Tag: fred wilson

• Multiple paths to a quick yes

  I have heard a number of people describe this blog as covering all that is new. That wasn’t my explicit goal when I started writing it. My goal was simply to focus on cities and all the wonderful things that shape them. But it turns that new ideas form a big part of that and that I am very interested in new ideas. Change is what moves the world forward.

  Of course, there is no shortage of new ideas. We all have brilliant ideas. Maybe you’re looking at Toronto’s public garbage bins right now and thinking to yourself, “You know what, I have some terrific ideas for how these could be greatly improved.” And chances are, your ideas are good ones. The problem, however, is that ideas are fleeting. The real challenge is bringing them to fruition before they die.

  So here are a few thoughts that came to mind this morning:

  • There is a difference between incremental improvements and directional/fundamental change. Generally speaking, we tend to be naturally better at ideas related to the former than the latter. When we look at a Toronto garbage bin on the street and see it overflowing with rubbish and see all its side panels swung open, we intuitively see the problems. But it is less common to think about, oh I don’t know, subterranean garbage networks for moving refuse around or networked robots that come out at night and tidy our streets with purple brooms. This is also why when we come up with something new like a horseless carriage or an iPhone, we often name them after the thing we already know and are familiar with, even though it probably undersells how meaningful the change is. It helps our minds make the leap.
  • Many organizations have separate decision making processes that depend on the above. Amazon, for example, likes to ensure that incremental improvements have “multiple paths to yes” within the company. Again, these are the more intuitive kind of changes and so you don’t want some brilliant, yet fragile, idea to get killed by some naysayer along the way. You want as many of them being implemented as possible. On the other hand, ideas that might change the direction of the company are typically slowed down and carefully deliberated. This is a common split. “Major decisions” go up to some greater governance body; whereas all other day-to-day decisions just get made on the fly by those “in the field”. This is one way to keep things moving quickly.
  • On a related note, venture capitalist Fred Wilson wrote today about the virtues of small and flat partnerships when it comes to early-stage investing (but I don’t think the lesson only applies to this sector). In his view, the biggest venture winners — at least when it comes to early-stage companies — often come from the most “controversial and out there” ideas. And to make these sorts of bets it is helpful to have a small and flat team with a lot of trust. I found this particular insight really interesting because it implies that when you have the opposite — big and hierarchical organizations — you naturally start to lose your ability to experiment with non-consensus ideas. And so what you’re likely left with is just the intuitive and incremental stuff.
  • Recently, we also spoke about the argument that generations view change differently. Young people are often more open to new ideas, at least partially because they view it as a way for them to make their mark on the world. Older generations, on the other hand, often view change as a threat to their current position in the world. None of this is universally true, but think about how this often plays out with new housing. Young people view housing supply as a way for them to buy or rent something new and form their own household. Whereas already established households can view it as a threat to their community and their existing way of life.

  These are a broad set of thoughts. But if there are any lessons to extract from these bullet points it is perhaps these: One, consider the kind of decision that needs to be made. Is it something incremental and intuitive? Is it an obviously sound infill housing project? Because if so, you want multiple paths to a quick yes. And two, consider who gets a say and who controls the decision. Because the wrong group dynamic can kill even the best new ideas.

  2022.06.12

• Is crypto just snake oil?

  As I understand it, databases are pretty important to technology companies. Here is an excerpt from a recent post by Albert Wenger talking about why he and his company (Union Square Ventures) believe that web3/crypto is going to unlock new value for our society:

  As a first approximation all the big powerful internet companies are really database providers. Facebook is a database of people’s profiles, their friend graphs and their status updates. Paypal is a database of people’s account balances. Amazon is a database of SKUs, payment credentials and purchase histories. Google is a database of web pages and query histories. Of course all of these companies have built a great deal more over time, but operating a database has stayed at the core of why they are powerful. Only they get to decide who has permission to read and write to this database and which parts of it they get access to.

  So how will web3 be any better? Well blockchains, at least right now, are poorer performing databases in almost all dimensions, according to Albert. And this is one of the reasons why they’re being so quickly dismissed by most people. But they do have one key advantage: permissionless data. No single entity controls a blockchain database. More from Albert:

  It is difficult to overstate how big an innovation this is. We went from not being able to do something at all to having a first working version. Again to be clear, I am not saying this will solve all problems. Of course it won’t. And it will even create new problems of its own. Still, permissionless data was a crucial missing piece – its absence resulted in a vast power concentration. As such Web3 can, if properly developed and with the right kind of regulation, provide a meaningful shift in power back to individuals and communities.

  All of this said, I do agree with Fred Wilson and others that the web3/crypto enthusiasts on Twitter these days are getting to be a bit much. For obvious reasons, everyone is trying to pump the crypto stuff that they own. And it can certainly feel like shills trying to sell snake oil. But as Fred pointed out today, this isn’t the first time that we’ve been here:

  It reminds me of the early days of web2 in 2001/2002/2003, when we started USV. That was also a time of great cynicism. We almost did not get our first fund raised. Nobody was buying the story we were telling. But of course, that story turned out to be true. And I am confident this one will too.

  If/when this story does turn out to be true — and I believe it’s a when — I think we will see it permeate through all sectors of the economy, including how we plan, build, and operate our cities. Of course, this will probably take decades and much of what will happen is unknowable right now. But it’s pretty hard to ignore that this was a pivotal year for the crypto space.

  2021.12.29

• Choice over convenience

  “Change makes us uncomfortable. Sunk costs are hard to ignore. Possibility comes with agency, and agency comes with risk.” –Seth Godin

  This is a quote from a recent blog post by Seth Godin talking about choice vs. convenience. His overarching argument is that we tend to go with convenience over choice when making decisions, and that means forgoing many/most of the options that we actually have available to us. Life inertia is a thing, which is why we often require big and meaningful events to shake us out of the conveniences of complacency.

  I think that is one of the reasons why you’re hearing talk of a “great resignation.” This pandemic has shocked many people into thinking about whether or not they’re truly happy doing what they’re doing. And for many people, that has translated into going out and starting their own business. Fred Wilson recently argued that what we’re living through right now isn’t actually a great resignation, it’s a great formation.

  I have never been a huge fan of new year’s resolutions for the simple fact that I don’t think you should wait until the new year to do something you allegedly want to do today. If you want it, do it now. But there is no denying that this week is probably the slowest week of the year. And this slowness has a way of freeing up cognitive capacity. Perhaps it’s just enough breathing room to encourage more choice over convenience. Whatever the choice may be.

  2021.12.28

• What happened in 2021 — a review of my predictions for the year

  

  On January 1st of this year, I wrote a post called, “My 2021 predictions.” It was part of a new practice that I have adopted where I try to forecast the year (I will be wrong) and then evaluate how I did at the end of it (the focus of today’s post). This year was, of course, a tricky year with lots of uncertainty. But here’s where my head was at in January and here’s what ultimately happened.

  Life will feel a lot more normal by spring/summer.

  This more or less happened. Cases, at least here in Ontario, were way down by the summer. Those who wanted to be fully vaccinated had the option to be. Cities reopened and summer felt pretty good after a long winter of lockdowns. As soon as it was possible to do so, we reopened our office and many/most people came back. I ended up being in the office this year more than I wasn’t. Of course, I had no idea that Omicron was going to be a thing back in January.

  Working from home/the office.

  I think the jury remains out on this one. It’s still too early to draw conclusions. I have been in the office full-time for most of this year, but I recognize that that hasn’t been the case for everyone. I know from the super scientific “Jimmy the Greek Reopening Index” that I developed that office utilization rates are not yet back. When I wrote about this topic back in October, the US average was thought to be just below 40%. Still, I remain bullish on office.

  An explosion of global travel.

  Well, Airbnb’s stock isn’t maybe as sky high as I suggested in my predictions post. But it is still up over 19% YTD:

  

  Marriott is also up nearly 27% YTD:

  

  The reality is that travel was/is rebounding. I managed to take two weeks off at the end of the summer, which is something I hadn’t done in at least several years. But Omicron has certainly impacted the recovery:

  

  Urban/downtown real estate will strongly rebound.

  I would argue that we saw this play out in the residential sector. Here in Toronto, Q3-2021 saw condo rents in the core increase 11.4% quarter-over-quarter. This was a fairly significant snapback. It was the largest increase in the region, outpacing both the inner suburbs and the outer suburbs. On the for-sale side, we saw evidence of the condo market returning as early as Q1. We were also able to successfully launch One Delisle and are now preparing to start construction.

  Trends accelerating.

  In some cases, what we saw was a reaction to short-term dislocation. Peloton’s stock is down about 73% YTD at the time of writing this. In other cases, what we saw was just a “pulling forward.” (Link to post by Fred Wilson.) The pandemic led to greater consumption of certain products and services, but now those companies could be headed for a period of slower growth. At the same time, there’s evidence that certain things, like buying more groceries online, may actually be sticking.

  Return of restaurants.

  What seems pretty clear is that people are quicker to return to bars & restaurants than they are to return to the office. As we know, getting together in person is fundamental to urban life. Here’s a chart from OpenTable:

  

  However, this is not to say that many restaurants didn’t have a tough go during this uncertain time.

  Public transit ridership will return to pre-pandemic levels by the fall.

  I was dead wrong and way too optimistic about this one. Office utilization rates remain lower than expected and so people aren’t commuting in nearly the same way. Those who are, seem to be driving more. As of August, Canada’s urban transit networks were operating, on average, at just over 40% of where they were pre-pandemic (August 2019). This is obviously a serious problem for operating shortfalls.

  Migration from high tax states to (warmer) low tax states.

  This is an established trend in the US and so it was certainly not a bold prediction. There are many other factors at play here beyond simply the pandemic. However, as I mentioned in my original post, what is perhaps more interesting right now is the heightened tension between centralization (urbanity) and decentralization. I’ll see what data I can uncover in the coming weeks, but we likely need to get to the other side of this pandemic before drawing any firm conclusions.

  In reviewing this year’s predictions it is clear that I was perhaps overly optimistic (which is far better than being overly pessimistic) and that missed a lot of important stuff. Some of it was unknowable, such as a new variant, and some of it I just missed, which is bound to happen. I could also be more precise and bolder in my predictions, and so I will endeavor to do that in my upcoming predictions for 2022. Stay tuned.

  If you’re not already an email subscriber to this blog, consider making that happen over here. And for those of you who have been reading all year, thank you. I truly appreciate it.

  Photo by Jamie Curd on Unsplash

  2021.12.21

• Dwelling in peace

  

  

  

  These “aesthetic monsters” are part of a new NFT collection that I recently bought into. They’re called Angomon (supposedly “ango” translates from Japanese into “dwelling in peace”). And they can be purchased on the Magic Eden NFT marketplace. At the time of writing this post, the floor price is about 1.15 SOL.

  The ultimate plan is for these characters to live in some sort of 3D world that will be called the Angoverse (which is an obvious play on metaverse). The team is also planning to provide NFT holders with the original 3D files for these Angomon so that owners can 3D print their own real-world figurines. Longer term, the hope is that there will be official Angomon collectible figurines available for purchase.

  All of these things are of course future plans. They could happen or they could not. These NFTs could have tremendous value or they could not. I just thought these monsters looked cool and fashionable, and so I bought a few. Right now the plan is to frame them and display them all at Parkview Mountain House.

  But it is also interesting to note how go-to-market strategies are changing in this new world of crypto and web3. Fred Wilson recently wrote about this over on his blog. In web2 (think the Facebook/Instagram era), most consumer applications started out with a tool. The network came after.

  Chris Dixon called this strategy, “come for the tool, stay for the network.” In the case of Instagram, the tool was initially photo filters. People used it to apply those filters that made every photo look brown and hipster-like. But eventually network effects took over and that became more important. There are were lots of people using it.

  In web3, everything now seems to start with some kind of asset or token. People buy in and then become invested in the project, which is interesting because they then begin to market out of self-interest. This post is not about that and is more about sharing something that I think is cool.

  Fred Wilson has proposed a new slogan for this. It is: “come for the assets, stay for the experience.” So these Angomon are now assets of mine. If the experience does eventually come, I guess I’ll stick around. Hello web3.

  2021.11.24

• Visionary vs. operational

  Fred Wilson wrote a great post last month about leadership. In it, he compares what he calls visionary leadership to operational leadership. Here’s a snippet:

  I like to keep things simple and in my simple mind, leadership comes in two flavors, visionary leadership and operational leadership. Founders are almost always visionaries (if they aren’t, run in the opposite direction) and hired CEOs are almost always operators.

  The post goes on to explain the dynamics between these two types of leadership. Vision, he argues, needs to come from the top. You need someone setting direction at a high level. Operational leadership doesn’t have to be this way, and often isn’t. You can hire for it.

  In some special cases, you have leaders who are both. Another snippet:

  Leaders who can provide both operational and visionary leadership are a rare but special breed. When you find one, get on their bus and stay on it for as long as you can. It will be an incredible trip.

  I have seen all of this play out in the real estate development space.

  There are people who are great at identifying new sites (land) and coming up with fresh and innovative ideas, but it is clear that they need an operator or two around them. There’s nothing wrong with this pairing.

  Development is also a very long and slow game and you need people who can operate — deeply in the weeds — over extended periods of time. Persistence and tenacity are crucial. Patience I guess, too.

  If this topic is of interest to you, I recommend you check out the rest of Fred’s post.

  2021.05.12

• The case for speculative asset bubbles (and happy new year)

  This is an interesting perspective. It is from Fred Wilson’s annual what-happened-this-past-year post:

  But here is the thing about speculative frenzies – they are generally directionally correct but off in their order of magnitude. And they finance the trend that they are directionally correct about. It may be the case that Tesla’s market capitalization is too high, but that allows Tesla to raise $10bn without diluting more than a few percentage points. And that $10bn will go towards accelerating the conversion of the auto industry from carbon-based fuel to renewable energy. And that is a good thing for society.

  When I first read this my mind immediately went to tulip mania. Was that directionally correct? Did tulip bulbs ultimately rebound and maintain their value over the long-run? I actually don’t know.

  But if you think about the dot-com bubble, that was directionally correct. Sure, infamous “companies” like Pets.com never ended up going anywhere, but the idea of tech and the internet becoming dominant was absolutely right.

  Fast forward twenty years and you can be sure that many people are now buying their pet supplies online, along with pretty much everything else. Sometimes we simply overshoot and get the timing wrong.

  This is perhaps a good thought for all of us to consider as we welcome 2021 and say goodbye to what was one weird and terrible year.

  Being directionally correct means that it’s okay for there to be bumps, mistakes, and speculative frenzies along the way. They are expected. What matters is the path forward.

  Happy new year, everyone.

  2020.12.31

• A new Frame Home in Brooklyn

  Fred Wilson (venture capitalist) and Joanne Wilson (also an investor) have been working on a passive house apartment building in Brooklyn for the last five years. Their development company is called Frame Home. And this past week they received a pretty great Christmas gift in the form of a Temporary Certificate of Occupancy from NYC Buildings.

  At 5 storeys and with only 10 two-bedroom units, you could classify this building as the kind “missing middle” housing that gets so much air time here in Toronto. And so not only have they managed to build relatively small, but they’ve done it using passive house design principles.

  Here are some of the apartment building’s features:

  • Cross-laminated timber (CLT) structure
  • Passive house design approach
  • Triple-pane windows
  • Interior polished and insulated concrete walls (presumably to act as a thermal mass to moderate heating/cooling throughout the year)
  • Solar panels installed on the upper facade and roof (passive house design should, in theory, allow these to supply a big chunk of the building’s energy needs)
  • No fossil fuels used throughout the building — everything is electrical
  • Fully sub-metered units
  • Outdoor circulation spaces/stairs, providing access to a shared rooftop courtyard (I’m assuming these also serve as required egress for the building)
  • Dedicated elevator entrance for every suite (i.e. no interior circulation/corridor spaces)
  • Composting facilities within the building
  • Bike room connected to the ground-floor lobby

  There’s also a co-working and community space planned for the ground floor called “Framework.” Interestingly enough, they have already responded to the current pandemic. Instead of open-air desks, you rent fully enclosed 8′ x 8′ pods that are sound-proofed and come with their own HVAC systems.

  Congratulations Fred and Joanne on such an exciting and pioneering project. (I would love to see the development pro forma!) If you’d like to learn more about Frame 283, here is their website and here is a profile that the New York Times did on the project back in January. Building with CLT is apparently prohibited in NYC. Frame 283 got an exemption.

  2020.12.25

• Tech and New York City

  Tech:NYC has just launched a new podcast called Talk:NYC. The first episode is with venture capitalist and blogger Fred Wilson. (Though, it should be noted that Fred and his wife, Joanne, are also involved in the real estate development space.) In this episode, Julie Samuels and Fred Wilson talk about why he came to New York, how to manage through a downturn, where working spaces are going, and why the magic of New York is still there — among a bunch of other things. Click here if you can’t see the embedded podcast below.

  https://soundcloud.com/user-212806065/talknycep01fredwilson

  2020.09.30

• Off the grid

  

  Two things struck me today.

  First, I read Bloomberg Green’s daily newsletter (Nathaniel Bullard) and came across the following statistic. In 2001, the world installed 290 megawatts of solar generating capacity. This year, the world is likely to install more than 100 gigawatts of solar — that’s 350x more per year than we were installing 19 years ago. You can also see how things have changed by looking at the above chart showing wind and solar asset financing per year.

  Second, I read about Fred Wilson’s SunPower Solar system and how, since May, he has been able to satisfy 91.5% of his home’s electrical needs via solar (this includes an electric vehicle). In fact, during the month of May when temperatures were a bit cooler, he had a surplus. He was producing more than he was consuming, and so he was selling that excess production back into the grid. It wasn’t until the summer months and higher AC usage that he started having a shortfall.

  Now I don’t know where his house is located or what its roof looks like, but it is interesting to consider both the macro and micro scale. 91.5% signals to me that it shouldn’t be much longer before many people and many homes no longer need to draw any power from the grid. That’s going to be a game changer.

  Chart: Bloomberg Green

  2020.08.20