Category: Tech

• The tokenization of cities

  The web in its current state is like a city without public spaces. People can only interact in places owned by someone else, and a small group of landlords captures an oversized share of all economic activity. – Dror Poleg

  I would encourage you all to read Dror Poleg’s recent article called, “The Token Society: Cryptocurrencies will change the way we work, live, and love.” It’s an interesting read, particularly for us urbanists. Poleg starts with urban history. He first talks about how the emergence of industrial cities allowed for new divisions of labor. The example he gives is that of the quatorzième, which is a job that emerged in Parisian society sometime in the late 19th century. The job of a quatorzième was literally to be the 14th person at dinners and functions. Since a headcount of 13 was thought to be bad luck, it was important to be able to call on someone at a moment’s notice to fill this critically important role. While this probably seems silly in today’s context — I mean, who goes out anymore? — it was a real thing and it was a thing that the modern city was suddenly able to provide. Poleg goes on to thread this idea all the way through to today. Web 2.0 enabled a new sharing economy and much larger digital communities (though note the quote at the top of this post). However, we’re nowhere near done yet. Web 3.0 is going to, in his words, enable “the finalization [or tokenization] of all human activity.” Welcome to the new token society.

  P.S. I’m by no means an expert on cryptocurrencies. I have just been watching from afar for the past several years. But over the last few months, it has been hard not to pay attention to what is happening with NFTs and the Ethereum network. And I’m not just talking about the price of ETH (which is up ~56% over the last month alone). I am now of the opinion that we are seeing one of the first mainstream use cases emerge on top of a blockchain network. And yes, I believe it will also change our cities.

  2021.05.03

• Opendoor launches cash-backed offers

  Opendoor is best known for allowing homeowners to instantly sell their homes online. Enter your address. Get a cash offer. And then choose a closing date. (The commissions are around 5%.)

  Today, Opendoor announced something new called cash-backed offers. What it does is help to reduce the friction on the buy side and how it works is that Opendoor literally backs your offer with cash.

  If for whatever reason you can’t come up with suitable financing, Opendoor will buy the home themselves and you’ll have 240 days to figure out your affairs and buy it back from them for the same price and at the same terms.

  The idea is that it helps to improve the attractiveness of your offer, which is particularly useful in competitive low interest rate environments, such as the one we’re living through right now. (Already about 36% of the market in the US is compromised of all-cash homes sales.)

  Opendoor started by dramatically reducing the barriers to selling a home (supply). And now they’re trying to make things easier on the demand side of the marketplace. At the same time, the process is going digital. I think this is great for consumers.

  For more on the trends shaping home buying in the US, check out this report that was published by Opendoor last month.

  Full disclosure: I am long $OPEN.

  2021.03.04

• What are your thoughts on Airbnb?

  Surface Magazine just republished this 2016 interview with Arne Sorenson. Sorenson was CEO of Marriott, but sadly passed away this week after a battle with pancreatic cancer.

  One of the questions he was asked in the interview was about the rise of Airbnb. This is how he responded:

  “It’s fascinating. I hope we’re not as exposed to this as the taxi industry is right now.  Taxis in many cities are awful and hard to find. So here comes Uber with a better product. In the hotel business, I still think we can deliver better service, so we don’t have quite the same risk. Airbnb is fascinating. Increasingly, it’s less personal, and there are more dedicated units. The more they get into that space, they become a competitor. The story isn’t over, but we’re set up to compete well.“

  Taxis were awful and that business model is done for good. But how do Sorenson’s comments about Airbnb hold up today?

  Marriott ended up launching its own home sharing platform in 2019, but it’s comparatively small as I understand it. There are also no shortage of bull cases for Airbnb (and just look at its market cap).

  But there are also headwinds. Barcelona, for example, is looking to permanently ban people from renting out private rooms on a short-term basis (< 30 days). This is even if the rest of the home remains owner occupied.

  So what use cases remain? Only extended stays?

  If I look at my own pre-pandemic travel record, I am largely in the hotel camp. I like the consistency and I like certain brands. But maybe that’s just me getting older. What do you all think? Leave a comment below.

  2021.02.17

• The great unbundling

  

  

  Every year, Benedict Evans publishes a presentation about the “big macro tech trends” impacting the global economy. They are always excellent and I usually share them here on the blog. It’s also becoming harder and harder to differentiate tech trends from the rest of the economy, and so in many ways this is just a presentation about important macro trends.

  In this year’s presentation, he focuses on the “unbundling” of retail, ecommerce, advertising and TV; China and the end of the American internet; and a few other timely topics. To view the presentation, click here. Benedict also delivered this same presentation at a recent event by Protocol and Nasdaq (video link) in case you’d prefer to consume the content that way.

  2021.02.10

• Using Clubhouse to talk about real estate and proptech

  Okay, Clubhouse is pretty awesome. I participated in my first discussion room — thanks to my friend Evgeny, who has been a vocal supporter of the platform — and I have now seen the light. The topic was real estate and PropTech. And we hope to do it again.

  It feels a bit like Twitter to me, but obviously with audio and with greater controls and visibility in terms of who can participate inside of a discussion room.

  It also makes perfect sense to me that Twitter is piloting their own version of Clubhouse called Spaces. That feels like a natural extension and something that needs to happen. Perhaps some of the moderation features will also make their way into the rest of Twitter.

  As many of you already know, what makes Clubhouse unique is that the communication is free-flowing and impromptu. You are able to see what topics people are talking about and then jump in and out of those audio rooms, as well as invite people to join a discussion that you may be having.

  All of this makes the communication feel like you’re at a party or in an open office. Over there you can see/hear that someone is talking about the “Pensky file.” If that’s interesting and/or relevant to you, you have the option of jumping into that conversation.

  I wouldn’t be surprised to see some of these features and behaviors translated over into workplace collaboration tools. I think it would be helpful to see what other discussions are taking place within a team or company.

  Maybe if we made things a little more free flowing, we wouldn’t need so many damn Zoom meetings.

  2021.02.09

• Thinking long-term and telling the right story

  With the recent announcement that Jeff Bezos will be stepping down as CEO of Amazon later this year, there have been countless articles about the legacy that he will be leaving behind, as well as about the next act that is expected to follow. A big part of this legacy is centered around innovation.

  Do any of you remember Amazon’s Fire Phone? Perhaps not. It was a complete failure. But that doesn’t matter because most people only remember the successes — everything from Amazon Prime to AWS, the latter of which was heavily doubted at the time. Isn’t this a distraction from the core business of selling books?

  This recent FT article by Dave Lee also makes a good point about another one of Amazon’s innovations: thinking long-term and getting the market to buy in to that approach.

  But another Bezos innovation has been his relationship with Wall Street, a world he was intimately familiar with, having previously worked at investment firm DE Shaw.

  Starting with his first letter to shareholders in 1997, Bezos consistently warned investors that profits would forever be secondary to growth, in what would become a recurring theme throughout Amazon’s history as it expanded its distribution network from seven dedicated facilities in 1999, to more than 1,500 today.

  “Bezos has an unparalleled ability to peddle his vision to Wall Street,” says Stacy Mitchell, from the Institute for Local Self-Reliance, who advocates breaking Amazon into smaller pieces.

  “He was given this incredibly long leash, selling books at a loss. Independent bookstores could have multiplied across the country with that business model. But of course, they weren’t allowed to lose money.”

  It reminds me of a blog post that Fred Wilson penned at the end of last year, where he argued that speculative frenzies tend to be off in their magnitude, but directionally correct.

  The point he was making was that who knows what the market cap of a company like Tesla should be. With its current market cap, it has been able to raise a lot of money without much dilution and that is going to accelerate our shift toward electric vehicles — a good thing and the right path forward.

  Of course, if you’re an independent bookstore owner, you may not look at Amazon’s approach as being all that innovative. In fact, you may have another word in mind.

  But if you look at the parcel room in any condo or apartment building (as I do all the time), it’s pretty clear to me that the majority of ecommerce transactions are happening on Amazon. A machine has been built that seemingly renders people what they want, how they want it.

  2021.02.05

• Voi Cube — the first store in Switzerland without any employees

  

  Swiss supermarket chain, Migros, has just launched what is being called the first store in Switzerland to not have any employees. The concept, called the Voi Cube, is a small container-like outparcel space that is open 24/7 and offers about 500 or so everyday items. You enter using their app, you grab what you need, and then you check yourself out. (Presumably the doors don’t open back up until you’ve paid.)

  The concept is being positioned as a convenience add-on to its existing grocery store business. Swiss federal labor laws still prohibit retail staff from working on Sundays, and so this is a clever way for people to shop for essentials during that time. They just got rid of the labor component. It also begins to show just how flexible and adaptable grocery stores can be as the retail landscape continues to evolve.

  2021.02.03

• Too many plug types is a problem for EVs

  Google Maps recently introduced a new feature that allows you to search for electric vehicle charging stations by plug type. Here’s what it looks like when I tried it here in Toronto:

  

  While helpful, it demonstrates two things. One, there are too many plug types and that’s a problem for EV adoption. Nissans and Mitsubishis use CHAdeMO, BMWs use CCS, and Tesla has its own proprietary plug, for example.

  Two, this is one the main reasons why Tesla is so far ahead when it comes to EVs. They’ve been very purposeful in building out an expansive network of charging stations so as to avoid what is very clearly a chicken-and-egg problem. You need great EVs and then places to charge said vehicles.

  As of January 2021, Tesla operates over 2,105 Supercharger stations worldwide with over 1,094 stations in North America, 589 in Europe, and 423 in Asia/Pacific. This is how you start to compete when there are over 160,000 gas stations in the US alone.

  2021.01.31

• Rich people and nerds (in Miami)

  

  Back in 2006, Paul Graham penned an essay about how to be Silicon Valley. Since then, it seems like every city on the planet has tried to replicate the successes of the Valley. At the time, his argument was pretty simple. Geography used to be destiny when it came to cities. New York City, for example, is arguably what it is today because of its geography and its deep harbor, which created a natural competitive advantage compared to other east coast cities such as Boston and Philadelphia. But this, he argues, has become far less relevant. Now, you can create a great city pretty much anywhere. So what are the necessary ingredients?

  Paul argued that you only really need two kinds of people to create a technology hub: rich people and nerds. You need people creating new things and you need rich people to fund those new ideas. That’s it. So in theory, if you could just dump a bunch of these kinds of people in one place — Nunavut? — you’d perhaps get unicorns coming out the other end. He goes on to say that Miami is a perfect example of a city that has lots of the former, but very few of the latter. It has lots of rich people, but, in his words, it’s not the kind of place that nerds like. So it is/was not a good startup city. (I’m a nerd and I like Miami.)

  But the year is now 2021 and a global pandemic seems to be helping to change this dynamic. Every tech entrepreneur and/or investor now seems to want to move to either Austin or Miami. To that end, SoftBank recently announced that it has earmarked $100 million for startups that are based in Miami or that plan to be based in Miami in the near future. It’s perhaps a good testament to the momentum that seems to be developing around the startup scene in the city, which is something that their mayor has been incredibly vocal about.

  But here’s something to consider. Was Paul right about the two requisite ingredients for a successful startup hub? And if so, does Miami now have enough nerds? Maybe this recent influx of people was just what it was missing.

  Photo by Cody Board on Unsplash

  2021.01.28

• Smart-lock company Latch to go public

  The WSJ announced today that smart-lock company Latch is getting SPAC’ed (i.e. going public). The deal, which is sponsored by commercial real estate firm Tishman Speyer, values the company at about $1.56 billion.

  One of the things that is attractive about Latch is that they’re a lot more than just a smart-lock company. They really bill themselves as being a “full-building operating system.” Their platform, called LatchOS, offers everything from access door solutions to guest/delivery management.

  If you operate a multi-family apartment building, one of the first things that you would like to do away with is all of your suite entry keys. They are a pain to manage. So smart entry locks are a huge value-add. I guess that’s why 1 in 10 apartments in the US are now being built with LatchOS, according to the company.

  Another thing that is attractive about Latch is that they operate as a SaaS/subscription service. So reoccurring revenue and (probably) a higher multiple. Given that changing all of the locks in a big apartment building is no simple task, there are also some natural barriers to churn.

  To learn more about today’s announcement, you can check out the WSJ or TechCrunch.

  2021.01.25