Indirect costs: A shutdown will affect more than just government employees and agencies, Bovino warns.

• Private contractors who rely on government spending will also be affected. Though they will eventually recover that lost business, they "are going to push off some of their investment ideas or investment plans until they get more certainty," she says.
• According to a National Association of Government Contractors survey following the 2013 shutdown, 29% of such companies delayed hiring as a result, and it negatively affected 58% of them.
• Bovino said the closing of national parks and monuments hurts local businesses that rely on tourist traffic.

A higher deficit: Government shutdowns make running the government more expensive. The Office of Management and Budget estimates that the 2013 shutdown raised the budget deficit by at least $2 billion, due to the added costs of stopping and starting government programs.

Horwitz is basing his conclusions on the Amazon HQ2 Index, a gauge he constructed to rank cities according to 11 metrics corresponding to what Amazon said it's looking for. Nine of his top 10 cities made the top-20 shortlist.

Public transportation is key: During Amazon's early days in the mid-1990s, founder Jeff Bezos refused to subsidize employee bus passes. "He wanted them to have their cars there so there was never any pressure to go home," Amazon's sixth employee, Nicholas Lovejoy, told Brad Stone, author of "The Everything Store," a profile of the e-retailer.

• But Bezos has apparently has come around to buses and subways, now that he counts on them to convey many of his tens of thousands of employees to work on a dense, urban campus.
• According to Horwitz, high-profile metro areas absent from the shortlist, like Detroit and Phoenix, fared particularly poorly on his ease of transportation index, coming 29th and 32nd out of 35 metro areas he studied.
• Detroit was in the top 10 in metro areas with the lowest cost of doing business, and in the top 20 for access to qualified workers and essential business services, suggesting that transportation hobbled the Motor City. "The don't even have a regional rail system at this stage," Horwitz said.

Surprise additions: Horwitz did not include Pittsburgh, Pennsylvania or Columbus, Ohio, in his list of likely site locations, because their airports lacked direct flights to Seattle, San Francisco and Washington D.C. (He suspects that, as part of their proposals, these cities promised to secure such flights.)

The bottom line: Corporate America is fleeing the suburbs for dense, urban campuses where robust public transportation is often necessary for workers to maintain a high quality of life. And Amazon's snub of Detroit and Phoenix are another sign of the growing importance of such infrastructure.

Clarification: The headline of this article initially stated that Amazon discriminated against cities without "subways," when in fact the company is biased towards cities with strong public transportation networks, whatever the form.

Norby doesn't earn a markup on what's sold at his shops, but rents shelf space to small tech companies that otherwise can't get their stuff stocked in any retail store. His outlets use software and cameras to track customer traffic, so gadget-makers can learn how they react to products.

• Neither Norby nor the gadget-makers care whether you buy in or out of B8TA, even if you do so on Amazon. B8TA earns its rentals regardless, and the gadget-makers have a chance to get their products into customers' hands for a tryout.

Norby hatched the idea for B8TA — a creative spelling for "Beta" — while working for Nest Labs, the maker of Internet-enabled devices like thermostats and security cameras.

• Nest, which was founded in 2010 by former Apple engineers, “was full of techie types who thought bricks-and-mortar retail was dead,” Norby tells Axios.
• But he and his colleagues quickly learned that their faith in the omnipotence of e-commerce was unfounded. “Nest wasn’t Nest without physical retail,” he says.
• “We used it as a way to get in front of the 95% of Americans who shop in physical stores. We used it as a place to teach customers about and get hands-on demonstration of products. And furthermore, it was the dominant sales channel, even for a hot tech company who had a massive team of engineers working on e-commerce.”

Getting physical in a virtual world: Norby’s newfound appreciation for physical retail didn’t mean that he was blind to how the industry had failed to change. He knew "there has been very little innovation of the retail storefront in forty years.”

• So Norby and three other Nest colleagues set out to create a physical retail space that fit the needs of emerging brands, confident that there were enough of them with exciting, new products that customers would be dazzled.
• The company opened five new locations in 2017, including Austin and New York City, and has raised $19.5 million in venture funding to date.

Big names took notice, with Netgear launching a co-branded store in San Jose, Ca., last fall, in part to show off its line of home-security devices, which recently grabbed Nest's top spot in that category.

• Even the traditional retailer Lowe's, hoping to make its outlets more experiential, is partnering with B8TA to create 70 stores-within-stores where Lowe's can demonstrate smart home products.
• Ruth Crowley, a Lowe's vice president, tells Axios that the hands-on experience is especially important for high-tech devices like connected appliances. "B8TA is a smart, upstart company with great relationships to the young tech providers," she said.

A synthesis of media and retail: Doug Stephens, CEO of Retail Prophet, says the B8TA model is an inevitable outgrowth of the maturation of e-commerce, in which we are all just a swipe of a smartphone—or an aside to Alexa—from buying something. “Media is no longer a means to attract customers to retail. Media is retail,” he says. “And the corollary to that is that physical retail is becoming a powerful form of media."

• Amazon appears to agree, demonstrated by increasingly aggressive moves into physical retail, such as its takeover of Whole Foods and its own growing stable of temporary and permanent retail outlets.
• China’s Alibaba also relies on this model. Much of Alibaba's online revenue comes from ad fees paid by sellers on its marketplaces, while it provides valuable intelligence on customer behavior and tastes. In recent months, Alibaba has been working to take this model offline, buying up traditional retailers and building out promotional pop-up shops for China's Singles Day.

The future of retail: Norby believes that while traditional retail will survive for those who need to buy everyday items on demand, most specialty retailers will eventually adopt his model. Ten years from now, he predicts that, in cities like Palo Alto, "20% to 30% of retail outlets will be filled by direct-to-consumer brands using it primarily for advertising."