Among the more than 4,500 Enron employees who have lost their jobs, John Elder sees a lot of entrepreneurial potential.
WHO: John Elder, 40, serial entrepreneur turned community activist
WHAT: Less than a month after Enron Corp. filed for Chapter 11, Elder and several partners founded Resource Alliance Group of Houston (RAGroup.org), a nonprofit incubator that advises the bearers of pink slips about how to start their own businesses.
A FULL ACCOUNTING: The number of workers laid off by Enron tops 4,500 so far, with another 2,500 or so still in jeopardy.
INITIAL PUBLIC OFFERING: Elder first floated his idea for an Enron-centric incubator at two meetings for former Enron employees that were held at local hotels.
HIGH YIELD: Though fewer than 50 people attended those meetings, Elder immediately received two business plans. He has since been contacted by 17 other groups.
ELDER'S STATESMEN: He has lined up four cofounders, including the retired CEO of Shell Chemical Co., Lane Sloan, to help refine this batch of Enron business plans.
GREAT RESUMES: Elder says the Enron alumni are people who are "very, very solid" and "levelheaded." Most are men in their thirties who were at or close to director level. "All of them have M.B.A.'s if not Ph.D.'s," he says.
"Jobs are simply not available for people at their level. They're going to have to start something."
WHAT THEY LACK: Savings. Any Enron employee who does start a company must be thrifty. "Their net worth is nowhere near what it was as little as eight weeks ago," Elder says.
AMOUNT OF EQUITY ELDER INTENDS TO TAKE IN ENRON OFFSHOOTS: 0
FINANCING HIS CAMPAIGN: To date he has funded the incubator with $5,000 out of his own pocket. Elder initially hoped to raise $130,000 in private and public funds to pay for the Alliance's first 12 months of expenses. Now he's thinking that he may need even more. This fund-raising will be done separately from the deals he'll help negotiate to raise start-up capital for the entrepreneurs he works with.
HOUSTON, WE HAVE AN ADVANTAGE: "Highly educated, available workers and cheap real estate" make the city a good place to start a company, Elder says.
HIGH RETURNS: Donald Hicks, a professor at the University of Texas at Dallas, says that cities with high job-loss rates typically also have high rates of job creation.
REVEALING NUMBERS: Houston's last big year for layoffs was 1986, when the city lost roughly a million jobs and created only 258,000. "Two years later, the numbers virtually reversed," Hicks says.