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

Friends & Colleagues,

SCOJ75. I thought I’d take the opportunity during week 75 to recap some of the sections and goals behind Saturday Cup of Joe. What started as a weekly email to stay in touch with my colleagues, friends and family on the East Coast after moving to Detroit, Michigan has grown into a running commentary on a variety of issues from the mortgage industry to consumer technology to Detroit to millennials. This week I turned my attention to more generic issues including some valuable lessons from business leaders. I couldn’t help but write about Amazon and Detroit’s continuing efforts to woo the tech giant.

At the same time, we’ve had new readers and subscribers lately so I wanted to point out that I still write about lending & mortgage when it’s relevant and interesting. I also try to keep tabs on millennial buyers, particularly consumer goods and real estate) as well as keeping tabs on the journalists who report on millennial trends. I also want to support a rebranding of the Rust Belt. I just don’t buy this old, derogatory name. I’ve worked hard to create the #NextBelt and I hope you’ll continue to see that pop up in my writing (and on social media) each week. Lastly, I’m always trying to learn lessons of leadership especially in the business side of the world. Where we can grab valuable insights from friends, colleagues, stories, movies and other spots on the Internet, I capture them and pass them along. Together, we’ll continue to learn from each other’s mistakes in the hopes we can proceed while making less of our own.

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Detroit’s Riverwalk at dusk

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This week I’m proud of my dear friend, Dana Miles Frost, who launched The Forced Joy Project on Instagram. As many of you know, Dana & Brad have lived in Detroit since 2006 and started the idea of Forced Joy after Brad was diagnosed with kidney cancer. Dana has been an inspiration to me for a very long time. Strong. Independent. No nonsense. Over the last year, she has experienced the worst days of her life. And yet, she wants to create a project that brings daily joy into everyone’s life. It’s incredible. She’s incredible. If you are looking to learn from a strong woman or experience an inspiration moment of joy in your day, check out her blog called Defending Your Life or her Forced Joy Project.

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Photo taken on October 16, 2016 during the Detroit Half Marathon while crossing the Ambassador Bridge into Canada. On Sunday morning, I’ll be doing it again a year later.

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Included this week:

· Of Interest — Goldman invests in flipping loans

· Amazon HQ2 Update — Quick look at Detroit’s rivals

· Millennial Minute — Millennials shaking up HR and real estate choices at major American companies

· Walk the Talk — Valuable lessons from the social media lawyer

· Quirky Story — Hyperloop gets a major vote of confidence

· Today’s Thought, the Quote and bonus

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Photo credit to Maria Popova’s Brain Pickings, if you don’t receive her emails, you are missing out.

Of Interest: One of the important parts of Saturday Cup of Joe for me has been monitoring trends and trying to get ahead of real estate and real estate finance trends. For instance, Wall Street Journal announced Goldman Sachs’ investment in Genesis Capital — a short term lender focused on house flippers. What’s interesting to me is whether an aging inventory will create an ever-increasing need for home renovation projects. According to the article, “Goldman’s interest in a small house-flipping financier reflects both the buoyancy of the residential real-estate market and the Wall Street firm’s hunger for new profit engines as its core trading business remains stuck in a postcrisis slump.” It’s an interesting inquiry. To me, it’s more about the volatility in available inventory versus the home improvement skills of today’s home buyer. One reason home flipping might be an emerging market is the difference in home repair / home improvement skills between current home buyers and previous generations. The idea of a fixer-upper is changing. Or, more accurately, the scope of the fixer-upper is changing. I think it will be interesting to watch where this goes. Obviously these are business/commercial loans, but it will be interesting to see if consumer loans also increase as current homeowners need short term financing for improvements and repairs they cannot do on their own.

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Amazon Update: I’ve been asked more and more lately whether “Detroit really has a chance” to land Amazon’s HQ2? My answer remains — yes, I really do. I have tried to provide interesting and honest feedback on the Amazon proposal process and competition by other cities. Next week, I’m hoping to share my own “op-ed” on #AmazonDetroit. For this week, I thought I’d highlight some of the other top rivals to Detroit, at least as far as I can tell. Here’s a quick overview:

Baltimore — Pros: Inner Harbor. Eastern time zone. Decent, but not great airport. Other corporations like Under Armor provide growing economic environment. Johns Hopkins. Commercial real estate, while expensive, is cheaper than neighboring cities like Philly and DC. Lastly, if true, Maryland might be prepared to offer the largest tax incentive in state history. Not sure if that’s good or bad for Marylanders but it makes the list of considerations. Cons: lack of options for “urban core campus.” Public safety. Traffic. Medium size in talent pool. K-12 STEM education for prospective Amazon families.

Boston — Pros: Harvard & MIT. Eastern time zone. International airport. General Electric recently selected the Boston waterfront for their headquarters and other tangential industries like financial services, healthcare and fintech are strong in Boston. World class healthcare. Cons: Expensive. Lack of flexibility or options for commercial real estate. Expensive real estate. Expensive cost of living. Expensive transit options.

Atlanta — Pros: Strong reputation in film and TV production. Amazon already films some original content in Atlanta. Cost of living. International airport. Cons: International airport. Downtown headquarter options. Downtown safety. Lack of equivalent higher education options (no offense to GA Tech and Emory).

Denver — Pros: Quality of life. Commercial real estate options & cost. Airport. Cons: Talent pool. Sprawling suburban city. Not far enough East to accomplish nationwide coverage. Access to higher education.

Chicago — Pros: Central time zone. International reputation as top American city. Welcoming mayor / economic environment. Talent pool including higher education. International airport. Cons: Traffic. International airport. Violence/public safety. Cost of commercial real estate/urban campus.

Pittsburgh — Pros: Cost of living. Flexibility / Options in commercial real estate (lease or own). Character. Carnegie Mellon. Other companies like Google already in town. Eastern time zone. Cons: Airport issues including direct flights where needed. Small(er) talent pool / recruiting issues.

Wild card: Raleigh-Durham — Pros: Quality of life. Research universities. Flexible commercial real estate options. Likely to provide tax or economic incentives. Cons: May not fit the minimum population or urban core standards. May not have qualifying airport. Small(er) talent pool potentially. Access to cultural / cosmopolitan features.

Detroit: (keeping in mind my full opinion will come next week) Pros: Flexible commercial real estate options downtown. Diverse residential options from downtown to suburbs. World class airport. Eastern time zone. Solid healthcare. University of Michigan close by. Windsor, Ontario allows for strong international bid (particularly around tech talent coming from University of Waterloo and Canada’s immigration policy). Tech talent growing every year over last 5 years. Cons: Regional transportation re: commuting, K-12 options for Amazon employees, general reputation to overcome, and recruiting if general reputation cannot be overcome.

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Millennial Minute: Yahoo! Finance is probably one of the most valuable assets the company has left. I know several CEOs who check in on Yahoo! Finance regularly if not daily. This week, I received an email from our Chairman, DG, highlighting a story on the move large companies are making to accommodate a millennial workforce. GE to downtown Boston. McDonald’s to downtown Chicago. AETNA to Manhattan. These moves not only matter for us as leaders of organizations but also drive real estate values. Suburban office parks. Residential, suburban neighborhoods. The next generation of white collar professionals want to bike to work, walk to get a latte, and work in a space with character & charisma. What are you doing in your organization to respond?

Thanks to another avid SCoJ reader, Julie Rogers, we have this interesting article about millennials. In particular, 26-year-old millennials are the largest cohort at 4.6 million or so. That’s more than 25, 27, or 28 year old millennials. The Wall Street Journal talked to a variety of consumer brands like Home Depot and Swiffer about the behavior and habits of these individuals. These millennials are buying homes and making home upgrade and home supply purchases but are not making significant home improvements…yet.

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Next Belt:

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This is the ONLY acceptable use of “Rust Belt,” in my book.

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Walk the Talk: I came across a story this week about an attorney whose expertise is maximizing social media. In reality, I didn’t read the blog post as a how-to of social media branding. I found his 5 lessons to be applicable to building a career or launching a business or applying for a job. Mitch Jackson founded a company based on his social media prowess and yet these are valuable lessons for anyone in any industry. Here are the 5 lessons:

1. It’s all about the relationships.

2. Occupy a specific niche.

3. Awareness, awareness, (self)awareness

4. Social media scales your influence

5. Above all, provide value.

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Quirky Story: High speed travel between LA & SF and/or NYC & DC is about to change. Many people didn’t take Elon Musk seriously when he launched Hyperloop. Now Richard Branson is involved. These are two of the biggest thinkers (& believers) we have. I’m not betting against them. Hat tip to NYC area resident Kyle Wood on the article and congrats on the new house. (The Woods are on the brink of the American Dream. Huzzah!).

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Today’s Thought: Optimism is not necessarily always finding the positive in something. I think optimism is the ability to reframe circumstances and information to find value or take the most advantageous view. Optimism is an active state. When something changes at work or new information would otherwise bring us down, the optimist can quickly adjust expectations and mindset given the new context. Though hard to articulate, it’s incredibly important. If someone criticizes your work or undermines your work, many people would claim the optimist is the person who “makes the best of it” or “sees the best in people” despite the criticism. In reality, I believe the optimist evaluates the critic, determines whether the criticism is true and then goes on the offensive or defensive depending on the determination. My optimist might reframe criticism as fuel to beat (or own) the critic. To me, that’s taking something negative and reframing it to be fuel / motivation / valuable to the mission. A far cry from simply “making lemonade when life hands you lemons.” This reframing and finding value wherever I can comes naturally to me. This week I’m going to work on ways to articulate it better.

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Quote: “Fate is fickle.” — Andy Lusk. Andy is one of the senior leaders at QL. He mentioned this phrase, almost under his breath, this week. It sounded like a famous quote but I realized I’d never heard it before. After a quick discussion, we weren’t sure where it came from. Seems like one of those things that makes sense and the thought behind it is quoted in many different ways over the years. A google search didn’t identify an exact source of the quote but did seem to imply the thought was out there in one form or another. Nevertheless, if it’s Shakespeare or something, please let me know. Otherwise, I took it as a welcome reminder that control is an illusion. I cannot control the future. I have to make the best decision given the information I have and trust that I’ll find a way to be successful no matter what. You never know what will change tomorrow or the next day. All the more reason to take action accordingly to your story, your life and your priorities.

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Bonus Content: A brief piece noting Portland, Maine’s emergence on the start-up and venture capital scene. I like Portland and have a great time any time that I visit Maine. When you drive up 95 across the state line, the Welcome to Maine sign says “The way life should be.” I’ve always respected that.

Continued success,

Written by

Thinker, curious leader, once an attorney…always trying to answer well.

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