The Opportunity of Real Estate Tech

The 2020s will see more transformation in real estate tech than the entire Internet age to date. Finally, 30 years of technology advancements will remake all aspects of the real estate sector.

This is no small feat, given that MSCI pegs just the global commercial real estate market at $8T and the U.S. market at $3T. The entire real estate category is worth $32T. Real estate might just be the biggest sector technology has disrupted yet – making the $5T technology industry itself seem quite small.

The forces shaping change across the technology landscape all have an impact on the real estate sector, and the cumulative effect will be transformational on the landscape. These mega-trends in technology are coming to their fullest expression right now.

Mobile

There are 5.3B people over the age of 15 in the world; and there are 5B cell phones. In the U.S., mobile internet penetration for adults is over 90%. At this point, mobile is the primary way most people access the Internet.

For the real estate sector, this creates new connectivity for virtually everyone who works in the industry. Most of the work in the sector is done in the field, and making business processes and information available in the field has a huge productivity boost for every employee.

Contractors, developers, agents, brokers, property managers, inspectors, landscapers, and maintenance staff will all have powerful tools at their fingertips to make them more effective and efficient.

Data

In the mid-2000s, a number of real estate tech companies started aggregating publicly available data and creating simple online portals for real estate information. Zillow IPOed, and Realtor.com started getting all of the disparate MLSes integrated into a common interface. These obvious data assets lay the foundation for more aggressive – and accretive – uses of data for the next decade.

The most obvious new data plays in the space are iBuyers, who will buy homes from sellers directly at very-small-to-virtually-no discount to the market rate. Offerpad and Opendoor have raised $2B between them; Redfin and Zillow have pivoted to this model; and new entrants like the brokerage Keller-Williams are launching competing offerings.

Having enough data to make a confident bet on the value of an individual property is the key technology ingredient for iBuyers to be successful. To collect that data, iBuyers have warchests of capital that will allow them to fine-tune their thesis without running out of funding before they get the model right.

Cloud

The rise of commercial-scale cloud computing started just before the Great Recession, and its adoption in the intervening decade has given rise to a host of new tools. To survive the transition, real estate developers and property managers have to adapt to compete. The cloud enables much of the real-time information needed to manage projects more effectively; and also reduces the burden of technical maintenance for small, nimble teams who assemble around specific projects (like a construction project!).

In addition, enterprise cloud services service as the backbone of operations for modern real estate professionals. Platforms like Viewpoint and CMiC provide a core ERP, from which to add on additional cloud services like Yardi, Propertyware, and Appfolio can engage with tenants and staff.

VR/AR/MR

Virtual, augmented and mixed reality holds huge promise for any industry that manages physical assets and sites. Tools like Autodesk and ARki dramatically lower the cost of architecture and design services. Visualizations from Reside and PlaceTime compress and shorten the funnel to find and manage tenants by allowing them to tour virtual homes. And tools like SmartReality reduce ongoing maintenance costs by allowing teams to visualize internal systems of finished buildings.

IoT

Connecting buildings means greater efficiency, less use of natural resources, and lower maintenance costs. As smart meters get added to new and existing structures, everyone will have a real-time view of energy use and optimization. Tenants will have the ability to monitor and control their spaces wherever they are. And new, differentiated experiences, like enhanced safety and shared spaces, will create new business models.

The biggest reason that the coming decade will transform the real estate tech sector is that the industry is ready for the change. After a decade of improving property values globally; and the adoption of many of these technologies in other aspects of people’s lives; leaders in real estate see the connected future as an opportunity to win their outsized share of tomorrow.

All The Books I Read in 2018

Here’s what I read in 2018. It’s in order of the stuff I liked the best, to the stuff I liked the least.

Uneasy Street by Rachel Sherman

I have an uneasy relationship with this book, which is why it’s the best book I read in 2018.

Sherman interviews super-high net worth families (think: $50M+ net worth) and then writes about how they see the world. It is horrible and fascinating and relatable and ridiculous and unconscionable and humanizing and disgusting and humbling all at the same time.

You think you have nothing in common with these people, then you find out they are just like you.

You think they are normal, then you hear them talk about some small aspect of their lives (like how they spent $30,000 on a desk. I didn’t even know you COULD do that), and you are filled with incredulous rage.

Then you seethe, reading about how these people feel oddly conflicted about their wealth. You seethe, yet you feel impotent, knowing that you could not change their perspective about their life in the slightest.

And then, they tell you they feel the exact same way. They also feel impotent. They believe that capitalism is inherently unjust, yet also see that even if they gave away everything they have, it would not make any real difference to anyone except making themselves worse off.

And then you find yourself asking Sherman what in the world she was thinking trying to get these people to talk. And then she tells you she wondered the same thing!

This is one of the most important books I have ever read about money. Mostly because Sherman found a way to get rich people to talk about what’s really going on for them. This is not some over-the-top Robin Leach and Donald Trump-inspired behind the scenes hack job of how the wealthy live. It’s a thoughtful and shockingly bias-minimal look at how money affects our values and beliefs (and, also, how it doesn’t).

This book should come for free with every winning lottery ticket.

The Innovators by Walter Isaacson

This is like a James Michener novel about the history of technology. Except it’s all true. Incredibly vast in scope, richly detailed and nuanced, and full of little rabbit trails and asides that make the characters pop and crackle.

Isaacson recounts the various characters and themes who made the “digital revolution” possible, retracing steps all the way back to 19th century Britain (giving me an even deeper appreciation for Ada Lovelace, that brilliant and egomaniacal dreamer).

It skips along the surface of all of the names you have heard of in building the computer age (Turing, Hewlett, Kleiner, Berner-Lee, Jobs, Gates, etc.), while fleshing out many of the important researchers, government leaders, hardware hackers, and financiers along the way.

It shows the truly global nature of the technology industry, even from its earliest days, and also contextualizes how the right mix of ingredients propagated in the specific location of Silicon Valley to spark so much rapid change.

If you think about the future of technology – as a medium, an industry, an ecosystem, and a force for change in the world – it is absolutely required reading.

Evicted by Matt Desmond

Maslow identified physiological needs as primary to human survival. Physiological needs are the most basic things we need to stay alive, like air and food. And shelter.

Shelter is the focus of Desmond’s intense exploration of the poorest neighborhoods of Milwaukee, Wisconsin, in the aftermath of the 2008 Great Recession. And what an exploration it is. Desmond went into do urban anthropology, moving into the apartments and trailers of the subjects he was studying to understand the complicated and intersectional nature of how stable (or, in many of these cases, unstable) housing impacts people’s lives.

This book won the 2017 Nonfiction Pulitzer and it’s easy to see why. Populated by colorful characters and common scenarios, the book is highly entertaining to read. Yet, the issues discussed are nuanced and complicated. it’s social analysis wrapped in an easy-to-digest package.

Desmond’s conclusions are as fundamental as they are profound – that stable affordable housing underpins stability in almost every other aspect of our lives; and that when that stability is threatened or removed, people’s lives decline precipitously and immediately. Their recovery is protracted, if it happens at all, and the intergenerational dynamics of unstable housing compound, exacerbating poverty in almost every way imaginable.

As a landlord serving working class and middle class families, I see the impact in myriad ways. And this book is actually quite inspirational for me from the perspective of wanting to expand the business model in order to expand the impact.

Full of instructive insights, as well as a solid set of policy recommendations to advocate into existence, this book has an extraordinary impact on my outlook this year.

Hillbilly Elegy by J.D. Vance

This is just one guy’s story, but it hit at just the right time to be so completely resonant for the moment. Published a few months before the 2016 election, it serves as a tight encapsulation of the history and mindset of Trump voters. Told from the perspective of a guy who grew up in a broken hillbilly home; joined the army because of a commitment to country and a lack of any idea what else to go; then parlayed that into a Yale law education and entree into the east coast elite.

He translates between these worlds as an effective interlocutor.

This is no hagiography. He is remarkably realistic about the flaws of even his most positive of adult role models and caretakers. His clan is full of brawlers, cursers, drug abusers, boozers, back-stabbers, and every other type of poor decision makers. He looks at them all unflinchingly.

Even still, he contextualizes the violence, explains the deeper codes that they abide by, and, most importantly, marvels over and over at the odd sequence of lucky breaks and intensity of personal investment from certain key figures in his life.

And, in his marveling, he outlines the complicated, conflicting and overlapping issues that create a sense of society failing an entire population – rejecting long-held values and beliefs; belittling their pride and history; and offering useless platitudes and dangerous chemical escape hatches.

A compelling accounting of the moment.

Janesville by Amy Goldstein

What is it about my home state inspiring such incredible long-form journalism books of the ravages of the Great Recession (see Evicted, above)? There is something important going on in the Badger State. Perhaps it has something to do with Scott Walker, the erstwhile governor in office during the time of the ravaging.

Ten years after the Great Recession, I can feel my memory of those moments fading already. This book brought everything into sharp focus once again.

Goldstein spends years getting to know the families of Janesville, Wisconsin, home of a General Motors plant that closes down when demand for new cars craters in the 2008 recession. Remember the auto industry bailouts (Thanks, Obama)? G.M. took the money and still had to close plants.

The Janesville plant was the economic engine for the whole city. The city that former Speaker of the House Paul Ryan calls home, incidentally. But neither he nor the unions nor the city’s economic incentive package could persuade G.M.

For half a decade, Goldstein gets to know the individuals and families affected by the plant closure. They follow every conceivable path to stay in the community, from hellish week-long commutes to other plant locations, to re-educating into the workforce, to falling down the rabbit hole of depression and medication. All while civic leaders scramble to reinvent the town for a post-modern future of uncertain fortunes.

Economic dynamism at its most granular and human, these accounts show the human toll of creative destruction wrought by the market’s invisible hands.

Born a Crime by Trevor Noah

I did not expect to like this book because I am a grumpy Gen-Xer who didn’t believe that anyone could replace Jon Stewart on The Daily Show, and certainly not some young know-nothing comedian with barely any standup experience and only a few jokes.

I was so so wrong.

Noah’s autobiography is not really that funny. I mean, there are some jokes and stuff, but it’s not really a humorous account at all. It’s a pretty even-handed description of how he grew up as a mixed race teenager in apartheid South Africa. It’s about how he had to learn to code switch to fit in and not get beat up or arrested; how he had to build his quick wit to get out of sticky situations; how he had to hustle to make it.

It’s not really a rags-to-riches story because he doesn’t spend any time on how he got famous, made it to the US, got a TV show, etc. It’s a touching homage to his mom, who raised him as a single parent in a community that was so stratified and insulated that he literally did not fit in anywhere.

And when you don’t fit in anywhere, you have to figure out how to fit in everywhere.

Noah has his fair share of platitudes and simple lessons, but they accumulate into something much bigger – a lesson on how we can all listen better, learn from each other, and come together.

Americanah by Chimamanda Ngozi Adichie

I hope this book never gets adapted into a movie, and instead becomes a series. Because there is so much here, so many incredible characters, so much richness of internal and external conflict, so many issues worth discussing, that it would be a terrible shame to try to distill the intoxicating mix into the boring narrative structure of the megaplex movie.

Ostensibly a love story, this book is really what it’s like to be an immigrant to the US in the 21st century. And about what it means to be black in America. And what it means to leave your home, and come back changed. And what it meant to be an early 2000s personal narrative blogger. And how to be rich in Nigeria. And how so many things that happen to us randomly end up making our whole lives, especially in those orange-hued years of late adolescence.

It’s about all of these things and much more, wrapped in a protagonist who is lovely and loveable and heartbreaking and warm and so relatable, even though you have almost nothing in common with her.

Like if Bridget Jones were smarter, less savvy, and from Nigeria.

White Working Class by Joan C. Williams

After Donald Trump was elected, the two most common touchpoints to explain his narrow victory in Pennsylvania, Michigan and Wisconsin were Hillbilly Elegy (discussed above) and an HBR article written by Joan Williams, entitled, “What So Many People Don’t Get About the U.S. Working Class.”

I read the HBR article in the immediate aftermath of the election, when I was working hard to understand the layered motivations that might factor into a vote for Trump.

This book is an expansion of the themes, and much more useful than the original article. It’s the book that you should give your eye-rolling, condescending, dismissive, better-than-you, city slicker cousin when you see them at Thanksgiving. Especially if you didn’t vote for Trump.

The entire book is an exercise in empathy for our fellow citizens, our compatriots. And, for many of us, for our actual family members.

It’s an examination of what it feels like to have a dominant culture act like your values are “cute” and “quaint” but not reasonable or worthy of prioritizing.

The actual text of the book is pretty short, too. It’s punchy and distilled. I read it on my Kindle, and when I was done with the book, I had reached 43% complete in the file. That’s right, more than half of the book is footnotes and citations. Williams doesn’t bog you down with the science and research that support all of her conclusions and prescriptions, she just focuses on the narrative to get you the information as fast as possible.

The thing that I found most surprising was that I still personally embody a lot of working class values. Partly this is because of my family history and upbringing, and partly it is because of my experience in the professional-managerial class (a term coined by John and Barbara Ehrenreich – yes, the Nickel and Dimed Barbara Ehrenreich; and morphed into the “creative class” moniker by Richard Florida).

Maybe it’s easy to return to your old-fashioned values when you feel like you have extracted what you need from the system; or maybe there are some values that just never go out of style.

Either way, this book hit home.

Origin by Dan Brown

OK, this is maybe the best Dan Brown book yet. Here’s a fiction thriller writer who is actually getting better as he gets more famous and popular.

Brown has exhausted the religious sexcapades of The Da Vinci Code and its echoes, and good riddance. We have graduated from self-flagellating albinos to deeper and creepier zealots. The primary plotline is techno-futurist in nature, and there are lots of meaty and interesting themes here. The packaging is also slick and fun and it moves fast.

Our hero, Robert Langdon, still gets a lot of mileage out of his fake academic field of “symbology;” the female protagonist is wonderfully free of romantic interest in him; and the set pieces are a love song to Barcelona.

If fact, after we went to France in the fall,  my father-in-law and aunt actually went to Barcelona partly inspired by the loving treatment Brown gives the city in this book.

This is the only book I managed to have the energy to read while on my Appalachian Trail hike. I thought I would spend hours reading, but instead I spent hours walking, then stumbled exhausted into my sleeping bag each night. Visions of wiling away hours in the forest solitude, with just me and an author’s ideas were vanquished in the first forth eight hours.

And yet, this was the best possible book I could have brought on my journey.

A Walk in the Woods by Bill Bryson

I hiked a chunk of the Appalachian Trail in the spring, and as I was training for the hike, everyone asked me if I had read this book. I had not. Not for any particular reason, I had just never gotten around to it.

My favorite Bryson book is In A Sunburned Country, which I read while I was in high school and not traveling anywhere at the time. I had wanderlust, and wanted to explore all of the adventurous places – The Jungles of Peru! The Temples of India! The Savannahs of Kenya!

IASC made Australia seem as exotic and interesting and full of possibility as those other places. It made it seem foreign and exciting.

It was also hilarious.

Since then, I have read several other Bryson books, but just never had the itch for his most famous book. It seemed, well, pedestrian.

But, in anticipation of my own hike, I had a renewed interest in his experience, which was actually helpful as a sort of beginners manual for what not to do in many regards. It was entertaining and enjoyable and fun. After I read it, I watched the Ken Kwapis-directed movie, starring Robert Redford and Nick Nolte. In many ways, I liked the movie better than the book – the themes of aging and needing to challenge yourself and facing your own mortality were more present, even if more fictionalized.

The movie was less real, yet more true.

Artemis by Andy Weir

Weir is the fiction writer version of the IFLS blog. This guy is obsessed with getting the science right. Every ten pages or so, you get another hit of, “woah I didn’t know science could do that!” inventiveness.

The science propels the plot forward for this novel set in the future on a city on the moon. Is it science fiction? I would rather call it science-inspired fiction. It feels so grounded in reality, so current, that I would believe that it was 2040, not 2080 as it’s actually set.

Weir is an OCD author, which serves the genre well. The pacing is tight, the action fast, and Jazz Bashara, the protagonist, is wonderfully scrappy.

The Intelligent Investor by Ben Graham

The first book that I re-read this year, it continues to be an important framing tool when thinking through the goals and objectives of your investing; and also for developing an emotional distance from your investments. I read this in the first half of the year, when the stock market was hunky dory and was reminded of it frequently in Q4 as the market became more and more volatile.

The Outsider by Stephen King

King is so great at the little details that make you really know who a character is. You get all of that goodness in spades in The Outsider. You know where this book is going just by reading the jacket lining. It’s basically IT all over again.

But, as with almost every King book, it’s not where you’re going, but how you get there.

This time you get there riding alongside the steely-eyed knowingness of Detective Ralph Anderson and the little league and lemonade American Dad Terry Maitland.

The final hundred pages are pure horror writing at its squirmy hard-charging best.

Rework by Jason Fried

I re-read this book this year, and found new resonance in it. In a moment where being a unicorn is not enough for large startups, and deca-corn ($10B valuation) is the new target, Fried’s quick pithy lessons on building companies are even more important to remind ourselves.

Most businesses don’t need to be big to be great. And, in a world where 1,500 companies have graduated from Y Combinator, and even hugely successful companies get acquired instead of IPOing, the Basecamp model deserves more credit and emulation.

Who cares if VCs think “lifestyle business” is a dirty word? The people living the lifestyle of their business are the ones who benefit.

What I Talk About When I Talk About Running by Haruki Murakami

This is the first Murakami book that I have read, and I actually think it is the one most likely to get me to read a more substantial Murakami book. I don’t think of myself as a runner, but I do like to run. Murakami talks about a lot of the reasons he likes to run, and I related to him strongly.

He also goes into some depth on this biography, in particular how he came to be an author. It’s compelling because I have only ever know of Murakami as MURAKAMI THE FAMOUS AUTHOR. Seeing his history as a bartender humanized him, and actually made me more interested in his fiction.

I Thought It Was Just Me by Brené Brown

I felt like I was spying on a women’s empowerment workshop reading this book. This book is written for women, consciously and specifically, and I felt like an interloper at times. Like maybe I shouldn’t read it, I was dabbling in something I had no right to, especially when I could just close the book and go back to my man-life, while the women who are the intended audience could only close the book and feel the sisterhood all around them.

But, the book is not pitched as a women’s book at all. It’s a book about shame. How damaging it is, how unproductive it is, and how we become our own worst detractors through our shame. How we carry the weight of our shame with us wherever we go, and how no one can take our shame away from us.

There was so much that I identified with, and probably more than anything, the fact that we just don’t really talk about our shame at all. If anything, we all walk around thinking our shame is well-deserved and a clear indicator of our constant and persistent failings; while the rest of the world pretty much doesn’t care one way or another.

There are great personal anecdotes, and there are great strategies for stopping the cycle of shame. Brown gets props for everything she writes, and this is actually the crux of her work – shame research – so she knows of which she writes.

Camino Island by John Grisham

Once in a while, you need a palette cleanser. And this is a pretty fun beach read. Grisham, having fully and completely reached the bottom of the legal thriller barrel (see below) finds stronger footing writing about something that is maybe a bit closer to his current experience – a struggling novelist and a rare books dealer.

As every Grisham novel is just a screenplay audition, this one would do well as a movie (not a series). It’s got a killer location, some fun character archetypes, and just enough intrigue to move the plot forward briskly. The main character is enough of a blank slate that someone like Olivia Munn could turn this into a solidly successful movie.

This is a fun heist movie masquerading as a book.

The Power of Habit by Charles Duhigg

There was a time in my life where a business book like this would have shot dopamine into my cerebral cortex, and I would walk around for a few weeks thinking that this new Unifying Theory of Everything was the key to unlocking the next level of success in my life.

That is not a criticism of this book at all, moreso a self-reflection on what I expect out of business books now. I feel like if I can get 3 concrete takeaways from a business book, that will make an incremental difference in my work life, then they are a success.

And, by all accounts, this book is successful.

Duhigg spends a lot of energy going through the importance of personal habits, how habits are formed and how they unconsciously control a lot of our decision making. The science is pretty interesting, and he goes into some detail here, which is the best part of the first and second section.

The third section, though, is the most interesting and impactful. It discusses the habits of organizations, and how informal culture and process actually drives a lot of the productivity and forward momentum of most organizations. And how to grab hold of those habits and reshape them. This is the meat of the book and where you should spend your energy if you pick up this title.

Talent is Overrated by Geoffrey Colvin

Reading a business book from 2008 is an odd time capsule, that shows you what was happening in the zeitgeist at the moment. The early stages of the tech recovery, post-dotcom bust, were ripening and business leaders were thinking about how they would expand.

This book was probably supposed to give them the solution, which is that hard work will get you everywhere, and that innate talent is a myth. It was published in October 2008, as the economy entered its freefall. Then Malcolm Gladwell’s Outliers came out in November, covering much of the same ground.

But, this book was surprisingly interesting, even though it covered well-worn ground. The most interesting part was the extended dish-y history of Mozart. The common story is that he was a musical genius from an early age, but actually his dad wrote most of his early scores, and even then they were just OK derivatives. The thing that made them interesting was that they were supposedly written by a young genius.

I love it when an author surprises you with the rest of the story.

The Coldest City by Antony Johnson and Sam Hart

This graphic novel was the basis for the Atomic Blonde movie starring Charlize Theron and James McAvoy. I heard about the movie in an NPR interview with the director, David Leitch, who went into excruciating detail about how he wanted to shoot the fight scenes in the film. He was going for an intense realism, where Theron’s character would not be able to physically overpower her attackers because she is physically smaller than them. So, she could only best them by using tools to crack their skulls and smash their legs.

The movie delivered on that front.

I was surprised, though, when my friend Brooke told me she had seen the movie three times in the theater. Until I saw it myself, and realized that if I were into women, I would shell out good money to watch Theron make out with Sofia Boutella a few times too.

Brooke lent me her copy of the graphic novel, which she picked up after becoming obsessed with the movie (and it’s excellent soundtrack).

Unfortunately for both of us, this was one of those situations where the movie is better than the source material. The GN isn’t bad. It’s just a bit….muted. It does not come across as kinetic, it’s mostly spies talking to each other and looking around furtively. The plot is the same, except Lorraine Broughton (Theron’s character in the film) is completely asexual.

So this is like watching Atomic Blonde, with the sound off, in black and white, edited for television. What is the point?

Rooster Bar by John Grisham

You know those books that are supposed to be “about” something, and work really hard to get you to “care?”

This is one of those books.

It’s “about” how horrible the for-profit higher education market is, which is true, but it’s a really hard idea to write a novel about. The characters are students in a for-profit law school, so already they are hard to sympathize with. They want to be lawyers (WHY?), but they know they can’t get jobs because of their crappy school (DUH!), so they are up to their eyeballs in debt (OF COURSE), so they decide to start practicing law without a license (WHA???).

Somehow, in the last five pages, a bad guy finally comes into focus and the whole thing gets tidied up so no one really gets hurt.

There are no stakes at all in this book. For anyone. Well, except the one interesting character, a woman who wants to become a lawyer to help the rest of her family to immigrate to America. She should be the focus of the (inevitable) TV series version of this story.

The Phoenix Project by Gene Kim, George Spafford, and Kevin Behr

Do you like doing homework for your job? If so, then you might like this book. It’s a novelization of a company under a huge IT infrastructure shift in support of digital transformation. Basically, its The Five Dysfunctions of a Team for non-technical F500 companies.

I am sure that there are some people who will find this book interesting and full of valuable insights about how hard it is to be in DevOps, but if you have lived it already, then it’s kind of like being a native English speaker and reading an ESL schoolbook for fun. It’s not entertaining or enjoyable, but it does remind you of the perspective of the intended audience.

This would be a good recommendation if you are technical and get acquired by a non-technical business, and want to bring them along to your worldview.

Everybody Lies by Seth Stephens-Davidowitz

This is one of those books that shows just how fast the world is moving. It was published in May of 2017, which means that most of the writing probably happened in the second half of 2016. And, by Q1 2018, it felt incredibly dated and archaic.

The basic premise is that the vast quantities of anonymous and pseudonymous data that Google, Facebook, Amazon et. al. collect are far more accurate and complete a picture of humanity than the narratives we tell each other in the light of day.

This book would have been so interesting in 2006, but now feels so underwhelming and underdeveloped. Stephens-Davidowitz rehashes blog posts from five years ago without adding anything new to the discussion. And, especially in light of the ongoing analysis into the 2016 election, this book just has no staying power.

 

The Myth of Cultural Relevance

Will Self is worried about the state of the novel!

So worried, in fact, that he has been talking about it for ten years. The novel is in decline! Literary fiction is being subsumed by “BDDM” (“bi-directional digital media”), and in the process, our brains are changing. Nicholas Carr documented it all, and what we lose is an entire way of thinking and understanding the world.

Thus begins Self’s latest essay in Harper’s Magazine, and I prepare myself for another techno-phobic allegory complete with references to Fahrenheit 451.

But, with a deft turn, Self tosses this worry stone into the ocean, eliminating twenty years of cognoscenti concern for the rise of digital, in deference to its inevitability. And, in this purging of worry, he finds the ability to reflect on some of the benefits that come from the demise of the status of authors.

Here’s the money quote: “If the literary novel was the crucible of a certain sort of self-conception, one of autonomy and individuality, then it was equally the reinforcer of alienation and solopsism.” Basically, we will lose some things as the long-form novel declines, but not *all* of the things we lose are necessarily bad.

And, all at once, my esteem for Self increases by a factor of ten. Because the truth is that there are pros and cons to every form of cultural content; and it is rare that someone with a vested interest in the declining topic is so open about its limitations.

We have a tendency to defend our place in the world, as if the world owed us something for all of the work we have done to create the expertise, the skill, and the work ethic to do the thing that we are good at. But, of course, the world does not owe us any of these things.

In fact, just the opposite. We owe the world to be able to make ourselves relevant and useful, if we want to have a place in it. Or, we can retreat into a Walden-like existence, which may leave us a legacy, but which will not allow us to be part of the conversation.

And, in any case, the whole notion of a unified cultural experience is, at this point, an unreality that is only defined by its relationship to the past. When there were only three TV channels, and TVs had 85% household penetration, we had a shared cultural experience. 100 million people watched the series finale of M*A*S*H*.  By contrast, 30 million people watched Prince Harry marry Meghan Markle.

At this point, the filter bubble has encased each of us. If the history of the writer is to put themselves in the mind of the reader, digital technologies do a way better job – they get into the mind of the consumer so well, they figure out how to best show us we would be interested in picking up the content in the first place; like when Netflix personalizes the artwork promoting shows to us.

This makes us feel simultaneously autonomous and part of a larger community at the same time. Congratulations to Self for recognizing it.

The Benefits of Long Hikes

Earlier this year, I did a 600 mile section of the Appalachian Trail. Even now, six months later, I continue to reap the benefits of being out on a long hike. Here are some of the reasons it was so great.

Can You Do It?

A big hike is scary, and you will not be sure if you can do it. And, in fact, you might not be able to do it. But you won’t know until you try. This is the kind of thing that is scary because there is uncertainty about success; which is the best kind of scary. The kind of scary you should lean into and find out the answer. And in the process, learn something about yourself.

Slowing Down

Time seems to move faster and faster every month, but when you are on the trail, time moves slower. Much slower. When you’re done, it feels like it went very fast, but when you are actually hiking, it feels like you will be hiking forever. Sometimes this feels boring, and sometimes it feels fleeting. But in all cases, going slower means you can really feel that you are moving forward.

Faint Signals Amplify

After a few days, all of the initial mechanics of hiking start to fall away. You stop being terrified of the wilderness, and start to accept your surroundings. That makes way for all of your worries and fears to come to the surface about your life in general: will my kids turn out to be jerks? Will I get promoted? Will I lose my hair?

After a bit, those worries and concerns also start to fall away. Then, you’re left with the space in your brain and your heart to listen to the fainter signals. You can drop into a meditative state more quickly and fully, and stay there for hours.

That’s when the real questions start coming out. What am I happy about in my life? How do I want to spend my energy? What are the unifying themes of my life? How can I make my time here the most impactful it can be? Who do I love? What actions should I take to fulfill my goals?

Marking Time

When you think about your time in high school, it’s pretty easy to anchor events. If you remember who was there, you can estimate pretty accurately when something happened because people graduate; and certain classes had certain classmates.

As you become an adult, the month-to-month level changes in your life start to settle down into a more regular routine, punctuated by moments of memorable activity (like life events such as getting married, having a kid, going to the ER, going taking a big vacation).

There is no life event quite as big as taking a big hike. I can tell already that in the coming years, I will think of my life as phases “before the hike,” and ” after the hike.”

If you have a chance, take it. If you don’t, make it.

Trump v. Clinton: Maslow’s Hierarchy of Needs and the Future of Work

In 1943, Abraham Maslow published his, “Theory of Human Motivation.” Fundamentally, Maslow believed that human beings worked to achieve and sustain their needs according to a fairly predictable hierarchy.

Seen through the lens of Maslow’s Hierarchy of Needs, the election results make so much sense. Democrats were not enthusiastic about a Clinton candidacy because she spoke to building a sense of community – of being Stronger Together. This appeals to our need for “Love and Belonging,” and many people voted for Clinton because she represented this need. The need for Love and Belonging manifests itself in ideas like:

  • The need for safe spaces, where minorities and historically oppressed groups can express their perspectives without fear of persecution

  • The need for women to have a voice in the political establishment, and to believe that any qualified person would be judged on their qualifications for the presidency, and not by their gender

  • The need to see yourself as part of the great American experiment, where people of different creeds and colors assemble under a shared vision of freedom and opportunity

In order for each individual to reach their fullest potential, it is clear that we need to feel a sense of love and belonging. We can’t be successful at developing a sense of strong self-esteem without it.

But, Trump spoke to a more fundamental need – the need for Safety. Maslow describes the need for safety as expanding beyond just physical safety, to also encompass economic security, and to feel safe from danger or threats. Trump voters feel the need for Safety with ideas like:

  • The need to protect us from the threat of violence from illegal immigrants who have infiltrated the country

  • The need to create jobs that provide economic stability, so that each of us can keep ourselves safe from harm

  • The need to have affordable healthcare, with reasonable and predictable insurance premiums that provide for physical safety

The biggest lesson for any political candidate is that they must speak to the lowest common denominator need on Maslow’s hierarchy that a majority of the electorate will relate to.

A political campaign that helps people believe that they can become self-actualized, and achieve their highest and best dreams, can only win if the majority of the electorate believes that they are safe; that they belong; and that they have self-worth.

On the other hand, if the majority of the electorate does not feel confident in having food, clothing and shelter, then a campaign focused on self-actualization is doomed.

So, within this context, we can see how our current electorate maps against the need for Safety and the need for Love and Belonging:

The Safety coalition included:

  • Whites with a high school education, who are unsure about their economic future

  • Evangelicals, who see their entire way of life as under attack with secular values proliferating

The Love and Belonging coalition included:

  • College educated whites, who have experienced the benefits of globalization and technology advancements

  • Minority voters, who expect to have a seat at the table of power and decision-making for the future of the American experiment

  • 18-25 year olds, who believe that they will inherit the poor decisions of previous generations and deserve to have a say in decisions made now

Just by looking at these coalitions, you can see how fundamental the issues were to each of these coalitions; for the Safety coalition, electing Trump was existential. The stakes could not be higher – he represents their only hope to maintain their lives in a relatively stable way. By contrast, the urgency for the Love and Belonging coalition was just not as fundamental. Which resulted in a poor turnout for Democrats – across the country, almost 6 million fewer votes were cast for Clinton than were cast for Obama in 2012.

Perhaps the biggest challenge with this election result is that Trump is not going to be able to wholesale move jobs back to the U.S. Advanced industrialized economies will lose over 7 million jobs to technology in just the next four years. By contrast, the U.S. has lost 5 million jobs to offshoring….in the 15 years from 2001-2016.

As software eats the world, we a 21st century economic model to deal with the accelerating automation of work.

Does “Maximizing Shareholder Value” Work as a Business Objective Anymore?

In arguments over business and the economy, you often hear that the job of corporations is to “maximize shareholder value.”

People use this phrase to justify all kinds of things that are ethically ambiguous (e.g. polluting as much as possible up to the legal limit), or seen as distasteful to some (e.g. layoffs).

But, is that the right goal of a corporation? Is it even a good benchmark of a successful corporation? And, does it even work anymore?

In order to understand if “maximizing shareholder value” makes sense as a primary business objective, it’s important to understand the historical forces that led to this goal for corporations being broadly adopted. This concept has not been fixed as the sole, or even primary, goal of corporations, but instead was created in response to a specific set of circumstances.


Basically, U.S. corporations performed relatively poorly in the 1970s because of their huge size and inefficiencies (it’s difficult for lumbering giants to find and invest in good ideas). This, combined with increased competition from smaller (and therefore more efficient) Japanese firms caused U.S. firms to profit even less.

The primary operating mantra for U.S. corporations was “reinvest and retain,” meaning that corporations should use their profits to 1) reinvest in new, productive inventions, and 2) retain both their earnings and their talent to build capacity to take advantage of those productive inventions.

To our modern business eyes, this might seem foolish, but you should remember that this strategy had worked basically since the start of the industrial revolution.

So, in the 1980s, the ~100 year objective of “reinvest and retain” wasn’t working anymore. Smaller, more nimble firms were eating away at larger, slower competitors.

In addition, the 1980s saw the rise of large institutional investors – basically guys who just aggregated capital and pushed it around. These started out being guys who aggregated retirement savings for hundreds of thousands of workers, and therefore had big dollars to push into productive companies.

Large institutional investors did not care about ongoing R&D, or about retaining quality talent. And, this model was not working very well at the time. So, “maximize shareholder return” was born out of this primordial business ooze. It aligned big capital with big business in order to produce stellar returns for both.

Of course, this begs the question: does “maximize shareholder value” work as a business objective today?

I would argue that it doesn’t because:
1. Large organizations are much leaner now (after 30 years of rightsizing and justifying every head against a P&L), and feedback loops on productivity of R&D and internal investments are much more equal across all sizes of companies
2. The large institutional investors have gotten so large as to overwhelm any (and every) capital market, and therefore, every company within the market. Currency traders can crash economies. Banks control both commodities traders and commodities storage and transport facilities, allowing them to manipulate commodities markets. And 70+% of market trades are made by algorithm, introducing manipulation through HFT (yes, yes, as well as liquidity, because when you want to sell a stock, you HAVE to do it RIGHT THIS SECOND so very often).
3. We have learned to manipulate stock prices (the most common and simplest proxy for shareholder value) with a host of tricks that have nothing to do with value creation. I’m talking about things like splits and buybacks; special dividends; shifting borrowing costs and bond holdings; offshoring tax liabilities with no way of repatriation of profits sans tax (unless – or until? – large companies strongarm the federal government into a repatriation tax holiday); the creation of shell corporations; etc. These things do not add to the productive economy, but do line the wallets of bettors and financial manipulators.

I would posit that a return to “retain and reinvest” as a main objective of corporations would be good for the companies, their employees, tax rolls, the broader business climate, and society at large.

In fact, the smartest businesses that I know of are using this model to grow very, very profitable companies (albeit, probably without saying it in this way).

Look at the organizing structure and operating model of these very, very innovative, and very, very profitable companies:

Google: Two classes of shares, with minimal voting rights of money investors. No dividends. Basically, the board cannot be controlled and the huge profitability of search ads can’t escape Google’s walls to be frittered away by dumb Wall Street people. Instead, it’s tightly held by the business leaders, who reinvest in a whole host of productive innovations.

Facebook: Two classes of shares, and 57% of the voting interest held in one person – Mark Zuckerberg. He gets to take risks with money from big institutional investors without being beholden to anyone for the performance of the company. Hence, you get huge moves like the $19B acquisition of WhatsApp, even when P/E is over 100.

Berkshire Hathaway: Has never split stock. Has never paid a dividend due to tax inefficiencies of doing so. Added a second class of stock to be more affordable to newer investors, but with reduced voting rights. Buys to hold literally forever, with no plans to ever sell a company. Keeps management in place to continue growing their business units. Takes FCF from business units into a BDC structure to mount the next acquisition. This is the definition of “retain and reinvest.” 

If this is interesting, you should check out a deeper overview of the history of “maximize shareholder value” (warning: PDF).

World Domination Summit Recap

This past weekend, I attended the World Domination Summit right here in Portland, OR. Chris Guillebeau organized this conference for the second year in a row, and this was my first year going.

I didn’t have many pre-conceived notions about what the event would hold, because I know Chris’s audience is diverse – travel hackers, nomads, bloggers, startup people, musicians, and basically anyone who is interested in living a life of non-conformity. So, there is no telling where things will go.

And, as a result, it felt like a little taste of many things. Enough to whet your whistle, and hopefully stir something in you to make you want to go deeper on your own.

Brene Brown was outstanding – I was not familiar with her work before the conference, and am now an instant fan. Her work focuses on authenticity, shame, empathy, and vulnerability. Pretty woo-woo stuff, except she is a Ph.D. researcher on these topics, and has done a ton of quant work proving out the concepts she talks through.

One key takeaway from Brene was that you can’t experience joy without being vulnerable – we must risk something in order to allow someone else to respond to us in an affirming way. What occurred to me was that gay people who have gone through the process of coming out understand this concept – and the vulnerability and exposure of coming out is exactly what makes gay people able to live authentic lives in other ways. Using this very fundamental reality about yourself as an opportunity for vulnerability is pretty empowering.

The other stellar speaker was Cal Newport, who talked about how to “Follow Your Passion” is terrible advice. Instead, he offered up another model that is much more productive, leads to better overall outcomes, and is actually proven to be successful: create a skill that is rare and useful, then use that skill to trade for the values that are important to you.

The model works this way: by developing a marketable skill through the process of mastery, you can use the scarcity of what you offer as leverage for the things you really want. Of course, that means you need to be accurate in your assessment of what skills will be useful and rare, and how to master them. It also means you have to understand what you really want. But it offers myriad ways to a path of success.

While many of the sessions were long on the “why” to do something, and short on the “how,” the attendees made the experience worthwhile. Being around interesting, passionate, motivated people was motivating in and of itself. I’m looking forward to next year already.

Google+: Real Name Policy Makes a Boring Social Network

This is a cross-post from Mashable.

Google has raised a lot of digital hackles with its new policy requiring real names for Google+. Cory Doctorow says that real identities are bad because they make it easy to sell us to advertisers. danah boyd goes further, saying that the policy is an abuse of power, because it may compromise users’ safety.

But they vastly understate the case, and ask for the wrong solution.

The hugeness of Google’s error is in misunderstanding the basic human need for a flexible framework for identity creation. People change and evolve, and throughout the entirety of human history, we have been able to shed old versions of ourselves, and construct new identities. This is so universally true as to be a cliche. How many films have this arc as the first act: A stranger comes to town. What is the mysterious secret he hides? What did he run away from?

Our identities are complicated. In fact, the need for multiple identities only accelerates in today’s internet culture. Digital natives understand the notion of curation so much so that they curate their own existence on social networks. Julia Allison and iJustine are extreme examples of this phenomena, but it happens all over every Friday night when young people spend more time shooting photos of themselves to upload to Facebook to show how great a time they’re having, instead of, you know, actually having a great time.

The act of identity creation happens on the social network, through the curation process. Not by the things that are really happening to the person.

In this context, we are becoming more like celebrities. We manage our personas by curating which pictures get tagged on Facebook with our identity (hint: only the ones where we look good). We portray the most interesting aspects of our lives through status updates (“I found a dollar on the street!” gets 27 Likes not because it’s important, but because it’s interesting.) We understand that parts of our personalities are most appropriate for different audiences.

The rise of celebrity culture is actually an attempt to create shared experiences for a large, fragmented society. Smaller countries have smaller celebrities in the U.S. (Incidentally, that’s why Kylie Minogue had to redeem her post-Locomotion career in the U.S. with the wonderful “Can’t Get You Out Of My Head;” and why David Beckham left a hugely successful career in the U.K. to bring soccer to a country that would rather watching boring old baseball than see a low-scoring soccer game.)

So, as our own social circles continue to grow, we become more like celebrities ourselves. So, we can learn something from celebrities about the importance of alternate identities. Increasingly, artists have created alter egos for themselves to make space for a different or new part of their personality to emerge. As they get boxed in by the expectations of their fans, they need to create an outlet that allows them to risk something by creating work that is outside of their traditional oeuvre.

Madonna took the persona of Dita when she released Erotica and her Sex book in order to explore sexuality in a deeper way than she could as the Material Girl.

Sean Combs became the rapper Puff Daddy, then P. Diddy when he needed to refresh his stale 90s image. Instead of creating a new personality, he just kept beating that dead horse, and when it stopped working, he dropped the “P” and just became Diddy. But, for his serious menswear clothing line, he uses the moniker Sean John.

Marshall Mathers became Eminem, and when there was still too much darkness and bile, he created the persona of Slim Shady.

The most extreme example is Nicki Minaj, who has taken the notion of alter egos to the insanely logical extreme. She has only released one album, but has no less than eight distinct personas:

1. Onika Tanya Maraj is her given name

2. Cookie is the first identity she created to escape her troubled home life

3. Harajuku Barbie is the playful Minaj

4. Nicki Minaj is her primary performing identity

5. Roman Zolanski is the hard charging, angry brute

6. Martha Zolanski is Roman’s mother

7. Nicki Theresa is a Mother Theresa-inspired saint

8. Rosa is her Spanish moniker

The value of multiple identities to these artists is indisputable. One of the most extreme examples is Roman’s Revenge, the 2010 Nicki Minaj and Eminem duet. Both rappers spend the entire song spewing hate-filled lyrics at their fans. This is not a song that a musician would want to present to the public as part of their late night talk show personality. Without alternate identities, this song could not exist. And while it’s a tough song to listen to, the world is a better place for having the song in it.

One single name will never be able to contain all of the aspects of any individual person, in all their complicated, contradictory glory. That’s why Google+ will ultimately fail in its attempts to create an “identity service” with their real name policy.

Quora also has a real names policy. But it never came under serious scrutiny because it was always clear about what kind of community it was: a serious-sounding, wonky intellectual place where deep-ish knowledge, packaged well, is appreciated. It’s a very specific niche, and it is more interested in keeping quality high than getting lots of users to interact.

Google+ wants us to give it everything, which means that we will end up giving it nothing of value. By requiring real names, Google+ is sending clear signals that it wants to be a specific type of community: the kind where people share cat videos and links about current events that can inform Google’s own search rankings. Paradoxically, even this banality will still create a huge amount of value for Google, because of how bad computers are at truly understanding people. Google’s ability to sell advertising will still grow tremendously, even from this crappy level of information.

Critics of the Real Name policy want Google to change its mind and see the error of its ways. That is the wrong solution.

The right solution, of course, is to do nothing. Allow Google+ exactly the kind of community they ask for: the one where you use your real identity, but in return, only share a certain, specific part of yourself: the part that you don’t mind being indexed by Google’s servers and made available to the entire world. In other words, the most boring, unimportant, and universal version of yourself.

 

 

 

 

 

 

 

 

 

 

 

 

How to Leverage Social Login (Part 1)

This post is cross-posted from the Janrain Blog.

Social login is a simple concept, with profound implications. When a user logins into any website using an existing online identity, there is immediate value for both the the user and the website.
For users, the ease of logging in without filling out a long profile form and the convenience of not needing to remember passwords is a clear benefit. For websites, among the many benefits is the information that users share offers an opportunity to make the site experience more relevant.
From a technical standpoint, the process of integrating Janrain Engage to enable social login into your site is very straightforward. Most of the effort in the integration will be around determining the best possible user experience for your community.
Defining Reasons to Register
First, and most important, you must clearly define why a user would register on your site in the first place. This critical step is often the most overlooked. Your users are rational economic actors, and as such, will evaluate the trade-offs of every exchange. They will weigh what they are giving up (personal information) for what they are receiving in return. Even when there is no money involved, your users still need to find more value in what they receive from registration, than the personal information they are giving up.
There are a number of ways to provide value for a registration. Here are some ideas to start you off:
  • Premium content: Some websites keep high-value content behind a registration wall. There are many ways to build value into content, like creating long-form reports, high-value videos, or early access to regular content. For content-driven sites, this is the easiest way to build value for registered users.
  • Contests and promotions: Short-term contests with valuable prizes are a great way to build registrations. Remember that the prizes don’t necessarily have to be expensive, but they must be valuable for your audience. An in-person meeting with a famous singer doesn’t cost anything, but has a huge value to fans.
  • Community: Access to message boards, comments, or your branded social network are all valuable add-ons to your users’ experience – and are sometimes the primary experience of your website. In those cases, it’s natural to register in order to contribute.
The type of experiences you put behind a registration will dictate the type of users who will register. Your most loyal fans will want access to premium content; more casual users may be interested in a contest (depending on the prize). Consider your goals in relation to the 1/9/90 rule: in general, 1% of users create content; 9% will comment on those creations; and 90% will be passive readers.

Bicycling.com offers compelling reasons for users to register and create a profile, like access to a training log.

Registration Process
Next, consider the actual experience of registering on your site. Where should the registration button be placed? Are there events that launch a registration flow automatically, like when a user clicks “Submit” after writing a comment. The launch experience will determine how likely a user is to abandon their registration. Make sure the benefits of registering are clearly defined right away in that process.
Finally, consider how much work it is for your user to complete their registration. You want the process to be as seamless as possible. This is your opportunity to leverage all of the data from a social login. If possible, do not require your users to create a separate “Display Name.” If there are certain fields that you require, like email address, only offer identity providers that provide that data to you.
If you must collect additional fields, they can be automatically pre-populated using the social data you have collected. Any additional information you require could cause your users to abandon the registration process. So, it’s crucial to only require items that are actually required. Don’t lose the good data they are providing by harassing them for one more item as it will cause drop off.

Go Try It On pre-populates social data into their registration form, allowing users to finish their registration quickly.

So far, we’ve discussed the whys and hows of user registration. Next week, I’ll talk more about how to make advanced registration and profiles more useful for your users, and for your business.