According to Inc., former 1871 tech incubator executive Howard Tullman describes a fundamental disconnect between technology-focused startups and community service businesses that emerged during his tenure running the world’s top university-affiliated incubator. Through initiatives targeting women, veterans, students, and ethnic entrepreneurs, 1871 discovered that neighborhood businesses keep economic benefits local while tech ventures typically export profits elsewhere. The article highlights Bulqit, a new service that organizes neighbors into “Blocks” to collectively purchase recurring home services like landscaping and pest control, achieving up to 30% savings for homeowners while providing vendors with concentrated service areas and predictable income. This model demonstrates how aggregation strategies historically used for food pantries can be applied to service economies, with the company currently rolling out six initial services in California before planned national expansion.
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The Overlooked Power of Economic Anchoring
What most tech entrepreneurs miss is the concept of economic anchoring – the phenomenon where locally-owned businesses create multiplier effects that benefit entire communities. While a successful tech startup might generate impressive returns for venture capitalists, the economic impact often bypasses the very communities where these companies are headquartered. Local service businesses, by contrast, recirculate revenue through payroll, local suppliers, and community investments. This creates what urban economists call “sticky capital” – money that remains within community ecosystems rather than being extracted to distant corporate headquarters or investor portfolios.
The Untapped Potential of Service Aggregation
The Bulqit model reveals a significant gap in how we think about service aggregation. While consumers have become accustomed to bulk purchasing for goods through warehouse clubs and group buying for experiences through platforms like Groupon, recurring service aggregation represents a largely unexplored frontier. The economic advantages are substantial: vendors gain route density that reduces travel time and fuel costs, while customers benefit from pricing that reflects these operational efficiencies. More importantly, this model creates natural monopolies within defined geographic areas, giving vendors incentive to provide exceptional service to maintain their exclusive block rights.
What Traditional Business Incubators Miss
Traditional business incubators often suffer from what might be called “scale bias” – the assumption that businesses must achieve massive growth and geographic expansion to be successful. This mindset causes them to overlook ventures with more modest growth trajectories but superior community impact. The reality is that a neighborhood landscaping business employing ten local residents might contribute more sustainable value to a community than a tech startup that eventually relocates its headquarters to a coastal tech hub. This isn’t to dismiss tech innovation, but rather to recognize that economic development requires a portfolio approach that includes both high-growth potential ventures and community-anchoring businesses.
The Implementation Hurdles Ahead
While the aggregation model shows promise, significant challenges remain. Achieving critical mass in individual neighborhoods requires overcoming what economists call “coordination problems” – getting enough participants to make the model viable. There’s also the risk of creating local monopolies that could eventually lead to service quality deterioration once competition is eliminated. Furthermore, as these models scale, they’ll need to navigate the complex regulatory environments governing different municipalities and business districts, each with their own licensing requirements and business regulations.
Beyond Business: Rebuilding Social Capital
The most profound implication of community-based business models may be their ability to rebuild social fabric in an increasingly fragmented society. When neighbors participate in collective purchasing decisions, they’re not just saving money – they’re creating what sociologists call “bridging social capital.” These weak ties between acquaintances have been shown to be crucial for community resilience, information sharing, and mutual support. In this sense, businesses like Bulqit may be doing more than providing economic efficiency – they’re creating the conditions for what amounts to community reincarnation, bringing back forms of neighborhood connection that many assumed were permanently lost to suburbanization and digital isolation.
The Coming Landscape of Local Commerce
Looking forward, we’re likely to see hybrid models that combine the efficiency of digital platforms with the community focus of traditional local businesses. The most successful ventures will recognize that technology should serve rather than replace community connections. They’ll also understand that serving diverse ethnic and cultural communities requires nuanced approaches that respect local preferences and traditions. The businesses that thrive will be those that recognize economic value and social value aren’t competing priorities – they’re complementary forces that, when properly aligned, create ventures that are both profitable and purposeful.
