Digitalization and the Rise of “Startup Cities”

For all of the destruction that COVID has caused, there have been some positive consequences. One of them being the digital transformation of my life. Now one could argue that many of these digital gains would have happened eventually, and COVID simply hastened the process. Whether that’s the case is unimportant. What is important is that I can now live wherever I want because my job and my social interactions are mostly online. Huzzah! I have reached Sovereign Individual status. An introvert’s dream. (Disclaimer: Obviously these sentiments aren't shared by everyone, but 2020 was generally a boon for introverts, myself included.)

What a relief tbh 

I was technically granted the ability to work from home in December 2019 “before COVID.” However, all of my in-person meetings still made me physically tethered to the city with which I currently lived. Now, meetings, conferences and visits with clients are all online, with a few exceptions here and there.

Not only did my work move online, but my social life did as well. I actually ended up seeing my friends who live out of town more in 2020 because zoom meetings became socially acceptable and are much easier and cheaper than say flying to New York. Connecting with people online and curating online social networks has actually become normal. People are more apt to respond to that LinkedIn message, and video calls are no longer awkward. Clubhouse is one such example, where every time I log into the app, someone mentions how amazing it is that they’ve made friends with a community of like-minded people who they’ve never met before IRL.

Freedom Achieved

So why does this matter? Well for starters it means that I can live pretty much anywhere. Not only that, but I feel much more empowered to do so. I now know I can work and maintain social connections from anywhere, as long as I have an internet connection. I can finally leave the city I currently live in, the city I feel little connection to but was living here anywhere because of mundane reasons that no longer hold true. For the first time in my life, I feel untethered to a physical location. I am free!

A real-life depiction of me realizing my freedom. 

I’ve researched several options for the next chapter in my life of digital nomad-ism. Due to the fact that I'm looking to start my own company and involve myself more in startups and startup culture, my choices fall into these 4 categories. (Due to the nature of my current job, I’m mainly focusing on the US.)

  1. Move to a city with a growing startup culture i.e. Austin or Miami
  2. Move to a “startup city” i.e. Culdesac or Starbase, TX.
  3. Be paid to move to a city/area that’s trying to increase its startup culture.
  4. Travel around and "live in the cloud" per Balaji S.
This guy knows something.

What is a Startup?

Now let’s first define "startup", as it’s used in this post. According to Investopedia: "Startups are young companies, founded by one or more entrepreneurs to develop a unique product or service and bring it to market."

And according to Forbes: "Startup founders dream of giving society something it needs but hasn’t created yet - and doing it at scale."

The reason startups are discussed in the finance and investment space at length is because a startup typically needs to raise money to develop their product or service. A startup is typically creating something from scratch, especially if it’s a disruptive or radical innovation. Even Microsoft was a startup at one time.

Startup culture is simply a culture that supports startups. What do startups need?

  • Funding, through either traditional means i.e. small business loans and grants or access to venture capitalists and angel investors.
  • Other platforms or tools that provide support services such as mentoring, feedback on pitches, collaborations, lab or office space, access to marketing services, etc. Obviously some of these services can also be found through online platforms like Clubhouse.

A city with a startup culture is an already-established city that has or is growing a startup culture. Balaji Srinivasan describes this as "a city that acts like a startup." A "startup city" may also do this, but the city itself is a startup. (This may differ from how mainstream media defines a startup city which is often described as any city that supports or has supported a number of startups or entrepreneurs e.g. NYC, LA, Singapore, etc.)

Starbase, TX aka Elon's SpaceX city

Option 1: Cities with a Growing Startup Culture

AKA cities that act like a startup. Move over San Fran, your reign as the US tech capital is over, as this article from Balaji describes. And don't get me started on NYC; their aversion for cryptocurrency reinforces the notion that NYC will never be the startup powerhouse it once was. (I still enjoy NYC and find it incredibly entertaining, but a city that supports innovation, especially in the fintech space, it is not. #oldmoney)

The two US frontrunners for this category are currently Austin and Miami, which is attracting energetic entrepreneurs in droves. Both cities offer a high quality of life, and you'll be able to rub elbows (IRL!) with like-minded individuals at different events and meetups. I also have some good friends who live in Austin. Bonus!

I mean look at that marketing tho.

Unfortunately these two cities come with some fairly significant downsides IMO. The cost of living is quite high, and I'm really not a fan of what's going on either of these states, from a political perspective. As I write this, Texas and Florida are passing legislation that would make it harder to vote and Texas’s stance on gun rights i.e. the ability to open-carry without a permit and the ability to purchase a gun without a background check make me queasy. Yes, both cities are governed by a Democratic mayor, but states overrule cities every time. I can say from experience that living in blue cities within red states, is annoying, to put it lightly. I'm also just generally eager to get the F out of Texas.

Yikes.

Climate change is also a big factor when choosing my next locale, and Miami is one of the most vulnerable cities when it comes to hurricanes and flooding.

I wonder if entrepreneurs who have recently moved to these two cities share these concerns? Could a startup city become shielded from the politics of the outside world? Can one local politician who has a "relatively powerless job" help me forget his city's propensity to be underwater? Maybe all locales should be viewed as temporary, knowing you can pick up and leave at a moment's notice, if need be. Another reason to pack light. #minimalismforthewin

Too many questions, not enough answers yet. I do hope we’ll see more US cities embrace this startup culture, maybe even cities in not so red states, <cough> Colorado. To that end, I've actually recently learned that there's a nice startup presence in Boulder, CO which is on my list to check out.  This Tim Ferris interview of Brad Feld (skip to last 30 min for discussion on Boulder) enlightened me on startup communities (versus cities). His books on startups and the startup revolution are on my current reading list.

Option 2: Startup Cities

Call it the new-age commune . . .or maybe just a startup city (that’s probably more apt), I actually love the idea of developing a city like you'd develop startup. For someone who lives in a very un-planned city which was once described to me as “an overgrown mining camp,” I’m a big fan of intentional development, considering both the end-user and the environment.  Novel idea, I know. Both Culdesac and Starspace still seem to be very much under construction, but I’m interested to see how this pans out. And if anyone can figure out how to gain immunity from state or local politics, it's Elon Musk. Am I right?

This guy can do no wrong. #elonfangirl 

I’m also hopeful that this emergence of startup cities will continue in places other than the US.

Option 3: Build a Startup Culture

Believe it or not, there are several cities/areas in the US that are paying remote workers to move there. I’ve actually applied to a couple of these programs (that don’t require you to buy real estate.) The obvious pro is the money, however you run the risk of living in an area that doesn’t meet certain quality of life standards, hence why few people live there. Typically these cities have very few places to rent, are not close to a major airport, lack certain amenities like theaters, museums, a variety of nice restaurants, etc. Sacrificing quality of life is not necessarily something I’m interested in for my next chapter, but the idea still is still quite interesting, and I'm glad cities recognize the value of remote workers. This remains a big “maybe” on my list.

Option 4: Live "in the cloud" / Digital Nomad

Why pick one location? This option would involve alot more travel than the previous options, however that’s also the appeal. I was burned on my last real estate investment, so I’m not too keen on buying or even renting property in the near future. And after the travel bans of last year, I’m itching to get out there. This option could combine a variety of fun options: staying with friends and family (fo’ free), house sitting (also free minus the membership fee), booking week or month-long stays in co-living spots (super affordable, especially in Central and South America), staying in airbnb’s, #vanlife, etc.

The one thing that I initially found so scary about digital nomad life, aside from the difficulty in maintaining social connections, was the lack of routines and rituals. I think I have a solution for that as well, which I'll be discussing in a future post. Additionally, I’ll be able to visit with friends and family much more than I’ve been able to in the past, helping with the social connection piece. This option will also give me time and freedom to check out the development of startup cities and possibly decide which one(s) I’d like to move to. So I think the best option rn is to stay in the cloud. However if you see a new city called Berriville crop up anywhere in say Colorado, you may know the founder . . . I kid I kid.

From Communities in the Cloud to... Cities?

Now I can't help but think: Do we even need to settle in a set physical location? Are the physical locations that we choose always  to be viewed as temporary? How long will the process below take?

Why do I feel like step # 4 will be the hardest to achieve?

However whenever I start thinking about living my entire life in the cloud, I  envision either a) me living peacefully in a remote location i.e.cabin in the forest, deer outside my window drinking from the pristine mountain stream, ahhh the freshness of it all!

Or... b) a Ready Player One situation where we're all living in destitution and our only escape is the digital game world.

Welp.. time to plug in!

What can I say, I have a decent imagination. Maybe this is why we have to/will always feel compelled to congregate in a physical location. Because as much as I do love socializing online, sometimes it is nice to be physically in the same room as other people... humans and our weakness for human contact! Le sigh. I think that's one of the takeaways of the book: if we live our entire lives online, our physical world will devolve and vice versa.

Vote with Your Feet

This freedom of location brought about by digitalism also applies to schools, another historically critical driver for choosing a physical location. With the advent of online education, the burden of choosing a home based on school has been removed.

Overall, I’m quite excited for the advent of cloud communities and startup cities. Gone are the days where you have to (or even want to) live in one location forever. People change and therefore their needs/wants/desires. This advancement in technology and social norms provides a new-found mobility that frees us to change our locale whenever we want.

This culture of mobility is also important because you can “vote with your feet.” We’ve always joked that "if X wins the election, I’ll move to Y." Well.. we’re actually seeing that happen, not with regular citizens but with powerful entrepreneurs. And the consequences are being felt. What an exciting time to be alive! Can’t wait to provide updates from my life on the road, possibly exploring some of these startup cities and/or conspiring to start my own. August cannot come fast enough!

Quick Note: This post was inspired by the 1729 newsletter. If you found this post interesting, go check it out and also the author's personal newsletter.

Miss Berri

Miss Berri