Andrew Chen recently delivered a keynote at StartCon in Australia called: What’s Next in Growth? You can find his entire talk, here, on his blog.
One of the themes of his talk is that, “technology changes, but people stay the same.” I like that. See above.
But more specifically, his presentation focuses on 3 techniques for growing businesses and products: customer referrals, viral content, and bootstrapping marketplaces. All of it is interesting, but I’m particularly fascinated by the last one.
Marketplaces are all around us. Uber is a marketplace that pairs drivers and riders. Bars are a marketplace that try to pair people together. Finding, trading, and transacting (whatever that might mean for the marketplace in question) seems so fundamental to humans. And cities really empower that.
The challenge with marketplaces is that they’re hard to start. There’s always a chicken-and-egg problem and so one side of the marketplace usually needs to be “hacked” at the beginning.
Uber is a perfect example of this. At the outset, it didn’t have enough liquidity in its marketplace to compete with incumbent taxis. That is, it took longer to get an Uber than to get a taxi.
So instead, the value proposition was not about speed (or cheapness); it was about luxury. Uber was “everyone’s private driver.” That made waiting acceptable. You were getting a different level of service. The first Uber I ever called in Toronto took 20 minutes to get to my place in midtown.
But obviously as liquidity increased, Uber was able to move downmarket and capture more (most) of the taxi market. Marketplaces are powerful once they get going. Network effects.
I say all of this because, as many of you know, I have spent a lot of time wondering about the future of real estate marketplaces.
At the same time, I also think that many of these seemingly tech-focused lessons could be applied to cities. Starting an online marketplace is difficult. So is building a new neighborhood from scratch. In the end, it’s always about people.
The following chart was created by Branko Milanovic (Visiting Presidential Professor, Graduate Center, City University of New York and Senior Scholar, Luxumberg Income Centre) and by Christoph Lakner (Economist in the Development Research Group at the World Bank.
It is known as the “elephant graph” because, well, it kind of looks like an elephant. The trunk is on the right.
What it shows is global cumulative real income growth from 1988 to 2008 for every percentile around the world.
The Centre for Urban Research and Land Development at Ryerson University recently published the following chart on their blog:
It’s a look at population growth across a few North American cities, broken down according to natural increases, net internal migration from other parts of the respective country, and net immigration from outside of the respective country.
When you sum up the pluses and minuses shown above, you get to population growth numbers that look like
Andrew Chen recently delivered a keynote at StartCon in Australia called: What’s Next in Growth? You can find his entire talk, here, on his blog.
One of the themes of his talk is that, “technology changes, but people stay the same.” I like that. See above.
But more specifically, his presentation focuses on 3 techniques for growing businesses and products: customer referrals, viral content, and bootstrapping marketplaces. All of it is interesting, but I’m particularly fascinated by the last one.
Marketplaces are all around us. Uber is a marketplace that pairs drivers and riders. Bars are a marketplace that try to pair people together. Finding, trading, and transacting (whatever that might mean for the marketplace in question) seems so fundamental to humans. And cities really empower that.
The challenge with marketplaces is that they’re hard to start. There’s always a chicken-and-egg problem and so one side of the marketplace usually needs to be “hacked” at the beginning.
Uber is a perfect example of this. At the outset, it didn’t have enough liquidity in its marketplace to compete with incumbent taxis. That is, it took longer to get an Uber than to get a taxi.
So instead, the value proposition was not about speed (or cheapness); it was about luxury. Uber was “everyone’s private driver.” That made waiting acceptable. You were getting a different level of service. The first Uber I ever called in Toronto took 20 minutes to get to my place in midtown.
But obviously as liquidity increased, Uber was able to move downmarket and capture more (most) of the taxi market. Marketplaces are powerful once they get going. Network effects.
I say all of this because, as many of you know, I have spent a lot of time wondering about the future of real estate marketplaces.
At the same time, I also think that many of these seemingly tech-focused lessons could be applied to cities. Starting an online marketplace is difficult. So is building a new neighborhood from scratch. In the end, it’s always about people.
The following chart was created by Branko Milanovic (Visiting Presidential Professor, Graduate Center, City University of New York and Senior Scholar, Luxumberg Income Centre) and by Christoph Lakner (Economist in the Development Research Group at the World Bank.
It is known as the “elephant graph” because, well, it kind of looks like an elephant. The trunk is on the right.
What it shows is global cumulative real income growth from 1988 to 2008 for every percentile around the world.
The Centre for Urban Research and Land Development at Ryerson University recently published the following chart on their blog:
It’s a look at population growth across a few North American cities, broken down according to natural increases, net internal migration from other parts of the respective country, and net immigration from outside of the respective country.
When you sum up the pluses and minuses shown above, you get to population growth numbers that look like
The 50-60th percentile range is also up. These are people in the developing world who started making a bit of money as a result of industrialization. In percentage terms things look good, but in absolute terms they’re not making a lot of money. Still, they are becoming better off.
Where things fall apart is in the 75-90th percentile range. These are essentially the lowest income folks in the developed world. Their incomes haven’t been growing at the same rate and, in some cases, their incomes decreased in real terms. They are falling behind.
Kaila Colbin wrote a Medium post about this graph and asks whether the exponential growth in technology that we are seeing today, will end up creating more jobs than it eliminates – as it did before in the past.
She also wonders whether the dip we are seeing in the 75-90th percentile range could spread left as automation eliminates jobs for those folks in the developing world.
These are important questions.
Houston, Dallas, and Atlanta are monsters in terms of population growth. They’re obviously smaller than New York and Los Angeles, and so on a percentage basis they are really adding a lot of people. Much of this has to do with the ease in which housing can be added in those cities and their relative affordability.
Toronto is competitive with New York and Los Angeles in terms of an absolute number, but again our base is smaller so on a percentage basis we are growing faster. The big story with Toronto is our dependence on immigration to grow.
The one city on this list that might surprise some of you is Chicago. Toronto and Chicago share many similarities and are often compared. But when you look at how the Chicago metropolitan area is shedding people, you see that, at least in this regard, it’s in structural decline.
The 50-60th percentile range is also up. These are people in the developing world who started making a bit of money as a result of industrialization. In percentage terms things look good, but in absolute terms they’re not making a lot of money. Still, they are becoming better off.
Where things fall apart is in the 75-90th percentile range. These are essentially the lowest income folks in the developed world. Their incomes haven’t been growing at the same rate and, in some cases, their incomes decreased in real terms. They are falling behind.
Kaila Colbin wrote a Medium post about this graph and asks whether the exponential growth in technology that we are seeing today, will end up creating more jobs than it eliminates – as it did before in the past.
She also wonders whether the dip we are seeing in the 75-90th percentile range could spread left as automation eliminates jobs for those folks in the developing world.
These are important questions.
Houston, Dallas, and Atlanta are monsters in terms of population growth. They’re obviously smaller than New York and Los Angeles, and so on a percentage basis they are really adding a lot of people. Much of this has to do with the ease in which housing can be added in those cities and their relative affordability.
Toronto is competitive with New York and Los Angeles in terms of an absolute number, but again our base is smaller so on a percentage basis we are growing faster. The big story with Toronto is our dependence on immigration to grow.
The one city on this list that might surprise some of you is Chicago. Toronto and Chicago share many similarities and are often compared. But when you look at how the Chicago metropolitan area is shedding people, you see that, at least in this regard, it’s in structural decline.
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