This post is by Jeff Carter from Points and Figures
Click here to view on the original site: Original Post
Up in Minnesota. The town we are near is super small. 1300 people. It’s in a remote area of the US where it is cold most of the year. There also isn’t a lot of big economic opportunity. A lot of that is due to national or state government policy. Hard to do a lot if you are ambitious.
A lot of policies that people seem to like or want in big cities don’t work in small towns. Raising the gas tax is one of them. Hard to live in a small town without a car. Putting in public transportation is out of the question and riding a bike everywhere is out of the question too. Raising the minimum wage to $15 is a bad idea for anywhere but it’s especially bad in small-town America. Businesses won’t be able to afford to hire people so will simply do less, or go out of business.
In my home state of Illinois, policies from Springfield that emanate out of the House of Representatives are killing small towns throughout the state.
Ambition drives away a lot of people from small towns all across America to bigger cities. When younger people ask me about becoming an investment banker, I always tell them if they want to be an investment banker they ought to seriously think about spending the first few years of their career in NYC. If they want to be a VC, or a VC attorney, Silicon Valley is probably the place you ought to go. Those things can change of course and they are generalizations, but it’s a lot harder to execute on those sorts of occupations in small towns.
I watched this clip on 60 Minutes with interest. As a person that has engaged in some community building in places that VCs don’t really pay attention to, I get it. I don’t agree with everything in the clip, but I agree with many points they bring up. People are not liabilities to be warehoused. They are assets to be nourished. Private efforts are much better at this than publicly funded ones.
One of the key things that any startup investment in small towns is going to have to figure out is network. How do you bring that mentor network? How do you make it tactile and available? It’s not just the money that makes the Valley great. It’s the network.
Small town life is very different. For example, Sundays in our town 2/3rds of the grocery stores are closed. Pharmacies close. The veterinarian is closed on Sunday and Monday. There just isn’t enough business. Getting tradespeople to work on your property can be very difficult. There can be long waits and many of the projects you need done aren’t willing to wait that long. Many businesses import labor from other countries just for the season. That person behind the counter might just as likely be from Asia or Eastern Europe as they are from the town you are in.
Businesses like Amazon can be lifesavers for people in small towns. The closest Home Depot to our town is 2.5 hours away. It gives them cheap access to lots of goods that they might not be able to get at an economical price otherwise. Businesses in small towns can get overwhelmed. Restaurants might have lines out the door during tourist season. Of course, as a proprietor, you make your hay during the season so you tolerate the madness.
But, small towns are great places to find some headspace and get away. You build relationships over time and people really know you.
Small town America isn’t connected to the internet like big cities. In my small town, we are super lucky. We have fiber internet and it’s fast. The rest of America isn’t like that. Instead of government programs, I’d like to see us change policy so that companies are forced to compete. If the niche gets worth competing in, some capitalistic enterprise will figure out a way to do it.
As small town America knows when you are stuck out in the middle of nowhere and need to solve a problem; a government program isn’t going to do it.