Venture capitalist Chris Dixon recently published an interesting post called, Two eras of the internet: pull and push. In it, he describes two patterns that have emerged within the internet over the past decade and a half.
Pull (2000s):
Pull is when you are seeking information, usually an answer to a question. You want to know the closing time of a restaurant, the description of a hotel where you are thinking about staying, the details of an historical event you heard about, etc. You go to your computer and pull the information. The killer app for pulling information was Google.
Push (2010s):
Push is when you are using the internet in a more passive way and content comes to you. The killer app for push is social networks, the most popular being Facebook. Information is pushed from user to user via likes, shares, tweets, etc. People tend to push things they find funny, interesting, moving, outrageous, etc.
Now let’s think about this for a second, because it’s a pretty significant change.
Google’s mission is to organize the world’s information. And they have certainly made it easier for us to get the information we want. Instead of physically searching for something, you just type in a few keywords and it pops up. But, it still involves us deciding we want something and then pulling the information.
What’s fascinating to me about push is the idea that content and information comes to you. And it’s one of the reasons that I’ve always found Foursquare more interesting than Yelp – even though Yelp is far more popular as a tool to help you find somewhere to eat, drink and so on.
When I walk into a restaurant or bar now, oftentimes I’ll see a Foursquare notification popup on my phone showing me a tip that somebody has left: “Try the meatballs – they’re to die for”. I didn’t search for that. I didn’t ask for a recommendation. But Foursquare knew where I was and presented me with that information.
Now, there are obviously potential downsides to constant interruption, but let’s focus here on the opportunities. How could these same principles to be applied to other industries such as, say, real estate?
I think there’s a pull and push parallel.
Today MLS operates in a way like a search engine for homes. You decide you might be interested in buying a home and so you go online and start pulling listings.
Of course, the vast majority of people also work with a real estate agent. And in a way they’re kind of like your push. They get to know you, they figure out what you’re looking for, and then they push relevant listings and information to you.
And maybe that’s why nobody has killed off real estate agents – despite the numerous attempts. Everybody has been focusing on new pull platforms (listing platforms) as opposed to a new push platform.
Who knows.
But I think it would be naive to think that these emerging push platforms won’t reach far beyond social media.
Yesterday Opendoor.com finally launched their product in Phoenix. If you’re a regular reader of Architect This City, you might remember that back in July of this year I wrote about how they had just raised $10M of funding to make selling your home as easy as a few clicks.
Well, since then, I’ve been following them like a hawk. I had all the founders on Twitter notification (so I got notified every time they tweeted) and I was eagerly anticipating their launch.
Now that they’ve launched, we have a much better idea of how their business model is going to work. I say “better idea” only because there’s still portions of it that are a question mark for me.
In any event, Opendoor basically provides instant liquidity to homeowners. You go on, tell them about your home, and they then make you an offer to buy, which looks like this and lasts for 3 days. The offer they make you is calculated using comparable sales and adjustments based on your home’s unique characteristics.
Upon accepting their offer, they then schedule a home inspection (at their cost) to confirm your home’s condition. Once this is done, you just select your move out date and Opendoor handles the rest. The fee for all this is 5.5%, which the company claims is less than the 6% that realtors typically charge (this would be high for Toronto).
After buying your home, Opendoor plans to turn around and resell it.
What this reminds me of is a “bought deal.” In the world of investment banking, a bought deal is when the bank itself agrees to buy the entire offering of a particular security, as opposed to going out to the market and trying to raise the money. The advantage to the company (offering the securities) is that there’s no financing risk. They know they’re going to get their money. But it usually means the company gets a lower price.
So what I wonder, is if this is what’s going to happen here. Since Opendoor is effectively taking on the selling risk, does that mean their offers will be lower? Or are all their costs built into that 5.5% and that’s truly their core business model? I’m sure some of this will surface in the coming weeks.
I do, however, think they are smart to be focusing on the supply-side of the marketplace and offering virtually perfect liquidity to homeowners. Real estate is a unique asset in that it’s difficult to bring supply to the market. And so if control the supply-side, I think you have a pretty good shot at controlling the market as a whole.
Earlier today, Christopher Hume of the Toronto Star published a review of The Residences at RCMI building currently under construction on University Avenue. He gave the building a ‘B’ grade.
His main criticism was the faux facade that has been integrated into the base of the building:
Then there’s the question of the historic 1907 building the RCMI occupied until recently. Though listed as a heritage site in 1973, the city approved its demolition. Planners also allowed the neo-classical front façade to be replaced with a replica that will fool no one, another example of the city talking out of both sides of its mouth.
But faux facades aside, one of the things that makes this development project unique in Toronto is actually something that you can’t see from the outside: there’s no resident parking. Apparently there’s 9 spots for deliveries and other short-term uses, but for the 315 suites in the building there’s no parking.
Depending on where in the world you’re from this may not seem like a big deal. I’ve written before about minimum and maximum parking requirements, and how some cities – such as Berlin – don’t have them. But here in Toronto, we do. And the city generally takes them very seriously.
“To assume a residential development of the project’s scale might be totally car-free runs counter to expert study and experience,” municipal staffers argued. “Although there are many households in the downtown without cars, it would be highly unlikely to find 315 of them permanently concentrated in one building.”
The fact planners were dead wrong is a shocking sign of a department either out of touch or that doesn’t believe its own hype.
In so many ways – as Hume pointed out in his article – this is complete hypocrisy. We’re always talking about building walkable communities and encouraging alternate forms of mobility, but when it comes time to build anything new, we force a certain number of parking spots to be included. And so we end up encouraging the exact opposite.
This also has a significant impact on the way we build our cities. Parking minimums can actually render smaller sites “undevelopable” simply because there isn’t enough room to lay out the required parking. In fact, it might surprise you how much of what we do ends up being governed by cars, parking, and traffic.
That’s why I think this image is so impactful:
The most accurate representation of the public space we give up for cars. Courtesy of @tchebotarev :) #athiscity pic.twitter.com/KBUX0Td4fj
— Brandon G. Donnelly (@donnelly_b)
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But I’m certain that a lot of this will change as Toronto continues to grow. Progressive cities all around the world are rethinking their positions on parking, and on cars in general.
Earlier this year Sao Paulo joined the club and got rid of parking minimums for sites along major transit corridors. And they actually imposed a parking maximum: 1 spot per residence. The expectation is that this will reduce traffic and improve housing affordability.
Parking minimums may not seem like a big deal, but the reality is that their impacts are far reaching. They change development patterns, they change project economics, and they send a message about the kind of city you hope to build.
Image: Looking south on University Avenue in Toronto (Flickr)