November 30, 2011

What "Churn" Does For a Community

Churn Rate: The measure of individuals moving into or out of a collective over a period of time.
What does Silicon Valley have a lot of? Churn. Entrepreneurs found a company then move on to work at another company as a VP or create another company. Then they move on to be an angel investor to other companies. While churn can be particularly annoying for an employer, it is ultimately good for the community as a whole. When people get too settled or stagnant, they become unproductive and there is no cross pollination of ideas or proactive growing.

I’ve found the entrepreneurial space is an extremely small world. In a city like Madison that is full of entrepreneurs, it is absolutely essential that these individuals leave their companies and start new ventures. Think about the folks from and Shoutlet. Both are new million dollar companies that were started by the founders of (a shopping deals site founded in 2006 and sold to Microsoft months later for an estimated $50M).

We need more founders and early stage employees to fly from the nest and go on to start new companies. This is my "eventual" dream for PerBlue employees. I would ultimately like PerBlue employees to be known for starting a bunch more awesome successful, profitable, and great companies that change the world.

The best form of success for an entrepreneur is to create churn. We need to inspire passion for entrepreneurship and entrepreneurs need to instill their own lessons learned along the way to early stage employees. The ability to look past the P&L statements and the sunk costs of losing an employee in order to inspire other entrepreneurs will allow us to create more churn within the community and drive real value into Madison.

We started PerBlue in 2008 at the beginning of the recession. The funny thing about our outlook was that the recession did not scare us at all. I remember it took a while for me to realize the scale of what we were trying to accomplish. My attitude was, "Wow starting a company in a recession is amazing. There are so many talented people who are available to join our team."

Three years later, we now gainfully employ over 35 full time people doing artwork, engineering, marketing, and community support. All are white collar jobs in a great work environment with an awesome culture that has extremely high job satisfaction. It almost reminds me of the Joker’s famous line in The Dark Knight, "Look what I did to this city with a few bullets and a few barrels of gasoline," except more like: "Look what we created with a few thousand bucks and a couple of have shot ideas."

If we really want to cure unemployment in this country, we need to spark more churn within ourselves and our companies. We need to invest in people who are creating value in young companies (not small companies but young companies). Do you have something that you absolutely hate about the world, something that just needs to be better? Maybe something that shouldn't be the way it is currently? Catch the entrepreneurial spirit and start a company dedicated to solving that problem or filling that need. Unite others who are passionate about the same things and dedicate that team to changing them... or die trying.

This risk is without a doubt worth taking.