It may be easier to explain via diagram why the content of wildly successful services like Facebook, Google, eBay and Amazon are sourced by crowds, yet places aren’t.

Based on economic models presented in crowdsourcing expert Clay Shirky’s Here Comes Everybody: The Power of Organizing Without Organizations, the key to whether or not an entity will crowdsource is based on its management and management structure.

On the x-axis, all business models are represented, from the least crowdsource-friendly to the most.  On the y-axis are the costs of managing markets, in other words, the costs of identifying, building relationships with, growing, and maintaining customer bases.  No business will survive if the costs of managing markets get too high, such as employees spending extensive face-to-face time with each and every customer.

However, the fork in the road between companies that are growing and those that aren’t, lies in what happens when the costs of managing markets gets too low.  That is, when just the opposite of extensive employee-customer relationship building time is spent, but rather ever decreasing employee time spent managing an ever increasing amount of time spent between customers building relationships with one another.

Why won’t certain businesses, and industries, embrace this?  Because they want to maintain full control of the content, such as is notorious real estate. Notice the narrow range (red line) of high costs real estate development firms insist on sticking to, which thus leaves a vast untapped market behind.  Our modern built environment reflects this - it literally looks like it was developed by a handful of people with the same ideas, and it was.  Not so with the fastest growing companies whose management structure is designed to allow more and more user-created input, content and participation… amongst themselves... and it shows.

Hope is on the way, when crowdsourced placemaking becomes the norm, and it will, starting with projects with management structures represented on the far right end of the diagram. Stay tuned to hear more from Renaissance Downtowns in New England and Red Dove in Washington DC, or go here to get started yourself.

Sure, our instincts tell us diversity and crowds lead to a greater collective intelligence, as witnessed by the reliable ‘Ask the Audience’ option on Who Wants to be a Millionaire?, but what about evidence?

That’s what Scott Page, professior of Complex Systems, Political Science, and Economics a the University of Michigan provides in The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools, and Societies. An excerpt:

“For crowds to be wise, they must be able and diverse.  One way to maintain this diversity is to mimic evolution. From evolution, we know that diversity combined with crude selective pressures can solve hard problems. In evolution, genetic mutation maintains diversity. Those mutations that increase fitness survive; those that do not fall by the wayside. The same effects occur within groups of people. Good attempts survive. Bad ones don’t. Experimentation can lead to a better “best” individual performer. More important, it can result in better collective performance.  Studies show increasing diversity improves our collective performance at prediction and at problem solving.“

Assuming the required conditions:

1. The problem is difficult.
2. The problem solvers are smart (ie able to relate to the problem).
3. The population of problem solvers must be large (and the collections of problem solvers working togeth must contain more than a handful of problem solvers.)

...the author provides the following conclusions:

‘The Crowd Beats the Average’ Law: Given any collection of diverse predictive models, the collective prediction is more accurate than the average individual predictions. Collective Prediction Error [is less than] Average Individual Error.

Diversity Trumps Ability Theorem: Given a set of diverse problem solvers, a random collection outperforms a collection of the “best” individual problem solvers provided.

In other words, if you’re looking for solutions to realizing healthier, more vibrant, increasingly productive communities, you’re going to have to let go of the bureaucratic model and learn to honor the crowd if you want to uncover the hidden gold in your city.

Photo of a festival in Amsterdam, The Netherlands

The motivating factor behind writing entries for this blog is that I get to work directly with progressive creatives and developers to crowdsource these concepts into built reality.

So, considering the state of the economy, what are creatives’ solution in how the development of a building can become a symbol for economic growth? The following framework of a building will soon be crowdsourced in Washington DC as an answer:

- Local, independent businesses on the ground floor. Not only do local businesses have four times the economic impact over nationals, but the entrepreneurs who run them are a key source for job growth. The ideal business in this building would be a third place restaurant/cafe/coffeehouse/lounge.

- Coworking on the second floor. Once again, support the entrepreneurs, the future Steve Jobs, Bill Gates, Debbi Fields… providing an attainably-priced (can’t emphasize that enough) open plan shared workplace for them to work among other entrepreneurs, inspiring, motivating and supporting one another. This is the backbone of any strong economy. The third place below serves as a great casual meeting spot both during and after work, sourcing the next great napkin ideas for business (ie the ideas for Pixar’s A Bug’s Life, Monsters Inc., Finding Nemo, and Wall-E were generated at such a venue).

- Mini-condos on the upper floors. These are pretty much the same sized units in most of the world, except in the U.S. we’ve become accustomed to living in spaces larger than we really need, or can afford, as the housing crisis showed. The American Dream is no longer the McMansion. 380 s.f. one-bedrooms, even 250 s.f. efficiencies are selling out rapidly in San Francisco and Seattle, and are a sign of things to come.

- Limited parking. Creatives are increasingly preferring a car-free lifestyle. Add in the real possibility that GM could be bought out by China, and one realizes that the auto industry is no longer be the heart of the U.S. economy, and its culture will follow. Oil was never central to our local economy, but has been devastatingly costly to maintain. The proposed building will look to eliminate as many parking spaces as possible, where current laws require one to two spaces per unit.

- Green. This has become a no brainer for creatives. The building will be as green as its future buyers can afford, continuing to support the growing green and renewable energy economy.

- Increased disposable income. Much smaller units can realistically save a few hundred thousand dollars in many cities, and that’s no exaggeration. The second highest cost is automobile ownership. Imagine if that money can be invested in fulfilling the true American Dream of starting your own business instead. That is more of an economy multiplier than the home building industry, and more sustainable as well.

Photo of the Burnside Rocket at night, featured previously.

Providing retail for the emerging, growing, progressive creatives market doesn’t follow the same rules as provided by retail consultant Robert Gibbs in A primer on retail types and town centers. It’s a good guide for the general population, so let’s see what happens when we converge and remix it with the 19 urban development types for creatives.

First of all, for creatives, it’s no longer just retail, but retail entertainment. Second, retail no longer follows a simple ownership, product formula, as you can see with just a bookstore as an example. Third, creatives tend to favor local vs. chain, if for no other reason than it’s a reflection of their own individually creative, unique mindset.

So, using the primer on retail development types as a guide:

Corner stores - 1500 to 3000 s.f., supported by 1000 households. This is a common model in urban neighborhoods, and throughout Europe. Other than the usual ‘corner store’ market items however, the merging of a cafe or even pub experience would add the more social element that creatives prefer. In fact, rather than the corner store, you often find a corner cafe or pub (retail entertainment) instead.

Convenience centers - 10,000 to 30,000 s.f. supported by 2000 households, though creatives prefer something much smaller than a 1.5 mile radius (3 miles in between), which is suited to more suburban densities. Again, rather than just the usual laundry, mail, bank services, creatives prefer a mix of cafes, coffeehouses and pubs featuring outdoor dining to give it a more people-rich environment, with vibrancy extending into the evening as well.

Neighborhood centers - 70,000 to 90,000 s.f. supported by 6000-8000 households in less than a 1-mile radius, with 15-20 small retailers. Same as above, but larger with at least one supermarket anchoring the other businesses. Again, stores such as the dollar store, DVD rental and shoe stores are better served elsewhere (in regional shopping centers or online), and instead creatives prefer a mix of retail entertainment, from bookstore/cafe/theaters to restaurant/cafe/bars, to art gallery cafes and art studio coffeehouses. Also, health-oriented venues are on the rise, like bike shops, yoga studios and fitness centers.

The following retail types do not appeal to creatives. Listed from most to least attractive…

Community centers (more aptly named big box centers) -  250,000 to 350,000 s.f., supported by population of 50,000, 4-6 mile radius. These are what are referred to on this site as corporate cultural districts, mainly because these include your Target, Best Buy, Bed Bath & Beyond, Office Max, Home Depot, Borders, huge supermarket, etc. anchoring smaller chains (i.e. Chipotle, Starbucks, cell phone services) and a mix of larger national and local restaurants. The key for creatives is to locate these in industrial or business areas rather than a historic neighborhood, while also integrating residential. These are necessary amenities for many, but they don’t need to be located where the above retail types are, nor do they need convenient access beyond a few trips a month, if that. This is typically where you’d find multiplex theaters. The more entertainment-oriented, the more transit-oriented it needs to be.

Lifestyle centers - Main street malls. This is essentially the reincarnation of the shopping mall, with the same stores, but organized in main street form. They typically don’t appeal to creatives because they’re usually located on suburban sites (ie former mall sites), are mostly national chains, have few restaurants, fewer cafes and even fewer coffeehouse venues, and are not transit-oriented.

Regional centers - The standard shopping mall surrounded by parking. 900,000 to 2 million s.f. At this time, not only are these are no longer being developed, but they’re being converted into mixed-use developments. An outdated product of the industrial age. Teenagers will need to find a new place to hang out soon.

Downtown ‘neighborhood center’ in Brussels, Belgium

First of all, most local bookstores simply can’t compete with the likes of Barnes & Noble and Amazon, despite their advantages supporting the local economy. However, it does have a chance if it’s more than a bookstore, adding a few revenue-generating elements. Why the focus on a bookstore? Because if there’s one business that seems doomed in today’s world, this is it, so figuring out a way to not only survive, but thrive, says a lot for many other local independent businesses.  Here are some trends that may point the way:

Convergence. It’s not about just retail anymore, it’s about retail entertainment. Bars are converging with cafes and restaurants, bookstores are converging with ice cream shops and coffeehouses, art galleries are converging with cafes. One extremely financially successful local indie combines a bookstore with a restaurant, bar and theatre.

A new localism. Newsweek’s There’s No Place Like Home states, “After decades of frantic mobility and homogenization, we are seeing a return to placeness…“  In the 1970s one in five people moved annually; by 2006, that number was 14%, the lowest rate since 1940 when these stats were measured. By 2008, the total number of people changing residences was less than those who moved in 1962 (with 120 million fewer people). People are reconnecting with local businesses. The Oxford Dictionary Word of the Year in 2007 was locavore.

The cooperative, communal, community model. Check out Clay Shirky’s (author of the crowdsourcing book, Here Comes Everybody! article, Local Bookstores, Social Hubs, and Mutualization, where he talks about allowing the locals themselves to share in the ownership and/or management. Some features of such an arrangement include:
“- Reservable space for book clubs, writers rooms, or study carrels;
- Membership with buy-back options for a second-hand book market run out of the same space;
- Certain shopping hours reserved for members or donors; use of volunteer labor, like a food coop;
- Sponsorships from the people or businesses in the neighborhood most interested in the social value of the store and most interested in being known as local machers.“

One bookstore that utilizes many of the aforementioned ideas is the Housing Works Bookstore Cafe in Soho in New York City, which features a cafe and live music performances, is staffed almost entirely by volunteers, and is partnered with a nonprofit.

An important point in all of this is that both locals and chains will continue to exist, so it’s a matter of where and how - see The difference between a natural cultural district and a corporate cultural district.

Photo by Laurie Berkner, Housing Works Bookstore Cafe.

How much of a greater impact do local retailers have on nationals? The Urban Conservancy recently completed a study with Civic Economics to answer just that, called Thinking Outside the Box: A Report on Independent Merchants and the New Orleans Economy. Keep in mind this is just economics, and not considering the cultural impact on the local neighborhood.

According to the study, when compared to leading chain competitors on a per square foot basis, local retailers:
- generate twice the annual sales;
- recirculate revenue within the local economy at twice the rate;
- have four times the economic impact in terms of wages, profits, procurement of goods and services, and charitable giving.

The study was actually a result of looking at two popular approaches to redevelopment for New Orleans:
1. The urban model involves the restoration and rejuvenation of existing commercial corridors.
2. The suburban model requires the development of large-format retail on large parcels, anchored by general merchandise and home improvement warehouses augmented by a mix of junior anchor and small in-line spaces.
See the urban and suburban development types here.

Another conclusion of the study: If New Orleans consumers were to shift 10% of all retail activity from chains to locals, the result would be the equivalent of injecting an additional $60 million annually into the local economy in the form of recirculated dollars that would otherwise have left the area, and $235 million regionally.

Posted publicly on Facebook here, Keith Ammann’s question on how to go about crowdsourcing a creative cultural district in the small town of Freeport, Illinois, supported with detailed advantages and disadvantages, is followed by a suggested plan:

Summary of advantages: 3-4 block downtown with a mix of architectural styles; moderate vacancy rate; mixed-use zoning allowing for apartments over storefronts; established, locally owned businesses including two coffeehouses; a successful multiplex movie theater; and cheap rent.

Summary of disadvantages: Municipal focus on commercial outside of the downtown; no good restaurant downtown; no public transportation; coffeehouses not open during the evening; existing stable businesses are scattered around downtown rather than clustered; disengaged, jaded populace; only institute of higher education in town is a community college; very little money in circulation; downtown perceived as unsafe after dark; a couple of buildings with featureless side or rear façades kill the streets beside or behind them.

Response: You need two things to start.
1. An initial community of supporting creatives who will identify a destination that fits that level of support. For instance, if you can round up only thirty people out Freeport’s population of 26,000, then you should stick to a creative cultural cafe rather than a creative cultural district.
2. A business owner/developer ‘sponsor’ that’s willing to accommodate a group of future customers/tenants that will reduce his/her risk by having the group assure the business’s future success, in exchange for actually investing in what the group really wants. Depending on support, this could be the owner of an existing coffeehouse looking to expand hours, or a real estate developer looking to redevelop an existing building into retail, coworking and housing.

When does the ‘crowdsourcing a cultural district’ effort come in?
When there’s evidence of success. There’s really little real motivation for people to stay invested in such a campaign if there aren’t any signs that anything will come of it. However, if one ‘sponsor’ is willing to invest in the collective energy of a group representing the town’s most creative and progressive, then that one venue can become representative of what a cultural creative district in Freeport would be. Thus, the vision for a creative cultural destination (ie a single venue) is developed at the same time the vision for a creative cultural district is, perhaps aided by a visual crowdsourcing tool like Bubbly.  Each informs and helps evolve the other.

Photo of Union Dairy Farms diner/ice cream parlor, Freeport, Illinois by Pete Zarria.

Sometimes a giant supermarket or big box store like Home Depot coming to your neighborhood is an inevitability, but The RISE in Vancouver, Canada proves it doesn’t have to be a one-story warehouse surrounded by parking. Instead, the parking is buried underground with over 90 condos and townhouses above. That’s right, when have you ever heard of residences above a big box?

No, this is certainly not an example of elegant, attractive design, but hey, baby steps. Developed by Grosvenor Canada, the 2.3 acre transit-oriented development received a ULI Award for Excellence in recognition of its innovative mix of residential and 212,000 s.f. of retail.

The building is designed to use 31% less energy, 67% less potable water, and will generate 52% lower greenhouse gas emissions, with a 20,000 s.f. green roof (pictured below) that serves as a park and community garden.

Thanks to Chris Leinberger, author of the The Option of Urbanism: Investing in a New American Dream, we know what the rather uninspired, industrial age 19 standard product types are that institutional investors put their money in:
Office: Build to suit; Mixed-use urban; Medical
Industrial: Build to suit; Warehouse
Retail: Neighborhood center; Lifestyle center; Big-box anchored
Apartment: Suburban garden; Urban high density
Housing: Entry level; Move-up; Luxury; Assisted living/retirement; Resort/Second home
Miscellaneous: Self storage; Mobile home park

However, what would be the 19 urban development types for the creatives that fuel the knowledge economy? Here’s one look at it, based on a list initially produced by renowned urbanist Andres Duany:

A. Primarily Commercial Mixed-Use Buildings
1. Pedestrian-Only Town Center Retail Entertainment Grouping:  Providing at least a 50% tenant mix of restaurants, cafes and bars with a predominance of outdoor dining fronting a pedestrian-only paseo or plaza, or pedestrian-oriented street, supported by personal services and unique shops. The principal surrounding building types would include triple mixed-use mid-rises and flats (see following building types.) The Town Center has a typical g.l.a. (gross leasable area) of 30,000 to 100,000 sq. ft.
2. Standard Town Center Retail Entertainment Grouping:  Mix of restaurants, personal services and unique shops. The principal surrounding building types would include triple mixed-use mid-rises and flats (see following building types.) A supermarket (often a co-op as chain supermarkets follow a more suburban model) would be a major tenant. The Town Center has a typical g.l.a. (gross leasable area) of 30,000 to 100,000 sq. ft.
3. Neighborhood Center Retail Entertainment Grouping:  Providing a neighborhood- determined tenant mix of third-place-oriented restaurants and pubs (neighborhood-friendly places beyond home and work), personal services and convenience goods. It has a typical g.l.a. of about 20,000 sq. ft. It is anchored by a popular restaurant or pub.
4. Triple Mixed-Use Flat:  Three-four story flat, one or two units/rods in width, with independent retail on the ground floor, loft office space on the second floor, and loft-type residential on the third/fourth floors, with roof deck.  Parking in the rear or below. These can be used as infill or as modular buildings to develop either the Town or Neighborhood Center Retail Entertainment Grouping.
5. Triple Mixed-Use Mid-Rise:  Three-six story mid-rise building, three to eight units/rods in width, with independent retail on the ground floor, loft office space on the second floor, and loft-type residential on the third/fourth floors, with roof deck. Maximum floor plate size: 25,000 sf. Parking in the rear. These can be used as infill or as modular buildings to develop the Town Center Retail Entertainment Grouping.

B. Primarily Residential Mixed-Use Buildings
6. Mixed-Use Loft Apartment Mid-Rise:  Three-six story mid-rise building, three to eight/rods in width, with independent retail on the ground floor, loft-type residential on the second-third/sixth floors, with roof deck. Parking in the rear or below. These are located on primary streets and not in any Retail Entertainment Groupings. Loft Apartments are defined here as lofts with enclosed bedrooms.
7. Mixed-Use Loft Apartment Flat:  Three-four story flat, one or two units/rods in width, with independent retail on the ground floor and loft apartments on the second to third/fourth floors, with roof deck. Parking in the rear. These are located on primary streets and not in any Retail Entertainment Groupings. Loft Apartments are defined here as lofts with enclosed bedrooms.
8. Mixed-Use Mini-Condo Mid-Rise:  Three-six story mid-rise building with 300-500 s.f. units and limited to no parking over ground-floor retail.  These are located in very urban, transit-oriented locations for people seeking attainably-priced units and don’t own cars.
9. Loft Apartment House:  An unconventional apartment building with every apartment available for residential and/or commercial use. The ceilings must be taller to pemit the commercial depth (a distance from windows greater than that necessary for a residential unit.)
10. Live-Work Units:  Rowhouses with the first story available as a commercial space, either independently leased or in association with the residential unit above. These are more costly units for the higher end of the market. Parking in the rear. These can be located in the Neighborhood Center Retail Entertainment Group or on a primary street.

C. Exclusively Residential Buildings
11. Loft Apartment House:  Conventional apartment buildings with parking behind or below. These are preferable as vertical buildings (two, four or six units per floor) rather than as continuous hallway buildings, as the scale of the smaller buildings yields a better urban fabric more compatible with houses and other mixed use. The trick here is to avoid the requirement of contiguous clustering of the type in the minimum of hundreds of units.
12. Courtyard Apartments:  A building that occupies the boundaries of its lot while internally defining one or more private patios. This is the most urban of types as it is able to shield the private realm from all sides. The front of the building is identical to a Loft
Apartment House.
13. Townhouses with an Ancillary Building:  The conventional types with the addition of a detached outbuilding or attached backbuilding to its rear. These premises are available for home occupations or as an ancillary rental units. They generate well over $1000 a month with a kitchen and separate bedroom at about 400 sq. ft.
14. Green-fronting Townhouses:  Conventional attached types on small lots with the addition of shared enfronting square, green or close in condominium association. A variant to the open space is a shared area within the inner block, usually a playground. The trick here is to have the common open space rated in the appraisal.
15. Paseo Housing Grouping:  An arrangement of any of the above residential building types fronting both sides of a pedestrian-only street (paseo). Parking in the rear. These were easily the fastest selling units at Kentlands, MD and largely responsible for the success of the Rosemary Beach development in Pensacola, FL.
16. The Inn:  A small hotel ranging from 30 to 80 rooms. Many towns do not have lodging available because the minimum standards are in the hundreds. It is as important to note that some excellent urban locations are too small for large hotels. These inns do not need to have restaurants and other costly services as the rest of the town would provide them in seemless proximity. The trick here is to get the size down.

D. Exclusively Commercial Buildings
17. Loft Office Mid-Rise:  A two-six story open floor plan office building with high exposed ceilings; large floor to ceiling windows with great views; and ample daylighting. These are the types of buildings that are often candidates for green building and high-tech real estate awards. Maximum floor plate size: 25,000 sf. Parking in the rear. Some alternative uses afforded by such a flexible building type is a series of artist studios on one floor such as the Torpedo Factory in Alexandria, VA, or for an open market on the ground floor for merchants like at Faneuil Hall in Boston or the Fells Point Market in Baltimore, even a live music venue and/or cafe. Essentially this would be the entrepreneurs’ dream workplace.
18. Avenue Office Grouping:  A converted office building enfronting a mixed-use thoroughfare rather than associated to a specialized office park. The parking is relegated to the rear of the building. This building has the capability of being seamlessly connected to other supportive building types. There are many still-successful historic examples. Palmer Square in Princeton is one of the best. The largest building should have a footprint no larger than 25,000 sq. ft.
19. Urban Villa:  A building similar to a large house, able to accommodate a wide variety of uses, including conventional apartments, single-room occupancy units (the old boarding home), bed & breakfast inn, small professional office, restaurant. The model is the old, converted mansion of the inner city. This is a useful and resilient building type which can evolve organically.

Image: Rockville Town Center, Maryland, a hybrid of Pedestrian Only and Standard Town Center Retail Entertainment Grouping types.

Would you live, work or play here? For many creatives, the answer would be yes, yes and yes.  What makes Portland’s Burnside Rocket the kind of building they want to see more of?

On the outside…
1. It’s expressive, authentic and unique. It isn’t called the Rocket for nothing. From the red exterior to the art panel shutters representing 24 emerging local artists, you won’t find anything like it… in the world, really.
2. It’s human-scaled. Framed construction vs high-rise concrete. People don’t seem out of place standing next to it (or on top of it).
3. It features public spaces. These are the spaces that make a building come alive.  There’s outdoor cafe seating on the ground floor and fourth floor, plus balconies large enough for a small party.
4. It’s car free. There’s no on-site parking, a sign of things to come, and a tremendous financial benefit. Spaces are shared with other buildings and mass transit is easily accessible.

On the inside…
1. It has progressive tenants. The building hosts a popular ground floor restaurant lounge and fourth floor restaurant, with open plan loft-style offices on the second and third floors.
2. It’s green. It’s LEED certified, with ground source heat pumps that eliminate the need for air conditioning with energy efficiency 40% beyond code, a rooftop garden used by the restaurant, and a well that provides all the water.
3. It’s affordable. Materials and construction are kept simple, passing the savings on to the tenants. Still, it’s designed to last at least 300 years.

The best part is that the developer, Kevin Cavenaugh, is looking to build more of these types of buildings, even consult those that want to develop such places in their own neighborhoods.