I had coffee this morning with an engineer who is going back to business school in order to segue into real estate development. This is a fairly typical journey. Lots of people come into development from a related discipline. In my case, it was architecture (even though I never practiced architecture). It was also the case when I went to Rotman that something like a third of the class had a background in some sort of science or engineering field.

However, one thing I did mention this morning was that he will likely find that he will need to unlearn certain things as he moves forward. Every discipline tends to indoctrinate us with a certain way of thinking about the world. Lawyers tend to be a certain way. Engineers tend to be a certain way. And architects tend to be a certain way.

In my case, I found that architecture school taught me to be, among other things, an intense perfectionist. The modus operandi in design studios is that your project is never ever complete. The more you work on it, the better it will become. And as a result, you should feel a deep onus to work on it as much as humanly possible. But in business, this isn't practical. In the vast majority of cases, speed over perfection will serve you better.

I believe wholeheartedly in multi-disciplinary backgrounds, and maybe this is one of the reasons why. It shows you what you should unlearn. What would you say your biases are?

Seth Godin recently posted this four quadrant chart on his blog. It is for plotting different products based on price and based on want vs. need. In his post, he asks his audience to think about what they’re offering and which quadrant it fits within. It can only be in one.

I am fascinated by questions of pricing. At at some point on this blog, I wrote about a pricing class that I took at Rotman while I was doing my MBA about a decade ago. It stands out to me as one of my favorite university classes.

So let’s consider these four quadrants.

In the top left, you have inexpensive products that are wants and not needs. This quadrant is where you’d place those novelty sunglasses you picked up for your friend’s theme party. Fun for that moment, but if they break or you lose them, that’s probably okay.

In the top right are expensive wants. Seth uses the example of a Hermès purse. The need is a place to put your belongings, but that’s not how these sorts of items are priced. The real value, arguably, comes from their “signaling” and how they make the owner feel.

This is the luxury goods category. Demand will likely be cyclical and sporadic, and so you’ll need to make sure that you have fat margins.

In the bottom right are expensive needs — like a pacemaker. Seth’s point is that these products need to work exceptionally well, all of the time. In the case of a pacemaker, it is truly a matter of life or death. At the same time, there’s going to be less price sensitivity.

In the bottom left are the inexpensive wants. Low cost products that people really want and are infinitely useful. Seth’s example is Amazon Web Services.

This quadrant of products is attractive because demand will naturally be extremely high. Cheap and invaluable will do that. However, Seth’s caution is that you still need to sustainably deliver the goods. These aren’t novelty sunglasses.

I find it helpful to think of products as existing in only one quadrant. But most offerings aren’t going to exist all they way in one corner. It’s perhaps important to consider the “job to be done.” (To borrow from the late Clayton Christensen.)

Take, for example, housing. On a fundamental level, it’s a need. We all need shelter. But it can also be a want, or have aspects of want. I need a place to live. But I want a place in the mountains. This subtle difference means something very different when plotted precisely.

Image: Seth Godin

I’ve been getting a lot of (email) questions lately about what to study in order to become a real estate developer. So I thought I would reblog this post that talks about exactly that. I wrote it over a year ago and I almost forgot it existed.

At the same time, I’m reminded of something: I think these questions really speak to the fact that there’s a significant opportunity (particularly in Canada) in terms of real estate development education. 

Oftentimes when I get these questions, I end up recommending the Master of Science in Real Estate Development (MSRED) at Columbia, MIT, and USC. Why don’t we have something similar (and better) in Canada? We are falling behind.

I have raised this with some Universities here in Toronto, but the response I got was that they felt the real estate courses being offered as part of their existing MBA programs were more than sufficient. I think we can do a lot better.

One professor suggested that I line up a big donor and work with them to spearhead the creation of the (Insert Donor Name Here) School of Real Estate. I think that’s a great idea, but not something I have the capacity for right now.

Hopefully somebody else out there is of the same mind.

Post Update: 3 days ago the Schulich School of Business (York University) announced a one-year full time Master of Real Estate and Infrastructure (MREI) program – the first of its kind in Canada. 

This is great news. 

Now I would love to see the University of Toronto and Ryerson University (as well as others) step up and leverage their respective architecture schools. Schulich is already out of the gate on this one.

I had coffee this morning with an engineer who is going back to business school in order to segue into real estate development. This is a fairly typical journey. Lots of people come into development from a related discipline. In my case, it was architecture (even though I never practiced architecture). It was also the case when I went to Rotman that something like a third of the class had a background in some sort of science or engineering field.

However, one thing I did mention this morning was that he will likely find that he will need to unlearn certain things as he moves forward. Every discipline tends to indoctrinate us with a certain way of thinking about the world. Lawyers tend to be a certain way. Engineers tend to be a certain way. And architects tend to be a certain way.

In my case, I found that architecture school taught me to be, among other things, an intense perfectionist. The modus operandi in design studios is that your project is never ever complete. The more you work on it, the better it will become. And as a result, you should feel a deep onus to work on it as much as humanly possible. But in business, this isn't practical. In the vast majority of cases, speed over perfection will serve you better.

I believe wholeheartedly in multi-disciplinary backgrounds, and maybe this is one of the reasons why. It shows you what you should unlearn. What would you say your biases are?

Seth Godin recently posted this four quadrant chart on his blog. It is for plotting different products based on price and based on want vs. need. In his post, he asks his audience to think about what they’re offering and which quadrant it fits within. It can only be in one.

I am fascinated by questions of pricing. At at some point on this blog, I wrote about a pricing class that I took at Rotman while I was doing my MBA about a decade ago. It stands out to me as one of my favorite university classes.

So let’s consider these four quadrants.

In the top left, you have inexpensive products that are wants and not needs. This quadrant is where you’d place those novelty sunglasses you picked up for your friend’s theme party. Fun for that moment, but if they break or you lose them, that’s probably okay.

In the top right are expensive wants. Seth uses the example of a Hermès purse. The need is a place to put your belongings, but that’s not how these sorts of items are priced. The real value, arguably, comes from their “signaling” and how they make the owner feel.

This is the luxury goods category. Demand will likely be cyclical and sporadic, and so you’ll need to make sure that you have fat margins.

In the bottom right are expensive needs — like a pacemaker. Seth’s point is that these products need to work exceptionally well, all of the time. In the case of a pacemaker, it is truly a matter of life or death. At the same time, there’s going to be less price sensitivity.

In the bottom left are the inexpensive wants. Low cost products that people really want and are infinitely useful. Seth’s example is Amazon Web Services.

This quadrant of products is attractive because demand will naturally be extremely high. Cheap and invaluable will do that. However, Seth’s caution is that you still need to sustainably deliver the goods. These aren’t novelty sunglasses.

I find it helpful to think of products as existing in only one quadrant. But most offerings aren’t going to exist all they way in one corner. It’s perhaps important to consider the “job to be done.” (To borrow from the late Clayton Christensen.)

Take, for example, housing. On a fundamental level, it’s a need. We all need shelter. But it can also be a want, or have aspects of want. I need a place to live. But I want a place in the mountains. This subtle difference means something very different when plotted precisely.

Image: Seth Godin

I’ve been getting a lot of (email) questions lately about what to study in order to become a real estate developer. So I thought I would reblog this post that talks about exactly that. I wrote it over a year ago and I almost forgot it existed.

At the same time, I’m reminded of something: I think these questions really speak to the fact that there’s a significant opportunity (particularly in Canada) in terms of real estate development education. 

Oftentimes when I get these questions, I end up recommending the Master of Science in Real Estate Development (MSRED) at Columbia, MIT, and USC. Why don’t we have something similar (and better) in Canada? We are falling behind.

I have raised this with some Universities here in Toronto, but the response I got was that they felt the real estate courses being offered as part of their existing MBA programs were more than sufficient. I think we can do a lot better.

One professor suggested that I line up a big donor and work with them to spearhead the creation of the (Insert Donor Name Here) School of Real Estate. I think that’s a great idea, but not something I have the capacity for right now.

Hopefully somebody else out there is of the same mind.

Post Update: 3 days ago the Schulich School of Business (York University) announced a one-year full time Master of Real Estate and Infrastructure (MREI) program – the first of its kind in Canada. 

This is great news. 

Now I would love to see the University of Toronto and Ryerson University (as well as others) step up and leverage their respective architecture schools. Schulich is already out of the gate on this one.