Tag: technology

• Opendoor.com launches in Phoenix

  Yesterday Opendoor.com finally launched their product in Phoenix. If you’re a regular reader of Architect This City, you might remember that back in July of this year I wrote about how they had just raised $10M of funding to make selling your home as easy as a few clicks.

  Well, since then, I’ve been following them like a hawk. I had all the founders on Twitter notification (so I got notified every time they tweeted) and I was eagerly anticipating their launch.

  Now that they’ve launched, we have a much better idea of how their business model is going to work. I say “better idea” only because there’s still portions of it that are a question mark for me.

  In any event, Opendoor basically provides instant liquidity to homeowners. You go on, tell them about your home, and they then make you an offer to buy, which looks like this and lasts for 3 days. The offer they make you is calculated using comparable sales and adjustments based on your home’s unique characteristics.

  Upon accepting their offer, they then schedule a home inspection (at their cost) to confirm your home’s condition. Once this is done, you just select your move out date and Opendoor handles the rest. The fee for all this is 5.5%, which the company claims is less than the 6% that realtors typically charge (this would be high for Toronto).

  After buying your home, Opendoor plans to turn around and resell it.

  What this reminds me of is a “bought deal.” In the world of investment banking, a bought deal is when the bank itself agrees to buy the entire offering of a particular security, as opposed to going out to the market and trying to raise the money. The advantage to the company (offering the securities) is that there’s no financing risk. They know they’re going to get their money. But it usually means the company gets a lower price.

  So what I wonder, is if this is what’s going to happen here. Since Opendoor is effectively taking on the selling risk, does that mean their offers will be lower? Or are all their costs built into that 5.5% and that’s truly their core business model? I’m sure some of this will surface in the coming weeks.

  I do, however, think they are smart to be focusing on the supply-side of the marketplace and offering virtually perfect liquidity to homeowners. Real estate is a unique asset in that it’s difficult to bring supply to the market. And so if control the supply-side, I think you have a pretty good shot at controlling the market as a whole.

  2014.12.10

• Panel: What is Smart Now?

  

  This Tuesday evening at 630pm, WORKSHOP – which is a design studio, gallery, and retail shop located in Yorkville, Toronto – will be hosting a panel discussion titled: What is Smart Now?

  On the panel will be a building scientist, a computer scientist, and two architects. The moderator will be Larry Wayne Richards, who is Creative Director of WORKSHOP and the former dean of the Faculty of Architecture, Landscape, and Design at the University of Toronto. He was dean when I was completing my undergraduate degree and is one of my favorite people in the world of Toronto architecture.

  Here’s a bit more on the panel:

  For more than half a century, visionaries and companies such as Monsanto, Hewlett-Packard, Microsoft, and Samsung have promoted the concept of technologically smart homes with highly integrated, interactive systems.  However few of these homes have actually been realized, leaving us to wonder why.

  Meanwhile, architects, builders, and home owners have become aware of the advantages of being smart in terms of energy efficiency and sustainability, from using common sense to selectively employing high-tech.  

  But now, with the digital realm and software advancing rapidly, will sophisticated smart home systems merge with recent advances in high performance materials and energy-efficient construction, making “totally smart” (and affordable) homes commonplace? Will we finally be living in the magical future that was imagined 50 years ago?  And what are the implications for architects and architectural education?

  And here are the panelists:

  • PAUL DOWSETT, Architect and Founding Principal, Sustainable TO
  • SRINIVASAN KESHAV, Professor of Computer Science, University of Waterloo
  • TED KESIK, Professor of Building Science, University of Toronto
  • JANNA LEVITT, Founding Partner, LGA Architects, Toronto
  • LARRY WAYNE RICHARDS (Moderator), Creative Director, WORKSHOP

  Given the current “Internet of Things” trend and the fact that software is creeping into so many non-tech fields, such as housing, I think this is a really timely discussion to be having. I also think it’s critical for these kinds of conversations to be cross-disciplinary. There are infinite opportunities in the housing market for people who are able to think in that way.

  If you’d like to attend, click here to sign up. It’s free and open to the public. WORKSHOP is located in the lower concourse level of 80 Bloor Street West.

  Image: WORKSHOP

  2014.12.07

• The case for not being mean

  Startup guru Paul Graham writes really interesting essays. Judging by the date stamps on his website, he’s been easily doing it for more than a decade. And he’s gotten really good at it – everyone in the startup community reads them. Whenever he posts one, I know I read it. No question. 

  His most recent essay is called: Mean People Fail. And in it, he argues that the structural changes that have happened in our economy have also meant a reversal in the correlation between “meanness” and success. I know that might sound a bit funny, but hear him out:

  For most of history success meant control of scarce resources. One got that by fighting, whether literally in the case of pastoral nomads driving hunter-gatherers into marginal lands, or metaphorically in the case of Gilded Age financiers contending with one another to assemble railroad monopolies. For most of history, success meant success at zero-sum games. And in most of them meanness was not a handicap but probably an advantage.

  That is changing. Increasingly the games that matter are not zero-sum. Increasingly you win not by fighting to get control of a scarce resource, but by having new ideas and building new things.

  That has always been the case for thinkers, which is why this trend began with them. When you think of successful people from history who weren’t ruthless, you get mathematicians and writers and artists. The exciting thing is that their m.o. seems to be spreading. The games played by intellectuals are leaking into the real world, and this is reversing the historical polarity of the relationship between meanness and success.

  This makes sense to me. But the other reason I find this interesting is because I’ve wondered before if I should be more of an asshole in my professional life. Some people are really good at being assholes. I’m not. It’s not in my nature. When I manage and work with people, I’d rather try and create intrinsic motivation as opposed to using some form of brute force. In my view, the latter burns social capital.

  So if you happen to be of the same mindset, you might like to hear that you’re probably sitting on the right trend line. Don’t be mean.

  2014.11.30

• How to apply for information

  This morning I was at Toronto City Hall looking for old drawings of a building that I’m now working on. While I was there, I also ran into John Tory, and so I was given the opportunity to congratulate him in person on his recent mayoral win. But that’s irrelevant to this discussion.

  What I instead want to talk about is access to information.

  We are living in a world that produces an unprecedented amount of data and information. Back in 2010, Eric Schmidt – the former CEO of Google – quite famously stated that we were creating as much information in the span of 2 days as we did from the dawn of civilization up until 2003. And that was 4 years ago. So I can only imagine what the numbers look like today. The internet is basically a giant data generating machine.

  But a lot of that information isn’t all that useful and much of the really useful information that’s out there isn’t yet digitally accessible in the ways that we have now become accustomed to. For example, for me to access old drawings and documents for a building in Toronto, I had to do the following…

  First, I had to file what’s called an Application for Routine Disclosure. It was a 2-page form that I was able to submit to the city over email. The fee for this application was $66.60. Once the city confirmed receipt of this application, they then went looking in their archives for any drawings and documents that might exist.

  After about a week, I called them up and they informed me that drawings had been found and I could now setup an appointment between the hours of 8:30am and 11:30am, Monday to Friday. I went in the next day and the lady – who was very helpful I must say – presented me with a stack of microfiche sheets (I think that’s what they’re called).

  I then took these sheets and walked over to a machine (shown below) where I could inspect the drawings. Everything about the machine had to be reversed. In order to get the drawings to show up properly, I had to put the microfiche sheets in upside down and mirrored left-to-right. 

  

  As I looked through the sheets, I was then instructed to demarcate – with a post-it note – which drawings I wanted a copy of. At the end of it all, the lady filled out another form that would be sent to a printing shop who would then convert these microfiche drawings into PDF files for me. I think that will end up costing a few hundred dollars when it’s all said and done.

  However, at this point, I also learned that this procedure applied only to drawings, and not to any of the other documents that I was able to find on the microfiche sheets. For non-drawing documents, I actually had to file what’s called a Freedom of Information application at a separate counter upstairs. So I did that. I applied to free the information. It was only $5, but the turnaround time for that is 30 days.

  Now, I realize that we’re talking about old drawings and documents. Some of them were from the 1940s. But I’m a big believer in the value of open information. And so today was a good reminder to me that, even though we now have a tremendous amount of useful information at our fingertips, there’s still lots of valuable information that’s really difficult to get.

  2014.11.26

• A revolution in personal mobility

  

  In the spirit of Startup Weekend, I thought it would be interesting to go back in time and pretend to pitch one of the most disruptive innovations of the 19th century: the automobile.

  Typically pitches start by first outlining the problem. The idea is to make your audience aware of the pain point, so that they feel excited when you ultimately pitch your solution.

  In the case of cars, the incumbent technology would have been horses. So I can imagine somebody standing up and talking about how horses are slow and how they drop stinky poo all over our city streets. And that the time has come for a revolution in personal mobility! Enough of this crap! 🙂

  But while many of us probably can’t imagine a world without cars, try and put yourself in the shoes of somebody at the end of the 19th century who can’t imagine a world without horses. And then think about all the things we have subsequently done to make cars thrive:

  • We paved roads and created networks of freeways.
  • We invented rules of the road to ensure that people were operating these new devices properly.
  • We created a licensing system to ensure that anybody who was operating a car was doing so relatively safely and following the rules that had been created.
  • We created schools that taught people how to be better drivers.
  • We started insuring cars for when accidents inevitably happened.
  • We started having to accept fatal car accident and pedestrian deaths.
  • We built networks of gas stations. As of 2004, there were 168,000 retail locations selling gas in the United States.
  • We had to give over large land masses to parking. In fact, we reorganized entire cities so that the car could be better accommodated.
  • And we setup government transportation divisions to make sure the needs of the car were always being met.

  This is a long list of things we had to do to make cars possible and I’m sure there are many others that I have missed. Today, we all know how disruptive cars have been and we’re certainly questioning many of the things we have done. But we also accept this list as being largely normative.

  However, before they were the norm, they were insurmountable challenges. How will we teach everyone how to drive these new cars? How will we minimize accidents? How will we make it easy for people to refuel their cars? Where will people store them when they’re not using them?

  There were a lot of moving parts to figure out. 

  Which is why people like Paul Graham have argued that the best ideas almost have to live in your unconscious mind. Because your conscious mind would simply reject them as viable options as soon as you started thinking about all the required moving parts. I guess that’s why they say there’s a very fine line between crazy and brilliant.

  Image: Benz Velo

  2014.11.25

• I’m back from Startup Weekend

  

  I usually write on Architect This City every day. But this past weekend I skipped both Saturday and Sunday, which is something I haven’t done in the 15 months that I’ve been writing this blog. I hate missing days. I really do. But I had no choice. I was at Startup Weekend here in Toronto.

  For those of you unfamiliar with the global Startup Weekend initiative, let me tell you how it works.

  Last Friday night, hundreds of people from Toronto’s startup community convened at the MakeWorks coworking space in Toronto’s west end to pitch and hear new business ideas. The floor is always open to anyone who would like to pitch, but you only have 60 seconds (hard stop) to convince the crowd that your idea is worth pursuing. This past weekend there were about 40 pitches.

  Following the pitches, the crowd then gets to vote on their favorite ideas. The top pitches – there were 13 selected this past weekend – get to move on and the people who delivered those pitches become team leaders. They are then asked to get up one more time to tell the crowd who they need to develop their idea over the weekend. Once that happens, everyone starts scrambling around to try and put together a team. It’s all about hustle.

  Immediately after the teams are formed, the work starts.

  By Sunday at 5pm, you’re expected to have validated your idea and problem in front of real people, executed on some sort of minimum viable product (the solution), and ideally brought in some of your initial customers. Because at the end of the weekend, all the teams get up and deliver a 5 minute pitch in front of a panel of judges who assess you on how well you did against those 3 objectives.

  It’s a weekend of raw adrenaline. I wouldn’t be surprised if I lost about 5-10 pounds as a result of how little food I ate and how much coffee I consumed.

  I pitched a real estate related idea – just like I did 2 years ago at the last Startup Weekend I attended – and I was fortunate enough to win the top pitch on Friday night. I think it may have been because I said fuck in my pitch. Although, a lot of people also remembered me from the previous Startup Weekend and started calling me “Mr. Real Estate.”

  Pitch 11 – Brandon dropping F bombs. Let others tell you the value of your home. #SWTO

  — Startup Weekend (@startupwkndTO)

  November 22, 2014

  //platform.twitter.com/widgets.js

  Our team ultimately didn’t place – which may have been because it was an Internet of Things themed Startup Weekend and we weren’t that – but I think we developed a super solid business idea.

  Either way, I had a blast. We knocked on people’s doors to validate our idea. We got a ton of positive feedback on what we were trying to do. And I was fortunate enough to meet a bunch of smart and ambitious people. I was so impressed by what our team accomplished.

  But what I also love about events like Startup Weekend is that it shows you how vibrant the startup ecosystem really is in Toronto. There is no shortage of passionate entrepreneurs in this city fighting to change the world. And what’s great about this community is that they all know how hard it is to start something from nothing, and so they’re incredibly supportive. 

  If you have any interest, I would encourage you to check out events like Startup Weekend. They’re a lot of fun and they all contribute to the greatness of this city.

  Image: The Unlyst Team at Startup Weekend TO 2014 (Jerry, Louis, Landon, and me)

  2014.11.25

• Toronto seeks injunction to stop Uber

  

  One evening this past spring I was leaving a Rotman School event at Liberty Grand on the west side of Toronto. There aren’t a lot of taxis coming through this part of the city, so I figured I was going to have to wait while I hailed one from my phone. But as luck would have it, one happened to be pulling up just as I walked out of the hall.

  As he drove up and rolled down the window, I told him that I was going to the St. Lawrence Market area and that I needed to pay by credit card (I was trying to be a nice guy and avoid the inevitable fight when he was dropping me off). He responded by saying, “My machine is broken. Can’t you pay with cash?” I told him, “No, unfortunately I don’t have any cash on me. I need to pay with credit card.” He then rolled up his window and drove up closer to the entrance of the hall.

  Faced with this scenario, I did what most people would probably do nowadays: I pulled out my phone so that I could hail either an Uber or a Hailo cab (I’m sad that Hailo has since left the North American market). I decided on Hailo (it was cheaper until UberX came along) and ordered a car.

  But within a few minutes, the same taxi with the broken credit card machine circled back around, rolled down his window, and told me that his machine was now working and he would take me to the St. Lawrence Market. Knowing exactly what had happened, I said to him, “Wooooow, that’s funny that within the span of a few minutes your machine has magically started working again.” He wasn’t happy with that response.

  Now, we all know why he didn’t want to take my credit card. He didn’t want to pay the fees and he wanted the cold hard cash. And who can really blame him for wanting to maximize his profits. But for the end user, this experience sucks. When it’s 2 in the morning and all you want to do is go home to bed, you don’t care about the few dollars he’s trying to save. You just, want, to go, home.

  And that’s one of the reasons why Uber (and previously Hailo) is having such a huge impact on the market. Even before UberX arrived (the cheaper alternative), lots of people were more than willing to pay the Uber premium. And they continue to pay their controversial surge prices. But that’s because the experience is so much better than what’s offered today.

  We all know that Uber is under a lot of fire for what they do, but Toronto mayor Tory is 100% right in saying that ridesharing and peer-to-peer taxis are here to stay. Toronto may be seeking a court injunction to stop the service in this city, but I would agree that it’s likely going to be a big waste of money. The cat is already out of the bag.

  What’s happening here is no dissimilar to what happened with Napster. A court order may have forced the company to shut down, but it didn’t maintain the status quo for the music industry. That industry went, and continues to go through, a lot of change. So a better option, would be for everyone to sit down together and figure out what the future of the taxi industry is going to look like. Because I can guarantee you that it’ll continue to change.

  Image: Anti-Uber protest in London (Flickr)

  2014.11.20

• The threat to big box retailing

  

  Earlier this week, I was having a conversation with a number of smart real estate people about the future of retail in today’s internet and smartphone world. This, of course, isn’t a new topic. The industry has been discussing it for years. And while internet retailing still accounts for a relatively small percentage of overall retail sales (~10%), we all know that change is coming.

  One company that came up during our discussion was not surprisingly Amazon.com. But the initial comment was that they don’t make any money. Fortunately for me I had just gone through a presentation by venture capitalist Benedict Evans the night before called: Mobile is eating the world. And so I pulled out my phone and presented this slide:

  

  The fact that Amazon operates with basically no net income is on purpose. Look at their revenue growth! So I wouldn’t dismiss them as being a fad. They may only account for 1% of all US retail sales today, but I’d put money on that percentage growing.

  The other reason I bring up Amazon is because, in some ways, I think of them as the online equivalent of a big box store. Just like a Walmart or Costco, where you can buy everything from tires to groceries to prescription drugs, I buy a lot of different things, besides just books, off of Amazon.com. You might do the same as well. And this is where I see the immediate threat to offline retailing and retail real estate: big box stores.

  In the second half of the 20th century, big box stores were incredibly disruptive to the retail landscape (and to cities). They used cheap land on the outskirts of cities, cheap buildings, and economies of scale to offer rock bottom prices to consumers. The value proposition was about cheap, not about differentiation. But as cheap as they may be, the internet can still do it cheaper.

  And retailers know this, which is why I think they all now sell groceries. Groceries have a very low online penetration. Basically everybody still buys groceries in-person. So if you offer that, you have a reason to draw people inside your store, where they will hopefully buy all the other stuff that they need. But as the online value proposition continues to get stronger, I think we’ll see many other, more significant, changes.

  Image: Flickr

  2014.11.01

• The middle class myth — a conversation with Marc Andreessen

  New York Magazine recently published a really great conversation between Marc Andreessen and Kevin Rose. Marc cofounded Netscape way back when, and now runs a venture capital firm.

  In addition to technology, the conversation touches on a bunch of different topics such as why it’s beneficial to be an optimist and why change can be difficult for people to accept.

  But they also hit on a number of broader economic shifts, such as the replacement of labor by machines, and the rise and decline of industrial production in the US. Here’s a snippet on that latter point:

  You’ve described the middle class of the 20th century as a myth.

  There are two middle classes. There’s the historical middle class—which is the bourgeoisie—starting in the, like, 1600s. This was the businesspeople and the traders, the merchants, the butcher, the baker, the general-store manager, the guy who was going off to China to go get silk and bring it back. Businesspeople.

  But in the 1940s something really significant happened, which is we bombed the rest of the industrialized world. And so the industrial base of Germany was obliterated. Japan was reduced to rubble. The rest of Continental Europe was bombed. England was bombed. The industrial base of the world was bombed. The one major industrial country that wasn’t bombed was the United States. So the United States became the monopoly producer of industrial goods.

  The army bombed the American middle class into existence?

  It was an accident of history. We had a window of opportunity which we took full advantage of. We had this window from basically 1945 to 1966, 1968, in which we were basically running unopposed. In that window, all kinds of wonderful things happened. One of the things that happened was the rise of this new idea of the middle class, which there was no historical precedent for, which was college-level wages for high-school-level education. As long as there’s no competition, it’s all well and good. The minute the Japanese show up, the minute the Germans show up, it just all falls apart.

  Click here for the full conversation. It’s an interesting read.

  2014.10.23

• The story of two urban giants

  This morning I stumbled upon an interesting documentary (via The Urbanophile) about two New York skyscrapers that were built in the 1930s as telecommunications buildings: the Western Union Building and the AT&T Long Lines Building. It’s fascinating to see how they have evolved along with technological change. Click here if you can’t see the video below. It’s only 8 minutes long.

  //player.vimeo.com/video/97945495

  2014.10.18