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…