Brandon Donnelly

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.

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Tag: seth godin

  • Cheaper or better?

    One perfectly sound approach is to just be the cheapest. This often entails lower margins, but hopefully higher volumes. However, the problem with this approach is that it can become a race to the bottom. At some point, somebody will find a new corner to cut. As Seth Godin says, “the problem with the race to the bottom is that you might win.”

    On the other end of the spectrum is this approach:

    This is a pamphlet describing full ripeness mangoes from the Miyazaki prefecture in Japan. These are not the cheapest mangoes around. In fact, it’s the opposite; they’re generally known to be the world’s most expensive. But they will almost certainly be the best mangoes that you’ve ever tasted. And you’ll only be able to get them between the months of April and August.

    Sometimes it’s possible to be both cheaper and better. And that’s obviously an ideal position to be in. But in many, or perhaps most cases, you’ll need to choose. Cheaper, or that much better.

  • Thinking about the things we’re used to

    This is a powerful perspective:

    We evolved to be wary of change. Our attention is limited, new things can be a threat and the status quo feels comfortable.

    As a result, we spend a lot of time and energy being afraid (and arguing about) the upcoming changes in our lives, but almost no time at all thinking about the things we’re used to.

    As an example of this tension, check out this “exit interview” with Toronto’s former chief city planner, Gregg Lintern. The underlying theme is change and why it’s desperately needed.

    But of course, that’s not easy.

    The interviewer, Victoria Gibson, mentions this survey stat: nearly half (47%) of all Torontonians think the city is building too little housing, and yet only about a quarter (27%) think their area could handle more.

    We need this, but not here. Probably because we’re used to the way things are.

    But if you read the interview, you’ll see that the answer, or at least one answer, is to make the conversation personal, and ultimately think critically about, you know, the things we’re used to.

    Change starts with not giving the benefit of the doubt to the status quo.

  • Risk perception

    Here is an interesting way of looking at risk (via Seth Godin):

    If you’re trying to reduce risk, do the hard part first. That way, if it fails, you’ll have minimized your time and effort. On the other hand, if you’re looking for buy-in and commitment so you can get through the hard part, do it last. People are terrible at ignoring sunk costs, and the early wins and identity shifts that come from the easy successes at the beginning will give you momentum as you go.

    He’s not wrong. We are generally bad at ignoring sunk costs, which is why they have to tell you in business school that you need to ignore sunk costs. It doesn’t come naturally.

    We are also victims of temporal myopia. Meaning, we tend to emphasize short-term items and discount things that are in the future. So if two things are equally risky, we’ll likely perceive the immediate one as more risky than the one that will occur in a few years.

    Some things to keep in mind as we go about managing risk.

  • Difficult work

    There is an old saying that if you can find something you love to do, you’ll never work a day in your life. But this is probably bad advice.

    Here is a simple graph, from Seth Godin, to help explain:

    The problem with fun things (y-axis) is that they’re fun. So lots of people want to do them. And if there’s a small or no market for said fun thing, then it’s probably a hobby. (Hobbies are still important.)

    Sometimes you can be fortunate where something that previously had no market eventually has a big market. Take, for example, tinkering with computers in the early days.

    This is what Chris Dixon was getting at when he said that what the smartest people do on the weekend is what everyone else will do during the week in ten years.

    But if this doesn’t happen or if a big market already exists — and you do want to be successful at something fun — it’ll likely follow a power law.

    Meaning, you’ll need to be the very best in the world and it’s almost certainly going to be a “slog”. (Bottom right quadrant.) One example of this would be the phenomenon of “starchitects.”

    And that’s pretty much it for the fun stuff. The rest of this graph is for things that are difficult, which means that 3 out of these 4 quadrants are difficult and/or a slog.

    This is not nearly as much fun as not ever working.

  • San Francisco’s transportation agency doesn’t love autonomous taxis

    Cruise, the autonomous taxi service owned by GM, is working toward offering 24/7 service in San Francisco. I wrote about that here. And so it recently came out with some supportive data suggesting that between September and November of last year, it completed 2,800 rides covering some 27,000 miles, and that it did so without a major collision or injury.

    The San Francisco Municipal Transportation Agency, however, disagrees. They are opposing Cruise’s service expansion plans, and have reported 92 incidents where Cruise’s autonomous taxis have obstructed traffic, caused delays to transit, blocked lanes and, apparently in two cases, driven over firehoses.

    These two things are not all that surprising. Firstly, autonomous vehicles are still in their infancy and they are known to do silly things. Part of this, I’m sure, is because they’re programmed around road and life safety. And so if they don’t know what to do, they’re going to default to what is deemed safe, even if it means blocking a lane or obstructing traffic.

    Secondly, transit agencies are suffering in our post-pandemic world. So this is an obvious and understandable case of self-interest. And it’s not new. But at the same time, we’ve all seen this movie many times before, from Napster to Uber. Progress is disruptive. But does it really make sense to stop?

  • This may not actually work

    I am, of course, generalizing, but we live in a world of comparables and proof. In the slightly-modified words of Seth Godin, we have been trained to show up with proven and verifiable answers because that’s what will get us an A on the test or what will allow us to keep our jobs. And there’s nothing wrong with that. Risk mitigation is an important part of any organization. But if everything you’re doing is already proven, then by definition, and regardless of any claims, you are not innovating. Because if something is truly new, then it may not actually work.

    My friend David Wex — who is on a mission to develop modern condominiums all across Canada — once told me that if he were to hire consultants to prepare market studies for his projects (he doesn’t), they would almost always tell him never to build. And that’s because there are often no comparables to point to and say, “look at this thing over here, it shows that somebody has already done this before and has been successful.” Instead, he has been forced to ask himself, “is there no comparable product offering because the market doesn’t exist or because nobody has done it yet?”

    This is a risky proposition. Because if you’re wrong — and the market doesn’t exist — then you will likely fail. But if you’re right, and you get to introduce something new to people that want it, then you get the benefit of a commanding market position. You were right about something that most people thought was wrong and/or didn’t bother to explore. That’s why Seth Godin has argued that innovation really requires two things. It requires guts, because the thing you’re trying may not work. And it requires generosity, because innovation is, after all, about trying to make things better.

    I think this is a great way of putting it.

  • What am I paying more for?

    So here’s the thing. The whole reason we are all talking about how to build more sustainably is that there isn’t often a quantifiable ROI for doing so. If building a net-zero building cost less than building a regular building, everybody would be building one. But that is not the case, which is why our industry, and others, are grappling with how to justify the added costs, even though we all know it’s absolutely the right thing to do.

    The questions we are asking ourselves look something like this: If I spend X% more on this build, what kind of rent premium could I command? And in some cases this premium is quantifiable and in some cases it matters a great deal. For instance, in the case of a new office building, you might need to spend the extra money so that you can attract the right tenants. While in other cases/asset classes, you might feel as if there’s no rent premium and nobody will ever pay more.

    But I like how Seth Godin thinks about it in this recent post: people never pay extra. If you’re paying more for an electric car, for example, you aren’t actually paying extra. What you are paying is a price that you feel is fair for what you are receiving. And what is it that you’re receiving? Well, in this case, you’re getting an electric car, but you’re also buying in Seth’s words, “sustainability, community awareness, cachet, status, safety, quiet, and the feeling of being an early adopter.”

    These things have value to some people. And as long as you can deliver on your promises, extra isn’t extra at all. But perhaps more importantly, this early adoption can help encourage change. Electric cars are becoming cheaper and cheaper, and I think it’s pretty clear that they will soon replace combustion engine vehicles. This model of starting at the top of the market and then moving down seems to have worked.

    Now, the auto industry isn’t perfectly comparable to the building industry. They have been good at improving productivity and bringing down costs, and we have been awful at it. Depending on how you measure it, construction productivity growth over the last half century is sitting somewhere between flat to some negative number. But I don’t think this dubious achievement changes Seth’s message. Think about what you’re offering. Maybe extra isn’t extra.

  • An exciting new proposal for Toronto

    I love change.

    In fact, a big part of what I do for a living is imagining what things could be in the future. However, the bias that humans have toward the status quo has been well documented by people like Seth Godin, as well as many others. It is easier to defend that which already exists. Here’s how Seth puts it:

    All one has to do is take the thing we have now as a given (ignoring its real costs) and then challenge the defects and question the benefits of the new thing, while also maximizing the potential risk.

    So as I was reading this recent blogTO article about the work of Stephen Velasco, I wasn’t surprised to see some of the responses. Stephen has built an outstanding 3D model of all the towers that are currently planned or under construction in Toronto. Here’s what that looks like:

    For some of you, this is exciting. And for others, this may look like too much density. In both cases, we might think we are being fair and reasonable in our assessment, but the reality is that it’s actually quite difficult to be a neutral judge. We are all guilty of poor logic and too much emotion.

    But here’s a good mental exercise, put forward by Seth, to test your logic: flip the story and then see if you still feel the same way.

    In this particular case, imagine that all of the above proposed buildings are already built. This is the city that we all live, work, and play in. This is the status quo. Now consider an exciting new proposal being put forward to demolish many/most of these buildings, create more surface parking lots in the core, industrialize our waterfront, and reduce our overall population density.

    Photo from the 1940s:

    Photo from the 1960s:

    Is this a better proposal?

  • 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.

  • Creating change

    I was reading about a proposed development earlier today (it doesn’t really matter which one for this story) and I immediately thought to myself, “wow, this is a beautiful development. I like what they’ve done here.” The project happens to be by one of my favorite architects in the city. Sadly though, we have yet to work with them on any of our projects.

    I then decided to read the comment section of the article. There were dozens and dozens of comments and virtually all of them were negative and against the development. What is, of course, clear is that we all have different beliefs. We all see things differently. And that’s part of the reason why creating any sort of change is usually so difficult.

    But if you think about it, so much of our world resolves around change. If we want to address climate change, we are going to need to make changes. If we want to improve housing affordability, we are going to need to make changes. If we want to build more inclusive and economically prosperous cities, we are going to need to make changes.

    The challenge with all of this change is that we have inertia working against us. Case in point: I’m sure that most of us have been in a meeting at one point or another when a decision was made purely based on what was done the last time around. We did X. So let’s do X again. Why change? Probably a safe bet.

    Seth Godin once said that, “if you do anything that matters, it means you’re trying to change something.” He was talking about the world of marketing. But I believe that there’s a universal truth to this. Change unlocks potential.