Baltimore Exit Interview – Paul Capestany

Paul CapestanyFor those of you who don’t already know Paul, he’s been a great community figure, helping to energize Baltimore by being an organizer in Tech Crawl East, Innovate Baltimore, Startup WeekendCowork Charles, and a lot more. He went through the process of forming his first startup here in Baltimore, going through the complete life cycle – from idea to team building, fund-raising circuit to untimely demise. Paul represents what we need more of in Baltimore, both from his community organizing and from his drive to create an awesome company, we can learn from this experience as to how to attract and keep more Paul’s around.

Unfortunately, Paul Capestany is leaving Baltimore for San Francisco. I had the opportunity to chat with him to unpack his thought process on why he’s leaving, and what we can do to make Baltimore more friendly to Paul and people like him.

Listen to the full interview here:


Q+A Below 
(edited for readability and clarity):

Give a bit of background about yourself.
I came to Baltimore 10 years ago to go to Johns Hopkins. I studied Neuroscience, and after graduating I went into research. Noticed a lot of web companies doing well and got really interested in the technology space. Fast Forward a few years, I convinced a college buddy of mine to help me start a company focused on reinventing message boards. Had a lot of trials and tribulations with that.

You’re not a Baltimore native?
No, I grew up in Northern Virginia, about an hour south.

After 10 years, why did you decide to leave?
What I’m interested in pursuing (risky, consumer facing startups) are not easy to do in Baltimore. Getting people excited in the idea and finding people who want to take risks on a product is difficult – both are culture issues. Access to capital is another problem in that Baltimore and the surrounding area seems to be more focused on B2B companies that  have a proven revenue stream and traction.

At a couple of investor meetings I had the opportunity to talk about all the cool stuff that’s going on in Baltimore, but we have a lot of deep infrastructural issues. One big issue us not having companies to look up to as success stories, companies that would inspire young entrepreneurs to say “If they can do it, we can do it too.” We’re missing that culture, and that’s not something can be fixed at the grass-roots level – we need to have something like LivingSocial cashing out, which would cause everyone to take notice that they had an idea, took risk, executed, and made it big.

If LivingSocial cashed out, they would likely be DC’s victory, not Baltimore’s.
Well, they’re an hour away, but they’re also a great company that makes themselves accessible and active in the community. Hopefully when they make it we’ll have some trickle down effect in Baltimore, not only in our attitudes regarding taking risk, but with their founders reinvesting in the local community.  I have really high hopes for that happening, but it’s a matter of when it will happen – and I didn’t necessarily want to sit around waiting.

To summarize, it sounds like the two key problems are the cultural issue of finding talented individuals that are willing to take a risk, and being able to find investment money for riskier consumer facing startups, right?
Yes.

There are a number of different regions around the United States that have become cultural startup Mecca’s, such as Boston, Austin, and Portland, why did you make the decision to go to California specifically?
I hadn’t consciously thought about this concept in over a decade, but it’s due to self-selection in groups. A great example of this is colleges: when you’re in high school you have to decide what major you’re interested in, you want to be the best in that field, so you pick the best school for that major. This creates self selected groups of people who are all really interested in learning about the same thing. I applied the same type of reasoning to where I want to be.

My gripes here with the culture and investor climate are present all up and down the east coast, I’ve been to events in New York, Philadelphia, and DC, all the same complaints are present to varying degrees. If Philly is ahead of Baltimore, and New York is ahead of Philly in terms of connectedness and cultural attitudes towards risk, I figured I would go right to the center of where the action is, which is Silicon Valley/San Francisco.

What are your professional and personal expectations from Silicon Valley?
I’ve been to Silicon Valley twice for technology conferences, so I was surrounded by my peers constantly. From what I’ve heard, the day-to-day lifestyle is still like that. You’ll walk into a bar or restaurant and meet people from other startup companies, there’s a higher density of people doing the same kind of stuff. That’s something I’m really looking forward to.

When I started my company in Baltimore five years ago, I was the only person I knew doing a startup, there were no meetups back then, no startup happy hours or anything. It wasn’t until very recently, maybe 2-3 years ago, that started improving in Baltimore.

Still, in San Francisco there’s a huge amount of networking possibility, and the general likelihood of running into people doing similar things is way higher.

Sounds like in your perception Baltimore is improving, what could have been done to keep you, and what should Baltimore be improving regardless if it personally affects you?
I’ve sat in on a couple of feedback sessions with the mayor’s office, they were conducting some surveys asking individuals why they’re staying in Baltimore. At those sessions, it seemed that most people come to Baltimore for either school or their jobs. That’s why they stay here, they get married, have kids, get a house, etc.

Was there a single moment that made you say “Hey, I’ve gotta get out of Baltimore?”
People don’t come to Baltimore and think about Baltimore as a place to start a startup. That’s a big deal, because people go to San Fransisco to start a startup. The whole attitude and the way people view themselves in a city is really important. From my experiences most people are coming to Baltimore for school or jobs, definitely not to start a company.

It sounds like your suggestion is that we fix the cultural issue first. In the LivingSocial example where they are trying new and exciting things and are successful, the money follows. What might be a prescription to Baltimore to incentivize or get out of the way of people who want to try new and exciting things?
It comes down to the perception of the city, what brings people here. What kept me here was the cost of living, and the fact that I had established a network here. The pros, which are solid pros – cost of living is amazing, and there are awesome people doing awesome things here,  was outweighed by the culture issues and perception issues.

I recently started talking to some students  in computer science programs at Hopkins and other local schools, and unfortunately the people who were entrepreneurial and wanted to work at startups all told me that they were heading to the west coast. That really was a huge tipping point for me when I realized that the students, the people who should be the talent that we’re retaining in Baltimore, are all leaving.

I believe that children are the future.
Oh for sure.

If Baltimore keeps on its current trajectory or accelerates like it has in the past three years, another three years from now would you consider coming back?
It depends where I was personally… that’s a really good question. The vast majority of my friends are in Baltimore, Baltimore is definitely changing and improving, but I don’t know if it will still match what I expect San Francisco has to offer… Not sure.

In your evaluation, what are the best and worst things about Baltimore?
There’s a lot of really good schools around here, so it hasn’t been hard to surround myself with cool, interesting, smart people. Have really enjoyed the smallness of the city, it’s easy to get around, and even though it’s small, it has tons of diversity in the neighborhoods and things that you can do. Cost of living is great, you definitely get a good bang for your buck in Baltimore.

I didn’t enjoy the perceptions that outsiders have of Baltimore, of course everyone thinks of the Wire and that we’re a “gritty” city. You can’t really control that, but I did spend a good amount of effort convincing people that there’s cool stuff in Baltimore and that it’s really fun. Other than that, I wish public transportation was a little bit better. The metro is useless, now we have the awesome Circulator which will hopefully keep expanding.

Just thought of one more sneak last question, when you’re in California and people ask you where you’re from, what are you going to answer?
Baltimore.

THAT IS THE CORRECT ANSWER.
Yes indeed.

We’re really excited to see you do well, looking forward to scheduling a follow up to see how the reality is compared to the perception. 
Awesome, looking forward to it.

One final note: To preemptively field some questions, my goal was not to talk Paul out of leaving, argue, disagree, or challenge his premises. While I may not personally believe in everything Paul said, I think it’s really important that we hear his perceptions. True or not, these are the reasons why people are leaving Baltimore, and if we don’t have this information we can’t hope to fix it. This in no way should depress or upset anyone, but if it does, lets use that energy to fix these problems.

You can read Paul’s original post here:  http://blog.paulcapestany.com/post/6907056840/goodbye-baltimore-hello-san-francisco

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9 Responses to Baltimore Exit Interview – Paul Capestany

  1. This is a valuable discussion. I would be really interested in a follow-up a year from now. What will it be like to join a much, much larger community of equally talented, and ambitious young men? There’s a lot to be gained from being part of a big scene like San Francisco’s, but isn’t Paul basically joining a gold rush?

    • Perhaps, I was planning to do a follow up even sooner than a year, 2-3 months maybe. Speaking personally, I think the density of like minded people Paul covets is as much of a detriment as it is a benefit – now you have ten times the amount of people around you competing for the same things. Hence the west coast investor trope of “This is the 8th pitch I’ve gotten for the same idea THIS WEEK.”

  2. icdboss says:

    I kind of understand where Paul is coming from as I had a very similar situation; starting a semiconductor design company in the Baltimore area (of all places) rather than CA, AZ, TX, etc. My reason for doing it here was the reason Paul mentions about why anyone would want to live here. Of course then I faced the challenge of being out of ‘the gold rush’ in terms of customers and talent. The strange thing was in the end our customer base was worldwide, so location within the US did not matter in that sense. And in terms of talent of course there was a much smaller pool but the advantage was that they also wanted to live here for similar reasons so retention and continuity in my group was very high. And we were forced to ‘grow our own’ which I think led to a more diverse team. From the money angle my biggest investor was a Japanese company so again specific location within US was not critical. Sometimes it feels good to do things the hard way 😉

  3. Gordon says:

    Having come to Bmore from the big Apple, I understand the lure of the much more glamorous SV/SF. And when you are young, the faster pace and excitement are truly magnetic. The key for Paul, I believe will be to gain the startup experiences that he seeks and build on his intelligence and his Baltimore experience. At the same time, I have to say that the future of the Internet does not lie in Silicon Valley. It lies in creative people with a unique perspective and the endurance to produce what hasn’t been done before. Filmmaker John Waters is a good example.

  4. Pingback: My Company Doesn’t Have to Cash Out to be Worth Something – ChrisAshworth.org

  5. Alan Viars says:

    This is a great article. Paul makes some good points. Good luck Paul!

  6. Hiro Amano says:

    Did you do this over the phone/skype? You should do stuff like this on video Charlie Rose style (2 or 3 cameras)… the problem would be finding a sponsor locally. Oh well, if we have to go to SF to find a sponsor I guess it wouldn’t work… Thanks for an interesting interview!
    🙂

    • Would love to do a 3 camera shoot… however, editing the audio took more than enough time :).

      For those interested, I recorded this over Skype with an app called Pamela, has a setting to pan the caller far left and yourself far right so that you can edit/silence as needed. Easy to setup, and if I do another skype interview I’ll likely use the same setup!

  7. This story made me think of an article I read a while back with a great quote:
    “The best minds of my generation are thinking about how to make people click ads,” he says. “That sucks.” From an article in Business Week titled “This Tech Bubble Is Different”

    http://www.businessweek.com/magazine/content/11_17/b4225060960537.htm

    It makes me sad that someone who is working on Neuroscience research moves to risky consumer facing startups. This is not intended to disrpect Paul. I understand all too well the reasoning. It is much easier to iterate fast, find a winner and reep enormous rewards in consumer facing internet startups.

    It’s actually a false description “risky” consumer facing startups… for the effort and time, you are far more likely to make more money and get more publicity in consumer facing internet startups then you can in neuroscience… but if we could somehow ease the regulation and reward the efforts in neuroscience like we do in consumer facing internet startups, I bet we would find far more impactful outcomes to society…

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