The Interview: Rosenbaum building a more entrepreneurial TEDCO
Rob Rosenbaum is president and executive director of Maryland TEDCO, a quasi-state agency focused on developing the state's technology industries. (Doug Kapustin, Baltimore Sun / April 17, 2012)
The Connecticut native was president of an apparel manufacturing firm, ran technology projects for big companies, and helped several businesses run smarter and more profitably with his operations acumen.
But for the past 18 months, Rosenbaum, 54, has taken on a new challenge: technology economic development for Maryland. He's been serving as president and executive director of Maryland Technology Development Corp., or TEDCO, the state's technology development arm.
And, with his broad experience in the private sector, he's transforming the quasi-state entity, which is organized like a private corporation, into a less bureaucratic and more entrepreneurial organization. TEDCO depends on state and federal funding for much of its budget, but Rosenbaum has been pushing for it to start pulling in its own revenues.
He sees TEDCO offering its services to investors and venture capital firms, and helping to move cutting-edge technologies out of the state's universities and into the market. TEDCO can also continue to invest in technology startups that could bring healthy returns to the state, Rosenbaum figures.
Rosenbaum, who once ran a venture capital fund, sees TEDCO helping build Maryland's venture capital investment ecosystem. TEDCO is going to guide a $3.3 million early-stage investment fund — Propel Baltimore — in the city, in a partnership with the Abell Foundation. Rosenbaum is also trying to organize the region's angel investors into a $50 million fund that will pump money into early-stage startups.
The Baltimore Sun recently caught up with Rosenbaum, who talked about his successes and failures, and his growth plans for TEDCO and the state's technology sector.
There was a conference organized by the Greater Baltimore Technology Council last week called BMoreFail, where entrepreneurs and business leaders talked about overcoming failure. You spoke at it. What did you have to say?
Part of entrepreneurship is learning from your failures and setbacks. One of the cultural challenges we have here in Maryland, and in a lot of old-money industrial economies, is that failure is not good. You need to get it right the first time. But that's not the case with entrepreneurship. You're going to have some bumps. It's about a cultural change in acceptance of failure. I've certainly had any number of setbacks. There have been strategic decisions that I've made that haven't worked out.
You oversee an agency that helps entrepreneurs take risks in business. Have you mastered your own aversion to failure?
I am OK with risk and with failure. My wife is constantly telling me that I'm much more risk-taking than she is. I've started several businesses from scratch.
You've been in charge of TEDCO for a little over a year now. Where was the organization when you joined and what do you think you've changed or done differently since you took over?
My assessment when I joined was that it was very effective at what it did and what it was initially chartered to do. But it needed an infusion of cultural change because it needed to start generating some of its own income and become less dependent on state and federal funding. We've had to change from a traditional economic development organization to a hybrid revenue-generating organization.
How is that working out?
It's working out very well. The staff has embraced the challenge and the change. I'm not worried about cultural acceptance anymore. I'm fully onto execution now.
How do you get money coming in?
We're generating revenue in two ways. First, on a fee-for-service basis, the way any consultant might generate revenue; and second, on an investment-return basis.
Who does TEDCO consult for?
We have had a range of engagements, some speaking engagements, and we're doing ad hoc due diligence and portfolio tracking for the Baltimore Angels [a private early-stage investment group]. We're managing the new [$3.3 million] Propel Baltimore fund. We are in the process to raise a $50 million investor fund.