Brandon Donnelly

Daily insights for city builders, delivered every morning at 6 AM ET. I’m Brandon Donnelly — a Toronto-based real estate developer and founder of Globizen. I’ve been writing here since 2013.

Subscribe

Category: Tech

  • Nurx announces home testing kit

    I have been debating whether I should continue writing about what is already on all of our minds, or if I should focus my attention on positivity and humor. The latter is hugely important at a time like this, which is why I have been trying to intersperse my thoughts, both here and on Twitter, with things like funny videos, dance music, and architecture.

    But the reality is that none of us know how this is all going to play out. As I mentioned yesterday, very few of us have a mental model for this kind of macro event. So it’s important for all of us to continue learning. Is our country taking the right approach? Are we doing enough? How long are we going to have to live like this and what does that mean for the global economy?

    The Financial Times published an invaluable story earlier this week about a small town outside of Venice called, Vò. With only 3,300 people, the town was supposedly able to test and retest all of its residents while the rest of northern Italy was growing as an epicenter for the Wuhan virus.

    In late February, they completed their first round of testing and found that about 3% of the town had been infected. But it’s important to note that about 50% of those that were infected were completely asymptomatic! However, because everyone was tested, the asymptomatic people got immediately quarantined.

    The town did a second round of testing about 10 days later and that point the infection rate had dropped to about 0.3%. Of course, if all those asymptomatic people had been out and about in the town of Vò, this would not have been the case. There now appears to be no new cases in Vò.

    It is for this reason that the WHO is urging diligent and repeated testing. But that obviously needs to be done in a sensible way. Having people line up — together — for hours upon hours is an obvious problem. Most people are not getting tested.

    Earlier this morning, San Francisco-based Nurx announced a home testing kit for the Wuhan virus. Supposedly it is the first of its kind in the US. (It’s not yet available in Canada — I asked). I don’t know how available it is to Americans or how accurate it is, yet, but I do know that something like this needs to become widespread.

  • Systemizing Airbnb

    Wired recently published a long read called, “I stumbled across a huge Airbnb scam that’s taking over London.” Apparently the people who do these sorts of things on the platform (things that are both illegal and questionable) call it “systemizing.” This is the process of trying to create scale. Secure lots of units. Create a bunch of fake/duplicate accounts. And try and maximize revenue.

    This obviously runs counter to Airbnb’s mission of “authentic places”, “community”, and “local hosts.” But as Benedict Evans points out in his latest newsletter, “where there is money and people, there will be scams.” And Airbnb is obviously doing everything it can to quash this kind of activity, especially as it prepares for a possible IPO this year. The company has a policy of zero tolerance.

    Fraud and government regulation are likely to be the two biggest kinks to work out as the company gets ready for public consumption. I am sure an equilibrium will be found; it’s just going to take some time and a few lawyers. It goes to show you just how challenging startups can be when you combine digital (tech) and physical (real estate).

  • Standing on the shoulders of giants

    “Every failed idea from the dotcom bubble would work now.”

    — Marc Andreessen

    Every year, Benedict Evans publishes a “big presentation” on the current trends in tech. They are always excellent and they help to put a lot of things into perspective. This year he covers everything from TV subscriptions to online mattress companies (there were 175 of them as of last year), and asks: What’s next in tech?

    New technologies have typically come in S-Curves (see above). They start out slow, see rapid growth, and then taper off. To use Benedict’s wording, they go from stupid to exciting and then to boring. Smartphones are currently in the boring phase. Each new year sees only incremental change. So, what’s next? That is still TBD.

    To download a full copy of the presentation, click here.

    Slide Image: Benedict Evans

  • The State of Mobile 2020

    Analytics firm, App Annie, has just published its annual The State of Mobile report. As you might expect, our phones continue to consume more of our time, attention, and money. Last year, there were over 204 billion app downloads across the world. Global mobile advertising hit $190 billion and, by the end of this year, it is forecasted to reach $240 billion. By 2023, the mobile industry is expected to contribute some $4.8 trillion to global GDP.

    Compared to 2 years ago, the world is spending, on average, 35% more time on their phones. See above chart. Mobile-first countries such as Indonesia and Brazil spend even more time on mobile as they skipped over the PC era that was seen in more mature markets. But globally, all of us are doing more on our phones — everything from managing our investments to consuming media (TikTok had an explosive 2019).

    Financial app usage increased significantly last year. Above are the top “breakout finance apps” of the year. PC Financial (the financial services brand of Loblaw) saw the greatest year-over-year growth in downloads but, since it only launched last year, it was starting from a base of 0. Fintech apps, which grew even faster than traditional banking apps, demonstrate that the big banks probably need to step up their mobile game.

    Young people do, of course, spend more time on mobile. Generation Z (those born between 1997 to 2012) had 60% more sessions per user in top apps than older demographics. But as of the end of last year, Generation Z is believed to have surpassed Millennials as the largest generational cohort in the world at about 32% of the population. So this wave is going to continue to come.

    If you’d like to download a fully copy of App Annie’s mobile report, click here. You’ll need to enter your email address. But there’s a lot of interesting data in the report. You can almost ignore that it’s specifically about mobile and think of it as an overview of where the world is heading.

    Charts: App Annie

  • Toronto’s tech cluster(s)

    A recent study by the City of Toronto has looked at why tech firms cluster (agglomeration economies) and where they cluster in the city. Here are maps of what they found:

    Downtown captured almost half (49.2%) of all tech employment in the city with some 29,701 jobs. The South Employment Monitoring Area, which is the area outlined above in blue, captured 63.4% of the city’s tech base.

    I usually shy away from headlines touting some total number of tech jobs because I feel that it can become a bit of a vanity metric. What about the quality of those jobs? How much venture capital have the companies raised?

    But this report is different and it is interesting to see the extent in which tech has concentrated itself in the core of the city. As of 2019, jobs in tech establishments represented about 4% of all jobs in Toronto.

    To download a copy of the report, click here.

  • A transactional real estate marketplace

    I would like to revisit the post that I wrote last week about the Brazil-based real estate startup, Loft. In it, I said that they are doing in Brazil what Opendoor, and others, are doing in the US. They are buying and flipping homes using algorithms. This has become known as “iBuying” and we’ve talked about it a lot here on the blog.

    But we have also talked about how this is probably not the end game. These companies are seeding a marketplace, because in every new two-sided marketplace you are always faced with a chicken-and-egg problem. You can’t attract supply if you don’t have demand. And you can’t attract demand if you don’t have supply.

    In reading the investment announcement by a16z, this larger vision is pretty clear:

    They [Loft] are building a transactional marketplace for the biggest asset class in the world, starting in the biggest market in Latin America, on a time horizon that makes it hard to believe it’s been less than a year since the PowerPoint. They buy homes, fix them (often according to formulaic specifications provided by active buyers), and sell them — what is now known as “i-buying,” with the vision of turning this into a transactional marketplace.

    If successful, these companies will transform from just “iBuyers” to fully fledged marketplaces for the buying and selling of homes. And when that happens (I believe it’s a when), it is likely to mean dramatic changes to the commissions landscape. Today, over $100 billion in residential real estate commissions are paid out across the United States each year.

  • Project connected home

    This week it was announced that Amazon, Apple, Google, and the Zigbee Alliance are joining forces to develop a new royalty-free connectivity standard for smart home products. The working group is called Project Connected Home over IP and the goal is to develop a “USB-like plug-and-play protocol for the home.” If successful, this standard would get applied to all smart home systems, including the Amazon, Apple, Google, and other “assistants” that you may already have in your home.

    The thing about smart home devices is that most of them are exactly that: a device. They’re something you buy and append to your home, as opposed to something that gets built into the core of your home. This, of course, makes sense, given how difficult it is to innovate within the real estate space. If you’re in the business of creating smart home products, you ideally want everyone to be able to buy it and quickly add it to what they already have. And as a consumer, you don’t want your permanent fixtures to become quickly outdated.

    But if/when a standard emerges, I wonder if that doesn’t make it easier to develop a more holistic approach to smart home products. That could be really interesting. If you’d like to learn more about the project, click here.

  • Protocols, not platforms

    Yesterday, Jack Dorsey published the below tweetstorm about Twitter’s efforts to create a decentralized internet protocol for social media. What does this mean? Think along the lines of the Simple Mail Transfer Protocol (or SMTP). Some, or many, of you may not know what this is, but you almost certainly use it every day. It is fundamental to modern email communication. It is how emails get sent.

    I would encourage you to click through to the entire thread. It all feels very topical. We are living in a world of recommendation algorithms and content designed to “spark controversy and outrage.” Arguably, this is the result of social media companies being platforms (i.e. proprietary systems), as opposed to being based around open protocols. Twitter is trying to change that by funding a team. And that feels like a great — and timely — idea.

    Full disclosure: I own $TWTR.

  • Tesla’s new Cybertruck is growing on me

    Tesla’s new Cybertruck was the talk of the town last week. Its design is polarizing and both windows broke during the unveiling (Elon’s reaction was amazing). At first I couldn’t tell if this wasn’t some sort of spoof on Arnold Schwarzenegger’s Terminator. Everything seemed to fit, including the design of the car, the chosen brand typography, and Elon’s outfit.

    But within the first 24 hours and with no paid advertising, Tesla received 146,000 pre-orders for the truck (though, all it takes is a USD 150 fully refundable deposit to secure a place in line). So while a lot of you may consider this to be one the ugliest vehicles around, there are others who think this entire move is genius.

    The design was jarring when I first saw it. It looked like a comical representation of what we thought vehicles in the future were going to look like. But I have to admit that the design is growing on me. And I agree that for Tesla to win any sort of marketshare in the pick-up category, it needed to do something radical. Brand loyalty to Ford’s F-Series pick up truck is simply too strong.

    Marques Brownlee has a good video explaining this take (and why he ordered a Tesla Cybertruck):

    But if successful, I also wonder to what extent the Tesla Cybertruck will eat into the sales of existing pick-up truck models versus capture new buyers that historically wouldn’t have bought this kind of vehicle. In other words, we are seeing tech people and successful YouTubers, like Marques, pre-order this truck. But I bet that very few of them currently drive an F-150.

    Image: Tesla

  • Ride hailing in Toronto

    Earlier this year, the University of Toronto Transportation Research Institute (UTTRI) published this report on the impacts of ride hailing services in the City of Toronto.

    And then today, the Ryerson City Building Institute leveraged it to opine on how “on-demand tech” might improve transit going forward. That’s how I discovered it.

    What is clear from the report is that ride-hailing services — which they refer to as Private Transportation Companies (PTC) — are driven by two dominant use cases: 1) going out at night and 2) commuting to and from work.

    Friday and Saturday nights are by far the busiest periods for PTC travel, with the peak usually happening around midnight on Sunday morning. About 13,100 trips per hour, mostly concentrated in the core.

    Overall, it is estimated that Toronto does about 176,000 daily PTC trips (as of March 2019). That places it behind New York and Chicago in terms of the size of the market. But Toronto also didn’t complete its first PTC until 2014. Here’s a comparison chart:

    Another diagram that I found interesting was the proportion of shared ride trips by neighborhood. It shows that much of the inner suburbs are hailing shared rides — sometimes as high as 45% of all trips. This is interesting because it is people effectively gaming the system.

    Because the population densities are lower in the suburbs than in the core, you’re a lot less likely to get paired with other riders when you select that option. So what tends to happen is that you end up getting a private ride for the price of shared ride. I know I’ve played the odds before.

    If you’d like to download a full copy of the report, click here.