Tag: innovation

• Construction is right-skewed and fat tailed

  My friend Christopher Bibby sent me this article over the weekend. It’s by Brian Potter — who writes an excellent newsletter on Substack about construction things — and it’s about why it’s so hard to innovate in construction.

  To explain this, he starts by showing that the distribution of cost outcomes in construction projects tend to be both skewed toward the right and “fat tailed.”

  What does this mean? It means that construction projects have a tendency to run over a budget. And that they are much more likely to be over budget than under budget (right-skewed distribution). According to some data from the US Navy, the difference in likelihood is 10x.

  At the same time, there are also instances where projects don’t just run over budget, they run really over budget (fat tail). All of this is different from your normal distribution where you have a symmetrical curve and thin tails. I guess construction isn’t normal.

  One of the reasons for this abnormal distribution is the fact that construction suffers from what Brian calls “cascading failures.” This is kind of intuitive, but it is everything in construction: In order to complete Y, you need to complete X. If X is delayed, then everything is delayed.

  Because of these dynamics, changes to the construction process are perceived as incredibly risky. This has created a bias toward incremental rather than fundamental innovations.

  For the full article, click here. It’s worth a read.

  2021.08.03

• The 25 top-funded proptech startups in Canada

  Proptech Collective has just published their inaugural 2021 Proptech in Canada report. Here are a couple of screen grabs that you all might find interesting:

  

  

  

  What these images should tell you is that the Canadian proptech landscape is fairly Toronto-centric, but that it’s also very much in its nascent stages. We’re just getting started here.

  I would encourage you to download a full copy of the report. It’s very well done.

  2021.02.08

• We are hiring for the Development team

  Slate Asset Management is hiring.

  We are looking to hire an Associate or Director to join the Development team here in our Toronto office. The full set of responsibilities can be found over here on LinkedIn, but at a high level, we are looking for someone who wants to join an entrepreneurial team and lead — fairly independently — a portfolio of urban infill projects.

  Our approach to development really stems from the broader Slate platform. We are bold and thematic investors who work to create long-term value for our investors and partners. From a development perspective, that translates into an unwavering commitment to design & culture, innovation, and disciplined project execution.

  We pride ourselves on working alongside the world’s best architects and designers, and uncovering opportunities that others may be overlooking. We are proactive and hands-on in everything that we do. We also feel an inherent sense of responsibility for the buildings that we create and we want the work that we do to help improve our cities. We stand behind our product.

  If this sounds like a mission that you can get behind, then I would encourage you to learn more about us at slateam.com and submit an application via LinkedIn. Please note that we are also asking candidates to introduce themselves through a short video.

  2021.01.19

• Where people are moving in the US

  

  Another day, another set of announcements about large companies and rich people moving to lower cost US states. Yesterday it was announced that Oracle will move its corporate headquarters from Silicon Valley to Austin, Texas. (If you remember, Elon Musk also recently announced that he had moved himself to Austin from California.) The company has said that the move puts Oracle in the best position to grow and to give its employees greater flexibility about where and how they work.

  While these sorts of moves are making headlines right now, it’s important to keep in mind that this is not necessarily a new phenomenon. In fact, depending on how you look at it, you could argue that these headlines are a lagging indicator for trends that have been underway for some time. Below is a chart from New Geography showing the top 50 state-to-state moves last year. Number one is the move from California to Texas with 45,172 net movers. And number two is the move from New York to Florida with 38,512 net movers.

  

  According to New Geography, California saw a net domestic migration loss of 912,000 people from 2010 to 2019. And the most popular receiving states are what you would expect: Florida (1,230,000 people) and Texas (1,146,000 people). A big part of this story obviously has to do with housing affordability and the search for an overall lower cost of living. As well, since companies are always in need of young and smart talent, it makes since for them to locate in places where young and smart people want to live.

  But urbanists like Richard Florida have also pointed out at this relocation of companies could be a leading indicator for something else: the decline of innovation in America. Here, he argues that in the nascent stages of a new invention, there tends to be a tight clustering phenomenon. Think steel in Pittsburgh, cars in Detroit, and computing in Silicon Valley. However, as the industry matures, the tendency to centralize seems to decline and companies then start moving around.

  I’m not yet convinced that this is what’s happening. Because there seems to be a pile on happening in specific cities like Austin (which, by the way, I hear is terrific). Even before this pandemic, there was a growing sense (from the outside, mind you) that the Bay Area had simply gotten too expensive, both for individuals and for companies. It would seem that when you greatly restrict the supply of new housing and make it unattainable for many, people go find housing somewhere else. Sometimes in other states.

  Photo by Tomek Baginski on Unsplash

  2020.12.12

• The art of the possible

  Architect Sheena Sharp, of Coolearth Architecture, tweeted something interesting out today:

  Development needs a tolerance for risk, and a skill set that is very different from planning.
  
  It’s the art of the possible in a high stakes, unforgiving marketplace. The expectations of municipal planners are mostly disconnected from the market.
  
  Improving this would be good.

  — Sheena Sharp (@sheenasharp) November 27, 2020

  Improving this would be good. And it is the same gripe that I had with architecture school when I was there. Why is it taboo to talk about money and the market? Why must design exist, in many instances, within a vacuum?

  I can appreciate the value in not always constraining yourself with the status quo. To innovate, you have to stretch. And sometimes, or perhaps oftentimes, the best ideas initially seem dumb. It’s important to have room to experiment and tinker.

  But eventually, reality does matter. Plans that look good on paper, may not be suitable for the market. Constraints are a big part of what makes the city building industry so rewarding. Planning is hard. Building is hard. Getting consensus is hard. It’s all incredibly difficult and you have to be creative.

  The really elegant solutions usually need to weave across and through many different objectives and stakeholders. And so in my view, the more you can empathize with those other constraints, the more elegant your solution will be. Knowing more is good.

  2020.11.27

• The “job” of a McDonald’s milkshake

  Management guru Clayton M. Christensen died this week. Sadly, he was only 67 (leukaemia). A professor at Harvard Business School, Christensen was best known for probably two things: His work on disruptive innovation and his teachings on how to live a more fulfilling life. If you’ve read anything on innovation and disruption, I am sure you’ve come across the work of Christensen. He had a way of explaining things by reframing them. Here is a short video about the “job” of a McDonald’s milkshake. And here is another one where he explains the cycle of disruptive innovations, sustaining innovations, and efficiency innovations. Both videos are worth watching.

  2020.01.24

• Hotels are here to stay

  I have a copy of Monocle’s Guide to Hotels, Inns and Hideaways sitting on my desk and I love flipping through it. There’s something magical about a great hotel. Part of that magic is intrinsic — it’s just a good hotel. And part of it is the fact that we’re probably all a bit more open to new experiences when we travel. Our mindset changes.

  On the first of January, I wrote (briefly) about two recent experiences where I was no longer required to interact with a person in order to check into a hotel. It was all done electronically. Some of you followed up and asked: “Do you think this is a good thing? Don’t you miss the human connection?”

  My response was that I think it is inevitable. There is a long history of technology/automation replacing human jobs. We used to have elevator operators. Now we don’t. We used to have people shoveling coal into furnaces. Now we don’t. And I think that’s okay. We created different jobs. The same is likely to happen with Uber/Lyft drivers.

  At the same time, our need for human connections isn’t going away. One of the best features of a great hotel is the bar. Whether it’s sitting at the bar and talking with the bartender or meeting someone new, those moments of interaction will always remain precious.

  And it’s one of the reasons why, I think, platforms such as Airbnb haven’t meant the demise of hotels. Part of it has to do with the service offerings and consistency of a good hotel. But part of it also has to do with our desire to be around other humans. In the words of Monocle: “There’s something about a hotel bar that captures our collective imagination.”

  2020.01.09

• Reading about adversarial interoperability

  

  I just finished reading a few articles (here’s one and here’s another by Cory Doctorow) on something called “adversarial interoperability.” This is relevant because it is being put forward as the thing that’s needed to solve big tech — as opposed to, say, just trying to break up big tech into small tech, which is what some policy makers think we should do.

  Interoperability is, quite simply, the ability for different products and/or services to work together. It’s the USB charger in your hotel room nightstand that empowers you to charge your phone. (Relevant post: Project connected home.) But, of course, there are different types of interoperability, ranging from cooperative to adversarial.

  Adversarial interoperability is when two products and/or services work together to the extreme chagrin of one of the companies. Usually that company is blatantly trying to stop it from happening so as to further strengthen their market dominance.

  The argument being put forward is that this adversarial relationship is fundamental to tech and fundamental to innovation. It allows new ideas to emerge. And so the real problem at hand is that big tech has gotten so big that it has managed to largely quash this varietal of interoperability. The result is less innovation and the persistence of big tech.

  For a proper reading list on this topic, click here.

  2019.12.30

• A taxonomy of moats

  Jerry Neumann’s recent blog post on the “taxonomy of moats” is a great summary of the ways in which companies — and perhaps even cities — can protect themselves against competition.

  Here’s an excerpt from his introduction:

  Value is created through innovation, but how much of that value accrues to the innovator depends partly on how quickly their competitors imitate the innovation. Innovators must deter competition to get some of the value they created. These ways of deterring competition are called, in various contexts, barriers to entry, sustainable competitive advantages, or, colloquially, moats. There are many different moats but they have at their root only a few different principles. This post is an attempt at categorizing the best-known moats by those principles in order to evaluate them systematically in the context of starting a company.

  And here is his taxonomy of moats. He identifies four main sources:

  

  As a sidebar, consider how this might also apply to cities.

  Scale, for example, matters a great deal. We know that as cities get bigger, people tend to walk faster, have broader social connections (the relationship is super-linear), and be far more productive and innovative.

  If you’d like to read Jerry’s full post, click here. And if you’re interested in this space, I recommend you also check out Fred Wilson’s recent post on, “The Great Public Market Reckoning.”

  2019.09.30

• Guts and generosity

  Today’s Seth Godin post on innovation, guts, and generosity is Seth Godin at his best. One of the reasons why I like it is that I keep thinking that “innovative” has become too much of a buzzword. It’s similar to walking around and telling everybody you’re a cool person. If you have to explain it to everyone, then you’re probably not cool. At the same time, I also find his generosity angle to be a clever one. Here is Seth’s post in its entirety (short and sweet, as usual):

  Innovation is guts plus generosity
  
  Guts, because it might not work.

  And generosity, because guts without seeking to make things better is merely hustle.

  The innovator shows up with something she knows might not work (pause for a second, and contrast that with everyone else, who has been trained to show up with a proven, verified, approved, deniable answer that will get them an A on the test).

  If failure is not an option, then, most of the time, neither is success.

  It’s pretty common for someone to claim that they’re innovative when actually, all they are is popular, profitable or successful. Nothing wrong with that. But it’s not innovative.

  Allow generosity to take the lead and you’ll probably discover that it’s easier to find the guts.

  2019.08.13