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.
I like the way that Scott Galloway describes entrepreneurship in this recent post about why he’s bearish on Tesla:
Entrepreneur is a synonym for salesperson, and salesperson is the pedestrian term for storyteller. Pro tip: No startup makes sense. We (entrepreneurs) are all impostors who must deploy a fiction (a story) that captures the imagination and attracts capital to pull the future forward and turn rhyme into reason. No business I have started, at the moment of inception, made any sense … until it did. Or didn’t. The only way to predict the future is to make it.
He then goes on to describe the difference between an entrepreneur and a liar:
This is not the same as lying. There’s a real distinction between an entrepreneur and a liar: Entrepreneurs believe their story will come true, as they are laser-focused on making it true. A liar, well, they know they’re misleading people with false data. Usually for money (i.e., fraud). This is where Tesla turns gray.
Scott continues to say things about Elon and Tesla. But that’s not the point of today’s post.
The point I would like to make is that real estate development is an inherently entrepreneurial endeavor. You need to be a salesperson and a compelling storyteller, because that’s the only way you’ll be able to create the future. And creating the future is what developers do.
He defines entrepreneurs through their actions and behaviors. In his view, this is what they do:
1. They make decisions.
2. They invest in activities and assets that aren’t a sure thing.
3. They persuade others to support a mission with a non-guaranteed outcome.
4. This one is the most amorphous, the most difficult to pin down and thus the juiciest: They embrace (instead of run from) the work of doing things that might not work.
As far as I can tell, that’s it. Everything else you can hire.
He then goes on to say:
All four of these elements are unnatural to most folks. Particularly if you were good at school, you’re not good at this. No right answers, no multiple choice, no findable bounds.
I obviously haven’t read it yet, but I like the premise. The book examines 12 famous figures and makes the argument that each of them had some sort of mental health condition that aided them in their success.
“The most common one may be narcissism. Frank Lloyd Wright is a good example. He had classic narcissistic qualities — a sense of grandiosity, superiority, a huge and complete belief in his aesthetic sensibility, and disregard for architecture that did not live up to his standard. Narcissists also have an ability to be charming, and to lure people into their orbit. That’s obviously useful for an entrepreneur. The issue is that while these qualities may make you a good leader, they may not make you a winning boss. Employees often feel that narcissistic bosses are ruthless or lacking in empathy. Also, unlike people with depression or anxiety disorders, narcissists don’t suffer as much personally from their condition — but the way they behave can be much harder on the people around them.”
Related to this topic is an emergent body of research that, more specifically, looks at the relationship between mental illness and entrepreneurship. And according to work done by professor Michael A. Freeman of UC-San Francisco and professor Sheri Johnson of Berkeley, there’s a significant relationship.
“Forty-nine percent of entrepreneurs surveyed reported at least one mental health condition. Nearly a third reported having two or more mental health issues, such as ADHD, bipolar disorder, depression, anxiety or substance use conditions. And half of the entrepreneurs who reported no mental-health conditions identified themselves as coming from families with a history of mental illness.”
Why would these conditions be of any benefit to entrepreneurs?
“For all of its ills, depression also brings empathy and creativity. Martin Luther King Jr. and Mahatma Gandhi attempted suicide as teenagers. Uncommon levels of empathy can allow a businessman to better understand a customer’s need. And a creative mind won’t be satisfied on the corporate ladder, but instead in a fast-moving start-up where he or she can unfurl ideas and dreams.
Individuals with ADHD naturally make decisions faster, are comfortable working independently and are more creative, necessary skills at a start-up. They’re likely to be bored working for someone else.”
From a city building standpoint, all of this is quite relevant. Because for all of the focus on promoting innovation and entrepreneurship, we don’t seem to be talking about healthcare and mental health systems. And there’s clearly an argument to be made that the two are connected.
Here on ATC, we’ve talked a lot about the changing nature of work and what that could mean for cities.
We talk (and debate) about the value of density and of being in close proximity to others so that ideas can percolate – whether that means open office floor plans or community coffee shops.
But alongside all of this, there are some fascinating structural changes taking place within organizations. Below is an excerpt from a recent New York Times article called, How Larry Page’s Obsessions Became Google’s Business.
But corporate success means corporate sprawl, and recently Google has seen a number of engineers and others leave for younger rivals like Facebook and start-ups like Uber. Mr. Page has made personal appeals to some of them, and, at least in a few recent cases, has said he is worried that the company has become a difficult place for entrepreneurs, according to people who have met with him.
Part of Mr. Page’s pitch included emphasizing how dedicated he was to “moonshots” like interplanetary travel, or offering employees time and money to pursue new projects of their own. By breaking Google into Alphabet, Mr. Page is hoping to make it a more welcoming home for employees to build new businesses, as well as for potential acquisition targets.
What I find interesting about the statements I’ve bolded is that they represent a radically different approach to business and employment. Of course, it’s not really a new thing. Google has been encouraging its employees to work on personal projects since, I think, the very beginning.
But as you read the above article, you really get the sense that Page believes that this kind of organizational culture is fundamental to the long term competitiveness of the company. It’s something he is genuinely worried about.
As counter intuitive as it might seem to encourage employees to work on other things besides the core business, one could argue that it’s almost essential in a world of rapid and constant innovation. Would you rather an employee or a competitor discover what’s next in your industry? If it’s the former, you have a chance of absorbing it into your current business. If it’s the latter, you’re already too late.
If you go back to the article I posted earlier this week, you’ll see that creative destruction is happening a lot faster than it did in the past. The average life span of many, or most, companies seems to be decreasing.
The tech sector seems to be ahead of most other industries with respect to this kind of thinking. But I believe that it will continue to percolate through the economy. And when it does, it will probably have many impacts on the kinds of spaces we design and build in our cities.
By accident, this week on Architect This City seems to be turning into Elon Musk week.
Yesterday, Musk announced something called the Powerwall home battery. Measuring about 3′ x 4′, the shield looking battery pack will charge using the electricity generated from solar panels (or from the grid when rates are at their lowest) and then power your home.
It’s designed for consumers and will cost between US$3,000 – $3,500 depending on capacity. The individual Powerwalls can also be daisy chained to increase capacity. It will be available starting this summer.
A wall battery may not seem all that interesting to some, but I think this is actually a big deal for a few reasons.
Renewable energy is often both intermittent and produced when you don’t need it. Here’s a great chart from Tesla that shows what I mean:
During peak solar hours, most people aren’t home and most people aren’t consuming at peak levels. That’s why it’s important to be able to store the energy that you collect, whether it be from solar, wind or other renewal energy source. And from what I hear from my friends in the industry, storage has been a bit of an Achilles heel for adoption.
It will also help to further decentralize energy production. What is produced locally (from say solar panels) will be stored locally for when it’s needed locally. This is in contrast to centralized production or producing energy locally and then feeding any excess capacity into the grid for use somewhere else. That requires transmission and will be by definition less efficient.
Finally, the other interesting thing about Powerwall is that it closes the loop on two of Musk’s businesses: SolarCity and Tesla. SolarCity is about the production of renewable energy and Tesla is about the consumption renewable energy. But as the chart above shows, storage is often needed to link those two activities in an efficient way.
All of this makes me excited about Powerwall.
If any of you are an expert in this industry (which I am not) or you just have additional thoughts, I would love to hear from you in the comment section below.
I usually write on Architect This City every day. But this past weekend I skipped both Saturday and Sunday, which is something I haven’t done in the 15 months that I’ve been writing this blog. I hate missing days. I really do. But I had no choice. I was at Startup Weekend here in Toronto.
Last Friday night, hundreds of people from Toronto’s startup community convened at the MakeWorks coworking space in Toronto’s west end to pitch and hear new business ideas. The floor is always open to anyone who would like to pitch, but you only have 60 seconds (hard stop) to convince the crowd that your idea is worth pursuing. This past weekend there were about 40 pitches.
Following the pitches, the crowd then gets to vote on their favorite ideas. The top pitches – there were 13 selected this past weekend – get to move on and the people who delivered those pitches become team leaders. They are then asked to get up one more time to tell the crowd who they need to develop their idea over the weekend. Once that happens, everyone starts scrambling around to try and put together a team. It’s all about hustle.
Immediately after the teams are formed, the work starts.
By Sunday at 5pm, you’re expected to have validated your idea and problem in front of real people, executed on some sort of minimum viable product (the solution), and ideally brought in some of your initial customers. Because at the end of the weekend, all the teams get up and deliver a 5 minute pitch in front of a panel of judges who assess you on how well you did against those 3 objectives.
It’s a weekend of raw adrenaline. I wouldn’t be surprised if I lost about 5-10 pounds as a result of how little food I ate and how much coffee I consumed.
I pitched a real estate related idea – just like I did 2 years ago at the last Startup Weekend I attended – and I was fortunate enough to win the top pitch on Friday night. I think it may have been because I said fuck in my pitch. Although, a lot of people also remembered me from the previous Startup Weekend and started calling me “Mr. Real Estate.”
Pitch 11 – Brandon dropping F bombs. Let others tell you the value of your home. #SWTO
Our team ultimately didn’t place – which may have been because it was an Internet of Things themed Startup Weekend and we weren’t that – but I think we developed a super solid business idea.
Either way, I had a blast. We knocked on people’s doors to validate our idea. We got a ton of positive feedback on what we were trying to do. And I was fortunate enough to meet a bunch of smart and ambitious people. I was so impressed by what our team accomplished.
But what I also love about events like Startup Weekend is that it shows you how vibrant the startup ecosystem really is in Toronto. There is no shortage of passionate entrepreneurs in this city fighting to change the world. And what’s great about this community is that they all know how hard it is to start something from nothing, and so they’re incredibly supportive.
If you have any interest, I would encourage you to check out events like Startup Weekend. They’re a lot of fun and they all contribute to the greatness of this city.
Image: The Unlyst Team at Startup Weekend TO 2014 (Jerry, Louis, Landon, and me)
Early this morning, before the sun even came up here in Toronto, I had a video conference call with a sharp and talented entrepreneur in Luxembourg. His name is Fräntz Miccoli and he’s working on an interesting startup called KonnectR.
The idea is to create a platform to connect with new people at any point in time and wherever you might happen to be. It may sound like a “hook-up” app, but that’s not the intent. He came about the idea while traveling and looking for other smart and engaging people to hang out with.
When we started the video conference call this morning, I showed him my window so that he could see the sun just starting to rise. He then showed me his coworking space, which made it seem like he is working out of an old industrial steel mill. Turns out, he is.
The area of Luxembourg he’s working out of is called Belval, which is a neighborhood in the west end of the country’s second largest city, Esch-sur-Alzette. The neighborhood used to consist of the largest steelworks in the country. But with the decline of steel production in Luxembourg, the area fell into decline. Today, it’s being reborn as a 21st century mixed-use community.
The developer behind the project is called Agora. And the site – equal to about 120 soccer fields – will house everything from residences and offices to shopping and cultural institutions. The University of Luxembourg has also centralized their campus in the new neighborhood. Having institutions “anchor” a community is becoming quite common for urban renewal programs. Here in Toronto, we did a similar thing with George Brown College along the waterfront.
To give you a better sense of the transformation taking place in Belval, here’s a streetview photo from 2009:
Here’s another one from the same intersection in 2013 (notice the same tower in the background):
I’m always fascinated by urban renewal projects of this scale because it so clearly speaks to the evolutionary nature of cities. Industries die. Businesses disappear. And new uses need to be found. In this case, the area has gone from steel production to tech startups. That’s not surprising.
But at the same time, I think it’s important that we don’t completely erase the past. Here, I think it’s great that they’re preserving some of the blast furnaces and other industrial structures. It gives the area character and a sense of place – which is oftentimes hard to manufacture and always better when it’s authentic.
Cities need old buildings so badly it is probably impossible for vigorous streets and districts to grow without them…. for really new ideas of any kind—no matter how ultimately profitable or otherwise successful some of them might prove to be—there is no leeway for such chancy trial, error and experimentation in the high-overhead economy of new construction. Old ideas can sometimes use new buildings. New ideas must use old buildings.
And what she was effectively getting at is that we live in a world obsessed with historical data and precedence. To use the words of business thinker Roger Martin: “The enemy of innovation is the phrase ‘prove it.’” Because, if it’s never been done before, how can you prove it? You can certainly imagine it. But you can’t prove it.
If you’re in the business of building buildings, convincing your lender to give you the money to build something that’s never been done before, is an almost impossible sell. That’s not the way it works. Which is why Jane Jacobs famously said that “new ideas need old buildings.”
We’ve seen this story play out in countless cities around the world. The creatives move into an scuzzy neighborhood, make it cool and then investment follows. The neighborhood has been proven. But for this cycle to continue, we need a continuous stock of derelict buildings and undesirable neighborhoods, or at least areas that offer the same kind of affordability and flexibility to creative entrepreneurs.
Often these circumstances have been the result of failure. The proven ideas that got the buildings built in the first place became no longer relevant. And so the buildings were left to expire. But in many global cities, these kinds of areas are an endangered specifies. However, it’s in our best interest to make sure that we don’t lose our creativity alongside them.
Yesterday evening I met up with a talented Toronto-based technology entrepreneur who also happens to be passionate about cities. The conversation meandered between both worlds, but we ended up coming back to one central theme: It’s all about people.
Facebook didn’t just buy WhatsApp for the technology. It spent $19 billion on almost half a billion active users. That’s what matters. Do people want to occupy your (real or virtual) space? Have you created a community? Whether it’s an app, a building or a neighborhood, you’re useless without engaged participants.
And to be perfectly honest with you, that’s my ultimate goal for this blog. Ideally I’d like each and every post to inspire conversation and debate (just like this one did on gentrification). A one-sided conversation can only take you so far. The real value happens within communities.
