Living in the future
Welcome to Technopolis, USA.
Planned communities are nothing new. Notable experiments include Hershey, PA; Levittown, the original suburb in Long Island; Seaside, FL (where the movie The Truman Show was filmed); and the more recent millennial tech bro utopia of Powder Mountain in Utah.
But now major US technology companies are constructing corporate housing developments, self-sufficient towns, and even entire urban neighborhoods.
WeWork, which is reportedly seeking a valuation upwards of $35B (see This Week in Data below), has refashioned entire urban neighborhoods around its real estate and office projects like this one in Brooklyn’s old Navy Yard.
Startups also are trying to reengineer the design of our homes from the ground up, and claiming that our “dumb homes” will finally be really smart from the inside out.
We’ve been tracking how tech giants like Facebook, Alphabet, Amazon, and high-flying startups like Katerra and WeWork are participating in these interrelated trends of tech-enabled real estate, offices, and housing.
Amazon, for example, just partnered with three of America’s largest residential home builders and developers, including Lennar. It’s clear that big tech cos aren't waiting for the welcome mat to be put out. They want to be integrated into the guts of your home from the start.
The question is, are we ready for that?
We dig into all these trends in our WeWork Strategy Teardown as well as our Future of Housing deep dive.
We asked top fintech executives and investors what technology will have the greatest impact on financial services in the next 3-5 years.
Seven respondents said AI will have the greatest impact. Surprisingly, blockchain was only mentioned once.
Check out the responses from execs at Visa, Wells Fargo, WillisTowersWatson, and more in our 20 Smart People In Fintech Report.
Stand in the place where you live
While smart home devices are becoming more prevalent, our homes themselves haven't actually changed much — yet.
Thanks to tech trends and a shortage of city housing, big US tech companies are now focusing on innovation in residential real estate and construction.
We dive into how residential construction is being reshaped, new housing and community development projects, and what these trends mean for how we'll live in the future. Check it out here.
Is it worth it?
Earlier this week, SoftBank Vision Fund CEO Rajeev Misra revealed that WeWork is raising new funds at a valuation of at least $35B. This would make it the second-most valuable US startup behind Uber — but is that valuation justified?
To explore that question, we dig into how WeWork is shedding risk, leveraging its data and tech advantage, and targeting enterprises. Read the teardown here.
This year it’s even better
“I made connections that will definitely be life changing."
“I came away infinitely smarter than when I arrived."
“Best conference I've been to. Speaker lineup was unmatched, great planning and execution."
“I regret not getting a photo with Anand!!!!"
This is just some of the praise we received last year. Register today for the Future of Fintech (June 19-21) and save $500 with code photoswithbilly.
Have a great rest of the week.
P.S. On June 26, we'll be discussing payments around the world. Register for the briefing here.
This week in data:
110%: Coworking unicorn WeWork disclosed its Q1 financials in an employee memo sent out early this morning. The company grew revenue 110% year-over-year to reach $342M, though it remains unprofitable. Occupancy rate for WeWork buildings was also up, rising to 82% at the end of Q1 (up from 73% a year ago). The memo did not mention WeWork’s newest funding push, though the company is reportedly seeking to raise new funds at a valuation of at least $35B, according to one of its biggest investors: Rajeev Misra, chief executive of SoftBank’s $100B Vision Fund. Read more about the company’s strategy, data initiatives, competitors, and more in our WeWork teardown.
- 9%: In a memo sent to Tesla employees Tuesday night, Elon Musk announced that Tesla will lay off about 9% of its employees. According to the memo, cuts were primarily made from Tesla’s salaried population and no production associates were included. Musk said in the memo that the cuts "will not affect" meeting Tesla’s Model 3 production targets, which include surpassing 5,000 models per week by the end of June. Tesla’s electric vehicles are just one industry where Musk is making waves. See others, including tunneling, machine learning, and space travel, in our report on 8 industries being disrupted by Elon Musk.
- 8: With AT&T’s $85B acquisition of Time Warner getting the green light earlier this week and Comcast making a $65B bid for 21st Century Fox, consolidation in the media industry seems to be accelerating. One Hollywood media executive interviewed by PACIFIC hypothesizes that just eight companies — Alphabet, Amazon, Apple, Facebook, AT&T, Charter, Comcast, and Verizon — will own all US media within the next 10 years. We recently highlighted where leading telcos are placing private market bets, the forward-looking moves being made by top telcos, and more in our Future of Telecommunications briefing. Get the slides and recording here.
- 1M: The World Cup kicks off today, and banks are predicting the winners. Goldman Sachs used AI to run 200,000 models and stimulate 1 million possible World Cup outcomes — ultimately picking Brazil as the victor, with Germany as the runner-up. (Meanwhile UBS picked Germany, while ING favors Spain.)
A consensus model based on quoted bookmakers’ odds predicted similar results to Goldman, with Brazil narrowly beating out Germany as the predicted champion. However, while the bookie-based model rounded out the top 4 with Spain and France, Goldman predicted Spain would underperform, leading to France and Portugal competing in the semi-finals.
- 454 pages: Facebook released 2 documents totaling 454 pages of follow-up notes to CEO Mark Zuckerberg’s Q&A session with Congress back in April. The hearing focused on data harvested by Cambridge Analytica, a political consulting firm that had improperly collected Facebook users' data. For more on psychographics, the marketing strategy that was behind Cambridge Analytica’s data scraping, check out our new explainer, What is Psychographics?
- $100M: With video gaming expo E3 wrapping up in LA, video game and software developer Epic Games isn’t done making announcements. The developer has announced that its first Fornite Battle Royale World Cup is set to take place in late 2019, with a prize pool for the international competition totaling $100M. From Fornite’s success to cloud-based play, expert intelligence clients can check out the top trends driving the gaming industry here.
- £162,500: A 10-year-old Hermes Birkin bag set a new European record for the most expensive handbag sold at auction this week, exceeding its list price of £100K – £150K to sell for £162,500 (over $216K.) The bag, with an 18-carat white gold diamond encrusted lock, is made from Nile crocodile hide. For more on luxury goods, check out our report on 7 trends reshaping the future of luxury.