Tim Mueller has been a sucessful internet marketing entrepreneur, Chief Development Officer for the City of Cleveland, husband and dad, and now he's involved in another tech startup. Cool Cleveland's creator Thomas Mulready has a heart-to-heart with Tim about their humble beginnings, the City's politics, the nascent startup, and Tim's pick for the next mayor.

Cool Cleveland: Start from the beginning. We used to share clients back in the early 90’s when you had your own design business in Lakewood. How did you get to be so rich and famous?

Tim Mueller: I think it can be boiled down to following your gut on opportunities, and being willing to risk reinvention over and over. I would say we reinvented Vantage One four different times over 10 years to seize opportunities.

What four changes did you go through?

We started off as a pure marketing and design firm, then a CD-ROM based interactive design firm. Then that morphed into a web-based, web development firm. Then by the end, we were a strong IT firm that didn’t have the constraints of just design or just IT. I smile now, because I see firms today that are successful and that is their model as well, such as BrandMuscle. We were doing that in 1997 or 98. Those are good smart inventive entrepreneurs who do that. And we were very lucky on timing when we sold. You add 10 months to the date of sale (November 1999), and it would have been a different story.

It was widely known that you negotiated with Mayor Jane Campbell to join her administration as a businessperson and entrepreneur and not a career politician. What were you looking for, and did you get it?

She remarked that it was unprecedented that someone like me was negotiating. I told her I wasn’t going to get caught up in the political side of politics. I wasn’t going to do fundraising and campaigning. That my intent was more to work for a city that I grew up in and that I love. I wanted untethered access to her, and the ability to be at the table for all major deals that we would be contemplating. And to the degree that we had the money to spend, which we found out later that we didn’t have, I wanted her to take some risks.

Did you get what you were looking for?

She held to her word. At the risk of sounding defensive, there were a lot of things that prohibited us from doing what a lot of folks in this region had expected.

What kinds of things did people expect?

On the one hand, I look at the fact that business had been alienated from City Hall from the last [Mike White] administration. There were a lot of business leaders that were not interested in talking to City Hall. And the fact that we were able to lure Sysco Foods, $50 million new facility at the airport, 400 jobs.

But it was only a move of a couple of miles from Bedford Heights...

We were accused of poaching from Bedford Heights. We were told that Sysco went to Bedford Heights and asked for 50 contiguous acres of clean land, and it wasn’t until Bedford Heights came back and said they couldn’t do it that the City of Cleveland got involved. They were also looking outside of Toledo and outside of Columbus. It was one of the toughest sells that I’ve ever been involved in. It took months to sell them and months to assemble the land.

In the 90’s we used UDAGs, or Urban Development Action Grants to help pay for the development of the Wyndham Hotel, the Powerhouse, Tower City, the Rock Hall. UDAGs are repayable bonds that work as seed capital. Theoretically the city has this coffer of money to work with. In the 90’s, the city had between $35 and $40 million each month to work with. When we came into office, because of all the big bets that had already been made, we only had $600,000 to work with. In the 90’s, with the recession, the people that had been given loans were not paying them back as fast and there was the potential that they would default.

The story on Cleveland is that the City is very difficult for entrepreneurs to work with: union rules, high costs, entrenched bureaucracy, race politics. Did you see any of that change while you were there?

No. Partially because it is a result of decades of modus operandi.

If these good people can’t do it, what hope is there?

I don’t want to say there isn’t hope. I’m not sure if any one good administration can make a difference in the first 2 or 3 years. I think an administration needs a minimum of 8 years to make a difference. That’s how you need to judge an administration. There was a lot of work to be done to right the ship, for example, finances. We started in the hole. I’m really proud of Bob Baker, the CFO, the absolute star of our administration. Jones Day guy.

If it takes 8 years, why did you leave after 3?

I told her that I was only going to do 3 years, not 4 or 8. I knew I wanted to go back into private business. I was going to run like crazy. The fact that we had our first child, and our second child, and I hardly saw them. It’s amazing that we even had children. I don’t want to send a message that I got so frustrated that I had to leave. I’m going to do some more public service. But if I want to follow my vision, I want to be the bus driver.

Does that mean you’re looking at something like Mayor or Commissioner?

It will be someone who has final say. It won’t be councilman or state senator. As long as it works into my family plan.

Would you consider any position in politics again?

Only if I sincerely could tap off of my previous experience, and, in a decision making role, make a difference.

What are your thoughts about City Council? Many people think its size should be reduced.

I will say that there are some very smart Councilmen. Mattt Zone, Joe Cimperman is a smart guy with good intentions, Marty Cleary, Saber Pierce Scott. There are others whose actions don’t always mesh with progressing the city. I’ll give you an example. Very early on in our administration, we were backing a $500K loan to Simbionix, who were contemplating moving from Israel to Cleveland. The agenda for them to be in front of Council moved up and they were asked to be on the agenda in two days, but the corporate heads were in Israel, but Jamie Ireland and Bill Sanford, former CEO of Steris, who were investors and knew the finances and the products well enough to explain to Council. At one point a Councilman who I won’t name but was indicted and who is no longer a Councilman, stood up and embarrassed these two corporate leaders while the public access TV was rolling, going on and on about loaning money to corporations. And these two gentlemen did everything they could to bite their bottom lip. And afterwards, Sanford came up to me and said, “Don’t ever ask me to come back here [to Cleveland City Council] again.” So you do what you can, but some things are out of your control. And that is not an isolated incident. It pains me to see that there is such a vehement spanking machine that kicks in whenever you try to bring in new businesses.

What problems still remain for entrepreneurs to work with the city?

I gotta tell you. You are a business owner, and an entrepreneur. I want to ask you, how many times has government stopped your success as an entrepreneur? My point is, we all bemoan that government stops us from being entrepreneurs. It doesn’t stop you, it doesn’t help you. When you want to build a new building, like AJ Hyland with his new building in Westlake, it is very helpful for the city government to be on board with your vision. And a low-interest loan or a grant. That is one thing. But to say that the city government is responsible is silly. Government can’t take the credit or the blame of the success of businesses. And politicians take too much credit or take it too much on the chin. Never has a business owner brought up the city leaders and said, "because of you, our earnings are way up."

The Mayor of San Jose did not invent Silicon Valley. The Mayor of Seattle didn’t invent Starbucks, Microsoft, LL Bean, and the rest. They may have helped, but they are not responsible. I feel I have some experience and some facts backing that up.

What would you recommend for Cleveland?

I’m not saying that these are separate silos. The city: safety, trash collection, snow removal, the basics are one thing. But the opportunity for civic entrepreneurs to be involved in civic ventures. I would list Ingenuity, Sparx in the City (I’m biased on that one), Parade the Circle, as ventures that create the environment that the people of the city want to happen. I’ll tell you a story. Ronn Richard of the Cleveland Foundation, when he was with Panasonic, had some say in where their next HQ would be. The city of Austin called him and said, "We’re going to fly you to Austin and have you stay in Lady Bird Johnson’s bedroom, and meet with some of the city leaders and business leaders and talk about why Austin is the place for you." At the time, there was a young man named Michael Dell, and he talked about how UT had 80,000 grads there, that Austin wanted to be the love music capital. You know where Ronn put his R & D center?

Businesses can help to sell this city. I want to get Dave Daberko (National City), Sandy Cutler (Eaton) and Henry Meyer (Key), and have them look another CEO in the eye and say, “This is the place for your business.”

So ask not what your city can do for you...

Yeah, to paraphrase a great line, or to bastardize a great line….

As for my own experience, as you get closer to the levers of power, you begin to realize that corruption and politics and the old boy network are difficult to overcome. Did you have this same feeling?

I never ran into corruption. There were two FBI agents who came to my home and asked me about it. There is a Councilman under indictment, and they wanted some questions answered. I never saw corruption. I’ve seen the old boy network, but I’ve seen some new old-boys get into the old-boy network; it is not impenetrable. But there is far too much business as usual that is still holding us back.

Would you recommend another businessperson make the same effort you did and work in government?

I sincerely hope that I was creating a trend here. Because for the city, it is essential to have more business people in government. For the individual, it is one of the most incredible experiences that you will have. I hope that it continues, whether it is through loaned executives, or foundation-backed initiatives. Maybe an official entrepreneur-in-residence role that rotates, no one is going to stay for 4 or 8 years, but for 2 or 3 years, then hand off the baton.

They have artist in residence programs in corporations and tech companies, and the artists inspire the scientists, and the flow goes back and forth.

It allows someone to create. It gives them some latitude. I think we should have a Customer Service Evangelist, someone who can get in the shoes of the customer.

The shoes of the tax payer or the businesses?

Businesses pay taxes, so both. From the moment they walk into City Hall, are they frustrated sitting and waiting for 2 hours to talk about putting new windows in their home? How many layers do they have to go through to get a small business loan? And this person must report directly to the Mayor.

Like an Ombudsman?

In NYC, Michael Bloomberg has brought in a businessman who created the Ombudsman role.

Your wife Susie Frazier-Mueller has had tremendous success growing Sparx In The City as an arts-oriented economic development driver, putting performance art on the streets of Cleveland and organizing Ohio’s largest Gallery Hop (9/16). Why do you think she’s been so successful when this type of energy has not been seen around here in a long time?

I think she took a very good idea and through brute force and thousands of hours of hard work, she’s been able to assemble a great team who have caught the vision and realized the benefits. She’s doing 3AMers during her pregnancy. She’s a nocturnal person.

But what is the reason. Is she super-tenacious?

She’s an over-achiever. I can’t point to something that she’s gone after that she hasn’t achieved. But it would be disingenuous to not point out that she has had access to the government. She has access to the Mayor. Not that the government picks and chooses. But they want to know who is doing the project. But remember that a lot of arts projects don’t have measurable economic outcomes. Susie was smart enough to do economic studies to show that these Sparx events have pumped in $1 million of economic benefit. And what she promises funders and corporate sponsors, she delivers.

She’s probably put in 2500 hours on this project. That’s a lot of hours everyday. She is the Queen of systems. She had teams for everything. She understands marketing intuitively. Somehow media gravitates towards her.

Are you endorsing anyone for Mayor of Cleveland?

Yeah, I am. The incumbent. I put my money where my mouth is. She is the best candidate. Please don’t ask the follow up question, “Is there someone better that is not running?” But she is the best candidate. You and I have talked.

Characterize the other candidates that are running for Mayor.

I look at it more like her work is not done. I would look at it critically. Would the people who are critical of her think differently if we had a new corporate HQ going up, or a convention center under construction? She didn’t kill the convention center—it was dead. And we still have to ask if spending $500 million on a convention center is really worth it for the community. I can tell you that much of the hard work that was done in this administration, you’ll start to see come to fruition in the next 4-6 years. There are billions of dollars of transportation projects, new housing, that I think people will feel differently. The East Bank project with Scott Wolstein that dated to the day before Christmas Eve two years ago.

Talk a little more about the convention center. It is a big controversy.

I am under the belief that we have made a substantial amount of investment in our hotel industry and infrastructure Downtown that was based on the belief that there would be a convention center that would fill those rooms.

Is it the existing one?

I actually think we need one built from scratch that is smaller in price tag and in size, and designed for the way meetings are taking place now. Is it a civic center that takes into account the arts and culture? Is it combined with another museum like a Rock Hall or some other hall of fame type facility? It has to be more than meetings and conventions. It has to be more of a destination. I know we can beat Pittsburgh, Detroit, Buffalo, Columbus, and that’s really our target market. But we’re getting our clock cleaned because of the god-awful convention center we have. We have a 7% occupancy (rate) now, 28 days in a calendar year we have something going on in our convention center. After having studied it from an economic development view, I think we really will blow it if we don’t force it to be attached to Tower City. Most meetings happen during foul weather times, and meeting planners are looking for attached structures so they don’t have to go outside. For our market, for the kind of meetings we do, with our kind of weather, it should be bolted on to Tower City. It’s not so Tower City can get rich, that’s just the best place to attract meetings.

Don’t you think Tower City and Forest City would get rich on this?

I don’t think they will get rich on a convention center based there. I think they would be lucky to break even. I think that their original decision to build Tower City was clouded by their civic responsibilities. I don’t think that decision was purely profit-driven. It was a time that we really needed a shot in the arm. And they’ve been taking it on the chin for over a decade, they’ve been losing money.

Is it the community’s responsibility to make sure they don’t lose money?

No, it’s not the community’s job to make them whole. But I think the convention center should be more of a multi-purpose civic center.

What is your latest venture?

This is a silicon-based business out of Sunnyvale, the home of Google & Yahoo! And pretty heavy hitters. PHYlogy. Telecommunications goes on several layers. And we deal on the first level, which is known as the PHY level. The product is very simple, but has the chance to change the face of the way DSL is delivered across America.

It puts DSL across copper?

Right.

How does that happen with compression logarithms not there yet, and it’s a small pipe?

Since the inception of cable TV in the 50’s, cable has always done video, and copper has always done voice. SO 1995 comes around, and both cable and the phone companies offer high speed internet with DSL and ISDN. More recently, Voice Over IP from the cable side have said, we want to offer video voice and data- the triple play. But the phone companies are saying, wait a minute, what are we going to do? Because most of the phone companies still deliver their services over twisted pair copper. Video is like putting Niagara Falls through a garden hose. You start getting tiling if it doesn’t go right. So the phone companies say, we have a couple of choices. We can speed up the time it takes to lay down fiber, which costs hundreds of billions. They need to do FTTP: Fiber to the Premises. All the way to the home.

What does PHYlogy do?

Two brilliant scientists looked at this and said they could create a line of signal boosters, amplifiers. Basically putting the data on steroids. Usually it peters out after a couple thousand feet. They have come up with boosters that can be easily installed on telephone poles. No disruption of service, no special training. And the result is the download speeds of 10 T1 lines, or four times the speed of cable.

Sounds too good to be true.

I was very skeptical, so I flew out to Silicon Valley, and I saw a simulation in their lab. Then I met with some folks at SureWest, a Telco out of Sacramento that are doing the field trials. They measure distance, bandwidth, and let’s say they were pretty excited. So a couple of things needed to happen. They have been working in a lab creating a product. They needed someone who knows start ups. And they offered me the position of President. I thought about it for a long time, to be bi-coastal. I think it will be pretty huge or it will die. This is a $200 billion market to do the triple play. I don’t think that it will have marginal success. That is the thrill of a start-up.

What’s it like on West Coast? Is it still reeling from the dot-com crash, housing out of control, cost of living out of control? What’s it like out there?

There are tens of thousands of jobs that will never come back to the valley. My belief is that the Valley [Silicon Valley] is very resilient. There were some lessons that were learned: price earning ratio, return on investment, and others. These lessons that have been learned will make Silicon Valley stronger and more resilient. There were a lot of immigrants who went there to get rich, and they have returned. For the truly inventive class, they are rebounding, and the Valley is starting to pick up again. Some companies have died, but Google has grown to 5000 employees. Yahoo was dying and is not growing. Apple had some hard times and were down to $2 a share, and then went up to $90 and split. In our space, the telecom space, the equipment space has rebounded and venture money is coming in.

Is there anything that Cleveland can learn from Silicon Valley’s rebound?

That is a great question, Thomas. The thing about the valley. Take away the location, the Bay Area, the mountains. They as a region have created an environment that rewards risk and they don’t penalize for failure as much as we do. They understand that businesses will go up and down. Around here, if a business person fails, they are almost ostracized. When Steve Jobs was fired from Apple after 10 years, he was able to find funding for NeXT, and Pixar. He sold NeXT back to Apple, and concurrently develops the most successful animation firm. This is a perfect example of what Cleveland can learn. That when entrepreneurs don’t succeed, we don’t push them aside in to the heap.

Would it have helped if Progressive had consolidated Downtown in that beautiful building that Peter Lewis was going to have Frank Gehry build?

Also think about Chagrin and Rockside, and think about consolidating them Downtown. There have been a couple defining moments.

How does Cleveland make the transiyion?

We have an old industrial city, mostly blue collar. In order to make the switch to high-tech, medical, bio, it will take the better part of a generation to employ people in those jobs, you just can’t take a person off the steel line and employ them in the new econmomy. It’s not either or, but there has to be a mix. I feel good about the fact that we have resurrected ISG (Mittal) with its 1200 jobs, not for it’s environmental impact, or for the fact that it’s old economy.

How fast do we have move? Pittsburgh was blessed to have lost their steel industry overnight, and they had to face the fact that industry was never coming back.

I agree that it takes a much more of a Tsunami effect to move that forward. Pittsburgh has also struggled, their finances are much like ours. But at least they are doing something, and you can’t hit it unless you’re at the plate. But I think it’s not one or the other. I have sat down with these out-of-work steel workers, and they are not willing to make any changes. So do you put them out of work, in the autumn of their careers, or put them to work at Mittal?

Interview and photos by Thomas Mulready (:divend:)