This week I had the opportunity to attend a holiday party. As I mingled and chatted, I noticed that no one was talking about work. I heard conversations about life, family, fun experiences, and funny stories. After the party, a group of us went to dinner, where we learned more about each other and our significant others.
The party was wildly successful. I watched people enhance existing work relationships, making them deeper and more personal. And I watched people establish new relationships with others they didn’t know they had things in common with.
My takeaway is that I’m a fan of holiday parties. It’s a great time for people to connect outside work and build deeper relationships based on who they are, not the work they do.
Founders Seeding Their Former Employees
I recently had a conversation with an aspiring entrepreneur. He wanted my thoughts on a company he was considering starting in a space I’m familiar with. During our chat, I learned that he’d been an early employee at a tech start-up and stayed for several years. That company recently sold for a few billion dollars. His equity as one of the first few employees gave him a financial windfall. Because he was on board so early, he worked closely with the CEO for several years, and they still talk regularly. The CEO encouraged him to start a new company and offered to back him once he settles on an idea.
I love to hear stories like this. An early employee is part of a company that turns out to be a massive win. He gets a significant financial reward. Seeing his former CEO’s journey firsthand makes him want to take the same journey. And he already has the backing of his former CEO, who knows his drive and worth ethic.
These are the kind of stories that, when repeated, lead to a city having a thriving start-up ecosystem. We need more stories like this!
Does Atlanta Still Lead the Nation in Inflation?
Last year I shared a post about Atlanta having the highest inflation rate among U.S. cities in 2021. My post was inspired by a Wall Street Journal (WSJ) article that talked about how Atlanta saw an influx of people during the pandemic, because of the city’s attractiveness, that caused Atlanta to have a higher inflation rate than other cities (mainly driven by above-average increases in housing costs).
I wanted to see where Atlanta stands today, so I did a little digging. The U.S. Bureau Of Labor Statistics (BLS) produces a city-specific Consumer Price Index (CPI) for various metropolitan cities, including Atlanta. The latest report, released this past week on November 14, includes Atlanta’s October CPI.
When the WSJ came out in February 2022, the 12-month Consumer Price Index for All Urban Consumers (CPI-U) for metro Atlanta was 10.6%; it peaked at 11.7% a few months later in August. Since August 2022, the rate has been declining, and it stood at 3.2% as of last month. For context, before the pandemic in December 2019, Atlanta's CPI-U was 3.3%.
I did a quick check against New York and Miami and found that Atlanta ranked below both cities in October. New York’s 12-month CPI-U was 3.5%, and Miami’s was 7.4%.
I’m no CPI expert, but the data appears to be showing that the rate of cost increases in Atlanta is moderating. The BLS’s next metro Atlanta CPI will be released on January 11. I’m curious to see whether this trend continues.
Manage Relationships, Not Transactions
The other day I came across a small clothing brand. I did some digging and learned it was Atlanta based. Since I enjoy supporting local founders, I ordered a few pieces.
A few days later I got an email saying my order had been refunded. No explanation or additional information. I wasn’t sure why I’d been given a refund and decided to email the company for more information. My hope is that I’ll understand what happened with this order so I can place another order or find some other way to support this local brand.
Having built a company that sold physical products online, I know how hard (and expensive) it is to acquire a customer. Lots of great brands are competing for customers’ wallets. If you acquire a customer, you want to think about it as an acquired relationship. Not a transaction. You want to manage the relationship as best you can to increase the probability of their ordering again (thus increasing their lifetime value) and telling others about your brand (word of mouth is the best and cheapest marketing). If you can’t deliver on the product or service the customer has paid for, an explanation goes a long way and often opens the door to the customer accepting a comparable substitute product. But this is possible only if you manage the relationship . . . not the transaction.
Atlanta Is Still Attractive
I caught up with a friend who’s working for an investment firm in New York City. In a wide-ranging conversation, we compared housing and transportation costs in New York and surrounding cities with those in Atlanta. New York is one of the top real estate markets in the world, which factored into my expectations, but what my friend shared today surprised me (especially regarding transportation). The cost of housing in the areas he frequents is still rising significantly, as is the cost of commuting into, around, and out of the city.
It’s one conversation with one friend—anecdotal for sure. But it reminded me how attractive Atlanta is from the perspectives of affordability and quality of life. And this is after the city has experienced some of the worst inflation in the nation.
Why People Don’t Know What Atlanta Has to Offer Socially
I recently attended a social gathering where I met someone working in tech who moved to Atlanta within the last eighteen months. He’s a native of New York City but most recently lived in Los Angeles. Before that he lived in Austin. He has an interesting baseline, so I was curious to get his candid thoughts on Atlanta so far.
Overall, he likes Atlanta. The climate is nice. The cost of living isn’t a steal (anymore), but it’s reasonable. The people are nice. The biggest downside, in comparison to Los Angeles and New York, has to do with the variety of social activities. I wasn’t expecting this, so I was interested to hear more.
In Los Angeles and New York there are several parts of town to explore, each with its own set of social activities. The options are well known, regularly explored, and openly discussed. Having a social life with tons of variety is easy. If you make the effort to leave the house, you know of many interesting things you can do.
He doesn’t feel the same way about Atlanta. A few parts of town are known for being entertainment venues, such as Buckhead, West Midtown, and O4W, and he’s aware of them, but he doesn’t feel the city offers as much social variety.
As we chatted, I shared with him some other parts of town and things to do. He had no idea some of them existed. I said that Atlanta may not have as much to do as New York or Los Angeles, but Atlanta does offer a healthy variety of desirable social activities in various parts of town. However, the awareness that people have of them, and their discoverability, are highly variable.
Atlanta is influenced heavily by homophily (the tendency for contact between similar people to occur at a higher rate than among dissimilar people). People who have a lot in common interact with each other frequently. People who don’t have anything in common interact infrequently or not at all. Of course, frequency of interaction is what defines a person’s social circle.
One of many ramifications of this is that information becomes localized in a social circle. The infrequent or nonexistent interaction among people who lack commonalities means that information doesn’t leave certain circles. In the case of social activities, people outside a social circle don’t know certain activities (or even parts of town) exist and therefore don’t participate. Said differently, people’s awareness of desirable social options varies drastically depending on whom they interact with frequently. People living in the same city end up having vastly different awareness of the social experiences available to them.
Homophily is a basic human principle. It isn’t going anywhere anytime soon. The key to maximizing social variety in Atlanta is acknowledging homophily’s heavy influence and trying to interact more often with people you have less in common with. This will help you get access to information that’s localized in circles you’re not part of about fun things to do in different parts of town. Obviously, this is easier said than done, but I believe it’s worth the effort because it helps you experience all Atlanta has to offer socially.
What’s Valuable about Communities
I’m a big fan of communities. I recently had a conversation with someone about them and was asked what’s been most valuable to me about the communities I’ve been a part of. After reflection, here’s my answer:
Connecting with people trying to solve the same problems I’m trying to solve.
Being around people who have similar interests is okay. But being around people actively trying to solve for the same thing I am is when I’ve received the most from communities and contributed the most to them. In my experience, sharing and learning from one another builds deeper connections.
Communities of people actively trying to solve the same problem have the most passionate members because those members receive immense value from being part of those communities.
Fitting Life into Work, or Vice Versa?
I caught up recently with a friend, an accomplished executive who’s worked for several Fortune 500 companies. He and his family have had to move a few times for these opportunities. He and his wife have always loved Atlanta, and they made their way back a few years ago. A new opportunity is bringing change to their lives again. He just accepted a leadership position for a company headquartered in a western state, where the job requires him to work. For now, he’ll live and work out west, his wife and children will stay in Atlanta, and he’ll come back every few weeks. They’ll make more definitive plans after he settles into the new role and the children finish the school year.
My friend has built an amazing life in Atlanta for his family and himself. He’s hesitant to uproot his family and take them away from the community and city they’ve come to love. I don’t know what my friend and his wife will decide, but I’m sure they’ll make the decision that’s best for their family.
Talking to him highlighted a change I’ve noticed. Companies used to attract talent to a location convenient to the company, which could have a big impact on the personal lives of the employee and their family. It was accepted that sometimes you must move for professional opportunities. In other words, people accepted making their personal lives fit into parameters set by their professions.
How people evaluate opportunities is changing. This is anecdotal, but I’m hearing more people evaluate opportunities differently. They’re looking at how a professional opportunity fits into their personal life, not the other way around. People are more hesitant to move or agree to opportunities that don’t align with their personal lives.
I’m wondering if this is just among the people I know or if it’s happening more broadly (as I suspect). I’m also curious about whether this is a trend that will endure regardless of the economic environment.
Communities: A Great Way to Hack Product–Market Fit
For early-stage founders, achieving product–market fit is an important hurdle. Iterating on a solution until it creates enough value for customers to be happy to pay for it isn’t easy, but for a successful company, it’s necessary.
In a world where people are more distributed, I’m a big fan of early-stage founders creating communities around the problem they’re solving. Bringing people with similar interests together can create value for all of them.
For the start-up, building a community early is a great way to accelerate reaching product–market fit. Early community members don’t need to be customers or users. They just need to have an interest in the problem being solved. Passionate community members can provide valuable insights on the problem that help founders understand what solution to build. Engaged community members with whom founders build a rapport are more likely to try a new product and provide honest feedback on how to make it better. All of this can help founders develop a superior solution sooner.
For community members, being around others with similar interests makes them feel connected and understood. The community has lots of benefits for members. One is the free flow of information and knowledge, which is valuable because it can lead to outcomes that otherwise wouldn’t happen, such as job opportunities.
Communities are powerful and can be cost-effective. Start-ups should consider whether it makes sense to create or become active in a community for their space.