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.

Tag: innovation

  • Why creativity requires freedom

    Brazil colors by bruno Gueroult on 500px.com

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    In a knowledge and innovation economy, new ideas matter a great deal. But it seems to be a lot easier for existing companies to come up with sustaining, incremental innovations, than it is for them to come up with new, disruptive innovations. 

    New can be hard.

    That’s why I was interested in a recent New York Times article by Wharton professor Adam Grant called, How to Raise a Creative Child. Step One: Back Off.

    The article starts by arguing that many “child prodigies” rarely become adult creators who go on to the change the world:

    The gifted learn to play magnificent Mozart melodies, but rarely compose their own original scores. They focus their energy on consuming existing scientific knowledge, not producing new insights. They conform to codified rules, rather than inventing their own. Research suggests that the most creative children are the least likely to become the teacher’s pet, and in response, many learn to keep their original ideas to themselves. In the language of the critic William Deresiewicz, they become the excellent sheep.

    To become creators Adam argues that children need to be given the freedom and independence to develop their own sense of self:

    When psychologists compared America’s most creative architects with a group of highly skilled but unoriginal peers, there was something unique about the parents of the creative architects: “Emphasis was placed on the development of one’s own ethical code.”

    Yes, parents encouraged their children to pursue excellence and success — but they also encouraged them to find “joy in work.” Their children had freedom to sort out their own values and discover their own interests. And that set them up to flourish as creative adults.

    I firmly believe in this approach. But of course, this doesn’t just apply to children; though that is certainly an important takeaway. I also think that if you want the best work out of people in the workplace, you also need to: back off.

    Creativity needs freedom.

  • The Business Blockchain Series

    I just backed this project on Kickstarter.

    https://www.kickstarter.com/projects/wmougayar/the-business-blockchain-books/widget/card.html?v=2

    I haven’t backed a lot of projects on Kickstarter, but I definitely enjoy the process of discovering a project that I’m interested in and then providing a small, seemingly insignificant, sum of money to help make it a reality.

    In this case, it’s a collection of two books by William Mougayar about Bitcoin, blockchains, cryptocurrency, and decentralization.

    These are all topics that I’ve touched on before on this blog, albeit with much less rigor than what I’m sure William will be applying to his books. I wrote this post about 2 years ago, when I first started wrapping my head around Bitcoin. And more recently, I wrote posts about how the blockchain could transform home buying and how Honduras is building a decentralized land registry system using the blockchain technology.

    So while at first glance it may seem like these books having nothing at all to do with city building and real estate, I am betting that they will over the long term, which is why I am doing my homework today.

    Here’s a snippet from William’s Kickstarter page:

    “The fundamental characteristics of blockchains are puzzling to consumers, corporations, governments, policy makers and regulators, because their implementation challenges centrally orchestrated trust, and enables a new kind of trust: one that is distributed, decentralized, from peer to peer, and not centrally managed by any single entity. Take any service, and add “without previous center-based authority”, and replace by “peer to peer, trust-based network”, and you will start to imagine the possibilities.”

    If all of this isn’t enough to pique your interest, then you should also know that William is from Toronto. Great things come out of this city 🙂

  • Why Google is worried about being welcoming to employees who want to build new businesses

    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.

  • The value of absurdity for innovation (and a story about tacos)

    Vegan tacos by Karolina Wiercigroch on 500px.com

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    “Great ideas alter the power balance in relationships. That’s why great ideas are initially resisted.” –Hugh Macleod

    I have been following the work and writing of designer Tobias van Scheider for quite some time now. If you don’t subscribe to his newsletter and you end up liking this post, you should consider signing up.

    Recently I stumbled upon something he published back in October called “Ignore Everybody”, where he argues that when you’re exploring something new – that could potentially fail – one of the best things you can do is ignore everybody. 

    And that’s because:

    “We have to understand that ideas are by nature very fragile. They’re like little naked babies, unable to protect themselves. If we really believe in a new idea, we have to protect her with great effort. This is difficult, because oftentimes the greatest ideas get killed by the people around us. Executing on a great idea is by nature a lonely path. If everyone would agree with you, the idea is probably not that great anyway.”

    I am incredibly interested in how new things get started and how new ideas thrive. Fostering innovation has become a critical component of city building in today’s world. But sometimes I feel as if we’re thinking too top-down, as opposed to bottom-up. 

    As Tobias rightly points out in his article, lots of great ideas started as stupid little projects. Who would have thought that a teen sexting app with disappearing messages (Snapchat) would become a company worth many billions of dollars?

    It’s for this same reason that Sam Altman of Y Combinator recently wrote that sometimes its better to call your new company a project, rather than a business. When you call it a business you impose all kinds of biases onto it in terms of viable business models, and so on. But when you keep it a “project”, it becomes more acceptable to be experimental.

    As an example of all this, I was fascinated to learn this past weekend about a Toronto-based ad agency called OneMethod. Because as part of their agency they have a division called the MethLab, where the goal is to simply experiment with “absurd ideas.”

    One of those absurd ideas was a social media campaign slash pop-up taco restaurant – remember, they are an ad agency not restauranteurs. It was so grassroots that they ended up having to sell original art work that happened to come with a “free” taco in order to get around all the legal requirements for serving food. Brilliant.

    The idea was so well received that it has grown into a fully fledged restaurant called La Carnita, which today operates across 3 permanent locations and happens to be one of the most popular taco restaurants in Toronto.

    But let me ask you this, if they had instead gone out to investors – as an ad agency wanting to get into the taco business – would they have been able to raise the money for their first physical restaurant? I can imagine this being a lot more difficult.

    On a larger scale, this is exactly what Google is doing with Alphabet. The company was reorganized and rebranded so that they could continue to work on absurd ideas outside of the Google cash cow. If the idea/project takes off, then it becomes a fully fledged company. If it doesn’t, then it gets shut down and something else is tried.

    This is what people and companies are doing today to stay relevant in the innovation race. 

    But in some ways it feels like a battle to allow the absurd to survive. That’s why the best approach might be to just ignore everybody. There’s value in the absurd but maybe you’re the only one who sees it right now.

  • The independent worker

    There’s a lot of discussion about what the “online gig economy” will mean for traditional forms of employment. And seeing how we’re on the topic of Uber right now, I thought it would make for an interesting discussion.

    Should Uber drivers, to use one example, be classified as independent contractors or should they be classified as traditional employees? There are arguments for both sides.

    Seth Harris and Alan Krueger recently published a discussion paper where they argue for a solution somewhere in between the two. They call it “the independent worker.”

    Here’s a snippet that illustrates the tension that currently exists for people working in this new emerging grey area:

    “Independent workers typically work with intermediaries who match workers to customers. The independent worker and the intermediary have some elements of the arms-length independent business relationships that characterize “independent contractor” status, and some elements of a traditional employee-employer relationship. On the one hand, independent workers have the ability to choose when to work, and whether to work at all. They may work with multiple intermediaries simultaneously, or conduct personal tasks while they are working with an intermediary. It is thus impossible in many circumstances to attribute independent workers’ work hours to any employer. In this critical respect, independent workers are similar to independent businesses. On the other hand, the intermediary retains some control over the way independent workers perform their work, such as by setting their fees or fee caps, and they may “fire” workers by prohibiting them from using their service. In these respects, independent workers are similar to traditional employees.”

    I haven’t read the full paper, but I like the idea of remaining adaptable in the face of innovation.

  • Will parking spaces in cities become more, or less, valuable in the future?

    Parking Garage by Nuno Silva on 500px.com

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    Lately I’ve been having discussions around the future value of parking spaces in urban centers. So yesterday I tweeted out this poll:

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    The sample size is very small, but for what it’s worth, there are some/many people who believe that urban parking spaces will become more valuable in the future.

    This is a reasonable assumption. 

    Over the last couple of decades here in Toronto, I would guess that parking ratios for new multi-family developments have probably fallen by more than half. It used to be that you had to build 1 to 1.5 parking stalls for each unit and now we seem to be sitting somewhere close to 0.5. Although, there are also exceptions and some projects today are getting built with no parking.

    So given that the supply side of urban parking spaces seems to be getting constrained and many cities are actively trying to encourage other forms of mobility, it’s not unreasonable to believe that parking stalls will only become more valuable. That’s why a new underground spot in Toronto might cost you $60,000 today and why some spots in New York can even fetch a $1 million

    But this assumes that the demand for parking will remain more or less the same. What if it doesn’t stay the same? What if we were to experience a tipping point that rearranged urban mobility? What if the cost of driving became so high that people stopped driving at scale? In these scenarios, the demand side of the equation would change.

    If you’re a regular of this blog, you probably know what I’m going to say next. But already I can think of two innovations that would contribute to the above scenarios: Uber and driverless cars.

    Uber’s goal is to continually drive down the cost of transportation and eventually get you to no longer own a car. They know very clearly that the demand for transportation services is highly elastic and that the cheaper they get the more you will use them. And the way they get cheaper is by continually increasing the utilization rate of their drivers/cars. An idle driver/car is the enemy.

    Of course, the other way to drive down fares is to remove the driver all together. And once you’ve done that, there is, in theory, no reason that a car should ever sit idle – like they do today. (The utilization rate for my car is around 2%.) And if a car is never sitting idle, then why would you ever need to park it? Certainly you wouldn’t need to park it as often as you do today.

    All of this isn’t going to happen tomorrow, but I believe – despite the supply constraints – that we are going to end up with excess parking spaces in our cities. And that will mean that they are going to be perceived as less valuable than they are today. I also believe that it will eventually seem silly to drive your own car. 

    What do you think?

  • A Detroit story of single family homes and pianos

    NO MORE MUSIC by Shawn Whitehead on 500px.com

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    I was reading Aaron Renn’s blog this morning and a post called, How Urban Planning Made Motown Records Possible, caught my attention. 

    His argument – taken from a book called Once in a Great City: A Detroit Story – is that the prevalence of pianos in black working class and middle class families was a key ingredient in Detroit ultimately punching above its weight musically.

    Here’s an excerpt that Aaron Renn shared on his blog:

    The family piano’s role in the music that flowed out of the residential streets of Detroit cannot be overstated. The piano, and its availability to children of the black working class and middle class, is essential to understanding what happened in that time and place, and why it happened, not just with Berry Gordy, Jr. but with so many other young black musicians who came of age there from the late forties to the early sixties. What was special then about pianos and Detroit? First, because of the auto plants and related industries, most Detroiters had steady salaries and families enjoyed a measure of disposable income they could use to listen to music in clubs and at home. Second, the economic geography of the city meant that the vast majority of residents lived in single family homes, not high-rise apartments, making it easier to deliver pianos and find room for them. And third, Detroit had the egalitarian advantage of a remarkable piano enterprise, the Grinnell Brothers Music House.

    Detroit is obviously not the only city with lots of single family homes. But it’s fascinating to think that this housing typology, combined with a number of other socioeconomic factors, could be what ultimately led to the creation of the Motown Sound.

    It’s also interesting to think about what kind of talent we might be squandering in our cities. I mean, look what happens when people have access to things like pianos (in the case of Detroit), computers (in the case of people like Bill Gates), and cheap/vacant space (in the case of Berlin and its clubs). They create amazing things.

    This is one of the reasons why I think we sometimes underestimate the importance of small scale moves when it comes to spurring innovation in cities. We forget that people will do incredible things when they are, quite simply, given the freedom to work on projects they are passionate about.

    If we could harness these passions instead of focusing so often on big political announcements, I think we’d all be better off.

  • The Next Urban Renaissance

    The Manhattan Institute for Policy Research has just published a free book called, The Next Urban Renaissance: How Public-Policy Innovation and Evaluation Can Improve Life in America’s Cities.

    Here’s an excerpt from the foreword:

    This collection of essays brings together the best ideas from scholars with expertise across a broad spectrum of urban issues. The common theme of the papers is to innovate, evaluate, and leverage the remarkable private talent that is so abundant in America’s great cities. Public capacity is sharply limited; the ingenuity of urban entrepreneurs seems practically boundless. Local governments should be more entrepreneurial and do more to use the talents of the entrepreneurs around them.

    As a further preview, two of the ideas suggested in the book include: 1) reducing or eliminating parking requirements for new developments (which is something I’ve written about before on ATC) and 2) implementing a split-rate property tax for land and its improvements.

    If you’d like to download the free PDF, click here.

  • Advancing green building technologies, one condo suite at a time

    This evening I had a fascinating conversation with Subhi Alsayed of Tower Labs. If you haven’t yet heard of Tower Labs, I would encourage you to check them out. Here’s their mission statement:

    Our mission is to facilitate the adoption of green building products, technologies and practices through pilot and demonstration projects in highrise buildings; and accelerate the evolution to a low-impact, sustainable urban environment.

    What they do is test out new green building technologies in one-off condominium suites. And since they were founded by both MaRS and Tridel (which is one of, if not the largest condo developer in Toronto), they have plenty of opportunities to do just that.

    This is important because the real estate industry is notoriously slow at innovating. I’ve written about this many times before. Whenever you try and introduce something new, there’s always a lot of change management that goes along with it. The construction trades, to use one example, need to get their heads around it. And until they do, they’re going to charge a premium for it.

    So by creating a one-off test case, everybody gets to see how it works, how it is built, and, most importantly, how it actually performs in the real world.

    One of the projects that they’re working on is something called NetZED, which stands for Net Zero Energy Dwelling. As the name suggests, it’s a condominium suite that produces as much energy as it consumes. 

    The way it works is by trading energy. At night when the sun isn’t out and the panels on the roof aren’t able to produce energy, the suite “borrows” electricity from the building. But during the day when the sun is out, the suite powers itself and then returns any borrowed electricity to the building. Click here to learn more about the suite. It’s being built in the Aqualina Condos on Toronto’s waterfront.

    image

    I find all of this incredibly exciting. Not only because they’re working towards a more sustainable future, but also because they’re applying their efforts towards the multi-family building typology (towers). Given that most of the world now lives in cities, this is an important building typology to make even more sustainable.

    Image: Tower Labs

  • Enabling innovation by lowering the barriers to entry

    Yesterday afternoon Sam Altman of Y Combinator published a blog post talking about a new YC Fellowship program for even earlier stage companies. 

    For those of you who aren’t familiar with Y Combinator, they are a super successful funding platform for early stage startups. They are located in Mountain View, California.

    What’s unique about their approach is that they invest a relatively small amount of money ($120,000 for 7% of your company) in a relatively large number of companies. Their most recent cohort was around 85 companies and they do that twice a year.

    The rationale behind this approach is that it can be incredibly hard to predict which people and ideas will produce the next great company. Oftentimes the best ideas appear really shitty at first. (Here’s a post by one of the cofounders of Airbnb talking about the company’s early rejections.)

    So instead of putting all of their eggs in one basket, YC invests smaller amounts in more companies.

    But beyond this being beneficial to them, it’s also a model that I think helps to reduce the barriers to people starting a company. It gives more people the chance to prove that their company has the potential to be something great. 

    And that’s precisely what makes this new YC Fellow program/experiment so interesting to me.

    Instead of $120,000, YC fellows will receive $12,000 and they won’t have to move to the Bay Area (although it’ll be encouraged). They’ll still get mentorship and advice like the regular YC program, but it’ll be a kind of light version. 

    Though this is almost certainly just the beginning. Here’s how Sam ended his announcement post:

    “Someday if it works, we’d love to fund 1,000 companies per year like this.”

    Now all of a sudden that’s some scale.

    What’s exciting about this is that I believe our cities have the potential to be far more innovative than they are today. Every city is trying to be the next Silicon Valley, but every city is not the next Silicon Valley.

    I saw a great tweet the other day that went something like this (I wish I could remember who the author was):

    “Entrepreneurs aren’t risk takers. They’re just rich kids with big safety nets.”

    It’s a bit of a tongue-in-cheek generalization. But to unlock the full potential of our cities, we should be figuring out how to get everyone participating and building their ideas, not just those with a head start. 

    I think there are a lot of people around the world who could be doing great things, but they just haven’t been able to take that first step for one reason or another.

    Hopefully organizations like Y Combinator will be able to help them take it.