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?

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.

Pride, Passion, Talent on Display at Startup Weekend Seoul

I believe that Silicon Valley may soon be going the way of the floppy disk.

For the last two weeks I have been traveling around Asia with a group of tech entrepreneurs, on a trip called “Geeks on a Plane” organized by Silicon Valley investor Dave McClure. I took the same trip last year.

Why take a trip like this? The answer gets at some very real and seismic shifts taking place in the startup world that will be big news over the next few years.

Startups Cost Less

Ten years ago a successful Internet startup might require one to five million dollars in outside funding. Data centers, engineers, and software licenses were hot commodities and could easily drain a startup’s resources.

Now it is possible to get a startup to the point of testing it in the market — with real customers — for $25,000 to $50,000. This effectively removes VC’s from the equation at these early rounds and turns things over to angel investors. As angel investing becomes increasingly professionalized, success rates increase and more people become involved with it.

“Silicon Valley is a State of Mind, Not Necessarily a Real Place”

Pay attention to this one! This is a quote by Dave McClure and it captures what is happening perfectly. Everywhere you go, there are techies and entrepreneurs who follow the tech business scene, and they are all ideological peers.

Silicon Valley is all about embracing the idea that the world can be changed for the better, and that one can (ultimately) realize rewards by changing it. If you believe this, you are a part of Silicon Valley. What about that statement is related to place?

In Shanghai, Beijing, Seoul, Singapore and Tokyo I have seen first hand the buzz and excitement that comes from people who believe that they can engage with the problems of our world imaginatively and productively. And they are not moving to Silicon Valley.

3D Printer at Singapore’s hackerspace.sg

Place as a Strategic Differentiator

Not being in Silicon Valley is very helpful if you are trying to tap into developing markets like those in China, Korea, and Japan. It is also helpful if you don’t want to have to pay Valley salaries and sucked into the echo chamber there.

As an example, a skilled developer in Silicon Valley might cost you upwards of $120,000 per year; the same person in India would cost $12,000 per year and in Singapore they would cost $48,000 per year.
If you are trying to build a product to serve the Asian market, wouldn’t you rather base your company in Singapore?

Being in “a” place is more important than being in “the” place

It is widely assumed that internet technologies like Skype and email crush distance and make global distributed business possible. True, but there are exceptions.

Real creativity, trust, and ideation has to happen face to face. This is where the magic occurs. If you don’t spend time with people you can’t create.

New-technology tools can help with execution, but only after the team dynamics are in place; they are great for keeping people connected and plugged in, but suck at creating an initial connection.

Love your place. Find the other like minded souls who love your place and start companies with those people. The creativity you unleash in your own backyard is the most important competitive differentiator you have. No one else has your unique set of talents and point of view. Leverage it.

Every City is Becoming Self Aware — All at Once

I do not know of a city anywhere in the world that is not presently undergoing a tech community renaissance right now. This is a VERY big deal.

Every city in the United States along with Europe, Asia, and South America is now using the same playbook — implementing coworking, hacker spaces, incubators, angel investment groups, bar camps, meetups and other proven strategies that will have the effect of cutting off the oxygen supply to Silicon Valley.

Let me say it again: Silicon Valley is getting its global AIR SUPPLY cut.

For the last few decades, Silicon Valley has traded on the fact that people are willing to move there to start companies. The MAJORITY of valley companies are founded by foreign born entrepreneurs. What if they stop coming? What if they find the intellectual and investment capital that allows them to self-actualize in their home turf, where they already have a competitive advantage?

The fact that we have made it so hard for new immigrants to come to the valley and create startups just makes things that much worse. That is why the Startup Visa concept is so important if America – not to mention the valley – wants to keep excelling in innovation and the economy of ideas.

“Soul-crushing Suburban Sprawl” – Paul Graham

The Valley Kinda Sucks

Everybody says that the big draw to San Francisco is the weather. True, it can be pretty nice at times. But it can also be pretty miserable.

The reality is that the weather makes no f*cking difference if you are slaving away 26 hours per day on your startup; and the fact is that humans only really perceive changes in weather anyway: you’ll notice a nice day if it has been preceded by 10 rainy ones, or vice versa. Studies have demonstrated this. Look it up.

Paul Graham said it best, “Silicon Valley is soul-crushing suburban sprawl.” And he also suggested that places that can implement a bikeable, time efficient startup environment without sprawl have a significant competitive advantage over the valley.

Nearly every major city is becoming that place for its community of entrepreneurs. All at once.

So Why Travel?

It’s simple: to go to where the startups will be coming from. Investors who wait around for startups to show up in the valley are going to miss out on serious innovations and investment opportunities.

This means leaving the Lamborghini parked on Sand Hill Road and cabbing it to a gritty hackerspace in the Arab section of Singapore to meet the innovators who are building the future. And this is something that most investors think they are too good and too important to go do.

Fortunately there are scrappy, forward-thinking folks like McClure who are willing to go out there and embrace the future and begin the creative destruction the next wave of innovation will bring to valley culture.

Our challenges are too great to demand that innovation happen one way, in one place, with one set of people. Innovation needs to be systematized and distributed, and this is the opening act.

The Future of Entrepreneurship

I had a great conversation with Dr. Meng Weng Wong today, founder of Joyful Frog Incubator in Singapore. We pondered questions:

• In the future, will companies form teams and then try to get funding, or will entrepreneurs just gather, form ideas and try things?
• How do bands form? And are incubated startups just boy bands?
• Are we not always just betting on individual ability to execute?
• Doesn’t team (and execution) always trump idea?
• Is entrepreneurship a cycle? Shouldn’t exited entrepreneurs come hang out with first time entrepreneurs and try ideas together?

These are important questions in their own right, but the most important thing is that we are asking them. And so are people around the world. And it has nothing to do with Silicon Valley, the place.

Want in on the ground floor of this next wave of innovation? Understand the change that is coming and leverage it in your own backyard. Get involved.

Because I guarantee that in five years the Valley will be a very different place and that we will see thriving startup communities bearing real fruit in every major city.

Why go to the Valley? Good question.

Thanks to everyone for engaging in this conversation!

Several months ago, this article from the Pew Research Center categorized several states as sticky, magnet, or both; sticky means that people who live there tend to stay there, while magnet means that  it attracts people. Some states (Arizona, Florida, Maryland) are High Magnet/High Sticky, while others are one or the other, and one sad batch is neither (Iowa, New York, West Virginia).

What this study doesn’t tell us is very much about what those places are actually like, only the “raw numbers” about mobility and retention. For example, my home state of Maryland is described as “magnet/sticky” (woot) but so are Arizona and Florida, and as far as I can tell, these three states share little in common. Certainly the recent real estate bust was felt worse in those places than here.

I believe that in Maryland’s case, we are both the wrong kind of magnetic and and the wrong kind of sticky, and so to describe Maryland in this way is counterproductive because it assigns a positive spin to some inherently negative patterns of movement.

For example: suppose Maryland is “high magnet” because it attracts people who want to work for federal government contractors. This increases the per-capita income but puts pressure on roads, exacerbates suburban sprawl, and adds people to the voting base who often don’t understand local issues or have personal experience with the landscape around them. I’d call this effect neutral, if not negative.

Suppose Maryland is “high sticky” because we retain 99.5% of our college graduates (a number I’ve heard tossed around). But suppose we export .5% of our very best and brightest and our natural born “effectuators?” And suppose that the smart people we do retain get sucked into government? Again, not necessarily a bad thing, but it doesn’t necessarily lead to the most creative entrepreneurial landscape sometimes.

Maryland has a great deal going for it, but articles like this are meaningless and enhance a simplistic, 19th century view of how we want to build our society. Who are we building our society and economic structures for?

If we are building them for ourselves we need to start thinking about how they serve our everyday experience as people. I have more thoughts on this. If we want to build our society for corporations and a 19th-century conception of what education, production, and economic value is then idiotic oversimplifications like “high magnet, high sticky” might be useful.

I believe we can and must move past such Orwellian, disingenuous oversimplifications.

Having just returned from the Le Web conference in Paris and having once again thoroughly enjoyed their Velib’ municipal bike-sharing system, I continue to be inspired to do as much as possible via bicycle.

I try to bike as a form of functional transportation, not just for exercise. If you start to think about biking as a way of getting around, a lot of the dysfunctional design of our cities and suburbs becomes evident.

Today our family was faced with the task of obtaining a Christmas tree, and wanting to get out for a bike ride I immediately thought this was something we could accomplish via bike. This summer when I attended TED Global in Oxford, I flew to Heathrow airport with my bike and then rode from there to Oxford (about 50 miles) with a 30 pound pack on my back. So a Christmas tree (20 pounds?) over 5 miles seemed no problem in comparison.

So this afternoon our family biked to a local produce stand and purchased a tree. We put it into a US Army standard-issue duffle and secured that to my back using cargo straps.

Here’s me in my fully mobile glory:

And here, on the Baltimore-Annapolis Trail:

This crazy getup evoked smiles all the way around. Many people said, “You’ve just made my day.” It was about a 30 minute trip home, and somehow a clichéd act of holiday duty had been transformed into something joyful.

I just wanted to take a few moments to reflect on 2009 and express my gratitude for an amazing year:

• The wonderful community we have discovered and built up at Beehive Baltimore (February-present)
• My old friends at Twitter and at AngelConf + Y Combinator, Silicon Valley (March)
• New friends + allies exploring the future of journalism in Baltimore (April)
• New friends and compatriots in Buenos Aires, Argentina (April)
• Jared Goralnick and his amazing Bootstrap Maryland event (May)
• Aaron Brazell, Jimmy Gardner and WordCamp Mid-Atlantic (May)
• Brady Forrest, Ryan Sarver, Anselm Hook, Andrew Turner at Where 2.0 and WhereCamp (May)
• Barcamp Baltimore (June)
• Micah Sifry and Andrew Raisej at Personal Democracy Forum + Transparency Camp (June)
• Dave McClure, Christine Lu, and the Geeks On a Plane #goap gang (June)
• Great new #goap Friends in Tokyo, Beijing, and Shanghai (June)
• Christine Lu, Chris Anderson, Lara Stein, Salome Heusel and the TEDx team (June)
• An Amazing experience at TED Global in Oxford (July)
• Winning Innovator of the Year Award from The Daily Record (October)
• Winning the Connector award from Greater Baltimore Tech Council (October)
• The entire TEDxMidAtlantic Team (August-November)
• An AMAZING life-changing event: TEDxMidAtlantic (November)
• New friends at Le Web in Paris (December)

It has been an incredible year. If you follow your heart, anything is possible. Don’t let anyone tell you something can’t be done. Strap a Christmas tree to your back if you want to. It’ll work.

Do good work, my friends, and get ready for an amazing 2010. We need each other.

Best wishes for a safe and happy holiday season, from my family to yours.

Approaching Baltimore by train from the north, as thousands do each day, a story unfolds.

You see the lone First Mariner tower off in the distance of Canton, and the new Legg Mason building unfolding in Harbor East.

Quickly, you are in the depths of northeast Baltimore. You see the iconic Johns Hopkins logo emblazoned on what appears to be a citadel of institutional hegemony. It is a sprawling campus of unknown purpose, insulated from the decay that surrounds it.

Your eyes are caught by some rowhouses that are burned out. Then some more: rowhouses you can see through front to back. Rowhouses that look like they are slowly melting. Rowhouses with junk, antennas, laundry, piles of God-knows-what out back. Not good. Scary, in fact. Ugly, at least.

Then a recent-ish sign proclaimig “The *New* East Baltimore.”  Visitors are shocked to see that the great Johns Hopkins (whatever it all is, they’ve just heard of it and don’t know the University and the Hospital are not colocated) is surrounded by such obvious blight.

Viewers are then thrust into the Pennsylvania Railroad Tunnel where they fester, shell-shocked for two minutes while they gather their bags to disembark at Penn Station, wondering if the city they are about to embark into will be the hell for which they just saw the trailer.

Appearances matter. Impressions matter. One task that social entrepreneurs could take on to improve the perception (and the reality) of Baltimore would be simply this: make Baltimore look better from the train.

We know that the reality of Baltimore is rich, complex, historic, beautiful and hopeful.  We ought to use the power of aesthetics and design to help the rest of the world begin to see the better parts of the city we love.

Author’s Note: my father-in-law Colby Rucker was the one that first pointed out to me how awful Baltimore looks from the train.  It was on a train trip from New York to Baltimore today that I was inspired to jot down this thought.

If you would like to read a good book about how places can make you feel and convey important impressions, read The Experience of Place (1991) by Tony Hiss (son of the controversial Alger Hiss). They were both Baltimoreans.

“When do we all become native to this place? When do we all become indigenous people?” – William McDonough

Ever wonder why America has such trouble with suburban sprawl, highway congestion, and keeping its urban centers viable? It’s a result of how we see “place” relative to other factors in society. We don’t respect it much; it is subservient to education and corporate employment.

For the last 60 years, “success” has meant going to a “good” college or university, getting one or more degrees, and then securing a “good” job. And we have told our children that they need to get good grades and engage in an array extracurricular activities in order to get into those good schools. The logical conclusion is that our children should fear the inverse outcome: not getting the good grades, not going to a good school, and ultimately not securing the good job. So the message is one of struggle: the world requires you to conform to its standards — you, the aspiring student, are expected to make sacrifices in order to be rewarded. And those rewards are held up as the make-or-break difference between the “good life” and an average life as a postal clerk.

And so the deadening chain of sacrifice and compromise begins.

When a promising 16-year old student tells her guidance counselor that she wants to study marine biology, can she really mean it?

When she is answered that she should consider a list of 5 schools, 4 of which are scattered across the country, is this even helpful?

A young person is rarely able to comprehend the specific nature of their vocation, much less make a choice about where they want to live to pursue that alleged vocation. So, what this mechanism really represents is a great geographic randomizer that spews people around the country while racking up student loans, disconnecting people from their indigenous roots and fueling the education industry.

Once the degrees are completed, the job hunt begins. Graduates and corporations engage in bizarre mating rituals, each trying to convince the other that they are the ones who got the better end of their devil’s bargain. And so the newly-minted worker starts to do what the corporation asks. When an “opportunity” comes up in a new city, the worker is enticed to rip up their roots, divorcing them from whatever local connections they have — trading them in for a 10-year thank-you watch, a 4.5% raise and a moving allowance.

A transplanted worker can’t know a new place deeply. Their immediate needs are straightforward and purchased: a house to store their possessions, proximity to shopping, services, and restaurants. If they have or want children, they also want good schools. Of course, good schools are hard to come by, and that scarcity means that the houses with the best schools cost the most money, and so the compromise is made and the choice is made to settle in a place that they necessarily have no connection to. They like it. It’s nice. It solves their need. And they have no idea where they live.

And so they don’t (really, deeply) care about where they live. They don’t care when a new shopping center is built, destroying an ancient stand of trees and filling a stream with runoff. (Oh look, we’re getting an Anthropologie and a P.F. Chang’s — I hear the lettuce wraps are great.)

They don’t care when new roads are built to service the very subdivisions they inhabit, leading to more traffic.

They don’t care when public transportation projects continue to go unfunded, because public transportation would require a 30-year budget process (longer than the attention span than most itinerant residents) and significant urban density.

And they don’t care when the city-centers in their megalopolis rot due to white flight and a failure to invest in urban infrastructure.

Enough.

• People should aspire to grow where they are planted.
• If they cannot grow where they are planted, they should at least plant themselves someplace they can grow.
• What someone does for a living should not necessarily determine where they live.
• Place is not fungible.

Why are so many successful people unhappy? And why are so many “less successful” people completely at peace?

People who have an opportunity to connect to place (to history, to extended family) are often the most at-peace and effective. Mike Rowe (of Discovery Channel’s Dirty Jobs) gave a surprisingly good talk at the EG conference about the meaning of work and what it means to perform the tasks that others in our society will not. In many senses, these are the people who have chosen to commit themselves to a place.

If You Want to be Green, Choose a Place to Love

If you really want to do good for your environment, it is not enough to commit yourself to unbleached paper towels and driving a Prius. In fact, both of those things represent environmental harm and disconnectedness. Paper towels? Spill less stuff, and use washable towels. A Prius? The energy required to build and dispose of its batteries is immense. An inexpensive high-mileage gasoline vehicle that you keep for years and barely use does much less harm than a Prius you drive 75 miles every day for 7 years.

The things that lead to the most efficient behaviors (commuting less, sharing resources, maximizing time efficiency) all derive directly from maximizing the relationship to the place where you live.

And so the ways you can make the most difference — and be the most green — have nothing to do with what you consume — they are derived from the design of your life. Is your life designed in such a way that you can become indigenous?

When you become indigenous to a place, you enable it in all kinds of new ways. Engagement is contagious and leads people to recognize themselves in others — and in you. Where before, kids were encouraged to follow their hearts by going to MIT (and thus launching the great chain of place-divorce), they realize they can follow their hearts by being a part of the schools (and culture) in their own backyard — which offer a rich, world-class experience. And so they stay. And they care about their cities, parks, and forests. And they go on to enrich their cultural institutions, entrepreneurial climate, and their urban centers. If you don’t think you have the kind of world-class culture you want to see in your backyard, start building it now by reaching out to others who want to see the same thing.

All of this leads to the most efficient use of resources in the place where you live. Isn’t that green?

How Do You Become Indigenous to Your Place?

Commit yourself to it. Attend events and meetups that you find interesting. Start events and meetups that you would like to see. Reach out to the bright minds in your own backyard. They are there, but they don’t know you are yet. Say hello. Work on ideas and projects that matter and have consequences. Start a business. Help someone. Be a mentor. Read history, and understand why your place is the way it is.

Place is not just another consumer choice. Place provides context for human interaction; it is the basis of our humanity. Only through connectedness to place do we enable the fullest range of human expression and of human being.

As we enter into a new economic cycle (I’ll stop short of calling it a new era), it is clear that economic activity based on flows and cycles is going to receive more attention than old school approaches of resource-rape and infinite expansion through leverage and buried externalities. For businesses based on closed cycles to maximize profits, they need to limit transportation of inputs and wastes, and that points towards fundamentally local and regional businesses. Local production and consumption is an inescapable imperative of the emerging business cycle.

If you have children, teach them about the place where they live. Talk about the future in ways that help them understand how (and why) they might make a life where you live now, without locking them down or sounding creepy — just make it a viable option. Start thinking about your family home as a family seat, not just a house that you buy or sell as an investment. If you’re not living in a home you would want to pass on to your children (or which they would not want), consider making that final move to a place that you may keep for a long time.

For some, keeping the same residence (be it apartment or house) is not always an option, or sensible. So if you can’t connect to a particular piece of real-estate, what can you do to connect yourself to a city?

In either case, you can’t become indigenous to a place without a multi-generational mindset.

The Constraint of Place

Anyone who does anything creative will tell you that constraints actually improve your work. All of this talk about becoming indigenous and attaching multiple generations to a place can sound confining and perhaps even suffocating — or worse yet anti-American (think about why that is for a minute). But, as a constraint it may actually be freeing.

Isn’t it central to our capitalist-consumer culture that each generation should be free to make its own choices about where to live and why? Why should our children be burdened by our choice of house and where to live? Isn’t it only a burden if it isn’t a very good choice?

But what if a constraint to place was something that actually enabled creativity? What if the choice of one generation was a reasonable choice for the next? If you were going to keep a home in your family for 10 generations, what kind of home would that be? Why don’t you live in it now?

This is not to say that it’s not acceptable to move if you need to move, or to even enjoy multiple places. A 19th-century worldview, of wintering in one place and summering in another, can make a lot of sense, assuming you fully connect to both places. Become indigenous to two places rather than a consumer (and destroyer) of many.

Conferences represent some of the worst excess and abuse (and neglect) of place. Why travel to a multitude of destinations to stay in hotels, eat bad meals, and talk to people who are only marginally better than the people you would find in your own backyard (if you’d only take the time to locate and develop them). Yes, conferences represent the only forum to connect with certain people, and it will be a while before the activity in your backyard can be as rich, etc.  Blah. If you fully engage with the people in your own backyard, your appetite to travel to conferences will be substantially lessened.

The Future Is Local

I am not the first to suggest that the economy of the future will have a big local component. Certainly that is true. However, we’re not just talking about switching to buying local garlic, squash, and milk here. Just as you can’t take and pile “new media” ways of doing business onto the newspaper industry, we can’t expect to reorient our economy to local production cycles without also adopting very different sets of behaviors.

I believe that new communications and organizing tools will cause these fundamental transformations:

• Restaurants will morph into dinner parties and gatherings
• Reverence for MIT, Harvard and Wharton will morph into localized study groups and self-education
• Desire for more possessions will morph into “conspicuous asceticism”
• Cars will be stigmatized as a mode of transport and, among those who care, valued as design objects only
• National/Global Conferences will be seen as carbon-tacky and time inefficient (a day lost traveling in each direction? why?)
• 7-14 day Vacations will become less common than poly-local living (these are the 2-3 places I want to live in)
• Hotels will fall out of favor relative to house-swapping and “couchsurfing”
• Cities will receive continued (and renewed) attention as McMansion-laden suburbs deteriorate and are stigmatized
• Homeschooling will emerge among progressive communities (not just the religious right) as a way of avoiding the dysfunctional public school system
• Public Schools will see new levels of engagement from their communities, as people are better able to communicate and organize outside of traditional PTA-like structures
• Food will be a focus of local living, with community supported agriculture and Internet enabled food-swaps
• Coworking will continue to develop as a way for people to connect and collaborate locally
• Local Conferences will flourish as people build critical mass around shared interests using network tools
• Mass produced consumer goods will see a lessening of popularity relative to artisan-produced goods with local connections
• Consumption will give way to communion, and participation in cycles of use
• Tools like iTunes U and Google Books will enable a lifetime of personal learning and one-on-one sharing

I believe we are already seeing the effects of most of these forces — some more than others. But this is not hippie pie-in-the-sky, smoking-weed-in-the-commune stuff. Notice all of this is free of ideology and any trace of the culture wars. These are facts and a simple observation and meditation on what’s happening in society already today.

And notice that each and every one of these forces is rooted first in a connection to place. These things are only enabled when you combine current people-connecting technologies (networking tools) with a specific location. Once these new ways of being start to supplant the old structures (which is going to happen, no matter how you feel about it) they are going to be hard to reverse because they represent fundamentally more stable ways of being.

Once people do finally become indigenous to their place, why and when would that stop?

I just returned from Paris and the formidable Le Web ’08 conference that Loïc and Geraldine Le Meur hosted there, and really had a great time!  I will write more about the conference shortly.

Meantime, you may have heard that Paris has installed a network of bicycle stations throughout the city and that they are available for folks to use for their commutes, errands, and to generally replace cars and other forms of transport where possible.

What the press has not reported so well is that these bikes are FREE for trips under 30 minutes (with a very reasonable 1 € /24H subscription), and that it is EASY for tourists to use the bikes. Often, European ticketing machines require credit cards which utilize a smart-card chip, but Paris’ Velib’ bikes have no such requirement.

Here’s how it works:

• Arrive at a bike station and select English as your desired language
• Select “Short term subscription” and choose a 24-hour (1 €) subscription or 7 day subscription (5 €)
• You will guarantee the bike with your credit card for up to 150 €, but you will only be charged if the bike is not returned
• You’ll be given a ticket with a subscription number good for the duration of your subscription
• Follow the directions for taking a bike, and grab one (warning, pick one with good tires and check the seat to be sure it stays up)
• Take a bike
• Return it within 30 minutes and your rental is free!
• Enter your subscription number when you return the bike to confirm the return; the bikes have active electronics that detect the station, so this may not be strictly necessary, but it’s a good idea

Now, at first the requirement to return in 30 minutes may seem like a problem, but it’s not: there are stations every 300 m throughout all of Paris, and you will see these stations everywhere.  So, these bikes are great for touring! Bike for a bit, return the bike when you are near your destination or see something interesting, and then walk, train, or meander wherever you like.  You can pick up your next bike wherever it’s convenient, and you never have to worry about locking up your bike, leaving a rental bike in a sketchy neighborhood, or having to go back to where you parked your bike.  It’s by far the most carefree and fun travel bicycling experience I’ve ever had.

Occasionally, the station where you would like to return a bike is full. If this happens, you can enter your subscription number at the kiosk and it will give you a map of nearby stations (there should be 3-4, as they are placed every 300m). The system also issues you an extra 15 minutes of free time to get to the other station, though in practice 5 minutes is usually all that is required.

We literally did not think that we were going to use these bikes because so many of the articles we read said things like, “These bikes are not great for tourists because they require a European credit card and cost a lot of money if you keep them all day.”  And yes, if you keep the same bike all day, they charge something like 4 €/hour after 2 hours. However, the cure for this is simple: don’t keep the same bike all day.  Up to 2 hours the rate is something like 1 € per hour and not nearly as expensive as a traditional bike rental.  And who wants to bike for more than a half hour anyway? Paris is all about stopping, checking out unique neighborhoods, grabbing some cheese and wine, and exploring.  For this, Paris’ Velib’ (short for Velo Libre — free bikes) is perfect!

Other cities (and counties) should follow Paris’ lead on this.  It’s a great system, run by advertising giant JC Decaux in exchange for outdoor advertising rights in Paris.  No small trade, but the the benefit to the people of Paris (and to its visitors) of having a well run system for replacing cars is huge. If you have not been to Paris before, this should encourage you to go; if you visit often, please try the Velib’ bikes!

And yes, biking in Paris is somewhat entertaining.  While they don’t have as developed a system of bike lane markings as in, say, Berlin, it is functional and you quickly get a feel for where it’s a bad idea to be biking. Shooting across the Seine to the Rue de Rivoli at 9:30 at night proves to be a bit harrowing, but you have the right of way and people are genuinely interested in not killing you; it would be a bureaucratic nightmare for everyone involved.

So, I can’t recommend it highly enough. Go to Paris, grab a bike, and have a great time!

Boulevard St. Michel, Paris, Google Streetview

So many wonderful things going on in this photo, and it’s all entirely unintentional. With such a vast quantity of visual data collected for Google Streetview, how many “artistic” scenes lurk within it?  How might one build a machine for finding the art within this dataset?  Can it be crowdsourced?

Want to work on this with me?  If so, ping me.

With the price of gas where it is, along with my own desire to get more exercise, I’ve adopted a set of rules regarding bicycle usage, and encourage everyone to do the same.  I think it represents a distinctly different attitude towards bicycling than we’re used to.  See what you think.

1. Ride a bike for a reason, not just for recreation; while riding a bike for recreation is fine, the idea is to promote replacement of cars with bikes where possible.  Make a point of choosing trips where you actually are replacing a car trip.
2. Don’t wear funny sports clothes. They preclude your ability to partake in normal society.  If you’re going to a lunch meeting, no one wants to see bikerman in spandex.  Furthermore, wearing sports clothing promotes the image that bikes are for ‘cyclists’ and not normal people.  Do wear a helmet, and lock it to your bike when you need to go in someplace.
3. Go where you need to go, including busier roads, if that’s what’s necessary to reach your destination. Bikes will never be used as replacements for cars unless they can truly substitute.  By making yourself visible on major roads, you increase the visibility of bikes as a whole and help raise awareness of problem spots. Obviously use common sense and avoid limited access roads and unsafe situations.  But DO go where you need to go to complete your trip.
4. Obey traffic laws and signals. Being on a bike doesn’t give you a free pass to act like a maniac.  Be courteous, intelligent, and follow traffic signals and laws.  This puts cars on notice that bikers (even slow, non-athletic ones) deserve their fair share of the road, but you need to reciprocate by acting in a predictable, lawful, and measured way.
5. Replace time at the gym (or other exercise efforts) with time on a bike as part of your daily routine. Isn’t it nonsensical to use a car to rush through your day so you can get home at 5 and then go to the gym (or bike or run) for an hour?  If you slow down and use a bike for some tasks during the day, you won’t need to spend as much time doing mindless exercise.  And you’ll save on gas (and carbon emissions), and get better connected to your community.

This week, I used my bike to go to three lunch meetings, a doctor appointment, and two trips to buy groceries.  I put in over 60 miles just between Monday and Thursday, and it took only a few minutes more time than it would have to drive.  I am sure I’ve lost weight doing this, though I don’t care how much.  I feel better and that alone is worth it.

And two of the best perks about biking: you’re never stuck in traffic, and second, you always get a top-notch parking spot.  Plus, you’re not circling around trying to find a place to park.  More gas and time savings.  Being on a bike in many ways is faster and more efficient than being in a car, especially when the distances you’re talking about are under 30 minutes of bike time (8-10 miles).

Anyone who lives in the Annapolis, Maryland area knows it’s a congested, frustrating experience to try to get ANYWHERE on a weekday afternoon by car.  Why not try it on a bike and see how much quicker it can be?