#3

New thoughts and life updates.

I write this newsletter to share some new ideas I’m thinking about as well as my professional progress. A little bit about me:

I own and manage an agency in Toronto called August that designs and builds digital products. We spend about 80% of our time on client work, and 20% on internal projects. The most recent, and the one I’m most excited about, is called All Sorts, a catalog offering direct mail marketing to DTC brands. I also invest in real estate with my two brothers.

some thoughts

It’s 2021 and NFTs are the new ICOs. A lot of people are making a lot of money and I’m very confident that, for most of them, this will all end in tears, again.

This is not to say that I’m hating the game, or the players—I’m not—but that I have a good reason to revisit my opinion that bitcoin continues to be the best investment in the crypto space, broadly defined. (Only in this space can you wonder whether you’re leaving money on the table with your paltry triple digit annualized gains.)

A common narrative is that bitcoin is something like digital gold, a great store of value, and that ethereum and other altcoins are something like a world computer that offers better utility. I think that this is mostly wrong, but also that it doesn’t matter whether it’s right or wrong.

Here’s why.

First, there isn’t much happening in ethereum-land that isn’t or couldn’t happen in bitcoin-land. That common narrative is all marketing. Smart contracts, for example, aren’t generally very smart—nor are they contracts—and mostly boil down to some combination of m-of-n multisig scripts and time locked transactions.

Second, even if right, over time, most value should still accrue to bitcoin due to the properties that make it attractive as a store of value—including, critically, its scarcity and security. If ethereum, for example, truly does provide greater utility, bitcoin holders can easily trade into it to complete a needed task and back into bitcoin. In fact, this could all be automated and happen under the hood.

As I write these ideas out, I recognize that they’re more developed in my mind than I’m able to articulate—at least concisely. But let’s try an experiment. If you agree with the above, great. God bless. If you don’t, reply to this email and tell me why. I’ll publicly respond in my next newsletter to as many counterpoints as come in.

business stuff

The basic division of labour at August is that I bring the clients in and my team gets them what they need—typically a cool new digital product that helps their businesses save or make more money. There’s a bit more to it than that but you get the general idea.

For that division of labour to work, I need to be good at business development and my team needs to be good at project management and delivery. To date, I’ll admit, they’ve done better at their role than I have at mine. We’ve done well enough to stay alive and grow a bit over the past three years, but we could be doing a lot better. So I’m doubling down.

Here are three things I’ve discovered while running August that guide how I think about business development.

  1. As much as possible, I prefer dealing with entrepreneurs and business owners. These are smart, ambitious people who have clear objectives: all else equal, they want to increase revenues and decrease expenses. As it happens, technology and digital products are all about doing more with less.
    These objectives aren’t always, or even often, shared with the rest of the management team, who might prioritize career advancement and other things that are harder for me and my team to optimize for.

  2. Every business owner has challenges that could be solved to some degree with better tech. Every single one. It’s up to us to understand those challenges and propose compelling solutions.

  3. Almost every business owner has a new idea or two stewing in their brain that they’d like to explore if they could carve out the time. These might be ideas for their current businesses or for new ones. This is another reason why I prefer dealing with entrepreneurs and business owners: they rarely stop scheming, and I like schemers.
    This is great for August as we’re especially good at taking concepts from a vague, incomplete idea to a v1.0 product. It’s probably the thing we do best, and our greatest edge over other larger agencies.

All Sorts - We’ve hit a bit of a snag. We need more attribution data to sell more ads in our second issue.

Here’s the problem. When it comes to direct mail generally, some product types perform better in some markets than others. We need to send a whole bunch of catalogues, testing different product types in different markets, to discover which those are. But most brands don’t want to pay us for ad space in our catalogues until those discoveries have been made.

In short, we’ve not yet hit product-market fit. This is the point at which a business might typically consider fundraising, if the potential upside is interesting enough. We think that it is, so we are.

investment stuff

Today is the day that my brothers and I close on the property I mentioned in last month’s newsletter. As a reminder, this is a ~20’ x ~100’ lot on a minor arterial featuring a two-storey building that we’ve purchased with a couple of partners.

Our plan is to now improve it with three additional storeys and a full-height basement.

As anyone who’s done any work building or improving a building in a city like Toronto will know, our next steps, the entitlement process, can be a bit tricky and a bit political. For that reason, you’ll forgive me if I have to be a bit vague about the project location and specifics until we’ve passed some of the major hurdles.

Our next steps will be to 1) sketch out a couple of options in terms of what we want to do with the property—one showing an as-of-right option, another showing an option that would require some minor variances, 2) schedule a Pre-Application Consultation with the local Planner to determine the City’s appetite for the variances needed for option 2, and 3) based on that feedback, decide whether we’re going to the Committee of Adjustments to request the minor variances for option 2 or straight to building permit applications for option 1.

There’s lots to do!

stuff I’ve enjoyed

This is some of the content I’ve come across over the past month that was especially good.

  • Article: I read this article just before writing this newsletter. It’s about Marc Lore reading Henry George and deciding to build a city with Bjarke Ingels. If you know anything about me, you’d almost think that I commissioned it. I love everything about it. I do think that it would be very hard to build a city from scratch, as real-world network effects and economies of agglomeration are very hard to kickstart, but also that that’s as cool a challenge for a smart billionaire to take on as any. This also fits in really well with my book recommendation.

  • Book: I’ve got a confession to make. I’m still working my through Walt Disney: The Triumph of the American Imagination, which I recommended last month. So there’s not much new to report here other than to double down on that recommendation. A new thought that struck me while reading this book is how Walt Disney built his empire by starting with a relatively simple, barely profitable service business. He produced short videos for distributors. Service businesses often get a bad wrap from product people but they are at minimum a great launchpad into the world of entrepreneurship.

  • Podcast: A few months ago, some friends of mine launched a daily business news newsletter called The Peak. (Disclosure: I’m a small investor.) A couple of weeks ago, they added a short daily podcast called The Peak Daily to their product mix. I listen to it every morning for a quick rundown of the important stories of the day.

  • Video: I’ve got two video recommendations this month, which I’ll share with a new personal heuristic: I probably am or would be good friends with anyone who enjoys them both. The first is this three-part tour of Starbase with Elon Musk. Listening to the richest man in the world geek out over extremely technical details of his rocket program is hard to beat. The second is the Lox vs. Dipset Verzuz. Enough said.

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And that’s it for now. I hope you have a great, productive month.

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