Please Dip Into Your Pockets for TechSTL
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- Published on April 14, 2022
- Last Updated April 22, 2022
- In Opinion
- Directly Sourced
- Phone Interview
- Email Interview
- Edited by EQ
TechSTL needs your money now.
Turns out a lot of EQ readers recognized their own frustrations in reading about mine. And that, unfortunately, is a testament to how many local entrepreneurs have felt sidelined by powerful nonprofits and non-governmental organizations who use “grand narratives” to put blinkers on the workhorses of the St. Louis Startup Ecosystem and court favors for empty promises.
In the age of social media, “more than a dozen” responses may not sound like very much. If I broadcasted my shower thoughts on social media all day, as most of our local politicians do, I might well be able to claim that I got thousands of views and throw my weight around with the same bravado as those I challenge.
And there’s a lot of swagger surrounding TechSTL. Yet, after “hundreds of hours” of LinkedIn group hugs, TechSTL has produced an infographic declaring its grand ambitions and a broken website.
But if you know anything about how social media metrics are actually measured —in terms of technical specifics about what constitutes a view, an impression or a click— you might know that social “engagement” is the most vapid of calculations. It often rewards you for things that don’t matter, like 3-second views, while distracting you from the things that do, like policy making.
Personally sending a message over email, phone or private messages (DMs) across social networks takes considerably more presence of mind and commitment to expressing yourself than hitting a like button or commenting on a post. Thus I would contend that in terms of energy/calorie cost, the dozen or so responses I got were especially significant.
To click the “like” button, one simply reacts. To send an email? One takes action.
Funding for Funding’s Sake
And action is exactly what we’ll need to fulfill the city’s dreams of TechSTL. Why? Because the organization basically has no money: the grant was always intended as funding for fundraising.
Most of the $475K federal grant has already been spent or allocated to salaries. If the organization is not self-sustaining by October, TechSTL can no longer pay salaries, which probably means no TechSTL.
These are open secrets; I’m not revealing anything that anyone who has met the TechSTL team doesn’t already know. Everyone I have spoken to has heard the same story. And the board, to their credit, essentially acknowledged it when I asked questions about the situation in February. In short, more than half of it went to Lindenwood and ITEN. Arguably, this is par for the course, as you’ll notice from the Grant Awardees List that it’s almost all universities that received funding.
To highlight the facts of TechSTL’s funding is not to point fingers, lay blame or claim incompetence. In November 2020, Jacob Barker, reported in the St. Louis Post-Dispatch that the grant funding, “…if awarded, should be enough to fund the organization for 18 months while it searches for new partners and sustaining capital.”
Zero Dollars Committed By Board Members Thus Far
Well, if you look at when the grants were first awarded —April 6th 2021— then tomorrow’s launch of TechSTL’s $500 annual membership program (announced yesterday) is not just cutting it fine… it’s not even close to asking for enough money to make any significant difference to the city.
None of the six members of the Board of Directors has made a financial commitment to TechSTL (nor is any being paid, thankfully), but these positions were intended to eventually be monetized and sold at $50K a seat.
But just “do the math” on the latest plan and you’ll see that the goal to enroll 250 “council members” at $500 each equates to $125K, which sounds like just about enough to cover… one senior executive salary or salaries for two junior staff, but not both.
Extrapolate that over five years, per TechSTL’s 5×5 plan, and the organization will have effectively used $613,736 ($474,020 in federal funds + $139,716 in local matched funds) in investment capital to bring in $625,000 — in other words, to make $11,264 over five years.
No New Jobs, No New Tech
To put it bluntly, TechSTL is possibly the lamest tech startup you’ve ever had the opportunity to invest in.
Unlike what’s been expected of every recipient startup of a $50K Arch Grant up until 2021 (when the grant funding amount increased), TechSTL doesn’t create any new jobs in the city. Furthermore, its mandate is to promise vaporware that already exists and is freely given by local entrepreneurs, in the name of “better regional storytelling.”
But, hey, maybe I’m being unfair? So, let’s game out the $20M fund they are promising.
Zero Dollars Committed By Steering Committee Members Thus Far
Currently, none of the 80 steering committee members listed has made any kind of financial commitment to TechSTL. Of those members, at least 36% are nonprofits and that number doesn’t include an additional 18 members representing government and education.
Do these organizations have the capacity to make big pledges? Probably not. Probably the hope is that the Missouri Technology Corporation (MTC) will randomly step in.
Of the remaining 33 members who represent for-profit interests, eight are independent consultants or professional service providers, three are big corporations and only four represent venture capital. Of the remaining 14 members (18% of the steering committee) that represent “Tech Startups,” only four have any significant funding and the rest are Arch Grants companies.
Do these companies have the capacity to make big pledges? I doubt there are any million-dollar donations among those for-profit companies, as they’re the ones claiming to offer all the jobs.
Get Your Check Book Out Now
So where does that leave us? Eighty members x $500 dues = $40,000 at 100% conversion rate. But 100% conversion rates don’t exist, and betting even on a 20% conversion rate is wildly optimistic.
If you’re one of the glad-handers proclaiming how wonderful everything is going to be on social media, I’ve got news for you. You better get your check book out now, because you’re TechSTL’s target customer and it’s time to put your money where your mouth is.