kickstarter for real estate development

Note: I’m spending much of this month open-sourcing business ideas. Feel free to copy, fork, use them, etc. All I ask is that if you become a bazillionaire, you must take me to dinner.

One of the interesting things about new destinations is that they become more valuable as they become popular. If you could get together with 100 of your friends and all decide to buy a lake house on the same random lake in Minnesota, you’ll find all the property on that lake and around that lake will likely triple in price really fast.

People don’t go to Aspen or the Hamptons just because they have great mountains or great beaches. There are plenty of places that are beautiful. They go to these well-known destinations because everyone else wants to go there.

Places are popular purely because they are popular. There is a recursive loop. Popularity breeds investment which breeds exclusivity which breeds more popularity.

So let’s say you find a really beautiful lake in Minnesota. It is gorgeous as a summer destination. It is close enough to a major airport. It has natural beauty. It is close to some amazing restaurants. The people are really friendly. And, oh yeah, you can buy two lake-front acres for $100,000.

How do you profit from that?

A traditional real estate developer will buy up a massive amount of property on the lake, build a community, and maybe some shared tennis courts and a golf course. Then the developer would market it as “Lakeside Commons” or something trendy like that and target rich people in Chicago or Houston (to escape the summer heat) to buy into the community.

Traditional real estate is very risky so it is in the real estate developer’s best interest to reduce those risks. Things are kept cookie-cutter. Things don’t deviate much from the tried-and-true approach.

enter kickstarter for real-estate

Now let’s revisit a new business idea. A community that forms online that wants to start a in-real-life community together. 50 to 250 families getting together to use their joint buying power to purchase a place. Each person is committed to marketing and building the new area so they see price appreciation (and a community that they want to spend time in).

Envision an entrepreneur scouting an amazing place and creating a vision for what it could be in the future. She negotiates to buy it. Then she recruits people to her vision and, if enough of them commit their dollars, they buy in. But not buying in just as investors … they buy-in as members of the community.

“We will buy this property if we raise at least $10 million from 100 different families.”

And sure, some of the community members will flip their holdings and make a quick profit. But most of the community will be formed with committed members that want to invest the next decade into seeing it blossom (and then benefit from the real appreciation).

Just think about getting together with your 20 best friends from high school and all deciding to focus your energies on owning a second home in the same place. You’d have an instant community.

Summation: if you start a kickstarter for real-estate, invite me to join your community.

Photo by eberhard grossgasteiger on Pexels.com

the ultimate combination: doughnut and mochi – the Doughchi

Note: I’m spending much of this month open-sourcing business ideas. Feel free to copy, fork, use them, etc. All I ask is that if you become a bazillionaire, you must take me to dinner.

We’ve all heard of the cronut — the croissant crossed with a doughnut that is yummy delicious. (I have not yet tried one myself, but I 100% take for granted that they are amazing). I have had the pretzel croissants at The City Bakery in New York which are out-of-this-world good.

That got me thinking … the doughnut is amazing food. It represents much of what is great in life. The doughnut crossed with lots of things is almost certainly going to be really good. And lots of people have already tried. (though not sure I would recommend the pickle-doughnut).

One thing that is super over-rated is the jelly doughnut. Jelly is just not a good filling. Jelly isn’t really tasty.

But other doughnut fillings ARE really good. Nutella-filled doughnuts are mouth-watering.

So started to think … what would be an even better filling for a doughnut???

Well, the only thing that is better than a doughnut is mochi. Mochi is amazing. And I’m not talking about crass ice-cream filled mochi. I’m talking about pure rice-and-sugar mochi.

only mochi is better than a doughnut

So pretty much the best dessert in the world would be a mochi-filled-doughnut. Whoa … my mouth is watering just thinking of it. I’m about to fly five Chicago police-officers (the best doughnut experts I can think of) to Tokyo for a taste test.

Just think … you bite into a doughnut and have a delicious chewy middle.

Yum.

And yes, you will have a 18% chance of having a heart attack.

But … yum.

Ok … the next thing is marketing. We need to market this invention really well so that everyone remembers it and forms crazy lines around the block hours before the Brooklyn bakery opens (yes, this is mostly likely to happen in Brooklyn … or Portland).

Originally I was thinking of copying the “Cronut” (which is actually trademarked) and calling this the “Monut” or even the cooler “Moghnut.” But besides for worrying about trademark violations, that name might be selling this creation short.

First, this creation would not have a hole in it (because it is a filled doughnut). Thus, no “nut.” Plus, who cares about the “nut” part of the doughnut anyway. The “dough” part is what everyone really likes.

So I give you (drum roll please): THE DOUGHCHI !!!

Enjoy the doughchi. And if you are lucky enough to create one, please consider me to give you needed product feedback. I will also offer up my kids and wife as beta testers.

Summation: enjoy this free business idea.

review of “How the Internet Happened” by Brian McCullough

How the Internet Happened is a history book chronicling the Internet from Netscape through the launch of the iPhone.

If you are old and have been intimately involved with the Internet since 1995 (like me), then this is a good book that will rehash many things you have forgotten.

great book: especially if you have not been in the Internet biz since 1995

But if you are newer to the Internet, younger, or not in the business of the Internet, this is a GREAT book.

The author, Brian McCullough, also is the host of the Internet History Podcast where you can get a lot of the same content of the book.

There have been surprisingly few books written about the Internet’s history (most of the best ones are biographies that focused on just one character). This book does a good job chronicling the major Internet events over 13 years (1994-2007). While it is a book about the Internet, it is also a great history book (and no history book from this era would be complete without walking through the Internet phenomena which has truly changed society).

While McCullough spends some time diving into technology, the main contribution to this book is really distilling down the core events that matter and giving a good business overview. I highly recommend reading this (it is also a very fast read).

McCullough also does a great job reminding us about the 1990s mania, the IPOs, and how all the 90s investments lead to the boom in the 2000s.

Summation: read “How the Internet Happened” (I’ve also started following Brian on Twitter (@brianmcc))

Davosman for Dummies (for 2019 season)

Thought conferences (like Davos) are super expensive and take a lot of time. To save you the price of going, below is the content for 100% of all thought conferences.

All you need to do is read this and you can skip all the conferences for the last decade.

If you do go, feel free to use this handy guide to play BINGO.

UNIVERSAL THOUGHT-CONFERENCE AGENDA:

Universal Basic Income (UBI)

another agenda item on UBI

Trump

Self driving cars

Income inequality

UBI again. did we mention how much we love UBI?

M-Pesa

USMCA

Tarriffs

Artificial Intelligence

Marsh Mellow test

UBI for those who failed the Marsh Mellow test

Bitcoin

UBI for those who failed to buy crypto before 2017

UBI for those who bought crypto in December 2017

Who will be the Democratic Party nominee in 2020?

UBI for those who fail to be the Democratic nominee

“Modafinil is much more effective than Adderall”

Solar energy

Putin

Metformin

yet another one on AI

UBI because AI will take all the jobs

“The Turkish Air lounge in Ataturk Airport is THE BEST!”

MBS

Meditation

Self driving ELECTRIC cars

Self driving ELECTRIC drones

“Where do you summer: The Hamptons, Saint-Tropez, Aspen, or Martha’s Vineyard?”

China

China and self-driving cars

Singapore and self-driving cars

“I pay my three nannies under-the-table to avoid taxes”

Turkish Lira

Brexit

Opioid crisis

GDPR

Micro-dosing

“I’ll have the gluten-free wine”

Synthetic meat

Crypto

Growth mindset

“We are living in a simulation”

Two and twenty

Grit

Charter schools

“See you in Dubai”

Trump

note: this was originally published in Medium in 2018

Five Links for reading (Dec 2018 edition) – subscribe now

About ten times a year, I send an email to 35k+ people on five things to read. Below is the email from December 2018 (the Jan 2019 will come shortly). If you like these, subscribe to Five Links.

here are five links worth reading/viewing (this month we are focused on health care) … 

A Billionaire Pledges to Fight High Drug Prices, and the Industry Is Rattled by Peter Loftus
Five Links reader John Arnold has put $100 million behind efforts to curb drug prices.

Health care prices do not play the role most people believe by Random Critical Analysis
Interesting paper that suggests the problem in U.S. healthcare is the demand for services, not the expensive prices. (HT Alex Danco)

Melatonin: Much More than You Wanted to Know by Scott Alexander
As you know, an article from Slate Star Codex is almost mandatory in Five Links. 

Why Doctors Hate Their Computers by Atul Gawande
Like all Atul Gawande writings, this is incredibly insightful.  But like all Atul Gawande writings, this is also 3 times as long as it needs to be (so caution). 

Decline of cancer and heart disease (tweetstorm) by Aaron Mitchell
More and more, the most interesting “articles” are being published as tweetstorms. This is one of them.  (HT Matt Clifford)

Note: after reading 50+ articles (+1 book) on healthcare In November… my take-aways:
+ there is no 80/20 rule to fix U.S. healthcare.
+ there are a series of fixes that each improve the healthcare system by 2-5%.
+ so fixing U.S. healthcare is going to be really hard because no one thing will have a big effect.

In addition — Some books I read since the last Five Links:

Health Care Handbook by Elisabeth Askin and Nathan Moore
(HT Travis May)

How to Raise an Adult by Julie Lythcott-Haims  
(HT Brian Davis)

God is in the Crowd by Tal Keinan
(Tal is a Five Links reader)

Inspired: How to Create Tech Products Customers Love by Marty Cagan
(HT Lauren Spiegel)

the U.S. Healthcare system: it is complicated, nothing is as it seems, and there are no silver bullets

I spent the moth of November (2018) diving into the U.S. healthcare system. I read over 50 long-form articles, played with a bunch of Medicare datasets, and read one book. Below are a few random thoughts from my learnings.

There is no 80/20 rule
We all know U.S. healthcare is messed up. Compared to other countries … the outcomes are not superior and the costs are higher. And no one thinks the experience is a lot of fun.

Going into my deep dive, I thought I would come away with one big thing we could do to fix healthcare. To my surprise and disappointment, I did not see any silver bullets (even ones that could never pass Congress).

Instead healthcare needs hundreds of very small improvements
There are hundreds of important things we can do to improve U.S. healthcare … but no one thing will likely have more than 5% improvement. Which means this is going to be a really hard problem to solve. Really hard.

Does the U.S. spend too much money?
On the one hand, of course it does. We spend roughly double per capita on healthcare than the next leading country (without better outcomes). On the other hand, we spend more per capita on almost everything. We live in way bigger houses, we have bigger yards, we drive bigger cars. We also spend WAY more than 2x per capita on higher education.

So if you look at the ration of healthcare/higher-education (I know this is a weird ratio, but stay with me), we are the lower spending G20 country (by a wide margin).

So do we spend too much on healthcare? The answer is still yes but it is not nearly as bad as people think.

U.S. consumers significantly subsidize European consumers
One of the most interesting things I learned about is the wealth transfer from the U.S. to other very wealthy countries. Many countries pay dramatically lower for the same drugs than the average U.S. price. That’s because these countries negotiate as one market … but also because the marginal price of a drug is essentially zero so the drug companies have a prisoner’s dilemma game to play with the countries and often make the calculation that some money is better than no money.

A simple solution to this (from the U.S. perspective) would be to create a law that drug prices to U.S. government buyers (like Medicare, Medicare, Veterans, Military, etc.) must not be higher than any price to any first world country (it would still be ok to sell drugs for low prices to poor countries in Africa … but not to rich countries in Western Europe). That means that the U.S. government would never pay a higher price for a drug than the market price. It would also mean that prices for drugs would be standardized since all other first world countries would follow suit and create the same rule. That shift would result in U.S. drug prices falling and European drug prices rising — ended the billions of dollars that the U.S. is currently transferring to Europe.

Summation: a month of deep dive, I know less than I did when I started the journey. Healthcare is complicated. Nothing is as it seems. People in it are really smart but also generally really conflicted.

Note: I had dozens of tutors but I want to especially thank Travis May (CEO of Datavant) and Joel Quadracci (CEO of Quad Graphics) for their guidance.

the experts are (usually) wrong – so dial down your trust meter

The experts are wrong a lot. If there is not a clear truth, the experts are usually wrong more than 50% of the time.

Experts (those who predict the future for a living) are, more often than not, dart-throwers. They usually perform no better than chance. And recently they have performed even worse than chance.

“Economists have predicted nine of the last five recessions.”

Most experts are biased by their experiences. In fact, the most dangerous person is one who says they are unbiased. “I am just using facts, not opinions, for this prediction” is almost always wrong.

We are ALL biased. We see the world through a very hazy prism of our experiences.

There is no unbiased news outlet. Even “real news” has lots of untruth to it. Almost every news story I had intimate knowledge of made a significant reporting mistake or factual error in the story.

We’re human and we make mistakes. We’re human and we see the world with our strong bias. We overweight certain sources and underweight others. We discount data that is very good and we rely on data that is wrong. We see patterns when there are none and see coincidences when there are conspiracies.

The “expert” can be dangerous.

We live in a world where people spend a lot of time building their bona fides so they can make their living off their “expertise.” Most of the top 1% of earners make their living predicting the future. But because people come with huge biases, their predictions can often be very, very wrong.

In even the most noble professions (like medicine), people have huge biases. Study after study finds top surgeons recommending treatments that they specialize in … even when the problem may be better served from another procedure. That’s because for most of us, every hammer is a nail.

Sacred cows tend to not be that sacred.

Experts tend to talk to other experts and can get sucked into a dangerous groupthink. Once all experts agree on something, even when it is highly speculative, it can become calcified.

Experts often say “that cannot be done” like it is a rule of the universe. But instead of a low of gravity, it is more akin to a custom (like setting fork on a left side of the plate).

We see groupthink happen most often is the softer sciences like political science, sociology, foreign policy, and economics. The more specialized the field, the more people find themselves talking to each other … and the more they will be prone to repeat one another.

While it is harder to happen in hard science, we see it happen there too. Wrong ideas are clung on to too long because it is hard to change one’s mind about the world. Max Planck famously said “Science advances one funeral at a time.”

None of this means experts are trying to be sinister. Yes, sometimes people are on the payroll of an interest (for instance, many people who campaign against oil pipelines are indirectly funded by the railroad companies or the Russian government), but that is not usually the case. Biases control people’s thoughts much more than money.

Protect yourself from experts through contrarian thinking

“Conventional Wisdom” is often very conventional thinking.

Before accepting opinions as truth, think through the issues yourself. Don’t just look for agendas but look for biases. If a surgeon recommends a specific procedure that only her hospital does, seek out other opinions.

Seek out outcasts. Seek out non-expert experts who often challenge the status quo. Some that I would recommend are: Peter Thiel, Naval Ravikant, Nassim Taleb, Paul Graham, Judith Rich Harris, John Hempton, Charlie Songhurst, Tyler Cowen, Sam Altman, Jonathan Haidt, and Slate Star Codex. I’d even throw in some more mainstream thinkers like Malcolm Gladwell, Susan Athey, Daniel Kahneman, Richard Feynman, Tim Ferriss, Daniel Yergin, Robert Cialdini, Oliver Sacks, Elie Wiesel, Robert Caro, and Charlie Munger because people like them will always make you think.

Of course, experts can be right. They often are.

You don’t have time to question everything in this world — you might turn into the Unabomber if you did.

For instance, even if you cannot prove the earth is round, it is not a good idea to think the world is flat. It is likely that the government did not fake the moon landing. And when you were born, you probably were not delivered by stork.

The 40-year life lesson: experts are (very often) wrong

Just because someone knows much more about you about a particular subject, do not assume there are correct. Do not bestow authority on them just because they are wearing a lab coat or possess a PhD.

Summation: just because someone has spent more time learning about something, it does not mean that they are a closer to the truth than you.

This is expanded from my 2017 post on Quora.

some totally random Rules for Life (2019)

ABC: Always Be Charging
Whenever you have a chance to charge your devices (phone, laptop, etc), always do it. You never know when you will lack access to reliable power.

Always Be Reading Long-form
Read at least 7 hours a week of long-form. Read books. But also read well-written articles longer than 3 pages. Save time to go down reading rabbit holes. Feel free to cut out short-form reading (like clickbait articles) to make time for long-form. The airplane is a fantastic place to read.

Always Go to the Bathroom
Whenever you have a chance to go to the bathroom, take it. Never “hold it in.” Just makes you very uncomfortable and unproductive.

Always Be Listening Long-Form
We are in a podcast revolution — take advantage of it. You also can get many books (but unfortunately only 20% of good books) on audio.

Always Love Email
Email is the best form of communication ever invented. All new communications methods in the last 20 years are inferior to email. Email is the greatest asynchronous communication tool. For synchronous communication: meet in-person, by live video, or talk on the phone. Slack and Facebook Messenger can be productivity killers.

Always be Writing
Try to write something over 500 words a few times per week … even if the only person who reads it is yourself. This will help you collect your thoughts.

Sometimes Change your Mind
At least once a year, challenge yourself to change your mind about a deeply held belief (business, family, political, societal, etc.).

self-driving cars will cause the Rich to Get Even RICHER

When self-driving cars come (and I’m skeptical they will come in mass in the next 20 years … but that is for another post), everyone’s commute will be much faster. That is because cars will be able to coordinate with each other and rarely need to go below 80 miles/hour on highways (even during the busiest of times).

But once self-driving cars happen, the next thing is to allow cars to pay up to go EVEN faster. There is no reason a car can’t go 160 miles per hour and get you there in half the time.

Cars that don’t pay up for the privilege will be forced to yield to cars that do. Essentially expect to see surge pricing to get to places faster.

Would you pay an extra $100 to get from San Francisco to Los Angeles in 100 minutes by car? An extra $300?

Note: I’ve been thinking a LOT about transportation recently because of all the transportation-related companies that use SafeGraph Places.

Summation: while self-driving cars will be good for everyone, they will be GREAT for people with lots of money (especially in capitalist societies like the U.S. and China).

Waymo self-driving car

Shorter deadlines for offers lead to better employees

Deadlines for offers should be extremely short. Ideally they are under 36 hours. There is even a good argument for deadlines to be under 20 minutes (as long as the employee knows it is coming).

Beside the obvious criteria for a great employee (smart, gets things done, etc), the number one (less obvious) criteria is that they REALLY want to work at your company. They will be so much more effective if they really want to work for you.

They need to have a REAL attraction to your company. Maybe is is because of the company’s mission. Maybe is is because of the culture. Maybe it is because of the people (or their direct supervisor). Maybe it is because of the technology. Maybe it is to get rich. … there could be MANY reasons … but that reason has to equal a genuine excitement to join your company that is beyond the rational pros and cons.

This is why you should give offers with a really short deadline. If someone needs a lot of time to make a decision whether to join your company or not, they probably are not super excited about your company. They still could pick your company and be a solid contributor … but my experience is that they rarely turn out to be amazing.

The a phrase in romance “he’s just not into you” applies in recruiting as well. You want people that want you. If a candidate, after the hours and hours of interviews, projects, reference checks, etc. still needs more time to decide to join your company or not, you should move on.

Summation: to most optimize for a 10Xer, keep deadlines for offers short.

Photo by Pixabay on Pexels.com

How to Select Vendors: look for rate of improvement in the product

When selecting software vendors, besides for just doing the usual (feature analysis, price, compatibility, ease-of-use, etc.) look for one core x-factor: rate of improvement of the product.

The faster the product has been improving in the last year, the more likely it will improve in the coming years.

Look for products that get better quickly. Look for products that fix bugs and performance issues quickly. Look for products that add new features. Look for products that keep delighting customers.

One way to do this is note your evaluation of the product when you first see it and then in subsequent times that you see it.

Look for companies that publish change logs

Reward companies that publish clear change logs on their product and show how the product is getting better over time (which means they are honest about past bugs). We’ve been experimenting with publishing change logs at SafeGraph and it has significantly helped our sales cycle and ability to gain customer trust. In addition, it is helpful for current customers to keep track of our ongoing changes. We would love for other companies to copy us.

Summation: a great way to chose a vendor is to look for the rate their product is improving.

Photo by Christina Morillo on Pexels.com

Tipping for is popular in B2C … could it be a new trend in enterprise software?

Have you noticed that there has been a proliferation of opportunities to tip people? Tipping has become ubiquitous. It is everywhere. Well, everywhere in B2C. But I have not yet seen it in the B2B world.

Backstory: I absolutely hate tipping.  I have tipping anxiety.

Tipping is an awful thing. I’m the sucker that always gives a 20% tip (it is much easier math than 18%), even when the service does not warrant a tip. When I go abroad, the servers are shocked at my “American tips.”

Random questions:

  • Why are tips a percentage of revenue?  (The rich just get richer)
  • Why tip at all in a restaurant? Even worse, tipping at checkout counter.  Square has massively increased my tipping anxiety.  It is just a way of squeezing an extra 20% out of suckers like me.
  • Why isn’t tipping just included in the price? You don’t (yet) tip when you buy an airline ticket or buy a book from Amazon.

Tips used to be for showing appreciation but today they are usually just to avoid embarrassment.  

Tipping in the enterprise

In my almost 20 years of selling software, I have never been “tipped” by a client.  

But that got me thinking, maybe SafeGraph should start asking for a voluntary 15% “tip” during our quarterly-business-reviews (with customers).  Maybe 25% of clients would pay (if they had a way of doing it).  
I have no idea how these customers would pay … but wanted to put it out there to some of your smart readers can figure it out.  

Summation experiment: next time your lawyer does an outstanding job, try to tip her.

Photo by maitree rimthong on Pexels.com