Tuesday, December 16th, 2014
[ My fellow Accenture alum Mark Suster is a former startup founder and now a VC based out of Los Angeles. Hence he writes the fantastic tech startup blog Both Sides of the Table that’s a must read if you’re into tech startups. This recent piece particularly caught my eye as it’s relevant to so many cities’ startup scenes. Mark graciously gave me permission to repost it here – Aaron. ]
I was at a dinner recently in Chicago and the table discussion was about building great companies outside of Silicon Valley. Of course this can be done and of course I am a big proponent of the rise of startup centers across the country as the Internet has moved from the “infrastructure phase” to the “application phase” dominated by the three C’s: content, communications and commerce. But the dinner discussion included too much denial for my liking.
I think startup communities being simple cheerleaders doesn’t help anyone. Those of us outside Silicon Valley need to make an effort to effect change not just wish for it.
At the dinner some of those arguing that Chicago has everything it needs now that it has built: Groupon, Braintree, GrubHub and others and that it has “come along way” and “will never get the full respect it deserves just because it’s not Silicon Valley.” But I think this misses the point. I’m a very big fan of Chicago. I started my career at Andersen Consulting (now Accenture) so I went to Chicago many times a year for nearly 9 years. I then got my MBA at University of Chicago so I secretly pull for local entrepreneurs as long as they don’t make me visit in the Winter any more.
But no community can become complacent with the wins that it has. It’s not the great companies you build, it’s the silent killer of those that should have been build locally and weren’t. It’s the thousands of jobs that weren’t created but you don’t even know it.
Think about Facebook had it stayed in Boston. Could it have become the behemoth that it is today? Who knows. But I’ll bet the Boston community would take 50% of the success of Facebook built locally. And the truth is that successful startups beget more successful local startups, wealthy VPs who go on to build their next startups, etc. Even Mark has acknowledged moving wasn’t the be all, end all in this famous interview:
“If I were starting now, I would have stayed in Boston. [Silicon Valley] is a little short-term focused and that bothers me.”
Boston is still a great tech hub. But wouldn’t it want to be great PLUS have Facebook?
We have similar stories in LA and most people don’t know it. For example, Lookout is a mobile security company that was founded by three talented graduates of USC. They started their company in LA but a couple of years after raising capital from Khosla Ventures in the Bay Area they ended up relocating there. A few years later they announced $150 million in a funding round at $1 billion+ valuation and are ramping up jobs to secure their market-leading position. You could say the team would have gone North anyways. Perhaps – who knows? But I know with local funding and local support that’s certainly less likely.
And consider Snapchat – one of our hometown favorites as they’re based in LA (Venice Beach). Luckily for our community the founders decided they wanted to build their company in LA regardless of not having local funding from LA. That’s our great gain as Snapchat has also raised a lot of money at a monster valuation ($10 billion reported) and has been scooping up talented Stanford engineers and relocating them to LA. Locally we call it “the Snapchat effect.” The VPs of SnapChat will be LA’s great founders 5 years from now.
Silicon Valley is littered with startups where the founders were originally in LA. Klout was an LA company – sold for $200 million to Lithium. As was FarmVille (sold to Zynga) and many, many others.
Local capital matters. Local mentors matter.
That was my original idea behind Launchpad LA. I figured if we couldn’t fund every company locally we should at least embrace them as a community and show that we’re willing to mentor them whether they raise their money in town or not.
So what can a community do?
I often point out the story of when we raised our fourth fund a few years ago. I went to see several LP funds in Boston. At least twice I had conversations that went like this, “Yes. It’s true. Your fund performance has been great. But there’s also several great funds in Boston and while our first priority is to returns we have an equal responsibility to local funds and local jobs.”
LA public pension funds and endowments have historically been the opposite. I think government and community members need to understand that capital formation is an incredibly important part of economic revival. People often say, “Great entrepreneurs will build a community and the capital will follow.” I don’t see much evidence of that. I think it’s a combination of the two. It’s clear capital with no talent ends up having to travel to do deals. But talent with no capital is another word for migration.
And then there is public policy. Historically the City of LA has been hostile to startups. I’m reminded of LegalZoom who was founded in LA but moved it’s headquarters to Glendale and much of its operations to Austin, Texas. While LA was trying to impose archaic taxes on the firm and seemed to care less about its existence since it was a “startup” – the first lady of Texas welcomed them to Austin by picking up the CEO at the airport on his first visit there. It’s no wonder hundreds of jobs migrated. Luckily since then we elected Mayor Eric Garcetti who understands the importance of startups and of technology and venture capital on job creation.
But we still need more funds. No – I’m not worried about the competition. We’ll win our fair share of deals. But when you remember the Snapchat effect you see that I gain even from the deals we didn’t get to do. I’m guessing the future leaders of Lookout will build companies in the Bay Area.
Communities can make a difference. I wrote about the awesome efforts of Cincinnati to stimulate its startup community and the role of Paddy Cosgrave in Dublin, Ireland as well the entire Irish business community, the IDA, etc. who woo businesses to put their headquarters there. I also covered the impact of Brad Feld in Boulder or Fred Wilson in NYC as observed from my keynote on a trip to Seattle, which I felt could have a huge boom if its elder statesmen embraced startups a bit more.
Don’t get me wrong. Chicago has made strides. The Pritzker Family has been very active and the opening of 1871 as an entrepreneurial hub is a great example. But my conversations with countless Chicago entrepreneurs suggests it has similar issues to all non-Silicon Valley centers: not enough venture capital, too few tech angel investors, not enough talent for product management or engineering, not enough local tech powerhouses to drive local biz dev / keiretsu. I think this is true of LA, NY and many other tech communities so I’m not singling out Chicago.
My point is this … cheerleading isn’t enough. We need to help create local venture capital funds who may be national in investment strategy (as we are) but who will do more than their fair share of fundings locally (for us that’s 50%). Fund formation + local mentors + local talent = a shot at creating successes that drive the future job growth of our great cities.
This post originally appeared in Both Sides of the Table on November 15, 2014.
Monday, September 22nd, 2014
This weekend’s New York Times Magazine had a story on Portland that featured Yours Truly. I recapitulated a few observations I’ve had over the years, including that it’s truly remarkable how a small city like Portland has captured so many people’s imagination, and also that “people move to Portland to move to Portland.”
A Portland writer named Steve Duin appears to have had an aneurysm over the piece and, among other things, criticized my statement about why people move to Portland, saying:
She quotes Aaron Renn, an urban-affairs analyst, who insists that while Los Angeles attracts starlets and New York the financiers, “People move to Portland to move to Portland,” as if the city is a space between Pacific Avenue and Park Place on the Monopoly board, not a vibrant, creative, accessible and accommodating urban scene.
Which only proves that he completely missed the point. All I’m saying is what he’s saying in different words, namely that people move to Portland for its lifestyle and amenities. This is exactly what every Portland booster claims, namely that what they’ve created is attractional. I’m simply pointing out the obvious: people move to Portland primarily for lifestyle and leisure, not career or economic reasons. People move to Portland because they want to live there.
Portland’s economy has actually picked up of late. Its unemployment fell below the national average in 2013 after having been above it for 14 straight years. But I want to highlight a disconnect between a couple measures of economic performance.
I’ve written many times that Portland has done very well in terms of per capita GDP. In fact, from 2001 to 2013 (the maximum range of data available from the feds), Portland was #1 out of all 52 large metros in the US in its percentage increase in real per capita GDP.
On the other hand, looking at how much of that economic value ends up in people’s pockets tells a different story. From 2001 to 2012 (I don’t think 2013 has been released yet), Portland only ranked 40th out of 52 in its percentage increase on this metric. Portland declined from a per capita income of 104.9% of the US average in 2001 to 98.6% in 2012.
I threw this divergence into a quick chart:
It would be interesting to dig into these numbers. I would particularly be interested in seeing where the GDP growth is coming from, as unlike say San Jose, there’s no obvious driver I see.
Update 9/23/14: I did a quick back of the envelop calculation of total GDP growth by industry. Only a few industry totals are available, but the biggest gainer was Manufacturing, up 300%. Education, Health, and Social Assistance were #2, followed by Professional and Business Services. Natural Resources, Retail. Information, and FIRE were at the bottom.
Speaking of San Jose, I see an even more remarkable divergence there. It was #2 in per capita GDP growth over the 2001-2013 time frame. Looking at the overall Bay Area total real GDP, it increased by 30.1% from 2001 to 2013. Keep in mind I’m using the inflation adjusted figured here, so there’s no inflation in that metric. But at the same time the Bay Area lost 2.4% of its jobs.
The Bay Area grew its economy by almost a third while shedding over 75,000 jobs. Pretty remarkable.
Wednesday, August 27th, 2014
Scotland holds its referendum on independent September 18th. So what better time to show this timelapse of that kilted land. You may want to click over to Vimeo for the high definition version. h/t Likecool
Here’s a timelapse giving us, shall we say, a more atmospheric look at San Francisco. It’s a timelapse of the fog rolling in and out of the city. If the video doesn’t display, click over to Vimeo. h/t Likecool
Lastly, if you’re into transport timelapses, here’s one taken at Singapore’s Changi Airport. Pretty sweet. If it doesn’t display for you, click here h/t Likecool
Sunday, March 2nd, 2014
Ed Glaeser’s plan for more skyscrapers in California?
[You may recall that when I posted Daniel Hertz’s take on Chicago’s zoning insanity I promised a somewhat different take. Well here it is. Daniel has already posted a reply. Your reasoned thoughts pro and con are of course always welcome – Aaron. ]
As housing prices and rents soar out of control in tightly regulated cities like San Francisco and New York, many people have called for a significant loosening of zoning rules to permit greater densification. Many policies contribute to unaffordable housing, including rent control, historic districts, eminent domain abuse, and building codes, but zoning puts an absolute cap on dwelling units per acre thus is generally part of any solution to the supply problem. What’s more, as recent commentators have started to notice, even many of America’s most dense cities are predominantly zoned for single family homes, calling into question the need to dedicate so much space to a single housing typology.
For example, a web site called Better Institutions posted this map of Seattle, in which all of the yellow districts are zoned exclusively for single family homes:
The poster lets his feelings be known by using scare quotes to denote single family “character” and blaming the zoning for Seattle’s high rents.
And Daniel Hertz posted a similar map of Chicago in which the red is single family homes only and yellow is industrial space unavailable for any residential use:
Some go beyond affordability, saying that we also need to significantly increase densities in central cities in order to reduce greenhouse gas emissions. Harvard professor Ed Glaeser wrote an article advocating this subtitled, “To save the planet, build more skyscrapers—especially in California.” He says, “A better path would be to ease restrictions in the urban cores of San Francisco, San Jose, Los Angeles, and San Diego. More building there would reduce average commute lengths and improve per-capita emissions” and “Similarly, limiting the height or growth of New York City skyscrapers incurs environmental costs. Building more apartments in Gotham will not only make the city more affordable; it will also reduce global warming.” He claims that, “The best thing that we can do for the planet is build more skyscrapers.”
These complaints and the proposed solution of more dense multi-family development may be true in a technical sense, but what would carrying that out mean for people who actually live in our cities?
Some critics may disdain the character of single family districts but few of these pundits ask the question of what eliminating lower-density housing actually means to the survival of the urban middle class. Districts, like the Portage Park example Daniel Hertz gave in Chicago, are some of the last bastions of middle class family life in the city. It’s clear that some densification can be implemented without radically changing the appearance or functioning of the built environment. Allowing 2-flats and coach houses, or even the corner apartment building or townhouse development, wouldn’t ruin Portage Park. There’s no reason such things should not be allowed. But nor would they make a major dent in affordability in places where a tidal wave of global demand is washing over the city such as in San Francisco.
To materially boost the number of units in an era in a manner that moderates prices in a highly desirable place like San Francisco would require massive changes in the built environment of its neighborhoods. This would radically transform the character and nature of the city in question. If San Francisco were really covered in skyscrapers, it would cease to be San Francisco— a city of low-rise buildings framed by hills that would be obscured by high rises. There may well be the same geography on the map labeled as such, but it would be a completely different place. We would have to destroy the city in order to save it.
One person who gets that is Alex Steffan. He’s angry about prices, saying that the “criminal lack of housing is a global scandal.” He’s also honest enough to forthrightly acknowledge that a sufficient scale of new homes to bend the cost curve would fundamentally change many of our cities:
We can build some housing incrementally, without changing the skyline or cityscape, but not anything like enough. To produce enough homes to matter, fast enough, we’re going to have to fundamentally alter parts of our cities. That, of course, demands a local government willing and able to plan and permit such widespread change. It also takes an array of homebuilders doing the actual work, often in more innovative and low-cost ways, like more collaborative housing, manufactured buildings and flexible living spaces. Most of all, it takes broader public insight into how large-scale development can improve our cities.
In other words, it’s a major change in communities that requires selling the public on the idea. He believes that young people will be the agents of change here. This shows perhaps one of the signature affects such changes would have. They would displace families by eliminating their preferred housing typologies in favor of forms more amenable to predominantly younger singles or the childless for whom living in an apartment with no backyard is more likely a relief than an imposition. But it’s hard to imagine cities as places for solving the problem of climate change if they are, like San Francisco, increasingly places devoid of families with children.
Steffan also says affordable housing is a social justice issue. Yet is it really social justice to require everyone to have equal access to San Francisco, population 825,000? I think not. Especially not when America is replete with urban centers whose biggest problems are depopulation and worthless houses that you can’t give away. There are plenty of options of places for people to live; we should look at making our now failing cities more attractive to people who may like the housing and neighborhood, if not for issues such as crime and poor schools. There’s no guarantee in America that you can afford to live in the place you might most want to choose. That’s long been true of suburbanites and city dwellers alike.
Also, the willingness to fundamentally reshape cities is odd in light of the fact that such previous attempts are uniformly viewed in the urbanist community as disasters. The idea of Manhattanizing San Francisco brings to mind nothing so much as Le Corbusier’s Plan Voisin for Paris, in which the historical cityscape is replaced with towers in the park.
Fundamentally altering Paris
Of course no one is actually saying to take it this far, although Glaeser’s vision gets close it. But once we enshrine the rule that a certain threshold of unaffordability means more density and building regardless of neighborhood character, it’s hard to see what the limiting principle would be. Also, high rises or even buildings above 4-5 stories in height usually require expensive construction techniques, and thus are inherently costly.
It’s true, however, that cities are not static entities. Every downtown skyscraper in America is built on a site that was once used for something else. Yet we see this densification overall as a good thing. Had Manhattan been preserved as of its pre-skyscraper era, it’s not clear the city would have benefitted.
Clearly the zoning and building regulations in our cities are often too strict. Yet the disasters of previous generations’ radical change suggests that incrementalism is a better course. By all means allow two-unit houses, corner stores with upper story apartments, etc. into currently all-single family zones. Add areas where high rises are allowed the peripheries of districts currently zoned for such; warehouse districts as well as office buildings that are not well occupied. But don’t bring out the bulldozer wholesale. Additionally, a healthy city should make sure to embrace the entire palette of housing types – including single family homes. There’s more to making cities attractive to middle class families than just cost, and things like the prospect of a backyard for the kids to play in are among them.
And given the relatively few intact and attractive urban cores in America, prices are going to continue to go up. That’s true even with radical new building. As mentioned, San Francisco only has a bit over 800,000 people. Boston and DC have only about 600,000 each. How many people can you plausibly put into these places? Realistically, not all of us who would like to live in San Francisco or lower Manhattan are going to be able to do so. That’s true no matter how many skyscrapers we build.
This post originally appeared at New Geography on February 26, 2014.
Wednesday, February 5th, 2014
This week a couple of transport videos out of the Bay Area. The first is a 1968 short film called “Along the Way” that was designed to promote the still under construction BART regional rail system. Atlantic Cities posted an article about this a while back saying that “viewers are hyped to the then-under construction system with a hippie-lite jingle about how BART will make life better for Bay Area resident.” If the video doesn’t display for you, click here.
Here’s another one of more recent vintage, this a time lapse of the construction of the new eastern span of the Bay Bridge. If the video doesn’t display for you, click here. h/t Likecool
Thursday, January 23rd, 2014
My latest post is online over at New Geography and is called “How Houston’s Missing Media Gene Hobbles Its Ambitions.” In it I contrast San Francisco and Houston as representative champions of two different models of both urban development, and future vision for the US economy. But while San Francisco has risen to the challenge, Houston has largely not because it has failed to tell its story to the world. That’s in part because it feels no need to self-promote and especially focus on getting its narrative out via the media.
Here’s an excerpt:
The second big divergence relates to media. After all, the media, understood broadly, is how we come to have knowledge about or opinions of many things. Simply put, San Francisco and the tech industry get the power of media, while Houston doesn’t.
The content creators may still prefer a New York, LA, or DC but the tech moguls are circling the last redoubts of entertainment and information. Apple now has a dominant position in content distribution for music and is expanding in other areas. Google generates huge advertising revenues that are greater than the entire newspaper and magazine industry. Despite its many troubles, Yahoo remains one of the most-visited news sites. Meanwhile in just last year or two, Facebook co-founder Chris Hughes has bought the venerable New Republic while Seattle’s Jeff Bezos recently bought the Washington Post. Pierre Omidyar, founder of Ebay, recently announced a $250 million new media venture featuring Glenn Greenwald.
Houston, by contrast, has close to zero media influence or impact and seems not to care. It’s much less an influencer of media than one whose reputation has been shaped by it, and often not in a good way. Though there are many sprawl dominated metropolises in America, it’s Houston that has become the bête noire of urbanists.
One commenter highlights a point I wish I’d made. Gary B contrasts Houston with Atlanta, where Ted Turner built a media empire. Here’s what he had to say:
To my mind, the more interesting straight-up comparison is Houston to Atlanta. They are both new cities, roughly comparable in size (in the 5-6+ million range) and growing at roughly the same rate; they share much the same Southern background and climate (though Houston is more diverse, drawing immigrants from a much greater portion of the world) and political orientation (thoroughly conservative leadership class, but emerging liberal demographics beneath, at least in the central cities). So why has most national press about Atlanta over recent decades been glowingly positive while those about Houston have been mostly negative? A great deal of it has to do with media presence. Atlanta has had Ted Turner’s media empire, and to a great extent has broadcast its own version of its story nationwide; Houston has left its image to be determined by often envious media empires located thousands of miles away.
Thursday, January 9th, 2014
After yesterday’s post, I thought I’d throw up some additional comparisons, this time at the metro level. County and metro per capita incomes only go back to 1969, not 1929, but there are still interesting things to see. I’ll post these without analysis for you to ponder on your own. Again, all data from the Bureau of Economic Analysis, with charts via Telestrian.
The five boroughs of New York City (Manhattan=New York County, Brooklyn=Kings County, Staten Island=Richmond County). In the case of Manhattan, it’s worth noting that this is a mean not a median value.
New York vs. Los Angeles. Keep in mind, the exurbs of LA are technically considered a separate metro area (Riverside-San Bernardino) and so aren’t included in the LA metro figures:
Chicago vs. Indianapolis:
Denver vs. the Twin Cities vs. Seattle:
Atlanta vs. Dallas-Ft. Worth vs. Houston:
Memphis vs. Nashville:
Cincinnati vs. Cleveland vs. Columbus:
Wednesday, October 16th, 2013
[ Quality of place improvements tend to be targeted at high end demographics downtown and such. In this piece Rod Stevens and Gregory Tung talk about how the needs of industry for better quality places should not be overlooked – Aaron. ]
In a recent posting on “The Promise and Peril of Rust Belt Chic” Aaron Renn contrasts the goals of self-affirmation with the Richard Florida approach of hipster havens. There is a division here between creating jobs and place-making, a gulf that has never been bridged between economic gardening and New Urbanism. Recently, we may have found a way of uniting these approaches, by focusing on the work districts themselves and the place-making needs of the firms already located there. We did this as part of a strategy for a 21st Century workplace district in San Leandro, California.
San Leandro is located just south of Oakland, in the San Francisco East Bay, and in recent years the city has seen most of the good new jobs go north to Berkeley and Emeryville. At one time San Leandro was an industrial powerhouse, a suburban center where factories were moving into farm fields. As California grew after WW II, this became a lunch bucket paradise where Portuguese and Italian families moving out of Oakland could earn a good middle class income working at the Caterpillar plant, the Dodge factory or one of a hundred other companies. By 1970, more than 20,000 people worked there in manufacturing. With its focus on making ordinary, everyday things, San Leandro was more like Muncie, Indiana than Mountain View, another Portuguese farm town to the south that was going electronic in what would become Silicon Valley.
Then, in the mid 1970s, the factories started to close and the jobs move away. The factory buildings stayed, but instead of being used to make things, they became places to store things. Today there are only about a third as many people working in manufacturing as there were 40 years ago.
Today the vacancy rate for this industrial space is just 5%, a rate brokers point to with pride, but their value is far less than in Berkeley, just 15 miles away, where there has been a renaissance of small, urban manufacturing. Like Brooklyn and San Francisco, Berkeley has become a center for making niche goods, not only food and apparel but also very technical items like scientific glassware. Those specialty skills have, in turn, drawn in companies that need them as part of their supply chain.
This realization that, effectively, many of the local buildings in San Leandro are barren of people led us to our first strategic goal: “IQ per acre”. This means raising the value-added in each building, whether by man or machine. This doesn’t have to require a masters degree. A lot of people are smart with their hands, and advanced manufacturing is all about combining technical skill with computer-controlled machinery that leverages this skill.
As we looked around the area and began compiling lists of interesting companies that worked there, we realized that much of the original DNA of making things is still there—but these companies had been forgotten or gone unrecognized by the city. We found companies still working in food processing, metals and machining, and instruments and process control. We also found vestiges of older companies that had moved away to cheaper places where it was easier to pollute, but in which the orphaned child had grown up and found success. INX Digital, founded as the subsidiary of a local paint company, now serves as the worldwide R&D center for a company that makes the inks that go in wide-bed printers. People working there wear lab coats.
As we talked with the managers of these companies, many of whom simply commuted into work there and felt no particular attachment to the place, we realized that some of their business needs were going unmet. They told us that they had no place to go to lunch and that local hotels were so tired that they put customers and suppliers up in other cities. They said that the curbs needed to be restriped to create more on-street parking, so that women coming off the night shift would not have to walk so far to their cars. They told us that the younger generation of tech talent coming from San Francisco and the North Bay could not take the BART trains, because the shuttle connections were too slow and infrequent. And they told us that their workers would like to have a nice place to walk to at lunch, someplace green that would be an alternative to the drab, industrial landscape.
This led us to our second strategic goal, “Serve existing customers first”.
Why? Because not only are these firms already there and producing jobs, but they are the best source of referrals for new business. You want them talking up the place at their next industry conference. You want them telling other companies in their supply chain that this is a good place to do business. But how to get them involved? A manager running a computerized chocolate factory probably is not going to take two hours off in the middle of the day to attend a planning meeting. You have to make it worth their while to get involved, to take care of that parking problem today. Only then will they get interested in the longer-term planning issues.
As we drove around the area, we realized that we ourselves were lost within it, despite many trips there. Key roads do not connect, most of the buildings are sun-bleached, and there are few landmarks. Nearby there is a Kinkos and there is a Starbucks, but they are buried in an outlet mall, across the freeway. In all, it reminded us of the movie “The Sheltering Sky”, in which Debra Winger wanders through the Sahara with nomads. How and where to create some oases that people could actually attach themselves to?
This led us to our third strategic goal, “Humanize the place”. With more than 2,000 acres to deal with, however, you cannot spread the peanut butter too thin. You have to concentrate the investment.
Our first tactic, then, became a “backstreets strategy” of attracting smaller companies to the cul-de-sacs and lanes with smaller buildings that are easier to change and upgrade, where changing a few facades, adding a parklet and improving parking will improve the overall place. The city has a façade program, but this has always been targeted at Main Street merchants, not factory managers.
A new, $1 billion Kaiser hospital is opening in the area, one that will bring more than 2,000 workers as well as countless patients, and so we encouraged putting a pod of food carts on its front door. Not food trucks but food carts. These are stationary and are far less costly to buy and operate than trucks. With more than 500 of these, Portland has proven that these can operate in a variety of places. Why not an industrial district barren of eating opportunities, next to a hospital where thousands of workers will want an alternative to the cafeteria?
And we recommended other bargain-basement ways to humanize this area. Things like pedestrian-level street lights that can be attached to the base of existing cobra-heads. Filling in the missing links on the bike routes, so that people can ride to work without fear of being side-swiped by a semi. Or, very simply, reversing the direction of the BART shuttle so that it does not have to make so many left-turns across traffic.
The fact is, we have over-looked the place-needs of industry for a very long time, simply taking the tax revenue from these places without reinvesting in them. A place like Detroit is proud of its Campus Martius Park, where Quicken workers can eat their lunch outside, but where is the equivalent investment for the machinist who makes jet engine parts, or the brewer who makes your local micro brew? More often than not, these people are sitting outside at a rough picnic table eating under razor wire.
Using place-making for economic development means taking care of the basic, day-to-day needs of business by providing safer, easier ways to get to work, service and amenities, and a nicer setting right outside the front door. It is no accident that there has been a kind of revenge of the cities in Millennials wanting to work in urban centers. These places are more convenient and interesting, in part because we have spent the last 15 years making them better places to live and shop. Now it is time to turn to the “productive” side of urban life- work, and in particular to making things, especially with advanced manufacturing.
In planning for these places, if we do it at all, there is a tendency to treat them as white spaces on the map, like “Indian Territory” to be settled by new white people. Yet there are successful businesses in these places, and the trick is to figure out how the place itself can make them more successful and draw in other companies in their supply chain. This requires the ability to talk to business, to tour the operations on the plant floor, what makes a given worker so good, and to listen for the opportunities to make the work district around the company better. This is the next frontier in place-making. The communities that do it well will be the economic winners.
Rod Stevens is a management consultant on Bainbridge Island, WA.
Gregory Tung is an urban designer with Freedman Tung + Sasaki (FTS), based in San Francisco.
Wednesday, November 28th, 2012
Here’s a gorgeous time lapse of San Francisco. The only thing I would have changed is the music, since they used the same track as the incredibly awesome Le Flâneur (Intro by The XX). In any event, definitely full screen for this one. If the video doesn’t display for you, click here.
If you still want more, here’s a San Francisco installment from the “Empty America” series. If the video doesn’t display, click here.
Tuesday, July 31st, 2012
[ Mark Suster is a former Accenture guy like me who left to become a serial entrepreneur and is now a partner in a Los Angeles based venture capital firm. He writes an excellent blog on the tech industry called Both Sides of the Table that draws on both his entrepreneurial and VC experience. I consider it a must-read for those interested in tech. A recent story of Mark’s caught my eye as it’s relevant to cities and comes from a bona fide investor, not urban booster, perspective. He graciously gave me permission to repost it here – Aaron. ]
Like many I read the headlines about Pinterest moving from Palo Alto to San Francisco and thought about the trend it portends. For those not familiar with the local geography, Palo Alto is the north end of what most consider “Silicon Valley” although nobody local calls it that. Palo Also is about 35 miles south of San Francisco.
Palo Alto is home to Stanford. It is the birthplace of Hewlett Packard. And Facebook. It is adjacent to Mountain View, home to Google. Further to the south are the legendary companies of Cisco, Apple, Intel, eBay, Yahoo!, Juniper and countless others.
Back in 2006/07 when I sold my company and then worked at Salesforce.com there were very few options in SF for technology folk to build their careers at big, growing companies.
Today there’s many. In addition to Salesforce.com (the 800 pound gorilla) there is also Twitter, Zynga and Square – just to name a few. And now Pinterest.
So why all the movements towards cities? It’s clearly more expensive for office space and living. In addition to higher rents many cities impose city taxes on local businesses. It’s clearly a complex topic without black-and-white answers.
Fred Wilson ponders this in his post “Cause and Effect”
Technology innovation doesn’t occur in a vacuum. It happens in a dialog with society. And sci-fi writers are but one example of the way society impacts technology.
I think that’s one of the reasons that many of the most interesting Bay Area startups are choosing to locate themselves in the city. And it is one of the reasons that NYC is developing a vibrant technology community.
Society is at its most dense in rich urban environments where society and technology can inspire each other on a daily basis.”
I’m sure there’s a lot of truth to that. I see it first hand in Los Angeles where given the growth of YouTube networks the worlds of art & technology are colliding. It’s becoming harder to distinguish tech companies from media companies.
Many “tech companies” now have green screens. And make-up artists. And costume & set designers. And sound engineers. And post production. And writers! And even … yes … actors.
I can’t say for sure, but it feels to me like the re-urbanization of technology companies is driven by a broader trend of the tech industry overall – cloud computing. In driving down the costs of building businesses it’s driving down the age of startup founders and thus they’re starting companies where young people want to live – in urban environments.
I’ve been meeting with LPs (those who invest in VC funds) over the past year and discussing trends I see in the market and where I think we need to be as a firm to be near to and meet the needs of our customers.
One of the major trends I’ve outlined is this movement of entrepreneurs (and as a lagging indicator venture funds) to more urban environments.
And it’s not just the movement from Palo Alto to San Francisco.
The same phenomenon is happening in many places.
- In Massachusetts companies (and VCs) have migrated from out by Waltham to Back Bay (Boston) or Cambridge.
- In LA companies used to be concentrated near Pasadena or in the San Fernando Valley. These days it’s Santa Monica and Venice. Not exactly “urban” in the way you think of SF or NY but certainly relative to the suburban communities of LA and at a minimum it’s where young people want to live / hang out
- In England they were all in The Thames Valley (45 minutes west of London) and these days they’re all near Shoreditch east of London
- I think NY has always – by definition – been urban. But there does seem to be huge startup energy around the Flatiron District / Union Square.
For those that aren’t aware of the broader technology shifts of cloud computing, the trend is described in a post I did about changes in the software industry.
The costs of building a company have gone down dramatically, from $5 million to get to launch in the late 90’s to $500,000 (or even lower) today for web companies.
As a result younger people are creating startups because they can. It’s far easier as an inexperienced 23-year-old to get $200,000 from somebody than $2 million or $5 million.
So we’ve seen an explosion in the number of startup companies and subsequently a huge burst in the number of incubators.
I think the urban tech renewal is happening for the same reason.
It’s not that young people wanted to live in Mountain View in the past. In fact, so many DID NOT that companies like Google & Yahoo! had free buses with wifi from San Francisco to their Palo Alto and Sunnyvale headquarters.
Young people want to live where the action is. They want to live amongst other young people. They want nightly restaurants, bars, dance clubs, karaoke, or whatever other late night activities are available to those with fewer encumbrances.
You know the story. You get older. You get married. You have a kid. Then another. Suddenly you feel the pull for a backyard and nearby parks. And a bigger house wouldn’t hurt so that when your mother-in-law is in town for 3 weeks it doesn’t feel like you see her quite so much.
So you move outside the city – even though you feel a strong pull to stay. It’s why many of the older executives at San Francisco startups live in Marin County and commute in. Or they do so from Burlingame, San Ramon or even Palo Alto.
I suspect the shift from the burbs to urban environments – or more specifically to places where young, single, technical startup people WANT to live – will continue into the future and will not decline.
And with startups so go VCs. Spark Capital, Flybridge, Founder Collective, NextView Ventures … all in Boston or Cambridge not west of the city.
In San Fran you find more recently established VCs like True Ventures, First Round Capital, Freestyle, Kii Capital and others.
And there has been a similar move from Sand Hill Road to Palo Alto itself with firms like SoftTech VC, Felicis Ventures, K9, Accel, True Ventures (other office) and Floodgate.
In NY you find the broader Flatiron / Union Square are home to USV (obviously), IA Ventures, First Round Capital, FF Ventures and the incubators General Assembly and TechStars.
I’m sure I’ve forgotten many who have moved or set up anew since I wrote the list in one sitting and with no research.
In LA the VC shift is clearly to Santa Monica / Venice, home of Rustic Canyon, Greycroft, Anthem and just about every incubator (Amplify, Launchpad, Mucker, Science).
GRP’s offices are near Beverly Hills. Our lease runs out in 2013. No prizes for guessing where our new offices will be located
This post originally appeared in Both Sides of the Table on July 10, 2012.