John Chaffee (bio) invited to be the keynote speaker on Tuesday at the annual meeting of the NC East Alliance, a non-profit organization that helps drive economic development in eastern North Carolina, which is basically the area between Raleigh and the coast. That area is also where I grew up, specifically in Greenville. The title of my talk was “Technology, Craft, and Local Economies” and my goal was to bring some ideas that might be helpful to the folks in my hometown building their next-generation economy. The slides are here and I’ve included slide-by-slide notes below (just scroll down) so you can follow the storyline. I got really positive feedback on the talk (see a couple of nice comments on twitter: 1, 2) so I’m posting my notes here since I’m hoping it could be helpful to other people building local economies outside of the places that get all the attention like NYC and the Bay Area.
To get the most out of the presentation, it’s important to understand my relationship to the place where I was presenting. I went to public schools there from K-12, graduating with many of the same people in my kindergarten class. When I graduated from high school, I hadn’t yet flown on an airplane and my only international travel consisted of a quick excursion for a few hours over the border to Juarez, Mexico and a few days in Canada, both on family road trips (I tweeted about how remarkable it felt to fly into Greenville — my hometown! — for the first time in my life earlier this week.) But my life after that was a crazy rocket ship in every way, with millions of miles of travel, building products and companies that people love, meetings at the White House, and all kinds of things I never would have imagined. It’s been a truly amazing ride since that kid who had never been on a plane left town to go out into the world in 1990.
I think a lot about the intense cultural divides we have in the US and the world today. However you describe it — red/blue, city/country, or “coastal elite”/heartland — I’ve got a lot of experience living in either culture. I’ve learned a lot in the past 20 years working in SF/Silicon Valley and in New York City and wanted to share some perspective from those life-changing experiences but also wanted to share with a sense of respect for where I come from.
My talk was at the end of the event and as I listened to the speakers before me (all from the region), I added one slide to my presentation on the fly about the concept of risk (see slide 80). So much of what we talk about is physical infrastructure — airports, broadband, highways — but how a culture thinks about risk is incredibly important. It’s almost a cliche but it’s true: you have to be willing to fail and try again. The culture around risk-taking is baked into how kids are raised, educated, and encouraged (or discouraged). It’s important for any region to build a culture of risk that is aligned with the rewards they seek. On a basic level, it’s about defaulting to “how do we do X?” not “X will never work” or “we tried X before and didn’t work.”
The trip was a good reminder that we can all learn a lot from each other. I was really impressed with what the people in my hometown and the surrounding region were doing to push the economy forward there. I mean, it’s really great to start a craft brewery in a place like Portland or Brooklyn but developing an entire ecosystem of craft brewing in eastern North Carolina, from four such places in 2010 to 27 today? Kind of unbelievable. North Carolina has a really complex history as it relates to alcohol and was one of the states that voted against the 21st Amendment that repealed prohibition. When I was growing up, seeing people in my family’s social circles drink at all was incredibly rare.
This was all very interesting to ponder after my talk while drinking some Pactolus Light Lager (named after a famous local ghost story from my youth) along with a few other styles at Pitt Street Brewing Company, a new microbrewery a few doors down from the site of the barber shop where I got my hair cut as a kid. I’m admittedly a bit of a beer snob and I’ll say with confidence that the beer I had there stood up to the beers I’ve had in places like Brooklyn, Portland, and San Francisco. Big thumbs up.
Without further ado, the slide notes are below. If anyone finds anything of interest in this presentation and/or wants to tell me about some of the successes where you live, my email is hello plus chaddickerson.com. Thanks again to John Chaffee and the NC East Alliance for inviting me to speak.
1 – (Title slide)
2 – It’s good to be back where i learned about hard work. My brother and I had a big lawn mowing business when we were kids. I think we had 25 or so lawns at our peak. Dad taught me about business. In particular I remember a lesson about interest.
We asked my dad if he would buy us a riding lawnmower so we could scale up our business and mow more lawns. He said he couldn’t buy it for us but he would loan us the money. He loaned us money via his Sears credit card and told me he would do it for something like “prime + 8.” (can’t remember the exact number) Prime rate was about 12% in 1984! He set up a payment schedule and we paid him back with the proceeds from the business. It was a good lesson about investing for growth.
3 – I graduated from DH Conley High School and went to my senior prom in this building. I’m really glad to have my English teacher here today, Ms. Jena Kerns. I wish Mrs. Tripp was here. She was my calculus teacher and gave me my worst grade in high school. If she was here, I would tell her that I think things turned out ok for me!
4 – The News & Observer (N&O) in Raleigh was my first job. Here’s the Raleigh skyline. I had just graduated with an English degree from Duke and took a low-paying clerical job there. It happened to be around the department where they were building web sites. You might not realize it but the N&O was the first daily newspaper on the web in the United States back in late 1993, early 1994.
5 – After a few years in Atlanta working for CNN and the Atlanta Journal-Constitution (another newspaper), I headed to the west coast in 1998 and spent ten years there, living through the first Internet boom and bust in the late 90s / early 2000s
6 – And then I got a call from a nascent crafts marketplace in Brooklyn. . . .
7 – . . . called Etsy. I was CTO there for three years and CEO for six. We took the company public in 2015. In that first three years, I and the team I assembled built the technology platform that helped Etsy scale to where it is today. From the time I walked in the door until the time I left, revenue grew about 50x and the company went from a chaotic startup to a billion dollar publicly-traded company. I learned a lot in that arc and some of that is what I’ll talk about today.
8 – This talk is about technology, craft, and local economics and I want to start with technology. Our lives are moving faster than ever.
9 – The web was adopted faster than any technology in history and the web as we knew it was significantly disrupted over the past decade with the rise of mobile.
10 – The iPhone was only announced in 2007 and just in the past nine years, the use of the web has migrated to something we carry in our pockets.
11 – Some say we are in the middle of a fourth industrial revolution, one that affects our daily lives more than ever, not just work.
If you think this sounds overblown, just look at some of the things happening around us today that affect our daily lives.
12 – In one generation, we’ve gone from this clunky and not that powerful computer on a desktop:
13 – To incredibly powerful computers we put in our pocket. The latest iPhone has 1000 times the processing power of the Apollo Guidance Computer that landed people on the moon.
14 – we’re now going beyond the supercomputers in our pockets to supercomputers that we wear, and this has even more implications for our lives. This device has saved lives — just Google “apple watch saved lives” and you’ll see many stories.
This fourth industrial revolution isn’t just about wearable computers. We’re seeing even more fundamental changes in where technology, biology, and the physical world meet.
15 – This is a plant-based product that is being engineered to cook and taste like beef. CEO said: “We want to have a product that a burger lover would say is better than any burger they’ve ever had.” In the natural world, cows eat grass and synthesize it into meat.
They and other companies are using artificial intelligence and sophisticated machine learning techniques to replicate what the cow does without the environmental damage of raising livestock and without the cholesterol and saturated fat in conventional meat. This sounds like science fiction but it is happening right now and being served by chefs in top restaurants around the country. The company has secured almost $400 million in funding and say they’re working on poultry and steak.
16 – This fourth industrial revolution isn’t just about what we eat, though. We’re reimagining fuel, healthcare, and many other things.
17 – This can be a little bewildering and feel like things are moving too fast.
One of the things I learned in high school at DH Conley is Newton’s Third Law: For every action, there is an equal and opposite reaction. That means the faster things go, the stronger the desire is to slow things down, to make things simple again.
18 – (no notes)
19 – In my nine years at Etsy, I saw this first hand. The goods sold on Etsy are mostly by small makers, many using time-honored techniques that existed hundreds, even thousands, of years ago. But the scope and scale of Etsy could only happen on the Internet. But it’s an Internet platform that capitalizes on simple traditions your grandparents and great grandparents would recognize.
20 – In the age of fast, younger generations have taken up crafts like knitting in huge numbers.
21 – farmers markets are more popular than ever
22 – food trucks are everywhere and provide an incredible amount of uniqueness and diversity in the food we eat.
23 – And it may surprise you, but young people are making their own butter again! For decades, you, your parents, and grandparents have been trying to step away from this kind of drudgery, right?
So, on the one hand, you have companies synthesizing meat without livestock and on the other, you have young people deciding to make their own butter again when you can buy a perfectly good stick of butter for $1 at any grocery store.
24 – How does this all fit together and make sense? What’s going on here? This can seem like a paradox but fast and slow actually feed off of each other. I’m going to talk through three particular forces that are combining to create this new reality. When there is great change, there is opportunity but you have to understand the underlying forces to be able to capitalize on the change.
25 – (no notes)
26 – the first. . .the rise of millennials
27 – Who are the millennials?
28 – they use their phones for everything and the most important thing is retail. Commodity retail will fully move to Amazon. There is no incentive to go to a store, pay more, and go through the hassle of buying toilet paper, toothpaste, detergent, etc. Outside of commodity purchasing, what will millennials be doing with their money?
29 – this orientation isn’t going to change or age out – this is a product of the new Internet economy and a fundamental realignment of how this generation views the world.
Remember the butter churning? When you think of millennials making butter as an experience instead of simply producing a good, it all makes a lot more sense.
30 – It’s also important to understand how work is changing. The habits of millennials are accelerating changes in the nature of work itself. To put it simply, you can learn anything anywhere and increasingly do high-paying work from anywhere.
31 – Freelancers will be the majority of the workforce by 2027. Economic development efforts have to take this trend into account.
32 – Millennials are leading this trend.
33 – I looked at two of the hottest areas in computer science right now and anyone with a broadband connection can get the best education on the most cutting-edge topics for free. You can learn about Bitcoin and cryptocurrency from a Princeton professor
34 – and machine learning from Stanford
35 – and it’s not just universities putting their services online. Entirely new products like Codecademy are in place to deliver education for high-paying jobs. This $80K average might seem crazy for someone who has “only” mastered an online course but I’ve hired hundreds of self-taught engineers at higher salaries. I’m standing here today because I taught myself how to code on the Internet 25 years ago. It’s way easier now.
36 – and it’s not just coding. You can learn architecture from the best architects in the world like Frank Gehry
37 – or how to make beer
38 – or how to start a shop on Etsy
39 – All of the infrastructure to build a massive digital business exists today — it’s not a “wave of the future” thing. It’s literally your brain plus hundreds or thousands of dollars to get started in a very real way. The risks have never been lower. I personally know many people who have built companies worth hundreds of millions or billions of dollars and it all started using these services. This is why broadband is important. With a high-speed Internet connection, you have the exact same access to tools as someone in NY or Silicon Valley. Literally zero difference.
So it’s easier than ever to start a business. Not everyone is going to start their own business, though, so it’s important to understand that employment is changing, too.
40 – More companies are location-less. They don’t have a HQ. If you’re trying to bring business to a specific area, what does it mean when a company isn’t formally located anywhere? With more freelancers and more distributed workforces, all of our traditional assumptions about building local economies are challenged.
41 – Technology makes it possible to both buy anything and start a business from anywhere. Many of the next generation of companies will not even have offices. This is not science fiction. It’s happening right now.
42 – One example is Automattic. Their software WordPress powers 30% of world’s web sites. You probably used their software today.
43 – These are not insignificant companies.
44 – Another is Invision
45 – again, this is a very serious company with an amazing customer list
46 – This is a quintessential millennial employment message. They’re not selling you to move to work with them, they’re selling that you can live anywhere to work for them.
(BONUS: As a side note, there is huge demand for great designers in the tech industry, almost equal to software developers. In the rush to focus on STEM, don’t forget the designers. As Internet has gone mainstream, it’s more important to make products usable!)
47 – So, many of the next generation of companies may not even have offices. The question becomes: how do I get these people, many of whom are really well-paid, to live in my community? There’s one trend where local culture, local flavor, and local influence win.
48 – I call this market “craft business,” and it’s booming. When I use the word “craft,” I mean goods and experiences based on uniqueness and taking advantage of all the modern tools I mentioned a few moments ago.
49 – Etsy is a great example of the power of “craft business.”
50 – I decided to take a few minutes (and it was only a few minutes) to find some businesses here in Greenville, NC that are thriving on Etsy. It didn’t take long.
Thomas and Meghan have 27,188 sales in this shop selling jewelry and two other shops on Etsy selling candles and craft supplies. He quit his full-time job two years ago to run his Etsy shop with Meghan, who designs the jewelry. Looking at his general price point and number of sales, this business is grossing hundreds of thousands of dollars. And this is one of three shops.
51 – I also found Heather’s shop. Heather is 29 year old graphic designer living with her husband, Garrett, and our one and a half year old son, Finn. Listed her first item in September 2013 and within a year, had her own full-time business on Etsy as her day job.
People like Heather and Thomas and Meghan often fly under the radar on employment stats. They may not have a physical store front. They may not show up in traditional “small business” government stats. But they are there, and in growing numbers.
52 – Lots of small can add up to big.
53 – But it’s not just Etsy. You see this demand for small/unique in places like beer consumption here in Eastern NC. These slides are copies of John Chaffee’s slides (head of NC East Alliance) from earlier today.
54-55 – (no notes)
56 – So, from 4 to 27 craft breweries here in eastern NC over the past seven years. Growing up here, I couldn’t have imagined this was possible.
57 – But it’s also not surprising because this is part of a global phenomenon. Data point: sales of craft beer exceeded sales of Budweiser for the first time in 2013.
44% of 21- to 27-year-old drinkers today have never even tried Budweiser. A brand that we all knew as the “king of beers” is not only losing market share, it is borderline meaningless to its new generation of customers. This is stunning and it’s happening with many consumer brands that were once thought to be unassailable.
58 – and it’s not just physical goods like crafts and beer. It’s services like hospitality as represented via Airbnb. And, like Etsy and craft beer, it’s happening right here in Greenville, just a little under the radar. I now have more choices of places to stay when I visit.
59 – Airbnb has tapped into the entrepreneurial spirit of homeowners while also satisfying the desire to have a unique experience when you travel (again, remember the importance of experience to millennials). I’ve rented Airbnbs in Montreal and San Francisco and each time, it was less expensive than a hotel room but also a better experience as I was able to live in the local community during my time there. (And, yes, it feels a little ironic saying this on stage at a Hilton!)
60 – Etsy, beer, hospitality, and also food. Small is outperforming big and many of the brands that we consider iconic American brands are becoming meaningless — just like Budweiser — to a new generation.
I was pleased to see that there are nascent efforts here in eastern NC like the Eastern North Carolina Food Commercialization Center (google it) to participate in this food renaissance. As a place with deep agricultural roots, I can think of nothing more promising.
61 – (no notes)
62 – I wanted to close with a few final thoughts on what this might mean for local economies.
63 – First, it just might be healthier to create the conditions for a lot of smaller enterprises than to chase the one big employer.
64 – Case in point: the MillerCoors plant in Eden, NC was a critical part of the community for decades. When global parent company Anheuser merged with InBev, consolidation meant “efficiencies” which meant hundreds of people losing their jobs, which left a big hole in the town.
65 – If you look west at Asheville, though, there’s a microbrewery boom and it is has become a destination for beer drinkers all over the world. 30 craft breweries and related businesses there employed 660 full time people plus 280 part-timers. Many of those brewers have formally committed to a living wage. They may not pay as much as the union jobs in Eden did but people are able to make a living and provide for their families. And if one of the 30 closes, there are 29 others. This is more sustainable and resilient.
66 – (no notes)
67 – Traditional office space tends to look like this — not very exciting or inspiring.
68 – I mentioned WeWork before as one of the tools out there that makes it easy to start companies. You can walk in and get an office the same day with a simple month-to-month lease. Great wifi, great coffee, and a community of people like you. This matters to the growing generation of freelancers.
69 – This is WeWork in Philadelphia. While this may look like people just hanging out, there’s a good chance that each of the people in this photo is pulling down six figures as a software developer, a designer, or a product manager.
70 – And if you think it’s only the youngest generation, here’s a photo of where I work every day in Brooklyn.
71 – the highest speed broadband possible is important. I am so impressed with what Wilson, NC has done in building municipal broadband — a town smaller than Greenville. They have shown that anyone can do this. When I went to the historic FCC hearing to speak about net neutrality in Feb 2015, I was just as excited to run into the team from Wilson there advocating for municipal broadband.
72 – Assume the businesses starting in eastern NC are global from day one
73 – Etsy started in 2005 and the first international sale was on the same day. People starting businesses on Etsy and other platforms can sell to the world from day one and know how to do it.
74 – You can also market a product anywhere in the world using ad platforms like Google AdWords. I spent five minutes creating a hypothetical ad for NC barbecue targeting ex-patriates in London, Paris, and Dublin. I discovered that for $10, I can get 74 clicks and 10,000 impressions on keywords like barbecue, nc barbecue, and pulled pork. With a little more work, I could determine if this acquisition model would support and scale a business.
75 – launching an ad campaign used to mean meeting with multiple sales people in TV, radio, newspapers, and magazines. Now you can buy ads with a credit card and launch to the world in 5 minutes, targeting down to the zip code and paying only for people who click on your ad. This is absolutely transformative.
76 – if I need to hire people outside my local area to stay in constant communication with them to build the business, I can set up a Slack channel and video conference with anyone in the world to make anything happen
77 – millennials want unique food, art, culture. In a world where the largest cohort of consumers want unique experiences, the biggest advantage you have is your local culture. You can’t re-create another city. Don’t try to replicate Silicon Valley. You have to lead with your local culture.
78 – I’m really happy to see Greenville undertaking efforts like Uptown Greenville to recognize the need for a more experiential way of living with integrated housing, shopping, and the arts.
79 – and the efforts of East Carolina University to work with municipalities like Farmville [back when Farmville was a big online game, I always thought back to the actual place – CD] to reclaim this gas station to become a glass-blowing facility (love the name “GlasStation”!)
80 – But local culture is also about risk and that’s not an infrastructure thing. It’s a mental thing. The main difference between Silicon Valley and everywhere else is appetite for risk. People try and fail all the time. Lots of “how do we do that?” without a lot of “that will never work.” In SV, it’s generally accepted that 9 out of 10 investments will fail. 90%! But the 10% that work are often world-changing. It’s the part of the culture and working there that was really life-changing for me. The biggest critique you’ll get in SV is that you’re not thinking big enough. In addition to everything else I’ve talked about, I urge you to think about risk. It’s reflected in everything from local banking to local politics to education to how you raise your kids. Big rewards require big risk. Do whatever you can to make eastern NC the place where you can take the kinds of risks required to do the big things that move us all forward.
81 – If you can get your head around this contradiction and work it to your advantage, the sky’s the limit. It’s exciting to see what y’all are doing to build a next-generation eastern North Carolina and again, I’m really honored to be here in the place where I grew up.
82 – (no notes – the end!)