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Technology

Rent an (AgTech) Robot.

October 6, 2021

Mark DeSantis is a Pittsburgh-based serial technology entrepreneur, policy wonk and educator. He is also CEO of Bloomfield Robotics, a new Ag company out of the CMU Robotics Institute that uses AI and computer vision to measure the health of agricultural crops on plant-by-plant basis, or in their parlance … “crop estimation technology.”

Mark knows venture capital and financing, and how technology gets commercialized. In the last 15 years Mark has co-founded and run three other companies: RoadBotics, an AI-based product that monitors and manages roadway infrastructure; kWantix, an energy hedge fund; and kWantera, a GE Ventures-backed energy predictive analytics company. Mark also served as CEO of Think Through Learning, an online tutoring company, and was U.S. managing director of ANGLE Technology, a UK-based venture capital firm and consultancy. And as if that wasn’t enough, he also ran as the Republican mayoral candidate in the 2007 Pittsburgh election.

On the policy side, Mark served as director of government relations for Texas Instruments in Washington D.C., and operated in a number of positions in the Federal government during the first Bush Administration, including as a Senior Policy Analyst in The White House Office of Science and Technology Policy and the Department of Commerce. He was also on the staff of the late U.S. Senator John Heinz. Mark has sat on a number of boards and served as a consultant for a variety of technology companies throughout his career.

Mark’s robots are for rent. All over the world. And he believes, as do his customers, that his company’s robots will help us to produce more food on the finite amount of land we have available to us.

Insights and Inspirations

  • AgTech robots will help to maximize crops on the finite land that we have.
  • Bloomfield Technologies is renting “inspector” robots all over the world.
  • Mark’s startup is based in Pittsburgh. A few years ago that was unheard of.
Read the podcast transcript here

Eve Picker: [00:00:11] Hi there, thanks for joining me on Rethink Real Estate. I’m Eve Picker and I’m on a mission to make real estate work for everyone. I love real estate. Real estate makes places good or bad, rich or poor, beautiful or not. In this show, I’m interviewing the disruptors, those creative thinkers and doers that are shrugging off the status quo in order to build better for everyone. When I’m not hosting the show, I’m running my real estate crowdfunding platform, SmallChange.co, where you’ll find impact real estate investment opportunities open for everyone. Or you can learn more about me and catch up on some podcasts at my website, EvePicker.com.

[00:00:20] Today, I’m talking with Mark DeSantis, serial entrepreneur and past Pittsburgh mayoral candidate. You might wonder how these two things come together and we talk about how. Right now his talents are focused on a startup called Bloomfield Technologies. They build robots that inspect valuable crops like grapes, helping to predict crop outcomes and helping to manage crop disasters before they happen. Mark’s robots are for rent all over the world. He’s certain they will help to produce more food on the finite amount of land we have on this earth. And so are his customers. If you’d like to join me in my quest to rethink real estate, there are two simple things you can do. Share this podcast or go to Patreon.com/rethinkrealestate and support us for the price of a cup of coffee.

Eve: [00:02:27] Hello, Mark.

Mark DeSantis: [00:02:29] Hi.

Eve: [00:02:29] It’s really nice to have you on my show. It’s been a while since we talked.

Mark: [00:02:33] Yeah, you bet.  Happy to be here.

Eve: [00:02:34] So you’ve been called a serial entrepreneur and you’re on to your next venture. And this one is an agricultural technology or what we call Agtech. Right?

Mark: [00:02:48] You bet.

Eve: [00:02:49] So, what is Bloomfield Technology all about?

Mark: [00:02:52] Yeah. So we inspect plants and we determine their health and performance one plant at a time. And we do that for the world of specialty crops. So, if you think of all of the, you know, the world’s largest industry as agriculture, as many, I’m sure your listeners know, and within that industry, there’s a category of plants and crops called specialty crops. And those are all the things that you and I buy when we go into a Safeway or a Giant Eagle or a Whole Foods. So think of fruits, vegetables, ornamental flowers. But it also includes things like trees and even cannabis, all those things that are not wheat, rice, corn are speciality crops. That’s the world, two trillion-dollar market. Those crops require a lot of love and attention, specifically from inspection. So there are people who are trained to walk among those crops, whether it be in a greenhouse or a vineyard in Napa, to look at those plants. And they’re highly trained, typically viticulturists, botanists, agronomists, and they walk among those crops, and they examine them. Periodically looking for things that could damage the plant, water stress, disease infestation. But they’re also looking at the health of the plant, determine whether or not that grape is the size they expected it to be at that time of the year. Or those tomatoes are as large and red as they should be given this time of the year and these treatments. And if they see a problem, then they can tell the grower to provide a remedy, whether it’s more water, more light, more nutrients or what have you.

Eve: [00:04:21] So kind of what I do in my own garden, but on a huge scale.

Mark: [00:04:25] Yeah, absolutely. Bet on a massive scale where you’re talking about tens upon tens of thousands of acres. Well, we do that with machines and A.I., with specifically with cameras that are mounted about the size of a toaster and they’re cameras, not unlike your cell phone, they use the same kind of imaging, except they have the stereo lens and their own light source. And you put it on anything that moves. Our growers, we are in 15 vineyards in four countries, as well as a blueberry grow in Peru. And all of those customers have vehicles of various sorts. They mount the cameras on, and they just drive up and down the rows. Image, take pictures of those things and of the crops and the A.I., the artificial intelligence in the cloud does the rest. So they take those images and go through them at the pixel level. And basically the A.I. has been trained to look for all the things that that human viticulturist or agronomists is looking for when they look at the plant, believe it or not. So A.I. has now reached a point, this is my third A.I. startup and that technology, I should say, to give a shout out to Carnegie Mellon was developed over a decade at Carnegie Mellon. Little known secret about CMU is that they’ve been making ag tech robots for 30 years.

Eve: [00:05:36] Oh, that’s interesting.

Mark: [00:05:37] Yeah, little-known fact. So yeah. So that’s what we do. Eve, I’ll tell you one interesting tidbit. Your, listeners may find this particularly, I think it’s cool, but so we do this for vineyards. Some of the vineyards are some of the best known vineyards in the world. So, one of our customers in Bordeaux is Chateau Palmer, which makes the famous Chateau Margaux one of his. You know, we have vineyards in California and elsewhere, but one of the most interesting customers we have is NASA. So we recently got a grant. There is actually a greenhouse, small greenhouse about size refrigerator, inside of the International Space Station.

Eve: [00:06:18] Oh, so interesting.

Mark: [00:06:20] Yeah, they’re growing leafy greens and spices and what have you. And it’s actually a program in NASA called Space Crops. So, think of Matt Damon in The Martian. That’s a real thing. They actually want to grow plants on the moon, on Mars, but also in the ship going to and from Mars because you can’t carry enough food to make the journey. It’s too long. So you’re actually going to have to grow your food on the way to and from…

Eve: [00:06:50] We’re talking x, x, x x, urban, right?

Mark: [00:06:53] Yeah. This is what I was joking with somebody, you know, they call the greenhouse world and the vertical farm world controlled environments. And I was telling somebody other day, we’re doing controlled environments a little different than a greenhouse. It’s one in space. So we’re within two years will be all goes well, you know, we’ll be sending one of our cameras up to the ISS, where it will be in the ISS monitoring the crops in the space station. So pretty exciting.

Eve: [00:07:24] Yeah. So back on Earth. Tell me about like a success story, you know, some crop your robot saved.

Mark: [00:07:33] Yeah, well, I don’t know if we’re there yet. We’re two years old, but we’ve, generally the feedback we’ve gotten and from the growers that, you know, as I mentioned, we’re in France. We have a customer in Italy. Peru and across four states in the U.S. The response is, is the following. The good news is the problem with using people to inspect on plants is twofold. One is, there just aren’t enough of them. You know, you’re talking about, I’ll use an example, a viticulturist, the person who’s highly trained to go look at grapes and vines and everything on the vine, you know, he or she can inspect about a tenth of an acre in a day. And that’s about one hundred and fifty vines, you know, so you’re talking about a very small fraction of of the total vineyard, whether it be a vineyard or apple orchard or orange grove. The other problem with using humans, and this one’s a little bit more, a still larger problem is that, you know, you’re using humans. And you know this from from your world, Eve.  If you gave five inspectors and had them look at the same thing, you know, you’ll get probably five opinions and they’ll probably be different enough to make any one opinion a little bit suspect.

Eve: [00:08:58] So it’s really about consistency, right?

Mark: [00:09:00] Exactly. So you really want to be consistent. And that’s where the machine, the machine intelligence, the A.I. really makes its benefit. So many of our growers have said repeatedly, you know, I now know the condition of my crops, my plants. I you know, I never really knew the condition because you’re imaging in many cases where imaging every single vine on the entire vineyard and knowing its condition as of Tuesday, that’s huge. Yeah, it’s big, big. And so, it’s new and different. No one’s doing this. This is you know, drones are a solution sometimes, but drones have been around. You know, farmers have been flying over crop fields, using sensors, various types for years. And the problem is when you’re up in the air, you can’t see through the canopy and all the fruit and everything. So we are the boots on the ground for the farmer. And growers have had higher yields. They’ve had better yield predictions. You know, that’s a big, big part of farming, as you know, is your…

Eve: [00:10:06] Yeah.

Mark: [00:10:06] And your grow. You want to know how many tomatoes you’d like to have a sense of, you know, how successful this is going to be and and so on. So all of those things are, you know, knowing what the yield is going to be, protecting the crops from damage from disease and infestation, a big one for citrus, particularly knowing when to harvest. That that cannabis is an example that we don’t we don’t do cannabis now. But we did previously some time ago when we first started the company and when I learned about cannabis is if you missed the harvest window by a day. By a day, you can lose 20, 30 percent of the value of the crop.

Eve: [00:10:47] Oh, wow.

Mark: [00:10:48] Yeah, and that’s a plant, by the way. That’s a crop where you’re talking anywhere between one and six million dollars an acre.

Eve: [00:10:58] Wow.

Mark: [00:11:00] Yeah, farming is changing dramatically and A.I. and robotic technology are driving that. It’s happened in the past, Eve. There have been waves of technology advancement in farming. You know, when you think of I always tell people this when you think of technology, the kinds of things that that allow humans to do more things, most of the advances up until the 19th century were in farming. You know, if you think of all the marvellous inventions that have helped humans do more with less and all those wonderful technologies, the vast majority of them been in farming over the last millennia or two.

Eve: [00:11:46] So interesting. Yeah. So this is a really mundane question, but I want to know what the robots look like. Did they look a little different than Rosie on the Jetson’s?

Mark: [00:11:57] Well, you would be disappointed. I can tell you that right now, anybody that’s imagining you know, like the robot butler.  No, no. You would be you would be incredibly disappointed, Eve. It looks sort of like a toaster, maybe more like small microwave with two eyes and a rim around the edge of lights of LEDs. So no arms, no legs that’s provided by the ATV or the tractor. There’s a little antenna sticking out of the side. It does look like a techie thing. I mean, when they show up on the farms, people look at that. And their first question is, what in the world is that thing?

Eve: [00:12:42] So they must be designed, designed to go over a whole variety of grounds, like rocky flat, mushy, buggy.

Mark: [00:12:51] Yeah. These things are, I call it farm hardened. You know, anyone has been on a farm, knows it’s a rough it’s a, you know, it’s a rough place. So we’ve built these things. It’s very robust, you know, pieces of equipment that have been dropped and kicked and gotten dirty and rained on and and so all that’s been sort of designed in.

Eve: [00:13:17] Cool. So I have to ask, how much does it cost to deploy one of these?

Mark: [00:13:20] Yeah. So we charge our growers anywhere, somewhere in the range of two thousand dollars per month.

Eve: [00:13:27] So they don’t buy them, they rent them.

Mark: [00:13:28] Nope. Rent.

Eve: [00:13:29] Ah, rent a robot.

Mark: [00:13:32] Yeah. And that’s, believe or not, there’s a, you know, when people, your, some of your listeners, are in the software as a service phrase that probably a lot of people have heard that. Well, there’s now a whole industry called robots as a service. You’re not selling the technology. You’re just giving them access to it. There’s even something called FaaS now. It’s called farming as a service where you actually have a piece of land, and you think there’s a way to earn some money. A company will come in and be the farming entity on that piece of land. So you’re the owner, you reap the share, the profits from…

Eve: [00:14:16] Kinda like you’re renting a building, but you rent land instead.

Mark: [00:14:18] And exactly.

Eve: [00:14:19] It’s interesting.

Mark: [00:14:20] It’s exactly that. Yeah.

Eve: [00:14:22] So I have to ask, is there a plan for tiny robots, for urban gardens?

Mark: [00:14:27] Maybe someday. I mean, it’s funny you say that. So, what we’re probably going to do someday when we get to enough size, we will make a phone app version of this that will be free. So what will happen is we have cameras, as I mentioned, the hardware that’s to do it at scale. You’re talking about farms of one hundred to twenty thousand acres. But if you want to use it in your backyard, you know, you’re not going to go buy a bigger machine. You’re what you would want, though, is access to all of the smarts. And because cameras have pretty good lenses for small scale data collection, what will probably do is will make the app freely available to anyone who can, you know, wants to download it. And then they can use their cell phone camera and they can benefit from the analytics. So if you have tomatoes and we’ve done, you know, vast tomato grows around the world, we now have, because of the way A.I. works – it’s learning, we now have all that wisdom from all those tomatoes from all over the world. Well, you can get access to that for free through your phone app for your own tomato garden in your backyard.

Eve: [00:15:42] So, you know I, over the last year, I became an avid gardener, something I thought I would never do in my life. It’s a great, great hobby when there’s a pandemic going on. But I’ve been using a plant app to identify plants in case I think they’re weeds and I’m going to pull them out. Extraordinary, pretty extraordinary. So can I be the first one to test your app?

Mark: [00:16:05] Absolutely, Eve. I hereby, I’ll go on live and just right here publicly say you will be the first.

Eve: [00:16:13] I mean, It’d be fantastic because you’re dealing with all sorts of, you know, mildew and moles and bugs. And it’s hard.

Mark: [00:16:22] You know, there’s a. you know, I’ve been in this ag tech now thing for two years, so I know, you know, a very limited knowledge, dangerous amount of knowledge, which is a very little bit. But one of the statistics I learned that really kind of stayed with me is, you know, for those listeners know your population and the world’s about seven billion, it’s expected to grow to 11 billion in the next 30 years. So that’s a 40 percent increase in population in 30 years. And somebody has done the calculation on food production. And what they concluded is that we will need to grow, we will need to grow more crops in the next 30 years than we have since the beginning of agriculture ten thousand years ago.

Eve: [00:17:13] Wow.

Mark: [00:17:14] Yeah, but it’s an even bigger challenge. And the bigger challenge is we’re going to have to do it on less arable land. So, there’s no Iowas or Ukraines left in the world with dense, rich soil left. So we’re going to have to do it on probably less arable land than is available now. And with fewer of the tools that currently are common to farming. The fertilizers and what have you are with all of the requirements for sustainability that are increasingly the case around the world, those tools will be less available. So somehow or another, we’re going to have to get more with less if we’re going to feed the world. So that’s really probably what’s driving this Agtech revolution I commented on earlier.

Eve: [00:18:03] Mm hmm. Interesting. So who thought up this robot?

Mark: [00:18:08] Well, I ,you know, I was fortunate to have met two people, one of Dr. George Kantor and who is a 20 years researcher at Carnegie Mellon, very well known in the Agtech space roboticist and one of his grad students, Tim Mueller-Sim. Tim and George had spent years developing variations of this technology in the field at Carnegie Mellon. In a literal sense in the field. And they had built all the robots that you’re imagining that you want to see, they’ve actually built those. So, the ones that crawl around or can pick a cherry without crushing it, all that, you know, they developed a lot of those things, field tested them and pretty cool stuff. But one of the lessons they learned is, you know, farmers don’t want to buy robots, yet. And that’s, you know, for people that love robots and build robots, that’s tough stuff. But they concluded, hey, look, we still want to help farmers. So what we’re going to do is we’re going to carve out the perception piece of that robot, the eyes and the brains, if you will, the A.I. in sensing and we’re not going to sell that to them. We’re going to sell a service. And we know that crop inspection, especially in specialty crops, is an essential routine in every specialty crop, just the way it is in your own garden. And so they said we’re going to carve that out and sell that as a service. So it was pretty, pretty thoughtful of them to kind of you know, it’s played out that way that the growers have resonated. So, you know, it’s probably the classic example of academic researchers transitioning to entrepreneurs. And, you know, that’s hard to do.

Eve: [00:19:59] And that’s where you came in, right? Because you are a serial entrepreneur.

Mark: [00:20:04] Yeah, yeah. And so when I met them, I came in as an advisor. And I think, Eve, I was like, I don’t know, 20 minutes into their first presentation and I, you know, I said to myself, OK, I’m just going to advise, see what. 20 minutes in, I’m like, oh, I’ve got to do this. So I just like, you know, I just can’t help myself and I don’t regret it for a minute. The two years it’s been I have flown by and I’m thoroughly enjoying this.

Eve: [00:20:35] So how do you hope to scale this company?

Mark: [00:20:39] You know, great question. So that’s the challenge every tech company has when they think of the all the benefits they could bring to the world, but then they don’t necessarily think through how everyone’s going to access this this wonderful tool. And for us, you know, for a lot of entrepreneurs like us, our strategy has been initially to knock on doors. The good news is because this technology had already been sort of field tested, we had a few leads with some vintners in California that led to them trying it and then them telling other vintners. And before, you know, we’ve got 15 vineyards in four countries,

Eve: [00:21:18] So no Facebook ads.

Mark: [00:21:20] No, no Facebook. You know, it’s funny. I think that it’s interesting how sometimes that PR is a startup and I’ve been guilty of this as you can almost get too much. And what happens is you get too much too early. And then when you meet investors or customers, they find out that the hype, you know, of your business is way ahead of what actually is there. So we were careful not to sort of get ahead of ourselves. But one of the things that we’re starting to do now, which is working is, is, you know, people use this phrase partnering. There are entities right now that buy large marketers that buy crops and then resell them to package them and sell them to the Whole Foods, Safeways and Giant Eagles of the world. And they have an interest in several things. One is in knowing that what the yield for that farm is going to be, if the sooner they know that, the better they can price it to the Whole Foods of the world. They also want to ensure that the crop that they’re buying at the beginning of the year is of a sufficient quality at the end of the year as to make that worthwhile. So they have an interest in knowing the condition of the crops, knowing the yield and various other things of the person from whom they’re going to buy those crops. So they came to us and I can’t name them yet. Someday soon, a big, big entity, global entity, and said, hey, we want to pay you to give your service to our growers. They can have access to all the analytics. They can get all that for free because we’re going to pay you and we get the benefit of knowing what the yield is going to be and the quality is going to be from that same data and then we resell it. But then there’s another addendum you’re going to find interesting. And this is new and different. This is very new. So what they’re telling us with this marketer is saying is people like you and me, when we go into Whole Foods or Giant Eagle or wherever we shop, we are increasingly want to know the history of that apple or that pepper, in other words, we want to know, OK, is that pepper really organic? We want to know where it came from. And when we say where it came from in this, believe it or not, this is where it’s going. The grower, the seller, the Whole Foods of the world wants to know what tree that apple came from.

Eve: [00:23:55] You’re kidding.

Mark: [00:23:56] I’m not kidding.

Eve: [00:23:58] I mean, is there a move towards buying more local in supermarkets as well as farmer’s markets?

Mark: [00:24:05] There is an attempt to do that. The challenge with buying local is, and this is some of the issues around some of the larger issues that people are struggling with is it’s pretty hard to compete with a Driscoll’s. You know, which is a massive grower when you’re trying to reach that quality level. There’s just a point at which a small grower just doesn’t have the scale.

Eve: [00:24:28] Yes.

Mark: [00:24:29] To match the quality of a massive grower like a Driscoll. So so there’s that. But there is a desire by the to grow the grocery stores, the places where we shop, to try to at least incorporate some local production. And so you’re seeing that play out. The challenge is we as consumers still demand our quality. As much as we want to buy local, as much as we have a desire to help keep that local ecology sort of functioning business, ag ecology functioning, we still like our quality apples. We still want to want to get the best quality we can for the price. And so there’s a bit of a challenge there for the you know, for the local growers. What’s seemingly happening is and I think this is another feature of just our own preferences as people are fussier and fussier and fussier about the quality of their produce, which is great. And so where there’s an opportunity for the local grower is rather than try to compete at the low end, they compete at the high end.

Eve: [00:25:43] That makes sense.

Mark: [00:25:44] So they go after the really premium crops, the kind that, you know, that I’m not, you know, five-dollar tomato or whatever.

Eve: [00:25:56] Yes. Yeah, interesting, so you must have done the math, because this is what I’m thinking, if everyone deployed one of your, every farm, deployed one of your robots. How much more food could we produce?

Mark: [00:26:09] Yeah, good question. You know, if you do the math conservatively, if you can increase yield just on believe it or not, I mean, the farming is it is a challenging business, whether you’re a giant grower or small. As you know, a lot of resources go into farming in the margins are pretty thin. So that means if you can increase yields, say two or three percent, you can dramatically improve the profitability of that farm dramatically. But that yield increase of two or three percent over time, in other words, you can do that on a fairly continuous basis, can add up to a lot. And that’s where food production is. It’s at the margin. You know, it’s at the margin of getting more with less. And by more with less, I mean, not just with less arable land, but with a lower resource base, less water. Water is now one of the big, big challenges in farming in, say, California, where a huge amount of our specialty crops come from. In the U.S., water is a big challenge. We as citizens of the Northeast United States, believe it or not, ultimately subsidize fresh water availability in on the west western United States. We are in our taxes and in the subsidies that are provided by the federal government to farmers. It allows for fresh water practically from being places like the Columbia River and other places out west to provide water on a massive scale, fresh water to farmers. And that is increasingly becoming expensive. Now there’s issues around the water table and you know, people that are much more expert at that than I am knowing about the depletion of of fresh water in the United States. But fresh water is now increasingly a constraint. So if you can increase yield with data and as a result, target my use of water and even nutrients by and have me use less of those and get higher yields, you not only improve the quantity of food, you reduce the resource cost. And that’s just data, Eve. It’s not, you know, we’re not talking about the labor costs or anything. We’re just talking about the simple use of the data. And that’s really our goal is not only to increase the productivity, the production, absolute production, it’s to reduce the resource base required to produce that.

Eve: [00:28:52] Yeah, interesting. So I’m going to shift gears a bit.

Mark: [00:28:56] Yeah.

Eve: [00:28:57] You know, you ran for mayor in the city of Pittsburgh a few years back, and you, and I know you’ve really been involved in the city, in the startup community. And I want to know what you believe the relationship is between a healthy city and startups.

Mark: [00:29:12] Yeah, that’s a good question. And I’ve thought a lot about that. Eve I don’t think there’s a city in the world that thinks that economic growth is necessarily inherently a bad thing. However, I do believe that a community like Pittsburgh, where there is now, I think, for the first time, I’ve been here 20 years, Eve, and I tell you what’s happening in the last three, three to five years is unlike anything that’s ever existed before. As long as I’ve lived here. It is really exploding. I mean, you have your first big IPO.

Eve: [00:29:47] Yes, Duolingo, right?

Mark: [00:29:49] And you have a few more in the queue. Yeah, that’s insane. So you’re going to see an explosion of millionaires living in the city. You’ve already seen that people who are now have suddenly are flush with wealth. There’s a concern by every city that, hey, is that going to be shared? Is that going to prosperity going to go to just a handful of people or a small elite community in this city? Or is it going to be our other citizens going to enjoy the fruits, the fruits of that?

Eve: [00:30:18] That did not play out well in San Francisco, right?

Mark: [00:30:21] Not at all. And I’ve been there with anyone who’s been there sees the disparity in peculiar San Francisco. You’ve got a beautiful, magnificent city with huge pockets of poverty.

Eve: [00:30:33] Yes.

Mark: [00:30:34] Disappointing. But I think in the case of Pittsburgh, I think it’s thoughtful leadership that doesn’t create a antagonistic kind of, you know, regressive. I don’t believe what’s happened. And I’m not pointing fingers at any politicians here. I think it’s just maybe just a natural outcome, you know, is this tech community grows is increasingly another community or other communities in this city are saying, hey, they’re getting all the attention and we’re still poor.

Eve: [00:31:04] Yes.

Mark: [00:31:04] We still have crappy roads, and our institutions are not working. Our crime is. And so I think that the kind of leadership that that needs to happen is that somebody sort of bridges that that doesn’t create an us versus them mentality, because then when the tech community says, oh, the city doesn’t like us because we’re successful now, they want to make us a scapegoat for their failures as local government. So there’s two sides to that. And that you end up creating, you know, you probably see it for the listeners nationally play out this way is, you know, when it’s really easy to point the finger and say it’s, you know, they’re the source of the problem. And I don’t see it that way. I think it’s a function of quality leadership, Eve, that I sound like giving a speech here.

Eve: [00:31:51] Oh, I completely agree with you.

Mark: [00:31:54] It’s the quality of leadership

Eve: [00:31:55] That, I mean, it’s actually played out that way with the health industry in Pittsburgh, which is really absolutely first class. And there’s been constant friction politically between that community, each other, and the city. And, you know,

Mark: [00:32:14] Needlessly, I think needlessly, I think both care about their community, both want it to succeed. Both have a desire to have everyone as much as possible enjoy the fruits of what’s happening. But I think that is in the details where it gets lost.

Eve: [00:32:30] Yeah, I mean, how did you get here? Like, what’s your background in a nutshell?

Mark: [00:32:35] Yeah, in a nutshell, it’s going to be a big nutshell because it’s crazy, but I’m trying to fit it in a tiny nutshell. OK, I spent the first 14, almost 15 years of my life in Washington, D.C., professional life in Washington, D.C., in and in and out of government, in and out of the federal government. I worked I was fortunate. I worked for initially two then congressmen, one guy named Tom Ridge, which any of your listeners in Pennsylvania would know to me became governor and secretary of homeland security. And fortunately, I worked for him. And then another guy named Mike DeWine, who is actually, now, the governor of Ohio, and that those two experiences were sort of fundamental. I then managed a political campaign in Maine.  A guy we ran for Congress and a fellow named Rollin Ives. That’s a great New England name. And we lost. But I learned a lot about campaigns and came back to D.C. I worked for a Beltway bandit, Booz Allen, that’s the phrase in Washington for anyone listening. So I don’t mean that in a negative way. So big, big consulting firm. Worked for the Justice Department, the US Justice Department, briefly as a policy analyst, and then ultimately got a job working for John Heinz. Senator Heinz, up until tragically he passed away in 91. When the senator passed away, the new senator came in and brought his own staff. So I was again in the market and I was fortunate. Just dumb luck really, got a job in The White House. Got a job working in the Office of Science Technology Policy and under the first Bush administration in the early 90s, so I got a chance to work with an interesting group of people, the science adviser for people who don’t know something called the Office of Science Technology Policy was formed formally became a White House office staff when Eisenhower was President. But but every President since John Quincy Adams actually has had some kind of science adviser. So did that for two years. And President Bush lost. I was a political appointee. So when the President loses, you also lose a job. And so I was out the door and back on the street again. But I am fortunate to have all those wonderful experiences. And I ended up getting a job with Texas Instruments. So, Texas Instruments was looking for a lobbyist, somebody to help run their government affairs in D.C. And at that time, Texas Instruments was a Fortune 60 company in 48 countries and had a lot of business all over the world. So I had to travel, got a chance to travel around the world and had a lot of interesting assignments and it’s a wonderful company. I cannot say enough good things about the generosity of the Texas Instruments. I learned a lot about technology and policy and funny thing when I left, Eve, for your listeners who don’t like corporate lobbyists, they all enjoy this. I had a going away party when I decided to leave that world and moved to Pittsburgh. So I kind of finished that stint when I was about thirty five. I had done all that stuff and I was ready to kind of move on. And they had a party for me at my favorite watering hole in D.C. and they someone gave me a bumper sticker and it said, and these are other corporate lobbyists too, they give me a bumper sticker and it said, “Please don’t tell my mother I’m a corporate lobbyist. She thinks I’m a piano player in a brothel in New Orleans.”

Eve: [00:36:30] That’s great.

Mark: [00:36:31] So anyway, so I got that and then decided I was done. I had done a lot of what I wanted to do there. It was wonderful, but I was done. So I came here right around 2000 and didn’t really have a job. I actually was able to pick up some consulting work locally and then kicked around, got some work done. I was did a little bit of consulting work for Free Markets, back in the day. And I did a little bit of consulting there and that gave me a little taste for entrepreneurship and then really kind of dedicated myself to the starting companies over the next, you know, 15, 16 years here.

Eve: [00:37:15] So, what’s interesting about that is, you know, when people think about startup, they think about some young 20-year-olds starting a company. But you have this amazing wealth of experience that you’re bringing to this company.

Mark: [00:37:33] You know, Eve, I will tell you, the statistics share. I’m also an adjunct professor, at Carnegie Mellon that’s said I want to shout out to CMU. I’ve been teaching here since I moved here and they’ve been wonderful to me. But people if the statistics for those listening or prospective entrepreneurs, statistics are, most startups are started by people in their late 40s, early fifties, believe or not vast majority. It is the, there’s a small fraction of people in starting new businesses that are in their twenties or early thirties. That’s a rarity when it comes to starting businesses. And everyone thinks of the overnight success and…

Eve: [00:38:14] And overnight success is ten years, right?

Mark: [00:38:16] Oh, yeah. I mean, this is it’s a, this isa brutal, I tell people who are contemplating starting a business and, you know, you’ve done it, you’ve done it more than once, and, you know, it’s a brutal taskmaster. It is unforgiving. And it’s…

Eve: [00:38:34] I think I’m about halfway through that ten-year fix, that success on my latest business. And it is completely brutal.

Mark: [00:38:41] Yeah. And it just, but, you know, it’s funny. It’s the kind of thing where as tough as it is. I have a friend, he’s a retired Navy SEAL officer and he’s also an entrepreneur. And he said to me once, you know, he is, you know, being an entrepreneur is sort of like being a Navy SEAL and that you just have to get comfortable being uncomfortable.

Eve: [00:39:04] Yeah. Yeah. OK, I have one more question for you, and that is, what is your big, hairy, audacious goal?

Mark: [00:39:15] Wow. Wow. Oh, my goodness, where do I begin? I just want to make a difference here and in our community and whether that community is Pittsburgh, the region or even the state, I want to make a difference. That’s my goal. I enjoy what I do. I feel great about this company and what it can do. And that’s one of the reasons I love this company, is it’s going to make a difference for farmers, hopefully all over the world. And, but another important goal of mine is to make a difference where I live and try to make as big a difference as possible. And so I think that the great old, grand old, you know, Keystone State that we live in, you know, one of the colonies from way back is seen better days. And I think the communities that are here, you know, we’ve had suffered from population decline in Pittsburgh, in the region and in the state. And I think that there’s a desire to see something better and see change coming. And I think that that’s now possible. You know, it’s not the old, you know, stodgy community state that it once was. I think there’s new vitality, but I think it’s going to take time. And I want to see what I can do to make a difference somehow, some way. That’s what I think is the most energizing thing for me is that it’s why I love startups. It’s a way to kind of cause positive things to happen, keeps me motivated. And that’s what motivates me, is to try to make a difference where you live.

Eve: [00:40:53] That’s a great answer. I feel completely energized now. Mark, thank you very much. Thank you very much for talking to me.

Mark: [00:41:01] Yeah, sure. Happy to be here, Eve. Thanks.

Eve: [00:41:09] That was Mark DeSantis of Bloomfield Technologies. Mark pivoted his life and career from politics into start ups, and he moved from D.C. to Pittsburgh, where he is living his dream, nurturing an ag tech company into a global position in his much loved, adopted city. We’ll be hearing more about Mark and Bloomfield Technologies, I’m sure.

[00:41:46] You can find out more about this episode on the show notes page at EvePicker.com or you can find other episodes you might have missed, or you can show your support at Patreon.com/rethinkrealestate for the price of a cup of coffee. A special thanks to David Allardice for his excellent editing of this podcast and original music. And thanks to you for spending your time with me today. We’ll talk again soon. But for now, this is Eve Picker signing off to go make some change.

Image courtesy of Mark DeSantis, Bloomfield Robotics

Buckle up!

September 29, 2021

Samson Williams isn’t one to think small.

While studying for a Ph.D. in emergency management, he dropped out of school to build an Enterprise Incident Management Center out in the real world. He then spent over five years at Fannie Mae developing strategies to prevent emergencies and crises.

A vocal advocate of blockchain, Samson holds a certificate in Blockchain and Cryptocurrency Law from UNH, and worked in Dubai for two years at the cutting edge of financial technologies. This grew into Axes and Eggs, an international consultancy. Oh yeah, and he wrote two books on the space economy.

Samson has worked in various roles as an advisor and strategist, serial entrepreneur, ‘accidental investor’ and teacher, but since January of last year Samson has been serving as president of, and evangelist for, the Crowdfunding Professional Association. As he says, “Crowdfunding ain’t your grandfather’s capital formation. It’s probably more appropriate for your great-granddaughters, as crowdfunding will continue to evolve not only from a regulatory and compliance perspective, but also from a technology and business perspective. RegCF is now 5, which makes it just old enough to go to Kindergarten. Buckle up!”

Insights and Inspirations

  • Samson Williams is watching the crowdfunding industry evolve from the front seat, as president of the Crowdfunding Professional Association.
  • Media companies will drive investment in the future.
  • All eyes will be on crowdfunding platforms with a niche.
  • Content will be king!
Read the podcast transcript here

Eve Picker: [00:00:10] Hi there. Thanks for joining me on Rethink Real Estate. I’m Eve Picker and I’m on a mission to make real estate work for everyone. I love real estate. Real estate makes places good or bad, rich or poor, beautiful or not. In this show, I’m interviewing the disruptors. Those creative thinkers and doers that are shrugging off the status quo in order to build better for everyone.

Eve: [00:00:45] Samson Williams isn’t one to think small. He traded in working on a Ph.D. to build an enterprise incident management center out in the real world. And then he spent over five years at Fannie Mae developing strategies to prevent, well, emergencies and crises. I’ve come to know Samson as the very vocal advocate for regulation crowdfunding, in his role as president of the Crowdfunding Professional Association. However, his interest in the new doesn’t stop there. He also has a certificate in block chain and cryptocurrency law from UNH. And he worked in Dubai for two years on cutting edge financial technologies. This grew into Axes and Eggs. His international consulting firm. And, oh yeah, Samson has also written two books on the space economy.

Eve: [00:01:45] If you’d like to join me in my quest to rethink real estate, there are two simple things you can do. Share this podcast or go to patreon.com/rethinkrealestate to support this podcast for the price of a cup of coffee.

Eve: [00:02:13] Hello Samson, I’m really happy to talk to you today.

Samson Williams: [00:02:17] Awesome Eve, I’m excited to be here too and we can have a real conversation. I’m excited about that as well.

Eve: [00:02:23] Yeah. So, you know, I’ve been watching you make your mark on the Crowdfunding Professional Association over the last year. You’re tackling what was rather, dare I say it, a lackluster organization that I was barely conscious of, into one really exploding with energy. And I’m wondering, you know, how and why you’re the president of the Crowdfunding Professional Association?

Samson: [00:02:50] I’m going to say why is because I missed the board meeting,s and I wasn’t there to vote against me being president. That’s the reason why.

Eve: [00:02:56] That’s always a reason.

Samson: [00:03:00] Yes. But most of my success is built on the shoulders of Scott McIntyre, Brian Belley and Devin, who were at the board, who were at the Crowdfunding Professional Association before me and the other board members, there’s about 11 or 12 of them. And so they really put in the legwork to get the organization up and running so that when I had the privilege of taking over the rounds in February of 2020, you know, most of the infrastructure was in place and we’re just now, so we just need to push down the pedal. And fortunately, or rather unfortunately, depending how you look at it, the pandemic hit and I was like, oh, I guess we should really push down this pedal fast.

Eve: [00:03:43] Oh, yeah. And I’ve been watching it go pretty fast. But what is the crowdfunding professional association? And, I mean, even if you didn’t agree, why are you president of it?

Samson: [00:03:56] Well, Crowdfunding Professional Association, it’s a trade association. It’s for crowdfunding portal owners. One of the big revelations is that if you’re a portal owner, you know, portals are what FINRA calls those platforms and entities that help entrepreneurs raise money. But portal owners themselves are small business owners. And so, on one hand, the portal owners, the platform owners, they’re busy trying to, you know, engage their customers, solicit new customers and help entrepreneurs and startups raise money on their platform. And because of that, they don’t always have the time or the bandwidth to go and advocate for certain policy changes that the Crowdfunding Professional Association does on behalf of all portal owners. So, it’s an important need. I came from the field of Fannie Mae. We’ll talk about real estate later, maybe. And so, when I was at Fannie Mae, we had the MBA, the Mortgage Bankers Association. We have the National Association of Realtors. You have these large associations that advocate on behalf of all realtors, all mortgage bankers, et cetera. And so, the crowdfunding field, let’s say it’s June 2021. In June of 2020 there were only, I’m going to go with 46 platforms, of which maybe there were only 15 that were actually active. Right now, fast forward to June 30th, 2021. I know I’m putting a time stamp to this, but that’s OK. It’s going to make a lot of sense. There’s about 67 right now. There’s 67 funding portals that are licensed by FINRA. Over half of those are currently active. When I say currently active…

Eve: [00:05:38] That’s a big change.

Samson: [00:05:39] Oh, it’s a monumental change. And because, by currently active meaning they have one or more deals on their platform at the moment.

Eve: [00:05:47] That’s a really big change, yeah.

Samson: [00:05:48] Yes. We have a friendly bet going on inside of the Crowdfunding Professional board whether we’ll have more than a hundred or less than 100 by the end of the year. When I say 100, I mean crowdfunding portals.

Eve: [00:06:01] Yeah, I think that’s possible. So, you know, I appreciate the advocacy because, you know, I have a crowdfunding portal, Small Change, and I’m a member of the association. And I really became aware of it when you guys drafted a letter to President Biden in January when his administration, let me see if I get this right, froze the regulations that were ready to be approved. And one of those, was pretty major changes to the crowdfunding rules, Regulation Crowdfunding, that really make it a lot better. And you guys stepped in with a letter that apparently President Biden read.

Samson: [00:06:41] Yes. And so, so when the administration transitioned from POTUS 45, to POTUS 46, President Biden, in the last days of President Trump’s administration, he pushed through a variety of changes. And so when the new president took over, Biden, he was like, hey, we’re going to call time out on all of these changes. And one of those changes were the rule change, rule updates rather, to the Jobs Act, in regards to raising the limit from one million to five million for Reg CF and from 50 million to 75 million for Reg A+. Those are like the two big things that people tend to focus on. But the details, down further in the details were the other rule changes for testing the waters, blue sky rules, special purpose vehicles, SPVs and so,

Eve: [00:07:32] And self-verification of accredited investors. That’s one I really like.

Samson: [00:07:35] Yes.

Samson: [00:07:36] Yes. Because there’s a slew of rules.

Eve: [00:07:38] There’s a slew of rules, yeah.

Samson: [00:07:40] And so the Crowdfunding Professional Association, we’ve been advocating for those rule changes for quite some time. Again, just to make it, as, you as a small business owner, as a portal owner, your job, your business gets a little bit easier. If you have bright line rules you know how to operate in. And then it’s just easier, particularly for, if it’s easier for you to onboard investors, because it’s great to onboard issuers, but it’s even better to onboard investors. So, this is where the CfPA is always advocating to, how do we remove some of the speed bumps from that process?

Eve: [00:08:15] Yeah, that’s great. I certainly don’t have time for it, so it’s really fantastic. But I want to go back to you. I mean, Samson, what is it you actually do for a day job? I’ve read marine space economist, professor, crisis management expert and podcast host for the space economy. So tell us all.

Samson: [00:08:37] By training I’m an anthropologist. I’m a cultural anthropologist, which led me by a very roundabout, not linear, path into crisis management at a small startup called Fannie Mae. You may recall in 2008, Fannie Mae had a little, small, tiny crisis, and so I showed up as their crisis manager in 2008.

Eve: [00:09:02] Oh, wow!

Samson: [00:09:03] Fortunately, I mean, I didn’t know what they did at the time, but it turns out neither did they. So, we figured it out together. And that’s the benefit of having someone who’s not entrenched in your business. Meaning, I’m there to put out the fire. I don’t necessarily know how to your business works, but I do know how to put out a fire. And then how do we recover? And my first day was March 24th, 2008. It was a 90-day contract because is a little emergency. And so, eight years later, I left.

Eve: [00:09:32] Wow.

Samson: [00:09:34] I went to Ireland in 2016 to work for a peer-to-peer lending platform, which was super cool. And then I was the Irish ambassador for alternative finance for a year from 2017 and 2018. And I’m Blexican, from Texas, so I’m not very Irish but I had a phenomenal time being the Irish ambassador and traveling around the EU and giving the keynote in Athens, Greece, about the wild, wild west of cryptocurrencies. So, this was in 2017 where, when the ICOs, the initial coin offerings were taking off, and I was trying to explain to everyone that initial coin offerings are just unregulated crowdfunding.

Eve: [00:10:20] Yes.

Samson: [00:10:21] So, on one hand, it’s, hey, they’re unregulated, but on the other hand, it shows that there’s power in retail investor, that retail investors are hungry for investment opportunities. And so that led me back, there was there is a brief two-year stint in Dubai doing some fintech stuff, but that led me back to here, to America. And so when I came back in December of 2019, I was like I should probably figure out what I’m going to do here for the CfPA because in my head, the future of capital markets is, one, content driven, meaning if you’re listening to this podcast, that’s part of the content and, two, it’s also crowdfunded. And so, when we think about that, the reason so many people download your podcast, I think you’re up to eight thousand downloads now you said, is that…

Eve: [00:11:15] Per month.

Samson: [00:11:16] Yeah, per month. That’s how people consume their information. And so now if they’re listening to this, like, oh, yeah, crowdfunding is super interesting. What does that mean? And so, when issuers also come on your platform, you’ll see that in the future crowdfunding platforms, they’re going to be media companies first and then part of the entertainment being crowding the engagement of the audiences, now that you’ve listened to this great, wonderful issuer, click here to invest with your, you know, invest not only your time in listening, but also your dollars in the company itself.

Eve: [00:11:50] So, yeah, I wanted to explore that a bit, because recently you wrote a post which really caught my eye called Crowdfunding Isn’t Static. I’m going to post that on my website if anyone wants to find it. And I wanted to explore what that post is about. You said a whole bunch of things that I thought were fascinating. One was that no funding portals are profitable. What’s that about?

Samson: [00:12:14] Oh, that’s just a recognition of the state of the business at the moment. I think I said, in my next bullet point, that some will be profitable by the end of 2021. So, when you look at the legacy platforms, those who came out in 2012, when the Jobs Act first got signed into law, even before the Reg CF portion got signed in 2016, those platforms, they paid the iron price to gain that market share. But, just based upon their deal flow, again, this is all you pull it out of Edgar, off the SEC, It’s all public information, based upon their overhead and their deal flow, you can like, oh, you actually have not made a dollar. Then fast forward. You have the innovations that are occurring in the crowdfunding space and those innovations, I love small change, not just because Eve is the founder and CEO, but because you have a specific vertical, you’ve got great content, your messaging is crystal clear, your on-boarding process is very streamlined. And so, there’s a lot of operational efficiencies that go into that in addition to what is the user experience. So, I like to tell people that, particularly on the Reg CF side, Reg CF just turned five on May 16th of 2021. It’s now old enough to go to kindergarten. And this kindergartner that is Reg CF, by the time it hits third grade it’s going to look completely different. And so, part of it is, for the legacy platforms that came out early on in 2012, 2014, they paid the iron price to gain that market share. They’re currently not profitable, but neither is Uber, by the way. So just take that with a grain of salt.

Eve: [00:13:56] Oh, yeah. Do I know it.

Samson: [00:13:58] Now, again, last year there was only about 40 platforms, now there’s about 65. By the end of the year, we might have another 35 platforms that are FINRA licensed. There’s just a level of innovation that comes from different entrepreneurs seeing the market, seeing the industry, and saying, that’s a pain point, that’s a pain point, that’s a pain point, let’s improve the process. And I’m really excited about some of the mobile applications, the mobile apps that are coming out for crowdfunding because they’re working a level of widgetry that is stellar.

Eve: [00:14:33] So lots of change going on. It’s an innovative space. You know, some of the non-regulation crowdfunding platforms, I think about this a lot, that are legacy platforms, like Fundrise, just have done really well not in that space. I wonder why. And I think probably it’s because they’re, how can I say this, I don’t want to say they’re more traditional, but they but they do reach a more traditional educated audience. I’m really thinking about the real estate platforms like Fundrise and RealtyMogul and Patch of Land. All of those came out really early on, before Reg CF was finalized and they’ve done very, very well. But they don’t have the burden of FINRA and the SEC looking over their shoulders, which is really pretty expensive for funding portals, tiny little businesses that almost have to run a compliance shop as well, right?

Samson: [00:15:29] No, you’re 100 percent correct. And so part of it is that investing, rather investing as a learned behavior, as is wealth management. And so if you’re engaging retail investors, rather, if you’re engaging customers, they might not know that they can be investors. So while they’re accustomed to buying a good product or service, they don’t know that they can invest in that. And in the real estate game, renters understand renting. And at some point, everyone is a renter. But it’s hard to explain to someone, oh, you cannot only rent this place, but you can also purchase this equity or contribute to the construction of this building. And so that’s a different level of education and just awareness that people that are already accredited, it’s not that they’re sophisticated, they just have been taught. It’s been passed down. You know, investing is a learned behavior. They’ve learned how to become investors. And so, when you’re looking at Fundrise and Patch of Land and RealtyMogul, they’re crowdfunding in the sense of their community are creating investors. And so, they’re going out to their community, having creating investors, and then using their platforms as a very smooth Excel spreadsheet to say we have this building. Here are the number of people who invested in this building, here’s their names, here’s the amount of money that they invested. Here’s the cap rate or the imputa for this building. Here’s the dividend or share we’re going to pay for that. So crowdfunding platforms in the Reg A+ plus world, they’re really just used as a tool. They’re a shovel. They help organize who’s on your, who’s in the deal?

Eve: [00:17:14] Mm hmm. You know, the other thing I’ve struggled with a lot is insurance. And I don’t know if the Crowdfunding Professional Association’s ever going to tackle that, but insurance for funding portals is really expensive. Have you come across that?

Samson: [00:17:30] No., tell me more so I can take this up. We love having new issues.

Eve: [00:17:35] Oh, forty thousand a year. To get decent insurance coverage. My suspicion is that there are quite a few funding portals that don’t have insurance because they can’t afford it. But, you know, insurance against, liability insurance in case you’re dragged into a lawsuit by an investor, even if they don’t understand and it’s a wrongful lawsuit you still have to pay the legal fees. Insurance is very expensive. It’s a brand new industry and we’re all paying the price for that. So, yeah, I’d love to take it up.

Samson: [00:18:06] That’s a super good point that you bring up. We haven’t had anyone discuss it. And now that you bring it up, I’m like, hmm, how many of them don’t have, you know, areas and emission insurance and liability insurance? So I’m going to definitely follow up on you, because some of them, as they operate as broker dealers, rather part of the innovation in the crowdfunding space is a number of broker dealers or BDs who, they sometimes they take offense when I call it poaching. It’s not that they’re poaching Reg CF deals, but they see the opportunity of engaging startups, early on in the process, so that when they’re at a level where they need to raise more than five million dollars now, it’s like, OK, now they’re already in that sales funnel for the BD, and BDs they have better insurance.

Eve: [00:18:54] It’s deal flow for them. Funding platforms are deal flow for them.

Samson: [00:18:59] 100 percent deal flow.

Eve: [00:19:01] It’s interesting. It’s like the McDonald’s and Burger King story. I’ve always wondered if it’s true that McDonald’s does all the market research about where they should be located. And Burger just tries to locate next to McDonald’s.

Samson: [00:19:17] I mean, I’m assuming, I sometimes live in Fort Lauderdale, and so there is a Chick-fil-A and directly next to the Chick-fil-A is a Sonic and I’m assuming Sonic’s like, yeah, we’re just going to put our place next to Chick-fil-A.

Eve: [00:19:31] You can save a lot of money doing that, right? It’s pretty smart, actually.

Samson: [00:19:36] That is pretty smart. And so, what broker dealers are doing in the Reg CF space, it’s a f0rm system. You know, it’s like if you’re following a sports team, they have the G League or the forum system so that it develops a talent, so that they can go to the pros. And so, in the broker dealer world, they didn’t have that before. It was just, you know, just a hot mess of startups and entrepreneurs were like, yeah, we’re worth a trillion dollars on our Excel spreadsheet. And you’re like, really? And so now, this is where, sometimes I’ll give it a little bit of shade to the VCs and the sharks, but at the end of the day, Reg CF crowdfunding, it makes for a healthier ecosystem, because issuer’s, startups, entrepreneurs and founders, they have greater awareness of here’s what’s required by the SEC, by the funding portal, these objective criteria to be business ready. So now that a startup is business ready, then depending on the platform they select, they go to Small Change. Small change says here’s our process to be platform ready. And then they can go on to test to see, whether or not they’re investor ready. And of course, the only people who can really define if you’re, really tell you if you’re investor ready are the investors who write checks.

Eve: [00:20:55] Right. Yeah, well in real estate, it’s a little bit different because eventually they won’t go on to broker dealers, but they’ll get bigger and bigger bank loans, and they’ll start to interest bigger and bigger investors. So I think we’re trying to give a leg up in the real estate industry. It’s slightly different, but same idea, right? So what do you think the potential is that Reg CF holds?

Samson: [00:21:21] So one of the reasons I left Fannie Mae was actually to explore the mortgage market for Reg CF, because, you know, if you’re a school teacher or a firefighter, you should be able to crowdfund a mortgage. That should be technically possible. Right now for a variety of reasons we’re not there yet, but, you know, again, Reg CF is only in kindergarten. Wait till it hits middle school. And so, where I see there’s a whole new class of investor called an ‘investermer’, meaning a customer that’s now an investor. And it’s creating a generation, particularly of digital natives who have the expectation that if they are a customer, or a client of a business, they should also be an investor in that business. And that’s where we’re going to be in 2030. And sometimes people say, Samson we’re not there. I’m like, yes, when I’m talking about this, I’m talking about the future state of regulation crowdfunding, where you get on your phone, you’re able to … during the pandemic I bought a house in Texas for my mom, sight unseen, because they give you a great virtual tour. You can look at it. You can look all throughout the house. And so, we clicked buy, went to, oh it’s called Rocket Mortgages by Quicken Loans. Everything was online. Signing was online and it’s like, oh, why haven’t we been doing this the whole time?

Eve: [00:22:46] Yeah, it’s only about, ten years ago we didn’t have any of this, right?

Samson: [00:22:49] Correct.

Eve: [00:22:50] We barely had our iPhones.

Samson: [00:22:53] And so now when you’re asking about the future, it’s, and sometimes reporter owners they hate to hear this, the future of crowdfunding is there’s going to be three different levels of crowdfunding. On the one hand, you’re going to have the media companies, you know, when your podcast is downloaded, 80,000 times a month I’m like, Eve runs a media company who also happens to offer real estate crowdfunding as a service on the side. Where you’ll have the media companies who attract the eyeballs, who attract the interest. And once they get those eyeballs and interest, then it’s like, hey, if you want to invest in this deal we just talked about here, you know, click here. And so now it becomes less about a Small Change or the platform per se, and more about the content that you push out. That’s the future. We see this with Dan Marvel over with going public, where he took the premise of Shark Tank but now through going public, everyone will be able to invest. And so that’s where one hand will be, where, hey, they’re real media companies. They have a funding portal on the back end of it. That way they can give their audience clear, specific direction. At the end of the, either the podcast or the video, to click here to invest now. And then on the bottom end, you’re going to have the invest now button, meaning you’re going to have many platforms who, they’re a utility. So, to make this a little bit simpler to understand, Eve has someone ever asked you who your ISP is?

Eve: [00:24:33] No.

Samson: [00:24:34] No one cares who your internet service provider is, right? You have Comcast or Verizon, no-one, like, cares.

Eve: [00:24:40] Right, right.

Eve: [00:24:40] Because that’s not your business. You’re not in the quote unquote Internet business and so on the other end of the spectrum is, you have an, maybe John Long Lasalle, CBRE, or other small real estate developers who want to keep all the traffic on their website. And so, you’re going to have, right now we’re calling them private labels or black labels, so you have white label crowdfunding platforms, black label crowdfunding platforms or private label crowdfunding platforms is, they go to rethinkrealestateforgood.co and she’s like, hey, rethinkrealestateforgood.co, here’s the deal we’re offering. And it looks from the user’s experience, they never leave that website. However, on the back end is Small Change, is one of the platform providers where they just provide a button so that you get all of, the issuer gets all of the benefit of the organic traffic, the potential customers and investors stay on the issuer’s website. And what this will enable is so that, one, during your crowdfunding campaign, it’s really just a marketing campaign for your good product or service. Let’s just, I’m drinking tea this morning so I’m just going to use this. You know, I’m selling this tea on my tea website. And so, you have the opportunity to either purchase my tea product or invest x into this business all on the same site. Where those are private label. And at that juncture, the platforms, they’re charging very nominal fees. They’re going to be charging somewhere between one to three percent to do that. Because it’s a utility at that at that juncture. Not too unlike Square, which does credit card processing. So, it’s like on one end you have media companies. On the other end you have, we’re just going to call them the credit card process platforms, meaning they’re a utility on the back end. You never, you won’t even know their name. Because in that instance, it’s all about the founder, it’s all about the founder’s business. But there is a button there. And then it’s, well, no-one cares who actually provides that button. And this is part of the innovation because, right now, the emphasis is on, hey, we’re Wefunder, hey, we’re StartEngine, hey we’re Fundrise. It’s the brand. The platform is selling you the brand. But the future, it’s not brand based. Because that brand base of, hey, we’re this fancy brand, that’s going, that market is going to shrink a little bit, because…

Eve: [00:27:28] Interesting. That’s a really interesting way to think about it.

Samson: [00:27:31] Well, yeah, when you think of crowdfunding as a shovel, as they say, a utility, a tool, because you have to look at it, we were talking about compliance earlier, particularly for portals, portals can’t do marketing, direct marketing for issuers. They can’t provide a lot of services that broker dealers can provide. But broker dealers have different insurance requirements.

Eve: [00:27:57] You mean they can’t, they can’t do, they have limited marketing. We can certainly do marketing, but it’s pretty constrained.

Samson: [00:28:04] Yes, it is very, and so that’s one of the things we’re trying to work out with the SEC. It is super constrained to the point, it’s like, oh, my goodness.

Eve: [00:28:13] Yes, let’s say nothing.

Samson: [00:28:15] Yeah, and so right now when you go on a brand name funding portal, the funding portal is telling you this is the brand. They’re saying we have thousands of investors who come to this portal. But the data is telling us that when issuers go to raise money, they’re raising money from, they’re using portals as a way to organize their friends and family round, number one, which is why last year the average raise was $266,000. That’s friends and family. RC round. I’m sorry, you have a question?

Eve: [00:28:52] And that was the average for successful offerings, right?

Samson: [00:28:55] Correct.

Eve: [00:28:57] Yeah, I think the average I read on the SEC was 100,000 if you include the unsuccessful offerings.

Samson: [00:29:05] 100 percent correct. And this is where you have to have that moment of, oh, Reg CF portals? They’re a utility. But there’s ways to make money off of utilities, off of being utility servers, but you have to really be thinking what does the next, you know, what does 2030 to look like? And so, there’s going to be some folks, some portals, who have a brand, like Small Change, because you provide a very distinct service in a specific niche. So, part of the reason that George Pullen and I, we focus on the space economy is that, there are issuers, there are founders, who want to raise money, who are in the space economy, who don’t want to run and don’t want to go through the process of, you know, having a invest now button on their button. They want to come to someone who they can trust and be like, hey, we have a satellite company, we have this data company, we’re a materials manufacturer, we’re trying to get Nasa, we’re trying to get our product on the moon, help us. So, there’ll be a couple of brand names that people turn to because they offer a specific specialization.

Eve: [00:30:21] And what’s in the middle?

Samson: [00:30:23] That is the middle. That is the middle.

Eve: [00:30:25] That is the middle, OK.

Samson: [00:30:26] The specialization where, so, for instance, for Small Change, what kind of offerings does Small Change offer?

Eve: [00:30:35] Are you asking me?

Samson: [00:30:36] I am asking you.

Eve: [00:30:37] Ok, well, we have real estate offerings, but we actually don’t raise money unless a real estate project scores at least 60 percent on our Change Index. And that means that they must be making some sort of impact, whether it’s job creation, an incubator, filling a vacant site, energy issues, it could be a whole variety of things, it’s not all of them. Affordable housing, obviously, but, you know, a fix and flip in the middle of a Texas suburb or a Dunkin Donuts is not the sort of real estate that we’re going to raise money for. So, we’re trying to, with our platform, provide not only a financial return, but a triple bottom line return to anyone who wants to invest. That’s very specific.

Samson: [00:31:29] And you’re super specific because you’re very clear to your, to the potential issuers. That, one, needs to be a real estate deal, first and foremost. It needs to have some kind of change index or social impact that aligns to your ethos. So, you’re already, you’ve got two inches wide and you’re about to go a mile deep. That’s the middle. At the top, you have the media companies who have crowdfunding portals attached to them. At the bottom, you have just the utilities who, there’s a button that says invest now, no one actually knows who owns that button. In the middle, it’s, hey, we want to raise money for a real estate project that has a social impact that hits these 60 percent of this change index? Oh, that’s a Small Change deal, because you’re building up that ecosystem. It’s a niche. Niche isn’t the right word, you’re specialized. And so, this is where, for us, why we focus on space and the space economy. There’s a Southern gentleman named Aaron. He’s from Spaced Ventures, S.P.A.C.E.D. Ventures. They’re technically our competitors and I love the fact that they exist, because when it’s just me and George talking about, hey, we’re trying to raise money for space businesses, they’re like, you two are lunatics, but when there’s Spaced Ventures out there, who’s right now going through the process, they just got their FINRA license in May, I want to say like May 20th of 2021.

Speaker2: [00:33:03] And they’re going through their BD process, because now I tell people absolutely, this is Aaron, he’s in Spaced Ventures. You should check them out if you’re looking to raise money for your space-based business, because it’s the specialization where the future is. So, it’s at three parts. Media companies at the top. They’re doing the big 50 to 75 million-dollar Reg As, baby IPOs. Then you have this specialization, meaning, if you want to do real estate with social impact in it, that hits this change index, you’re going to Small Change, it’s not a discussion. And then it’s, if you want to do space, it’s, you know, Spaced Ventures, Brite.us, and then it’s the utility guys who are, they’re just the ISP providers, no one knows who they are.

Eve: [00:33:48] Interesting. I’m going to have another conversation with you about this offline. There’s one more topic to cover and that’s blockchain. You teach blockchain, FinTech and more as a professor, and I want to know why and how you became a blockchain expert.

Samson: [00:34:08] So in 2014, was that Fanny, I was talking to, it was like eight or nine o’clock at night, I was talking to our, the chief information security officer, a guy by the name of Anthony Johnson, he’s wicked smart. So, he’s like, hey, you should buy some Bitcoin. I don’t know what that is, Anthony. So, he explained it to me and I was like, OK. And then I was sitting in a meeting for operations and technology. My last two years, I was the deputy chief of staff for the Operation Technology Executive Office. And so, I was sitting in a meeting and we do this thing called the now, the new and the next. So, now is what technology are we currently dealing with? New is what technology will be new in 24 months, 24 to 36 months, and then the next is five years over the horizon. What is the technology that we’ll be engaging? So, in 2014, the next technology was blockchain. So, I was like, I don’t know what that is. And so, when we talk about blockchain or distributed ledger technology, there’s going to be a tipping point in the mortgage industry where you, right now, you can sort of fractionalize, or tokenize, deals but the real game changer will be when we finally get rid of title companies. Because it’s like, why am I paying this stupid title fee for every transaction?

Eve: [00:35:33] And why are these transactions so complicated? That’s the other one, right?

Samson: [00:35:37] Correct. Correct. It’s like, we should know who owns this piece of paper. We learned this in 2008. And so with distributed ledger technology, it’s a great way of tracking records. And so we should be able to track title, who owns the commercial paper, who owns the mortgage backed security, who has the right to foreclose, our redemption on this piece of paper. There are a lot of really smart people working on that. It’s not quite yet there. There’s some infrastructure changes that have to take place. But again, put on your time travel hat. I can see in the future where you walk up to a house and you just scan the little QR code, the house of lets you and by yourself, you walk around, you make an offer and you hit buy now. Amazon could probably roll this out today if they wanted to.

[00:36:32] That would be great.

[00:36:33] Yeah. So this is where I came into contact with blockchain. And what’s very important for people to understand is, you know, blockchain is not going to save the world. The easiest application of blockchain are cryptocurrencies. Right now you can make a cryptocurrency in about six minutes. Cryptocurrencies are really just a marketing campaign. And so, if you ignore the ‘we’re going to overthrow the government and get rid of the banks’, blockchain is just a really good way of encrypting records of data. And so…

Eve: [00:37:07] That was always my thought. I’ve always thought blockchain holds really serious possibilities because I’ve done plenty of real estate transactions, which have really looked ridiculous in the paperwork and the data and how to store it. But I’m not convinced about cryptocurrency. And I want someone to convince me.

Samson: [00:37:30] That’s not going to happen here because the challenge is money, and this is the anthropologist in me, is you have a social contract and so the social contract is we’re going to follow these sets of rules, and that’s what sets governments up. And so, right now the biggest thing that I caution people with cryptocurrencies, is so long as you have to work to earn said cryptocurrency, it doesn’t matter if you get paid in pesos, rubles, dollars, bitcoin or doge, you still have to work for it. And so, in which case, now we have to have a larger conversation about what is a living wage, because I don’t care what your wage is denominated in, you still have to work for it. Does your wage include health insurance, childcare, affordable housing? What is affordable housing? And then, when you have that conversation with crypto, with bitcoin maxis, bitcoin maximalists, or cryptocurrency enthusiasts, they’re like, oh, I’m like, yes, that digital thingamajiggy you’re referring to as currency, it doesn’t actually solve any of the social issues with, you know, our modern society and how a largely unchecked capitalism has shaped our world around us.

Eve: [00:38:48] Well, said, Samson. Yeah.

Samson: [00:38:49] This is why that doesn’t work out so well, at least in my opinion.

Eve: [00:38:53] And in fact, it’s creating a problem because we have an energy crisis and bitcoin consumes a huge amount of energy. And I’m sort of really stunned that people don’t pay more attention to that. Where is that going?

Samson: [00:39:11] Part of it is we never had a, this isn’t in defense of Bitcoin, but we never looked at the carbon footprint of our banking infrastructure or our credit card processing.

Eve: [00:39:21] Oh, that’s an interesting thought.

Samson: [00:39:23] Because we just never, was like, oh, yeah, it’s a point-of-sale machine. Like, I have no idea what the carbon footprint of all the point-of-sale machines are. But now there’s that conversation. And so it’s not that cryptocurrencies don’t have a role because we have so much money going … if you, quote unquote, invested in an ICO between 2016 and 2018, you really funded 26.2 billion dollars of research and design. That’s what you did, because that money that flooded into the cryptocurrency market, it went for faster processing, for chips, for Nvidia. And when you got people interested in cryptology and math, people who had to actually learn about what is money. And so this is where the benefit of Bitcoin and cryptocurrency is. It’s brought a whole new class of education, a whole new interest for people to figure out. This system, I call Bitcoin a flashlight. This system, does it work? Now, we have highlighted, pointed out, its inefficient, it doesn’t work. What’s the solution? Ninety nine percent of the time, the solution is not Bitcoin or blockchain. But now that we know it’s broke, or now that we can publicly acknowledge it doesn’t work as it should, how can we fix this? And so, this is where blockchain and Bitcoin, it’s not all bad because it has spurred some innovation, and I will put an asterisk into this to say that when we talk about the space economy, when we talk about machine to machine payments, micro payments, we are talking about some type of digital currency. It won’t be bitcoin. It won’t be a cryptocurrency. It will be a government issued. But then we have to have a larger conversation about, oh man, Eve, you’ve got me on this rant, because it ends up with when we have to talk about the universal basic income and privacy rights. In the sense that, if you have a central banked, issued, digital currency, the challenge with programmable money is, I can say that any product that has more than x percent of sugar or fructose in it, you can’t purchase it with this product. So that creates an immediate black market. You might not care about that until you think about, hey, if we have these digital currencies that are issued by the Fed, or it might be that the currencies pay themselves, pay taxes automatically. It might be that you can’t make end-of-life decisions because you can’t pay for your particular medical procedures because that’s not authorized. Because, again, this is programmable money. So, it opens up an ethical debate, not necessarily a technological one, because if you ask me, right, yeah, we can build it for you, you know, it might take about 20 minutes to do. But just because you can do it, it doesn’t mean that you should do it.

Eve: [00:42:25] Sounds like you need a philosopher on your team, next.

Samson: [00:42:27] 100 percent. Yeah.

Eve: [00:42:29] I’ve got one of those in-house. Samson, I have one more question for you, and that is, what’s next for you?

Samson: [00:42:39] So I didn’t actually answer your question at the beginning of this podcast. You said, why are you president of the Crowdfunding Professional Association? So, one, I don’t mind being president. I actually love it because I have a bias for action coming from crisis management. We’re going to have a discussion, we’re going to make a decision then we’re going to execute. Often enough, people, they discuss something then they get stuck in analysis paralysis. And I’m like, we’re not doing that. And so, with the Crowdfunding Professional Association I liken it, very similar to when David Stern took over the NBA in the early 80s. The NBA was bankrupt, and it had no viewership. The games were rowdy. And he transitioned that league into the NBA we know now. And so, when I’m thinking about the Crowdfunding Professional Association, I’m really thinking about, we are going to have, by 2022, we’re going to have between 150 and 200 funding portals. We’re going to have between 150 and 200 small business owners who don’t have the bandwidth to advocate on the Hill, to advocate at the local level for intrastate crowdfunding. And they need a voice. And so, when I look at where the Crowdfunding Professional Association is going in the future, it’s on par with the National Association of Realtors. It’s on par with the Mortgage Bankers Association, because what we do, what the Crowdfunding Professional Association does, what Small Change does, you create jobs. When you have a real estate project that hits your social change index, you not only change society you also create hyper local jobs.

Samson: [00:44:27] And so, this is why I’m super passionate about crowdfunding, because I do want to live in a better society. I want to live in a better world. And we achieve that when we invest locally, when we invest in people who we know, when we invest in our community. And so last year, crowdfunding raised, Reg CF, raised 214 million, which is a lot, total, but it was 105 percent increase over 2019. This year, already in 2021, you have to double check this with Woody Neiss, we’re on track to do a little over 450 million dollars raised as an industry. Next year, we’re going to blow past a billion. And so, when you fast forward to 2030 and you say, alright Samson what’s a reasonable amount a number that the Reg CF industry raises every year by 2030? Conservatively, I’m putting that number around 12 and a half billion dollars a year. And it’s like, how is that possible, right? It’s a change, it’s a fundamental change and something I will fight on this field forever, customers have more money than VCs. And so, it’s like, VCs use entrepreneurs and founders to tap into customer pockets. And so, when we’re talking about crowdfunding, particularly the retail revolution, we’re saying technology is going to provide greater transparency and access to early stage investing that has traditionally been held by the one percent, by the elite. And so this is where I see crowdfunding going as a whole. And this is why I get so excited about it.

Eve: [00:46:07] Well, Samson, I really appreciate you taking the time to talk to me today. You are a great leader. And I’m going to be a forever member of the Crowdfunding Professional Association, at least as long as you’re leading it.

Samson: [00:46:20] No, no, there’s, trust me, I am just the loudest one. All the brain power, it comes from Sara Hanks, it comes Maureen Murat, it comes from Jenny Kassan, it comes from Devin Thorpe. I just happen to be the loud one because they’re out executing. They’re out building relationships. And so, I just happened to have the pom poms out. So, I encourage everyone, if you’re listening, join the CfPA, because part of it is, if you’re a small business owner who happens to run a funding portal, tell us what your pain points are. We’re that’s what we’re there for. We’re going to go try to figure them out. It can be like, hey, what’s up with the insurance? Is like, that’s a good point. Let’s go find that out. Or it could be like, hey, we want to change, right now, we’re working with the Florida Office of Financial Regulations to improve the intrastate rules for Florida. Again, for me, it’s how do we create local jobs? People need jobs. And so that’s what we’re doing.

Eve: [00:47:21] Thank you so much, Samson.

Samson: [00:47:23] Awesome. Thank you very much Eve.

Eve: [00:47:41] That was Samson Williams, an altogether energetic person. He’s watching the crowdfunding industry evolve from the front seat as president of the Crowdfunding Professional Association. And here’s what he’s seeing. Media companies will drive investment in the future. All eyes will be on crowdfunding platforms with a niche, like Small Change. And finally, content will be king.

Eve: [00:48:16] You can find out more about this episode or others you might have missed on the show notes page at rethinkrealestateforgood.co or you can support us at patreon.com/rethinkrealestate for the price of a cup of coffee. A special thanks to David Allardice for his excellent editing of this podcast and original music. And thanks to you for spending your time with me today. We’ll talk again soon. But for now, this is Eve Picker signing off to go make some change.

Image courtesy of Samson Williams

It’s a Buckminster Fuller thing.

September 8, 2021

Judi Lynn Brown, co-founder and Chief Impact office of CivicMakers, is a creative systems and design practitioner. She is a member of a new generation of progressive and inclusive change-makers who embrace civic technology along with “radically inclusive, participatory governance structures.”

CivicMakers, which is based in the Bay Area, was created to make gathering spaces for those interested in public impact projects and civic innovation. It has since evolved into an innovation and engagement firm that provides “service design, community engagement and digital strategy to government agencies, nonprofits and civic technology companies.”

Born in southern California and raised in Nevada, Judi comes from a working class family where neither parent attended college. She was raised as a Catholic, came out in her mid-20’s and feels “queer activism is absolutely a model for sustainability.” Judi’s early life experiences suggested the “world-saver” path she would later take and her first professional experiences in nonprofit management and corporate philanthropy led her to look for more “creative ways to change parts of systems that currently don’t work for 100% of humanity.”

Prior to CivicMakers, Judi worked as a design strategist with Collective Invention, a social innovation firm working in education and community development. And she also did survey development and evaluation work for Zawadisha, a micro-lending fund for female entrepreneurs in Kenya. Judi she worked on a project involving the first-ever impact-rated municipal bonds, and on homeless issues (as a nonprofit board member).

Insights and Inspirations

  • Human-centred design (HCD) is an approach to problem-solving that puts the people at the heart of the design process. It’s all about designing for public impact.
  • Civicmakers applies human centered design to disciplines like strategic planning and community engagement. They also use systems thinking because being in the public sector means there’s no designing in a vacuum.
  • Judi hates scale. Her ambition is to remain hyper local, digging into the minutia of each community she works with.
Read the podcast transcript here

Eve Picker: [00:00:07] Hi there. Thanks for joining me on Rethink Real Estate. I’m Eve Picker, and I’m on a mission to make real estate work for everyone. I love real estate. Real estate makes places good or bad, rich or poor, beautiful or not. In this show, I’m interviewing the disruptors, those creative thinkers and doers that are shrugging off the status quo, in order to build better for everyone. When I’m not hosting the show, I’m running my real estate crowdfunding platform, SmallChange.co, where you’ll find impact real estate investment opportunities open to everyone. Or you can learn more about me and catch up on some podcasts at my Web site EvePicker.com.

Eve: [00:00:59] Today, I’m talking with Judi Lynn Brown, a self-confessed world saver. She’s one of a new set of progressive change makers in support of radical inclusion. Her early career involved some professional stints that disheartened her, and she decided that non-profits and corporate philanthropy were not for her. Instead, she decided to figure out a creative way to change a system that currently doesn’t work for 100 percent of humanity. And so she co-founded CivicMakers, an innovation and engagement firm that provides design and digital strategy services to support excellent community engagement. Hyper local is big in Judi’s mind.

Eve: [00:01:47] If you’d like to join me in my quest to rethink real estate, there are two simple things you can do. Share this podcast or go to Patreon.com/rethinkrealestate to support this podcast for the price of a cup of coffee.

Eve: [00:02:08] Hi Judi. Thanks so much for joining me today.

Judi Lynn Brown: [00:02:10] Hi Eve. Thanks for having me.

Eve: [00:02:12] Yeah, so I was really fascinated by the company you launched called CivicMakers, which is a great name, by the way.

Judi: [00:02:19] Thank you.

Eve: [00:02:20] I was wondering how long ago you launched it and why.

Judi: [00:02:25] Yeah, thanks for that question. CivicMakers, we’re kind of a unique firm in that we actually started as a meetup.

Eve: [00:02:34] Oh.

Judi: [00:02:35] Right around mid 2014, my co-founder, who I actually met while I was in grad school at Presidio Graduate School in San Francisco. He was working for change.org at the time. So he’s kind of in this emerging civic technology space. Prior to that, he had spent seven years in local government, and I was in school studying public administration and really just became fascinated with the concept of reimagining the design and delivery of public services by involving the people who are served in that process.

Eve: [00:03:13] What a unique thought.

Judi: [00:03:15] Imagine that, right?

Eve: [00:03:18] Yes.

Judi: [00:03:18] Revolutionary. So CivicMakers, like I said, started as a meet up, CivicMakers.meetup.com. My co-founder started hosting these events around the Bay Area that were a mix of salons, panel discussions, unconferences with a wide array of topic areas from public broadband to democracy in the workplace. And at that time, after I graduated, I was doing some work with a small social innovation firm that was run by some really incredible women. And I started getting involved, helping Lawrence, who’s my co-founder, with events for CivicMakers in about April, I think, of 2015. By August, we kind of started accidentally getting hired to do services. So, we’re like, OK, I guess we’re a services firm now. Prior to that, we were actually pursuing our work as a civic technology firm. So CivicMakers was going to be a platform that would connect consultants, practitioners, and developers in this emerging civic innovation space. So we pitched to Y Combinator. We went through that whole experience of putting the pitch deck together, trying to find a chief technology officer. And then it just kind of turned out that we were the platform, in fact, because what we love to do is bring people together and provide space for them to imagine their big creative ideas and bring them to life. So fast forward, you know, several years and we’re a seven-person civic design firm. We work primarily with municipalities throughout Northern California. We have some clients in California as well. And it’s all in applying human centered design to disciplines like strategic planning, community engagement. And I get to lead up a lot of our immersive learning experiences, which is really fun for me. So, it’s facilitation and coaching and… Yeah, so that’s the origin.

Eve: [00:05:29] So your business really grew out of a real need because people started hiring you?

Judi: [00:05:35] Yeah, it continues to evolve in that way, right. I think that having that as a foundation, you know, we never put together a business plan in the beginning for our services. The challenge is that we’re very responsive and adaptive. So that means that we are somewhat obsessively going back and examining the services, how we talk about them, who the clients are. You know, we’re also beholden to the public procurement process, you know, so there aren’t always RFPs issued that ask for the type of services that we do, but that’s grown over the years.

Eve: [00:06:17] Just for the sake of our audience. What exactly is human centered design?

Judi: [00:06:22] Excellent question, Eve. Thank you for that. So human centered design is a design process that incorporates human input throughout. This was highly popularized about 30 years ago with firms like IDO, the Stanford d.school, and traditionally has been applied to, you know, technology products. For example, like all the apps that we use, go through a process of empathizing with users, defining what exactly the market is, what exactly the problem is they’re trying to solve, ideating around how to solve that problem in a unique way, prototyping. So, of course, we’re not building it before. We are testing small increments of what a product or service could look like. And then we continue to test that with users. So that’s how that plays out in that technology space or private industry. We take that process, and we apply it to things like programs, policies, procedures within the public sector. So the idea that we’re not just creating programs that exist within the minds of our so-called experts, people who have some letters after their name or have been working in a particular field for a long time, they’re an integral part of that process, but they’re not the only part of the process. So we bring in the end users.

Eve: [00:07:50] So and I also read on your site about something called public impact design. Is that different than human centered design?

Judi: [00:07:59] That’s a great question. Early on, human centered design and design thinking in the public sector is kind of a bright, shiny object right now. It’s gaining momentum. It’s gaining traction. We can’t just take this particular methodology that has worked really well in the private sector, plop it into the public sector and assume it’s going to work well. So, we were playing around with this idea of how CivicMakers uniquely apply as human centered design. And it came up with this. It’s about public impact and it’s about designing for impact. And it’s not just that we use human centered design and the five phases of empathize to find IDA, prototype and test, but that we’re also bringing in systems thinking because we definitely in the public sector, there is no designing in a vacuum. Everything has some kind of reverberation or constraint, right, within a system. And then the other sort of methodology that’s part of that is reflective practice, which is something that a lot of professional fields, such as medical doctors do this where they have to constantly be learning and relearning about their practice, going through certifications, et cetera. So if we are to do that at a public administration level, pause and reflect on what we’re learning as individuals and how we’re applying that in our work, the idea here is that we create change by engaging individuals. That’s reflective practice, helping them collaborate and problem solve creatively with teams. That’s human centered design. And then this third layer is that this is all within, you know, arguably very broken systems. So…

Eve: [00:09:55] Yeah, no, it’s not easy to pause and reflect. I can’t remember when I did that. We are all moving very fast. And it’s that’s got to be pretty purposeful, I imagine.

Judi: [00:10:10] Yeah, definitely. And all of these, sort of, the idea that we’re pausing and reflecting on how we as individuals show up in the work, what are our unique superpowers. Right? How do those map to those of our teams? And then what are we really trying to achieve, those, sort of, systems level view. Even we as a small firm have a hard time living those values, right?

Eve: [00:10:37] Yeah, yeah. You talk about impact. How do you describe impact? What do you see as impact?

Judi: [00:10:45] Yeah, I don’t know that I have a good answer for that, Eve. When we started this firm and in grad school, I actually focused primarily on the concept of impact evaluation. And I did that through the lens of microfinance. And I found that impact can really only truly be defined from the perspective of those who are impacted. Right?

Eve: [00:11:13] Yes.

Judi: [00:11:14] So if we have the World Bank and the IMF and, you know, professors, folks who are, you know, doing extensive literature review and trying to create some sort of standardized framework by which we can measure something like, for example, a quality of life indicators over the life of the loan. We can’t do that in a meaningful way without also being able to source those indicators from people who are served. So, we have a really amazing intern from UC Berkeley right now who’s helping us to develop our theory of change.

Eve: [00:11:54] Mm hmm. I would love to see it. We developed our own little change index, which is our impactful tool and probably out of the same frustration or comments that you just made. I mean, in the physical world, you know, the impact tools we had when we developed this were leads ratings and oh, God, I don’t even know what else. But those those types of ratings for everyday people just make no sense at all.

Judi: [00:12:22] Yep.

Eve: [00:12:22] I mean, they had enough for me, a professional, to understand.

Judi: [00:12:26] Yep.

Eve: [00:12:27] I dug into my urban design background and my understanding of spaces and where people like to be and like to exist in affordable housing and job creation to kind of create a much simpler, more flexible view of what impact might be.

Judi: [00:12:43] Yep.

Eve: [00:12:43] And some of the indices out there were just downright scary.

Judi: [00:12:48] Yeah, and inaccessible, right?

Eve: [00:12:50] Very, very inaccessible. Well, you know, we work with regulation crowdfunding, which demands accessibility. The rule actually says that we need to write everything in plain English.

Judi: [00:13:01] Yep.

Eve: [00:13:02] And so that was kind of the driving force behind our stupid simple index.

Judi: [00:13:08] Yeah.

Eve: [00:13:09] Which actually took an awful long time to develop and figure out how it might work, applied to real estate. Not easy. Yeah. Yeah. I can imagine what you’re doing is even harder.

Judi: [00:13:21] Well I had a feeling, Eve, that this was definitely a topic that we could explore together because…

Eve: [00:13:30] Yes.

Judi: [00:13:30] Right, you accidentally start a civic design firm and accidentally become a human centered designer, and then you have to come up with something to call yourself so that the world knows how to position you within these structures that tell us where people are. Right?

Eve: [00:13:50] Yes.

Judi: [00:13:50] And so I took on this title of Chief Impact Officer, you know, a good six years ago. And I’ve realized that I don’t like any of those words.

Eve: [00:14:03] Yes.

Judi: [00:14:04] I don’t like chief. I am leery of the term impact because…

Eve: [00:14:09] I don’t like titles like Period.

Judi: [00:14:14] And I certainly don’t want to be known as an officer because, you know, I think that word from a public administration perspective, Eve, stay with me here, the idea that, you know, in the public sector, so many of our institutions are designed according to arbitrary hierarchies. Right. A lot of that comes from the sort of command and control this kind of like militaristic aspect of governance. So a lot of the language was

Eve: [00:14:49] Very, very male, you know.

Judi: [00:14:51] Oh. Yes, definitely extractive. Yes. Like, what is it? Divide and conquer. I’m constantly trying to sort of like de-violence or de-militarize my own language because even saying something like front line employees, you know, gives us a mental image of war, right?

Eve: [00:15:15] Yeah, it does. What are frontline employees? That is actually a first for me. I’ve never heard that.

Judi: [00:15:21] Oh, I’m so glad you asked that.

Eve: [00:15:24] I understand it, but it’s…

Judi: [00:15:26] Yeah, these are public facing employees.

Eve: [00:15:30] Oh.

Judi: [00:15:31] These are like the public servants at the DMV that no one is very excited to see, but play a very important role in shaping our cities, right.

Eve: [00:15:41] And so they’re at war with their customers.

Judi: [00:15:44] Exactly. And that’s the image that we’re painting in our heads of public service.

Eve: [00:15:49] Yeah, I worked in a public service job for a couple of years at the planning department.

Judi: [00:15:55] Um hmm.

Eve: [00:15:56] Actually, my boss was the past head of planning for San Francisco, and this was a few years ago and it was the best job I ever had. It was fantastic. It goes both ways. So the public didn’t always treat us very well.

Judi [00:16:11] Right, right. Oh, for sure. Yeah. I love hearing that, Eve. I think that there are many, many, many unsung heroes every day making our cities better. And, you know, I’ll give you an example. We’ve been fortunate enough to be doing this work with the San Francisco Municipal Transportation Agency. And essentially, it’s a training program for public facing employees. So those are the bus drivers, the ticket agents, the parking control officers. You know, the ones who drive those little they’re called gopher vehicles around. Everyone hates them, Eve. Even if you’re not getting a ticket, people see those gophers and they turn red. These people have arguably some of the most dangerous jobs because at least law enforcement, you know, they can defend themselves. Our parking control officers, they have stuff thrown at them. They’re yelled at. And so, part of these trainings are around how they can de-escalate potentially violent situations with the public.

Eve: [00:17:23] Wow. So what is impact then?

Judi: [00:17:27] Oh, right, yes, back to that, what is impact? Some of the metrics that I use are things like hugs and high fives. So, stay with me here, back when we used to be able to do workshops in person. I’ve done workshops with state employees for the California Department of Technology. So I’m a human centered design facilitator for their open enrolment trainings that are open to any state employee across the state. And then sometimes I’ll work within their leadership academy. So it’ll be like cybersecurity professionals or IT professionals. And, you know, we think about state government as being kind of, you know, not very human. So if I walk into a room of people who did not know each other, you know, four, five, six, seven hours prior to that, depending on how long the workshop is and we leave the room and people are giving each other hugs and high fives, that’s an indicator of impact to me.

Eve: [00:18:36] Mm hmm.

Judi: [00:18:37] I know it may sound just like you were saying, surprisingly simple, but the theory is that if we create internal bureaucracies that really respect the creative potential of everyone within that bureaucracy, regardless of where they sit, if people within a municipality, I get emails all the time from some of this really amazing work that I’m so humbled to be able to do, which will be like, I was about to leave the city until I was part of this learning experience.

Eve: [00:19:12] Oh, wow.

Judi: [00:19:13] Because…

Eve: [00:19:14] That’s a great result.

Judi: [00:19:16] Yeah. And those are the things, Eve, that I can’t really quantify. Like, I cannot demonstrate the ROI on the culture change work. That essentially is happening when we’re able to do this.

Eve: [00:19:32] I agree. I agree.

Judi: [00:19:34] And I’m sure you struggle with that, too.

Eve: [00:19:36] Well, we have some clearer indicators, but there were always challenges. Things don’t always work perfectly. But there are other returns on investment that are not, you know, indicator list that I certainly am aware of. Like, you know, the return on the pandemic and Black Lives Matters is filtering through. To my life in an unexpected way, as I’m sure many other people are feeling. So, you know, with, what a horrible year, with some really amazing outcomes.

Judi: [00:20:14] Absolutely.

Eve: [00:20:14] So, was that the way to get there? Probably not. But apparently it needed, there needed to be some sort of seismic event to make people sit up and think, right?

Judi: [00:20:27] Yeah, absolutely. That’s an excellent example. You know, there’s offices of racial equity popping up all over the country.

Eve: [00:20:37] Oh, yeah.

Judi: [00:20:37] So now we have equity officers. A few years ago, it was all about the chief innovation officers and the chief digital services officers. I don’t know if creating separate offices is really the way to do this, right?

Eve: [00:20:55] I’ve always felt like when I’m invited to be on an all-women’s panel at a conference, I just feel like it’s being invited to sit at the kid’s table.

Judi: [00:21:04] Yeah.

Eve: [00:21:04] So, you know, treating everyone equally is really the key. Separate office seems, you know, I don’t really fully understand it. But the way I’m feeling it in real estate is that more and more minority real estate developers are coming to us. It’s a pretty significant shift. And I’m loving that. It’s really pretty fabulous, and I’m convinced that’s a direct result of the last 18 months.

Judi: [00:21:34] Yeah. In theory, everyone treated equally. Love that. And, you know, there is a certain amount of reckoning that people who have historically had access, right. There’s a certain kind of empathy and humility that we as people of privilege have to be aware of every day and think about, what are we willing to give up to make up for some of the, you know, inequities that have existed? I started in sustainability, right. So, 10 years ago when I was in grad school to do a sustainable master’s in public administration, it was like chief sustainability offices and chief sustainability officer. Right. But like sustainability should be part of all of the work. Innovation should be part of all of the work. Equity should be part of all of the work. And I wonder if, you know, as part of this work that these offices are doing, if we can find ways to not be, you know, exclusive, like, here’s the all-women’s conference kind of thing, but really strategize how we might elevate and remove barriers, you know, and I think maybe what you are experiencing in real estate is a by-product of that. We do have to be intentional about barrier remover because it turns out we all succeed when we provide others with the same opportunities.

Eve: [00:23:11] So how does your work then translate to the physical environment? I have to ask that because, you know, real estate is what I think about.

Judi: [00:23:19] Yeah.

Eve: [00:23:19] But I mean, I’ve been to plenty of community meetings in my past, first as a planner in a planning department and also as a real estate developer. And they were always very difficult.

Judi: [00:23:32] Yeah.

Eve: [00:23:34] Meetings with very little meeting of the mind, really. You know, they and us, really, that’s what these meetings are typically. So how does this change that?

Judi: [00:23:46] Yeah, I was thinking about this in terms of some of the projects that. So I don’t need the community engagement efforts for our business. My business partner, Cristel, does. She has a background in planning and community development. She actually started her career at Google and then decided she wanted to do more meaningful work. You know, there are constraints, right, because if a planning department or a housing authority hires us to do community engagement. In some cases, they’re hiring us to do the sort of check the box, have a community meeting at 2pm on a Tuesday. That means the usual suspects show up. Like how many working mothers can show up to a public meeting at two p.m. on a Tuesday, right?

Eve: [00:24:34] Well, especially in underserved neighborhoods where often single mothers who are holding down several jobs.

Judi: [00:24:40] So, yeah, absolutely. Absolutely. And so the pandemic actually going back to what we were talking about a little bit earlier, has made these engagements slightly more accessible. I mean, of course, we still have the digital divide to maneuver, but we were doing a project with the housing authority in Silicon Valley and we were going to have a community meeting the following week before we got the shelter in place mandate, right. And the client would have been happy with twenty-five people showing up to that meeting. We move that online. We used various channels to market it, we made it accessible, we included subtitles, we did some in language facilitation, and we got three times the amount of participation than we had assumed we might get doing it in person. So that’s an example.

Eve: [00:25:45] That’s a great outcome. Yeah.

Judi: [00:25:48] And so how that translates to your point to the physical environment, of course, is that we have more voices saying, OK, if we want this percentage of this development to be affordable, what does that mean? And, you know, because there are some people, there’s like the YIMBYs and the NIMBYs, but like sometimes the YIMBYs are only YIMBYs if it’s like 20 percent affordable housing, but if it’s 40 percent, then they become NIMBY’s, right. So those are the kinds of you know, and then there’s there’s some pretty egregious and painful limitations around the Brown Act and and just some of the constraints that we have with true, meaningful community engagement. But if our clients also get it and they should, because when they engage community authentically into your point, Eve, you know in the planning process, it’s like, OK, we make a decision, we make a decision, we make a decision. And then it’s like, oh, let’s engage community and then community’s pissed off because they’re like, actually, why didn’t you engage us at the beginning, right?

Eve: [00:27:06] Yes. Yes.

Judi: [00:27:07] So our sort of human centered community engagement, like applying that human centered design lens to how we engage community offers to start that engagement much earlier. And it doesn’t have to be with a whole public meeting. Right. We’ve really been experimenting with this concept of civic councils so that there is there is like a learning opportunity. There’s like a co-ownership opportunity. And it’s not just this two-way us against them communication stream, but that we’re actually having deliberative dialogue around what’s going to change in our cities.

Eve: [00:27:48] Because change is scary, right?

Judi: [00:27:51] Yeah, yeah, absolutely. I mean, that’s another thing that the pandemic has shown as though too, right. It is possible for our permitting processes to be online. It is possible for our engagement processes to be online. What would be really nice is if we were able to respond to crises which will just keep on coming, instead of react. So, so much of what we saw was reactive. But we’re also seeing those who are resistant to change. It’s the only thing that is constant, right?

Eve: [00:28:32] I think most people are scared of change. I have to keep reminding myself of that because I love change. I thrive on change. It just drives me. I’m married to someone who has trouble with change. He likes things the same. And I think most people do. And because they can’t visualize what is coming, it makes it really scary. And that’s hard to wrap your head around, I think.

Judi: [00:28:57] Yeah. So the way that shows up in our work, um, well, there’s definitely the built environment, but we do a lot of work around sort of digital infrastructure, digital services. We don’t build those things, but we do some of the engagement around them, right. So whether it is convening community to co-create, lots of alliteration there, digital privacy principles, or helping a municipality internally engage their employees, some of whom have been doing the same paper based process for 30 years, and have that fear they’re going to become irrelevant when their process is digitized. Right. That’s a real scary fear. And if we can get leaders to ask those people, these are not necessarily the quote unquote front line or public facing in some cases, but, you know, like payroll clerks, for example, like that’s still a job in a lot of municipal government. If we can bring them along and ask them, where are you seeing some of the greatest needs or gaps in services? How might we engage your human ingenuity to meet those while we can understand that a lot of your time that you would spend matching up paper-based time cards and doing data entry in a system from 1991 will be freed up. It’s not that they’re going to go away. Right, because…

Eve: [00:30:45] They’re going to do something different.

Judi: [00:30:46] Exactly. And if we ask them, what would you like to do, what are you seeing? As opposed to telling them we’re doing this whole project and it means that you know, 80 percent of your workday is going to change, then I think that we can minimize some of those shocks and some of the fear.

Eve: [00:31:08] So you said that you’ve been very responsive, little company. And I’m just wondering if you thought about how you’re going to scale or if you have a big, hairy, audacious goal.

Judi: [00:31:19] Yeah, I hate the concept of scale, Eve. I mean, maybe hate is a strong word. I am highly critical of the concept of scale because I think some of the magic that we get to co-create with our partner clients where we do that work is due to the sort of hyper localization, is due to the fact that, you know, like I live in San Francisco, I ride those buses with those operators that I’m training. Right. I visit the small businesses that the Office of Economic and Workforce Development is supporting. I think at some point, because we are also just like overachievers, we have a very rigorous internal strategic planning process. And at one point in time, I would say maybe around 2017, when we went from a two-person company to a three person company, we were like, oh, in 10 years we’re going to have 50 employees and we’re going to have offices here and offices here and. I just don’t know that that’s part of what we want to do, because when you reach a certain size, you just don’t have that level of intimacy and relationships. And those are the projects that I feel are most impactful, even if you ask me what I mean by that, and I’ll stumble through not having, you know, the exact metrics in mind.

Eve: [00:32:59] It sounds to me like it’s a little like cloning. Cloning these little offices is, you know, probably the way it might work because you you have an impact in one particular part of the world, but maybe you could do it somewhere else.

Judi: [00:33:12] Yeah, I appreciate that. Some of the scale of the work. Right. In realizing that my superpower is facilitation and co-creating immersive learning experiences. Right. It’s not, like I taught a couple graduate level classes, but I really try to create a space that allows for folks to share their innate knowledge and what they’ve learned about their work. It’s very much about eliminating the power differential between professor and student. And so I had the opportunity to go and test this out in late 2019 because of work that we had done with California Health and Human Services. So they had an Office of Innovation, right, here it is. The Office of Innovation would take people from different departments, train them up an innovation methodology, and then they would work for a year in doing these sort of design sprints with different departments and then they’d go back to their home departments. That model has shifted quite a bit. The Office of Innovation has now morphed into something else because, again, maybe that wasn’t the best approach. But I had the opportunity in working with the Deputy Director of that office to go to Montenegro, which is her home country. And we did a five-day training, immersive training in this concept of digital transformation, which has nothing to do with digital and everything to do with humans, right? So we had teams from Albania, North Macedonia, Bosnia Herzegovina, where else, Serbia and Montenegro. So I had five teams of people from the Western Balkans, of which I know sadly very little about. Right. In terms of their context. And it was sort of scary because, again, the work is very context specific. But, Eve, we had an amazing time and now I have lifelong friends who are ministers of, you know, digital transformation in Serbia. Like I can hit them up on Slack right now. So I do appreciate that. I don’t know that some of the longer term, deeply embedded project work that we do would work elsewhere, but we’re open to it.

Eve: [00:35:42] Well, this has been a delightful conversation. I appreciate that you’re a local girl.

Judi: [00:35:49] Thank you.

Eve: [00:35:50] Local is where your heart is. And it’s pretty fantastic that San Francisco has you.

Judi: [00:35:55] Oh, thank you. We have a multitude of challenges. That’s such a nice reflection. And as part of my project for grad school, I went to Kenya and I interviewed women business owners. This is for another conversation, maybe over cocktails sometime, Eve.

Eve: [00:36:12] Yes, in real life.

Judi: [00:36:16] And I realize that…

Eve: [00:36:17] When the pandemic has been crushed.

Judi: [00:36:19] Exactly. Exactly. And I realized that I don’t need to do that work in Kenya or in, you know, anywhere else that isn’t my beautiful, vibrant and challenging adopted city of San Francisco. So, you know..

Eve: [00:36:39] It’s been delightful. Thank you so much for joining me.

Judi: [00:36:41] Yes, thank you, Eve.

Eve: [00:36:45] That was Judi Lynn Brown. Judi hates scale. Her ambition is to remain hyper local, digging into the minutia of each community she works with. She doesn’t see any other way to continue building on the work she’s doing, human centered community engagement.

Eve: [00:37:08] You can find out more about this episode or others you might have missed on the show notes page at EvePicker.com, or you can support us at Patreon.com/rethinkrealestate for the price of a cup of coffee. A special thanks to David Allardice for his excellent editing of this podcast and original music. And thanks to you for spending your time with me today. We’ll talk again soon. But for now, this is Eve Picker signing off to go make some change.

Image courtesy of Judi Lynn Brown, CivicMakers

One year. 41 more conversations.

July 28, 2021

41 amazing people. 41 inspiring conversations.

Cynthia Muller. Richard Rothstein. Andre Perry. Charmaine Curtis. Lyneir Richardson. Darryl Scipio. Libby Seifel. Beth Silverman. Patrick Quinton. Daniel Parolek. Charles Durrett. Heather Hood. Diana Lind. Scott Flynn. Atticus LeBlanc. Sam Ruben. Andrew Luong. Stephanie Gripne. Shannon Mudd. Ken Weinstein. Garry Gilliam. Andy Williams. Daniel Dus. Patrice Frey. Bruce Katz. Christopher Leinberger. David Peter Alan. Annie Donovan. Michael Shuman. Dan Miller. Scott Ehlert. Katie Faulkner. A-P Hurd. Max Levine. Brian Dally. Jonny Price. Michael Lee. Kevin Cavenaugh.

These are the rockstars of my show.

Season Three starts soon …

Read the podcast transcript here

Eve Picker: [00:00:14] Hi there. Thanks so much for joining me today for the final episode of Rethink Real Estate. For Good, season 2.

My name is Eve Picker and I’m on a mission to make real estate work for everyone. Real estate can help to solve climate change, can house people affordably, can create beautiful streetscapes, unify neighborhoods and enliven cities. 

You can learn more about me at my website, rethinkrealestateforgood.co, or visit my real estate crowdfunding platform, SmallChange.co. Our projects offer impact, solve housing problems, invest in neighborhoods and give everyone the opportunity to invest and build wealth for as little as $500.

[00:01:12] Today marks the second anniversary of this podcast. Two years ago, I didn’t know that our audience would grow as it has. In fact, two years ago I wasn’t sure we would have an audience at all. Now 10,000 people download episodes every month. That’s 10,000 people who care about thoughtful and impactful real estate solutions.  Wow!  I am humbled that all of you want to listen in.

This second year has been an opportunity to learn from yet another class of extraordinary leaders and innovators in real estate. My guests are working on housing solutions, policy issues, manufacturing, in fintech, on preservation, on developing new technologies and on providing real estate metrics, on mobility issues, as architects, on sustainable development, on community capital, on equity for women and equity for minorities and in many other niches, pushing the boundaries of the built environment to be better for everyone. 

The range of work that is being accomplished is quite awe-inspiring.

[00:02:25] Perhaps the most important theme this year was equity.

Cynthia Muller, director of Mission Driven Investments at the Kellogg Foundation. has been described as a “thought leader of the impact investing ecosystem and a trailblazer in the field.” In No guilt. Just Action. she reminds us that every time there has been an opportunity for black and brown people to build an asset, to build wealth, it’s been taken away from them. Let’s change that. 

Richard Rothstein and Andre Perry have written about these inequities.In The Color of Law Richard argues for a national civil rights movement to ensure that we all get to reap the economic benefits of living in this rich and diverse country. And In Know your price, Andre share findings that homes are underpriced by 23 percent, or $48,000 per home, in majority black neighborhoods. That’s $156 billion in lost equity.

[00:03:31] Charmain Curtis, Lyneir Richardson and Darryl Scipio are a new breed of black developers. Charmain has built a successful career as a developer despite being a black woman. She didn’t realize what she was up against until she was in her 30s. In Spread the Wealth she ponders how wealth could be distributed equitably to everyone.

In Building Generational Wealth, Lyneir describes his plan to buy 100 community shopping centers with 100 community members, all focused in majority black neighborhoods. He provided the first opportunity to 140 investors on Small Change early this year.

[00:04:17] Justice runs deep with Darryl.  In Turning renters into homeowners he describes his latest passion project, Savers Village.  He aims to help every tenant save enough for a down payment on a home.

And Libby Seifel is focused on women.  In Women building collective muscle, she describes the network of women leaders in real estate she has built. After more than 30 years in the industry, she is no longer the only woman in the room, and that some of the biggest new projects in the Bay Area are being driven by women.

[00:04:56] Housing solutions are importantly getting a lot of attention.

Perhaps the boldest of these is Beth Silverman’s Lotus Project. In Radical in its Simplicity she tells us how ,for just $800, her organization can successfully house a homeless family and change the trajectory of their lives forever.

We learn about accessory dwelling units as an affordable housing solution in Yes! In My Backyard! Patrick Quinton has developed a manufactured solution that drops a 32×14 foot ADU into a typical 50-by-100-foot lot in Portland, Oregon without hitting the setbacks and without requiring city design review. And he’s raising money for this project on Smallchange.co

[00:05:48] On the west coast, Daniel Parolek, architect, coined the phrase, The Missing Middle just as the critical absence of affordable housing was becoming a major planning issue for cities nationwide. He explains what the missing middle is, why it is important and how we can build more of it. 

Charles Durrett brought co-housing from Copenhagen to the US many years ago and wrote a book about it. He explains why he’s spent a career in co-housing and how it can make people’s lives better in It takes a Village.

[00:06:27] In Northern California, Heather Hood oversees efforts for the Enterprise Community Partners that ensure low- and moderate-income residents have access to affordable, quality housing. We talk about the enormous size of this problem in The elephant in the region.

And Diana Lind wraps it up for us in Lets be Brave. She’s written a book called Brave New Home in which she argues that the single-family home is at least partly to blame for our current housing woes.

[00:07:01] Technology is rapidly transforming the real estate industry in many different ways as well.

Some of my guests, like Patrick Quinton and Scott Flynn in Manufacturing change, are focused on manufacturing affordable homes in factories. Scott’s company, IndieDwell, manufactures smaller, sustainable and affordable homes at the pace of 10 homes per week and growing.

But others are pursuing new ideas.  Atticus LeBlanc tells us about PadSplit in One Room at a time.. He wants to dramatically change how we address affordable housing by using space that is now under-used in everyday homes.

[00:07:46] Or Sam Ruben in 3D-printing, robotics and automation, oh my! His company is printing buildings and hopes to create affordable and sustainable homes with their new technology.

And finally, Andrew Luoung who has deconstructed the often lengthy and confusing process of small scale real estate investment, making it accessible to everyone.  In Andrew loves real estate he describes the online turnkey service that he has developed into Doorvest.

[00:08:20] Some guests are focused on fertilizing tranches of future impact investors and leaders.

None is more passionate than Dr. Stephanie Gripne. In The impact accelerator, she tells us about founding the Impact Finance Center with a mission to identify, train and activate philanthropists and investors to become impact investors. Her big, hairy audacious goal is to move a trillion dollars into impact investing.

Dr. Shannon Mudd is right behind her, teaching students how to invest $50,000 of real money for maximum social impact. His Young Angels are carrying this knowledge into their professional careers.

[00:09:09] Others want to pay it forward.

Like Ken Weinstein, a highly successful Philly developer whose career was inspired by his landlady in Germantown. He’s created a boot-camp for aspiring developers called Jumpstart Germantown and describes the program in Jumpstarting a community.

[00:09:32] Garry Gilliam may be best known for playing in the NFL. Today he has a second career as an impact real estate developer. He tells about his first project in The Bridge. It came about as a joint effort with Garry’s friends from the Hershey School, a philanthropic school for low-income children. That school gave them all a leg up and now they want to give back to their community. 

Or Andy Williams, a former Marine who was determined to secure his future through real estate. He’s built a substantial portfolio of homes, a real estate development business focused on larger projects, and now, a program that seeks to turn veterans into entrepreneurs just like himself.  

[00:10:23] Some guests, like Daniel Dus and Patrice Frey, are focused on building on what’s already there. Learn how Daniel is planning to redevelop the dramatically underutilized historic luxury estates of the Berkshires for the shared economy in Everything old is new again.  And in Saving Places, Patrice explains the role of the National Main Street Center in servicing the revitalization of commercial main streets in big cities and small towns alike.

Bruce Katz moves the focus back to metro areas in Cities are networks. As a foremost policy expert, Bruce argues that cities must knit together solutions. It’s an imperative. And he calls this the new localism.

Christopher Leinberger is thinking along the same lines in Back to the Future. As a renowned urban strategist, teacher, developer, researcher and author Chris thinks “Back to the Future” got it right.

[00:11:30] While David Peter Alan enchanted me in I’ve been working on the railroad with his singular passion for the country’s railway system. He has ridden the entire Amtrak system and about 300 transit providers in the U.S. and in Canada.

Annie Donovan and Michael Shuman are focused on alternative finance. Michael thinks we have it Totally backwards. Local owned businesses make up 60 to 80 percent of the private marketplace in the average U.S. community. But economic developers and subsidies almost always overlook them. And Annie believes that disruptive capital is critical for solving thorny problems. She describes her pursuit of fairness in economics and finance in The world beyond banks.

[00:12:27] A handful of guests are diversely focussed on sustainability in the built environment.  Perhaps the most interesting is Dan Miller, who has launched a platform that connects everyday investors with farmers who need loans. He’s Stewarding the Future of Farming with investments as low as $100.

Scott Ehlert and Katie Faulkner are mass timber experts.  Katie as an architect with an eye on sustainability in From here to there.  In Mass timber for the masses, Scott tells us about the installation and cost benefits of a proprietary hollow core mass timber system he is designing that uses 50% less wood fiber. And, as if that is not enough, Scott is also designing a robotic fabrication facility to anchor a new wood product innovation campus, in California.

While A-P Hurd remains focused on building Livable and delightful communities.

[00:13:28] This class of guests would not be complete without my colleagues in the crowdfunding industry.

Some like Max Levine and Brian Dally are focused on real estate.

In Hello, Neighbor we learn about Max’s Neighborhood Investment Company, which has a mission “to localize wealth creation and broaden access to neighborhood equity.”  While in Get in on the ground floor,  Brian describes the platform that he has built into the go-to funding platform if you want to fix’n flip property.

Jonny Price, previously with Kiva and now with Wefunder, is focused on Filling the “crazy” gap. There’s a common theme for Johnny – financially excluded and socially impactful businesses.And Michael Lee is Building Virtual Communities using blockchain. Instead of using blockchain for crypto, he’s using it as an organizing tool to democratize the power of data.

[00:14:31] Finally, what better way to end than with Kevin Cavenaugh a developer in a class of his own. In I do a bunch of weird stuff, you can tap into this unique developer. Left brain, right brain, head and heart all come to bear on his wildly creative buildings. “I’m tired of mocha-colored, vinyl-windowed boring. I can’t change the fact that the streets are gray, and the sky is gray. But the buildings?” says Kevin.

Phew. That’s a lot of podcasts.  I’ve enjoyed every interview with every person.  I’m in awe of them all.   But it’s time to take some time off to recharge and get ready for Season Three. We’ll be back refreshed in September with many more amazing people for you to listen to and for me to learn from.

Thank you so much for joining me.  Now go forth, invest a little in your community and make some change!

The potential of unused space.

March 8, 2021

The US may be facing the most severe housing crisis in its history. Restrictive building regulations and zoning have pushed real estate prices out of reach for more and more Americans. The problem, which has been growing for the last fifty years, has been sharply accelerated by the pandemic.  

While some progress is being made, the rate of homelessness is outstripping policymaking to squash it. This problem requires more creative responses, both long-term and temporary, that recognize the unique characteristics of cities and their populations.

Vacant land 

Many cities have vacant and underutilized land. There’s a growing awareness that cities are the most sustainable places to live and this makes vacant lots in cities quite attractive. Often small in size, they can be well-suited for the building of small, affordable homes. Developers and architects are turning their attention to these lots in an effort to make an impact on housing affordability. Architects like Brian Gaudio, turned housing manufacturer, who launched his company Module to build efficient infill homes. Or Jonathan Tate, a New Orleans- based architect who focused on designing and building affordable housing on odd-shaped and forgotten lots. One of his projects, Starter Home Two, was built using crowdfunded equity raised through Small Change.

Adaptive reuse

Underutilized government offices, hotels and shuttered public schools might also help to solve the housing shortage. The pandemic has increased the inventory of buildings that now stand vacant. And some developers and investors are creatively acting upon the opportunity.

Repvblik, an LA development company, has built its practice around adaptive reuse since 2015. In Branson, Missouri, they have converted a Days Inn Hotel into affordable housing, turning 423 hotel rooms into 341 affordable multifamily units. Plato’s Cave now includes coworking spaces, meeting rooms, a gym, a communal kitchen and dining room for functions, a beach volleyball court, and free-to-use bicycles. The cost of conversion for this project was less than half of the cost of building a new property. Starcity, a San Francisco-based company, is also converting defunct and underused commercial and hospitality spaces. And ASK Studio, an architectural firm, has converted an 1888 local high school, in Clinton, Iowa, into 16 affordable multifamily units.

Empty rooms

But what about homeowners who are feeling the squeeze and have a spare room or two in their home? Or real estate owners who are just not realizing the appropriate rent for their property? Atticus LeBlanc, an affordable housing advocate for over a decade now, founded Padsplit to address affordable housing a little differently. Instead of building new, he advocates for using every empty space in every home for an abundance of affordable living options. On Padsplit, a technology platform, homeowners can list a room, or find a local contractor to reconfigure their home so that they can share it with multiple tenants. On the outside, a PadSplit looks like any other traditional home. But on the inside each house typically has five to eight furnished bedrooms, with shared bathrooms, kitchen, dining, and laundry rooms (no living rooms). Utilities, internet service and cleaning is included in weekly rent, making these “pads” extremely flexible housing options. Padsplit homes are designed to allow single person households, or individual workers in our communities, to be able to rent individual rooms rather than entire homes.

Want to learn more? Listen in to my podcast conversation with Atticus.

Image by Htm CC BY 4.0, via Wikimedia

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