Top of Mind— February 2019
This month, I thought I’d highlight three theses I’ve been noodling on for some time now.
Airbnb and Uber are prime examples of companies that leverage Internet-enabled networks and markets to allow for the monetization of uncovered assets, previously underutilized. If you view this as an umbrella concept, we’re still in early innings. Personal assets can stretch far beyond cars and real estate:
- Free Time
- Knowledge Base
- Peer Network
- Human Capital
- Personal Data (shopping receipts, listening history, etc.)
Once a certain asset comes into play, there are endless models for deployment. Here are some examples:
Products and services that enable lightweight and frictionless ways to deploy these assets interest me. I also think the nature of the potential products could cater themselves to natural growth mechanics because they play to human incentives. If something makes it easy to make you money, wouldn’t you do it?
Furthermore, I’ve really only touched on the supply side of this equation. Once various forms of scarce assets get unlocked, how do you democratize access to them in a “Promethean” manner?
Real Estate → Apps + Infrastructure
“You’re not in the hamburger business, you’re in the real estate business.” — Harry Sonneborn
I love this quote from The Founder. Sonneborn (B.J. Novak’s character) points out to Ray Kroc (Michael Keaton) how McDonald’s should be making money. He noted that McDonald’s should own the real estate their locations are on and lease that land to their franchisees, changing the nature of the revenue stream.
While I haven’t been thinking actively about McDonald’s franchising model, I have considered new types of tenants that are occupying commercial spaces.
- Coworking (WeWork, Industrious, Knotel)
- Business Travel (Zeus, 2nd Address)
- Experiential Retail (Bulletin, Fourpost, Camp)
- Healthcare Clinics (Forward, Kindbody)
- Delivery-only Kitchens (CloudKitchens)
- Warehousing and Fulfillment (Stord, Flexe)
- Data Centers and Crypto Mining
For all these businesses, I believe that you can harness technology in some way to underwrite them as prospective tenants or occupiers of space. I haven’t been the first to make this analogy, but one might view the tenants as customer-facing “apps” and the backend real estate process and land as the “infrastructure.” With this set up, where does the value get captured?
For certain verticals — esp. where the businesses are commoditized with no moat — the value is in the real estate. I’m not quite sure when and where that happens, but it’s an open question I’m keen to explore.
The Internet and Collectivity
If you read the works of early Internet pioneers (Vannevar Bush, J.C.R. Licklider, Doug Engelbart), they all hammer home the point that a technical, networked structure (such as the Internet) should be focused on the coordination and collaboration of agents towards collective goals or strategies. Fast forward a few decades, and we haven’t made the transition from pipeline to platform in many instances.
It definitely feels like there should be more ways to buy items in groups, work together on creative endeavors, access bundles of products, and share discrete information with one another on the Web. Framing problems through these lens can also help entrepreneurs thinking about business defensibility and moats.
Nevertheless, I’m sure the crypto crowd also has a thought or two to share on digitally-native cooperative organizations.
I welcome all thoughts and feedback! Feel free to get in touch at aashaysanghvi[at]gmail.com.