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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Tag: augmented reality

  • Audio is the poor person’s augmented reality

    I have long been interested in the work of entrepreneur Dennis Crowley. He is perhaps best known as the co-founder of Foursquare, which popularized location “check-ins.” But he’s created a bunch of other stuff too. The common theme is that his products exist at the intersection of tech and cities (the physical world), which is probably why I’ve been so interested over the years.

    Check-ins, for example, allowed you to say to all your friends, “hey everyone, I’m at this bar.” It was a way of checking if anyone you knew was there too, or close by, and also a way of inviting your friends to come join you if they were so inclined.

    This was extremely popular for a period of time, but then kind of fizzled out, and Foursquare was forced to pivot and try a bunch of other things. And in the end, this “problem” of augmenting the physical world with our social graph (and other information) never really got solved. I mean, this is broadly the promise of augmented reality.

    Thankfully, Dennis has a new company (Hopscotch Labs) and a new tech/city product called Beebop (which is currently in private beta). Here’s how it works (excerpt from this Crazy Stupid Tech interview):

    It’s an iPhone app. There’s not much to do in the app, there aren’t a lot of buttons to press. Once it’s installed and you set the permissions, every time you put on your headphones — your AirPods or any other headphones, it doesn’t matter—it chimes and says, “Beebop’s been activated.” (Beebop is the first project from the company, Hopscotch Labs.)

    Then as you walk around the city, it will tell you things about certain places. Eventually, if I walk by a place where my friend was, it tells me that Alex was here two days ago. If I walk by a place and someone’s inside, it tells me that Max is inside that place. A lot of it is still under development. Eventually, people leave a comment at a place. Imagine Twitter. It is as if you leave a tweet and you stick it in the ground. When you walk over it, you hear it.

    So like before, it’s about experiencing cities:

    It’s been a long time since I built something. What’s different now? AI is what’s different. You know what’s different? Everyone’s on their phones all the time. Back in my day, we made stuff for the streets. You would use your phone, you’d put it away, and stuff would happen. Where are the people making that stuff anymore? All we make is stuff that makes you look at the screen. Let’s make stuff that gets you out in the world, where you’re not glued to the devices. You’re out there doing stuff. Big companies out there aren’t going to make stuff like this.

    The key idea here is that augmented reality doesn’t have to just be visual. Visual also requires somebody to figure out a cool set of glasses that people will actually wear out in public. Who knows when this happens, though I do think it will eventually.

    So what Dennis is doing is making something that works today — with audio. This has been called the poor person’s augmented reality, but I think that’s selling it short. This is really clever. And once again, it’s fundamentally connected to how people live in and interact with our cities.

  • Canada’s proptech landscape

    The morning I attended the release of Venturon’s 2024 Sustainable Proptech Report. What’s great is that it includes a list of all the (known) companies that are active in this space in Canada. It also summarizes venture funding by region. Interesting to see Alberta punching above its weight and coming in second behind Ontario. It has roughly half the population of Quebec.

    As part of the event, the following companies also gave short presentations:

    • Panergy — they make a prefabricated insulated wall system
    • Darabase — they are creating an advertising ecosystem around augmented reality; one that will allow building owners to monetize in a new digital world
    • Axe Buildings — they make simple, prefabricated homes; they are optimizing for speed and price, not quality
    • QEA Tech — they use drones with thermal cameras to tell you where your building envelope is leaking and wasting energy

    I don’t know anything about these companies other than what I heard this morning, but all are working on important problems. Darabase is perhaps the most future oriented in that it appears to rely on AR / spatial computing becoming a thing. I believe this will happen, and so I found it particularly interesting.

    The 2024 report is available online, here.

  • What might happen in 2024

    Yesterday we looked in the rear-view mirror. Today we’re looking forward:

    • The market consensus right now is that this cycle of interest rate increases has come to an end, and that we should see rates start to come down next year. Having confidence that rates won’t go any higher in the near future is what markets need in order to start making more decisions. So this is, of course, positive. At the same time, I don’t think anyone should expect a return to ultra-low rates. Rates today are still low when viewed historically.
    • Lower rates are good for levered assets such as real estate, but I don’t think that our industry has fully felt and processed the impacts of higher rates. Unfortunately, I think that things will get worse (in 2024) before they get better (maybe toward the end of 2024 or perhaps in 2025). This is when a “risk-on” approach will return in commercial real estate. A year ago today, I thought 2023 would be the year for this, but as I said yesterday, I was overly optimistic in terms of my timing.
    • On the residential resale side, I think we will see greater optimism sooner, certainly for the most in-demand cities and areas. There is pent up demand waiting on the sidelines and, once we can get past the current bid-ask spreads and deadlock, I believe we’ll return to a more balanced market in 2024. To be clear, I’m not expecting bidding wars and the like. And because of our housing affordability crisis, I also think the Bank of Canada will be more resistant to lowering rates compared to other central banks. This will help the Canadian dollar.
    • If you’re a buyer of real estate, I generally believe that 2024 will turn out to be a pivotal year for you. Roughly speaking, you win acquisitions in one of two ways: either (1) you pay the most or (2) you believe in something that most other people in the market don’t. This second approach is harder to achieve in bull markets. But in slower markets, the door is open and history has taught us that it can be the foundation in which great fortunes are made.
    • As I mentioned yesterday, I agree with the prognostications that hard costs will soften further next year (perhaps even more than 5% on average). Obviously every market is different. But here in Toronto, I just don’t see us returning to the level of construction starts that we have seen over the last number of years.
    • Since 2021, I have used my hyper scientific Jimmy the Greek Reopening Index to keep tabs on office utilization and the overall return to office. And based on this, 2023 was a positive year. Initially, souvlaki consumption appeared dramatically lower on days like Monday. But I noticed discernible increases as the year went on. However, if you look at actual data, such as what we have from swipe cards, the great return to office seems to have stalled out at around 50%. I don’t think this will hold, though. I continue to believe that of the people who work in offices, most will spend > 50% of each week there. And we will see that in 2024.
    • 2023 was the year of AI. But Fred Wilson makes an excellent point, here. AI is 40+ years in the making. Last year only became the year of AI because a consumer-facing app — ChatGPT — was revealed that captured everyone’s attention. Crypto will eventually have this moment, but it will likely need to marinate a bit longer. Instead, I think 2024 will be the year of augmented reality (AR) and a further blurring of our offline and online worlds. Think digital art, fashion, and other collectibles (such as NFTs).
    • Right now, autonomous vehicles feel like they’re in the trough of disillusionment (within the hype cycle). There were moments last year where it felt like we were finally moving beyond this phase. But then some very suboptimal things happened. I think AVs are our reality in the next 5+ years, which means that for next year we likely want to be focused on the inputs: vision/LIDAR, battery tech, etc.
    • Zooming out, we should be thinking about the above two trends in the context of a broader shift toward greater automation. I think it will feel more insidious than immediate (certainly in 2024), but the longer-term impacts are going to be profound for our society. The so-called gig economy is likely to be impacted first. Eventually the overall economy will create new jobs, but we are still going to need to manage this transition toward more automation.
    • TikTok Shop is where to look for the future of shopping. I think the platform will continue to see strong adoption and ultimately prove to be a dominant e-commerce platform throughout 2024. Amazon, Meta, and others will see this, and try their best to catch up and copy it.
    • At the time of writing this post, the total crypto market capitalization is about $1.74 trillion. This is down from nearly $3 trillion at the peak of the market in 2021. The recent gains suggest that the so-called “crypto winter” might be over, and so combined with lower interest rates and more real-world use cases, I think that 2024 will be another strong year for crypto. Total crypto market cap at the end of the year will exceed its 2021 peak.

    And there you have it. My current thoughts for this upcoming year. I should note that I’m not an economist, analyst, or an expert on souvlaki demand for that matter. But I enjoy writing this post as an annual discipline. It forces me to think critically about the topics that interest me. And in the paraphrased words of Howard Lindzon, it gives me an archive that I can go back to and either cringe at or think to myself, “hey, I could have been a somebody!”

    And with that, a big thanks to everyone who has read this daily blog over the last year. This year marked its 10th anniversary. I wish you much success and happiness in 2024. Happy new year!

  • 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.

  • Will Apple Vision make our cities more lonely?

    Okay, so I haven’t tried it yet. But Apple Vision looks pretty awesome and the people who have tried it seem to be very impressed by it. The best article that I have read, so far, is this one here by Ben Thompson (of Stratechery). He gets into some of the tech details and explains why Apple is probably the only company in the world that could have created a device like this.

    For those of you who are interested, Apple Vision is still technically a VR device, even though it is being marketed as an augmented reality (AR) device that allows you to stay engaged with the world around you. This last part is true, but it is all done digitally through 12 cameras that capture the world around you and then display it back to you.

    So experientially, yes, it is an AR device; however, the tech behind it is actually just exceptional VR.

    But this is not the point of today’s post. The point I would like to make is one that Ben raises at the end of his article. After praising Apple Vision’s achievements, he goes on to argue that the arc of technology is one that is leading toward “ever more personal experiences.” In other words, it is increasingly about individual, rather than group, use cases.

    And this is one of the first things that I thought of when I watched the Vision Pro keynote. “Wow, this looks like a really cool way to watch and experience a movie. But how do I do that with my partner? I guess we both now need Vision Pros. And what about families with a bunch of kids? That is a lot of Vision Pros.”

    But maybe this doesn’t matter. Ben’s point is that it’s probably not an accident that this technology arc is happening at the same time as a larger societal shift away from family formation and toward more feelings of loneliness. Indeed, the number of single-person households has been steadily increasing in the US since the 1960s. The current figure sits at more than 1 in 4 households.

    So there is an obviously dystopian narrative that we could all tell ourselves here. It is one where everyone works from home, plugs into virtual workplaces, and then flips over to other, more exciting, virtual worlds when it’s time to unwind from the stresses of the former. And if you think about it, this isn’t that much of a stretch compared to what many of us do today.

    Whatever the case, in my mind, none of this is any reason to become bearish on cities. Humans will still be humans. And none of this tech is going to replace the feeling of enjoying a perfect pesto gnocchi in an impossibly narrow laneway in Milan, or drinking a caipirinha on the beaches of Rio de Janeiro while being surrounded by shockingly beautiful people.

    Or at least let’s hope so.

  • What could happen in 2023

    The central bank tightening and interest rate hikes that we saw last year will come to an end in the first quarter of 2023 as inflation gets under control. This will ultimately lead to a recession but my sense is that it will be more mild than severe. For this reason, I don’t think anyone should expect ultra-low rates to return in the short-term.

    Much of the real estate sector went on pause in the second half of 2022. But ultimately this reset to a more balanced market is going to be necessarily painful for some. And I think we will see that pain play out in the first half of the year. This will obviously be bad for some, but it will create opportunities for others.

    Construction costs tempered in the second half of 2022 and started to show some evidence of price softening. I think we will see more of this in 2023, which will be healthy for the market. Cost management over the last few years has been a meat grinder for the development industry.

    Pre-construction condominium sales for well-located projects will return in a more fulsome way by the spring. This will be driven by buyers now having clarity around where interest rates will be hanging out in the short-term and, in the case of Canada’s largest cities, by record-high immigration levels.

    For the tertiary/fringe housing markets that saw big run ups in pricing during the pandemic, I unfortunately think it will take many years for prices to fully rebound. The price increases we saw in these submarkets were of course a result of low rates, but it was also driven by a view on urban decentralization that in my view did not actually materialize.

    The desire to add more housing to single-family neighborhoods will continue to pick up steam across North America. How exactly this plays out will be market specific, but in Toronto I expect to see new planning policies put in place, as well as supportive building code changes.

    Public transit ridership will remain below pre-pandemic levels throughout 2023. This will continue to exacerbate public finances.

    Autonomous taxis will grow rapidly this year. Companies, such as Cruise, will expand into a number of new US markets and, at some point during the year, I will take my very first ride in an autonomous vehicle.

    2023 will be a big year for augmented reality and “phygital” goods. Last year I thought Apple would release a new product in this space. That didn’t happen, but it will this year. At the same time, we will see more companies releasing products that blur the lines between our online and offline worlds (hence “phygital”). This will include NFTs and other crypto-related things that will start to operate more seamlessly in the background of consumer-facing products/services.

    I continue to be bullish on Ethereum and I think it will overtake Bitcoin in terms of market cap in the next 2-3 years. But I was very wrong about Solana last year. And now I am struggling with its value proposition. Today, layer 2 chains such as Polygon feel more likely to win out. Broadly speaking, I suspect 2023 will be a positive year for crypto, but not a record-setting one.

    In summary, I think we are going to see more pain at the beginning of 2023, but that on the other side of it will be healthier and more balanced markets. This means that we can look forward to the end of the year feeling much better than it does right now. All of this said, please keep in mind that I’m often wrong and that nothing in this post should be construed as actual advice.

    Happy 2023, friends. I’m excited to get going.

  • A whole new internet

    I don’t exactly know what “metaverse” means, but what is clear is that nobody really does right now. Here is an excerpt from a recent article by Benedict Evans:

    If the narrow definition of ‘metaverse’ is that VR and AR will be the next smartphone, the broad definition is that there’s going to be a whole new internet. Our experience will be 3D, but much of that will be layered onto the real world as we see it through glasses. Games will become a much larger part of daily life – instead of the current split between a few hundred people playing deep and rich AAA PC and console games and several billion playing much lighter-weight smartphone games, Roblox and Fortnite point to a growing middle ground of persistent, open, accessible and expressive environments that are much more about social and identity than games per se, and that can become platforms and ecosystems for developers. Many of these experiences will blur into each other, and digital goods (skins, avatars and other models of self-expression in digital form) will be portable and interchangeable between these worlds, rather like the characters in Wreck-it Raph could pass between games.

    Some people, namely Mark Zuckerberg, believe that VR is going to be the next smartphone. But Benedict raises an interesting point: the direction of travel for tech seems to be toward less immersion, rather than greater immersion. We used to have giant computers that filled rooms. Then computers got smaller. And now we just carry one around in our pocket and pull it out when we’re standing in a line and bored. Portability and casual usage are what won out. And so is it reasonable to assume that billions of people are going to want to immerse themselves in VR goggles all day?

    I don’t see it. Here’s my working thesis:

    • I am an urbanist. I love cities. And I believe that our deep desire to interact meaningfully with other humans is not going to go away. For this reason, I believe in the less immersion over greater immersion argument.
    • At the same time, blockchain technologies have made it possible for us to own, collect, and trade digital assets — everything from digital fashion to digital art. I think this trend is only going to continue.
    • And as this trend continues, we are going to continually look for ways to display and experience these elements of our digital identity. So how do we make that happen? This is an important part of the conversation around “the next smartphone.”
    • My view is that it’s going to be some version of augmented reality, and that we are going to end up with a continuous blurring of the line between physical and digital.

    But hey, I could be wrong. Time will tell.

  • Last night in Sicily

    The first time I went to Italy was, I think, when I was about 18 or 19 years old. My friend and I took the train down to Milan from Zug, Switzerland (where his father lives), and we got out of the train station without any idea as to where we were going or where we were going to stay. We were young and brazen and clearly not very prepared. I was probably also wearing Diesel jeans and holding a Sony Ericsson T68 in my hand. Sadly, neither of these things were all that helpful as travel aids.

    Today it’s impossible to imagine traveling without our smartphones and apps like Google Maps, Google Translate, Airbnb, Uber, and many others. I know that Uber has received its share of criticism over the years, but if you want to fully appreciate what Uber brought to the world, go to a place that you don’t know, that is generally unsafe, and where you don’t speak the language. It becomes invaluable. (This was Rio de Janeiro for me.) But even without all three of these things, it’s an incredibly powerful tool.

    In situations where there is zero overlap in languages, I have also used Google Translate to have entire conversations. When push comes to shove, I prefer this approach over trying to impose English (or French) on someone. After all, I am the visitor. I should be the one bending as much as possible. You can also use the app to photograph a restaurant menu and have the entire thing translated in realtime. This to me — realtime reading — feels like a powerful use case for when augmented reality arrives.

    I also like to use to Google Maps to fastidiously track where I want to go and where I have been. I love logging my travels, and that is much easier to do today compared to the Diesel jean days. I also try and remember to pre-download whatever maps I need so that I’m less reliant on roaming. Here is what Marseille and Sicily look like right now following our trip:

    (If any of you are looking for recommendations, CRABE-TORO was our absolute favorite restaurant in Marseille and Càssaro was our favorite place for a drink in Noto, Sicily. We, unfortunately, never tried the food at the latter, but I’m sure it’s terrific.)

    Technological change has always elicited criticism, negative externalities, and some people wishing that things would just remain as they are. And there is, of course, something liberating about getting off a train in a foreign city and figuring out things as you go. In Milan, we simply walked into various hotels, asked them what their rates were, and then probably got taken advantage of as two young Canadians.

    At the end of the day, though, I am a firm believer that the world is a better place because of technological progress. From the Gutenberg printing press to Google Maps, technology empowers us as humans. And I have little doubt that 10 years from now we’ll all be traveling with some sort of augmented reality device and romanticizing the good old days of pins on a Google Map.

    For the Canadian readers out there, I wish you all a happy Thanksgiving weekend. I am back in Toronto and regularly scheduled programming will now resume on the blog. I hope you enjoyed some of the post diversions over the last 10 days.

    Photo taken at La chiave in Catania, Sicily

  • Augmented reality is coming — will it finally reach construction sites?

    Apple has been working on new virtual reality and/or augmented reality headsets for at least 6 years. This has been widely reported. But in typical Apple fashion, nobody knows anything about them, even though something is set to be revealed as early as this fall. I also don’t know anything about them, but I already want one. I am sure Tim Cook will get up on stage at some point and convince me that I need it immediately, so I’m trying to get ahead of that moment.

    VR/AR headsets are, of course, not new. Google tried and failed. Nobody wanted to wear them besides nerds. I had a pair of Focals by North but they were far too cumbersome to use and about as comfortable as having a smartphone duct-taped to your face. Meta’s headsets currently control the market. They have about 78% market share. But the overall market remains small. It’s mostly gamers. But the same could have been said about tablets before Apple did its thing.

    The promise is that these AR headsets might replace our phones as the dominant personal device. AR > VR. And that feels to me like a reasonable assumption once the requisite tech arrives. But even before that, there are a ton of great use cases for highly-functioning AR — everything from online shopping and digital fashion to finally fulfilling the dream of walking around a construction site and visualizing the design and coordination clashes.

    Technically these things are already possible, but the technology remains fairly niche. I hope Apple changes that.

    Full disclosure: I am long Apple.

  • My predictions for 2022

    As promised, below is a list of some of my predictions for this coming year. I have tried to be both punchier and more precise in my prognostications; because, well, obvious predictions are boring and precision will allow me to better evaluate my thinking at the end of the year. So here goes.

    1. 2022 will be the year that COVID-19 becomes endemic and finally fizzles out to a point where it no longer factors into our decision making in the same way that it has for most people over the last two years or so. I think this will happen by as early as the summer.
    2. As a result, I think the majority of people will be back in their offices by this September at the very latest, with many coming back much earlier. The whole hybrid/flexible work thing won’t completely disappear, but the majority of people who used to work in offices will be back.
    3. Recreational/fringe residential real estate will soften in 2022 as a result of 1) its tremendous run-up during this pandemic and 2) the renewed pull of urban/office life. Conversely, urban apartment rents will continue to rise and eventually surpass their pre-COVID levels. The SF Bay Area could be one exception.
    4. The explosion of travel that I thought was going to happen in 2021, will truly happen this year. The summer will mark its official return, with European travel volumes (to give just one example) returning to their pre-COVID levels.
    5. We will see meaningful efforts to further breakdown the hegemony of single-family zoning throughout many North American cities. This has been building for a number of years and I think we will see some tipping point-like moments in 2022. Specifically, expanded permissions for multi-unit housing and greater densities.
    6. I wish I could say that autonomous vehicles are destined to do something truly remarkable this year, but I think we are still a few years out (2024-2025?) before a large chunk of us are ride-hailing AVs. But on a related note, I do think that Uber will come into its own this year and finally become profitable (and not just with adjusted profits).
    7. Public transit ridership will, unfortunately, remain depressed and below its pre-COVID levels for this entire year. The beneficiaries of this will continue to be cars (not good), bikes, and micro-mobility solutions like e-scooters.
    8. 2021 was a huge year for NFTs and other fun stuff like digital fashion. Given these trends, I believe there will be growing demand from people to better integrate their digital and physical lives through technologies like augmented reality. Snap has been at the forefront of this space for many years and 2022 will be an important year for its Spectacles (AR glasses). But Apple and others will also make major announcements.
    9. Miami’s ascent as an important tech hub will get interrupted by questions surrounding the climate crisis and its own resilience. At the time of writing this post, the price of carbon on the EU’s Emissions Trading System (EU ETS) is about €80 per tonne. I think we will see it break €125 per tonne this year, and possibly go even higher.
    10. Ethereum, Bitcoin, and Solana (in this order) will be the top three cryptocurrencies according to market cap by the end of the year. At the time of writing this post, their market caps are $446 billion, $895 billion, and $55 billion, respectively. I am also expecting some breakout web3 consumer applications that will push, maybe, 40% of Canadians and Americans into the crypto space.

    Photo by Dave Xu on Unsplash