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Baltimore: A Startup Hotbed of Another Kind?

December 31, 2012

Andrew Zaleski has an excellent, sober commentary on Baltimore’s status as a “startup hotbed.” 410 Labs founder Dave Troy reminded me of Matt Yglesias’ three-month old post on local governments and tech startups when he points out on the Baltimore Tech Facebook group that,

There’s no city town or burgh not experiencing some kind of “tech renaissance” with startups, angel culture starting to bubble, collaboration, etc. I see it everywhere in the world, from here to Moscow to China. (When current and former communist countries get into the act, you know it’s happening everywhere.)

Yglesias recognizes there is room for tech outside of the traditional startup hubs, but argues that “if every civic leader in America focuses on this goal simultaneously they’re each going to accomplish very little.” Instead, he argues that state and local officials “should look more closely at what assets they already have and what those assets need to thrive.” This runs counter to attempts to get Baltimore’s political and business leadership to champion tech entrepreneurship throughout the city.

Baltimore has as many things going for it as it does things working against it, including dwindling population, persistent unemployment and lackluster schools. Of course, these intractable challenges can be seen as opportunities as well–talk about entrepreneurs solving real problems. Every time I step foot inside of a government agency, I imagine how technology can revolutionize the delivery and efficiency of social services–and how doing so can potentially make someone a pretty penny.

Case in point: software company Social Solutions, which designs software that helps nonprofits document and manage their efforts and outcomes in great detail. Three years prior to Millennial Media’s IPO (and before it considered leaving the city because of parking constraints) Social Solutions was a 90 person company that was quickly outgrowing its offices in the Emerging Technology Center. After a $6.5 million round of investment, it left the city for Middle River and continues its growth.

The founders at Social Solutions filled a need–utilizing technology to better allow social service nonprofits to execute on their missions–and found themselves experiencing great growth and profit. Baltimore is a great petri dish for a company like Social Solutions–and there’s more room for companies like it to follow.

The Baltimore City Public School System, for example, has a $1.3 billion budget–and isn’t even in the top-30 of largest school districts in the country. A savvy entrepreneur could solve problems for a multi-billion public education market with technology advances–just as Social Solutions has done for nonprofits. There’s potential for the same to be done for the billions spent locally in social and human services.

It might not be as sexy as mobile and web apps–but what’s better than solving “real problems” and experiencing exponential growth as a company?

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