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CES is underway right now in Las Vegas. About 200,000 people are in attendance.
Since tech and mobility are today closely intertwined, the show has become an important platform for the automative industry.
Here is a video showcasing BMW’s new iNext concept (expected by 2021):
It is based on level 3 autonomy, which means the car will do mostly everything, but you need to be ready to take over at any time.
The video is interesting because it begins to show you what becomes possible when you no longer need to pay attention to the road. It is a bit like flying (but hopefully more enjoyable).
And here is a video of Bell’s new urban air taxi, which is called Nexus (expected by the mid-2020s):
This is the company’s first concept. But they’ve been working with Uber since 2017 to develop a network of flying taxis for cities.
We used Uber to get pretty much everywhere when we were in Rio de Janeiro. For reasons of convenience, cost, and safety, it just made the most sense. I can tell you that it felt a lot more valuable in place where you don’t speak the language and you’re acutely aware of being in the wrong place at the wrong time.
And since Uber is going public later this year (along with Lyft), it got me thinking about whether or not it is a stock that I would want to own. Are they destined for monopoly profits? Do they have a defensible business model? How powerful are their network effects? Having first-mover advantage doesn’t guarantee anything.
My initial thoughts are that the network effects for their core offering – single rides – don’t feel that strong. Sure you need a critical mass of drivers so you’re not waiting around too long, but at a certain point the response time is likely good enough. Rides are a commodity.
This arguably changes as you get into services like Uber Pool and Uber Commute, because more users on the network in close proximity to you can mean lower costs and higher service levels. But is there any sort of lock-in effect?
Many passengers and drivers seem to “multi-tenant.” In other words, many (or maybe most) people have multiple ridesharing apps installed on their phone and they will switch back and forth when it makes sense to do so. I do that when prices are surging. And drivers appear to be doing the same based on the Uber and Lyft emblems in their cars.
For a long time, Uber was the only show in town here in Toronto. Hailo only lasted about two years or so. But as soon as Lyft entered the market, both companies moved to aggressively discount their rates, and that is still going on to this day. This suggests certain things to me.
Among other things, it is a reminder that the demand for (commoditized) transportation services is highly elastic. We are price sensitive. We will use whatever is cheaper. So one way to win is to obviously create a cost structure advantage. Hence the current autonomous vehicles “arms race.”
Lyft is also trying to establish itself as a multimodal transportation solution. (When are scooters coming to Toronto?) Perhaps that will make them less of a commodity. But again, how defensible is that approach? I suppose the market will tell us what it thinks later this year.
At the beginning of this year – January 2nd to be exact – Apple revised its earnings guidance, downward. It was the first time in 15 years that the company had to do this.
Tim Cook’s letter to shareholders, which can be found here, focuses a lot on China and its “economic deceleration.” But M.G. Siegler of 500ish Words believes that a greater pivot could be underway. His piece can be found here. It’s a good read.
Firstly, Apple’s current growth period is probably over. And secondly, the company is likely going to need to diversify away from high margin hardware/software sales and continue to grow its Services business (something that Microsoft has, ironically, already done).
The iPhone has simply been too good of a business. And it’s hard to see what tops it. Certainly in the near term. If Services is to carry Apple in the future, it will likely be only after years of relatively stagnant iPhone revenue growth mixed with a rising overall market. In other words, time and the broader world will have to catch up. And then Apple can have their “Microsoft Moment” — a services-based resurrection of growth.
As Tim points out in his letter, most of Apple’s Services revenue is tied to its installed base, as opposed to current period sales (also: less exposure to China). Last quarter that number was $10.8 billion – a new record.
So what we may see in the near future is the end of outright phone purchases and instead some sort of iPhone as a Service (or iPaaS). Pay Apple every month in perpetuity; always have the latest iPhone.
Of course, Apple has many other irons in the fire. Apple Watch has turned out to be a big business and the company is said to have 2,700 “core employees” working on its autonomous driving project.
Maybe some of these businesses will also end up as Services.
Over the weekend I learned about Dan Buettner’s Blue Zones. These are cities and parts of the world where, according to Dan, people have a much longer life expectancy. The five regions he identifies as Blue Zones are: Okinawa (Japan); Sardinia (Italy); Nicoya (Costa Rica); Icaria (Greece); and Loma Linda (California).
Many of you have probably heard of this finding from Malcolm Gladwell. I think he writes about it in Outliers. I had. But I didn’t know about Dan Buettner and his efforts to teach these “secrets” to other regions around the world.
I can’t speak for the efficacy of his consulting practice, but I think it’s interesting that some of the characteristics of these Blue Zones include a strong sense of family and community, as well as constant moderate physical activity. In other words, activity that is integral to normal life, such as lots of hills in a mountain town.
The links between urban form, walking and biking (instead of driving), and health outcomes are something that get a lot of air time. It is, of course, one of the reasons why denser cities are thought to be healthier cities. They encourage more active forms of mobility.
But what else could we be doing to make physical activity an inseparable part of urban life? In Rio de Janeiro, they often incorporate fitness facilities into their public spaces, whether it’s a parklet or the beach. That probably doesn’t qualify as inseparable, but it’s certainly a start.
“Francis is one of the most decisive people I know. He made a commitment to invest in our first venture capital fund in a five-minute cab we shared to work one morning.”
—Fred Wilson, Co-Founder, Venture Capitalist, and Blogger, Union Square Ventures
Francis Greenburger, who is founder and CEO of the real estate investment and development firm Time Equities, recently appeared on Barry Ritholtz’s Masters in Business Podcast.
They touch on a number of topics, including why development sometimes produces more bankruptcies than billionaires; why development margins are compressed in Toronto; and how Francis popularized the co-op in New York.
The University of Toronto is looking for a Director, Real Estate to manage their tri-campus portfolio of income producing real estate, as well as the development opportunities that they have on and adjacent to their three campuses. The downtown campus alone is over 120 buildings across 130 acres.
A good friend of mine is helping with this search; I went to the University of Toronto (twice); and I believe that institutions, such as U of T, play an important city building function. So I’m sharing this opportunity with all of you today. For more on the University’s development strategy, click here.
They are looking for someone with 10+ years of experience. The salary will be competitive and commensurate with this level of experience. And you would be reporting directly to the Chief of University Planning, Design & Construction.
If you’re interested, you can apply here. You have until January 25, 2019 to do that. I hope the position gets filled with a star. Also, sorry if this post isn’t relevant to you. Regularly scheduled programming will resume tomorrow.
Last summer, Zach Mortice published this article in Metropolis talking about two new buildings in Chicago. Here is his architectural description of the first:
Ross Barney’s design is unabashedly cosmopolitan, yet welcoming. Conceived as a series of interlocking Miesian pavilions, it comprises a glass cube containing the dining room and a smaller opaque volume, which holds the kitchen. The glass envelope shows off the restaurant’s burly cross-laminated timber beams, the first time this ultra-strong, low-carbon structural system has been used in Chicago. The exterior pergola is clad with solar panels and provides shade across an entire city block while also generating most of the restaurant’s energy. With a landscaped plaza and outdoor seating, there’s a strong focus on attracting pedestrians to this green-starved section of the city, with a landscaped plaza and outdoor seating.
Zach is describing the then new flagship McDonald’s in the River North area of Chicago. That’s maybe not what you were thinking as you were reading the description, but it is, of course, part of a broader transformation for the brand:
“We don’t need to be loud anymore,” says David Vilkama, McDonald’s global creative director. “We’re trying to move away from the old, cheap, plasticky, in-your-face fast food culture.”
It is a clear example of the value of good design and also how it has seemingly become table stakes for many firms and industries.
But as Zach points out in this article, is this also evidence that brands need to, not only invest in good design, but also move upmarket in order to maintain growth?
In other words: Does good design inevitably equal more expensive?
I am currently in transit and catching up on some internet reading and email on my way back to Toronto.
At this time of year it is, of course, common to reminisce (or lament) about what happened over the last year, as well prognosticate what may come.
Over the last few years, I have done a bit of that on the blog. But I clearly didn’t do that this year while in Brazil (and away from any semblance of a workspace).
So here’s what others have been writing and thinking about over the holidays:
- 2018’s tech trends and tribulations in 14 charts. Recode. Link
Starting in the late 1930s, New York City began hiring photographers to document each and every building in the city. It did this to improve the accuracy of its tax assessments, and so every photo was taken with a sign board indicating the building’s block and lot number. The photos looked like this (taken from here):
The initiative produced over 700,000 black and white photos, all of which have been recently digitized according to the New York Times. The Times also recently published this interactive piece where they go back to these archival photos to see how the city has and hasn’t changed.
In the late 1930s and early 1940s, documenting a city and its buildings was clearly a manual endeavor. Today we have Google Street View (launched in 2007), which has now photographed much of the world. Many countries, including all of North America, are reported as having “mostly full coverage.”
But already autonomous vehicles (and their supporting services) are starting to scan and map our cities in new ways. So it will be interesting to see what ends up getting built on top of this data. I am certain it will empower much more than just better tax assessments.
Happy New Year, friends. Thanks for reading over the last year.
I have been using Google Translate a lot on this trip. Few people here in Rio de Janeiro speak English.
It is an incredible app that also works without cell service. You just download whatever language(s) you need to your phone.
There’s a conversation feature that allows you to go back and forth with someone in real time (almost).
There’s a camera feature that is invaluable for translating restaurant menus.
And there are a number of smaller features that I have also found really useful.
For example, if you rotate your phone into landscape mode, it will show you your translation in big text like a flash card.
It looks like this (trust me it is useful):
I also just learned that, since November 2016, the Translate app has been using a neural machine translation system developed by Google.
It is capable of understanding and translating complete sentences, and that has reduced translation errors by about 60% compared to the previous system.
Rather than translate word-by-word or phrase-by-phrase, Google’s NMT network encodes the “semantics of sentences.”
