Requests for Startups, ATMs, & Founder Characteristics
Small Cities Weekly | 02.16.2024
As part of the work we are doing on the Small City Segment, we send out a brief weekly post of thoughts, links, and research in progress that reflect the week’s work. I’d love to hear from you if you have any thoughts, questions, disagreements, or things to add. Please forward this on to people you think might enjoy reading it.
Requests for Startups
This week, Y Combinator released its latest “Requests for Startups” (RFS). Their team periodically puts together a list of the areas they find interesting, are seeing momentum in, and generally think will be the basis for big tech companies of the next decade.
There are other investors that have similar RFS lists on their website, pointing to where they’d love to take meetings and potentially make investments.
I wonder what it would be like for cities to start creating their own RFS. Whether from the actual city government, or a consortium of actors, they could open-source a list of issues where policy and non-profit programming seem to be the wrong tools and where startups might make sense. They don’t need to spell out the solution - just what needs to get solved. Essentially complete the Mad Lib, “It would be great if someone could come up with a way to __________.” Instead of offering investment, they could offer connections to potential customers and partners for startups that submit credible and interesting solutions.
It makes sense why investors would do this, but I’m not sure who has a good incentive for spending the time to do this and keeping the list updated.
Maybe it’s something we should give a try.
Links
You can find links from this and all previous editions here.
The mapping tool that’s trying to make zoning laws accessible to all, Marketplace
“So Connecticut is a fairly small state when it comes to landmass. It has about 3 million people and it has about 183 zoning jurisdictions. Right now, you see across the state a sea of what would be the primarily residential color in the map, a sort of medium-purple color.
So when you go to “show me where people can build single family homes,” you’ll see the map change, but actually not by much. 91% of the state remains shown on the map in some shade of purple.
If you now click on apartments with four or more units, you will see virtually all of the purple disappear, leaving just about 2% of the land across the state zoned for multifamily housing.”
An interesting map to explore!
ATMs, The Economics of Everyday Things
“ATM stands for automated teller machine. The name is a reminder that long ago, people used to have to get their cash from a human teller at a bank branch. Today, there are around half a million atms in the US. And most of them are those little standalone models that you find at nail salons, corner stores and bars. They're owned and managed not by banks, but by individual operators who earn a living off the surcharges that you have to pay to withdraw money.
And anyone can get into the trade.
It's not regulated. You don't need a license. You just go out and buy one of these ATMs and find a spot at a barber shop, and you're in business.”
We don’t think much about ATMs until we need one. They are a great example of technology filling in gaps in a network (bank branches), where the traditional model didn’t pencil out.
What Makes a Successful Founder?, Basis Set Ventures
Every venture capitalist looks for strong founders, but what makes a founder strong is open for debate. With limited time to interact with founders before making decisions, investors often over-index on potential signals like age, school, technical credentials and experience. Unfortunately, this heuristic often biases investors towards people already within their network and similar to themselves.
Over the last year, we’ve asked early stage investors representing north of $40 billion in AUM to rate 60+ founders on a number of dimensions including demographics, behavioral and psychological traits, in an effort to understand what makes a successful (i.e., IPO, raised substantial capital, large exit) or struggling (i.e., shut down, stagnant, small exit) founder.
As we dug into the data, we uncovered a perspective on founders that we feel has not yet been fully explored. Below we’ve made an effort to codify our learnings and share them with the community.There are a lot of blog posts on founder traits and characteristics. While this is from a narrow sample, there are some interesting insights and pushback on some commonly held beliefs that are worth learning from here. For example: “Whether a founder/CEO is technical does not differentiate company success…however having a complementary cofounder, often a technical one, is correlated with success.”
If you…
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know someone who might be/should be building for the small city segment…
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Love your comments on how cities should create their own "RFS" - "City as a Lab" - and providing a platform to prove out their concepts. Not a small city but Pittsburgh is doing this. Hamilton, Ohio did a good job of this. City of Hilliard, Ohio.