Amazon HQ2

Do rural communities need Amazon HQ2?

After Amazon announced they would be building a second headquarters somewhere in the U.S., they received a predictable flood of urban tax incentives and offers of “Take my community, please” (apologies to Mr. Youngman). 238 of them, in fact, because few companies can say they’ll bring 50,000 jobs to a community and back it up with action. Amazon is one of them.

Why rural didn’t apply

If you look at the map, you’ll notice that no community proposals came from Montana, North Dakota, South Dakota, Vermont, Hawaii, Arkansas, or Wyoming. If you live in one of those states, you might be frustrated by their failure to apply.

I don’t believe it was a failure. It was a well-considered choice. In the past, I have chided some rural communities for not applying for community-transforming projects like Google Fiber. This time, no application was the right call for these areas.

Speculation in the tech press stated that Amazon received no applications from these states for reasons that are “unclear” and that it might be “anti-corporate sentiment“, or because these states were “off-put by the company’s preference for government incentives“. The reasons for the lack of rural applications seem pretty obvious if you live in a rural area.

Some examples, and a few counterpoints to the speculation:

  • Amazon’s stated desire is to build HQ2 in an area with a population of at least a million people. Several of these states have barely a million people total, much less a metro area of that size.
  • An Amazon HQ2 building with 50,000 employees would be the second, third, or fourth largest city in the Dakotas, Montana, and Wyoming.
  • No one in their right (ethical) mind would apply knowing that they can’t come close to filling 50,000 new Amazon jobs with local people. Amazon can build a successful data center here, but a new HQ? Nope.
  • These rural states don’t have the airport routes / seats / facilities that HQ2 will demand. We can build the facilities, but the seats and routes will take time. Upside: The additional routes and seats required to support HQ2 would benefit us as our low traffic numbers balloon our air travel costs to ridiculous levels.
  • These states already provide government incentives to other businesses, though not likely at the scale Amazon might be seeing. We have plenty of sizable corporations – even some multi-nationals.
  • Hawaii makes no sense due to massive amount of air travel required.
  • The ideal Arkansas metro area for Amazon HQ2 is in the northwest corner: arch-rival Wal-Mart’s back yard. No one in NWA is crazy enough to enrage WMT, even though the land availability, cost of living, and the necessary volume of in-context skill positions are available.

Yes, but we’re too rural for Amazon

Yes, you are – and it’s OK.

Even if Amazon lost its mind and came to your rural community – is that what your town really needs? Probably not.

While small, rural communities can’t get, don’t need and can’t handle hosting a facility the size of Amazon’s new headquarters, they’d still benefit from the kind of jobs HQ2 will bring. So what do you do to bring these jobs to rural communities?

The too-obvious choice is often to chase companies that are trying to move or expand from other areas. Rural communities don’t need tens of thousands of these jobs. In fact, they need fewer than they might think.

Suggestion: Think small.

Two pizzas

Jeff Bezos’ famous “two pizza rule” says if it takes more than two pizzas to feed a team, it’s too big. Figuring two or three slices per person, you’re looking at feeding a team of five to eight. Can your community do what’s necessary to help its people create just one new two-pizza-team each year?

You might be thinking “One team per year? Why bother?”

A team might be one administrative position, one founder / manager type, and three to five technical people (whatever “technical people” means). Figure a total annual payroll of somewhere between $300K and $450K. The total might be higher, but it probably shouldn’t be lower – unless you want to lose repeatedly lose people. Startups don’t need that.

What would the impact be if your community had five new, active payrolls of that size five years from now? “Technology” could be software, wood products, water purification, medical research, etc.

Next time, we’ll talk about what communities can do to encourage the formation of these teams.