I was planning to write about something else today, but then I saw Fred Wilson’s post on revitalizing urban cores and I had to switch topics, because I think he makes a great point about turning around declining cities:

I’ve been asked by civic leaders from places like Newark, Cleveland, Buffalo, and a number of other upstate NYC cities that have suffered a similar fate how they can do the same thing. They all talk about tax incentives, connecting with local research universities, and providing startup capital. And I tell them that they are focusing on the wrong thing.

You have to lead with lifestyle. If you can’t make your city a place where the young mobile talent leaving college or grad school wants to go to start their career, meet someone, and build a life, all that other stuff doesn’t matter.

It’s exactly the same point I made in my post entrepreneurship as economic development strategy. You can throw as much money as you’d like at startups, but if young people don’t want to live in your city then you have a serious problem.

Fred goes on to talk about Tony Hsieh’s (founder of Zappos) initiatives in downtown Las Vegas:

When Tony moved Zappos from the suburbs to the former City Hall in downtown Vegas a few years ago, he decided to invest $350mm in a massive urban revitalization project. He set aside $200mm to purchase land at bargain prices and the other $150mm to invest in three areas, arts and culture, small businesses (restaurants, cafes, bars, markets, boutiques, etc), and tech startups. $50mm is going into each area.

It’s an example of leading with lifestyle, urbanism and city building, rather than purely economics. And I think it’s the way to go. But to be clear, I’m not suggesting that the focus should be on large capital projects, such as stadiums and infrastructure. I’m not convinced those are the most effective catalysts. There’s no silver bullet here.

Instead, I think the answer is in building, from the ground up, a real sense of community and place. People need to love your city. That’s easier said than done though.

It’s no secret that a lot of cities out there want to become the next Silicon Valley (or San Francisco, since a lot tech companies seem to be now setting up shop there instead). With the shift towards a knowledge/information/networked economy (pick your favorite name), cities around the world are betting that entrepreneurship is going to be the key to future economic growth.

As an example, I was reading yesterday about a Buffalo-based business plan competition called 43North. It’s allegedly one of the biggest business plan competitions, ever:

With $5 million in cash prizes, including a top award of $1 million, six $500,000 awards and four $250,000 awards, 43North is setting out to turn the best new business ideas from around the globe into reality.

In addition to cash, winners will receive mentoring and free office space for a year. But while the competition is open to anyone in the world, you have to relocate to Buffalo for a minimum of one year if you win. 

It’s a bold move. $5 million is a lot of money. But it strikes me as a step in the right direction to reinvent a city that was once the 8th largest in the US. I’m a big believer in the power of entrepreneurship.

But 2 considerations do come to mind.

The first is that this move can’t, or at least shouldn’t be, purely about business and economics. To create an entrepreneurial hub, I think you need to also ensure that you have a city that young people would love to live in.

I’m not saying that Buffalo isn’t one of those cities (I don’t know it well enough to comment), but I am saying that it should be part of any economic development strategy. Why do you think more and more startups are moving from Silicon Valley to San Francisco?

The second is that I worry we may end up with too many cities trying to become the next Silicon Valley. The industrial economy allowed for the creation of a certain number of thriving metropolitan regions (see: The Rust Belt).

But I’m not so sure the networked economy will require as many. I could be wrong, but the data seems to suggest that we’re heading towards a spikier economic landscape—both within cities and across nations.

In any event, here’s my question for the community: Would you move to Buffalo?