For a long time here, people believed in miracles.
Economies around the country would topple, and Vegas would keep growing. At a more immediate level, you could put a few quarters in a machine, push some buttons and come out thousands of dollars richer. If slots teach anything, though, it’s that players lose many times more than they win.
Which brings me to Romotive, the company that took a $500,000 investment from Tony Hsieh and his VegasTechFund, built itself up, then announced Friday it was leaving for the sunny, high-tech environs of Silicon Valley.
It’s probably not a financial loss for VegasTechFund, which has gotten or will get a nice return on its investment. Romotive, after all, recently received an order for 10,000 of its iPhone-driven toys/robots and is making the devices in China. Yet, it’s definitely a loss for VegasTechFund, which is trying through investments not only to make money but to build community.
VegasTechFund is a startup investor with a different mission. Its mantra is to invest in companies that give back to the community. Instead of ROI, which is the Wall Street dictum “return on investment,” VegasTechFund has in its bylaws the touchy-feely ROC, which stands for “return on community.” The fund only invests in startups that, in some way, enhance the Downtown Las Vegas community.
So did Romotive fulfill that part of the equation?
Sure, they held a potluck dinner for the “community” every week. But Romotive’s real community return was supposed to be in the jobs it created. For a short while, that was enough.
Company founder Keller Rinaudo and a few baby-faced college grads moved here in 2011 and grew the company to at least 20 employees. They lived and worked in the Ogden, where Hsieh has a bank of some 50 condos that are rented to new tenants or are free to some visitors.
One of the good things about how VegasTechFund invests is that it also tries to help companies in its portfolio with ancillary benefits, such as mentoring—providing tech and business advice to young entrepreneurs who might know everything about coding but less about how to turn a good idea into a financial success.
It’s a remarkable business model, especially for Las Vegas, whose business people are known more for their shark-like instincts. In the long run, it could be argued that VegasTechFund’s community-mindedness might be infused into the new companies, which will then pay it forward. With Romotive, it feels like just the opposite happened. With nurturing, Romotive grew and became a success, but instead of deepening its Vegas roots, the company bolted for California.
In an email, Rinaudo said the company wanted to be closer to “strategic partners and hiring brilliant senior talent.” Oddly, something I often hear from tech-types Downtown is that they don’t necessarily need all the talent to live here in Vegas. With speedy Internet connections, Skype and other forms of connection, “talent” can work elsewhere for companies here.
Many took this from Romotive’s announcement: They took the money then left him when things got good.
The “him” is Hsieh, of course. As time passes, the question will be how many of the tech companies he lures here will learn to believe in Las Vegas.