December 22nd, 2005

Brad @ Burning Man

Well, That Was a Waste of Their Money

By the late 1990s, the elite who run this town, the boys down at the Missouri Athletic Club and on the board of Civic Progress, were so jealous of Palo Alto and Seattle and Austin that out-of-towners were rolling their eyes and calling for the wah-mbulance. It had become obvious that St. Louis had pretty much completely missed out on the dot-com boom (or, more accurately, bubble, but they didn't know that yet -- for all that I did). This frustrated them beyond all rational comprehension, because as far as they were concerned, that money should have been ours. So ever since then, for ten years now, there's been intense debate on two questions. First, what in the heck did they do right that we did wrong? And second, once we figure that out, what's the next stock market boom or bubble and how do we position ourselves to get the lion's share of that prize? Actually, calling it a "debate" may be generous to the "debaters." The tone of the debate resembles nothing so much as when losers like me "debate" why other guys get all the chicks and what we should do about it: alternating bouts of whining, rationalization of shortcomings, and clueless fantasizing.

Actually, their idea that St. Louis would have made more sense as a place for the dot-com boom to break out is not as crazy as it sounds. Seattle has absolutely nothing going for it that St. Louis doesn't have, and in fact, in the previous tech-stock runup, the Reagan era defense-spending boom, we were ahead of them. Palo Alto is next to Stanford, yes, which is a slightly better school than Wash U ... but it's in Palo Alto, a tiny little town surrounded on three sides by one of the worst slums in the Bay Area, an area every bit as bad as our worst slums and probably even worse than ours. And Austin? Who was calling UT Austin a top school before hand, and before Michael Dell started expanding his operations, who could have predicted they would be big? We had plenty of cheap real estate and office space, near a major world campus, with a thriving night life, and plenty of very frustrated venture capital money running around chasing opportunities without anywhere near enough opportunities to chase.

But anyway, by the end of the 1990s, our ruling elite had come to a consensus on what the next stock-market sector to explode would be: genetics. And this time, they were determined that we were not going to lose. They set up even bigger venture capital funds, and advertised them on campuses all over the country in hopes of attracting scientists with business plans. They persuaded their real estate developer members and buddies to rehab even more buildings as tech-company incubators (in pretty dumb places, if you ask me, but still). The made sure that the whole world knew that a St. Louis company was the world high-tech leader in genetically modified food crops. On the off chance that bohemian cultural life matters, which is one school of thought, they stream-lined the process for getting 3:00 am closing times for bars and dance clubs, and backed Joe Edwards' expansion of the shopping and entertainment district in University City near Wash U. To hedge that bet in case the opponents of that idea were right and what future high-tech employers are looking for is exurban office parks with plenty of compliant workers, they also stream-lined an explosion of new construction in former flood plains on the far west side of the metro area. By the time the Human Genome Project had finished their work, which had been predicted to be the starting gun for the biotech stock boom, St. Louis's rulers were visibly salivating.

Boy did they waste their money. Whether or not DNA is the next silicon, whether or not we're in for another stock bubble, whether future ultra-tech employers are looking for exurban nerdtopias or hot trendy loft districts in bohemian neighborhoods, one thing's for sure. No matter how good the libraries are, no matter how good the bookstores are, ultra-tech investment booms don't happen in the 12th least-educated metropolitan area in the nation.