Tag: avc

• 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.

  2023.11.18

• Why I write something every single day, even if it’s garbage

  I was out for brunch last weekend with a few close friends from high school. It’s a “monthly reunion” that happens nowhere close to every month. But the hope is certainly there.

  During brunch the topic of my blog came up. And one of my friends asked me how I got started and how the hell I keep up with one blog post every single day. (I get that second question all the time.)

  I’ve written about this before, but I think it’s worth revisiting.

  Earlier this week venture capitalist Fred Wilson wrote a post on his blog called The Blank Screen. And I really liked how he described the experience of writing a daily blog post:

  Sometimes this process produces great insights for me and possibly others. Sometimes it produces garbage. But I’ve come to realize that the daily post, and its quality or lack thereof, is not really the thing. It is the ritual, the practice, the frequency, the habit, and the discipline that matters most to me. And, I would suspect, the same is true of the readers and commenters who frequent this blog.

  Fred’s blog was a major source of inspiration for me. I saw him doing it. I saw the value he was getting out of it. And I wanted to do it too. So I did, almost 2 years ago. 

  But he also inspired me in another way.

  Venture capital and real estate development share many similarities in my mind, even down to the way that deals are often structured with preferred returns and promotes.

  But the interesting thing about venture capital is that it went from a largely closed and “ivory tower” kind of industry to now one where almost every venture capitalist blogs, tweets, and strives for greater transparency (when possible).

  I thought this was a fascinating shift and it made me think that the exact same thing was bound to happen in real estate development. So I am trying to make that happen. Hopefully this blog is helping.

  2015.06.20

• Fun Friday: Everyone’s Upstairs Neighbors

  This week has not been a good week for Toronto city builders. So I think a Fun Friday post is in order to lighten things up around here. (I’m stealing the idea of a Fun Friday post from Fred Wilson’s technology blog – he has been doing them for years).

  Here’s a short comedy sketch called, Everyone’s Upstairs Neighbors. If you’ve ever lived with a noisy neighbor above you, this will all make perfect sense to you and I think you’ll find it hilarious. Click here if you can’t see the video below.

  [youtube https://www.youtube.com/watch?v=4IRB0sxw-YU?rel=0&w=560&h=315]

  2015.06.12

• What are your disciplines?

  

  sunset drag by Philippe Clairo on 500px

  I’m sitting in Calgary International Airport right now waiting for my flight back to Toronto. This marks the end of the 6th Penn Annual (our annual ski and snowboard trip). We all had an amazing time and I can’t wait until next year’s annual. We’ve already (pretty much) decided that it’s going to be in Park City, Utah.

  As you can probably tell, I like traditions and routines. As boring as that might sound, I think there’s a lot of value in doing the same thing over and over again. 

  It’s why I do an annual ski and snowboard trip every February with some of my closest friends (to a mountain we’ve never been to before). It’s why I write something – no matter how short it might be – every day here on Architect This City. It’s why I lift weights 3-4 times every week. It’s why I’m interested in brand building (creating equity takes consistency and time). It’s why I love the permanence of real estate. And it’s also why I like dollar cost averaging when it comes to investing.

  I guess you could say I like the long game. I enjoy having “disciplines.”

  And that’s because I think there are very few substitutes for hard work and sustained efforts. We all love to talk about those overnight success stories, but in reality they’re often the farthest thing from overnight. I know that it takes time to get great at something. And I also know that I’m not always going to be right. But the simple act of not stopping can take you pretty far.

  In any event, I hope you enjoyed all the mountain town talk (I have a few more ideas I want to write about) and my Snapchat stories (if you followed along). I got really into Snapchat on this trip. And that’s because I think the platform is at a tipping point where brands are going to start thinking of it as a legitimate marketing channel – and not just an app for teens.

  Do you have any routines or disciplines? If so, feel free share them in the comment section below. Or if you hate routines, tell us why.

  See you in Toronto 🙂

  2015.02.15

• That’s a wrap

  

  Today is the last day of 2014.

  It felt like a frenetic year for me, and so I have to say that I’ve been really enjoying this holiday break. I needed the downtime. I needed the time to think and strategize. And I got all of that this holiday. (The only thing that would make this break even better would be some more snow on the mountains.)

  I’m super excited for the new year and what’s ahead, but before getting into that, I thought it would be worthwhile to look back at what happened in 2014.

  I was initially going to list out some of my thoughts, but then I figured that a better way would be to simply list out the most read Architect This City posts. That way it’s my (daily) thoughts, but curated according to what readers cared about most this past year.

  Click here for the top 15 most read Architect This City posts of 2014. I’ve listed them on a “topics” page that I plan to update every year.

  If you’re looking for some other 2014 themed reading material, I recommend also checking out the best #cityreads of 2014 by CityLab; the best articles of 2014 from ArchDaily; and what just happened? by venture capitalist Fred Wilson.

  Happy new year everyone! Thanks for reading. See you in 2015.

  Image: Family and friends lunch at Pizzeria Libretto, University

  2014.12.31

• How you can be more lucky

  I don’t have any tattoos and I have no plans of ever getting one, but if I were in the market for something to tattoo on my body, this Latin phrase would be a solid contender: Audentes fortuna iuvat. It translates into something along the lines of: Fortune favors the bold. And it’s one of my favorite proverbs.

  The supposed meaning behind the phrase is that Fortuna, the Goddess of fortune and luck, was believed to be more likely to help those that took risks, took action, and were generally bold. And what I like about this is that it doesn’t make luck some abstract thing that people either have or don’t. It firmly transforms luck into something that you yourself can create. That is, if you want it.

  Earlier this month, venture capitalist Fred Wilson wrote a post on his blog called Get Lucky, where he talks about the research that psychologist Richard Wiseman did on so-called lucky and unlucky people. Wiseman concluded the following:

  My research revealed that lucky people generate good fortune via four basic principles. They are skilled at creating and noticing chance opportunities, make lucky decisions by listening to their intuition, create self-fulfilling prophesies via positive expectations, and adopt a resilient attitude that transforms bad luck into good.

  Obviously, the common thread between these two ideas is that luck is something that you yourself can control. Lucky is a state of mind. Whether you believe in greater powers or not, people at least as far back as the Roman times identified the benefits of taking action, risk, and of boldness. It creates opportunity. And it creates luck. 

  I try and do as much of that as I can.

  2014.08.25

• Airbnb for retail spaces raises $7.3 million

  Though it’s sometimes common to downplay “this for that” startups (that is, derivative startups that try and borrow a model and use it in another market), Storefront–which can be described as Airbnb for retail spaces–has just raised a $7.3 million Series A round.

  Storefront is a marketplace for short term retail space (think pop-up shops). People with space simply create a listing and decide how much they would like to charge per day, per week or per month. In doing so, Storefront “helps all sorts of brands, sellers, and merchants to create their first brick and mortar retail experience.”

  What I find interesting about Storefront, and other startups like Airbnb, is that they’re really rewriting the way real estate marketplaces work. Instead of large retail landlords (Storefront) and multinational hotel operators (Airbnb), technology is allowing individuals to now participate in these marketplaces. Supply is being decentralized and anyone with extra space can participate.

  You could argue that these sorts of informal and short term rentals are nothing new, but I don’t think there’s ever been the possibility of scaling up like there is today. I mean, just look at how much attention Airbnb has been getting in New York. These startups are having an impact on the way the larger market functions.

  Change is coming. And I think we’ll see a lot more of it in the real estate space.

  2014.04.28

• BlackBerry started our forest

  A friend of mine posted this article on my Facebook wall yesterday: “A Snowier Silicon Valley in BlackBerry’s Backyard.”

  It essentially talks about the fact that despite the rapid decline of BlackBerry (it just reported $4.4 billion in losses), the Kitchener-Waterloo region is thriving. Many companies—both local and international, such as Google and Motorola, Square, Desire2Learn, Kik and others—have all hung their shingle in the area. 

  Part of this certainly has to do with the University of Waterloo, but much of it also has to do with the legacy of BlackBerry. In fact, you could argue that BlackBerry (formerly Research in Motion) is what started at all.

  In reading the New York Times article I was reminded of a post that Fred Wilson wrote last year called, “The Darwinian Evolution of Startup Hubs.” It’s a great post. In it he talks about how he looks for the company that gave birth to the hub. In Silicon Valley he argues that it was Fairchild Semiconductor and in New York it was Doubleclick.

  Once started, he likens the hub to a growing forest. The big trees (mature companies) start dropping seeds and new trees then start to grow (more startup companies). This is important, because it kick-starts a non-linear cycle of entrepreneurial growth.

  Here’s how he maps out Silicon Valley:

  “In my mental model of Silicon Valley, the first “tree” was Fairchild Semiconductor (founded in 1957) which begat Intel (founded 1968) which begat Apple (1976) and Oracle (1977), which begat Sun (1982), Silicon Graphics (1981), and Cisco (1984) which begat Siebel (1993) and Netscape (1994), which begat Yahoo! (1995) and eBay (1995), which begat Google (1998) and PayPal (1998), which begat YouTube (2005), Facebook (2004), and LinkedIn (2003) which begat Twitter (2006) and Zynga (2007), which begat Square (2010), Dropbox (2008), and many more.”

  Using this logic, Fred Wilson argues that Silicon Valley is about 10 cycles in and New York is at about 2. So what about Kitchener-Waterloo? Well if you buy into the argument that BlackBerry is what started it all, we’re really only into our first cycle. BlackBerry created a lot of wealth and talent, and now it’s being deployed into local startups. Our forest has begun.

  Part of me worries, though, if Kitchener-Waterloo is the right place for a startup hub over the long term. Sure it has the University of Waterloo, but does young talent want to be there? At about 320,000 people, it’s no San Francisco, New York or Toronto. And we’re already seeing a significant pull towards urban centers.

  But let’s look at it from the perspective of Southern Ontario as a whole. We’re at a critical moment in our evolution. The mother tree has caught a disease and it’s starting to take its toll. It may be able to fight it off, but right now it’s not looking promising. Thankfully, there are many young trees sprouting up to replace it. But we’re going to need to take special care of them, because they’re probably our best shot at creating our own thriving forest.

  2013.12.24

• Tech is now the second largest job sector in New York City

  According to a recent report called Building a Digital City, which I found via Fred Wilson’s blog, tech is now the second largest job sector in New York City behind financial services (which includes real estate). There are an estimated 262,000 tech workers in the city earning wages in excess of $30 billion.

  This is a really interesting stat that speaks to the diversity of New York’s economy and the ability for it to continually reinvent itself. But what I found particularly interesting, was the following comment by Fred Wilson:

  “And the reason tech is growing so fast in NYC is that it is embedding itself in all of these other industries. It’s not entirely clear to me whether Gilt is a tech company or a fashion/retail company, it is not clear to me whether ZocDoc is a tech company or a health care company, it is not clear to me whether Codecademy is a tech company or an education company.”

  This is very much the way I think about so called tech companies today. I recently had a Rotman colleague say to me that he felt the startup world was becoming saturated. Everyone is now seemingly working on some new app.

  But I like to think of it slightly differently. As Fred’s comment above suggests, a lot of startups today aren’t purely tech companies. They’re just out to solve a problem and it just so happens that technology and the internet are creating all sorts of opportunities for new solutions.

  I also read a blog called Platform Connected and the author put it like this:

  “In the future, every company will be a tech company. We already see this change around us as companies move to restructure their business models in a way that uses data to create value. We are moving from linear to networked business models, from dumb pipes to intelligent platforms. All businesses will need to move to this new model at some point, or risk being disrupted by platforms that do.”

  So there you have it. Software really is eating the world.

  2013.10.09