We did this last Nov in Bellevue - It rocked, and several products came out of it that do indeed make things a little smarter, in their respective niches
(+ it helped us test out and refine some skills and lit a fire under our behinds that probably has served to make us biz things more smartly ; - ))
We met several city planner types in the groups and acting as judges. A lot of ideas were exchanged and contacts made - and that all helps, too, used well.
It felt a bit like Odyssey of the Mind, but adult biz centric ; - )
From that experience and results I've seen/heard of from others, I definitely think Hackathons have a place in making cities, companies and individuals smarter.
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- Startup Weekend