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.

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Category: Tech

  • Automated checkouts

    I did something this week that I don’t often do: I shopped for (non-grocery) things in person. Like, in a physical store. So I recognize that this isn’t entirely bleeding edge. Still, I am thoroughly impressed by the self-checkout process at Uniqlo.

    All of their items now include RFID tags, which means you don’t need to scan anything. You just place your basket or items down, and then everything shows up automatically on the screen. Done. The most frictionless checkout that I have ever experienced.

    My understanding is that this was done more for supply chain management and that it is now possible because the cost of these tags have come down to something like a few cents per unit; but the added benefit is that they have greatly improved checkout throughput and the overall experience.

    This has been a part of the promise of RFID tags for many years. And this week I experienced it IRL for the first time. It was awesome. Now I hope this same experience comes to grocery stores in the near future.

  • Are shared e-scooters now dead?

    I first wrote about Bird, the electric scooter company, back in March 2018. At the time, they had just raised $115 million and their pitch was that they were going to solve the last-mile mobility problem. This is a real problem, and so lots of urbanist-type people, including myself, were excited. I then rode my first shared scooter in 2019 in Lisbon, and I had a ton of fun. I wrote: “Now I know what all the fuss is about.”

    But it wasn’t all puppy dogs and ice cream. People started getting annoyed by the clutter that dockless scooters were creating in our cities (see above photo). Safety also became a great concern, and so they started getting viewed as a nuisance. Toronto never allowed them (despite my insistent blog posts) and Paris — which had arguably become the scooter capital of the world — banned them in early 2023.

    Now there’s this: Bird announced this week that it has filed for bankruptcy. The once unicorn, which had its stock halted back in September because its market cap fell below $15 million for too long, needs cash. According to FT, they have about $3.25 million the bank, but they have an immediate need for $16.8 million to meet some “financial obligations” in January.

    This is maybe not unexpected. But I think the important question is: Is this an existential moment for micro-mobility and shared scooters (i.e. this is a fundamentally bad business), or is it more of a case that money used to be mostly kind of free, and now it’s not? Either way, I think there’s no question that the latter is going to cause further distress throughout 2024.

    But the question remains: Can shared scooters be a sustainable business?

    My day job is not to be a scooter analyst. But I do think that a number of things are true:

    These first and last points are important ones. I believe it’s always going to be easier to get people onto electric scooters and bikes than onto regular bikes; people will generally always choose what is easiest. At the same time, here is a company that has allegedly figured out how to offer this service profitably. Assuming these two things remain true, I think we’ll continue to find scooters in our cities.

    Photo by Gemma Evans on Unsplash

  • Spatial videos

    If you have an iPhone 15 Pro (and iOS 17.2), you can go into Settings -> Camera -> Formats and turn on a setting called “spatial video.” It will then enable this (excerpt from Om Malik):

    Spatial video is a mixed-reality video format that allows videos to record the depth and spatial information of the scene, and when you play it back, you get a more immersive, three-dimensional (3D) experience. The iPhone 15 Pro utilizes its main lens and the ultra-wide lens to capture the depth and spatial information of the videos. The spatial videos are captured at 1080p, 30 frames per second, and use the HEIC format.

    What you can then do is watch your videos on something like an Apple Vision Pro. It’s not going to be exactly perfect right now — given that the Vision Pro display is over 8k and the above is 1080p — but it will give you an indication of what’s to come for photography, video, and many other use cases.

    Some examples.

    As a regular consumer, this might allow you to capture videos from a trip and then more fully relive the moments once you’re at home. And as Om argues in his post, this will inevitably change photography/video. Because how we consume media, impacts how and what we capture.

    If you’re in the business of selling real estate to people, you can also imagine this set up having a profound impact on virtual tours. Because now you have something that’s pretty damn close to reality, if not eventually indistinguishable. Why even go in person until you have to?

    Of course, all of this will depend on whether Vision Pro actually sees widespread adoption. But if the technology is as good as everyone who has tested it seems to think, then surely there will be at least some initial users who find immediate value.

    And if that is the case, it opens the door for the masses. To once again quote Om: “It is not hard to be excited about the possibilities.”

  • Cul-de-sacs and Dutch auctions

    I am, of course, more grid than cul-de-sac, but here is an interesting NFT art project that is launching on December 12, 2023 at 1PM EST. It’s called Cul-de-Sacs:

    “Cul-de-Sacs” explores the banality of suburban sprawl through the anachronistic stylization of American folk art. The algorithm generates flattened representations of suburbia at range of scales, interspersed with the remnants of rural life.

    The starting price is 0.2 ETH and the resting price is 0.05 ETH. What this ultimately means is that these NFTs are being offered by way of a Dutch action.

    Dutch auctions are a price discovery mechanism. They start with a high asking price and then gradually lower it until a price is reached where the quantity demanded equals all of the available supply.

    In other words, it’s a way to determine what the market thinks a particular thing is worth. In this case, though, the resting price is 0.05 ETH. Meaning there’s a floor.

    If lots of people are willing to pay 0.2 ETH for this art, it could sell out right away and that will prove to be the market price.

    But if few people want to buy it, then the price will gradually fall to 0.05 ETH, and that is where it will hang out until all of the available supply is absorbed. If/when that happens.

    Another important feature of this auction process is that if you buy early, and the price subsequently drops, you get a refund equal to the difference between what you paid and the final achieved price (thought to be the market price).

    So there is zero incentive to wait for a possible price decline; everyone ends up paying the same price no matter what. You’re encouraged to bid aggressively.

    And because all of this is now happening on a blockchain and enshrined in code, you can be confident that this is exactly how the process will work and that you’ll get any refunds that you deserve.

  • A lot more people are now getting the news from TikTok

    It won’t surprise many of you that, according to this recent data from Pew, about half of Americans now get their news at least “sometimes” from social media. Meaning, half consume the news either “sometimes” or “often” through social media, and the other half do it “rarely” or “never”.

    What may be more interesting, though, is how much TikTok has jumped over the last three years. 43% of its users now “regularly” use it to get the news. This is roughly inline with Facebook and second only to X:

    Also interesting:

    Different networks seem to have clear gender biases. Facebook is women. Instagram is women. X is men. TikTok is women. Reddit is men. And Nextdoor is men. There also seems to be a racial bias that I wouldn’t have necessarily expected.

    If you market on social media, you may want to give some thought to these charts. For the full Pew fact sheet, click here.

  • There’s something to be said about hard assets

    Here is a recent post by Scott Galloway comparing Uber and WeWork. In it, he praises the virtues of asset-light business models:

    For most of business history, having assets was good, and having more was even better. However, one of technology’s tectonic unlocks has been elevating information (bits) over objects (atoms). In the information age, owning assets is one business, while operating them is another, and each demands distinct capital structures, management approaches, and operational skills. Businesses offering the greatest return on invested capital don’t have much capital (assets) and can scale up faster, as they don’t bind themselves to cars, apartments, or even inventory.

    We know this. Uber doesn’t own cars. Airbnb doesn’t own rental properties. And most hotels, as Galloway mentions, also don’t own their real estate. Generally speaking, hotels are brands that enter into fee-earning management contracts with people who own real estate.

    However, WeWork is not this. According to Galloway, WeWork had $47 billion of pre-IPO lease obligations. These ran/run through to 2038. In this regard, WeWork is more bank-like: they have a similar mismatch of short-term assets and long-term liabilities.

    Galloway also argues that asset-light businesses offer the greatest ROI because they can scale up faster. And this is certainly one of the virtues of tech businesses. In more asset-heavy businesses like real estate development, each project/asset is largely a discrete effort.

    But there are significant advantages to owning real estate; one of them being that, at the end of the day, you own a hard asset.

    Venture capitalist Fred Wilson once wrote on his blog that one of his big lessons from the dot-com bubble was that he learned to take his tech wealth and funnel portions of it into hard assets — namely real estate in New York City.

    This, of course, comes with its own set of risks. But clearly there is something to be said about owning real estate.

  • How to make the internet more like our cities

    I am halfway through reading Read Write Own and I can confidently say that you want to read this book. If you’re already a believer in this “next era of the internet” (like I am) it will make you a true believer. And if you’re not a believer, maybe it will make you one. Or not. Either way, I am thoroughly enjoying it.

    One chapter that will be particularly interesting to all of you is the one where Dixon makes a comparison between the internet and cities. Cities, he argues, work because of a delicate interplay between public and private interests. And the private side works because, among other things, we have the rule of law and the construct of ownership.

    If I own an asset, like a piece of real estate, I’m only going to be confident to invest in it if I know that someone won’t take it away from me (or dramatically change the rules on me), which is why if this prerequisite doesn’t exist, you typically see a lack of investment.

    The same is true on the internet. But currently, the dominant form of networks are centralized corporate networks. In city terms, you can think of these like an amusement park. Once you enter through the gates, you’re in their world. You could maybe rent some space, but at the end of the day, the owner makes the rules. And if they don’t like what you’re doing, they can remove you.

    It’s a pretty stark contrast when you think of it in these terms, which is why it’s hard not to feel compelled when you consider that similar dynamics are playing out on the internet right now. Cities thrive because we have rules, ownership, and the freedom to innovate on top of the foundations laid by government.

    So I’m all for making the internet more like our most successful cities.

  • The digital layer for the physical world

    This is one example of how AR (augmented reality) can be used in a large retail store:

    In this particular case, it’s an example of a customer being guided to a particular screw in a large hardware store.

    The company, which is called Hyper, is also working to expand their product to other physical locations, such as malls, campuses, airports, and hospitals. And broadly speaking, their mission is to “build the digital layer for the physical world.”

    Where they have started seems to make a lot of sense. If I’m in a large hardware store and I’m trying to find a very specific product, I’d be more than happy to pull out my phone and have it guide me there.

    I could also see myself pulling out my phone if I were standing in Yosemite National Park and I wanted to know all of the important points-of-interest. So from these perspectives, AR seems obviously useful.

    But these are discrete moments in time. I’m looking for something right now, help me. And this is arguably how we will all start regularly using AR — with our phones for brief periods of time.

    But at some point, it is likely to become more seamless and constant. Maybe that sounds far fetched (or completely undesirable). But I’m still hoping that this becomes possible with a cool pair of sunglasses.

  • Scarcity in a world of AI

    As someone who collects NFT art, I now see a lot of AI-generated images. Usually I can tell when an image was generated by a computer, but sometimes it’s hard to tell and I’m sure eventually I won’t be able to tell. But if I’m being honest, today I find that I have a bias toward art that was created without any AI prompts. Maybe that changes in the future, or maybe it doesn’t.

    Either way, the marginal cost of producing new content, such as images and videos, has now gone down to zero as a result of AI tools. (Here are some of my crappy creations.) That means that, if you aren’t already, you’re soon going to be faced with a deluge of things created in this way. This will almost certainly become the dominant form of content that we consume.

    I don’t think that we need to be scared by this future, but I do agree with Ben Thompson and others that it’s going to make authenticity and human-content more valuable. In other words, we’re probably going to need to know what is digitally scarce and what is just another thing generated by AI. Thankfully we have a suitable technology for this: it’s called a blockchain.

  • Comparing innovative technologies

    This is an interesting chart from Bloomberg Green comparing some of today’s innovations against innovations of the past. At the top of today’s innovations are EV batteries, which from 2010-2020, saw annual deployment growth similar to that of US WWII aircrafts. However, when it comes to reducing costs, both EV batteries and solar PV modules come out on top with annual declines approaching almost 20%.

    Of course, these probably aren’t perfect comparisons. If you look at EV batteries and solar PV modules from 2020 to 2023, their growth rates jump to 72% and 39%, respectively. So who knows if these are the right time slices to be using in order to accurately capture the “key expansion periods.” Regardless, it does provide some historical context and it does say something. These are important innovations.