There’s been an explosion of interest in new “startup accelerators,” incubation, coworking, startup funding, and new-manufacturing efforts in Baltimore in the last few months; unfortunately this appears to say less about Baltimore than it does about the growth in interest in these efforts worldwide.

Here’s a list of some efforts in this space:

• “Accelerate Baltimore” at ETC Baltimore
• Accelerator led by Cangialosi and Lane
• ETC Baltimore itself (Canton and 33rd street)
• Baltimore Node, Hackerspace on North Avenue
• Sizeable Spaces, coworking in South Baltimore
• Capital Studios, coworking on Central Avenue
• Beehive Baltimore, coworking at ETC Baltimore
• Accelerator effort being driven by Mike Brenner
• Accelerator/cyber/techspace in Harbor East, led by Karl Gumtow
• Innovation Alliance effort being led by Newt Fowler
• Theater/workspace being discussed by Chris Ashworth/Figure 53
• Shared warehouse workspace being discussed by Andy Mangold/Friends of the Web
• Baltimore Angels (Cangialosi et al)
• Invest Maryland fund (DBED)
• TEDCO’s Innovation fund
• Abell Foundation fund (tied to Accelerate Baltimore)
• Wasabi Ventures fund (investing in city, affiliated with Loyola)
• Fabrication Lab at Towson University
• Fabrication Lab at CCBC
• Fab-lab ideas discussed by John Cutonilli
• Highlandtown workspace development led by Ben Walsh
• Mike Galiazzo, pushing Local-Made, (head, Regional Manufacturing Institute)

Did you know about all of these things? Amazingly, many of the people leading these efforts don’t. Or if they do, they’ve not actually talked to the people involved. To me, this is a problem.

Why? Because folks attempting to gather support for these efforts don’t have all the facts. They either haven’t sat down and listened to people’s motivations, and they’re flying blind. Or it means that they have been unable to sell other like-minded entrepreneurs on their vision, which probably means their vision is not that compelling. And that’s even worse.

But this is not all that’s wrong.

Two Serious Problems

One: there’s a tremendous amount of duplication of effort represented in the list above. Why duplicate all of that administrative, accounting, legal, and governance overhead? By pooling more of these efforts together, that overhead can be minimized and shared.

Two: we don’t have enough human capital to support all of these different efforts. We simply DON’T. Many seem to think it will somehow materialize, but from where I sit, with possibly the widest-angle view of the landscape here of anyone, I don’t see that flow of new startups or even new individuals that can support all of this. It just doesn’t exist.

The Opportunity

Baltimore has an opportunity to become a regional and even international destination for people looking to start or join entrepreneurial enterprises. But for that to happen, we need to have stuff here that can actually become a destination.

And unfortunately, the efforts currently underway are not likely to become that destination because duplicated overhead will keep each effort small and parochial.

However, if more of these efforts pooled their resources and talent – and most importantly identified a BIGGER and more IMPORTANT vision for what it is they are trying to achieve, there would be many positive effects, such as ample governmental and foundation support. And that would be hugely helpful in funneling in the sorely lacking regional and international *human capital* that we so desperately need here!

One Possible Vision

Baltimore has an opportunity to become the hub for digital manufacturing and mass-customization technology on the east coast.

Cangialosi and Lane are already talking about supporting some basic fabrication capabilities at their proposed facility on Key Highway. Gumtow’s effort has placed fab-lab capabilities high on its priorities list. CCBC and Towson have fab-labs, though it’s my understanding they may be underutilized. If you’re going to spend money on fabrication equipment at all, it should be utilized 24×7 in order to maximize the asset.

Something bigger – like taking over the WalMart in Port Covington, or the Meyer Seed Warehouse in Harbor East – could support an accelerator, fab lab, and shared workspace. Thinking a little bit bigger would also have the effect of lowering per-square-foot costs dramatically, and even dramatically altering the real-estate ownership structure.

Baltimore is already home to Under Armour, and at some point in the near future (similar to what happened with Ad.com) it will start throwing off new entrepreneurs with experience in consumer products and manufacturing. Where will they go? Will we keep them here in Baltimore?

Focusing on the intersection of manufacturing and technology is important because it represents the one shot we have at rebuilding even a little bit of a middle class here in Baltimore. Because of that, you’ll find abundant support for such efforts — support that can further reinforce Baltimore’s reputation as an international destination for digital and manufacturing.

The More the Merrier?

I am a fan of placing many, diverse bets rather than making a few large ones. But it’s also important to make strong bets. Unfortunately, Baltimore is right now setting itself up to have many weak positions instead of a smaller number of stronger ones.

I strongly urge the folks leading these efforts to get to know each other and coalesce around a bigger unifying vision that can turn Baltimore into an important regional and international destination for entrepreneurs.

Because without agreeing on a bigger vision, it’s likely that these efforts – each led by well-meaning individuals but with individual motivations – won’t ultimately amount to much, and it would be a shame to waste so much time, effort, and talent.

I’ve been vocal about the 2011 Mayoral Race in Baltimore. It’s an opportunity to break free of the machine and finally put the city first.

But there’s a sorry timidity in Baltimore politics. Everyone agrees we need change. But too many are resigned to the way things have been, and whose “turn” it is. Who owes who favors. But this is a democracy, you say. Every vote counts, right?

That’s not how things have been. In Baltimore, the fix has always been in. However, last year we started to see the machine creak. Upstart young candidate Bill Ferguson unseated 27-year incumbent George Della. Gregg Bernstein defeated long-time incumbent Pat Jessamy. Cynics would point out that Ferguson was adopted by a clique of developers, or that Jessamy ran a horrible, entitled campaign. But still, this wasn’t how it was supposed to be.

There is other evidence of the decline and fall of the system. Ridiculous and incompetent Belinda Conaway filed a $21M suit against a blogger – which backfired. Now her challenger Nick Mosby has a real shot at upending the ludicrous and long-time Conaway “three bears” platform. And her father Frank appears more ridiculous every day.

I want more for Baltimore. That’s why I’ve supported Otis Rolley in his campaign for mayor. I’m simply tired of business-as-usual in Baltimore.

Specifically, I’m tired of developers being offered tax breaks in exchange for campaign contributions. I’m tired of city contractors being given lucrative no-bid contracts in exchange for campaign contributions. I’m tired of the same old tribe of corrupt, cynical power brokers doing what they have always done.

A vote for Otis is a vote for new blood – and for entirely different people. Don’t kid yourself. When you vote, you’re not voting for policies or a platform. You’re voting for a power structure. You’re voting for a group of people.

• Stephanie’s people: out-of-state contractors, developers, city contractors, democratic party operatives, county-based people with interests in the city, friends of her father’s, the Governor, the Governor’s brother, attorneys, KAGRO (the trade group that represents the Korean corner-grocers profiting from Baltimore’s food deserts), casino operators, scrap metal dealers, city employees. These people have either “paid to play” or are actively benefiting from the decline, fall, and eventual ruin of Baltimore – or want to have a finger on exactly how Baltimore is run.
• Otis Rolley’s people: real citizens of Baltimore (rich and poor; more individual donations than any other candidate); tech people, urban farming people, entrepreneurs, designers, patrons of the arts, folks from ALL of Baltimore’s neighborhoods.
• Catherine Pugh’s people: contacts from her work in Annapolis, aerospace contractors (?), some decent and concerned folks throughout Baltimore, a computer repair shop on Fayette street, Scott Donahoo (used car dealer).
• Jody Landers’ people: folks primarily concerned with the property tax issue, strong base in NE Baltimore, realtors, and many individuals associated with real-estate issues and encouraging residency in the city. (Ed. note: this post previously made reference to Live Baltimore, on whose board of directors I serve. There was no intention to associate Live Baltimore with any candidate or agenda.) Not many others.

I like and respect Jody Landers and Catherine Pugh. However, I had hoped that Jody would weigh his chances, drop out of the race, and back Otis. I, and others, asked him to do just that. And I think Catherine Pugh can do more for Baltimore by continuing to serve as a State Senator in Annapolis. She had nothing to lose by running for Mayor.

The conventional wisdom (The Sun, with its one poll and its feeble, lackluster endorsement of Rawlings-Blake) says that the fix is in, and we should just accept our fate.

There is one way that this race can end differently, and that is to turn out votes for Otis Rolley tomorrow.

The same set of jaded old political pundits (Barry Rascovar, Frasier Smith, Matthew Crenson – I’m looking at you) who will tell you that the “race is in the bag” for Stephanie are the same ones who also predict that turnout will be atrociously low on Tuesday.

Wonder why that would be? Maybe folks are tired of being told how to vote, and that races are over before they start.

It’s true. The internet and social media are not the drivers of voting behavior in Baltimore yet. But the Ferguson, Bernstein, Mosby, Ramos, and Rolley candidacies have received a boost from discussion by “networked citizens” that is unprecedented in Baltimore. And that’s something that the Sun’s lone pollster and our 1980′s era political pundits seem incapable of understanding. And the sentiment on Twitter has been overwhelmingly in favor of Otis Rolley (with almost no mention of Sen. Pugh, and few positive comments for the Mayor.)

It’s impossible to predict the outcome of tomorrow’s race. But know this: YOU can change it. You have a voice. Go vote. Get others to vote. Baltimore deserves that.

And beyond tomorrow, there’s another truth: 5th most violent, the 6th dirtiest and the 7th most murderous is no longer good enough for Baltimore.

To all those who say “stay the course,” please get out of the way. Baltimore deserves the best. We’re done waiting.

Check out Tom Loveland’s insider view of this election (and accompanying post). The reality will surprise you.

Otis Rolley delivers this powerful “closing argument” on why you should choose him as your next Mayor.

Otis shows his deep love for Baltimore, and understanding of cities, at TEDxMidAtlantic 2010.

Newly-elected Maryland State Senator Bill Ferguson was recently named to the Baltimore Business Journal‘s Power 20. This week they asked me, as a friend of Bill’s and member of a previous Power 20 cohort, to comment on Bill’s relationship with and use of power.

“Bill is a curious, humble, and earnest young man, and he represents a true shift in how power is conferred in this town,” I said. “He didn’t work his way up through the ranks and spend a few years as a city council person, or wait his turn. Bill was able to win because of a shift in political power that’s taking place right now. He derives his power from the people, not from the system.”

Political power is now being conferred through the accumulation of weak and strong ties with citizens, and no longer by top-down power structures, power-brokers, and kingmakers. Don’t get me wrong; those folks still have an impact (they did in Bill Ferguson’s race – they got behind him when it was clear he was onto something), but that impact is waning. And things that were previously unthinkable are now possible.

It may seem like hyperbole to compare the situation in Baltimore to what took place over the last three weeks in Egypt. But it’s an apt comparison.

For decades in both places, people have felt marginalized by a top-down, tone-deaf government that was more interested in its own well-being than that of its citizens. In both places, decades of neglect and mismanagement have led to a serious crisis of confidence.

People are fed up. They’re tired of feeling marginalized, the failed programs, the broken promises, the lack of accountability and the inability to implement imaginative solutions. For 60 years, Baltimore’s population has been in decline, and places in decline have not had the benefit of oversight, dollars, or creative leaders. Instead, corruption (explicit or implicit) festers.

The Perfect Storm

Several factors are emerging all at once:

• Young people want to live near their work and are tired of commuting (and they’ll accept a pay cut to do it)
• Our roads are full and can no longer be meaningfully expanded due to lack of space and funds
• Fuel costs are projected to rise as China’s demand grows exponentially
• Online networks are having a meaningful impact on real-world relationships and politics

These factors, combined, have made Baltimore the most important jurisdiction in Maryland – practically overnight. Yet our leadership has not caught up with this reality.

Baltimore’s recent rise to relevance combined with the power of communications networks will create stark shifts in the power structure.

Two Kinds of Leaders

Today we have a choice between two kinds of leaders. We can choose between the leaders that the system hands us, or we can choose to put our faith in new, emerging leaders with whom citizens have a legitimate connection and a voice.

It is sadly telling that Mayor Stephanie Rawlings-Blake’s much-promoted (Orwellian, broadcast-oriented) Safer City social media campaign follows just one person on Twitter: the Mayor herself. And it has just 78 followers. Why? Because it’s all for show, and no one legitimately cares about a program to mitigate a problem – people actually want to solve it at the root. To hell with a Safer City: give me a city where everyone can earn a living, and I can bet you it’ll be safer.

But our politicians don’t know that, because they have not taken the time to benchmark ourselves against other cities or learn from best practices elsewhere. Baltimore has more cops per capita than any other city. Why is that?

Because we need them. Why do we need them? Because we have a lot of crime. Why do we have a lot of crime? Because we have no middle class. Why do we have no middle class? Because we have not seriously focused on enabling small business formation, which is the number one driver of jobs. Instead we have given tax handouts to fatcat developers so they can build big projects and enrich their cronies.

Yes, clearly the cure is more cops. As the Mayor told the Baltimore Sun’s Justin Fenton, “Maybe we could do without as many officers, but that’s not what the public wants. They want more patrolmen on the street. They want more police in the neighborhood.”

No, Madam Mayor. What the public really wants is for these root cause issues to be addressed. It takes true leadership and understanding to go beyond just treating the symptoms.

Accelerating Change

Some have called the recent events in Egypt “the Twitter and Facebook revolution.” A few have scoffed at the idea that these tools could spark a revolution and cite eons of revolutionary precedent as proof. But it’s a mistake to dismiss their role.

Online networks are accelerants. They create connections passively where none might otherwise exist. Critical mass for change comes when the density of connections between people reaches a threshold level. Ideas spread between networks instantly. What might have taken 10 years before now takes 1 year.

The Soviet regime could never have survived in the age of networks. Iraq would have collapsed under its own weight if given time and these tools.

And the same repressive structures will fall in Baltimore, for the same reasons.

To quote Gandhi: “First they ignore you. Then they laugh at you. Then they fight you. Then you win.”

50% Off Loaves and Fishes…

Every few years a company emerges that grows so swiftly that it manages to define the zeitgeist and often helps to inflate a bubble that defies any rational explanation. Often these businesses are driven by new, disruptive ideas that take the market by storm and create a real shift in how people do things. Amazon (and online shopping), Google (and the search business), and Apple (music, smartphones, and touch computing) fall into this category. They created real, thick value.

For every one of these, there are others that grow, get tremendous buzz, and then seem to dissipate as quickly as they emerged. Or they settle into a kind of staid middle-age, their torrid teen years long forgotten. Think about 90′s darlings like IOmega, Boston Chicken, eBay, and Home Depot. It can be difficult to predict which businesses will stick around and which will fall away (or become low-growth, boring enterprises).

Groupon has emerged as the “Jesus Startup” of 2010-2011. The industry always needs one, and they tend to conform to an archetype and have a mythical story: the visionary CEO (Marc Andreesen, Evan Williams, Mark Zuckerberg) who experiences a remarkable rise to greatness. For this story and for these 15 minutes, we have Andrew Mason, the humorous and self-deprecating everyman who declares of the fledgling Groupon, “We could still fuck this up.”

The implication is that they’ve done something to “ace” it so far. But the truth is that they are just regular guys that started out doing something else (some kind of social mission charity stuff – blech – don’t talk about that, it’s not compatible with the visionary myth). And after executing on their original idea and experimenting a bit, they found themselves in the middle of a new exploding business model. Kudos for that. But as is the case with most “Jesus Startups,” there’s been a notable lack of critical thinking about what happens next.

Here’s where I think Groupon is weak.

1. Over-reliance on hypergrowth.

Groupon has posted some crazy huge numbers as they push through massive expansion into new markets. When you are turning up a new major metropolitan area every few days, gross revenue numbers are going to grow very quickly as businesses rush to be part of something that’s got so much buzz. As their geographic footprint stabilizes, top-line revenue will start to level out. When that happens, the business becomes much less interesting and has a lower upside (see Home Depot, Gap, Boston Chicken, Microsoft). This is why a push to IPO while this hypergrowth is happening seems to be a priority for the company.

2. Customer fatigue.

If you have been using Groupon, Living Social, GILT, HauteLook, or any of the countless other sites that rely on daily emails to get their message out, I’ll bet your experience has been something like this: at first you reviewed the emails every day; you bought a few things; you are now buying almost nothing; now, you may not look at the emails at all; you still have unused Groupons. Time is money, and people have too much crap. Eventually, people are not going to take the time with this. And when Groupon has exhausted all the “easy hits” that drive people to buy, then what? Besides, I thought email was “dead” and for “old people.” Right? Or did I miss something? (Sure, the deals spread through Facebook or whatever social channels, but email is a huge part of the business model.) As younger folks steer away from email, it’s an open question whether the current “daily deal” model can be sustained.

3. Business fatigue.

Businesses are tripping over themselves to be part of the latest new thing and expose themselves to thousands of customers at a shot. And sure, a Groupon deal can be a great opportunity for some businesses. But many businesses (some say up to 40%) have found that doing a Groupon deal can be a costly mistake that actually damages their business. The economics of the deals deliver a fraction (typically 25%) of the face value, which often does not cover their costs. While there is some breakage (unused deal revenue that can offset losses), this still may not cover the cost and hassle the promotion entails. Additionally, businesses that undertake in smart advertising can promote themselves all year round. A business can do a Groupon deal at most once every few months – otherwise the deal just doesn’t seem “special” enough. Groupon is a great novelty that can help some businesses become better established, but I really wonder if many businesses would participate more than once or twice, when compared to ongoing targeted marketing initiatives.

4. Scale as the only barrier to competition.

There are now thousands of competitors to Groupon (Living Social is the largest). There will be thousands more. The reason why both companies have received such massive investments to date is that they need to get big to create a local sales force in every market in the world, which is obviously an expensive proposition. If they can get sufficiently big, they can build a sustainable business that will dissuade new market entrants simply because any competitor would have to build a worldwide localized sales force. And if you’ve ever had to run a local sales force, you know that it’s a very expensive, messy, people-driven business. The business that Groupon will eventually most resemble structurally is the Yellow Pages. With sales teams in every city, the major directory publishers were able to exert a near monopoly control over the interface between local businesses and consumers, and Groupon is going after the same market. The difference is in Groupon’s use of technology and use of social. Otherwise, the two businesses are nearly indistinguishable. The assumption is that Groupon’s scale will prevent competitors from gaining a foothold, but I don’t see any real reason a focused local competitor couldn’t develop a sustainable business.

5. Tone-deaf on China.

Groupon has undertaken a massive push to expand into China. That sounds great, and any US investor would likely salivate over such an aggressive, prescient-sounding move. Ah, that Mason guy, he really knows his stuff. But my friend, China-expert Christine Lu tells me that Groupon’s Berlin office has recruited 1,000 new hires for China in the last three months – many recent college graduates. But here’s the thing. I’m currently getting a daily deal from a site in Shanghai called Wufantuan that’s indistinguishable from Groupon. (50% off Mexican food in Shanghai was one recent deal.) If you know anything about the Chinese market, you know it favors locals and cloning is part of the culture. To expect Groupon to be able to achieve anything meaningful in China is wishful thinking. Google got run out of the country on a rail. You expect the powers that be there to allow a US firm to “split” revenues with Chinese businesses to provide its budding bourgeoisie with deals on burgers, skydiving, and cupcakes? Um, yeah. OK. If there’s a business there, it will be Chinese. The entire Groupon strategy with China is theater, designed to show investors that they’re “paying attention to that market” while they ready the IPO.

So, the real deal of the day is for Groupon itself. The question is whether there’s enough upside in the model – and enough “bigger suckers” out there for the average Joe to make any money on the offering before the business model settles out and becomes the next eBay, Home Depot, or Gap. These are fine, sustainable businesses, to be sure, but all are way less sexy than they once seemed. (Yes, for about 6 months in 1995, Gap was incredibly sexy.)

Before you decide that Groupon’s the next hot young thing, it’s worth asking whether you want to jump on this model right now. I believe there’s a really nice, long term, but ultimately very boring business in there that should pay a nice dividend. Meantime, the visions of hypergrowth are likely much exaggerated.

I certainly can’t criticize the trajectory that Andrew Mason and company have managed to carve out for themselves. It’s an incredible story and it’ll be fascinating to see how it unfolds. The expectations are so high, they really can’t be met.

My bet is that they will need to move on to more sustainable forms of year-round marketing for businesses and away from the aggressive 50% discount model. That’s a much less sexy place to be and it will require some real creativity to carve out a niche there. But I just don’t buy the idea that they can continue to build a business based solely on deals of the day at such aggressive discounts.

The Groupon model right now is based primarily on creating new relationships between businesses and customers. They’ll be on to something really interesting when they can help to nurture and sustain those same relationships profitably.

From my friend Christine Lu (@christinelu):
Thanks for the mention Dave. I think they’re hiring 1K in the next few months. As in currently in the process of. Things over there have just sounded a bit weird to be a sustainable market entry strategy so I think it’s all a nice way to have a China story to prop up the IPO. The elusive vision of 1.3 billion people using Groupon. Nevermind that clones are already saturating the market and they’ll have Alibaba’s Taobao to deal with. Anyways, we discussed it a bit on Quora.

From my friend Vivian Wang (@vivwang):
The JV is a positive differentiator for both companies and will accelerate market consolidation. There are 1686 other group shopping sites as of December, yet only 29 sites have CIECC licenses to legally operate. Some believe there are only 10 serious contenders that can attractively compete. The real threat is Alibaba and Taobao, so a more international footprint into China seems warranted. One of the smarter things Groupon did was buy Mob.ly back in May, which has been developing on all mobile platforms. For a sector that’s already doing about $79B in transactions, I think the risk seems worth taking.
…
Hope something truly uniquely innovative comes out of this that the world has yet to see. I’d personally love to see Tencent migrate from selling a $1B of games & virtual goods to some seriously tangible merchandise. The foolish side of me actually thinks they’ll have a fair shot at it. Should be fascinating.

And from my friend Francine Hardaway (@hardaway):
I believe all this bargain stuff, especially in the US, is part of the recession and will go away when it is over and we all relax. I agree with you 100% on Groupon’s model; I am done buying stuff I don’t need, even at half price. All the people I know who love coupons (I never have) are armed with sheaves of them, and all that happens is the merchants are in price wars with one another in a race to the bottom. Sites like Groupon and Haute Look might be marketing front ends, but they are also margin-shavers for the people in the businesses they market. This HAS to be unsustainable at the end of the day, whether China is successful or not (and I bet it won’t be, because of all the people who, when we were in China, got up and said they would clone our products in half an hour).

What do you think about Groupon?

The 2011 Mayoral contests represent a unique opportunity to make American cities work again. Cities have already begun an inexorable return to relevance as refuges from crushing commutes, and as havens of culture and innovation. Our economy is increasingly hitched to our ability to develop and capitalize on innovative ideas, and that innovation can’t happen when folks are trapped in their cars and isolated in the matrix of suburban sprawl. Cities are the American future.

But in the early 1970′s, they were left for dead: victims of race and class warfare, they became abandoned places – a place where people work or would go to the symphony, but not places to build a life or raise children. Formerly walkable, livable cities degraded into a-la-carte destinations you could get into and out of quickly as 1950′s visions of suburbia gained dominance.

With this shift, cities’ political influence waned, and city politics evolved into a top-down enterprise. Power brokers, political clubs, and church groups conferred power on those who would play the game and wait their turn. In Baltimore, city politics became either a launching pad for state office, or a refuge of scoundrels whose city fiefdoms became ends in and of themselves. Instead of working for Baltimore, all too often our politicians have tried to enrich themselves at its expense. With minimal popular interest and the atrophy of the press, there has been increasingly less oversight. So the machine has lumbered on – unencumbered by the tempering force of investigation, new blood, or real political imagination.

In other contexts, leaders are judged on their ability to lead and deliver tangible improvements. But in our cities, it has become enough for our politicians to just not screw things up even worse than they found them. Enough. It’s time to move forward again.

In 2010 we saw some new trends: long-term incumbents who fit the old standard – of merely not being demonstrably corrupt or incompetent – were booted out. And not because of typical anti-incumbent anger, but because people saw something else: that maybe we could demand better.

In Baltimore, 27 year-old newcomer Bill Ferguson delivered a decisive blow to 27-year incumbent State Senator George Della. Gregg Bernstein defeated long-time incumbent Baltimore City States Attorney Patricia Jessamy. These races shared two things in common: no one thought they could upset the machine, and they used the Internet to organize financial and ideological support.

The simultaneous rise in the demand for urban living along with the use of the Internet for political and community organizing will usher in an era of unprecedented change in American cities. With the 2010 races, the old system was put on notice; in 2011 it will begin to be dismantled.

I support Otis Rolley in his candidacy for Mayor of Baltimore in 2011. At 36, Otis is part of the new guard. He’s qualified – he has a masters’ degree in City Planning from MIT. He has been in Baltimore since 1998. He served 10 years in the public sector and two in the private sector. As an executive, he led the Baltimore City Department of Planning and – shockingly – produced the city’s first actual master plan in 39 years.

In his time at Planning and as a Chief of Staff, Otis was struck with one question: can’t we do better than this?

Indeed we can. Leadership is about creating a culture based on shared values. We need a leader who is willing to stand up for his values and the values of people who care and work hard, and not allow entrenched career “slugs” to dilute those efforts. He proved he could do this at the Department of Planning, empowering those who had a vision for the city, pushing out those that did not.

But while Otis was able to turn around a non-performing department and produce a workable plan for the city, he ultimately realized that the only way to see its recommendations executed was as Mayor. We should give him this opportunity.

Otis can turn around our city the same way he turned around a department: by creating a new culture. Frankly, there are a lot of people in city government who should be looking for other kinds of work. We can start there.

Otis understands that we need to start allocating our resources differently. Economic development has for too long been about big projects, like the currently proposed $900 Million Baltimore Arena redevelopment. While this plan would assuredly enrich some developers and provide ample future backing for political operators looking to entrench themselves for a lifetime in Maryland politics, we should instead be thinking about new ways to capitalize on Baltimore’s biggest economic development assets: its people and its fortunate geography.

If instead we were to invest $900 Million in the infrastructure to support entrepreneurial enterprises and startups, we could potentially create tens of thousands of jobs across a wide range of income levels. A new startup-friendly Baltimore could outperform other regions in terms of standard and cost of living as well as access to a world-class workforce. A strategic focus on manufacturing, both large and small using the latest technologies, could restore what was once a thriving middle class. Arenas, convention centers, stadiums and hotel subsidies just deliver more jobs that don’t even pay a living wage. Otis knows we can do better.

In 2011, we have a choice: do we want to be a good city, or a great city? Otis has a vision that he will articulate over the coming months as part of what should be an open and healthy debate around the future of our city, and not about personal politics. As I have come to know Otis over the past 14 months, I am confident that he is the right leader for Baltimore’s future. If you give him an opportunity to serve, you will not be disappointed.

Baltimore is Otis’ first priority. He has no aspirations for higher office. He wants to work for Baltimore and for all of you. In 2011, we have the wind at our backs – cities are on the upswing, and the Internet is connecting us in unprecedented ways. It’s time to take back our cities and make them the vital, beautiful, functional, and inclusive places we all know they can be. Otis Rolley can help us do that. This is Baltimore’s moment; let’s seize it together.

Also check out Otis’ talk at TEDxMidAtlantic on November 5, 2010:

Last week another Maryland elected official, Prince George’s County Executive Jack Johnson, was arrested – along with his wife – on federal corruption charges. And once again, land development deals were the problem: a relatively inexperienced public official was lured by small profits gained by handing out development deals to a few cronies.

Shockingly, the press and the public feign surprise every time this happens. The Washington Post’s coverage of the Johnson arrest earnestly reports that the county seems to have developed a “pay to play” culture – and that you “don’t hear that about other jurisdictions.”

What about Baltimore city, where just nine short months ago former Mayor Sheila Dixon was convicted for accepting gifts and bribes from developers? Granted, Dixon was dealing in a few thousand dollars worth of gift cards and baubles while Johnson and his wife were flushing $100,000 checks and stuffing tens of thousands of dollars in their underwear. But one gets the impression that this may be a result of Dixon’s relative inexperience. Given more time, she would likely have learned to ask for more.

How did we get here? How is it that public-private development deals can be handed out to cronies and first-time “developers?”

First, too many people that seek public office expect to be financially enriched by it. There’s a reason it’s called public “service” – it is meant to be a sacrifice made in exchange for the opportunity to participate in private enterprise. When politicians go into office expecting that the power of public office should also include big money, they’ll be disappointed. Only crooked deals can fulfill those expectations.

Second, we have collectively lost sight of what “development” actually means. Today when people say “development,” they almost always mean turning an unsuspecting piece of land “into” something, whether it’s houses, a shopping mall, a hotel, or a stadium. And sometimes that fulfills a real need.

But too often, these are projects that we don’t truly need – but they do hold the potential to make a few people pretty wealthy. A small-time developer can double his wealth over a few years. But like a small-time addict, the beast must be fed: with new land, new projects, new deals. Because very often the gains are one-time hits. A housing project might make a five time return on investment. To keep the perpetual motion machine going, there must always be new deals.

This is where local elected officials come in. Mayors and county executives have just enough power to direct their agenda towards development projects that can enrich developers. Often, cronies of elected officials will become developers just to take advantage of their proximity to this fresh supply of new land deals. This seems to have been the case with Johnson. One of Johnson’s golf buddies had never developed anything, but was given a no-bid contract on a major project. This constitutes an illegal squandering of public funds.

Maybe it’s time to rethink what we mean when we use the word “development.” Do we really need to develop more strip malls, hotels, and suburban housing? In a place like central Maryland, we’re darn near out of land anyway. So this pyramid-scheme of land development has to stop. The corruption will only stop when local elected officials stop thinking that no-bid or restricted-bid contracts for major development deals actually move anything forward.

Instead, let’s start thinking about “development” in terms of “resource allocation.” How are we going to allocate scarce public resources to enrich our citizens through education, equal opportunity, and in repairing and maintaining the infrastructure and buildings we already have?

If the goal of “development” is to advance the economic opportunity and prosperity of the people of our state, maybe we should start by valuing our landscape. Instead of cluttering it up with mile after mile of pointless suburbia, let’s invest in places that mean something to the people that live there. Let’s make the places we have better. Let’s fix blight and make transportation systems that work. Let’s plant trees and make bike lanes.

Development should be about developing our people and making what we already have work more efficiently, not in building shoddy new projects that devalue existing assets and clutter our landscape.

And when contractors are required, let’s put the bidding online, require each bidder to go through the same qualification process, and let the lowest, most qualified bidders win.

When the public changes its perception of what development means, we will have fewer politicians who see elected office as a get-rich-quick scheme. Every time another politician is caught in these shenanigans, the public trust in government is undermined.

So a change in public perception about the nature of development can actually lead to a tangible restoration of public trust in government, and that can’t come too soon.

When I was about four years old, my parents asked me what I wanted to be when I grew up. My response? A cashier. Why? They were the ones who got handed all the money.

Today, when people cite crime and education as the two major problems facing America’s cities, the knee-jerk response is to “protect city education budgets” and “put more cops on the street.” This is the same kind of simplistic logic I used as a child, and it’s just as wrong.

If this was how things worked, the safest cities in the world would be populated entirely by police, and the highest levels of education would be attained by those countries who spent the most on teachers and schools. This also is not true. Excluding repressive regimes, the areas with the least crime and most educated populations tend to be places where all citizens have access to the same opportunities.

Access to Opportunity

The new film by Davis Guggenheim, “Waiting for Superman,” chronicles a year or so in the life of a handful of students of different backgrounds as they struggle to get access to the educational resources they need to thrive. The heart-wrenching conclusion shows these kids – all but one – get denied that opportunity by a system that is clearly broken and unfair. 720 applicants, 15 spots. You get the picture.

If America is going to have a public school system, this kind of unfairness should not be tolerated. What happens to the kids that don’t get into the schools that can help them thrive? Should people have equal opportunity? Most people would say “yes.”

How We Got Here

Economic vitality is a kind of spotlight: it shines a light on things that need fixing, and provides the funds and political power to do so. Since our cities were torn apart by race riots and the global consolidation of manufacturing, the resulting precipitous decline in economic health has meant that cities have operated substantially in the dark. Watchdogs have been absent, and grassroots efforts have been underpowered.

American cities have reached a kind of feudal equilibrium. Politicians in power have little incentive to promote the kind of broad-based economic growth that could ultimately result in their ouster, but they can’t let things deteriorate so badly that everyone leaves – also stripping them of their power. And so American cities walk the line: with crime, schools, drug use and taxes locked at levels that are tolerable to just enough people that they are still worth milking, all while politicians hand out favors to power-brokers and childhood friends. Enough.

Ending the Abuse, from the Bottom Up

I wrote in my previous post that cities are now prime locations for idea-based industries. Over time this will mean an influx of wealth into cities as well as an increase in poorer populations in the suburbs.

Economic vitality in our cities borne from idea-based industries will result in a demand for accountable leadership and provide new levels of participation. In short, the feudalism will end when creative people begin to use their economic power to demand real change. The 40 year free ride is over.

Too many people in cities have resigned themselves to the idea that politics is a top-down enterprise — that it’s primarily influenced by the machine, by power-brokers, by community leaders, or by churches. Or that there’s a “turn based system,” where everyone who serves is given an equal shot unless they do something wrong.

That’s just wrong. American city politics from now on will be a bottom-up grassroots affair dictated not by the economics of writing checks to campaigns, but by the interdependent economics of jobs and a shared vision for the future of places that people care about.

Restoring Trust

To be workable, all power relationships must be a compact founded on shared values. Kids trust teachers that have their best interests at heart. Citizens trust cops who behave consistently and fairly. People trust politicians who put the civic interest ahead of their own.

There is nothing that ails us that cannot be fixed by restoring these trust relationships.

In “Superman,” Guggenheim asserts that bad teachers are kept around out of a “desire to maintain harmony amongst adults.” It’s difficult to stand up and fight to end someone’s teaching career, but it’s what’s required. To fail to do so is immoral.

It’s easier to keep getting a paycheck than to make enemies. And certainly there are dozens of systemic problems that make firing teachers very difficult. But that’s all that’s wrong with our schools, our police and our politicians: a simple failure to defend our core values.

And if we cannot agree on those core values – if a desire for personal gain exceeds a willingness or ability to serve the public – then those people deserve to be called out.

The Game Is Up

To be an old-school politician in a major American city today is to be in the way of a major cultural shift. Idealistic, intelligent, educated millennials armed with 21st century political weapons are coming, and they are going to ask why?

Why is the city so screwed up? Why are these jokers in power? Why are these incompetent teachers shuttled between schools? Why is more money spent on development deals for cronies than on parks? And why the hell can’t we clean up the blight that makes any trust or pride impossible?

Should we spend more money on schools or police? More than likely, all we need to do is let smart young people start asking questions. Crime and education take care of themselves if those that have violated the public trust can be removed from power. And with a little attention and common sense, we can ensure that more kids have a shot at the same opportunities.

Because in the end, crime, education, and blight are really just one problem, and it can be cured at least as quickly as it developed.

Some have predicted that high energy costs, either due to decreasing supply of oil or costs associated with carbon emission mitigation, will soon push people out of their cars and onto public transportation.

But there’s something else happening: people are getting sick of spending time in transit at all, making city living increasingly attractive. We are now increasingly able to infill “scrap-time” during our days with useful activity, and location-based social networks make it possible to maximize personal connections as we move about. We are engineering our own serendipity to generate real value from every moment. Why would we squander that potential by spending time in transit of any kind?

In the future, I predict:

• Air travel will be reserved for trips greater than 500 miles
• Trains will be used for trips less than 500 miles
• Bicycles, walking, and local transit will be used within cities
• Any local trip longer than 20 minutes will be seen as burdensome
• Cars will be seen as a luxury to be used for road-trips + utility hauling

And again, this will not happen due to fuel scarcity alone – it will happen because people demand it; and I’m not talking about you – but your kids and grandkids.

Regardless of what happens with fuel prices, we know that roads do fill to their available capacity. And then that’s it. Expansion does not help for long, because roads then fill to whatever capacity is available and development occurs until roads are too broken to use.

Roads are also increasingly expensive to build. A major construction project such as the popular-but-doomed Intercounty Connector in Maryland will cost over $2.6Bn to build. Is this a good long-term use of resources? Seems to me we’re throwing a bone to some 55 year-old commuters who have been annoyed with the state of the Washington Beltway since it was built, and this is the only solution they thought could fix it. Enough with the reductionist, idiotic causal thinking already: it’s a dumb idea. I don’t begrudge it, but in the long term, who cares?

The idea-driven creative industries that America has hung its hat on can only thrive in cities, where people can get together and trade ideas freely. Any barrier to that exchange lowers the potential net economic value. Put simply, all of this kind of creative work will happen in cities. Period. Because if we don’t do it in cities, we won’t be able to compete with our peers around the world who will be doing this work in cities.

So, what of the suburbs? In many European cities, the urban centers have been long reserved for the upper-class elites; poorer immigrants, often Turks and other Islamic communities, tend to inhabit the outer rings of the city – denying them crucial access to economic opportunity. This kind of social injustice is baked into many European cultures; in France, you are simply French or not French, and no amount of economic mobility will allow someone who is not of that world to sublimate into it.

This is not the case in America. We are all Americans, and even marginalized citizens are able to fully participate in all levels of our culture – though certainly there is social injustice that must be overcome.

Over the next 50-75 years, there will be a net gain of wealthier people in America’s cities and also a net gain of poorer people in our suburbs. This will be a natural byproduct of an increasing demand to be in cities, and an increasing (and aging) suburban housing stock coupled with roads that no longer function.

To fulfill our challenge as Americans, we must use these dual gradients in our cities – the inflow of the rich and the outflow of the poor – as an opportunity to maximize social justice. By avoiding flash-gentrification and fixing education as we go, we can in a span of 20-40 years (1-2 generations) offer millions of people a pathway into new opportunities that stem from real, sustainable economic growth; all the while realizing this is going to mean more color blindness all around – and that suburbs will generally be poorer than the cities.

In my home state of Maryland, the only foreseeable damper on this force is the federal government and the massive amount of money it injects into industries like cybersecurity and other behemoth agencies like the Social Security Agency.

Because these agencies and the companies that service them generally do not have to compete globally to survive, they can locate in the suburbs and employ people that live in the suburbs – and subsidize all of the inefficiency, waste and boredom that comes with that.

This is nothing but a giant make-work program and its benefactors are little more than sucklings on the federal government’s teat, which is spending money that will likely come straight out of your grandchildren’s standard of living. Right on.

Cybersecurity, for all its usefulness in possibly maybe not getting us blown up by wackos (bored wackos from the European Islamic suburbs, I’ll point out), is  nothing more than a tax on bad protocol design. For the most part it doesn’t create any new value. In the end, we’ve got suburban overpaid internet engineers fighting an imaginary, boundless war with disenfranchised suburban Islamic radicals. Who’s crazier?

Lastly, for all of you who think I’m wrong or resist these predictions because you personally “wouldn’t do that” or can produce one counterexample, I ask you: Are you over 35? If so, your visceral opinion may not matter much. I fail this test myself, but I believe my argument is logically sound and is based in the emerging attitudes of young people.

The future will be made by people younger than we, and based on everything I can see, we are on the cusp of a major realignment of attitudes and economics in America.

It won’t be too much longer til active, entrepreneurial creative professionals (black and white) in our cities look at the suburbs (black and white) and decry the entitlement culture of the suburban welfare state.

Occasionally we here in the burgeoning tech community in Baltimore have paused to take stock about how far we’ve come, and what would be good to do next. About a year ago, Mike Subelsky made some suggestions on the BaltTech blog, and he’s recently identified some awesome emerging leaders who have made a real difference in the last year. Many of the ideas he identified are ones that people have taken up and run with.

In my travels in the last year, I’ve come across several ideas that are working in other places that we should consider pursuing here – in no particular order.

• Startup Weekend – Bring together a bunch of startup-minded people on a Friday, form groups, and build something entirely new from scratch by Sunday. Demo it on Sunday afternoon. I had the chance to attend StartupWeekend Seoul this summer and it was a great experience. Lots of relationships were formed and some truly great ideas were unearthed. We need a big-ish place where folks can hang out for 3 days straight and someone to take the lead.
• Girls In Tech – This organization is a global group of women who are making a real difference in the tech community. Some have griped about the name, and I agree it’s somewhat problematic – however to their credit they are trying to do their best to attract young women involved in tech and create a culture that is at least somewhat fun and edgy. Behind the scenes, its founders and main movers and shakers are some of the most intelligent and connected emerging women leaders in the tech world; with strong leaders in China, New York, and San Francisco. I promise you that a Girls In Tech Baltimore chapter would find good connections worldwide.
• Founder Dating / Find-a-Cofounder – These events have been popping up in San Francisco, Seattle, and New York in various forms. The idea here is that if you can bring together a ton of people who all have a clear intent to want to form a startup – if they can find good partners to work with – maybe something will come of it. This seems like a great way to unearth “startup-curious” folks in boring jobs and pair them up with ambitious entrepreneurs who just need a strong partner. And every other combination. Worth doing. (And it looks like a meeting may be happening next week to start the conversation!)
• Hacks and Hackers – Baltimore has the critical mass to support a chapter of this group that aims to connect journalists and tech/developer people. And entrepreneurs. News here is horribly broken and it’s going to take an entrepreneurial mindset to fix it. The sooner we can get journalists and smart startup people to get to know each other better, the sooner a new model will be discovered. Get on it.
• TEDxBaltimore – I helped pull together TEDxMidAtlantic in 2009 and 2010, and TEDxOilSpill this summer. TEDxMidAtlantic aims to throw a spotlight on a wide range of creative thinkers in and around our entire region. Mel Brennan from YMCA of Central Maryland and Open Society Institute have been discussing a potential collaboration to help produce TEDxBaltimore, which would have the opportunity to focus on Baltimore and its future potential. I strongly support this and anyone who would like to step up will find support from YMCA, OSI, and TEDxMidAtlantic. Contrary to some recent tweets, no date has been set.
• Entrepreneurs Unplugged – This event in Philadelphia features an entrepreneur on stage to discuss their story, successes, and failures. As long as they can keep from lying on stage I think this could be an extraordinarily powerful format. GBTC has had a Face2Face program for several years, which avoids the tendency that entrepreneurs have to whitewash over failings and details by pulling together a very small group over dinner. Both are awesome.
• Reverse VC Pitch Party – My friends Larry Chiang and Dave McClure have been dreaming this one up, so VC’s can do “outreach and education and stimulate deal flow.” I think it’s a great idea and I’d love to see groups like my own Baltimore Angels as well as some of the VC firms in the region get up on stage and talk about the deals they like to see, the reasons startups should seek them out, etc. A great way to turn the tables and share perspectives that are all too often misunderstood.
• CityCamp – In the spirit of BarCamp and SocialDevCamp (both of which could use folks to take the charge for updated events – we’ll all help!), CityCamp is a catalyst and a forum for talking about what’s working and what still needs to be done from an Open Government / Gov 2.0 standpoint. It’s what Baltimore City’s well-intentioned “Data Day” this summer perhaps should have been. There’s a lot of potential for involving folks from the design, architecture, and foundation community here too.
• Junto & Salons – Ben Franklin convened a regular gathering of smart folks in Philadelphia, many much older than himself, to discuss ideas of the day and to trade notes about what businesses had gone bankrupt and the like; he called it a Junto. Lately I’ve noticed an increasing number of evening salon conversations about politics, startups, tech and the like. Our friends in Philadelphia revived the Junto tradition a couple of years ago, with awesome results. We’ve discussed doing it here but it hasn’t happened yet. Are you the charismatic leader?
• Bootstrap Baltimore / Mosh Pit 2.0 – For the last two years Jared Goralnick has put together Bootstrap Maryland at University of Maryland’s College Park campus. This is a great event, and we could use something here in Baltimore that is aimed at drawing out the amazing quantity of entrepreneurial talent here in Baltimore’s many universities. A few years ago, GBTC hosted an event called MoshPit – a business plan competition for college students. We need to revive this program and meld it with something like Bootstrap. And we especially need to reach out to students in engineering, science, and the arts – not just business students.

Go ahead and steal these ideas. There are plenty more where these came from. Borrowing working ideas from other places means they have a much higher chance of success than trying to design a totally new event format from scratch. Plus, it gives the potential for direct exchange with organizers elsewhere.

If you are interested in pursuing any of these ideas, ping me – I can put you in touch with the originators of these events. And thanks again to everyone who has stepped up to make a real difference here. We are changing this city one mind at a time.

Putty Hill, a film by Matthew Porterfield (2010)

Something amazing is happening in the world of filmmaking. Crowdsourced funding mechanisms like Kickstarter.com are enabling a new generation of filmmakers to get a foothold doing what they love, where they want to do it. They’re using social media to find acting talent, and new digital camera technologies are making it possible to create amazing high quality films for a fraction of what it used to cost.

Matthew Porterfield

I’m particularly impressed by the work of Baltimore filmmaker Matthew Porterfield, whose films “Hamilton” (2006) and “Putty Hill” (2010) exemplify the new kind of “cinepreneurial” skillset which will certainly come to define 21st century filmmaking. (You can read here about the funding and creative process behind Putty Hill.)

Porterfield is a nice, unassuming guy who teaches film at Johns Hopkins and directs his students that if they want to make documentaries, they need to go to New York, and to go to Los Angeles for pretty much everything else. For today, this is sound advice. It’s the same kind of advice you’d give talented coders looking to unleash the next big web technology — go to San Francisco, because it’s where the industry is centered — at least right now.

But if you ask Porterfield why he doesn’t take his own advice, he’d likely offer a cryptic sort of answer — that he’d considered it but really couldn’t imagine himself anywhere else. I don’t know him well enough to speak for him, so I hope he weighs in here. But Matt and I are kindred spirits: we both are actively choosing place over anything else, and investing our time and talent to make it better.

Let’s Invest in Maryland Film, Not in Hollywood

Baltimore and Maryland have been the home to many well-known movie and television productions over the years, not the least of which have been Homicide: Life on the Street, The Wire, and a slew of Baltimore native Barry Levinson’s films including Diner, Tin Men, and Avalon. And most all of these productions received significant subsidies from the State of Maryland.

As budgets have continued to tighten, the O’Malley administration made a strategic decision to cut back on investment in film production subsidies. And that has probably been a very wise decision. Other states have been more than willing to outbid Maryland, offering ridiculous breaks. And Maryland really doesn’t need to be in yet another race to the bottom.

The Curious Case of Benjamin Button (2008)

The film The Curious Case of Benjamin Button (2008) was based on a short story by F. Scott Fitzgerald (who lived around the corner from me in Bolton Hill when he wrote it), and it was originally set in Baltimore (original text). Yet the film version was set in New Orleans and had a subtext about a dying woman retelling the story as Katrina bore down on the city. Why? Subsidies. New Orleans offered more subsidies than Maryland would. And so the story was changed and moved there. Who knows if the Katrina storyline was a condition in the contract!

I don’t really have an opinion about whether Benjamin Button should have been filmed in Baltimore, but I do have an opinion about engaging in zero-sum games with 49 other desperate states: it’s bad policy. And I also think the time has come to admit that big movie studios are the next big dinosaur to face extinction. Why should Sony or Disney or Universal make the bulk of the world’s content when every man, woman, and child has access to a $200 HD camera and a $999 post-production studio?

Investing in Cinepreneurs

John Waters is one of Baltimore’s great artistic assets. And it’s not because of film subsidies. His work is known worldwide, and it celebrates the quirky, distinctive voice of Baltimore. Matthew Porterfield is distinctive and quirky too, and he makes beautiful pictures: he’ll be next to make his mark. And there are dozens more teeming around places like MICA, the Creative Alliance CAMM Cage, Johns Hopkins, Towson University, and UMBC. We need only to nurture their talent and the ecosystem.

Browncoats: Redemption, 2010

Another film, Browncoats: Redemption was made locally last year and created by local entrepreneurs Michael Dougherty and Steven Fisher. It is utilizing an innovative non-profit funding model. The film’s is raising money for five charities and it leveraged social media and Internet to recruit 160+ volunteers and market the film.

Instead of blowing money on Hollywood productions that bring little more than short term contract and catering work to Maryland, why don’t we instead start investing in the artists in our own backyard? Just as IT startups have gotten much cheaper to jumpstart, it’s now possible to make films for anywhere from $50 to $150K. If we dedicate between $5M and $7M to matching funds raised via mechanisms like Kickstarter, we could make something like 150 to 300 feature length films here in Baltimore. This would unleash a new wave of creativity that would yield fruit for decades to come, and put Maryland on the map as a destination for filmmakers.

We already have great supporters of film in the Maryland Film Festival, Creative Alliance, and many other organizations. It wouldn’t take much to get this off the ground. Instead of going backwards to the 1980′s in our view towards film production (as former Governor Ehrlich has recently proposed), let’s take advantage of all the available tools in our arsenal to jumpstart the film industry and move it forward in Maryland.

For every new artistic voice we nurture, we’ll be building Maryland’s unique brand in a way that no one else can compete with. It will make an impression for decades. And investing in film and the arts will help the technology scene flourish as well. Intelligent creative professionals want to be together. And coders and graphic artists think film and filmmakers are pretty cool.

We shouldn’t let an aversion to the failed subsidy policies of the past get in the way of forging a new creative future that we all can benefit from. We can invest in the arts intelligently. Let’s start today.