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💡 case study: key living
This week, I’ll take a quick look at Key Living, a Toronto-based housing startup currently in stealth mode. For only $25,000 you can become an owner-resident in one of their first buildings in Toronto, and they take care of the rest of the financing requirements through their investors. That sounds pretty neat to me.
How do they [plan to] do it?
Key buys entire pre-construction condo developments, delivers a community/tech-centric living experience and allows Canadian residents to become homeowners. Key offers the benefits of ownership – an equity investment and secure tenancy – with all the freedoms of renting. Key is acquiring a $2B pipeline of multi-residential projects including its flagship location which will be an over 700-unit high-rise in the heart of Toronto.
What’s fascinating about Key Living is that the company may not be able to fully (ever?) exit stealth mode unless it achieves a series of regulatory exemptions or amendments. We’re talking things like:
Working with Securities regulators so that retail investors (*that is financial code for “everyday people”) can buy shares in Key;
Exploring a Capital Gains exemption with the CRA [re: principal residences];
Exploring an exemption on Land Transfer Taxes;
Exploring whether to structure the company as a non-profit;
Designing a new Owner-Resident Agreement;
So, while (in theory) we want more pilots and innovation in the housing space (perhaps part of what is leading to growth in “PropTech”), in practice, the regulatory environment also needs to evolve or at least demonstrate some elasticity to support these innovations. Also, do VCs recognize (or care about) regulatory realities when they are investing? I’ll return to this question frequently.
📌 pinterest as a policy leader
Oh, look! An 🇺🇸 company. Wanted to shout out Pinterest. I don’t think it gets the respect it deserves in terms of being such a responsible social media platform. It moved very early to limit search results for “COVID-19,” “coronavirus” and related terms to “internationally recognized health organizations.” Granted, they are more of an aggregator than a content generator, which may make it easier for them to take these kind of positions - but still. *Googled it, and I’m not the only one that feels this way.
There’s a lot of online chatter re: evolving the social safety net under COVID-19 as well as evidence that private companies are generally able/willing to expand coverage and supports to workers. I think that another dimension worth watching are the platforms’ ability and appetite to self-regulate beyond their “policies.” More to come on that.
PS. The Verge has great coverage of tech companies getting more aggressive with COVID-19.
💸 setting money on fire
Doordash lost around $450 million (USD) in 2019 - that’s about $622M CAD; or almost half of what Quebec pays for their universal low-fee childcare program.
Yes, I read Steven Levy’s latest, “Facebook: The Inside Story.”
First, an aside: while I have a quiet pride in the fact that I haven’t been on Facebook since 2009, it also means that I often lack a lot of the context re: privacy, disinformation, etc. that has some to characterize everyone’s experience on the platform. I read about it, but it’s probably not the same as experiencing the casual embarrassment of “People You May Know,” or “Beacon.” It also means I get a lot (um, a FEW?) of terse emails inviting me to parties “for those of you not on Facebook.” Do I worry what I’ve missed out on over the years? No, because I have no freaking idea since I don’t see the invitation or photos of who went. Isn’t every RSVP a “Facebook maybe” nowadays? Yes.
Back to the “The Inside Story.”
I think that the most fascinating aspect of the book is that it reinforced just how aggressively Product and Policy were (are?) siloed at Facebook. Zuck has product, Sheryl has policy. By totally divorcing product development from policy considerations, communication across teams has been limited and a sense of awareness/responsibility across the functions is lacking. This seems to have resulted in furious, last-minute compliance debates that the CEO ultimately overrules. Fun? There’s got to be a better way.
Here’s one of the most confounding quotes from the book. It is referencing the design of “People You May Know” (PYMK):
Zuckerberg defends PYMK, and the way he does it illuminates his thought process and product acumen. When I bring up the above conundrum to him, he gets very serious. “This gets to a really deep philosophical thing about how we run the product,” he says. He concedes that if users take the hint from PYMK and friend their weak ties, their experience might be somewhat degraded. But there is a more important issue at stake, he argues—the health of the network in general. “We don’t view your experience with the product as a single-player game,” he says. Yes, in the short run, some users might benefit more than others from PYMK friending. But, he contends, all users will benefit if everyone they know winds up on Facebook. We should think of PYMK as kind of “community tax policy,” he says. Or a redistribution of wealth. “If you’re ramped up and having a good life, then you’re going to pay a little bit more in order to make sure that everyone else in the community can get ramped up. I actually think that that approach to building a community is part of why [we have] succeeded and is modeled in a lot of aspects of our society.”
🚀 space policy
Does the “Lunar Gateway” mean anything to you?
More: Did you know there is an Outer Space Treaty? Do you want to know what it used to be called? Trust me, you do: the Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies. Last year, Canada launched a new Space Strategy, and there was even a Space Advisory Board. See? Space policy is real, we just don’t know enough about it - YET. Let’s keep clicking.
*This is my MVP of a weekly missive on startups and public policy in Canada. If you are reading it, you may be a BETA reader (thanks!). Send me your thoughts on how it can be improved so that it’s more relevant to you. I also know that the formatting is kind of ugly. I’ll work on it.