Far from the Madding Crowd

I came across an IITian who has run and sold startups in the US and now set up a 10-person AI services firm in a 250,000 population small town. For India, that's a tiny place. It was thrilling to find that people are moving back home after a slew of achievements, finding meaningful work (from US and Bangalore), getting locals trained in the newest technologies and raising local incomes without having to push a vision of moving out/going abroad etc.

I grew up in #Bhopal, #Coimbatore and #Cuttack. Bhopal is a populous city but people still have the mentality of a smaller town. Life is less hurried and you can get from center to periphery in 30 minutes. Lovely place to live in if there was something to employ one there. Obviously, the 2019 debate is between Megacity mouse and Smallcity mouse.

Hidden gems of cities like these sometimes get discovered and then grow like Bangalore, but it destroys what was nice about them - with the metro having obliterated MG Road, hot weather, constant crowds, I can't recognise the city I loved on first sight in the 90s. It would be great if the economic benefit could come without having to pull 3x the population in a few decades from neighbouring states, building daunting rivers like Outer Ring Road, which cannot be safely crossed on foot without a walk of kilometers

This is not a concern of regressive people who happened to grow up in small towns. Fred Wilson of Union Square Ventures writes about how the valley and other hubs in the shadows of titans like Facebook, Google etc are becoming uneconomical to do anything but the earliest seeding of a startup. Scaling happens at other and lower-cost locations. https://avc.com/2019/09/scaling-in-lower-cost-locations.

There are two aspects of business that enable dense aggregations of suppliers and producers like megacities to succeed better than distributed loose or tight groups of collaborators but they both really come down to establishing trust and common purpose.

• External interfacing e.g. Selling is faster when done face to face. Whether you are pitching your startup to a VC, whether you are doing an enterprise deal, whether you are selling a financial product, it is easier to establish trust and commitment in person. Sometimes a long flight taken by a senior person itself becomes a signal of willingness to put further skin in the game.
• Within-company interfacing is faster and more effective when done face to face. Getting alignment of multiple stakeholders on some change initiative or an innovation is often hard until everyone is gathered together, agree together and see everyone else agreeing.

With the newer tech platforms, some elements of earned trust are encoded into the historical trackrecord of the participants, and summarized in a single rating or a set of reviews. The commitment of participants comes from their willingness to allow their trackrecord to be incremented/modified by the next counterparty. When a 4.9 rated Uber driver with 3 years of driving takes on a passenger, he is placing his Uber fate in the passenger's hands while the passenger is placing his physical fate in the Uber driver's hands. This and harsh responses by the platforms to deviations has turned out to stabilize behaviors and result in much higher trust by passengers than was possible 10 years ago.

If similar ratings and reviews were established in more markets, it may remove or reduce the need for physical meeting and conglomeration, which is the advantage of megacities. This is emerging in the KPO-type work of labelling data for AI input as seen with Scale.ai It has distilled in freelancer markets of individual contributors in coding (elance / upwork, rentacoder) and is emerging in others like domestic services (urbanclap, housejoy), transport (ola, uber) or hospitality (Airbnb).

What has still not happened is marketplaces with ratings where companies can trade with other companies while establishing trackrecords, ratings and reviews for both sides. The Government of India is pushing for an MSME exchange that may enable something like this https://economictimes.indiatimes.com/small-biz/sme-sector/alibaba-like-msme-marketplace-soon-nitin-gadkari/articleshow/71055327.cms engineer.ai ran into some controversy, but if the effort were run better, it could have been the next evolution for companies awarding contracts to companies. Procurement portals and e-tendering from the buyer's side are a candidate in this direction, but they waste a lot of the provider's time in writing up RFPs and meeting qualification criteria that the central marketplace should itself be accumulating over time.

If this global marketplace of companies comes about, we may be able to move away from the race to megacities and urbanisation that results in very successful, but expensive, unequal, polluted, congested hubs that limit entrepreneurship and risk-taking to a credentialled elite.

As Barksdale said, There are two ways to make money - bundling and unbundling. We have been doing physical bundling in locations for five millenia now and have seen its downsides. Maybe now that we have better technologies to allow remote collaboration and accumulation of trackrecords and feedback, we could aim for some unbundling.