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

Saturday Cup of Joe #150.

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Friends & Colleagues,

Week 150. I’ve crossed round numbers before, 10 was a sign of commitment, 100 comes to mind as well, but I might have been most proud of 52, a first full year! 150 weeks in Detroit. Now just 6 weeks from 3 full years. I took a look back at some of those newsletters.

#10 — Saturday, July 16, 2016.

The CFPB turned 5 years old at that time. SoFi was restructuring and profiled in the WSJ. I floated the idea of the #NextBelt — a combination of the former Rust Belt and gritty “second tier” cities that thrive on hard work and potential (thanks, in part, to low cost of living). All the big city feel for the Midwest price. My “Today’s Thought” a feature since the first week was on the +2, -2 effect of expectations. Set expectations up (+2) and your customer/client/reader/spouse is likely to experience the same thing 2 degrees below what you foreshadowed. Lower the expectations initially (-2) and they often have a better experience as a result.

#52 — one year — Saturday, May 6, 2017.

The CFPB, millennial homeownership and the #NextBelt were all still frequent topics in the newsletter. Digital platforms reach out to Millennials and challenge the CFPB on how to regulate a new world of Fintech. (Are we any closer to stability or understanding today?) I decided, apparently, that it was time to declare myself a full-fledged millennial (as if there were a question before this?). This week included a Charlie Munger quote — “I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines. They go to bed every night a little wiser than they were when they got up and boy does that help, particularly when you have a long run ahead of you.” Still relevant and perhaps the previously unmentioned mission of Saturday Cup of Joe. Let’s all learn something every day.

#100 — April 7, 2018.

We looked at convenience as a tyrant that comes to determine every decision. The Stoics response to tyrants — “To have a great man for a friend seems pleasant to hose who have never tried it; those who have, fear it.” I also revisited the concept of Firewalking. A concept I’ve not been able to let go since I first was introduced by Josh Waitskin on Tim Ferriss’s podcast. Firewalking is the idea that we should learn lessons from observation instead of having to experience a mistake or misstep first. Learn from those who have gone before to make fewer or at least new, productive mistakes as you grow.

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The deep dive on the Saturday Cup of Joe brought me back to my iPhone notes. I don’t know about you but I have about 200 notes on my phone that date back over the last 3–4 years. Here’s one that I wanted to include. January 21, 2017: “If cancer can end a life in 100 days, can we save a life in 100 days? Your 100 days. Live courageously.”

Hopefully you take it in the spirit that I meant it — inspiration to action.

I read a comment on Twitter recently but cannot remember the name of the account but the message was this: so many people claim they would never go back in time for fear of making one small change that alters the entire future, but how many people dismiss making one small change today? I feel ready to start making some small changes that will have dramatic future impact. What about you?

What does your 100 days look like?

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This: Rich Lowry writes in Politico in response to Senator Elizabeth Warren’s campaign pledges to “break up” “big tech.”

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Senator Warren calls out Google for allegedly killing off its competitors by burying them in its searches… “No government regulator is going to make Google’s searches better, or is qualified to even try.”

She also pledges to break up or stop mergers, including Amazon’s acquisition of Whole Foods.

To what end?

“Amazon doesn’t have anything close to a monopoly in food retail. Rather than taking over the sector, it’s spurring investment and innovation.”

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That: Sophie Kasakove writes in Pacific Standard in response to Senator Elizabeth Warren’s recent support to regulate/end the single family (SF) home rental market. The opposition is not to the idea that SF homes be available for rental but that homes are directed to investors who become corporate landlords. How SF homes are sold to investors eliminates the chance for individuals to compete for the home in the first place, only left to rent the same house afterward at an increase.

This is where the potential policy comes in. On one hand, Fannie Mae and Freddie Mac benefit from efficiently disposing of their excess inventory. In fact, selling their foreclosed homes helps offset some of the costs of making loans. On the other hand, the process is not easily understood or accessible to everyone.

If the argument to change this process is simply that “[a] more robust policy might include substantial investment in non-profit developers to make them more viable buyers of distressed properties, and additional support to owner-occupants to help them stay in their homes,” then improvement is possible.

One thing many policymakers do not consider, however, is whether more and more consumers will prefer to rent. That institutional investors may support mobility and flexibility. Certainly where data shows the rents are higher than market value is not a balanced market. And anecdotally, I think there are more unbalanced markets than not.

Yet, whether this is an area best addressed by legislation is also not clear to me. What is clear, though, is that as technology (and therefore access) improves disposing of single family homes obtained in foreclosure should be easier and easier. Auction sites or bid sites open to everyone equally, including individuals and non-profits, ensures fair market value. Transparency and visibility can drive the market.

Lawmakers not required.

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iEverything: When you hear iBuyer you may think of the new Apple purchasing service but in this case, the likeness is pure coincidence. iBuyers, or institutional buyers, here indicates companies positioned to buy and sell homes for cash allowing consumers more flexibility in real estate transactions. Curbed profiled the players in this space. Whether this is the future of the real estate transaction is an open question, the interest and activity in this competitive market is undeniable. How do new players disrupt your market? What do you do about it?

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Hotel, Motel, Holiday Inn: Wired posted an in-depth analysis of AirBnB’s public policy strategy. The article outlines the history of how the company’s approach changed as attention and opposition evolved. The company took on local legislation and fought taxes in a variety of contexts. The article is written to line up all the ways AirBnB either eludes or ignores taxes without ever asking — are we sure AirBnB should be taxed like a hotel? Why?

The article repeatedly implies AirBnB is a hotel. Except it’s not. So why are we so sure this “guerrilla war” as it is called is a problem? If local legislators decide to specifically tax AirBnB businesses (i.e. hosts), that’s one thing, but to try to apply hotel taxes to AirBnB hosts without passing new laws leaves me skeptical.

I was also disappointed this article did not consider or analyze whether local legislators might want AirBnB hosts in their city. I’ve personally visited places that I may never have stayed or spent time & money but for AirBnB. In one case, I spent a golf weekend with my friend in Louisville, Kentucky made possible (or at least made more convenient) thanks to AirBnB. In another case, my wife and I stayed with our close friends in a home in Scottsdale, Arizona for another friend’s wedding weekend. We would not have experienced North Scottsdale in the same way. Now we love the memory and the location.

AirBnB encourages visiting and spending.

What’s more, in many cases, residents or former residents benefit as AirBnB hosts. The article references one corporate host as if that’s the sufficient reason to justify substantial regulation of all hosts. It seems, though, that many hosts are committed to the local community and benefit the local community even if the AirBnB unit brings in temporary visitors from outside the community.

Policy is difficult enough without innovation and new business models making it even more so. At the same time, I’m not sure I’ve heard enough from this article or others to jump to the conclusion that there’s something nefarious here.

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Last weekend, we came home with a rescue. This good lookin’ dog came from Louisiana to a Humane Society in metro Detroit. She may have just had a litter of puppies according to what we saw at the shelter. She’s been a ton a fun so far and actually leaves our cats alone. I’m going to find out later this morning whether she’s a jogging partner. We’ll see…

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Today’s Thought: Everything is a people business. This is true. BUT, do not let it overcome an objective view of your business or the market. It’s true that we all make decisions emotionally, even when we quickly rationalize them with data. Clients, coworkers, colleagues and competitors are all people and your ability to connect with those groups will make all the difference in your career. Clients-Colleagues-Connect-Career. Something like that.

The point is that we should never forget or obscure that people remain the heart of everything we do.

But don’t allow a people-centered mindset to obscure your judgment on innovation and technology. Just cause it’s a people business doesn’t mean you can ignore tools, solutions and revolutions (ok, evolutions).

People empowered by curiosity. People empowered by technology.

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Quote: “And to love life through labour is to be intimate with life’s inmost secret.” — The Prophet, Kahlil Gibran

Bonus content: Farnam Street offers this overview of decision-making and the aptly-named “sources of stupidity.”

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Continued success and continue to answer well,

Written by

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

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