Which small cities has Big Tech most disrupted?


October 2, 2020

PLUS: The state of the US rental market.
October 15, 2020
The Hustle
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We’ve written about lots of macro trends in business and tech this year. Today, we wanted to step back and tell the stories of small US cities and towns that Big Tech has totally reshaped. 

We’re calling it The Hustle’s atlas of tech disruption. Let us know what you think.

Population: 64k

Cheyenne, Wyoming: American crypto hub?

The US recently got its first crypto bank — a safe, regulator-approved place to deposit and withdraw cryptocurrencies.  

The bank is run by a startup called Kraken. But unless you’re big in the crypto world, you might be surprised to learn what city Kraken has chosen as its home: Cheyenne, Wyoming. 

Most people know Wyoming for its mountain ranges, but it has quietly become the US’s most crypto-friendly state.  

What Delaware is to corporations, Wyoming is to crypto

Most of the credit goes to Tyler Lindholm, a Wyoming state rep who WIRED described as a “longtime cryptocurrency enthusiast.” Lindholm had wanted to retrofit Wyoming for the crypto crowd for a while. But when he proposed legislation in the state legislature, his colleagues laughed it off.

So a few years ago, he had an idea: Wyoming is a huge coal state, but coal profits have lately started to flame out. Crypto, he argued, could replace it as the state’s next big business. 

The Cowboy State is going all in on crypto 

Over the last 2 years, Wyoming has passed a flurry of pro-crypto laws, including rules that exempt crypto from state property taxes.

Now, dozens of crypto and blockchain startups have registered businesses in the state.

But don’t think crypto enthusiasts are strapping on their cowboy hats yet

For now, most of them operate out of P.O. boxes. Kraken, for instance, has a banking license in Wyoming, but most of its operations are still in San Francisco. 

Instead of an influx of crypto money, Wyoming is getting a tiny cut — sometimes as small as the $100 corporate filing fee.

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Snippets
  • Prineville, Oregon (pop: 9,253): All your Instagram likes? They’re stored in this rural town. It’s been totally reshaped by Big Data: Facebook has spent $1B+ building up 2 gigantic centers on cheap land outside of Prineville. Just up the road Apple has a $988m data center. 
  • East Wenatchee, Washington (pop: 13,190): Mining for bitcoin requires a ton of electricity. So crypto miners have flocked to towns like East Wenatchee, just off the Columbia River, where they can buy up electricity from hydroelectric dams.
  • Maple Heights, Ohio (pop: 23,138): Small cities used to depend on 5% fees from cable companies for revenue. With the pandemic busting budgets, many of these locales — like Maple Heights — are looking for additional revenue sources. One option: streaming services like Netflix and Hulu. 
Pop: 1,788

Roundup, Montana: The town with more Amazon packages than people

There’s a pretty good chance that at least one of your recent Amazon orders has gone through Roundup — a tiny, 1-stoplight-town in rural Montana.

Amazon doesn’t actually have a warehouse there. Instead, Roundup has become central to its operations by accident — and it’s all thanks to the ballooning economy of delivery “prep centers.”

Wait, what’s a prep center?

Let’s take a step back: Amazon is home to a thriving industry of 3rd-party sellers. Many of them make money by trawling other retailers for huge discounts, then reselling those products.

That Nordstrom Rack overcoat they got on sale for $20? A seller can put it on Amazon for $60.

These sellers never see their own merchandise. Instead, they ask Nordstrom Rack to ship to “prep centers.”

Prep centers repackage your overcoat according to Amazon’s specifications — for instance, removing the old price sticker — before forwarding the package to an Amazon warehouse.

Roundup is the US’s prep center capital

Kristal Graham, a Roundup resident, started the town’s first prep center in 2015 on a total whim.

In such a tiny town, word spreads fast. Pretty soon, a bunch of other residents started jumping on the prep center bandwagon. Now Roundup sees 3k-4k packages a day and hosts 9+ prep centers. They make about $1 per package.

There’s not much reason for Montana’s preeminence — except one.

Montana has no sales tax, so sellers who list Montana prep centers as their shipping address can pocket a few extra bucks.

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Pop: 16.7k

Truckee, California: America’s foremost ‘Zoom town’

The town of Truckee, California is pretty used to rich tech people. It sits right alongside one of the Bay Area’s favorite vacation spots: Lake Tahoe.

But as people flee the city for more spacious “Zoom towns,” Truckee has seen more Airpod-wearing city slickers than most locals can remember.

Many of those people are moving in full-time. Truckee’s housing market is up more than 23% since the start of the pandemic.

Truckee isn’t the only place with a housing boom

Vacation-friendly spots like Aspen, the Catskills, and Sandpoint, Idaho are also seeing an influx of full-time residents.

But maybe no other place has leapt so far to national prominence as Truckee.

Several Googlers have already moved in. Bloomberg reported that some shops — like Tahoe Bike Company — had their busiest season in memory. And in Truckee public schools, like others in big ski towns, a bunch of new kids just enrolled.

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The Rental Market

Where are rents rising and falling in the US?

The pandemic has turbocharged many major tech-led trends, from remote work to ecommerce. How are these changes affecting local rental markets?

To answer this question, Thinknum — a leading alternative data firm — sent us data that tracks the biggest changes in average rental prices for US cities over the past 6 months.
Looking at cities that Thinknum tracks, here are the markets seeing rent rise and fall the most:

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Shower Thoughts

  1. Kids don’t like sleeping so much because they haven’t gotten bored with life yet.
  2. Water can taste great for 4 billion years, but one night in a glass beside the bed and it tastes terrible.
  3. Normally the floor is what stops gravity from killing us, but if we get too far from it, gravity uses the floor to kill us.
  4. You know you’ve led a successful life when your obituary says you were assassinated instead of murdered.
  5. Cling wrap can stick to itself or not stick to itself but only does what you don’t want.
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