Toronto - St Lawrence Market by Chris Dufresne on 500px
This past Saturday night I was out with a few friends in my neighborhood (St. Lawrence Market area). And I was delighted to see how busy it was. Virtually every bar or club we walked by had a line down the street.
Being the city geek that I am, I started thinking about two things: (1) how often I get localized to my neighborhood (I have data to back this up) and (2) what makes a “complete neighborhood”, such that you’re even able to be localized?
In some ways the idea of a “complete neighborhood” is universal. Everybody needs a grocery store and access to food, for example. But in other ways, a “complete neighborhood” is very much a personal thing – you want goods and services that are important to you.
So today I thought I would do a quick breakdown of the goods, services, and amenities that I really value in my neighborhood and that I think make it more or less “complete.” This list is a combination of universal and personal choices in no particular order. At the end, I summarize some of the things I wish I had.
What I have:
A 5-10 minute walk to subway and streetcar
A 24/7 grocery store
A world famous food market (St. Lawrence Market)
Staple coffee shops (Starbucks and Balzacs)
Lots of restaurant and food choices (including decent Mexican, one of my favorite foods, and Pho, for when I feel a cold coming on)
2 drugstores (Shopper’s Drug Mart and a new Rexall)
A great gym that’s less than a 10 minute walk away
An outdoor/athletic store that also fixes bikes
Cool local bar (AAA) where I can watch the Raptors (because I don’t own a TV)
After work bar with a good Happy Hour (Pravda)
Patios for the summer (all along the Esplanade)
All the major banks
Nearby recreational amenities (bike trails, waterfront, etc.)
Great architecture (from Daniel Libeskind to the classics)
High walkability
What I wish I had:
Less chains and a few more independent businesses
A hip indie coffee shop where the (male) staff have waxed moustaches
A good takeout sushi place
A pool that I could walk to (I ride my bike to Regent Park)
A liquor store with longer hours (but alas this is Ontario)
Those are my working lists. What would create a complete neighborhood for you? And how does your current neighborhood hold up?
I was watching this talk with Albert Wenger of Union Square Ventures last night. He was recently in Toronto for a Wattpad board meeting (USV is an investor).
It’s an interesting discussion that touches on education, healthcare, Canada’s tech ecosystem, as well as a bunch of other things. But one point that Albert made that I particularly like is the comparison between industrial and internet scale.
In both cases, it’s all about growth and scale. The bigger a firm can get, the better.
But with industrial production, scale is all about driving down the marginal cost. This is also known as economies of scale. As firms increase in size, efficiencies are found that allow the unit of production to drop in price. This, in turn, creates defensibility, because smaller firms simply can’t compete in the market.
With internet platforms the situation is different. Sure, there are still economies due to scale, but their competitive advantage is often derived from the fact that, on the margin, every new user increases the value for every other user on the network. This is called a network effect.
A perfect example of this is Facebook. People use Facebook because all of their friends are there. And as more and more friends join, it becomes increasingly more valuable. Without friends, a social network has little value. This make starting one fairly difficult. However once started, network effects are incredibly difficult to dismantle. This is their defensibility.
Another network effect example that Albert mentions is search (i.e. Google). This one isn’t so obvious. It may not seem like there are network effects with search, but there are. As a search user, you enter a query and then select from a list of results. In doing so you’re actually helping the search engine figure out what the best and most relevant results are for the keyword(s) you just entered. Again, in the end, everybody benefits.
I found this interesting because, in the case of internet platforms, scale is directly related to value proposition. The bigger something gets, the more useful it becomes. Now, you could maybe argue that the same is true for industrial production, but it’s a bit more tenuous. The direct link is cost.