$UBER went public on Friday. Notwithstanding the initial stumble, Uber will go down in history as one of the most lucrative venture capital investments of all time.
The stock is down from its IPO price of $45 per share, but at that price, the initial seed investment of $510,000 that First Round Capital made back in 2010 was worth about $2.5 billion on Friday.
Here is a list of some of the other notable investors from Uber's seed round and what their initial investments grew to over the course of 9 years (chart from the WSJ):
Of course, for every Uber, there are many more failed companies. And for every investor who turns $5,000 into nearly $25 million, there are many more who decided to pass on the opportunity.
In the case of Uber, many early investors couldn't see how the product could go mainstream. It initially started upmarket with limousines, which was actually a clever way to hack the chicken-and-egg problem that plagues marketplaces.
Many also wondered how many metro areas outside of San Francisco had the kind of urban density and supply and demand drivers to support this kind of a service.
Today, some nine years later and many billionaires later, lots of people -- including myself -- are still wondering: Will Uber turn out to be a great (i.e. profitable) business? Hindsight is always 20/20.
I was recently asked: How do you go into a neighborhood, build new, and not erase and/or sterilize what makes that neighborhood interesting in the first place?
Gentrification is a controversial topic in city building. Too often I think we ignore what happens when we don’t invest in communities, but that doesn’t mean we shouldn’t be deliberate when we do make investments.
Development is filled with tensions. We are constantly trying to navigate through constraints and balance out the wants of each and every stakeholder. It becomes an art. It doesn’t always work out as planned.
To state the obvious, I would say that it starts with caring. If you’re not interested in community and city building, then the default response will be to simply replicate what worked on the last project.
But every place has a local culture. And if city builders are to have any hope of preserving and building upon what makes that place unique, we have to first understand it. What made it successful in the first place? What is its DNA?
Because then you’re in a position to think about both built form and programming in a way that is culturally sensitive.
One example that comes to mind is the proposed redevelopment of Honest Ed’s / Mirvish Village here in Toronto.
The “micro tower” design is intended to create the sense that the area was built up organically over time. And the fine grain retail (50-60 individual retail spaces) is intended to house local retailers, micro retail startups, and pop-up shops. To me, both of these elements speak to the history and fabric of the area.
Adopting a unique approach can also sometimes mean rethinking how you measure ROI. If all you care about is who will pay you the highest rent – right now – then you’re going to make a decision based on that metric.
Maximizing revenue is not a bad thing. That’s what businesses are supposed to do. But sometimes there is or should be a larger vision at play. And sometimes you need to take a longer view.
In Toronto’s Distillery District, the developers made the decision to eschew large chains and franchises (in favor of more local retailers) so that they could create a very particular place. Ultimately that particular place became a great place to sell condos, but they suffered early on for it.
I like how Gary Vaynerchuk put it when he asked: What is the ROI of your mother? Sometimes you may not be able to measure it, but that doesn’t mean the ROI isn’t there.
Any other suggestions?
Earlier this month the Toronto Star published an article talking about the resurgence of streetcars in American cities. According to the Star, 89 cities in the US are currently implementing or at least considering building some form of surface-rail system.
But the article also goes on to argue that it could be a snobbish fad. Streetcars are new. They’re shiny. And they make yuppies – who don’t like taking buses – feel better about themselves. But is the ROI really there? Is the economic impact of streetcars as big as people are making it out to be?
To support this argument, the Star quoted transportation planner Jarrett Walker, who I’ve mentioned here before on Architect This City. But according to a follow-up post that Walker did on his blog, it would appear that he was misrepresented in the article. Here’s a snippet of his response:
Here’s the bottom line. Streetcars are just a tool. They can be used in smart ways and in stupid ways. Asking a transit planner for an opinion about a transit technology is like asking a carpenter what his favorite tool is. A good carpenter sees his tools as tools and choses the right one for the task at hand. He doesn’t use his screwdriver to pound nails just because he is a “screwdriver advocate” or “hammer opponent”. Yet the Toronto Star assumes that nobody involved in transit debates is as smart as your average competent carpenter.
I wanted to share this because I think it’s a great way to approach transportation planning and because I think it gets at a larger issue that we continue to face here in Toronto: We keep politicizing mobility tools. Cyclists have become pinkos. Streetcars are a war on the car. And the list goes on. How about we just look at the problem, and figure out what solution would work best?
Image: Flickr
