Tag: tech

• 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

• SHARE NOW exits North America (and a few European cities)

  Last week, SHARE NOW — which was previously known as Car2Go — announced that it will be exiting the North American market entirely come February 29, 2020, and that it will also cease operations in London, Brussels, and Florence. A couple of reasons were cited, including the “volatile state of the global mobility landscape,” but that really translates into low adoption:

  Further, despite our best efforts and investments in Brussels, London and Florence over the years, we are unable to continue operations in a manner that’s sustainable for our business due to low adoption rates.

  Moving forward, SHARE NOW will focus on the remaining 18 European cities. We, along with our shareholders, believe these markets show the clearest potential for profitable growth and mobility innovation.

  There was a period of time when I used to use Car2Go here in Toronto. My network did as well. But that quickly stopped with the rise of Uber and Lyft. I mean, why bother finding a Car2Go and then parking it, when there’s a much lower friction option? I would imagine that’s how most people feel. (Maybe there’s a care share advantage for longer trips.)

  At the same time, companies such as Uber and Lyft have, as you know, not performed well as public companies. The market is nervous about their path to profitability. In my view, they’re largely an undifferentiated offering right now, and it’s pretty easy to switch across them. So yeah, I guess the global mobility landscape is pretty volatile.

  2019.12.22

• A non-zero probability of copycats

  Software businesses are generally high margin businesses. But along with this feature comes some risks. Here’s an excerpt from a recent post by Scott Galloway (which is actually about FedEx):

  With any software start-up, there is a non-zero probability that you wake up the next day and find that a better-resourced firm (Microsoft, Oracle, Salesforce, Adobe) has deployed 200 engineers to copy your product, bundle it with their stack for free, or near free, and … welcome to zero. I believe this is happening to Slack, but more slowly than Netscape, as Microsoft’s General Counsel has likely coached Satya to charge a nominal fee for Teams and let Slack bleed out, instead of putting a bullet in its head and stirring the DOJ from a 3-Ambien slumber.

  Real estate, by comparison, doesn’t get disrupted in quite the same way. A location/city can lose its economic purpose (Great Grimsby is just one example), but as long as there are growth tailwinds the real estate should do well.

  Venture capitalist Fred Wilson has on many occasions written about how he (and his firm) made a fortune in the dot-com era, only to lose it all and have to remake it again over the subsequent decades.

  One the lessons learned from that experience (according to his blog), was to take some of that second tech fortune and invest it into hard assets — namely real estate. That feels right to me.

  2019.12.21

• Algorithmic home buying expands to Los Angeles

  

  Algorithmic home buying companies (or iBuyers) have now started to expand into Los Angeles. If you recall, most of these companies started in smaller markets where the homes are more homogenous, relatively inexpensive, and generally less liquid. Places like Phoenix.

  By tackling the second largest housing market in the US (after New York City), the algorithms of Opendoor, Redfin, and Zillow will now need to content with an older housing stock, greater variability, and higher values.

  All of these companies have increased their maximum offer price. The sweet spot for algorithmic home buying has typically been in the $150,000 to $300,000 range. Last year, two-thirds of all homes bought by iBuyers were in this range. I can’t imagine that gets you very much in LA.

  I keep expecting these companies to scale into something more beyond just iBuying and flipping. Perhaps we will see that happen once they establish themselves in country’s biggest markets.

  Photo by Josh Rose on Unsplash

  2019.12.08

• A theory of genius

  I thoroughly enjoy the way that Paul Graham reasons through arguments. There’s something hyper rational about it. And even if you happen to disagree with his position(s), you still end up appreciating the way he has taken you through his logic. I guess that’s what you get when you combine a computer scientist with someone who clearly likes to write.

  His latest essay is about how to do great work. Conventional wisdom, he explains, has it that you really need two things: ability and determination. That’s how you win. And that’s how you create new things. But Paul makes the case for a third ingredient — one that is arguably even more telling than the first two. Here’s an excerpt:

  If I had to put the recipe for genius into one sentence, that might be it: to have a disinterested obsession with something that matters.

  Aren’t I forgetting about the other two ingredients? Less than you might think. An obsessive interest in a topic is both a proxy for ability and a substitute for determination. Unless you have sufficient mathematical aptitude, you won’t find series interesting. And when you’re obsessively interested in something, you don’t need as much determination: you don’t need to push yourself as hard when curiosity is pulling you.

  He refers to this as his “Bus Ticket Theory of Genius,” because bus ticket collectors are an example, in his view, of a group with a “disinterested obsession.” They’re not collecting bus tickets for any particular reason, other than because of interest. And when you have this kind of obsession with things that (ultimately) matter, it can lead to important discoveries.

  Think Darwin and his obsession with natural history.

  But the other reason this topic resonates with me is because it makes the case for passion projects, side hustles, creative pursuits, and all other irresponsible things that seem to get harder to fit in the older we all get. I am believer in this. There’s tremendous value in indulging in the things that stoke our curiosity, even if they might seem to silly to others.

  And so I will leave you all with this final thought/excerpt:

  It might be at least as useful to ask yourself: if you could take a year off to work on something that probably wouldn’t be important but would be really interesting, what would it be?

  2019.11.26

• Rules for location data

  The CEO of Foursquare — Jeff Glueck — published an interesting op-ed in the New York Times today, calling on Congress to regulate the location data industry. Currently, there are no formal rules in place.

  In case you’re not aware, Foursquare is one of the largest independent companies operating in this space. I have written about them many times before on the blog.

  Here’s an excerpt from Jeff’s op-ed explaining why this matters:

  But location data can also be abused. Bounty hunters were able to buy the current location of a cellphone for $300, Vice reported, because telecom companies sold the real-time location of phones to shady companies. And apps that track location data may turn around and sell that data, revealing someone’s every movement — whether it is to a retail store, an abortion clinic or a gay bar. Bloomberg Businessweek recently reported on a company with thousands of cameras selling car locations to debt collectors and others; there is no “opt-in” involved, and it’s illegal in all states to cover your license plate.

  I am writing about this today because I think it’s relevant to city building. Location data is inherently spatial. It is how we exist in cities. So it shouldn’t come as a surprise to any of you that this is valuable information — hence why it is being abused.

  Here we have a company advocating for more, not less, regulation. They, of course, want it to be sensible. But I still think it says things about the current location data environment. To learn about the specifics of what Jeff is proposing, click here.

  2019.10.17

• TikTok’s revenue is apparently over $7 billion

  Last week, audio clips from an internal Q&A session at Facebook were leaked and published by the Verge. These meetings have historically always been private. In what I think was the right move, the company then decided to publicly livestream a subsequent Q&A session — you know, to show that they had nothing to hide.

  The media tended to focus on Mark Zuckerberg’s comments about the threat of Facebook being broken up by regulators. #BreakUpBigTech. Lots of people are also attempting to glean what this leak might signal about the company’s current corporate culture. But there are lots of other interesting soundbites.

  Here’s an excerpt from Zuckerberg about the Chinese social media app, TikTok:

  So yeah. I mean, TikTok is doing well. One of the things that’s especially notable about TikTok is, for a while, the internet landscape was kind of a bunch of internet companies that were primarily American companies. And then there was this parallel universe of Chinese companies that pretty much only were offering their services in China. And we had Tencent who was trying to spread some of their services into Southeast Asia. Alibaba has spread a bunch of their payment services to Southeast Asia. Broadly, in terms of global expansion, that had been pretty limited, and TikTok, which is built by this company Beijing ByteDance, is really the first consumer internet product built by one of the Chinese tech giants that is doing quite well around the world. It’s starting to do well in the US, especially with young folks. It’s growing really quickly in India. I think it’s past Instagram now in India in terms of scale. So yeah, it’s a very interesting phenomenon.

  TikTok now has over 1.4 billion installs outside of China according to TechCrunch. And in the first half of this year, it supposedly booked more than $7 billion in revenue (though most of it came from China). The company is also saying that it posted its first profit in June of this year.

  All of this is, indeed, “a very interesting phenomenon.”

  But it’s even more interesting because this is probably the first consumer-facing Chinese internet product with massive global adoption. And it has Facebook paying attention. They’re now the ones who have to play copycat — their version of TikTok is called Lasso. Of course, it’s not nearly as popular.

  2019.10.07

• 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

• Patch Homes announces $5mm Series A round to grow fractional home equity platform

  There are a number of home equity startups in the marketplace today.

  A few years ago I wrote about an alternative product to HELOCs or home equity loans, called Point. And earlier this year, I wrote about a startup, called Landed, that is helping “essential professionals,” such as teachers, with their down payments. They’ll contribute up to 10% of the value of a home in exchange for a share in any future gains, or losses.

  Today, another startup in the space — Patch Homes — announced a $5mm Series A round. From what I can tell, it appears to be similar to Point in that it involves the fractional sale of home equity. Though, to be clear, the model is distinct from the fractional homeownership that is popular in many high demand vacation destinations. Here’s a bit more on how the product works (source):

  The Patch model enables homeowners to “tap into” their home equity by selling 20–40% to Patch’s affiliate, Patch Capital, which shares in both the upside and downside. The homeowner remains in control of her or his home for the life of the relationship and exits via a sale or refinances in 7–10 years.

  While this product is not for all homeowners, it provides a new and important financing option. The Fed estimates that home equity ownership in the US is $15 Trillion. It makes no sense that the only financing options are additional debt or a complete sale of the property. Patch gives homeowners the option to de-lever their personal balance sheet or otherwise raise cash. Clients have used Patch proceeds for numerous reasons, the most popular of which are to pay off debt, increase liquid savings and finance home improvements.

  I am not surprised to see this gaining momentum. The biggest benefit is that it gives you partial liquidity (i.e. cash up to $250,000), without having to sell your property or take on additional debt service payments. It’s equity, not debt. Fred Wilson, an investor in the company, calls it fractionalizing home equity.

  2019.09.12

• Death of the standalone camera

  

  I took the above photo on my Fujifilm X-T3 at the Museum of Contemporary Art here in Toronto. Obviously, it is a cast of David Bowie’s head. I’ve been using Fujifilm’s X cameras for exactly 3 years now and have already gone through 2 different models. I love them. But Om Malik’s recent post on why the future belongs to computational photography is, in my opinion, entirely accurate.

  For most people, taking photos on a standalone camera and dropping them into Lightroom is not only far too much work, but also unnecessary. Here is a chart from Om’s post showing total worldwide digital camera unit sales (in millions). Sales have fallen off a cliff from about 10 years ago and now look to be on the verge of dying.

  

  What is obvious is that we are all now just taking photos on our phones. Thanks to better chips, sensors, and software, the future of photography looks, again, destined to be computational. Apple is set to announce its new iPhone 11 (or whatever it will be called) this week and already the rumors point to a dramatically improved camera.

  This change in hardware has also changed our relationship to the photograph. We now take photos for the purpose of real-time sharing, which is another point that Om makes. When I post photos of things that have happened in the past — as I often do — people are commonly confused: “Where are you? When are you back in Toronto? Wait, is this a #latergram?”

  This has made photographic memories feel ephemeral. Once the moment has passed, we forget about them. They get drowned out in new real-time images and shares. As a society we are taking more photos than ever before. Not surprisingly, this lowers the gravitas of each individual one.

  2019.09.08