Of Startups and Meltdowns... Free Market Success vs. Government Failure

I’m an entrepreneur. I’m constantly full of ideas and trying to get businesses started. As I seek to launch my newest endeavor, BrandScanned, I’m trying to get myself involved in the Atlanta startup community. As such, last weekend I had something of a startup adventure. I participated in Startup Weekend at Georgia Tech, where people with ideas and skills get together in a mashup competition to build an idea into something more over the course 54 hours. Inexplicably, BrandScanned just missed attracting enough votes to be one of the projects that went forward, so I joined a team called Zuit. Zuit was the brainchild of a young woman named Megan, who saw an opportunity in the fact that women rarely feel beautiful or confident in off the rack suits. Her customized tailoring website idea was not only brilliant, but the team was amazing. Over the course of a weekend we took Megan’s idea and turned it into something more. The tech part of our team was made up of four coding geniuses, including these guys. They designed and built a beautiful demo website that was nothing short of spectacular.  My part of the team focused on the business model, the business opportunity and putting together the investor pitch while others filmed videos for the site.  

You can of course imagine the scene… Diet Cokes, granola bars, pizzas and lots of coffee. There were computers and iPads and mobile devices and lots of white boarding. Some of the teams had a plan then pivoted 180 degrees after talking to prospective customers. Others, including ours, stayed laser focused on the original idea. And that of course is the beauty of entrepreneurship, you combine what you’re good at or passionate about and figure out how those things fit with what customers need or want. 

While some of the ideas that teams worked on were throwaway and others were quite serious, the takeaway of the weekend was this: Driven people can do amazing things. Essentially a room full of people who mostly didn’t know one another were told to talk about their ideas, split into groups and then essentially “Go do something.” And they did. None of the ideas is likely to save the world or cure cancer, but that wasn’t the point. It was to try and make something. And they did.

The whole thing reminded me of something I’d read a few days before Startup Weekend. It had to do with three guys who developed HealthSherpa.com (an Obamacare clone that actually worked) in just a few days. Somehow, three 20 year old kids were able to build something in less than a week that the government couldn’t figure out how to accomplish in three years with half a billion dollars at their disposal. (Actually the government spent 4 times more building a broken website than apple did building the iPhone that changed the world.) What’s worse, the catastrophe that is Obamacare not only doesn’t do what was claimed it would do, but it actually makes matters far worse than it was on countless levels, and we’re not just talking about a dysfunctional website. Can you imagine if Apple built into the iPhone a tool that allowed convicted felons to track your whereabouts? Can you imagine if your stock broker took away your shares of Google and replaced them with shares of Zynga without asking? How about if you live in Iowa but in order to drive a car State Farm required you to have hurricane insurance? That's basically what the government does with Obamacare.

Thankfully the private sector doesn’t usually work that way. There are two reasons for that. The first is that in a free market consumers have choices, and they can vote with their feet and dollars when a company fails to meet their needs. With government that’s never the case. It decides what’s best for you and you’d better get used to it, because it’s pretty certain that you’re going to be stuck with it for a long time. There is no consequence for failure and as a result most government endeavors fail, miserably.

The second reason is that government operates from a top down mentality. A bunch of politicians, bureaucrats and lobbyists decide they know what’s good for you and then start writing laws and regulations and force you to comply. Unfortunately for you, while the ostensible motivation is your well being, in reality the driving force is usually the accumulation of power, money and of course reelection. Entrepreneurship is just the opposite. It’s a bottom up approach where most ideas come from people who are actually doing things and trying to find real solutions to problems in the marketplace or make their fortune by seizing opportunities where consumers are willing to pay for goods or services.

Which brings us back to Startup Weekend, Zuit and three guys behind HealthSherpa.com. Whether America wants real solutions to real problems or frivolous things that are… well, just fun, the source is unlikely to come from government. Genius ideas come about when creativity is fostered, success matters and the customer is the driving force. As Obamacare (which shares none of those things) decimates the American healthcare system it might be time for Americans to remember what created our unprecedented prosperity in the first place: free markets where entrepreneurs, inventors and innovators decided to try and do something and customers voted with their pocketbooks. As more of our resources are sucked into the abyss of government failure, less are available to invest in entrepreneurs like Megan who seek opportunities in building businesses that bring solutions to real problems. If the implosion of Obamacare does nothing else, maybe it will reverse that trend. Maybe that half billion dollars spent will have a positive outcome after all…

Could Obamacare be the Coup de grâce for Battered Liberal Syndrome?

Years ago I was talking to an uncle who happens to be a martial arts expert. He told me a story about being in a bar when a man started beating the heck out of his girlfriend. My uncle being my uncle, he intervened and separated the two. As he’s standing there confronting the abuser, he was attacked from behind by the girlfriend…

You hear about things like this all the time, a version of what is called “Abused Woman Syndrome” where a woman is abused by a man but continues to stay with him, and as in the story above, often defend him. Often the woman’s friends and family try and convince her that he’s bad for her, but while she admits he has his flaws, she loves him and she knows things are going to get better. Conservatives in America today find themselves in a situation similar to the one my uncle did, but the difference is, it’s not battered women that we face, but rather it’s battered liberals, and the abusers are the politicians in the Democrat Party. And while the liberals continue to stay in and empower the relationship, it’s everyone in the country who gets abused.

The Democrats have been abusing the American people for decades, and we have the scars to prove it:

Education in the United States is a train wreck. We spend more than any country on the planet on education and yet we trail most of the developed world in math, science and reading scores. Not only are students not learning the basics, but more importantly they are not learning to compete in, survive in and thrive in the real, competitive world.

Prosperity and economic growth are being strangled. In the 1950’s when the Federal Register (list of federal regulations) averaged less than 10,000 pages a year the American economy grew at an average annual rate of 4.6% a year (after inflation) – at which rate it would take you 15 years to double your income. Over the last decade when the Federal Register has weighed in at 78,000 pages a year, GDP growth has shrunk to 1.5% annually – at which rate it would take you 48 years to double your income. That means that the GDP growth – read prosperity – has declined by 65% as the Federal Register has grown by 800%.

The number of people on welfare is greater than the number of working people. The workforce is at its lowest level in three decades and those among the Democrat base (women, minorities and youth) are the most adversely affected by all of these issues.

On these and a myriad of other issues the Democrats have been abusing the American people (and in particular their own base) for decades. Nonetheless, when faced with the evidence of the Democrats abuse in the form of failed policies, they always have an excuse. Republicans want to cut education or kill Grandma or destroy the environment or let companies abuse their employees, etc. etc.. And of course the Republicans hate women, workers, blacks, immigrants and basically everyone who’s not rich and white.

And now we have what is potentially the most important event ever in the sordid history of the Battered Liberal Syndrome: Obamacare. Not only was it proffered on a false premise in the first place, it has been nothing but lies since: “If you like your plan you can keep it.” “Premium reductions will save you $2,500 per year” And the lies keep coming: “It’s the fault of the insurance companies”, “You’ll come to appreciate the better plan”, and of course the obligatory “We had no idea any of these problems would crop up.”

For so many years Democrats lied about practically everything as the failures of their policies came home to roost. Because of charlatans like Ted Kennedy, Barney Frank, and Barack Obama they could deflect blame to others for their failures and come out unscathed. But with Obamacare they are facing a different scenario all together. They own it lock, stock and barrel.

They passed the legislation on their own. They wrote the regulations. They built the website. Obama wrote the exemptions. They managed the entire process from A to Z, and they lied about every piece of it all along the way, and none more so than Barack Obama himself. As such, as the entire thing melts down there is no way for them to deflect the blame. Conservatives and many Republicans have been saying for three years that Obamacare was going to be an abject failure, it was going to cost jobs, it was going to drive up healthcare costs and it was going to expose citizens to chaos as government sought to control healthcare. All of those things have come true, and more is on the way.

The failure of Obamacare doesn’t just expose the failure of one program, but rather the failure of the Democrat philosophy in general that all things can be made right and good by simply writing a piece of legislation, throwing money at a problem or by putting the government in control. The failure of Obamacare is just a most explicit version of the policies that have brought us failing schools, the mortgage collapse, green energy sinkholes and countless other failures. The difference is, the only fingerprints on this debacle are Democratic and for the first time in history their failure is being seen as theirs alone. This is partially due to the fact that even the complicit mainstream media can’t cover up a disaster of this magnitude as Americans are seeing their plans cancelled, premiums and deductibles rise, all while choices and jobs evaporate.

Is it possible that Obamacare could be the Coup de grâce for Battered Liberal Syndrome? Perhaps this train wreck will be the incident that finally begins to shake battered liberals out of their blind devotion to the Democrat Party and liberalism. Maybe they will finally step back and look at the bigger picture and recognize that it’s results that count, not soft Democrat whispers of how it’s really someone else’s fault, how they’re just trying to make things better or fair and that they really care. You have to think that after years of battery at some point soft whispers and “good intentions” no longer matter and results finally do. At that point perhaps discussion will turn to the damage that invariably occurs when government seeks to control everything. Maybe 2013 is that point. Perhaps Obamacare is the catalyst… If so there might end up being a silver lining after all.