In Over Your Head

Where the Poor Go

I was checking out some graffiti in my neighbourhood the other day and thinking about gentrification.

It seems natural that those that are poor would be able to see opportunity in places (neighbourhoods) where the rich are not looking yet. This is how startups get profitable and why artists move into sketchy areas of a city.

As these same areas become profitable, though, big organizations move in and build condos, or Facebook gets into location based social software. This eventually crowds out the poor or small as the rich lean into the problem with their increased resources. Depending on laws (anti-monopoly, rent control, etc.), this may take longer, but it can’t really be stopped entirely. This is “fine” (not really), as long as there are new places to go.

When the poor of Europe took boats to America to have access to new land and to stop oppression of their people, they had to work hard in order to make it livable for their families, but their hard work was rewarded. They had more opportunity and freedom than their class normally allowed. They became rich in a new way by changing the pond they swam in.

This is all fine and good… until you run out of land.

I’m asking myself where settlers go now. When all neighbourhoods become gentrified, when all areas of business become monopolized by larger enterprise, where do the disenfranchised go to seek new opportunity? Do they have to move out to the North of Canada, the wilderness where no one really wants to be, in order to find something new for themselves?

Another question to ask yourself is where you are on the spectrum. Do you seek out opportunity by finding strange, uncomfortable places, or do you look for areas where risk is lower? This is the spectrum from angel investor > venture capitalist > shareholder in a blue chip company. Each has methods of profit but they are based on ability to understand risk. (Of course it all comes back down to this.)

Wherever you are, it seems inevitable that someone bigger will eventually come in and crowd you out. This force exerts its influence wherever you are on the chain.

So, everyone must become a settler again in order to find better land. Best that we adjust to discomfort now and find new ways to increase our liberty and profit– before the tides turn.

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Joe Gannon

Comments

6 responses to “Where the Poor Go”

  1. Whitney Avatar
    Whitney

    It’s actually cyclical, believe it or not. I grew up in a neighborhood near downtown Rochester where big houses built around the turn of the century for the rich- many of the houses had laundry chutes, dumb waiters, and front and back stairs for servants-had lapsed into states of disrepair. Many were converted into duplexes. My folks bought as well as a bunch of other people with young families, and they spent the greater part of the late 60’s and 70’s renovating this older homes, building the neighborhood and the schools, and the whole area began to be the chic place to be.
    But the tide turned once again, and the original renovators got old, their kids went off to college, and they moved to smaller, easier to care for homes in the suburbs. The local public school now houses offices. There are parts of the neighborhood that are still trendy, but the old community is gone, and one part of the area, on the margin, is receding back into disrepair.
    I’m sure this neighborhood will have another renaissance. It needs new people to discover it, make it better and be the new settlers, like my folks were. But you need people who will commit to an area for a long time. Often, because of simple life cycle issues, that can be families and children, since those folks tend to put down roots, at least as long as their kids are in school.
    The great thing is that the settlers bring a sense of adventure, a sense of can do, a sense of making an area their own.
    Over years, this may also mean you lose the candy shop run by the old grumpy guy for a chain drug store. The old guy dies, his kids sell the store, and another piece of the “remember when” puzzle is added to Nostalgia.
    Being a settler means seeing opportunity and putting sweat equity and vision to work. Along with your community, you can make tremendous positive change. But after a while, the new becomes old. The energy runs out and is replaced by complacency. And then the cycle begins again.

    Reply
  2. Ben Ziegler Avatar
    Ben Ziegler

    Julian. Great question. Ideally, the poor don’t have to go anywhere. We would welcome them, in our neighborhood, and potentially as friends. Diversity = survival. Hey, my observations are that one is only a mishap away from joining the soup kitchen line. One way to reduce the friction between rich & poor is to reduce income differences. Along with income inequities come a whole host of problems. Obviously a big challenge.

    Also liked Whitney’s comment – a nice example of how what goes around comes around.

    Looking forward to seeing/hearing you again in early October in Victoria.

    Cheers,
    Ben

    Reply
  3. Ben Ziegler Avatar
    Ben Ziegler

    Julien, sorry for name typo in previous comment.

    Reply
  4. aaron wall Avatar
    aaron wall

    The web is a virtual land, is it not?

    There is always under-developed markets which will only support a company of 1 to 3 people that won’t be served by larger companies.

    marketing > online marketing > search marketing > SEO > link building > software

    marketing > online marketing > search marketing > SEO > video SEO

    marketing > online marketing > search marketing > SEO > local SEO > for dentists

    etc.

    Part of doing something original means that you will end up doing something that others thought the risk vs reward ratio wasn’t good enough (because they already have so many other things to focus on). At this point could I run a brand based on doing local SEO for dentists? Maybe. Would I want to? Not currently.

    Also opportunity and competition are cyclical, as Whitney stated. Right now lots of domains which were not available a few years ago are fairly affordable. The same thing happened in the 2001 to 2003 timeframe.

    However I think the big *big* issue going forward is going to be energy prices. Over 40 million Americans get food stamps now, and after the next recession from reaching the constraints of oil production that number could likely double! There are going to be a lot more poor people in the next 5 to 10 years due to rising energy costs, so doing anything which has empathy for the newly poor is going to have a large market to target. There will be many new niches created within that niche. 😉

    Reply
  5. aaron wall Avatar
    aaron wall

    In my above comment, I should have stated that it will also be easier to run such small 1 to 3 people companies due to the increasingly cheap costs of hosting and software.

    And speaking of the water cycle nature of business, a lot of people do it this way:

    find a popular paid product -> make a light free version -> get boatloads of attention -> monetize some of it by selling advertising, consulting, custom software services, and or creating bolt on features for sale.

    The general trend is deflationary, creating more opportunity for those who know how to bolt the pieces together, but as the complexity and range of products increases there becomes a lot of cost in figuring out what is best amongst the sea of noise, and that means there is a lot of value in just knowing what pieces to bolt together & helping others do so.

    The self-help industry is full of options and angles…and they can be applied to an infinite number of markets. 🙂

    One other thing worth adding is that if you live where the cost structure is low then you can suck really bad at business and still get by just fine off the start. When I was starting out I actually lived in a mobile home and my monthly living costs were *well* under $1,000 a month. If I didn’t have a car they could have easily been under $500 a month. 😀

    And when I wrote an ebook about SEO it was generally thought that all books about SEO were garbage and it wasn’t worth doing. And that was a great opportunity for me 😉

    Reply
  6. Michael Avatar
    Michael

    I agree with Whitney that it is cyclical in some cases. However, in other cases, the examples that you are talking about, the poor are forced to move to poor suburbs or other poor parts of the city.

    I grew up in the Boston area. There, some residents managed to stay while others moved out to places like Brockton, Randolph, Medford, and Stoneham. Immigrants and the working class of different backgrounds populate these towns. The movie Flag Wars of early 2000s is a good film to watch that examined the problem of gentrification when upper class gay residents started to take over a formerly black middle class neighborhood.

    Last spring, I took a Downtown Revitalization class and learned some things about gentrification. My professor, who was very lame, thought some gentrification was okay with minor adjustments—the old argument of commerce vs local control—she fell on the commerce side. I disagreed with her—I felt that more balance was needed—more visibility. For instance, secretly, Harvard bought most of Brighton (it is adjacent to Cambridge) in the 90s through backdoor deals to expand its University. So stake owners need to be aware of the changes in there community. Yet, old towns, small towns, and certain urban areas need revitalization to compete with new commercial factors (like outsourcing), sustain their workers, and just survive. Think for many years, many cities were plagued with blight…small towns were desolate, as everyone moved to the suburbs after WW II.

    Since so many urban renewal plans of the past failed, I can accept gentrification on a minor level as long as these areas have inclusion—mixed income housing, jobs, and “current” community involvement.

    Reply

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