Month: October 2018

• Transit tech lab launches in NYC

  

  Earlier this month, the Metropolitan Transportation Authority (MTA) and the Partnership for New York City launched a new vertical accelerator dedicated to public transit. The mission is to make the city a global leader in this space.

  Applications are open until November 30, 2018 and they are looking for early and growth stage companies that address one or both of the following challenges:

  1. How can we better predict subway incident impacts and serve customers?
  2. How can we make buses faster and more efficient?

  Selected companies will go through an 8-week accelerator and, at the end of it, the most promising companies will partner with the MTA on a 12-month pilot. So it is an opportunity to potentially test your product(s) on the largest transit authority in the US.

  If you’d like to apply, you can do that here.

  Photo by Tim Gouw on Unsplash

  2018.10.30

• The five rules of wealth creation

  Jamaican-Canadian billionaire, Michael Lee-Chin, was in ROB Magazine last week talking about how he grew up, how he got into the investment industry, and how he thinks about wealth creation.

  I met Michael once back in 2009 thanks to an introduction by my father. And at that meeting I remember him explaining the five rules of wealth creation. It’s his formula and he’s been practicing it since 1978.

  Everybody who creates wealth does five things: They own a few high-quality businesses. They make sure they really understand those businesses. They make sure those few businesses are in strong, long-term-growth industries. They use other people’s money to invest in them. And they vow to hold them as long as they remain great businesses.

  That’s consistency. And he’s a pretty consistent guy. The other quote I would like to share from the article is this one here:

  Outside wealth is created when there’s a difference between perception and reality, when there are inefficiencies, and when there’s a lack of equity capital flowing into the country, sector or company.

  This is something that we have talked about before on the blog. The real value creation happens when you believe in and you’re right about something that most people think is wrong.

  As Michael says in the article, you have to be willing to swim upstream, because floating downstream is far too easy and will only get you to the same place as everyone else.

  2018.10.29

• A moral compass for autonomous vehicles

  One of the challenges that self-driving vehicles present is not about technology per se, it is about ethics. The typical example scenario is this one: If a pedestrian were to step out in front of an autonomous vehicle illegally, should the car be programmed to hit the pedestrian or veer off the road at the risk of potentially harming its passengers?

  I believe that self-driving vehicles will ultimately result in fewer accidents. Statistically they will be safer. But self-driving vehicles, particularly early on, are going to get a lot of attention when they do get into accidents, even if they are still safer as a whole. And that’s because they will make for good headlines.

  Safety and statistics aside, in turns out that the answer to the above moral question could depend on where you’re from. Nature recently published what they are calling the largest ever survey of “machine ethics.” And out of this survey they discovered some pretty distinct regional variations across the 130 different countries that responded.

  The responses were able to be grouped into 3 main buckets: Western, Eastern, and Southern. Here is the moral compass that was published in Nature:

  

  And here are a few examples. In North America and in some European countries where Christianity has historically dominated, there was a preference to sacrifice older lives for younger ones. So that would guide how one might program the car for the case in which a pedestrian steps out in front.

  In countries with strong government institutions, such as Japan and Finland, people were more likely to say that the pedestrian – who, remember, stepped out onto the road illegally – should be hit. Whereas countries with a high level of income inequality, often chose to kill poorer people in order to save richer people. Colombia, for example, responded this way.

  Also interesting is the ethical paradox that this discussion raises. Throughout the survey, many people responded by saying that, in our example here, the pedestrian should be saved at the expense of the passengers. But they also responded by saying that they would never ever buy a car that would do this. Their safety comes first in the buying decision. And I can see that.

  There’s an argument that these are fairly low probability scenarios. I mean, the last time you swerved your car, you probably weren’t driving on the edge of a cliff where any deviation from the path meant you would tumble to your death. But I still think that these are infinitely interesting questions that will need to be answered. And perhaps the answer will depend on which city you’re in.

  2018.10.28

• China has a lot of people

  Matt Daniels over at The Pudding recently visualized the world’s population in this spiky 3D map. You need to take a look. Better on desktop.

  The data is from 2015, but you can also compare it to and show the change from 1990.

  Here is the Greater Toronto and Hamilton region (16.8 million people reside in this screen grab):

  

  Here is the New York City region (55.4 million people reside in this screen grab):

  

  And here is China (1.054 billion people reside in this screen grab):

  

  I tried to capture both Shanghai and Hong Kong in this image. Guangzhou, Hong Kong, and Shenzhen are currently in the mist of forming a 40 million-person megalopolis.

  If we pan back over to the northeastern United States and Central Canada – keeping the same scale as the above image from China – it looks like this:

  

  These last two images say a lot. 

  2018.10.27

• Project Profile: Coal Drops Yard

  

  A new retail district called, Coal Drops Yard, opened this week in King’s Cross, London. The architecture is by Heatherwick Studio and the project is absolutely stunning. I love the idea of taking the roofs of the existing buildings and delaminating them to create the new spaces. It is a good example of old meets something new and cool. Here is a short video that I think many of you will enjoy. If you can’t see it below, click here.

  [youtube https://www.youtube.com/watch?v=iLUGxPP0iNw&w=560&h=315]

  Image: Heatherwick Studio

  2018.10.27

• Plus atelier

  This morning I went through some of the floor plans for King Toronto, which are now up on BuzzBuzzHome. In case you’re wondering, they are currently showing an average price of $1604 per square foot.

  Here is a 1 bedroom + atelier:

  

  And here is a 2 bedroom + atelier:

  

  Right away you’ll probably notice a few things. 

  There are no dens in these plans. They have been replaced with ateliers, which sounds cool. I want my own atelier where I make things. But it may also be a clever way to get around calling them studies or nooks.

  A lot of people in the industry have been commenting on how they’ve included the exterior living space in the calculation of total area. That seems logical to me, especially for a project like this where the terraces form such an integral part of the architecture.

  The other thing I noticed is that the buildings are, actually, being referred to as mountains. This has been part of the project’s design narrative since the beginning. So I like the consistency. The above plans are for suites within the “east mountain.” 

  But what I wanted to ask all of you today is whether you find the addition of a 3D plan helpful. It’s obviously not new, but it is still fairly uncommon, at least in this market. Do you think it’s worth it?

  2018.10.26

• Buy land, Chip. Buy land.

  

  Bloomberg Businessweek just published a longish article about Vancouver and the Chinese capital that fuels it. It’s called, The City That Had Too Much Money. 

  Most of you are already familiar with this narrative, but here’s an excerpt that talks about the city’s economic base and its apparent dependency on foreign capital:

  Change will be difficult and fraught. Vancouver has been closely connected to Asia since the late 19th century, when the first Chinese laborers arrived to help build the trans-Canada railway, and the city is proud of its record of integrating immigrants. Also, beyond real estate, Vancouver’s economic base is shallow. It’s not the business capital of western Canada—that’s Calgary—and it has few major corporate headquarters or large-scale manufacturing operations. “Asian capital has kept this economy alive, end of story,” says Ron Shon, a Chinese-Canadian venture capitalist who arrived as a teenager in the late 1960s. “You can see it in every aspect of our lives.”

  One of the things I found particularly interesting were Chip Wilson’s comments around what is going on. Chip is the founder of Lululemon and is largely credited with pioneering the current “athleisure” trend.

  Yet as Wilson explains, sitting in his office on the top floor of a century-old warehouse, these days he’s as interested in bricks and mortar as in quick-drying fabrics. “The global capital flowing out of China across the world, you’d have to be an idiot not to acknowledge it,” he says. “You know, we could just be at the cusp of that.”
  

  To profit from the deluge, he’s been buying up land all over town, especially in False Creek Flats, a derelict industrial area that’s slated for redevelopment. He estimates that about a third of his holdings are now in real estate. British Columbia’s current government may succeed in slowing inflows temporarily, Wilson says, but China’s boom has created many multimillionaires who need a place to put their money. “So where do you go if you’re Chinese? Sydney, maybe. But nowhere, probably, is more friendly than Vancouver.” One way or another, he says, those funds will find their way to Canada.

  That’s why, Wilson says, whenever he returns from a trip to Asia, his first thought is simple: “Buy land, Chip. Buy land.”

  For the full article, click here.

  Image: Jens Kristian Balle/The Forbes Collection/Contour/Getty Images (via Bloomberg)

  2018.10.25

• The tallest residential building in the world

  Earlier this month, Extell Development Company announced the launch of sales for its Central Park Tower – which it is calling “the definitive New York skyscraper”, as well as the tallest residential building in the world. 

  The project is located on Billionaire’s Row in NYC and it will be 1,550 feet tall when completed. That puts it well into supertall territory.

  According to Curbed, the smallest apartments start at 1,435 sf and the largest will be an estate in the sky at around 17,500 sf. 

  The projected sellout for the project is, or at least was, $4 billion back in 2017. That will set all sorts of records upon completion. At the time of the above filing, the average price was pegged at $7,106 per square foot.

  If you’d like to read up on the project’s capital stack, you can do that here. And for those of us who are used to having to pre-sell condos before digging, you may find it interesting to know that this project started construction in 2014.

  I wonder how much a parking spot costs (assuming there is even parking).

  2018.10.24

• Policies for the leisure state

  

  Andrew Kortina and Namrata Patel recently published an intriguing essay called, Kinky Labor Supply and the Attention Tax.

  They begin by talking about declining labor force participation rates, particularly among young men. Remember that the participation rate is distinct from the unemployment rate. Here is a chart from the essay:

  

  Participation is down for young people, but up for older people. This is perhaps signaling that older demographics still need to work in order to maintain certain needs and/or a particular lifestyle.

  The possible explanations for this declining rate among young people are interesting. The authors argue that it is a combination of the declining cost of media entertainment content and the amplification of social status signaling, among other things.

  The declining cost of online content has meant that this form of leisure activity has become incredibly cheap, if not entirely free (beyond the mostly fixed cost of an internet connection). So there’s always something enjoyable to do.

  At the same time, the authors argue that once people make enough money to satisfy basic needs, there becomes a tradeoff between trying to make more money and simply spending more time on leisure.

  Historically, the motivator to make more money has been arguably associated with social status signalling through conspicuous consumption. But with the advent of social media, we are all now signaling globally, instead of just locally.

  Due to increased competition, the argument is that people are now feeling demotivated by all the conspicuous consumption that they see online. It is simply too difficult to compete. The Gini coefficient is too high.

  So why not just spent more time on leisure?

  One potential policy implication is that raising the minimum wage wouldn’t be enough to spur increased labor force participation. Labor isn’t responding in the same way to wage increases. There would need to be a much more significant increase in income for that to happen – hence the “kinky labor supply curve.”

  One view of the status quo is that media companies are aggregating human attention and selling it at a discount–far below minimum wage–to advertisers in a massive arbitrage on human capital. So, the state could set the price of an hour of human attention at the minimum wage rate, and charge media companies 12% (the federal income tax rate on minimum wage) of that wage rate for each hour of human attention they consume.

  One possible solution is an attention tax. But their takeaway is that this lost productivity will more than likely be made up for with technology, which could ultimately translate into something we are already seeing: increased inequality.

  Check out the essay here. It’s an interesting read.

  2018.10.23

• Lyft announces subscription plan

  Last week, Lyft announced a new subscription plan. 

  It costs $299 every 30 days and you get 30 rides included (up to $15 each). So it represents a possible 1/3 discount on rides. If you go over the 30 rides per month or over $15 on any one ride, you simply pay the difference. Though as a subscriber, you get 5% off additional rides.

  Subscriptions are good for business. They can be like an annuity. And I suspect that with the above model, there will be unutilized rides every month that the company is just able to bank. You can’t carryover rides with this plan.

  But moreover, Lyft’s “All-Access Plan” is designed to help you ditch your car. Trade your car payment for a ride subscription plan. So if the numbers didn’t quite work for you before, maybe they do now. Depending on the situation, I can certainly see this plan being cost effective.

  But as ride hailing/sharing continues to nibble away at public transportation and personal vehicle ownership, what will this mean for cities?

  2018.10.22