Don Marostica Interview

I had the opportunity to interview Don Marostica today. It was really interesting, he does a great job of laying things out eloquently and directly. (I had a dead battery in my recorder which is unfortunate as the podcast would have been great.) And the OED offices are really nice digs with an awesome view of the Rockies.

I started off asking what is it the OED does. Don broke it out to 7 parts.

1. Growing businesses in the state, both organically and try to bring companies in. He is concentrating on organically because A couple of states will offer a ton more. Texas (state slogan - "I hate government stimulus") is presently offering 50K/job for companies to move there. Michigan, Tennessee, & Nevada are close behind. So he says that if he can get people to come here, and it's not purely a financial decision, then Colorado has a strong chance. But otherwise – build up what we have.
   Interesting note he brought up – 70% of Colorado business is small business. So that's where the action is here. And they are focused on start-up companies – and a lot of that is teaching people the fundamentals of running a business. (Interesting thing I learned – my company is not a start-up, it's now a growth company.)
2. Helping rural companies. They have a part focused on the rural parts of the state that have been heavily hammered by the recession – some have unemployment rates of 20%. (I think what's key here is generate start-ups in rural areas that can sell over the net world-wide so that brings a positive cash flow to the area.)
3. Increasing loans to small businesses. The present lack of credit is presently the biggest brake on job growth (very true). They are seeing banks starting to loan a little, but it's miniscule. Mostly they are seeing people get money from Friends, Family, & Fools. There is also a state program that has lent some money. And he is working on getting together all the super-rich in Colorado and beating on them to invest some of what they've made here back in to Colorado companies. (This is a really good idea – companies get the money they need and the investors will make a nice profit.)
   My $0.02: The banks are total scumbags withholding credit from companies that have years of continuous profit – after we bailed their asses out when they invested in bogus paper they were all selling each other. (Thank god my company does not need to borrow.)
4. Creative industries from painters to a guy who makes artistic gun stocks. Don thinks this segment will become a significant part of Colorado's economy as it grows.
5. International trade. Most of Colorado's trade is with Mexico and Canada and so that gets primary focus. The other big effort is Japan where they have been working for 5 years to get a direct flight from Denver to Tokyo. A lot of this is trying to set up relationships between Colorado companies and the appropriate people in other countries. (This can help a lot – the relationship building takes a lot of time and money and small companies cannot afford to do it individually.)
6. Tourism, which is our second largest industry. Which led me to ask "what's first?" Well, by far, in "small government" Colorado it's… government. Now this category spans the gamut from City/County up to the federal facilities throughout the state. But still, first?
7. Minority and woman owned business. He then talked a bit about the work they are doing to help small Hispanic businesses in the state.

Don believes OED is doing a good job in a rough environment. He takes a lot of pride in the number of small start-ups they have helped that are still in businesses, and the number of jobs across all of them. I asked him why I hadn't heard of them and he asked me how large my company is and if we're hiring (we are). And his reply was we don't need them. I take this as a good indication – they are focused on getting companies started.

I next asked what industries will be driving Colorado over the next 20 years. He first brought up the excellent point that the single biggest issue of the economy going forward is that we are now in a worldwide global economy. This is true today for software but he sees it as being true even for land development (his background) and that's about as localized a business as any. Excellent point – companies that can't compete worldwide, or that don't sell worldwide, are not going to be successful. He then listed what he sees as the biggies:

• Aviation & aerospace. Aviation in that DIA runs at half capacity and he thinks that will grow to full. Aerospace in that companies like Lockheed-Martin and the federal government have a ton invested here and will continue to grow it.
• Bio/life sciences. Everything from medical care (which is gigantic everywhere) to bioscience research. One item he called out was some company has a bio-something that can be pumped into the ground and it causes ongoing natural gas generation there.
• Green energy. We have seen a lot of investment here and he puts a lot of that due to the fact that the euro/dollar exchange rate has slipped to make purchases in the U.S. dirt cheap. But hey, however we get it.
• I.T. (Yeah!). He said that the upper floors of all the offices along Pearl St. in Boulder are filled with software start-ups, many of them game companies. Out of this he thinks we will get a number of good sized successful companies with a lot of great jobs (very true).

My $0.02: I think everything he says here is spot-on. But if we want our companies to be successful worldwide, then the state needs to update its tax laws to take into account sales worldwide. And install leadership in the Department of Revenue who can actually figure out what should be done, and implement it.

Finally I asked him about the future of the Republican party in our state. He believes the GOP suffers from a lack of leadership, that they need strong experienced leaders who are not career politicians. This was interesting that his discussion was not at first about the philosophical schism, but instead he discussed how the leadership is people who have made a career of politics and who have not been in it that long.

I then asked about the schism between those who want a more conservative party and those who look to the private sector and want to minimize government, but are somewhat moderate and can therefore craft compromise with the moderate Democrats. This also got an interesting response in that he talked about the social conservatives who wanted to tell everyone how to live vs. the "independent" Republicans who want to leave the social part to individuals. This was interesting because he didn't even bring up the "drown government in a bathtub" contingent. (I should have asked is that because this contingent is so small.)

I finally asked if he thinks the two wings of the Republican party will come back together. Don does not see that happening. I pointed out that we Democrats managed to do it, but he was adamant that it's not happening on the GOP side (soon).

My $0.02: I think he's correct that the state GOP is missing that senior active level of political leadership. They have young up and comers like Penry and McNulty. And they have the retired old dogs like Armstrong & Brown. Scott McInnis is really all the GOP has and that's not a deep bench (Jane Norton has connections, but not the depth of experience). I don't know why the state GOP is missing this segment in their leadership but Don is spot-on with this observation.

On his view that people should not make politics a career, it is a somewhat common viewpoint, but much easier to hold for someone who themselves has not made it a career. As you move up the ladder, there is a strong advantage, both in electability and in being effective in office, in having a ton of political experience. Reagan and Clinton were both very effective presidents – and both were career politicians. It's an interesting question, but I don't think it is the root of the GOP woes.

His opinion that the schism in the Republican party will not be healed is the most worrisome. Don is one of the leaders of the "independent" Republicans. He clearly speaks to many other Republicans of similar view. And he sees them sitting politics out because of this schism (and the requirement to fully disclose finances). If this is true, the Republican party will either break in half or will stay in a minority position. Either way that is not good for Colorado because a permanent Democratic majority will lead to a corrupt system (see Boulder).

My final question was where he sees the economy going. He thinks the next 2 – 3 budgets are going to be awful. Income for the state is a lagging indicator and the federal money is going to dry up – both the direct dollars to the states and the stimulus funding. So the first 3 years of the next administration are going to be awful. (So as Dems, should we work to get McInnis elected?)

I enjoyed talking to Don. He's a nice guy, speaks what is on his mind, and has a good understanding of helping business in Colorado. I think Governor Ritter made a good choice here. On the flip side quiet competence tends to be boring – so no fireworks out of OED.