Monica Beeman and I propose the creation of a business incubation and acceleration project to encourage more risk-taking and more wealth-creation in Baltimore called Startup City. During the 12-week program, ten teams of entrepreneurs create 10 new companies. Each team gets $15,000, free office space, business advice, and continuous mentorship from local investors and business leaders. The program culminates in a “Demo Day” before an audience of investors, journalists, and customers.
A host of technologists and artists are building a thriving innovation community here in Baltimore: every week brings a new event or organization, often organized or promoted through social media channels. These include everything from BohConf to Baltimore Node to Single Carrot Theater to the Baltimore Love Project. It’s time for this community to channel some of its entrepreneurial spirit and expertise into forming new businesses that create wealth and help revitalize and diversify our economy.
The capital needed to start such companies has dropped dramatically. Incubator programs around the country like YCombinator, Techstars, and Launchpad have demonstrated that many good ideas can be prototyped for less than $20,000. At that level of funding, the prototype can either be sold to early customers or it can attract further funding from angel investors or venture capitalists.
One big obstacle to new business formation in Baltimore still remains: a lack of role models. Unless one grows up around entrepreneurship or serendipitously encounters it later in life, most people have a hard time imagining what it would take to start a new business. Worse yet, some innovative people overestimate the risks involved and never entertain the notion at all. Baltimore boasts several mega-success stories such as Under Armor, BillMeLater, Millennial Media, and Advertising.com, but we also need a steady, visible stream of smaller, more accessible examples. Startup City would create ten highly visible, potentially high impact startups in the city that might not otherwise have the activation energy to get started.
What would a startup city look like?
Baltimore should avoid stale efforts to “recreate Silicon Valley” and instead capitalize on its distinct urban character. Yet it is worth pondering for a moment how a place like Baltimore could compete with Silicon Valley, as described by YCombinator founder Paul Graham:
For all its power, Silicon Valley has a great weakness: the paradise Shockley found in 1956 is now one giant parking lot. San Francisco and Berkeley are great, but they’re forty miles away. Silicon Valley proper is soul-crushing suburban sprawl. It has fabulous weather, which makes it significantly better than the soul-crushing sprawl of most other American cities. But a competitor that managed to avoid sprawl would have real leverage. All a city needs is to be the kind of place the next traitorous eight look at and say “I want to stay here,” and that would be enough to get the chain reaction started.
Baltimore has many problems, like any big city, yet it has many advantages that make innovators “want to stay here.” Through Startup City, we hope to encourage those innovators to stay here and start businesses here.