Blog: Justin Fenwick

Justin Fenwick, community manager of the Arts Alliance, defines art as the artwork itself and also the process of starting something. This week Justin gives the shout-out to Creative Hybrids, a local class of artisan entrepreneurs who form collectives or set up an L3C, a type of enterprise combining business and social mission.

Post 2: You Want Free? At What Cost?

When exploring topics for these posts, I got a slew of suggestions from folks on Facebook. One friend suggested the following:

"How about the hidden costs of free? Free music on the radio = lowest common denominator dreck. Free water means that valuable resource is commonly wasted. Free curbside parking hides the costs of using that space for vehicle storage when it could be made to benefit everyone."

Now as my first post suggests, I've got a thing for creative types and projects. Creativity and social service is part of the hip(ster)/millennial lexicon, so consider three points for a moment.

1.    These projects are affordable and accessible.
2.    The demand will grow as scalable customization takes over our markets.
3.    As support for creativity moves away from the grant-funded market, the gap that remains is an unmet demand.

And in a down economy, more of these ideas are made into fruition. While not a hard fact, the stressors and low employment of a down economy traditionally fuel would-be entrepreneurs to take the leap. Lower costs and weaker competition helps too.

It's true that Washtenaw County was not hit as hard by the recession, especially by Michigan standards, but it was nonetheless. In a county where over 50% of the population has a college degree, competition for well-paying professional work is fierce. Not to mention that fewer people are retiring and leaving the workforce. This creates an unfortunate perfect storm fueling our poor retention rate on talent. Given this climate, who would stick around?

Free, you ask? Don't worry, I'm getting there.

From where I sit, I see an opportunity. The biggest innovation of this downturn will be as much the new ideas and projects as it will be the new structures and approaches to building organizations. L3Cs, collectives, co-ops, co-working spaces, crowdfunding/sourcing, etc., are all being used to create Hybrid organizations, on the edge of nonprofit, for-profit, and art, that have found traction in the scramble to survive the recession. These are led by the Creative Hybrids I mentioned in my last post, but also by all sorts of recession refugees and doers.

Free, you ask? I sit under a mountain of debt, nearly all student loans. In a head-to-head battle I usually have the larger mountain, save some of the med and law students out there. From my poetry to my M.B.A., I know these skills were worth every cent. In fact, I'm positive that the idealism, skills, innovation, and added social and environmental sensitivities were a direct result of my education. From here I find my drive, 20-something insanity, and all the things that help me find passion. I can do anything (but this might just be the 20-something speaking). This is a sentiment, or at least energy, is expressed by many going for their dream idea right now. But what now?

People like me are starting businesses and creating projects out of an under-organized creative market. This area has historically used support from the umbrellas of foundations and grants and doesn't stand up, yet, for its value in the market. Both a new model for creative arts and access to capital to fund it are needed. Because we are cultured to think that the arts and creative education are supported through a social pact (our taxes), the void is currently being met for nearly no money at all, especially at the local level. It stays this way because the resources remain unorganized.

Education recently has churned out business-minded liberal arts graduates or laid-off professionals taking their skills and mixing it with their hobby. In fact, it's a business model to utilize free creative capital. This blog, or more extremely so, the Huffington Post, sources free content in exchange for an audience and platform from which to speak. Not wrong, just is. This is the crowd aspect known popularly in wiki, open-source, and other models.

People like me are seeking support in droves and real opportunities for all interests reside here. A market is slowly monetizing out of necessity. Yet, it is not supported by a funding world that is moving like molasses to adjust to including for-profit/independent entities. In addition, banks are on lock down and along with traditional investment routes, they in general have a myopic and narrow focus. They don't see similar opportunities in this field, mainly because of a huge communication gap that needs to be bridged. Our efforts are deeper than free, they are built on promises from our education, stresses from being unemployed, and the resulting debt of both. I want to say, "Hey, we are over here!"

It's not that starting something shouldn't and hasn't always included this amount of upfront work, but it's that the options are limited after you burn out your free resources. Not every idea is a good idea, but we need people to start doing the sorting process. Ann Arbor churns out successful and wildly creative tech companies all because of existing investment capital or support systems. This infrastructure will follow opportunity, which is at our doorstep.

The opportunity to build this infrastructure is now. As my friend suggested, this is to avoid lowest common denominator outcomes, waste, and hidden costs. I don't mean to overstate myself, it may just be greatest most profitable project, but without resources to scale and self-sustain, the impact is stunted.

Market adjust
The technology, resources, and willpower to utilize the philosophy guiding these projects exist. Washtenaw County is bound to be one of the richest in this way, especially in S.E. Michigan. Unable to work for free, some things have sprung up that take the free crowd-generated philosophy to funding. Examples include: Kickstarter, IndieGoGo, ProFounder, investedin, crowdrise, givezooks!, Creative Capital, and social wish. Additionally, on a local model, things like Ann Arbor SOUP, a micro-funding event, have been hosted by groups like A2 Area Emerging Leaders or the Shadow Art Fair, which raise money for local creative projects. We see coaching for artists popping up at the Arts Alliance and their Art Meets Business program.

These feel like baby steps, not infrastructure. I also know some larger foundations are opening up their funding beyond nonprofits, but they are still few and far between. Donald Jones who is a senior consultant to the New Economy Initiative and COO at Venture Inc. in Pontiac said to me at a recent conference, "You are five years ahead of your time." Sounds like the right time to invest, right?

We need more. We need mentors, funding, and a space to grow what will be a new economic territory. We need a different understanding of charity that allows for social investment, donor plus+, micro-loans, and other reward models for social or environmental change. In this area, funding designed to support growth, not survival, increases both impacts and efficiencies. This is about opening up and supporting the funding model in an environment where creative energy is only just being organized. There are monies and livings to be made here.

According to an IBM 2010 Global CEO Study: "Creativity Selected as Most Crucial Factor for Future Success", chief executives believe that -- more than rigor, management discipline, integrity or even vision -- successfully navigating an increasing complex world will require creativity. Washtenaw creates the talent; for example, Eastern Michigan University has had a long standing Arts Management Program and U-M has an Arts Enterprise chapter.

Free at last? This is not just a creative boom, but a creative uprising. Where creative meets social and environmental ends, we find solutions. Washtenaw County has the right foundation set up to foster this environment to. Are you on board?

To my friend's comment at the beginning, to support this world with local talent will provide a greater benefit to everyone. Only extremes are supported in an unorganized system. But successes show that things are adjusting, each organization with their own balance to be financially sustainable. Out of a sudden, and unfortunate, increase in need for alternative options to arts education, my company, Community Records L3C, has been able to step out early into this middle ground mission-based business. Songwriting and other music workshops (listen to songs) meet a need for youth development, arts education, and a framework for skill building. This work employees musicians and has reached over 2,000 students.

Additionally, we are on our way to being financially sustainable. My experience has been that we go through the same start-up cycle and growth as a healthy start-up should, with traditional cash flow problems up front.  The landscape feels like an endless friends, family, and acquaintance funding dance, ready for the next step with few options. We spend half our time explaining the new business structure and larger landscape of options to support organizations, instead of the company and its growing impact.

Our journey is one of endless informational meetings, old school networking. This is my informal meeting with all of you, in long form. Like any good informational meeting, I should try to set up a follow up conversation or get a referral to another contact. So who wants a follow up? Make a referral to everyone by sharing some examples of local support systems or other organizations walking this same dance. How can we jump start this engine to build an economy and fund social change?

Note: I may be a bit generationally blind on this, so correct me if I'm wrong, but I think this trend isn't as limited by age as I describe it. The creativity required to set up a business or independent venture is insane. Often it's a head-first into accounting, marketing, advertising, and a bunch of other things people never learned. When your life is starting over again and you are being dumped into a wacky market, doesn't that make us all young again, staring directly at our passions with tons of work to do but life is now ahead of you?