In 2020, I was the city manager in Alpine, Texas. Pop. 6,000. The kind of place where every storefront has a story and every closed storefront has a louder one.
The local Small Business Development Center would onboard almost any client with almost any business idea. I watched the same pattern play out every quarter. A retiree with a $40k nest egg. A young family that had saved hard. A motivated returning veteran. They'd walk in with a dream, walk out with a business plan template, and walk into a market that had no room for what they wanted to sell. Roughly 95% of those new businesses failed inside five years.
The SBDC wasn't doing anything wrong. It was doing exactly what it was designed to do. Help anyone who showed up. The problem was that no one was at the door asking the harder question first.
So I wrote it down. I built a private file of small-town business categories I believed had a real, market-tested chance of working. Twenty-plus of them, each with a narrative explaining the demand, the capital required, the operator profile, and the way to start. I drafted a screening framework. I wrote a marketing approach. I built the bones of a website. The theory was simple. If you could move the success rate from 5% to 30%, you'd change a community.
Then 2020 turned into 2021, and life moved. The file went into a folder and stayed there.
The SBDC wasn't doing anything wrong. It was doing exactly what it was designed to do. Help anyone who showed up. No one was at the door asking the harder question first.
This week I opened it again. What I found surprised me.
Most of the list aged well. A handful of the businesses got stronger. A few got weaker. Some got replaced by categories that didn't exist in 2020. But the bigger shift was what AI did to the math underneath every business on the page. A solo handyman in 2026 can run scheduling, invoicing, marketing, and customer support with two tools and zero admin staff. A small-town IT shop that fixed printers in 2020 can install AI automation for the chamber, the clinic, and the law firm in 2026. Same customer base, ten times the contract value. The 2020 file was about probability of survival. The 2026 file is about probability of survival plus an AI lever that wasn't on the table six years ago.
That's the thesis of this series.
For the next six weeks, alongside our regular GAIN Report issues on AI asset indexing, I'm running a weekly issue called the 2026 Small Town Reboot. Each week I'll take a business from the original file, tell you what's different in 2026, and show you where AI moved the unit economics. For better or for worse. A couple of the 2020 winners are 2026 losers. A couple of the 2026 winners weren't even on my radar six years ago.
This isn't an investment newsletter. It isn't financial advice. It's an operator's read on which businesses still have legs in the small markets that make up most of America, and how to think about deploying AI inside them so the operator keeps more of what she earns.
If you're an aspiring small-town entrepreneur, a city or chamber leader watching your local startup failure rate, or someone who thinks the future of American business runs through the towns most analysts ignore, this series is for you.
One ask before we get started. Reply to this email with the one business you wish your town had. I'll factor the replies into the series. The ones that show up most will get a dedicated issue.
The 2020 file was about helping the next entrepreneur not throw away her savings on a business that was never going to work. The 2026 file is about something bigger. Turning Main Street into the place where applied AI actually pays the rent.
That's why I'm reopening the file. Glad you're here for it.
Reply with the one business you wish your town had. I'll factor your answer into the series — and the businesses that come up most will get a dedicated issue.
— Erik Zimmer, Founder, GAIN AI | getgainai.com