My wife and I like to say we eat our way through the city of Chicago, but we don’t have this start up food scene like they do in New York and San Francisco. There are plenty of great spots here, and some really unique independent artisan shops. But we could use more of them.
Competition has a great effect on business. It drives existing businesses to perform better and provide more service at better value for its customers. Food trucks, pop up restaurants and allowing independent food providers to make artisan food products easily will drive more competition in the local food industry. The net net is more choice at cheaper prices for consumers.
When looking at entrepreneurial ecosystems, mom and pop small businesses are a critical part of it. Yesterday, I was lecturing at Notre Dame and we were talking about investable businesses from an angel’s perspective. One facet of analysis that we discussed was market size. Angels like to invest in market size measured in billions. However, I told the students, if you find a business that seems like it fills a niche and doesn’t have a market size of a billion dollars, don’t toss the idea out. Go run that business. It may always be a lifestyle business but that doesn’t mean you can’t earn a lot of money off of it. Lifestyle businesses may transform into angel investable businesses, you never know.
Ecosystems are like a building. At the top of ecosystems sit the big Fortune 500 firms. They provide the steel girders economies are built around. Think stability when financial earthquakes hit. Then come your medium size businesses that provide the flooring and raw space. Start ups fill those buildings up, sometimes breaking off to form entire new buildings or neighborhoods. The cracks, streets and sidewalks are filled with mom and pop businesses. They are the blood cells of the economic ecosystem.