Get Used to Startups Trying to Reinvent Housing

[M II A II R II K]

Get Used to Startups Trying to Reinvent Housing


Aug 25, 2022

By Arielle Pardes

Read More: https://www.wired.com/story/get-used...nvent-housing/

In 2016, the WeWork cofounder Adam Neumann described home as “a feeling” rather than something you own. He was introducing WeLive, his company’s concept for rental apartments, where lease terms were flexible and apartments came furnished, right down to the linens and toiletries. The idea swapped traditional tenancy for “membership,” allowing people to move between WeLive apartments as easily as Equinox members could swipe into a gym in a different city. WeLive didn’t last long. It began to crumble, along with the rest of the business.

- Three years later, Neumann is back with his second swing at reinventing housing and the Silicon Valley commentariat are unimpressed. His new startup, Flow, is another branded apartment concept, expected to offer community features and other amenities, on flexible terms. — The gridlock in the US housing market has necessitated new ideas about how, and where, people live. And unlike when WeLive launched in 2016, plenty of startups are now trying to reinvent rental housing for a generation of people who likely won’t buy homes. Flow could become part of a new sector that manages to fundamentally change the way some Americans think about housing, by creating upsides in remaining a renter. That could be lasting and profitable even if it doesn’t mitigate many of the downsides of the US housing crunch.

- For the past two decades, a confluence of factors has caused young Americans to give up on buying houses, a pattern also seen in the UK and some other European countries. — As a result, the share of first-time home buyers has shrunk, leading more millennials to rent well into their thirties and forties. This new, permanent rental class presents a worrying outlook for some economists: Housing is in short supply, and that drives prices up for everyone. But for startups, it also presents an opportunity. “It’s a massive, trillion-dollar industry,” says Andrew Collins, founder of real estate startup Bungalow. “And yet it really hasn’t been innovated in the last 50 years.”

- Bungalow, which launched in 2016, aims to serve this new class of renters. It offers flexible leases to furnished apartments and homes and helps residents find roommates they’ll vibe with. It also lets residents move between houses managed by Bungalow without penalties for breaking the lease. — Many other startups operate on a similar thesis: that people will willingly trade ownership for flexibility. “Let go of renting restrictions,” promises Landing, a residential startup that allows residents to bounce from apartment to apartment in more than 300 cities on a single lease agreement. Sentral, which manages some 3,000 apartments, seems to court a class of nomadic remote workers who might pick up and move at any minute.

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[kingkirbythe....]

Adam Neumann is barefoot human garbage.

[montréaliste]

Originally Posted by kingkirbythe....

Adam Neumann is barefoot human garbage.

I take it you don’t like the guy.

[The North One]

Startups have been trying (and failing) to do this for the last 15 years, not new.

[kingkirbythe....]

Originally Posted by montréaliste

I take it you don’t like the guy.

Is it that obvious?

If you have followed him in the last few years and know anything about him and WeWork, you know he is a con artist.

There's even a limited series on Apple TV+ about him called WeCrashed.

[twister244]

So the solution to younger Americans not being able to make a purchase is to literally hand the keys over to VC funded startups?

I guess that whole "You will own nothing and be happy" quote sure does seem to have teeth these days.

[iheartthed]

Originally Posted by kingkirbythe....

Is it that obvious?

If you have followed him in the last few years and know anything about him and WeWork, you know he is a con artist.

There's even a limited series on Apple TV+ about him called WeCrashed.

I don't think Neumann was the problem, tbh. He was doing what he was supposed to do as someone trying to build a company out of nothing. The real problem were the people giving him money and those absurd valuations, and thus enabling him to disguise building a real estate portfolio as a tech company. That's what makes this Marc Andreesen investment most bizarre to me. The people who should have learned the lesson -- people like Andreesen -- apparently did not.

[mhays]

So, flexibility and furnished but you pay more? Kind of like a mid-point between a hotel and an apartment?

I can see a market for the concept, but probably a limited one. Innovators often offer ideas that appeal to themselves...this idea seems to target high-income, not tied down, looking for a social environment...

[kingkirbythe....]

Originally Posted by iheartthed

I don't think Neumann was the problem, tbh. He was doing what he was supposed to do as someone trying to build a company out of nothing. The real problem were the people giving him money and those absurd valuations, and thus enabling him to disguise building a real estate portfolio as a tech company. That's what makes this Marc Andreesen investment most bizarre to me. The people who should have learned the lesson -- people like Andreesen -- apparently did not.

It was Adam Neumann's fault.

It was also idiots-giving-money's fault.

They were all at fault.

And now, they are repeating the same mistakes.

[iheartthed]

Originally Posted by kingkirbythe....

It was Adam Neumann's fault.

It was also idiots-giving-money's fault.

They were all at fault.

And now, they are repeating the same mistakes.

He wasn't without fault, but he wasn't the fundamental problem. The venture capital industry (or distortion of it) was the fundamental problem. If it weren't for SoftBank recklessly giving him money we would never know Adam Neumann's name.

[Obadno]

Cyberpunk Neo-Feudalism is developing apace.

[llamaorama]

I'm not a business genius so I am probably wrong, but don't you think society has had about enough "disruption" in the consumer space? Like that was a new thing with web 2.0 and apps and social media but now it's stupid.

We need disruption in the stuff people don't see, on the back end where it isn't sexy. There are shortages of everything, and everything is expensive to produce and ship and keep in stock and process when it's returned.

What about a startup to produce more pre-fab house parts. Or a startup to create franchised construction crews where one company does all the HR and can train up workers. Or a startup to manufacture lumber or shingles differently? Why not partially automate the framing houses and truck the pieces onsite. with stuff like plastic hose pipe already included?

[The North One]

The goal is never to actually "disrupt", that's not even possible under our current economic system.

It's to bullshit your way to an extremely lucrative IPO and run with the money.

[ocman]

Don’t really think anything about Adam Neuman’s concept, but something like Pacaso should be run into the ground and banished from California.

[Gantz]

Originally Posted by llamaorama

I'm not a business genius so I am probably wrong, but don't you think society has had about enough "disruption" in the consumer space? Like that was a new thing with web 2.0 and apps and social media but now it's stupid.

We need disruption in the stuff people don't see, on the back end where it isn't sexy. There are shortages of everything, and everything is expensive to produce and ship and keep in stock and process when it's returned.

What about a startup to produce more pre-fab house parts. Or a startup to create franchised construction crews where one company does all the HR and can train up workers. Or a startup to manufacture lumber or shingles differently? Why not partially automate the framing houses and truck the pieces onsite. with stuff like plastic hose pipe already included?

There are a lot of B2B or enterprise-level startups and VC funding. In fact, that is one of the most lucrative areas of funding for VCs. You just do not see them, since those companies do not have to advertise to consumers. Only the truly big B2B co's, like Salesforce for example, that average consumers know about.

Shipping is tricky as well, since ports in the US are usually government-controlled and employ union workforce. As a result, US shipping ports are some of the least productive ports in the whole world, on par with Africa, and something like 5x less productive than EU ports. Most of the innovation in ports infrastructure and logistics is definitely happening, but outside of the US, sometimes with American VC funding.

[mhays]

Tons of innovation is happening in building materials and prefab. The materials stuff doesn't hit the papers (unless it fails), and the larger-scale prefab stuff tends to be much harder in reality than in theory (though it'll get there).

And yes, a lot of people are trying to create disruptive companies that will succeed long-term. It's just hard to do. Some might be just trying to get funding and last long enough to sell the company, but the idea that this is the norm is basically conspiracy theory.

[jmecklenborg]

Originally Posted by llamaorama

Why not partially automate the framing houses and truck the pieces onsite. with stuff like plastic hose pipe already included?

You mean one of these?
https://en.wikipedia.org/wiki/Mobile_home

[jmecklenborg]

Originally Posted by llamaorama

I'm not a business genius so I am probably wrong, but don't you think society has had about enough "disruption" in the consumer space?

"Disruption" often means consolidating something that is dispersed between many regional owners and bringing it all under one roof, which might be good for the typical consumer, or even good for a typical investor (an industry that was formerly privately held by regional barons but is now under the auspices of 2-3 publicly traded behemoths) but is bad for the country.

[Obadno]

Originally Posted by llamaorama

I'm not a business genius so I am probably wrong, but don't you think society has had about enough "disruption" in the consumer space? Like that was a new thing with web 2.0 and apps and social media but now it's stupid.

We need disruption in the stuff people don't see, on the back end where it isn't sexy. There are shortages of everything, and everything is expensive to produce and ship and keep in stock and process when it's returned.

What about a startup to produce more pre-fab house parts. Or a startup to create franchised construction crews where one company does all the HR and can train up workers. Or a startup to manufacture lumber or shingles differently? Why not partially automate the framing houses and truck the pieces onsite. with stuff like plastic hose pipe already included?

As the others have said disruption just means inefficient and vulnerable market that the startup seeks to circumvent.

[MonkeyRonin]

"Distrupting the housing market" = new ways to commodify housing.