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Anchor Aweigh
Longtime chamber prez Nemerson plunges into the New Economy
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Business New Haven
3/20/2000
By: Michael C. Bingham
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On April 1, Matthew Nemerson will draw the curtain on a 13-year career as president of the Greater New Haven Chamber of Commerce and enter the woolly world of Internet commerce as senior vice president of business development for Lexitech, a Branford-based firm that develops proprietary software for use in Web-based kiosks (see related story, page 1). He sat down with BNH March 10 to talk about the past, and of course the future.
What will you be doing at Lexitech?
The way the new economy works is that you need to create a scenario of increased valuation. In the old days, it was, 'How do I build a better production line to make rifles that shoot straighter and can be made quicker?' That's what Oliver Winchester was trying to do. Now you need to create a story and a set of relationships, which if played out to their logical conclusion, you've created great value. How does that position you to acquire the resources to create that value, or are you acquired because of that valuation by someone who wants to have that story as part of their story? What [Lexitech President Alexander Richardson] has created is a fabulous piece of proprietary software which can reach into the Internet and pull out pages, database, video that may be on a Web site anywhere in the world and put it on a touch screen that a user can manipulate without browsers, without typing in URLs. As these kiosks can now be connected through broader-band telecommunications, the possibilities are literally endless. At some point the Internet is going to be how we communicate; it's going to be the printing press. To be able to have access to three billion people at the touch of a screen - say, from a village in China, or a 7-Eleven in Oklahoma - there's value there.
Would you have taken this job if Lexitech hadn't gotten $5 million in new investment?
I wouldn't have been offered the position [laughs]. I've known [Richardson] for 17 years. Lexitech was the first company to move into Science Park. We went to the same school [the Yale School of Management]. We've talked about our businesses and our views of the world many times. The company is prepared to grow. I've spent the last 13 years trying to create real communities; now I find myself in a company where the goal is to create life-like terminals that will create virtual communities.
How does it feel to be moving from an environment where slow and steady wins the race, to one where speed is a cardinal virtue?
People who have worked with me in the policy world know that I can be incredibly annoying to work with, because my basic speed is that I'd rather try something and fail than wait five years to do it the right way. Let's keep pushing the system to failure, and then let's try something else. That's just not how it works in the public-policy world. When you talk about speed, I was out at Lexitech yesterday talking with people and sitting in on a couple of meetings. When it occurred to me what kinds of things were going to happen even between now and the day I start there, and the amount of decisions and business and deals - it was absolutely intoxicating. What you're saying is true about the world I've been in. But rather than feeling thrust into some new world I don't understand - and I don't mean this as a negative about where I've been - I suddenly felt as if the anchor line had been cut and the motor could now shoot ahead. I wanted to go in ten different directions at once. Of course, the real key to creating value is to take a couple of things and do them really well.
What do you think chambers of commerce will evolve into?
Up until about ten years ago, regional chambers like ours had a monopoly on useful information for local business people. If you wanted to know annual retail sales in Cheshire, there weren't very many places that information was easily available. We were the only ones who bothered to get the data. One of our big products that we made a lot of money on was our wage and salary guide, where every three years we would send out a big survey to every company to find out how much a secretary was making at Echlin. Now I can get 1,000 different salary reports for every industry in about a minute. Now there's too much data. So what chambers have to do is analyze it to make it valuable. Raw data doesn't mean anything by itself. What's important to know is are the indicators for biotech job growth in the next five years as robust here as in Princeton, N.J.? The world now is about benchmarking. What the decentralization of power and capital means is that people can go wherever, but they're still human beings and they go somewhere because they like it more. So one of the things [chambers] have to do is be absolutely with-it about collecting information, analyzing information and distributing information.
The second is, in a world where you no longer have the luxury of two dozen CEOs, who once they've achieved the top position at a Sargent or at a hospital, that half their job is to play CEO - to be on boards, to have long lunches, to raise money for organizations. That was a time when most markets were protected - banks had protected markets, so did newspapers. Right up through the early '80s we had a CEO culture here that was very luxurious in terms of the amount of brainpower and money power that could be applied [to civic problems]. In Dick Lee's time you could move 50 companies and demolish six blocks by getting people together to do it. That's over. The next role [for chambers] is to create a sense of virtual leadership by taking the CEOs that we do have, with their limited time, ramping them up on the issues, mixing them with some senior VPs from companies that no longer have local ownership plus the family businesses that are left - and melding them together in support of a single vision.
Looking back over 13 years, what's one thing your would have done differently?
So many things [laughs]…It's a toss-up between doing whatever I could short of jumping off the building to make the changes at [Tweed-New Haven] airport to keep United [Airlines] here - or doing whatever I could short of jumping off the building to keep [would-be downtown mall developer] Taubman interested. The fish that got away. I just look back at United and Taubman as two wonderful transforming opportunities that we had in our net, and they just flopped away.
Do you think the political leadership of this community really believes in free enterprise? All they seem to talk about it 'control' to keep properties from 'speculators.'
I don't think that's about free enterprise. When you're creating value by having government investment, there are a lot of opportunities for virtual blackmail by people who operate more quickly and tie up key pieces of property with no goal other than to flip them back to the public entity at a huge profit. I don't think there's anything wrong with a city capitalizing the equity it's creating by doing the political legwork to bring in public money. Why should an intermediary or just a professional flipper get the equity that the community in essence is creating? The only reason you try to get control of key properties is so you don't have a transfer of wealth from another governmental agency to an individual who simply moved quicker than you did.
If you were a third party writing a brief summary of your years at the chamber, what would it say?
I guess it would be three things: He created a well-managed, strong institution; helped people see the logic of partnering between towns and institutions to get things done; and laid out a specific set of achievable goals and projects that the community can work with toward becoming a world-class community.
Sounds like a good summary. And a good job.
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