Small Cities Weekly | 12.08.2023
Founder Density, Old Home Repair, and Austin
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.
The Density Cold Start Problem
Over the last few weeks I’ve spoken with founders, investors, and entrepreneurship resource providers across a few different small cities in different parts of the country.
The stories have been different in details, but the same in summary: there is a lot of energy and support for innovation-based entrepreneurship, but there just aren’t enough founders yet.
Almost everyone mentioned the term “culture”. It is said in a myriad of contexts but the story is always similar. The type of entrepreneurship driving today’s economy is just is not a well-worn path in these communities.
Every resource I’ve read, podcast I’ve listened to, and talk I’ve attended advises to start with the founders in your community: let them lead, ask them what they need, double-down on what’s working for them. This is great m you have those bright spots of founder density already - but if you don’t, it feels like a moot point.
My current hypothesis is that there might be a way to build density across small cities from the activity that already exists in them individually. For some, this might be the momentum they need to become their own hot spot of activity. For others, this might be a longer-term solution.
As someone I talked to said after our conversation: “It’s always inspiring and a bit rejuvenating to talk with someone who “gets it.”
That sentiment might be the key to getting past the cold start.
Links
Should Public Transit Be Free? (Update), Freakonomics Radio
“I'll just give you a very clear example. Bart in the San Francisco Bay Area, going into downtown San Francisco, those peak hour, peak direction commuters that is, going downtown in the morning have higher incomes than the average driver. So you're saying making public transit free for those commuters doesn't make a lot of sense. First of all, they're not that price sensitive. And secondly, it's just transferring a benefit to very high income commuters.
On the other hand, local bus service in Lubbock, Texas, the users are almost uniformly low income there. Fair, free transit is essentially a transfer to lower income disadvantaged populations. Just saying, generally, make it fare free for everything, for all types of trips. I would not agree with that.”
This episode is a great primer on how public transportation varies throughout the country - and how policies in some places wouldn’t make the least bit of sense in others.
LaGrange GA: Attacking energy burden with SOUL, City Climate Corner
“So that means about two or 3% of your income, your household income you're spending on energy bills, water, lights, gas, whatever else you got. But low income households nationwide pay about three times or spend about three times as much of their income on energy. So they're spending around eight or 9%. And anything above 6% is considered a high energy burden. In the areas that we're working in, we're seeing energy burdens that are 20% or higher.
Look at, like Alaska, Hawaii, states that unsurprisingly have really high energy costs. So you have really high energy burdens there. But in the Southeast, where we're working, the energy costs actually, compared to national rates are low. So it's not really the high rates that are causing these high bills. It's more the quality of housing, just old homes that are losing a lot of energy.”
This program is a pretty cool alignment of interests to upgrade old homes to be more energy efficient. Instead of underwriting the resident, the underwriting is on the house and its energy usage. In addition to non-profits like Groundswell that are making these programs easier to implement, I also found a company called EEtility that appears to help utility companies and co-ops roll these programs out at scale.
Is the Texas boom town of Austin losing its luster?, Mary Ann Azevedo, Techcrunch
In his view, the reason founders (or anyone) might be souring on Austin has to do with the messaging and promotion of the city being “inconsistent with the value delivered to the market.”
“Of course, many of us, myself for example, absolutely love Austin for all that it is good and bad, but many move here hearing that it’s the ‘next Silicon Valley,’ ‘best place for startups,’ or ideals such as the ‘Live Music Capital of the World,’ and it’s not that those ideals are invalid but rather that expectation exceeds reality,” he wrote.
I worry about this sometimes with such competition for entrepreneurial talent between cities. Our smaller and more nascent entrepreneurship scenes risk a lot if we overpromise and underdeliver to people who’ve already proven to be mobile. We’ve all been guilty of it - in some ways it feels like you have to be to get anyone’s attention at all. It makes me think about Kevin Kelly’s quote again and how it might be wise advice here again - “Don’t be the best, be the only.”
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