Criteria for Creating Startup Cities
In this piece we’ll be distilling a few more key considerations to building sustainable startup cities. The most crucial tenet of a proper startup city is that it has to be a grassroots/organic effort. That’s not to suggest that we need to literally be building all the infrastructure from scratch but rather first fostering the values and mindset that exists in a startup itself which can ideally spread amongst a larger group in a given locality to operate within the existing physical infrastructure (the “hardware”) of a given city.
Grassroots & Bootstrapped
Arguably the most important aspect of a startup city is the level of its organic interests (often R&D related) and subsequent action to creating one (economic drivers) that will create the most sustainable ecosystems to operate in. San Francisco is the most oft-cited example from its early origins in naval R&D (seed) -> educational anchor (talent/skills) -> rise of silicon (infrastructure) -> internet origins (scale). Mayor Suarez understands this phenomenon on behalf of Miami initiated by his famous tweet:
But even the Miami approach was not entirely grassroots and remains to be seen how effective it will be in the long run. This author is optimistic on the future of Miami but primarily because of the talent migration from a relatively similar socioeconomic strata that was intra-country (ie. SF -> Miami). But even with this approach, one city’s new future becomes another city’s plight, what now will become of San Francisco after its exit? Time will tell, but there are several bleak indicators to date.
These lateral talent migrations can be even more pronounced in areas with higher socioeconomic variance. One example, Prospera, has seen its fair share of controversy and developmental hurdles due in large part to a lack of transparency and misalignment of interests between investors and the surrounding locality. As another pseudonymous Tech Progressive Writing Challenge author succinctly put it in a Discord conversation:
“Low income host country with arguably corrupt ecosystem + international high tech “elites” flashing bling bling + huge inequalities between potential residents and the Hondurans in surrounding areas => likely recipe for instability at some point.”
These same challenges don’t just exist in the realm of startup cities but also just geo-arbitrage in general if not considered thoughtfully. This is frequently evident in the battle for Puerto Rican statehood for example and really any economy that is overly reliant on tourism. All these things point to the same conclusion that the most lasting startup cities of the future are the ones that are organically able to form the mindset, set the conditions, and follow through with the determination for local economic innovation and success that can then be fueled by external capital and talent. Everyone has the spark within, and with the right conditions and network, it can be cultivated into a cohesive community and thriving local economy.
Start Small Together
Before pulling out the architecture schemas, whiteboards, and capital accumulation plans, let’s just start with the basics: meetups! Best to start small & grow out. It starts with one person who wants to see it through. That one individual meets a 2nd over coffee. Pretty soon there is a 3rd, 5th, and 10th person to the group. By now, there is enough people to consider establishing a more permanent place to work and scheme together or at the very least a common meeting place. By this time you may have even started forming a startup amongst one another or working on a common project that has some potential. By leveraging the infrastructure of web3, you can then start tapping into a global base of talent and capital. This author is at extreme risk of oversimplifying the process but hopefully the reader walks away with this: the spark has to come from within the locality and the actions have to be a compounding effect of small, incremental steps. Insert cliche statement here of “Rome wasn’t built in a day.”
Find or Forge the Right Conditions
When thinking about the conditions of Silicon Valley, we listed some earlier with respect to seed/R&D, talent/skills, infrastructure, and scale. Today, these conditions can arguably exist anywhere:
Seed/R&D: What’s in the area currently? What’s been invented in the past? What is the history of the economy in the region? Where does it exist today? Somewhere in the answers to those questions are the gems and sparks of innovation conducive to forming a startup city.
Talent/skills: Ivy League school not in your backyard? It doesn’t matter anymore (and may be dodging a debt bomb anyways)…all the skills/education you need can be found online full stop. MOOCs, Github commits, Substacks, etc. These are widely available to all with an internet connection to develop the talent/skills necessary for forming a foundation of a startup city.
Infrastructure: The combination of the previous two attributes will yield the answer here for any given region.
Scale: Enter the Network State — see below.
Gain Leverage from the Network State in the “Seed Stage”
Everything stated above is admittedly oversimplified and in some cases impractical except when we consider the state of digital infrastructure that exists today. Unique to our time is the era of web3 and more broadly speaking, the ability to transfer value to anyone in the world over the internet near instantly and in a broker-less fashion. It doesn’t just stop at capital transfer either, talent can be applied to anywhere and from anywhere in the world to very well-defined projects. This phenomenon could be broadly put under the umbrella of possibilities of the internet but also more formally defined under the more recent emergence of the concept of the “Network State.” Balaji Srinivasan defines the Network State as:
a social network with a clear leader, an integrated cryptocurrency, a definite purpose, a sense of national consciousness, and a plan to crowdfund territory.
When considering this cloud layer, these startup cities are drastically derisked from building in vein like they may have been in the past. Instead, they can “plug in” to a pool of resources that a Network State can provide in absence or augmentation of any resources a Nation State can also bring to the effort.
Build & Scale
Again, at risk of oversimplifying, once a startup city has found “product-market fit” with a corresponding Network State, then the bidirectional pipeline of talent, resources, and capital would ideally improve the on-ground conditions and scaleability of the startup city in conjunction with creating momentum for the Network State.