In this interview, Horace Tiggs IV, a partner in McKinsey’s Detroit office, speaks with W. David Tarver, president and founder of the Urban Entrepreneurship Initiative (UEI), about spurring innovation and entrepreneurship within urban communities, how that drives economic mobility, and the challenges it faces today. They also discuss the importance of connecting entrepreneurs to ecosystems that lead to new solutions and scale. This transcript has been edited for clarity and length.
Horace Tiggs IV: David, thank you for coming in to talk about urban entrepreneurship. We’ve done some really good work together, and I’m looking forward to digging in a bit more with you.
Let’s start with a wide view of the field. How would you define urban entrepreneurship? How does it differ from other forms of entrepreneurship, and why is it so important in our communities these days?
W. David Tarver: The simplest, cleanest definition I could give for urban entrepreneurship is that it is business activity or business formation aimed at improving quality of life in urban communities. Entrepreneurship in general is about solving problems for people. An entrepreneur identifies a problem, solves a problem for people, and gets compensated. They receive value by providing value to other people. So the difference between urban entrepreneurship and entrepreneurship in general is simply the customers that we choose to focus on. We’re choosing to focus on urban communities—the needs of those communities, and the customers who are in them.
Horace Tiggs IV: How would you differentiate an urban community from a nonurban community?
W. David Tarver: A lot of people generally know, or have an impression of, what an urban community is: a high-population area, city, or metropolitan area. We think of them simply as areas that have a population density consistent with a town or a metropolitan area, so it’s not necessarily a big city. A town of 20,000 can be an urban community. A town of 10,000 could be an urban community. It is really these communities where people congregate and where you have people of different backgrounds and different occupations coming together. And generally, it relates to population density as opposed to a particular kind of city or place.
Horace Tiggs IV: Yes, and I asked that question very specifically. In the work we did together, we spent a significant amount of time trying to determine whether an urban population has a specific headcount. Ultimately, population is central to a specific location in which there are a number of industries through which we can actually effect change within that population.
W. David Tarver: When we talked about this, we looked at UN definitions, which relate to population density per square kilometer. But we tend to think of cities and towns as urban communities. We jokingly say, “If there are cows walking around, it’s not an urban community.” But then you think, “What about India?” There might be cows walking around there.
Horace Tiggs IV: But ultimately, the impetus of the entrepreneurship is tied back to the urban community itself. That’s what differentiates us here.
Let’s talk a little bit about UEI. We would like to understand UEI’s overall mission and vision. What does success look like? And on the personal side, why now? What about your journey brought this together?
W. David Tarver: Our mission is simply to facilitate more innovation and entrepreneurship aimed at improving the quality of life in urban communities. In terms of how I got here, I grew up in Flint in the 1960s. That’s when I came of age.
At that time, Flint had the second-highest per capita income in the United States. Even though today people know about Flint for different reasons—they think of it as a basket case with a water crisis—when I grew up there, Flint was a prosperous city. We had great schools and great public institutions and great opportunities, and I thought that’s the way it was everywhere. I thought every community was like that.
But then I left Flint, went to the University of Michigan, and worked in New Jersey at AT&T Bell Laboratories, a research and development organization. I ended up starting a business in New Jersey and stayed there for 31 years before moving back to Michigan in 2007.
When I got back, I saw a very different Michigan from the one I left. A lot of the entrepreneurial activity and industry had been drained from the communities I grew up in. It was disconcerting to see, but also, I could see clearly that when there was economic activity, entrepreneurial activity, and innovation, quality of life was higher. And when those things were missing, quality of life was tremendously lower.
Challenges to urban entrepreneurship
Horace Tiggs IV: Based on your answer, I can tell that the personal pull, the personal draw, the personal experience became the impetus for UEI. Why do you think this is such a difficult problem to solve? This concept of jump-starting, for lack of a better word, the entrepreneurial energy in these urban spaces? From the perspective of someone who grew up here, why do you think is this so difficult now?
W. David Tarver: I think a lot about that. I think a lot of entrepreneurial activity rightly follows the perceived opportunity. The expansion of a truly globalized economy in the 20th and 21st centuries has followed, in part, the increase in opportunities abroad. We talk even now about supply chains being extended to Asia and Mexico and places like that. A lot of that entrepreneurial activity helped create supply chains, built businesses that took advantage of those supply chains, and maximized returns for shareholders.
The people who are left behind in these communities are aware of opportunities and problems that they could solve—but they often don’t have the access, the resources, the education, or the connections to produce those solutions. So we are trying to make it possible for people who want to produce solutions for urban communities to do it more effectively and to be connected with other people who want to provide those kinds of solutions—even if they may be on the other side of the world—so that we draw from this community. We draw strength, and we draw inspiration from this larger urban entrepreneurial community and improve the quality of life in these communities.
One of the toughest challenges for urban entrepreneurs is something I like to refer to as the holy grail: doing well by doing good. There are a lot of ways to do well, but a lot of times, we don’t focus on doing good. We focus on how much money we can make. To have a sustainable business, you have to make money. You have to be able to incent people, and you have to be able to bring people in. But wouldn’t it be great to be able to do all of that at the same time? You’re improving quality of life for human beings who you see in your community. That’s kind of the focus that we’re trying to bring to this.
Horace Tiggs IV: In your response, you brought something up that I don’t think I’d ever really thought about, and I’m going to play it back as a lead-in to how UEI is directly making a tangible change. What you described is Flint in the time that you grew up—really, the globalization of the economy. You talked about the expansion of the supply chain, the diversification of supply chains, the globalization of manufacturing, and all of that broader concept or construct then feeding urban entrepreneurship and the question of, “How do I contribute to that?”
I think about where we are right now, which is a world that is very globalized. If urban entrepreneurship is closely tied to globalization, then what’s next? This is why the platform you’re building is so important. It serves as a differentiator for how to potentially tap into globalization. I’d love to hear a little bit about the UIP [Urban Innovator Platform], how it differentiates UEI, and how you’re thinking about bringing this together to try to solve this problem.
W. David Tarver: That’s an excellent point. I hadn’t really thought about it that way. But there hasn’t been a platform that enables people to take advantage of the solutions that exist in other places. That is what we are creating with the UIP, or Urban Innovator Platform. We are creating this solution, which is both online and not online, but it has an online presence where we can engage entrepreneurs and innovators around the world to connect and see solutions that have already been created to see who’s working on what, where. And when we talk about these different levels of community vitality, whether they be health or mobility or education, we can see who’s working in those areas and what solutions they’ve created. Over time, we want to build this community and this set of information that will be a valuable tool for anybody who is going into this field. People can draw from the information on the platform, and they can contribute to it themselves.
Building supportive ecosystems for urban entrepreneurs
Horace Tiggs IV: Following up on that a little bit, what you’re starting to poke at is this construct of ecosystem—using the platform to create an ecosystem for urban entrepreneurs that they can then tap into, both to consume and to contribute. What is your point of view on how you process and think about the overall community and societal impact that can be driven from the establishment of this ecosystem, and how do you see the ecosystem playing a larger role in the overall impact that can be driven here?
W. David Tarver: For a long time, everything has really been about community. We have different kinds of communities. When I worked in the telecommunications industry, I didn’t think of it this way at the time, but I was working in a community of people who were working to improve the way people could communicate at a distance. And we had mechanisms whereby we could meet and talk to each other. We had trade shows, communication standards, organizations, all these kinds of things. If we’re working in the medical field, there’s a medical community there.
So what we’re doing is not something new; it’s something focused on a different objective. That objective is to bring together a community and to form an ecosystem of people who simply want to make life better for people in urban communities. And if we can move the needle just a little bit on economic activity, if we can increase GDP just a little bit, then the return on investment and what we’re doing can be enormous. I’m excited about making this kind of platform available and about inspiring people to work on it—even inspiring people to compete with it, because the more activity there is out there, the better off these communities will be.
Horace Tiggs IV: I think you’ve said before that the Urban Entrepreneurship Initiative isn’t the only game in town, nor should it be the only game in town, so even creating an ecosystem of urban initiatives could potentially be successful. I want to double-click on the economic point that you just brought up about the idea that success could mean moving GDP just a little bit. As you think about economic impact, what are the long-term strategies that are driven by UEI? Or, more broadly in this space, what are the long-term strategies that can be explored that will increase our chances to have the economic impact that you discuss?
W. David Tarver: We plan on employing a few direct strategies. One is to just go out there and identify as many people as we can who are working in this field or who are interested in working in this field. We believe that there are people providing solutions all over the country and around the world, and once we connect with them, the power of those connections will drive new solutions. So one of the things we want to do is identify who these people are.
The other thing that we want to do is expose the business models of people who are providing solutions, of companies that are providing solutions, so entrepreneurs who are interested in working in that field can say, “Hey, I could contribute to that business,” or “I’ve got something that I’ve been thinking about, and seeing what this business model is, I can adapt that and do something here.”
Being able to see what business activity is going on is something entrepreneurs will benefit from, as well as, by extension, the people they serve. I’ll give you an example of this: In my early days, when I was working in industry at Bell Labs, I had this idea that I was going to make a process control computer—computers were new, microcomputers, so I was going to computerize the world. So I had the idea to build this process control computer, and I was going to take it to industry. And I built this thing, I tested it, and it worked. I had a buddy who worked at Ford, and I came to see him, and I said, “I want to show this to somebody at Ford.” I had no idea how this thing might be used at Ford or who might use it or that kind of thing. I didn’t have a view into the industry to know what problems they had. If I know what problems they have, I can design a solution. If I know who has the problem, I can design a solution.
So that’s one of the things that was in the back of my mind as we were forming this thing. Because there are a lot of people out here who are very skilled, very talented, very motivated people who want to solve problems. They would love nothing more than to form a business that solves an important problem for somebody. What they are not aware of is what the needs are, what problems exist out here, and what other businesses have been formed in a similar area to try to solve these problems. So just bringing the level of information up and bringing up the awareness of what the needs are is going to benefit the people in this community.
Horace Tiggs IV: I think the way you describe that in terms of identification of folks who want to make impact is one key strategy. The second key strategy is around information dispersion. How do I get information out there that can be leveraged—whether it’s information on the problems, whether it’s information on business models that have actually been employed—so that people can actually take the LEGOs, for lack of a better word, and make a new, potentially impactful model for their urban space? So this is exciting.
One thing I want to follow up on is given those strategies, given the work that UEI is doing right now, given the effect that UEI is having, what’s giving you hope? You’re starting to see some of this stuff come together now, so what’s giving you hope, and what’s making you excited about the effect that you’re having?
W. David Tarver: We just recently—within the past few weeks—put in place a version of this platform that looks like what we’re going to put out there. Once we had this thing up—and it has social features where people can communicate with each other, and it has a business profiles area, and people can make business proposals—once I saw all that in place, I got excited because this is the kind of thing we want to put out there. And then when I exposed some students and people in the community to what we were doing, the response we got was enthusiastic. I’m anxious to put it out there and start getting feedback on it. And seeing that there are so many people I know around the country and around the world, I’m just going to call them up and say, “Hey, get on the platform,” and I know they’ll do it. I know we’ll get feedback, we’ll get responses, we’ll start getting a conversation going. So I’m hopeful. I’ve seen a lot of feedback from people that something like this is needed, and I think it’s really going to make a splash that’s going to create change.
Fostering the next generation of urban entrepreneurs
Horace Tiggs IV: I want to go back to what you just said about students. I know you’ve got an official role at the University of Michigan. Tell me a little bit about how you’re activating the next generation of entrepreneurs—these students—and getting them mobilized.
W. David Tarver: When I came back to Michigan in 2007, I was doing a number of different things. In 2012, I started teaching at the University of Michigan and Center for Entrepreneurship. I wanted to bring my experience as an entrepreneur to students, and I wanted, frankly, to get better at teaching entrepreneurship. It’s one thing to do it; it’s another thing to teach someone else. So I taught general entrepreneurship courses at Michigan from 2012 to 2015, and during that time, we started the Urban Entrepreneurship Initiative. It struck me that there was a need to educate people, to inform people, about this focus on urban entrepreneurship. So I decided to develop a course that was focused on that, because there are enough people out there teaching general entrepreneurship courses already, but there was nothing there that was focused on urban entrepreneurship. So I started a course called Urban Entrepreneurship. It’s now called Innovation for Urban Impact. But the idea is to acquaint students with how they can create solutions in urban communities, to acquaint them with the work of existing entrepreneurs, to let them see the business models, and to develop further the business models of existing businesses so that we develop this cadre of people who are well versed in this particular field. I’ve been teaching that course since 2015. Just this year, it became a regular course at the University of Michigan. I’m looking forward to engaging the students with this platform. Now the creativity, the innovation, the business models that they develop, they have a place where they can park those on the Urban Innovator Platform.
Horace Tiggs IV: Outstanding. One last question. Urban entrepreneurship is very purposeful in the sense that the business you start has to drive impact—hence the name of your course—in a specific community. Given the impact you’re having by getting this concept out there, what does success look like for you? What does success look like in this space when ten years from now, you look back at UEI and the impact that it has had?
W. David Tarver: To me, it looks like having thousands of people on the Urban Innovator Platform—or whatever we call it at that time—interacting with each other and interacting with each other’s businesses to have more businesses created that are aimed at improving quality of life in urban communities. And to have it recognized that this is a viable opportunity for entrepreneurs and innovators focusing on urban communities and developing solutions that are both sustainable and scalable. We just want to increase the overall level of activity in this particular area and to have a recognized community of people who are working together regularly to make these solutions happen.
