Small Cities Weekly | 08.18.2023
Rockets, Thunderstorms, & Weird Niches
As part of the work we are doing on the Small City Segment, we send out a brief weekly post of thoughts and links that reflect the week’s work. I’d love to hear from you if you have any thoughts, questions, disagreements, or things to add! And please forward this on to people you think might enjoy reading it.
I’m also trying something new. At the end of all posts, I will give a short rundown of topics I’m actively researching, questions I have, and people I’d love to connect with about them. Read on to see previews of problem profiles in the works!
Thoughts
I wrote a piece this week about how small cities might think about optimizing for being weird when it comes to their entrepreneurial ecosystems.
It has motivated me to learn a lot more about the economic histories about these places. From the piece:
In fact, a large part of the economic history of these places is tied to developing weird niches. For example here in Indiana, Fort Wayne is known for specialty insurance. Elkhart is the RV capital of the world. Warsaw is the home of orthopedics. These arose from years of compounding combinations of capabilities.
I’m going to dig deeper into these over the coming weeks and months and hopefully learn and share some lessons on how getting weird historically has served this places well. Please let me know if you know of any interesting and weird economic niches that small cities have built!
Links
The Loss of Space Command Headquarters Brings an Alabama City Down to Earth, Emily Cochrane | NYTimes
Though Alabama has been plagued by high rates of poverty and maternal mortality, struggling schools and a legacy of racism and disenfranchisement, advocates for the northern part of the state, which includes Huntsville, say the region has worked to insulate itself from those trends.
“We have to deal with a perception of what people think happens in the Southeastern U.S.,” said Chip Cherry, the president and chief executive of the Huntsville-Madison County Chamber of Commerce. “They think of other places as being the hubs of this kind of activity, which is not true.”
…
A city of nearly 222,000, Huntsville now has some of the highest numbers of engineers and doctorate degrees per capita, with an array of accolades for quality of life. It has fostered specialized engineering programs at multiple colleges and at least one high school.
Along the lines of what I wrote above, it was awesome to learn about Huntsville’s history as a hub of the space industry. With space tech becoming a trend in the startup space, you wonder what unique and differentiated capabilities a city like Huntsville could bring to the table.
In the US, a series of severe thunderstorms prompted insured losses of USD 34 billion in the first half of 2023, the highest ever insured losses in a six-month period. Ten events caused losses of USD 1 billion and above each, compared to an annual average of six events for the previous ten years. The most affected state was Texas.
I was surprised to learn this. When most people think climate change, I think they go things like hurricanes and wildfires. But thunderstorms and the winds and water that accompany them are far more common and widespread. I have a hunch that if you looked deeper into the data (which I’m in the process of doing!), small cities might be disproportionately affected by these storms. But this level of loses could also be a huge opportunity for new solutions that make these storms less damaging.
I Moved From Ohio to New York City. Was That Financially Crazy?, Will Flannigan | WSJ
But my decision also reflected where I come from and what I’ve been through. As somebody who grew up in a small town near the junction of the Rust Belt, Appalachia, and Coal Country, just South of Youngstown, Ohio, I’m familiar with financial hardship. I’m also keenly aware of the dwindling opportunities the area provides, and the stress that comes along with it.
I am the son of a single mother who worked in manufacturing, putting me in an exclusive but growing club in the 1990s: a hardscrabble working-class latchkey kid.
This was such an interesting read for me. I at once understand where he is coming from and respect him for betting on himself, and also wish that ambition, especially in a knowledge economy job, didn’t have to equate to leaving.
What I’m Working On
These are threads I’m pulling on for future Problem Profiles. I’m not sure if they will make the cut yet for a full post, but I’m trying to learn as much as I can about them to find out. Any and all resources, connections, or first-hand accounts are welcomed!
Reduction in Health Care Services Offered
After writing the Small City Segment piece, a friend who has spent his career in healthcare wrote to me that it made him think of an interesting dynamic in healthcare that’s happening. As more PE firms and large hospital systems buy up small practices, there are a lot of cuts to services happening because of low margins and low volumes. This is leaving some services deserts, forcing people in smaller markets to have to travel to larger ones to receive care. If you know anything about this or anyone who might, please let me know!
Public Bus Transportation Incentives
Another topic that came up in a conversation about the Small City Segment was the government incentives around purchasing buses and how it may be leading to oversized buses being used when a larger fleet of smaller buses might make more sense. If you know anything about this or anyone who might, please let me know!
Costs of Sales
A common reason given for not selling into smaller markets is the costs of selling into them. This can limit what technologies make their way into these markets, especially for smaller firms. One example someone mentioned to me would be the software vendors available to small, independent physician practices - only the largest ones can afford the costs of sales, but that also means that small firms are a marginal customer and therefore not served particularly well. If you have stories or people that struggle with either side of this dynamic, I’d love to hear from them too!
If you…
are interested in building for the small city segment…
are already building for the small city segment…
know someone who might be/should be building for the small city segment…
want to contribute expertise to problem profiles…
or want to help us expand our networks of trust in small cities…
please subscribe and reach out at dustin@invanti.co.