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Saturday Cup of Joe: a lending and tech(ish) newsletter from Detroit

Saturday Cup of Joe #132.

Friends & Colleagues,

Week 132 in Detroit. Snow, snow, snow (to be read with the White Christmas soundtrack in mind). The weather, know what I mean? Big topic of conversation. I traveled to Virginia for a very quick trip — 24 hours — and woke up to snow. As you know if you’ve spent any time in the DMV — DC, Maryland, Virginia — snow is complicating. Lucky for me it only caused a minor flight delay but otherwise was not a problem.


Some good news on Instagram, Toyota USA buying a new truck for a good Samaritan, first responder.


Are you someone that talks about the weather? Do you find if someone comments on the weather that you respond? Moderate to severe inclement weather leading to discussion of moderate to severe inclement. (Source: link)


View from Clinton County, PA. 11/10/18.


Interesting Headline of the Week: “Pentagon fails it’s first-ever audit, official says.” According to Reuters (and David Saint John for passing this one along), you gotta wonder why this is not a bigger deal. Financial audits, particularly in the financial services industry, are extremely labor intensive and critical. $2.7 Trillion is a large financial organization, that’s for sure. So, as the Deputy Secretary of Defense said, (and I’m paraphrasing) Hey, at least we actually completed the process. Here’s for trying.


“To think is easy. To act is hard. But the hardest thing in the world is to act in accordance with your thinking.” ― Johann Wolfgang von Goethe


Detroit, MI, USA.


Design thinking: How much have you heard about design thinking? Thanks to premier, exclusive programs like the one at Stanford University coupled with the rise of design thinking in product development at the major tech firms, design thinking is everywhere. I was fortunate to experience it firsthand in a Lender Advisory Council meeting at Freddie Mac this week. I know it’s popular in tech companies (and what company is not a tech company these days).

Here were a few of my takeaways. First, it is really helpful to have an experienced facilitator. Drives specificity and encourages confronting the hard questions head-on.

Second, the cycle of Understand-Ideate-Experiment is a helpful rubric regardless of whether it’s in the design thinking contest or just as an approach to product, innovation or problem solving within your organization.

Last, the final product was also useful. We created a X-Y axis of the results. The ideas were placed on a grid with the X axis increasing in substance/meaning moving left to right and the Y axis increasing in difficulty/cost moving bottom to top. The top right hand corner is the most impactful and difficult problem (the strategic game-changer type stuff).

Here are the quadrants (imagine a X-Y axis):

Luxuries (Low Impact, High cost) | Strategic (High Impact, High cost)

Quick wins (Low Impact, Low cost) | High Value (High Impact, Low cost)

I really like the ambition of the process and the space created to invite challenges. Though you may scoff at the ambition of tech companies and the (recent) rise in the celebrity entrepreneur, there is a daring to the attitude that’s health. It allows for the wild idea, the big idea.

Through the process of this design thinking on Thursday, a series of tasks and voting resulted in me writing “How might we raise incomes?” Out of context I’m sure it’s laughable. But the reality is that’s how big ideas are born, how greatness happens, how you have to start to start the thing, whatever that thing ends up being. (If that makes sense.).

Next time you are curious about design thinking or wondering which business improvement or process improvement activities have legs, go experience it. Test it by doing it.


Amazon HQ2: Well, it happened. Last week, Amazon announced the location of it’s second headquarters. Oh wait, headquarters. Kinda headquarters.

Yea, second headquarters means they’ll now have 2.

No, you mean, 3.

What do you mean? I thought it was a second headquarters?

Right, but they picked 2 locations for the second headquarters.

So it is that 3 co-equal headquarters or 2 co-second headquarters?

For a company that values decisiveness and clarity, I’m starting to get confused. Hard to make the tough decisions, I guess. It’s a tie! Can be hard to make big decisions, I get it. Do you think the other 18 cities on the top 20 will get a participation trophy?

Seriously though, considering that Amazon split the HQ2 into HQ2x2, can the two locations cut their incentives in half? Only fair.

I’m surprised Crystal City can handle the proposed expansion and I’m surprised Amazon felt such a strong need to be that close to Manhattan. All week when asked if I was surprised, I had been saying not really. Now that I think of it, when someone asks if I was surprised by Amazon, I guess I have to say “kinda, sorta.”


More from Clinton County, PA.


Decision-making: Farnam Street, a thoughtful and deep blog, posted an interesting framework for how to view investments. Investments of time, money and resources. And actual investments too. Farnam Street used Bezos and Buffett as exemplars of this approach but what I appreciated the most is the turning-the-question-on-its-head. Do not try to predict the future. Bet on what will not change. One reason — “To capitalize on what’s going to change in the future, a lot of things have to go right.” But beyond that, asking “What’s not going to change in the next ten years?” means building a business, making an investment, or challenging assumptions on a foundation of certainty. To do great, big things, we have to take big swings, big risks, but your whole business cannot be constantly betting on big changes. Especially when investing. “While investing in what’s changing is risky, investing in what stays the same is not.”

Next time you are approaching a big decision, consider what’s not changing.


Housing: One topic that comes up a lot in our industry is the lack of affordable housing available to most first-time homebuyers or middle class home buyers for that matter. Not surprisingly, though, the housing trends are going the other way. For example, the share of single-family homes valued at a million dollars or above “has grown 7.6% over the past year alone, and doubled since 2012, increasing from 1.5% to 3.6% of all homes on the market.” Just as the wealth gap widens, luxury or high priced housing is generally isolated to the coasts. Interestingly, Suburban Boston is the only neighborhood in the top 10 not in California.

What does this mean for you or your business? Not much…probably. That said, it goes to housing trends even migration trends that might influence your business (or your choices). The fastest growing states for millennials are closely correlated to states with increasing home values — Nevada, Utah, North Carolina, and Idaho.

Yellow states are influx states.

Are you investing in real estate? Are you tracking how jobs or employees move around the country? Can you compete against competitors in California given the cost of living / cost of housing there?


More Amazon you say? There’s been a lot of commentary on Amazon (including more than a little in this newsletter each week). Some industries are fearful Amazon will target their product, service or industry. Other companies are hopeful Amazon will come and buy them up or buy them out.

This week, I found a sharp take on Amazon and thought one observation stuck out.

The moment brands choose to sell on the Amazon marketplace, they begin handing Amazon the blueprint for how to put them out of business. Listing products on Amazon leads to a plethora of information on exactly what sells, and paying Amazon to sponsor a given product tosses kerosene on the data inferno.”


Real estate technology heating up: The battle between Zillow and others, like this profile of HomeSnap, is accelerating an already hot market. Between machine learning and technology that cultivates “the home buying experience,” you can “put an offer on the house without even setting foot inside.”


Today’s thought: “Mark cut his hair.” I was listening to a podcast this week called Big Questions with Cal Fussman. Cal interviewed Frank Blake the former CEO of Home Depot about leadership and asking questions. I highly recommend the whole podcast but one story stuck out to me. An analyst representing a large mutual fund buyer targeted Home Depot and took a major (~20%) stake in the company. She kept a close eye on the company after that. In one such conversation with Blake, she said “it looks like you’ve solved that logistics platform issue you were struggling with.” Blake was confused, “yes, we did, but how did you know that?” She said, “Mark (who is the Exec responsible for logistics) cut his hair.” In fact, Blake realized that he had been styling his hair to cover part of his face and now it was clean cut. We should all be so thoughtful and observant.


Quote: “As we express our gratitude, we must never forget that the highest appreciation is not to utter words, but to live by them.” -John F. Kennedy


Bonus Content: 657 Boulevard, Westfield, New Jersey. Ever since Meredith and I finished The Haunting of Hill House on Netflix, we have been paying special attention to haunted house stories and ghost stories alike. When I began reading this article on a home in New Jersey, I couldn’t stop. It gets crazier and crazier. And then it just gets sad. But still worth it.

Continued success and continue to answer well,



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