Tag: tech

• My 2021 predictions

  Life will feel a lot more normal by spring/summer (Q2). By this time, the various vaccines should be broadly available (at least in the developed world). This is something that never happened during the Spanish Flu. From what I have read, the Spanish Flu lasted about two years and there were four major waves, the second of which was by far the most deadly. Ultimately, a vaccine was never found. It just petered out as people developed immunity. But medicine then was not what it is today, so surely we are destined to do better.

  What happens with working from home is going to be one of the most important outcomes of 2021. Right now it feels like tech vs. commercial real estate. The tech industry has been quick to renounce offices (while many large tech companies continued to lease more space through 2020). And the commercial real estate industry has naturally pointed out that we’re all still going to need physical offices.

  My view is that, yes, people appreciate the flexibility of being able to work remotely, but that we’re greatly exaggerating the extent to which work is going to disperse in the short-term. I think it comes down to three main things. 1) It’s nice being around other humans, both in the office and for those after work drinks. 2) Collaborative and knowledge-intensive endeavors work better when people are in the same room. And 3) corporate politics will encourage people to return to the office. Who do you think is going to get promoted first, the person who Zooms in from the Caribbean for meetings or the person who shows up to the office and grinds it out every day?

  As the world returns to normal, we will, however, see an explosion in global travel. Many will be questioning how Airbnb’s sky-high valuation makes any sort of sense, but it’ll have the right story for what’s going on in the world (some people call these “story stocks”). The reality is that there will be a massive amount of pent up demand that starts to come out as soon as people start to feel safe and governments start to allow people to travel en masse. I’m already looking forward to the 2021-2022 ski season, which I fully expect to be a blockbuster season.

  Because of this, we will see a decline in recreational real estate. The kind that was fulfilling people’s need for local travel during this pandemic. Instead, people will turn their attention to more international experiences and try and make up for lost time. Many will also come to realize that the whole working from home thing didn’t stick as expected and so they’ll start deriving less utility from their property outside of the city. Expect a kind of reversion to the mean when it comes to prices.

  Urban/downtown real estate will strongly rebound in the second half of 2021. As restaurants reopen, as people return to offices, and as urban life in general resumes, we will see an increase in demand for condos/apartments, and probably larger urban spaces given the run-up in prices for single-family homes that many cities saw last year. (A bit more on this point can be found over here.)

  The trends that are being accelerated as a result of this pandemic are not going to stop, though their rate of increase will temper. The apps and platforms that people started using in 2020, perhaps for the first time, have established new habits. People’s credit cards are now on file and it’ll be very easy for those online habits to remain. But the opposing force to all of this will be the strong desire for socializing, travel, and novel experiences. It’ll be the more routine stuff that will continue to live entirely on our phones.

  The restaurant/food industry will bounce back in a slightly different form. Sadly, many businesses will have failed. But we will also see an explosion in new ideas and new concepts, satisfying our demand to be out socializing and trying new things throughout the new roaring twenties. Ghost kitchens and on-demand food delivery companies will continue to disaggregate how some restaurants are setup. Companies like Uber will see their ride-sharing businesses quickly snap back, which will more than offset the decline in food delivery as people resume eating out.

  Public transit ridership probably won’t return to its pre-pandemic levels until at least the fall. Possibly late fall. This is going to be a serious problem for the various levels of government that subsidize virtually all public transit authorities. Many transit networks have seen ridership declines of 70% or so and, if my timing projections are correct, that will have been the case for about a year and a half.

  The migration from high tax states (like California and New York) to low tax states (like Texas and Florida) will continue. This trend was well underway before COVID-19 and so I don’t see it reversing. What is perhaps more interesting to consider is how this dispersion of economic activity will ultimately play out against some of the centralizing/polarizing forces of the global economy. Urban agglomeration economies aren’t going to go away.

  To end, I will say that I think it’s safe to assume that we’re all looking forward to the world getting back to normal, whatever that happens to mean. But ironically, once that happens, I reckon that some of us might look back on this period of time and feel hints of nostalgia. Perhaps you learned a new skill or perhaps you were able to spend more time with love ones. Time and distance may better reveal these silver linings.

  Onward, my friends. What a time to be alive.

  2021.01.01

• 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

• Amazon opens up its maps platform

  More than half of Amazon’s US deliveries are now completed using its own fleet. So at some point, the company will no longer need to rely on FedEx and/or UPS. It’s also on track to quickly surpass them in terms of packages delivered per year, if it hasn’t already.

  But this also means that Amazon has had (and has been developing) its own maps platform to help support its delivery vehicles. Up until recently it was an entirely internal and proprietary tool. But this month, the company started to open it up in preview form (via an API).

  What this mean is that if you have a web or mobile application that needs a map or some other kind of location-based feature, you now have the option of using Amazon instead of Google or Apple or some other company.

  What’s interesting about this move is that it’s exactly what Amazon did with AWS (its dominant cloud infrastructure business). AWS is a meaningful part of Amazon’s overall business — in fact, it’s responsible for over 10% of the company’s total revenue, and an even bigger part of its operating income.

  So this quiet little announcement could be something.

  2020.12.30

• The Great Dispersion

  It’s that time of year again. It’s time to make predictions for the upcoming year and time to look back on the ones we all got wrong from a year prior. I don’t recall many people (if any) predicting that a pandemic would cripple the global economy.

  I like how Scott Galloway put it in his 2021 predictions post. It’s obviously better to be right than wrong, but it’s okay to be wrong. The value in writing down your thoughts is that it forces you to think. It’s the reasoning that matters. (It’s one of the reasons why some people write blogs.)

  A key theme in Galloway’s predictions post is something that he calls “The Great Dispersion.” This involves two things: (1) The physical distribution of products and services over wider areas and (2) the bypassing of gatekeepers and other intermediaries (which is something the internet has always been good at).

  You could interpret this as being directly antithetical to cities. Urbanism, after all, is all about agglomerations. But I think it’s more nuanced that that. Cities have generally always had both centralizing and decentralizing forces. The two can co-exist.

  I will get into this in more detail in my own 2021 predictions post. But in the mean time, I would encourage you check out what Scott Galloway recently published, over here. And if any of you have any thoughts about what’s in store for us in 2021, please leave a comment below.

  Don’t worry, it’s okay if you’re not right.

  2020.12.29

• Crossing the chasm in Austin

  I can’t open Twitter these days without seeing someone in the tech industry talking about moving or talking about someone who just moved to either Austin or Miami. “What’s the best neighborhood in Miami for startups? My friend just moved to Edgewater. Where did so-and-so move?”

  Here’s a recent article from the WSJ talking about how accelerated tech-fueled growth is straining Austin. And below is a set of charts (from the article) comparing home prices in Austin and San Francisco. (Reminder, the California-to-Texas migratory pattern recorded the highest number of “net movers” last year.)

  

  But in reading through the article, I am reminded that the challenges facing Austin are not entirely unique. Growing cities all around the world are being put in a position where they need to decide whether they want to remain car-oriented and relatively low-density, or if they want to make the shift toward more transit-oriented urbanism.

  It’s admittedly not easy, both politically and practically speaking. It’s hard to rewrite deeply entrenched built form. But Austin is naturally looking at what happened in San Francisco, where restrictions on new development are thought to be partially (largely?) responsible for the city’s unaffordable housing.

  According to the same WSJ article, voters in Austin turned down two previous transit proposals. One was in 2000 and the other was in 2014. There was concern over too much urbanization. There was concern it would induce more people to move to the city. And there was concern that it would threaten the city’s low-rise single-family homes.

  But this year a transit plan was approved that includes three new rail lines, one of which will tunnel through downtown. Provided that Austin can effectively pair this with more housing, more uses, and more density — which is generally what you need to make transit work — then it may be well on its way to crossing, if you will, the chasm of urbanity.

  Charts: WSJ

  2020.12.27

• Delivering happiness

  I was both surprised and saddened to learn about the death of Tony Hsieh this weekend. Forty-six years old is far too young.

  Though best known as a pioneer of e-commerce (he was previously CEO of Zappos) and for his brilliant/wacky management ideas, Tony was also a city builder, particularly in Las Vegas.

  Here’s an excerpt from a recent WSJ article:

  In Las Vegas, Mr. Hsieh became beloved locally for investing $350 million into revitalizing part of the city’s downtown including real estate, restaurants, retail and a tech startup fund starting in 2012. His vision included the development Container Park, a quirky shopping and entertainment center where retailers operate in converted shipping containers. Visitors are greeted by a giant sculpture of a praying mantis that shoots fire.

  But perhaps more importantly, everything I have read this weekend about Tony describes him as a good human being with a great sense of humor and a commitment to “delivering happiness.”

  Here’s another excerpt from the same article:

  After Zappos had a rash of late deliveries, he sent an apology note to customers and provided a phone number for use by anyone who suffered “undue hardship.” As for those who were merely annoyed, he said, they were welcome to call Zappos and “ask whoever answers the phone to do something weird and embarrassing, like sing ‘I’m a Little Teacup.’”

  Happiness. I can’t think of anything better to be delivering to people in the world right now.

  2020.11.28

• The value of boredom

  I took a class during my undergraduate degree about the material culture of the Victorian era. I took it mostly for fun and because I found the lessons relevant to architecture. But it also allowed me to write papers about things like gin (though I remember not doing very well on that one).

  My big takeaway from that class, which continues to stick with me to this day, is about how difficult it was for the Victorians to process and ultimately accept new technologies and ideas. There seemed to be immense skepticism and concern for everything that was novel.

  Take, for example, the first ever escalator. An invention of the Victorian era, there were very serious concerns at the time about what such rapid changes in elevation would do to the human body. That’s why they initially gave people booze at the top of the ride. A little something to calm the nerves after such a traumatic experience.

  This, of course, seems silly today. But I always come back to it when I see us trying to process new technologies. Will posterity eventually think that we too were being silly for worrying? Will they think it’s cute that we thought social media was turning us all into narcissistic and envious creatures? Probably.

  Still, there’s no denying that material culture impacts us all. I was reminded of this while reading this WIRED article by Craig Mod called, “The Glorious, Almost-Disconnected Boredom of My Walk in Japan.” (Tim Ferriss shared it in his most recent newsletter.)

  Craig does ultra-marathon walks. And the article is about one that he did in Japan. While this may seem like a recipe for a whole lot of nothing, there are things to be learned here. In it, he talks about how he rationed his use of technology on these walks and how “boredom” became something of value.

  In the context of a walk like this, “boredom” is a goal, the antipode of mindless connectivity, constant stimulation, anger and dissatisfaction. I put “boredom” in quotes because the boredom I’m talking about fosters a heightened sense of presence. To be “bored” is to be free of distraction.

  Perhaps the biggest drawback of our phones is that they allow us to fill every second of boredom with stuff. Have 3 three seconds to spare? Pull out the phone. On the one hand it’s nice to never be bored. But on the other hand, it’s harder to be contemplative. It’s harder to go deep into things. And it’s harder to find that right kind of “bored.”

  Or maybe we’re just being fuddy-duddies who will one day be made fun of by future generations when somebody decides to teach a university course about early 21st century material culture.

  2020.11.20

• Billionaire wealth in China grew by 1146% over the last decade

  

  UBS and PwC’s recent report on billionaire wealth highlights some interesting trends about the global economy and global wealth.

  • Billionaire wealth in mainland China is now second to only the United States, having grown by about 1146% from 2009 to 2020, compared to 170% in the US. As of the middle of this year, it was sitting at about USD 1.7 trillion in China, compared to USD 3.6 trillion in the US.
  • Hong Kong remains a force with only 1,105 square kilometers of land (not all of which is developable). Billionaire wealth grew by about 208% to USD 356 billion over the same time period as above. That puts it ahead of the United Kingdom, Canada, and Brazil in total dollars.
  • About half of all billionaires seem to have a significant amount of their wealth invested in real estate. Somewhere between 21-40% of their net worth.
  • At the same time, the report identifies the real estate industry as having the fewest number of “innovators & disruptors.” Only 17% of billionaires (whose wealth is primarily derived from real estate) are classified in this way. The report calls out the sector as being “especially slow to embrace technology to boost efficiency.”
  • Perhaps the most interesting takeaway is that, even within the rarified billionaire community, tech is driving polarization. For most of the last decade, the sector didn’t matter all that much. The rich were getting richer. Now it’s more so the tech rich. And COVID-19 seems to be accelerating this trend.

  This is not to say that I think people are particularly worried about billionaires who maybe aren’t getting as rich as they used to. That’s like complaining about being too good looking. But it is clear that tech is driving a bunch of macro shifts in the global economy and this is just another example of that playing out.

  Image: UBS and PwC

  2020.10.18

• The internet is no longer American

  

  This is the topic of Benedict Evan’s latest blog post, which is all about the internet, regulation, and the rise of China, as well as other countries. The internet is now deeply ingrained in everyday life. As of 2017, about 40% of Americans had met their partners online. We do everything online. But 80-90% of the world’s internet users are now outside of the US. There are more smartphone users in China than in the US and western Europe combined. And venture capital dollars have started to diversify away from just the US (see above chart). All of this — but mostly Tiktok — has Americans questioning how best to handle and how best to regulate.

  Here’s an excerpt from Benedict’s post:

  Both of these are captured in Tiktok. This is the first time that Americans have really had to deal with their teenagers using a form of mass media that isn’t created in their country by people who mostly share their values. It’s from somewhere else. That’s compounded by the fact that the ‘somewhere else’ is China, with all of the political and geopolitical issues that come with that, but I’d suggest that the core, structural issue is that it’s foreign. This is, of course, a problem that the rest of the world has been wrestling with since 1994, but it comes as something of a shock in Washington DC. There’s an old joke that war is how God teaches Americans geography – now it’s regulation.

  For the full post, click here.

  Image/facts: Benedict Evans

  2020.10.06

• 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