#25

Thoughts and life updates

I write this letter to share some of the things I’m working on and thinking about. A little about me:

I own and manage a digital agency in Toronto called August, where we design and build websites, web apps, and mobile apps. We spend about 80% of our time on client work and the balance on internal projects. Most recently, we’ve been working on an AI-powered 311 platform for municipalities called 311AI, and a directory of real estate development vendors called Buildstack (think: Builtwith for buildings). I also invest in and develop real estate with my two brothers.

some thoughts

There’s a progressive think tank in Canada called Canada2020. My understanding is that they mostly run a conference and have acted as somewhat of a launchpad for Justin Trudeau and many of his senior staffers.

They’ve just announced a new advisory board, and with it, their newly defined main areas of policy focus. These are:

• Promoting growth for all

• Accelerating the transition to net-zero

• Advancing economic reconciliation

• Driving innovation for health, and

• Building government that delivers.

I thought I’d share my list for another think tank, whichever one might want to take it on.

• Promoting growth - Forget distribution (for now), let’s focus on production. We want maximum growth, as growth solves most of our problems on its own and makes the rest of them much easier to solve. Read Tyler Cowen’s Stubborn Attachments for more.

• Accelerating research and development of AGI - I subscribe to Paul Romer’s endogenous growth theory, which places this focus as being consistent with and complementary to the first. Put simply, endogenous growth theory holds that the economy will grow if we get more smart people to do more smart things. Developing AGI would be like having countless new smart (maybe even supersmart) people spawn out of nowhere and get to work.

• Advancing energy abundance - In many ways, the cost of energy is the limit to innovation, and per the above, to growth. We need abundant and therefore cheap energy to make flying cars pencil, for starters. Read J. Storrs Hall’s Where Is My Flying Car? for more.

• Driving competition and choice in healthcare.

• Building housing, a lot of it - Especially in our high-productivity regions. Read The Housing Theory of Everything for more.

• Facilitating affordable family formation - I’ve been told that this one is worded a bit weirdly but I got it from a good and very smart friend and was reminded to include it in this list by another good and very smart friend. Aside from the standard and much-repeated benefits of having children, they also deliver greater future orientation. Your life stops becoming just about your life and starts becoming about that of your kids and their kids. Per Tyler Cowen, growth is a moral imperative. We owe it to our descendants, to deliver to them a better life. Having some descendants really helps to hammer that home.

What do you think? What am I missing?

business stuff

• The big news this month is that starting tomorrow, I’m going to be shifting my primary focus away from my agency business. My colleague and good friend Jeff, who I’ve known for over 20 years, and who’s been with August since the start, will be taking over the day-to-day management, including business development and project delivery. This will free me up to spend more time on growing our products (311AI and Buildstack) and on building the real estate activities I’ve been tinkering with into a proper business.

• I’m pretty excited about 311AI. Despite how hard it is to close municipal clients without having any existing municipal clients to point them to as references, I think that ours is a compelling pitch. Our product is the best in class, with best-in-class AI integration, and has plenty of room for horizontal expansion. One example of the latter comes from an RFP that was recently issued by the City of Timmins. They’re looking for a mobile app that would let its residents with accessibility needs book transit service on-demand. We played around with some design concepts and think that we can add this functionality to our app without adding any undue UI complexity. There’s a long tail of such services that we could bundle in over time.

  

• Buildstack continues to be a slow grind, which is fine. I’m thinking of attaching a Slack community to it for real estate developers to meet each other, trade notes, ask for help, and so on. This idea really builds on the Missing Middle Summit, as I’ve been getting pinged pretty regularly since by people who want to keep connecting with others in the space. I’ll try to get to that this month.

• As mentioned above, I’m going to be spending much more of my time professionalizing my real estate activities and adding some structure and systems to the things that I do. This will all be under the banner of Spoke Developments, which I own with my two brothers, though many projects will be in partnership with others.

real estate stuff

• We’re in an interesting place with FH1*. We bought our land at a reasonably low price and despite not opting for a fixed-rate mortgage, which in hindsight we totally should have done, have a fairly low carrying cost. As mentioned in past newsletters, we’ve received our building permits but are now trying to decide how quickly we should pull the trigger on construction, given that we would incur approximately $1.5 million in new costs financed at a much higher rate. One way to think about it: if we sit tight for the moment and do nothing, we only need rents to increase by 1.5% over the next year to absorb a year’s worth of carrying costs.

• Everybody who dabbles in real estate of a certain scale in Toronto has been eagerly anticipating provincial direction on land use within Protected Major Transit Station Areas (PMTSAs). These are areas that have been delineated by the City surrounding—you guessed it—major transit stations. According to rumours, this should be released sometime over the next few days. We all expect that the Province will require the City to upzone to greater densities within these PMTSAs than they might otherwise do, though maybe not to the degree that many of us would like.

• Premier Doug Ford continues to repeat his promise that he will facilitate the construction of 1.5 million homes across the province over the next 10 years. This is despite a major slowdown in housing starts this year. This is also despite his timid approach to forcing the upzoning of so-called stable neighbourhoods. Specifically, with last year’s Bill 23, the Province now requires that municipalities allow for no less than 3 units to be built on any residential lot. That’s nowhere near ambitious enough to make a dent in that 1.5-million homes target. If the target is to be met, it will have through the radical upzoning of Major Transit Station Areas (MTSAs).

• MR1** is within a PMTSA. This week’s news will likely impact how we think about our next steps on that project.

*Forever Hold 1. A proposed four-storey multiunit rental building in Toronto’s west end that we plan on holding forever.

**Midrise 1. A proposed midrise multiunit residential building (tenure to be determined) in Toronto’s west end. We’re starting with a rezoning and will see where we take it from there.

stuff I’ve enjoyed

• Article: When Paul Graham drops a new essay, you stop everything and you read it. This might be part of the reason why this newsletter is a few days late. His latest on “How to do great work” is hard to summarize without robbing it of its soul. It might be his longest essay to date, but it’s concise and packed with insight. Take it with you to a nice park on a nice day, bring a stogie, light it up, read, and enjoy.

• Book: I just finished reading Living with a SEAL, which reads like a series of diary entries recounting the time Jesse Itzler invited David Goggins to live with him and train him. It took me two otherwise busy days to get through the book, which means that it’d be perfect for a non-busy day.
  
  Jesse Itzler is one of those guys who played, and continues to play, the game of life really well. When in his early 20s, he thought it’d be cool to be a rapper, so he became a rapper, got a music video on MTV, and had a few notable college tours. He then started a successful record label and at one time employed 50 Cent as an intern. Sometime around then, he got a taste of flying private and thought that cool too, so he started a private jet startup and sold it nine years later for hundreds of millions of dollars. Yada yada yada. Started a few more companies, launched a few more products, married Sara Blakely, the billionaire founder of Spanx, had four kids, and at 54 looks like a really fit forty-something.

• Podcast: George Hotz on the Lex Fridman podcast is a great listen. An excerpt: “If there’s one—I’m pretty centrist, politically—if there’s one political position I can not stand, it’s deceleration. It’s people who believe we should use less energy. Not people who believe global warming is a problem; I agree with you. Not people who believe that saving the environment is good; I agree with you. But people who think we should use less energy, that energy usage is a moral bad. No. No. You are diminishing humanity.”

• Video: ConvertKit founder Nathan Barry is an interesting guy, and he put together a short documentary covering the founding and growth of his business over the last 10 years to $30 million in annual recurring revenue. This guy has grit.

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And that’s all for now. Here’s to a good and productive June.

Feel free to reply to this email with any comments or questions. I love chatting about everything mentioned above.