This time around, the Trump Administration will better prepared to act on more promises including a roll back Biden era climate action. It’s likely Republicans will control the House and Senate as well. Trump also has new, focused allies like Musk and Ramaswamy. Beyond climate, immigration is also an issue that will impact founders, as we experienced in the first Trump admin.

We wrote What Trump Means For Climate/Urbantec in 2016 and updated it a few months later as some of the positions became clearer. We’re attempting to do the same thing here and will update again in Q1 as there is more detail, including the results of end of year efforts to distribute some program funds to states for everything from heat pump subsidies to the EPA’s Greenhouse Gas Reduction Fund for catalytic grants.

We’ll start with the harder adjustments, then move on to where there may be opportunity and strategy.

Where There May Be Less

Federal programs are very much under threat. Vivek and Elon seem set to launch the Department of Government Efficiency. Vivek has talked about things like 75% headcount reduction.

• DOE loan programs and grants. The current DOE actions underscore this as they rush to distribute funds in an effort to make it harder to roll back.
• Emissions mitigation programs (especially if there is a green premium) are likely to have less support, especially as business see less urgency and can defer these kinds of investments.
• International Cooperation on climate action had declined somewhat as the IRA forced the EU to respond to additional policies to avoid reduced investment in the EU. Explicitly exiting the Paris agreement again confirms that the US is an unreliable partner, though the energy transition will go on anyway.
• Direct subsidies for things like heat pumps may be at risk as the programs relied on states to set up and it’s unclear how many are actually set up already. For example CA and NY are ready to go, but many states like TX are unlikely to ever roll out these programs.
• Imports from China — China remains a critical supplier, especially for batteries and solar. There has been some preparation here with Chinese firms building in the EU, MX, etc. Last year for example Foreign Direct Investments increased 48% in Mexico. The main question is how large the tariffs will be.
• Immigration challenges — from immigrant founders in the US, to talent wanting to work here.
• FOAK funding — if loan guarantees or grants aren’t secured by year-end, many of these efforts need to pivot to the EU or Asia for government or corporate support. This presumes that the EU can remain on track to invest and subsidize. Trump likely also means reduced defense subsidies for NATO, which will force some budget reallocation to defense.

Where There May Be More Or The Same

It’s largely back to the future or how things were before the IRA. We made the majority of our investments in this period and great companies will still be built in any environment. So lets take a look at what might be the same or better.

• “Faster, better, cheaper” market winners. Winning cost curves for solar and batteries in particular will continue to drive change. This is also where generalist investors can most easily get excited.
• Tax equity is a core part of the IRA and broadly popular, so this is unlikely to be touched. This means access to project finance for those who can clear the underwriting thresholds for “mature technologies”.
• Already allocated funds to states — quite a lot of this was being rushed out the door in anticipation of this outcome. And so some states will be able to continue executing on these parts of the IRA like heat pump incentives.
• Focus on adaptation will likely continue as it becomes less of a climate issue politically and more about carrying costs from insurance. There is likely some path to federal government support, given the link back to real estate values and stability of mortgages.
• Corporate public commitments to climate action will become an important part of differentiation, especially for those doing business in the EU. But actual purchase behavior will likely prioritize climate action that promises “faster, better, cheaper” and resilience because of the direct impact on operations.
• State and local subsidies — started locally and may accelerate since they’re cheap and effective ways to drive a lot of good outcomes. The biggest question is scale and in places like CA this is linked to other factors like capital gains, which is in turn linked to public markets and M&A.
• M&A will go up. We’ve set records in abandoned M&A because of scrutiny by entities like the FTC. That will change and we’ll likely see a boom in M&A activity. M&A is still mostly about a strong economy, so that has to remain true as well.
• IPOs likely will go up. Some of this is just cycle related. Some is related to expectations that there is less regulatory oversight.
• Some reshoring will continue, but the case for it will likely have to touch defense and national security, especially in cases where China might gain some specific advantage. While EV incentives will likely disappear, adoption will still grow, but also there are direct dependencies on batteries for weapons systems now from drones soldier systems like optics and communications.

Potential Sources of Noise

• Fall out of Federal Loan Guarantees & Grants from Biden Admin — Lots of funds were rushed out the door, for example at DOE. It’s likely there will be a review and failures will be used against the Democrats maybe in midterms (remember Solyndra from Cleantech 1.0?). Maybe even an executive order to pause in cases where funds are sitting with intermediaries. As a counterpoint, maybe having a lot of the work actually happening in majority Republican states, will make this less of an issue.
• Musk’s wishlist — Trump and Musk have spent a lot of time together since election day. The potential influence of Elon Musk in the administration and how this might affect policies, especially those linked to Tesla (EVs, Autonomous, Robots), SpaceX, X / Twitter, and Neurolink. Musk is motivated to end all incentives, which would favor firms like Tesla that have achieved scale. And invitation to Chinese firms to build cars in America is also interesting.
• AI — Hard to predict actual additional demand for clean power. Some of the demand might not be real. Some of the demand might come from existing sources like coal, as EPA emissions rules are gutted. Some of the demands might be about resilience and independence from the grid. That said big tech was leading on purchasing clean power before the IRA, so there is good reason to expect this to happen again.

What you can do

Understand funding process and timelines — if you’ve received commitments from a Federal Gov program, you need to understand the timeline and the closer we get to the end of the year, the more likely you’ll have to figure out contingencies.

Understand customer purchase processes — some customers are likely to feel less pressure or re-evaluate investments without incentives. So it’s essential to re-evaluate how the above changes might be impacting 2025 pipeline.

Understand immigration implications — in Trump 1.0, there were a range of uncertainties linked to immigration, such as bans on specific countries (and therefore their passport holders). Right now, some teams are changing vacation schedule to let team members visit overseas family ahead of potential changes. Additionally some teams opted to set up EU or Canadian offices to ensure that had more predictable access for talent. The upside of post Covid world, is we have more tools and strategies for remote.

What does Trump mean for climate startups was originally published in Third Sphere on Medium, where people are continuing the conversation by highlighting and responding to this story.

What is urbantech?

Urbantech describes startup technology companies that directly improve city life and cities’ sustainability. Unlike smart city technologies, urbantech does not primarily sell to city governments, but rather consumers and businesses.

Sectors of urbantech

When Urban Us first created The Urbantech Radar in 2014, the main sectors included:

1. Civic & Administration
2. Resources & Built Environment
3. Transportation, Mobility & Logistics.

At the time, notable startups included Airware (now shut down), Lyft (LYFT), Nest (acquired by Alphabet), Opengov, Opower (acquired by Oracle), Uber, and Waze (acquired by Google). This list’s M&A and public offering activity shows how viable the then-nascent category has become.

Since 2014, the urbantech sector and Urban Us’ experience investing exclusively in urbantech has evolved. We’ve expanded our definition to include the following sectors:

Built Environment & Real Estate

Technology improving how we add capacity to urban spaces and increase efficiency in building it.

Infrastructure & Industry

Roads, bridges, utilities/smart grid, Industrial Internet of Things (IIOT), equipment, manufacturing and efficiency.

Food, Waste & Water

Access to sustainable and healthy food, clean water, and the reduction of commercial and residential waste.

Public Health & Safety

Welfare and protection of the general public, environmental health and behavior, and city livability.

Energy & Grid

Renewable energy and energy efficiency that reduce environmental impacts.

GovTech & Civic Solutions

Digital upgrades to existing state, local, national and international government and civic functions including data collection and civic participation.

Transportation & Mobility

Changes of how we move people and things with autonomous vehicles, car sharing, electric vehicles and alternative transportation options.

While some of these sectors have been slow to use emerging, digital technologies, an increasing number of founders seek opportunity in these sectors.

Together these sectors represent about 25% of US GDP, and Urban Us’ analysis estimates 1 to 2 in 10 companies founded over the last few years are focused on at least one of these areas.

Urbantech serves as a systems-lens for a number of interconnected sectors and integrated technology areas. Professor and author, Richard Florida notes that urbantech is unleashing a new round of creative destruction on cities, enacting a set of economic transformations.

According to the data he collected using CB Insights, urbantech investments totaled more than $75 billion from 2016–2018, representing roughly 17 percent of all global venture-capital investment. Between 2016 and 2017, urbantech investment more than doubled — from less than $20 billion to $44 billion — as its share of global venture investment surged from 13 percent to 22 percent. Urbantech may well be the largest sector for venture capital investment, attracting considerably more funding than pharma and biotech ($16 billion in 2017) or artificial intelligence ($12 billion in 2017).

Notable urbantech companies

Below is a list of companies doing impactful work in early stages and at scale in the urbantech sectors just identified. Urban Us’ portfolio companies are indicated with asterisks.

Built Environment & Real Estate

Starcity (https://starcity.com/) — *Urban Us portfolio*

Starcity is a lifestyle brand which provides beautifully designed co-living communities in major cities. Starcity is building a new category of real estate between hotel and housing, with the mission to make great cities accessible to everyone.

Landed (www.landed.com)

Landed is on a mission to help essential professionals build financial security. They primarily focus on helping educators buy homes by investing alongside them. They call this model shared equity down payment support.

WeWork (https://www.wework.com/)

WeWork designs and builds physical and virtual shared spaces and office services for entrepreneurs and companies. The company’s 100,000+ members have access to health insurance, an internal social network, social events and workshops, and an annual summer retreat. In Q2 2019, WeWork confidentially filed its IPO at a valuation of $47 billion and managed 10,000,000 square feet of office space.

Infrastructure & Industry

Biobot (www.biobot.io)

Inspired by the potential of wastewater epidemiology, Biobot is the first company in the world to commercialize data from sewage. By measuring the concentration of drugs that are excreted in urine and collected in sewers, they map this data empowering communities to tackle the opioid epidemic in real time.

GoJava (www.gojava.ca)

GoJava.ca was founded in 2015 with the mission of finding a recycling solution for the millions of coffee pods across North America that were going to landfill. The goal was to create a service that would allow users at home or at the office to recycle their coffee pods on a wide scale that was free, simple for users, and easily adapted into their existing routines.

KOKO Networks (www.kokonetworks.com)

KOKO’s IoT platform connects consumers, retailers and suppliers to improve life for everyone in African cities. They build and deploy dense Networks of cloud-connected “KOKOpoints” inside local corner stores, which serve as consumer access points for goods and services delivered in partnership with major suppliers.

Opti (www.optirtc.com)

Opti enables communities and businesses to continuously improve stormwater management by delivering real-time visibility, adaptively controlling assets, and supporting smart city initiatives.

Food, Waste & Water

Bowery Farming (https://boweryfarming.com/)

Bowery Farming is a modern farming company growing the purest produce imaginable by revolutionizing agriculture. By combining the benefits of the best local farms with advances made possible by technology, indoor farms create the ideal conditions to grow post-organic produce with a proprietary software system using vision systems, automation technology, and machine learning. Because Bowery controls the entire process from seed to store, Bowery farms use zero pesticides, 95% less water, and are 100+ times more productive on the same footprint of land than traditional agriculture.

DrinkWell (www.drinkwellsystems.com)

Drinkwell is a market-leading water technology company operating in India and Bangladesh that provides turnkey water solutions. Their proprietary technology removes contaminants from water using a gravity-fed process that reduces energy costs and wasted water by more than 95% versus competing technologies.

Sanergy (www.sanergy.com)

Sanergy builds affordable sanitation products designed specifically for urban slums, and franchises them to community members to serve all residents. They convert the waste at a centralized facility into valuable end-products such as organic fertilizer and insect -based animal feed. Sanergy builds healthy, prosperous communities by making sanitation safe and affordable for residents of informal settlements.

SpoilerAlert (www.spoileralert.com)

Spoiler Alert is helping food manufacturers, wholesale distributors, and grocery retailers manage unsold inventory more effectively. We offer 1) a business intelligence solution that allows companies to get a better handle on food recovery and waste diversion efforts, as well as 2) a controlled, relationship management portal that facilitates real-time food donations, discounted sales, and/or organic byproduct redistributions.

Public Health & Safety

Mark43 (www.mark43.com)

Mark43 creates the next generation of law enforcement software that allows police to effortlessly collect, manage, analyze, and share information. Mark43 has reinvented the law enforcement paperwork process which includes everything from arrest and incident reports to investigations.

Medwood Services

Medwood provides administrative and management support services to a network of primary care and family medicine physician practices located in New York City, which collectively support more than 40,000 visits annually. The primary care and family medicine practices that Medwood services are providing low-cost, high-quality care within medically underserved communities.

OneConcern (www.oneconcern.com)

OneConcern is building a global disaster-intelligence platform with one concern in mind: saving lives. They are using AI and machine learning to (1) create a robust, disaster-resilient cloud infrastructure, (2) create a real-time big data pipeline to inform disaster response and modeling, and (3) combine traditional hazard models with machine learning to provide clear pre-disaster insights, while capturing post-disaster data to continuously improve response and recovery.

Energy & Grid

BlocPower (www.blocpower.io)

BlocPower uses data, thermodynamic models, structured finance, IoT and edge computing to make city buildings, greener, smarter and healthier. BlocPower connects online investors to solar and energy efficiency project micro-finance opportunities, and trains and hires local unemployed workers to install all BlocPower retrofits.

DEPsys (www.depsys.ch)

DEPsys provides a versatile control platform allows power grid operators to run distribution grids safely, reliably and optimally — making it possible to feed large quantities of renewable energies into their grids from decentralized sources. Their leading product, GridEye, also allows for the easy management and control of micro-grids and neighborhood solutions.

Spark Meter (www.sparkmeter.io)

SparkMeter provides smart metering solutions tailor-made for rural and central utilities in developing markets, where 2.1 billion people live without reliable electricity access. The simple plug-and-play solution enables utilities operating in remote locations to access a range of features — prepaid billing, customer communications, and remote monitoring and control — that improve their operations and help them achieve financial sustainability.

GovTech & Civic Tech Solutions

Neighborly (www.neighborly.com)

Neighborly is democratizing the $3.8T municipal securities market, fostering a healthier relationship between global banks and our nation’s places. By engaging individuals to invest in civic projects through municipal bonds, drives investment in world-positive infrastructure projects like broadband, solar microgrids, and libraries.

OpenGov (www.opengov.com)

OpenGov is a technology company that offers cloud-based software for public sector budgeting, reporting, and open data, powering more effective and accountable governments. Through its Smart Government Platform, OpenGov offers a complete suite of software products, all designed to enable public agencies to make data-driven decisions, improve budgeting and planning, and inform elected officials and citizens.

Remix (www.remix.com)

Remix is a platform for planning public transit, designing streets, and managing new mobility. Remix makes a web-hosted application for planning public transit systems. It automates the process of route and schedule scenario testing, letting planners draw routes onto a map and immediately see a potential schedule and fleet requirements.

Transportation & Mobility

Bird (www.bird.co)

Bird gives you access to shared personal electric vehicles (scooters) that can be picked up and dropped off anywhere. Bird shares a mission with cities to reduce traffic congestion and carbon emissions by providing people with a safe, affordable, and clean alternative.

Lyft (www.lyft.com)

Lyft is an on-demand transportation company primarily providing ride-hailing services.

One Wheel (www.onewheel.com)

Onewheel is a self-balancing electric board-sport, recreational personal transporter, often described as an electric skateboard.

Startup challenges in urbantech

Urbantech startups generally encounter at least one of three significant challenges.

1. Heavy regulation. Local, state, and federal governments regulate most urbantech sectors, and can create friction for startups attempting to scale services quickly.
2. Lengthy sales cycles. When startups sell to local governments, procurement processes can result in long, costly sales cycles.
3. Alternative capital models. As many urbantech startups use hardware to scale, some must either sell more equity than their software-exclusive counterparts or look beyond traditional venture finance for capital. The Urbantech Playbook consolidates learning from founders about how to address these challenges.

Most urbantech startups do not sell to local government, and instead focus on business and consumer go to market paths. There is a balanced mix between software, hardware enabled software, and software enabled services (like market places) across urbantech technology stacks.

Startup advantages in urbantech

Urbantech startups generally benefit from several differentiated advantages.

1. Well-known predecessors. The rise of urbantech reflects the growing role of cities and urbanism in the global economy. Many of the companies that now have the greatest influence on our daily lives are urbantech unicorns: Uber, Lyft, Airbnb, WeWork, Nest, Tesla and Instacart.
2. Overlapping categories. The themes of these urbantech unicorns consider many aspects of human life: mobility, housing, energy systems, food, and government services. Further, they elevate cities and the density afforded by urban areas to promote efficiency, inclusivity, sustainability, and shared infrastructure as an opportunity to improve our collective use of resources.
3. Potential for scale. Urban Us invests under a philosophy that industries and experiences in cities are complex, intersectional, and should not be examined in a silo. For example, when we look at a startup working on transportation, we consider its impact and opportunity on housing, safety, and climate change. We consider how the solution could impact not only mega-cities, but also thousands of smaller urban areas around the world. Intersections and scalability are most literally the benefit and beauty of cities and the key to creating new large, impactful companies.
4. Eligible for impact capital. Admired for their fast growth and investor returns, some of these companies have also benefited from “impact” capital that seeks to improve society through investments in social and environmental change.
5. A growing need for new solutions. Old technologies, many introduced over 100 years ago now, helped cities scale to deliver the opportunities for urbanization we see today, but many are no longer up to the task and will to deliver what needs. In the age of climate change and more people moving into cities globally, we need more benefits without all of the negative consequences, like electricity without global warming or rapid, comfortable mobility without risk of injury.

Active investors in urbantech

Active urbantech funds cover some or all of the above sectors.

• Traditional and corporate venture capital funds include Alliance, BMW iVentures, Builders, Congruent, Ekistic, Energy Impact Partners, Fifth Wall, Fontinalis, Govtech Fund, Metaprop, Omidyar Network, Trucks, Tusk Ventures, Urban Innovation Fund, and Urban Us.
• Generalist VC is increasingly active in urbantech, including Alphabet, Amazon, First Round, NEA and Social Capital.
• Specialist accelerator programs include DreamIt, Tumml, Urban Future Lab and URBAN-X, Urban Us’ accelerator in partnership with BMW-Mini.
• University programs for MBA and engineering students interested in urbantech are offered by Cornell and the Massachusetts Institute of Technology. While Harvard University’s program is based on the Urban Us case study, we also have the honor of creating and facilitating the curriculum at the University of Chicago.

Y-Combinator, the largest generalist accelerator, is increasingly making calls for urbantech startups in areas like government and climate change. Generalist investors increasingly have partners dedicated to one or more urbantech sectors.

Current opportunities

Urbantech is similar to smart cities in its goal of improving city life. However, the first generation of these “smart city” projects tended to focus on cities with a lot of power. This means they missed a lot of important areas, especially in mobility and built environment.

Organizations like Sidewalk Labs are now incorporating the benefits of mobility and built environment in their vision of smart cities. By building whole cities, they seek to control usually private elements like buildings or cars. We expect this approach will become more common with time.

Urban Us’ is focused on existing cities and opportunities to improve tools and systems across the sectors that are latent to upgrade for today and tomorrow’s cities.

Sector Power Signatures — The size of the green area denotes the mayoral power/control over transport assets and functions.

Want more? Get the whole playbook here.

What is Urbantech? was originally published in Urban Us on Medium, where people are continuing the conversation by highlighting and responding to this story.

Public safety is an increasingly complex sector as urban populations grow while struggling with broader issues like crime, environmental resilience, and national security. The public safety sector includes emergency response teams like fire departments and law enforcement, who need help more than ever to leverage tech to keep us and themselves safe.

Consumer tech and internet platforms are playing an increasing role in public safety. Nest and Ring (Amazon) increasingly help in gathering neighborhood crime data. Amazon and Facebook are amassing massive datasets useful for identifying people. While these and other large firms are also shoring up public safety solutions through partnerships(12) and acquisitions(4), many new firms are being built with improving public safety as a first principle. One Concern* uses A.I. to help first responders prioritize maps for minimizing loss of life after a natural disaster. Mark43* helps police departments automate the organization of data within and between jurisdictions to make officers more efficient (and less stressed). Haas Alert* helps reroute traffic to help improve routing for emergency vehicles. 3AM Innovation* helps plan and track firefighters to optimize personnel and minimize lost lives. While most investment activity in AI is geared towards healthcare, finance and cross-industry platforms(13), our portfolio, including these four startups just mentioned, represents applied uses for AI to improve city life and sustainability across sectors like mobility, construction, and public safety.

We are increasingly seeing solutions focused on surveillance and incident or threat reporting. These approaches have already generated concerns, from privacy and mass surveillance, to racial bias and profiling. The introduction of any new technology to the urban fabric should be debated, as historically, tech has shaped our lives in cities for better and worse. And any new solution carries the potential to create negative externalities, like emissions (cars) and disequity (again, cars)(14).

AI startups for public safety can potentially help avoid repeating the mistakes of the past by, for example, tackling discrimination head on or providing new types of oversight for misconduct from public safety personnel.

AI-based solutions hold implications for cities even more impactful than automotive technology did at the turn of the 20th century (though AI is already changing the automotive industry(5)).

But “if deployed with great care, greater reliance on AI may well result in a reduction in discrimination overall, since AI programs are inherently more easily audited than humans.”, cites Stanford’s AI100 report(6).

“It’s a valid concern that AI may become overbearing or pervasive, but the opposite is also possible and AI may enable policing to become more targeted and used only when needed. We’re hopeful that AI may also help remove some of the bias inherent in human decision-making.” — Stanford’s AI100 report

The number of AI startups developing city focused solutions is encouraging, as it signals a new wave of upgrades for cities that have the potential to increase the quality of life, our relationship with the environment and public safety in cities. The opportunity is too large to ignore and spans economic, social and sustainability needs. So we’re inviting more dialogue around ethics as we seek to better support founders building the next wave of city upgrades.

Our investment process encourages dissent and debate and none generate more discussion than the AI startups for public safety. This dialog has helped us advance our understanding of the challenges in building ethical AI and benefits from our diverse backgrounds and lived experiences. We also benefit from having outside resources who speak for other stakeholders, including our startup’s customers themselves, who freely share their concerns and aspirations. Our growing network of thousands of beta customers across sectors, including citizens/consumers, business leaders, and city workers, have been reliably ready to test new solutions and provide feedback. Some of our companies have gone on to create stakeholder-led ethics boards to help monitor and shape the algorithms behind their solutions. We embrace the impetus to question approaches and risks, and the motivation of disparate stakeholders to help us find and support the most ethical yet game-changing solutions.

Our team has navigated issues around surveillance and monitoring technologies before, such as how to avoid personally identifiable data gathering when building classification models or how to keep private data out of hosted datasets. We’ve also helped create data gathering approaches and tools that combat the “lack of data challenge” while increasing privacy (small datasets result in models that have a high bias to avoid overfitting the model to the data(8). In one instance, though we replaced cameras (to protect privacy) with noise and seismic sensors we were able to generate highly accurate probability scores. Our startups have worked with our dedicated engineering and UX design experts to shape new interfaces and algorithms, source bias reduced datasets, and to flag and reduce bias inducing correlation. We also like helping founders think through platform security, as most solutions are either hosted by platforms constantly targeted for vulnerabilities or live on IoT devices where security is generally an after-thought(10).

Your ability to build solutions that take ethics into account is only part of the battle, knowing what those ethical guidelines “should be” is another. In addition to the tech elements of AI development, some of the deepest insights we can offer come from our understanding of how policy shapes what models and features you can and cannot use, no matter how accurate. To help keep best-practices and the best people to work with in mind, our portfolio of founders also help each other by sharing AI centric best practices, tools and relationships such as potential hires(7).

Privacy and data security are at the forefront of concerns in our increasingly internet-connected and highly surveilled cities, and although AI (which is inherently less capable of self-interested bias than humans(9)) has been vilified in many instances, there’s much more reason to be excited about AI than scared. We’re excited about the potential to make cities safer and more sustainable, so we steadfastly seek the best founders to work with. We wrote this to share our learnings from multiple decades of working on tech for better cities, our research over the last 6 years on AI and the changing political, regulatory and social urban landscape, and as a rally cry for founders to build more solutions for safer and more sustainable cities. If you’re building an AI solution for cities, or specifically an AI startup for safer cities, please consider working with us. We want to help you build not just ethical but also adaptable, generous or even benevolent AI for safer cities.

See below for reference articles, deeper comments cited throughout this article, and for more related reading(15).

Thank you for reviewing and nudging previous drafts of this along: Leah Edwards, Yi Han, Tamar Lucien, Caitlin Roberson and the Urban Us Team (Shaun, Liz, Mark and Anthony).

* — One Concern, Mark43, Haas Alert and 3AM Innovation are all Urban Us portfolio companies. You can read recent news on One Concern here: https://www.bizjournals.com/sanfrancisco/news/2018/03/01/disaster-response-startup-one-concern-cities.html

And you can see more of our portfolio at https://urban.us/portfolio/

1 — Why city sectors? Cities are already at the forefront of introducing new AI solutions to our lives, including self-driving vehicles, AI-assisted surveillance and AI-enhanced robotics for construction and infrastructure maintenance. Self-driving technology, in particular, is a unique nexus of mobility history, safety and tech. Mobility has been shaping cities since even before the automobile was introduced leading to increased economic opportunities but also negative consequences like urban sprawl and increased emissions. More recently, with the very concept of what a driver is being redefined, we’re seeing new questions arise about sprawl, safety and emissions (https://fortune.com/2016/02/10/google-nhtsa-driver/). Cities are an increasingly large portion of the global economy and population, which introduces challenges for security and the resilience of digital and physical infrastructure. We want good density to lower individual carbon footprint, to lower the environmental impact of providing utilities, and to increase resilience against environmental disasters. But with density comes safety and crime challenges. From retail and traffic to borders, we’re already being heavily surveilled and tracked, AI can help us be better. We share some of our learning about building and investing in urban technology for fighting climate change by upgrading cities in our Urbantech Startup Playbook and our new Urbantech Investor Playbook.

2 — Why startups? Startups offer us a chance to build and scale new AI-powered solutions designed for fairness and that can make cities safer for all. We help founders who are bringing new solutions and technology to cities by funding them and making sure they have the resources to embed ethics and scale into everything they build. With emerging technologies like AI, which hold broad implications to safety and privacy in cities, we have a unique opportunity and obligation to get things right this time. Before we get there though there are a lot of questions to answer about AI’s readiness as a deployable toolset for building various solutions, how ethics and privacy are factored in, consumer acceptance, and the evolving regulatory environment.

3 — Why AI (and what is it)? AI, to be clear, is not a panacea nor is it, as the name might suggest, true intelligence, in the human understanding sense. It’s also not Skynet. AI tech is a continuum of technologies that have evolved over decades from basic algorithms to more advanced machine learning like neural nets and reinforcement learning. Though today’s AI tools being used in production will seem as dull as flip phones in a few decades, even at the edges of AI research, the tools don’t propose to give meaning to pixels and other data points beyond what we train them to do. We have a responsibility to shape the evolving AI toolsets towards ethical usage and uses, such as improving public safety with less bias. For example, much of “dumb” surveillance tech has been used to solve crime, almost always with human bias. One use of AI might be to prevent crime based on surveilled behavior (movements) and not physical features. Most (justified) fears of surveillance are related to facial recognition, but might we use AI to avoid the need to recognize faces in the first place?

There are also a number of challenges to AI development itself, such as data quality and inherently biased training. AI is a work in progress at best and a pandora’s box at worst. It’s simultaneously a useless tool without large, useful datasets, and a weapon in the wrong hands, while holding the promise of being our greatest hope for better solutions for how we live, get around, operate and build better cities.

4 — There’s an overwhelming amount of activity in AI investments, acquisitions and policy-shaping. Microsoft recently announced a billion-dollar investment in AI research startup, OpenAI, to advance the development of generalized AI with broad potential implications on society and climate change (https://openai.com/blog/microsoft/). Google, one of the most active acquirers of startups, has continued to position itself as a “machine learning first” company (https://www.wired.com/2016/06/how-google-is-remaking-itself-as-a-machine-learning-first-company/). Even non-tech companies are starting to embrace AI as part of their core strategy (https://www.economist.com/special-report/2018/03/28/non-tech-businesses-are-beginning-to-use-artificial-intelligence-at-scale). Some AI startups have struggled to scale beyond soft landings such as Apple’s acquisition of DriveAI (https://www.axios.com/apple-buy-driveai-753da17d-60fe-44f9-84ff-1d2d82cd0b81.html). And some rollups may encourage debate, such as Taser’s recent acquisitions in an effort to boost their ability to analyze vast police video data (https://www.geekwire.com/2017/two-taser-acquisitions-create-new-axon-ai-group-boosting-effort-analyze-vast-police-video-data/).

We’re also seeing more policy debate around AI. Large tech firms like Amazon, with more than 100 million Alexa devices being used to gather data, and who wants nothing to do with how ethically it’s used, are prompting questions on how to handle user privacy and their position on the use of tech being completely up to society is being questioned.

5 — We don’t have to wait for fully autonomous cars to see the positive impact of AI on mobility. AI can start helping improve safety now by tackling the challenge of reducing the millions of crashes and resulting injuries and deaths. For example, automatic emergency braking, or AEB, already reduces rear-end crashes by 50%, and reduces crashes with injuries by 56%. (https://www.wsj.com/articles/self-driving-cars-have-a-problem-safer-human-driven-ones-11560571203) Might better AI-assisted driving, roads and signals help us get that to an 80% reduction, or 99% without AI fully taking the wheel? But if we do need fully autonomous vehicles to get to 99%, the implications for public safety include questions like “who is responsible when a self-driven car kills someone in an accident?”.

6 — The Stanford AI100 report, which we have written about before, in “acknowledging the central role cities have played throughout most of human experience” narrowed its focus on “large urban areas where most people live.” and explored other interesting areas for AI at the nexus of cities. AI technologies could help address the needs of low-resource communities, for example, predictive models are being used to help government agencies address issues such as prevention of lead poisoning in at-risk children and distribution of food efficiently. Public safety and security agencies and professionals might improve public trust by using AI. Well-deployed AI prediction tools have the potential to provide new kinds of transparency about data and inferences, and may be applied to detect, remove, or reduce human bias, rather than reinforcing it. (https://ai100.stanford.edu/sites/g/files/sbiybj9861/f/ai100report10032016fnl_singles.pdf)

7 — Some frameworks and tools recently shared:

• Best Practices for ML Engineering https://developers.google.com/machine-learning/guides/rules-of-ml/
• Machine Learning for Beginners: An Introduction to Neural Networks https://towardsdatascience.com/machine-learning-for-beginners-an-introduction-to-neural-networks-d49f22d238f9
• AI Education from Google https://ai.google/education
• Algorithm Toolkit To Reduce Bias Affecting Residents From Automated Decisions Made By Loca lGovernments https://govex.jhu.edu/wiki/center-for-government-excellence-releases-first-of-its-kind-algorithm-toolkit-to-reduce-bias-affecting-residents-from-automated-decisions-made-by-local-governments/
• How to Automate Surveillance Easily with Deep Learning https://medium.com/nanonets/how-to-automate-surveillance-easily-with-deep-learning-4eb4fa0cd68d
• Google Just Made Machine Learning More Accessible And Portable With Containers https://www.forbes.com/sites/janakirammsv/2019/07/01/google-just-made-machine-learning-more-accessible-and-portable-with-containers/#57097b754dcc
• The 50 Best Free Datasets for Machine Learning https://lionbridge.ai/datasets/the-50-best-free-datasets-for-machine-learning/
• UChicago’s Aequitas — An open-source bias audit toolkit for machine learning developers, analysts, and policymakers to audit machine learning models for discrimination and bias, and make informed and equitable decisions around developing and deploying predictive risk-assessment tools. https://dsapp.uchicago.edu/projects/aequitas/
• https://openai.com/blog/introducing-activation-atlases/
• How to hack your face to dodge the rise of facial recognition tech https://www.wired.co.uk/article/avoid-facial-recognition-software
• How to protect your privacy https://www.nytimes.com/2019/05/06/opinion/7-simple-ways-to-protect-your-digital-privacy.html?module=inline
• How to spot parking spot with Machine Learning https://medium.com/@ageitgey/snagging-parking-spaces-with-mask-r-cnn-and-python-955f2231c400

8 — Dealing with lack of data in machine learning https://medium.com/predict/dealing-with-the-lack-of-data-in-machine-learning-725f2abd2b92

9 — Notes on AI bias — Ben Evans (a16z) https://www.ben-evans.com/benedictevans/2019/4/15/notes-on-ai-bias

10 — “At present, computers are inherently insecure, and this makes them a poor platform for deploying important, high-stakes machine learning systems.” https://www.eff.org/deeplinks/2018/02/malicious-use-artificial-intelligence-forecasting-prevention-and-mitigation

The Worm bricking IOT devices https://www.zdnet.com/article/new-silex-malware-is-bricking-iot-devices-has-scary-plans/

11 — In Hong Kong Protests, Faces Become Weapons https://www.nytimes.com/2019/07/26/technology/hong-kong-protests-facial-recognition-surveillance.html

Hong Kong Authorities Charge Dozens with Rioting, Igniting Clashes

https://www.wsj.com/articles/hong-kong-authorities-charge-dozens-with-rioting-igniting-clashes-11564510703

12 — Facebook, Google and others come together to set benchmarks for AI https://www.engadget.com/2019/06/26/facebook-google-and-others-come-together-to-set-benchmarks-for/

13 — CB Insights- ARTIFICIAL INTELLIGENCE DEALS TRACKER https://www.cbinsights.com/research-artificial-intelligence-startup-deals

14 — “How Cars Transformed Policing | Boston Review.” http://bostonreview.net/law-justice/sarah-seo-how-cars-transformed-policing 3 Jun. 2019,. Accessed 22 Jul. 2019.

15 — More related reading:

• The Robots, AI, and Unemployment Anti-FAQ https://www.lesswrong.com/posts/ZiRKzx3yv7NyA5rjF/the-robots-ai-and-unemployment-anti-faq
• You Care More About Your Privacy Than You Think https://www.nytimes.com/2019/06/11/opinion/privacy-facebook-sexting.html
• Obama Administration’s Report on the Future of Artificial Intelligence https://obamawhitehouse.archives.gov/blog/2016/10/12/administrations-report-future-artificial-intelligence
• “The Social and Economic Implications of Artificial Intelligence” https://urban-us.slack.com/files/U03T7RRGE/F2M7UP0MP/20160707_cea_ai_furman.pdf
• Venture backs AI against hacking https://venturebeat.com/2019/06/17/ironscales-raises-15-million-to-defeat-phishing-attacks-with-ai/
• Walmart building an AI powered store to prevent theft https://www.theverge.com/2019/6/20/18693324/walmart-ai-camera-computer-vision-tracking-theft
• The BS-Industrial Complex of Phony A.I. https://timmccloud.net/blog-the-bs-industrial-complex-of-phony-a-i/

Call for AI startups for safer cities was originally published in Urban Us on Medium, where people are continuing the conversation by highlighting and responding to this story.

Forward thinking investors increasingly prioritize investing in underserved sectors of the economy and in startups with what some call ‘unfair advantages’ — such as an exceptionally-positioned founding team, product insight, or early start in-market.

Urbanization and climate action have created a unique opportunity to combine top tier financial return goals with outsized public benefits. But the best opportunities often exist across multiple traditional sectors.

Fleshing out an investable strategy prompts multiple questions. If you’re investing in the electrification of transportation, do you focus on the energy sector, automotive, or even real estate? Or if you’re investing in resilience, do you invest in local government first responders, private insurance or construction firms?

A playbook

Our investment experience over the last few years, and the increasing interest from other investors, have prompted us to surface our best practices and compare notes with leading impact investors. The result, which today we’re excited to announce, is the Urbantech Investor Playbook. Urbantech describes startup technology companies that directly improve city life and cities’ sustainability through unusual strategies and insights that many investors consider unfair advantages.

The Urbantech Investor Playbook compiles best practices from over 25 Limited Partners (LPs), — from impact funds, foundations, and family offices, — as well as direct investors like venture capitalists, wealth management firms, accelerators, incubators, and more. We particularly thank the following contributors:

Ben Zachs, Zachs Family Investment Fund

Charlie Macdonald, Impact Investment Group

Chintan Panchal, RPCK

Colin Le Duc, Generation IM

Dan Luscher, ADAP Capital

Ellen Martin, Closed Loop Partners

Ian Adams, Clean Energy Trust

Jesse Simmons, Align Impact

Jo Fackler, Impact Management Project

Justin Motika, Advantage Capital

Karla Mora, Alante Capital

Kathryn Petit, The Urban Institute

Lisa Sebesta, Fresh Source Capital

María Puch Herreros de Tejada, New Ventures

Mathilde Beniflah, Beyond Capital

Mike Belinsky, Bridgespan Group

Mike Winterfeld, Active Impact Investments

Randy Castleman, Direct Investment Resources

Richard Ambrose, Pomona Impact

Rob Eloff, Lateral Capital, https://www.latcap.co/

Sarah Freeman, Bridges Fund Management

Shuaib Siddiqui, Surdna Foundation

Vineet Diwadkar, AECOM

What it covers

To make this playbook, we asked investors to share industry-tested best practices on how to improve deal access, evaluate opportunities, and accelerate investment decisions in urbantech startups and investment managers. Specific topics we cover include:

• Sectors of the urbantech landscape
• Finding and accessing the best opportunities
• Understanding emerging technologies
• Scaling social benefits
• Choosing appropriate success metrics
• What makes a good urbantech LP

Urban Us is indebted to our friends and colleagues’ wisdom, and expect others will find the content as valuable as we do. You can access the full Urbantech Investor’s Playbook here, and we look forward to hearing your feedback and thoughts.

The Urbantech Investor Playbook: 25 experts share their best practices was originally published in Urban Us on Medium, where people are continuing the conversation by highlighting and responding to this story.

But there are other kinds of robots that will impact cities. Over the last few years we’ve been looking at robots that silently re-organize your living space. Automagically transforming space is intriguing because you can get more use out of the same square footage at near zero cost. These robots will allow us to begin thinking about real estate in three and even four dimensions (length, width, height, and time).

Transforming apartments isn’t new. There are retailers like Resource Furniture whose items focus on specific pieces of transformative furniture, like beds that fold into walls or dining tables that can quickly expand or shrink to the changing needs of their owners. At the Resource Furniture website, you’ll find a reference to Life Edited and our friend Graham Hill. We recently shared our own experience in one of Graham’s 350 square foot transforming apartments. If you go further back and travel to Hong Kong, you’ll find Gary Chang, who upgraded his 344 square foot apartment into a “transformer,” resulting in more storage space than he can use. There are even some examples of flexible storage fixtures that use the Z axes. Robotics takes these ideas further.

Born at MIT, Ori Systems’ first product is an all-in-one robotic dresser, desk, and bed. Ori has solved two big objections to transforming spaces — they’ve lowered setup cost and removed physical effort for transformations.

Much of the innovation is in the robotic components like actuators, sensors, and software. These components don’t add much cost relative to the cost of materials and labor for traditional furniture, and the resulting product can deliver a lot more value than its nontransforming or manually transforming counterparts.

Still operating in stealth, Bumblebee Spaces is the only company we know working to unlock the value of all three (X, Y, and Z) vertices. This volumetric use of space will potentially enable a multitude of additional configuration possibilities.

Another element of these robots is their use of interfaces that you might think of as “AI butlers.” Using artificial intelligence to make homes more functional (and not just “smart”) will unlock infinite possibilities and create a totally new category of living space, one that measures real estate not just by square footage, but also the number of configurations the space can have over time and based on the number and needs of its occupants. Amazon is also working on building “robots for the home,” which will further increase market acceptance of AI and robots moving things around in the home.

We’re fascinated by the possibilities these solutions offer to reimagine increased density, not as sacrifice, but as abundance, and a leap into the future.

Credits: Shaun Abrahamson for drafting and editing with me & Sankarshan Murthy for reviewing.

How Robots Revalue Real Estate was originally published in Urban Us on Medium, where people are continuing the conversation by highlighting and responding to this story.

This workshop course is 10 weeks of research, design, prototyping and startup building to address urban challenges. As with the last two years, the student teams built solutions based on a thoughtful understanding of the problem sets and shaped for business viability, impact and ability to build a software prototype (we used Bubble.is to make this part easy).

Each week, we introduced the teams to visiting speakers and coaches, and this year we partnered teams with mentors (generally founders). We’re grateful for the participation of Shaina Doar (Sidewalk Labs), Mike Rosengarten (Persista), Scott Crouch (Mark43), Sidney McLaurin (LimeBike), Lisa Abeyta (AppCityLife), Hardick Bhatt (Amazon), and many others who visited, coached and mentored this quarter. We are especially grateful for the help of Jason Goode, formerly of NYCEDC and now a UofC grad, for his hard work in ensuring this year’s class ran smoothly.

Special thanks to Neerja Balaji, Emmanuel Straschnov and the rest of the Bubble.is team for their continued support of our class.

How did the teams do?

What software startups can Booth MBA students possibly build in 10 weeks?

— This is the skeptical question I was asked last year that prompted the first edition of this post.

Below are the high-level statements, screenshots and demo links for the solutions the teams came up with. The final presentations and written reports will knock your socks off.

Street Cred

“Chronic homelessness increased 12% between 2016–17. One of the key drivers for prolonged homelessness is a lack of stable, gainful employment. Yet 68% of all US jobs are low-to-middle skilled jobs, and 40% of US employers report struggling to fill low-skilled jobs. Employers across Chicago consistently emphasize that soft skills are the main determinant of longer-term retention. However, most people find it challenging to convey their soft skills through traditional resumes and job applications. This mismatch in the labor market is a significant waste of resources, both in terms of unutilized labor as well as ineffective hiring processes, and cannot be fixed by policy alone.”

“StreetCred empowers low-income individuals with a newfound way to demonstrate their soft skills and credibility. Job seekers earn credits by completing actions within three key soft skill categories: Consistency, Collaboration, and Drive. StreetCred’s platform connects job seekers, workforce development programs (WDPs), and employers to create a more inclusive and efficient hiring process.”

SWOT — Securing Women on Transit

“Many women feel uncomfortable moving around cities for fear of being harassed. Reporting tools for sexual harassment in urban and university settings have low utilization rates and need to be modernized and made user friendly in order for meaningful data to be collected and used for improvements to public safety and public transportation.”

“SWOT provides a service to women in transit and makes the data collection process for sexual harassment streamlined. Our platform is an interface for victims of harassment to easily and quickly share their experiences and then distribute this data to the organizations in charge of public safety for that specific region. Users of our mobile reporting tool also benefit from features such as location sharing with friends, access to public safety officials, and the ability to view aggregate data showing which areas have historically been problematic and should be avoided.”

RecycleHero

“Chicago creates nearly 1 million tons of waste a year. Chicago has a particularly dismal recycling rate of 9.7% (as of 2017), particularly when compared to other US cities such as Seattle (recycling rate near 60%). We wanted to consider how we could motivate these city tenants to change their behavior and increase their trash sorting.”

“RecycleHero incentivizes tenants of urban multi-unit buildings by allowing them to collect points when they scan their recyclables in their homes. These points can be redeemed for rewards such as rent credits or local restaurant discounts from their building management. Building management is in turn incentivized to increase adoption of RecycleHero and offer attractive rewards because they are paid for usage of the app. CPG companies pay for the granular, real-time information gathered by tenant scanning to better understand the customer usage of their product and the competitive landscape (e.g. demographics, consumption habits). RecycleHero takes a percentage of that payment, and the rest goes to building management.”

RideAlong

“The average American uses their car only for 55 minutes/day. Despite 85% of Chicago households owning at least one car, more than 50% use a method other than single occupancy driving to get to work, an indicator of low vehicle utilization. Despite declining car usage, antiquated parking laws continue to require developers to build a specified minimum number of parking spots for every residence built. This has resulted in an excessive amount of urban land being used for parking. Estimates indicate that there are 800 million parking spots in the US and 14% of urban Los Angeles is set aside for parking.”

“With reduced reliance on privately owned cars and an increasing shift towards ride sharing, we aim to provide a unique car sharing solution — one centered around existing neighborhoods, particularly apartment buildings.

RideAlong will lease, operate, and maintain cars and charge the property management a fixed monthly fee per car. Each resident will be entitled to a certain number of “car use hours” at no extra charge. The cars will be fully integrated into the apartment as an amenity — they will be parked in the apartment parking lot, shown to potential tenants when come to view the apartment, the apartment residents portal will include a scheduling software, and apartment keys will unlock the cars. Essentially, RideAlong cars will be no different from on-site gyms or laundry rooms in apartments. We believe that urban residents will also be more comfortable sharing a car with people they know — their neighbors — and less likely to be careless with a shared car that they need to return to their apartment.”

FeedMore

“There is a large number of urban residents who are considered food insecure, there are donors of food, yet there is a significant amount of food waste that results from operational challenges in the food donation and distribution space.

At the food bank level (akin to a wholesale distributor), these challenges are primarily around supply and demand matching, inventory and capacity management (currently done manually), as well as delivery optimization. Additionally, there are significant costs incurred related to waste management.

At the community-partner level (e.g., food pantries, community centers, faith-based organizations), these challenges are around capacity and inventory management, volunteer/labor management, and logistics/food transport, which are exacerbated by constrained budgets.”

“A two-sided market where donors, food banks, and community partners interact in a “network” structure. Donors “ping” the network with the specifics of their proposed donations (type, volume, logistics requirements) and are matched with food banks based on their capacity and demand (which is simply the aggregate demand of their community-partners). Once matching occurs, the food bank’s inventory management system is updated automatically reflecting the incoming donation. Once sorting and allocation occur at the food bank, community-partners then have visibility around the delivery process, allowing them to optimize their storage space and distribution process (i.e., managing volunteer-base and fleet, if available), thereby limiting waste, its associated costs, and the inefficient use of resources.“

Bicicletea

“Almost 30% of the urban population in developing countries live in underdeveloped neighborhoods, representing around 880 million people. One of the problems these neighborhoods face are long and uncomfortable commute times, which are associated with difficulties in job searching, happiness and health. These low income periphery neighborhoods frequently have very difficult access to city centers, where most of the job opportunities are found.”

“Bicicletea aims to connect these low income periphery neighborhoods with cities by reducing the commute times and introducing a cheap, healthy way of transporting to reach key transportation stations. This project is developed for community members that today have long commutes and walk a great time to get to their transportation systems and for governments trying to increase the use of bikes and the social inclusion of periphery areas.

Bicicletea is a bike transportation system specially designed to tackle with difficulties found in low income neighborhoods. Stations are designed to adapt to different adversities such as floods, lack of electricity, lack of space and security. Today’s biking systems are designed for different neighborhoods and governments find it difficult to implement these same systems in other neighborhoods, leaving part of the population and usually the most in need, without access to a cheap and healthy transportation means. Bicicletea comes to close this gap.”

Ohana

“Since 2009, the U.S. housing market has seen growth in demand far outpace growth in supply. Even with 600,000 new housing units produced in a year; this is outstripped by the formation of 1 million new households in a given year. This housing shortage has translated into a sharp increase in the cost of for-sale and rental housing in cities across the country.

While Accessory Dwelling Units (ADUs) have been recognized as a potential source for new housing supply, the U.S. has yet to see a major uptick in their construction. In cities where it is legal to build new ADUs, homeowners cite the potential for rental income as the primary motivation to build an ADU. At the same time, homeowners indicate that a lack of financing is the most significant barrier to building an ADU. This finding is striking given the virtually unlimited amount of financing available for the construction of more traditional forms of rental housing. To date, there has yet to be a solution that fills this gap in the marketplace.”

An Ohana loan is a home equity loan that takes into account the additional income and value created by an ADU rental. Ohana loans are approved in situations where it is clear that an ADU will add significant value:

• A market where there is a housing shortage and increasing rents

• A homeowner with strong credit and interest in additional rental income

• A construction budget that allows for an attractive ROI

The Ohana loan is secured by the homeowner’s primary property and the ADU, providing significant collateral. The Ohana loan is further de-risked by having all rental payments made directly to Ohana, which, in turn, will remit the positive cash flow back to the homeowner.

CareMatch

“Urban parents with young children need child care in order to work or go to school. That said, finding child care that matches their schedule and preferences can be extremely difficult, particularly for parents that specifically want home-based child care. Currently, parents primarily find child care through word of mouth and sometimes use such such as Yelp and Craigslist. Further, in many communities, the supply of child care does not meet the demand. At the same time, many home-based child care providers are earning limited profits and there is significant idle capacity in their home-based child care business.”

“CareMatch is an app that connects parents and child care providers. Home-based child care providers can market their business and input their schedules to highlight current openings. Parents search nearby providers that have openings when they need childcare and research program characteristics. When they find a provider with an opening that matches their needs, they are able to contact them directly to interview them and see if they would like to place their child in their care.”

Employmentor312

“In 2017, the Bureau of Labor Statistics estimated that ~70% of Illinois’ youth experience joblessness, a rate that is ~16x the state average. In Chicago’s Cook County, there is an estimated 21,500 youths aged 16–24 without a high-school diploma who are disconnected from both school and work opportunities. Young, black men are most disadvantaged in Chicago. 85% of this 16–19 year population are unemployed. Statistics quote a loss of $197,000 in taxable income over the working life of a youth without a high-school diploma. The importance of youth unemployment is unarguable. However, so often the focus is on finding a job, but what is often overlooked is how hard it is to keep a job.”

“Employmentor312 is an application-based texting platform that matches newly employed youths in Chicago with mentors who are working professionals in the city. Mentors are expected to serve as a positive role model for youths, demonstrating and coaching on the necessary skills required to succeed in the workplace. Mentors are selected on an application basis and will be required to meet in-person periodically to establish trust and build an enduring relationship. Consistent engagement between mentors and youths is expected via daily texts.”

WasteLess

“40 percent of the food produced in the U.S. is wasted. American restaurants alone waste approximately 571,000 tons of food each year. Meanwhile, 1 in 8 Americans face hunger on a daily basis.

Food waste in restaurants results in nearly $18.7 billion in lost revenue each year and adds 381 million tons of greenhouse gases to the atmosphere. When you invest in WasteLess for your business, you’re doing more than just saving money: you’re saving millions of Americans from going to bed hungry and our planet.”

“WasteLess is a web-based application designed to help independent restaurants reduce their food waste through smart data analytics. Each year in the United States, between 30 and 40 percent of the available food supply goes uneaten, and at least 10 percent is lost at the retail level. Recycling excess food prepared at restaurants is difficult due to regulatory and logistical constraints. WasteLess allows restaurants to prepare just as much food as they require to meet daily demand — eliminating the need for costly recycling programs. WasteLess will be geared towards small and independent restaurants which often lack the infrastructure, time, and funding to invest in an in-house predictive analysis tool. Similarly, many existing solutions use only the restaurant’s own historical data to make daily predictions. WasteLess aggregates data from peer restaurants, proximate restaurants, and publicly available information like traffic patterns and road closures to make a more informed and accurate prediction, ensuring that WasteLess restaurants can prepare only what they need — and waste less of what they don’t.”

The Housing List

“There is a staggering lack of affordable housing in cities throughout the United States, yet the demand is huge. In many cases, this lack of supply is due to the fact that affordable units aren’t as profitable as market rate housing for companies to develop and manage.”

“The Housing List is an online platform that increases application transparency and eases affordable housing property management. With an eligibility screening tool, property managers will be able to find eligible tenants for available low-income housing units more efficiently. This will make the eligibility process dynamic and transparent, with an easy to manage waitlist and useful communication tools.”

What urbantech startups can Booth MBA students build in 10 weeks? 2018 Edition was originally published in Urban Us on Medium, where people are continuing the conversation by highlighting and responding to this story.

Here I summarize and deconstruct Elon’s most recent announcement of the Space-X BFR (Big Falcon Rocket aka Big F****** Rocket) in order to derive steps in organizing great product pitches. His past presentations have proven to be a great reference for product pitches. I wanted to see how much his presentations follow the same pattern, where they deviate, how they’ve evolved. Hopefully the lessons here can help founders think about how to make the most impact in their product & company launch presentations.

Part I. The Vision (aka the world as it should be)

“Fundamentally, the future is vastly more exciting and interesting if we’re a spacefaring civilization, and multi-planetary species than if we’re not.”

— Elon Musk

Elon’s presentations tend to start with painting a picture of the world as he envisions it. Here, he explains why being a multi-planet species is a great idea. While this vision may fall in the realm of obvious ideas, Elon leverages its impact on the collective imagination. He deliberately explains​ ​how​​ interplanetary life will​ affect​ our​ future​ in an appeal to the audience’s imagination.

This approach is a slight deviation from his normal opening message about the dangers of unchecked GHG emissions, or in this case, the long-term doom of being a single-planet species.

Step 1 — Appeal to Wonder

It’s been shown that an appeal to people’s desire for gain is more effective than an appeal to their fear of loss or pain. The latter is powerful, but comes with the risk of panic, fatigue and defeatism. This is the challenge climate change advocates (and many impact-focused entrepreneurs) have faced.

A close parallel to an appeal to the desire for gain is an appeal to the imagination to envision a better world or a life of wonder. He wanted to inspire the audience with his vision.

“You want to wake up in the morning and think the future is going to be great.”
- Elon Musk

What about your product’s long-term vision is an appeal to wonder? Your presentation might start by painting a picture of what that wonder looks like and why it matters to the audience’s present problems.

Step 2 — Explain the Pain

It helps to follow the carrot with a bit of stick, as Elon does, and remind people that choosing your vision means avoiding pain too. Multi-planetary life means an escape from problems such as overpopulation, eventual scarcity of resources and the probability of an extinction event.

It also helps to explain what the barriers to your vision have been in the past. These may have been technological or cost barriers, as in Elon’s case. The goal is to help change the frame of what people perceive as currently possible. Elon helps the audience realize that the capacity of human beings in terms of scientific progress has reached​ the​ point​ where​ what​ was previously seen​ as​ science​ fiction​ in​​ is​ now​ possible. He walks us through very specific barriers and the advancements the Space-X team has made (or plans to make) to overcome them.

Your presentation may not allow for too much time to go into this level of detail, but if there are major objections or doubts you might expect people to have, it helps to face them upfront. This serves as a contrast to the vision you just painted, brings the audience’s attention from doubt back to following you on the journey, and teases the answer to the question on everyone’s mind, “How?”

PART​ ​ II.​ ​ The First Reveal

“Last year, most people thought the plan to eventually make Mars habitable was farfetched. So this year, we decided to show proof of feasibility.”
 — Elon Musk

Elon’s ambitious product announcements tend to face a fair amount of scrutiny, so he spends a significant amount of time proving doubters wrong. Since the products are on a continuum of a collective mission (eliminating existential threats to humanity), he leverages past successes as reference points. In the case of BFR, Space-X can show a timeline of proof that they are changing the dynamics of space travel.

Figure 1. The Fuel that will Power the BFR. Elon’s demo was this tank blowing up.

He takes a first step in shutting the doubters down by showing the main fuel tank of the BFR. “We developed a new carbon fiber matrix, that’s much stronger and more capable than ever before.” Elon claims.

In a second blow to skeptics, Elon shows proof that the question of “can this be done?” has already been answered (to some degree). He​ ​ gives ​ progress​ ​ reports​ ​ through​ ​ pictures​ ​ and​ ​videos so the audience can visualize the project. Your mileage may vary, but like Elon, you’ll face skeptics who want to see proof that you aren’t all talk.

Figure 2. The Growth in Launch Rate

He claims that the project has been progressing at a fast rate not just through talking but through a medium that the audience could visually grasp and understand. The bar graph above shows the success in launch rate of the rockets ever since debut.

Step 3 — The Demo

There is no better way to quiet doubters than to show them you’ve already done what you’re claiming. Even if what you are able to show is a beta version, showing is an order of magnitude better than telling.

You may not need to (or have the time to) walk the audience through a full demo, but you want to show something that represents the fact that you’ve actually built something. *Even vaporware can have a powerful effect*

When showing a product, the propensity is often to first share the features or technical specs. While some light touch-points on those two might be helpful for answering obvious questions, your focus is better spent on benefits first. Better still is a contrast of benefits that your solution provides over existing solutions. If your product represents something that’s never been done before or has been tried and failed, it may help to use an analog that people can understand. For example, Elon compares the BFR spaceship to an airplane.

You can share benefits in a number of ways. One is using analogs, as mentioned above, like how fast a spaceship can go from one country to another versus a normal airplane. Note that this specific example is master craftsmanship that Elon employs, as we’ll learn later. Another is to explain how the benefits of your product have evolved over time from earlier beta versions. Yet another is to explain how your solution is built to continue to develop benefits, for example, cheaper through economies of scale, or more valuable through network effects.

If you are showing a product rendering, it pays to be very grounded relative to your bigger vision. While a rendering of a terraformed Mars is impressive, it still left too much doubt in Elon’s past presentations. In this instance he shows renderings of the device that is the first step in getting there, the rocketship.

Figure 3. Perfecting Propulsive Landing. Elon Musk demonstrated the progress of propulsive landing by showing different scenarios in which the rocket landed on different terrains successfully showing its reliability.

Step 4 — The Specs

Though features can often bore and distract an audience, at times highlighting features can be helpful to remind people that what you’re building is very hard to do. While you may or may not want to flat out say that, it can be powerful to detail some of the components that go into making the thing.

For the project to make sense to the audience, Elon Musk discussed the specifications of the ship that enable it to function and simplified each part so that everyone would understand their importance in the project.

Walking through the specifications is another opportunity to highlight benefits. It’s also an opportunity to do more showing versus telling. Additional pictures, video clips or holding the product up in a different light might help.

The main value of this step is to further alleviate your audience’s doubts by showing how specific feature decisions impact benefits and make the whole thing possible, and better. The additional value is in showing that you and your team are putting a lot into making a great product and that replicating your efforts would be very difficult.

Figure 4. BFR’s Engine Testing

“The raptor engine will be the highest thrust engine of any vehicle ever made”, as Elon claims. Given the specifications of the engine depicted in the picture above, this was a big step in the right direction with regards to spacefaring projects. The specifications on the engine are indeed off the charts out of any spacefaring project.

PART​ ​ III.​ ​ How We Got Here

In this part of Elon Musk’s presentation, he took a step back and reminisced to when the SpaceX project started. This is important since it starts to answer the question “Why us? “. In SpaceX’s case, this is a team that has had to learn from many failed attempts at the first Falcon rockets.

Elon Musk featured the Falcon projects in contrast to the BFR to show not only how the technology for space travel has evolved, but also how they’ve progressed through successive iterations of the projects. This is comparable to how major smartphone brands showcase their flagship devices by contrasting new technology with the old. Elon Musk even stated that you could fit a stack of Falcon 1 spaceships in the payload section of BFR. This gave the audience a grasp on how they’ve progressed since the early stages of development.

Step 5 — Team Effort

You may have already introduced your team in an early effort to eliminate doubt by showing credentials or in your introduction. While you can use this opportunity to make this the first time you show your team’s bonafides (past companies and achievements), this is really about showing what your team has done together.

There are many ways to do this. One is by explaining the length of time and amount of struggle your team has endured in working on this project. Another is to briefly talk about how your team has overcome struggles together in the past. Yet another is to show the progress of the product itself (as Elon does). “We messed up the first 3 launches of Falcon 1, but thankfully the 4th launch was a success”, Elon stated as he looked back to the early stages of SpaceX.

The goal here is not to list off a resume, but to show your ability to ship a great product as evidenced by the amount of progress your team has already made together. The inference is that you have the team dynamic and character to continue to deliver on expectations. You don’t necessarily need to even talk about the team or individual team members in detail. Your product and traction can speak for themselves.

Figure 5. From Falcon 1 to BFR

From the figure above we the audience could see the exponential growth of the SpaceX projects with not just the size difference of BFR from the earlier Falcon projects but also the capabilities.

Part IV. This is a BFD aka How We Win

Next in his presentation, Elon showed the engineering designs of BFR and highlighted how the current version surpasses the previous designs. He discusses this and a few other product decisions to continue to show how the team has learned from previous mistakes in landing failures and how they’ve adapted their approach engineering-wise. This continued deep dive into the product furthers his efforts to remove doubts.

This also set his presentation up to provide contrast to the competition. He goes on to showcase the capability of BFR by comparing it with other well known spaceships such as the Saturn V. For example, he explains how BFR surpasses the competition in terms of the payload.

Figure 6. BFR vs the competition

As the audience could see from the figure above, the BFR exceeds all other spacecrafts in terms of the amount of payload it could carry. “It is important to note that BFR has more capability than Saturn V even with full reusability.” Elon claims.

He further wowed the audience by showing how cost-effective BFR is compared to these spaceships. He emphasized here that BFR would cost the least amount of money to launch, provide more capabilities and would be reusable.

Figure 7. The launch cost of BFR vs the competition

Step 6 — Competition

Whether you like it or not, and whether you know it or not, you will face competition in anything you launch. This includes competing with inaction (inertia or even comfort with the status quo) . Therefore, it’s essential to paint a clear contrast that makes the advantage of your product abundantly clear. If you’re lucky to be in a league of your own, you may even show how you make past versions of your own product obsolete.

In Elon’s case, he helps the audience realize how important it is to not just abandon an aircraft after it has traveled to its destination. “It’s really crazy how we build this sophisticated rockets and then crash them everytime we fly, this is mad!” Elon stated. The cost of the main fuel of the spaceship is very low. Obviously the cost of actually just refuelling the spaceship is lower than getting another spaceship to fly out to another destination. No other competing systems offer this, and now that it’s abundantly clear how stupid it would be to not strive for a system like this, SpaceX wins.

At this step, Elon mainly shows the benefits of BFR and how it can affect current space projects. In many cases, the BFR is a big step up in terms of efficiency and cost, as well as form and function. This entices the audience to believe this project is really in a league of its own. “Reusability is absolutely fundamental, and the refilling spacecrafts is very valuable.” Elon claimed as he emphasizes the reusability of BFR.

If nothing else, this step is an opportunity for you to continue to highlight your product’s unique benefits. If you can, show how you kill the competition with a thousand cuts of benefits.

Part V. The Big Reveal

Given the trajectory of the project, Elon Musk claims that landing on Mars will be possible in the year 2022. Due to the Mars and Earth synchronization every 2 years, SpaceX also plan to land 4 ships on Mars by 2024. This frequency of landings gives rise to the creation of a Mars base, which eventually spans into a city paving the way for terraformation. But none of this is the big reveal.

Figure 8. Terraformation in Mars

“If you build a ship that’s capable of going to Mars, what if you take that same ship, and go from one place to another on Earth?” Elon Musk as he teased the audience on what’s to come.

The big reveal is that transportation on Earth using BFR is also possible, heralding a revolution in international travel. As a result, the distance from Los Angeles to Toronto can be traversed in a mere 24 minutes. Whoa.

As you may recall from earlier in Elon’s presentation, claims about planetary travel were used to lightly tease the fact that you can think of a spaceship as an airplane. He does this multiple times, seemingly in an innocent effort to create an analog that people can use to better understand the power of the BFR rocket. But when he states that the BFR is so fast that it can compete with airlines, and that a flight from North America to Europe will take 30 minutes, he is deliberately seeding the audience to think of the BFR as a civilian aircraft. Just a really big and really fast one.

Since he’s already primed the audience to believe in the feasibility of the bigger vision to colonize the Moon and Mars, super-sonic travel seems like a piece of cake.

Figure 9. International travel through BFR

Step 7 — What’s Next

Your product is likely not a spaceship or rocket (or maybe it is), but that doesn’t mean you can’t employ the same “show them the stars and give them the moon” technique. You, and your audience with you, are already invested in the grand vision that your product offers. If your vision truly is grand (and you are significantly better off in fundraising if it is), yet tantalizingly believable, all that’s left to seal the deal is to give the audience something they can grasp today — but not just any something. Something that is almost as bold as your big vision, but significantly more believable by contrast.

Again, if your vision is grand and you are on the path to creating a truly great product, the next feature or version of the product you can release should be quite impressive. Even if it’s only remotely related to your long-term vision. Especially if it further creates a bridge in the imagination to that vision (i.e., ”Wow, I can fly in a spaceship to the other side of the planet!“)

This last step in your presentation is your chance to plant a final nail into the coffin of doubt. It’s an opportunity to let your audience know that they can join along for the ride. You are telling the audience what the immediate next steps are towards your vision, a better version of the future, and inviting them aboard.

Pitch like Elon Musk: Lessons from the SpaceX BFR launch was originally published in HackerNoon.com on Medium, where people are continuing the conversation by highlighting and responding to this story.

Video link: https://youtu.be/S5V7R_se1Xc

PART I. Explanation on why being a multi-planet species is a great idea.

Elon Musk explains how it’ll affect our future as a species by appealing to the audience’s imagination.

● Escape from problems now such as overpopulation, eventual scarcity of resources

● Forward looking, but stays grounded/it relates to our problems

● Made the audience realize that the capacity of human beings in terms of scientific progress has reached the point that what we saw as science fiction in the past is now possible

PART II. Progress report since the 2016 SpaceX presentation

Last year, most people thought the plan to eventually make Mars habitable was farfetched, so this year they decided to show proofs of feasibility.

● Examples are costs as well as reusability of materials for future projects

● He gave progress reports through pictures and videos so the audience could visualize the project.

● They made their plans more accessible and transparent; how?

○ They highlighted the steps they would be taking to achieve the goal.

○ They stayed within the realm of reality that most people can relate to, for example comparing the BFR spaceship to an airplane.

○ They outlined their plan clearly as opposed to the past presentation where they brought up terraforming Mars, resulting in people being dismissive of the plan.

○ Of course, a factor is time. More people considered the possibility since they see technology evolve through the pictures and videos.

○ They also simplified the plan by putting all the ideas for spaceship in one prototype — lowering the cost of the entire project, making it flexible

○ The presentation discussed how it can be used in the present setting — for example, the spaceship is so fast that it can compete with airlines. A flight from North America to Europe will take 30 minutes, for starters.

○ They pointed out that all the past resources used can be applied to this system — emphasizing their reusability and adaptability.

PART III. The spaceship’s specifications

For the project to make sense to the audience, Elon Musk discussed the specifications of the ship that enable it to function and simplified each part so that everyone would understand the importance of the project and the gravity of how it would affect people’s lives if it was successful. He discussed the following parts.

Tank/body for the spaceship

● As pointed out above, they compared it to a regular Airbus A380 airplane

● They showed a new iteration of the giant tank seen at the last SpaceX 2016; which solidified the fact that they’re actually working on making it happen and it’s not banking on false hope

● They showed its risks as well by showing a video of the tank exploding due to stress testing

Engine of the spaceship

● They mentioned that the spaceship’s engines are the best in all of history

● They included a video of the engine to emphasize the engine’s capacity; the thrust lasted for more than 100 seconds when a Mars landing requires only 40. This shows that they’re going overboard to minimize risks

Propulsive Landing

● They showed clips of the Falcon 9 landing on various terrains as well as on a landing pad floating on water.

● Showing a different environment people never considered (landing pad floating on water) showed people that they thought ahead and covered all bases, even the ones people consider unnecessary

● They further emphasized its “brilliance” by highlighting that in extraterrestrial environment, there are no smooth runways or landing pads

● They also highlighted its consistency by trying it on 16 different environments, all of which are successful

● Emphasized it more by pointing out that Falcon 9 lands on a single engine whereas the BFR will always have multi-engine

● This means that they’re going above and beyond with precaution; it also means they acknowledge the hazards of the project, but stressed the safety measures they’re taking to quell them

Why was this discussed?

Their goal is to appeal to the public that the project’s reliability in terms of landing is on par with the safest commercial airlines. Obviously trying to simplify things, making it easy to understand by comparing it with something we‘re familiar of. Precision of the landing is highly advanced that they don’t need legs on the spaceship to allow vertical landings. This is further emphasized since the removal of the legs would save costs and would allow for different landing possibilities.

Automated rendezvous and docking

● They’ve perfected docking and transferring propellant from a spaceship to another with the SpaceX Dragon One without any pilot control

○ Dragon 2 directly docks to the space station (without any use of the arms, as Dragon 1 used to do, without human intervention as well)

PART IV. From humble beginnings

In this part of Elon Musk’s presentation, he took a step back and reminisced to when the project started. This is important since the idea had to come from somewhere. The First Project: Falcon 1

● The first few launches of Falcon 1 failed

○ Elon Musk stated that he messed up the first 3 launches of Falcon 1 but pushed through with the project

○ This is important because this exhibited his team’s determination and drive to make the project possible

● The progression of Falcon 1, Falcon 9, and Falcon Heavy

○ Falcon 9 is over 3 times the size of Falcon 9 carrying over 30 times more payload

○ This was emphasized to appeal to the public the progress the project was making

○ He also introduced Falcon Heavy which gave birth to a whole new vehicle altogether

● BFR vs Previous Falcons

○ He featured the project in contrast with the previous iterations of the Falcon projects.

○ He discussed how BFR greatly improved in terms of the payload it could carry as well as how reusable the spaceship is

Why was this discussed?

Elon Musk featured the Falcon projects in contrast with the BFR mainly to show not only how the technology for space travel has evolved but also how they’ve achieved their success through successive iterations of the projects. This is comparable to how major smartphone brands showcase their flagship devices by contrasting new technology with the old. He even stated that you could fit a stack of Falcon 1 spaceships in the payload section of BFR. This gave the audience a grasp on how they’ve progressed since the early stages of development.

Part V. What’s inside BFR?

In his presentation he gave the engineering designs of BFR and how it surpasses the previous designs. He stated that this design uses subcooled Methane (CH4) and Oxygen (O2), which when chilled gets a meaningful 12% density increase. This in turn helps with precision landing. To further support his claim of precision landing, he also showed the different landing engines which support one another. This is for when an engine fails, another would function in its place.

Why was this discussed?

He discussed this part thoroughly to emphasize the risk free landing procedure of BFR. This also shows how they’ve learned from previous mistakes in landing failures and how they’ve adapted their approach engineering-wise.

Part VI. Rocket Capability vs Launch Cost

He showcased the capability of BFR by comparing it with other well known spaceships such as the Saturn V in which it surpasses the competition in terms of the payload it could carry as seen in the graphic below.

He further wowed the audience by showing how cost efficient BFR is compared to these spaceships with it being the least expensive to launch.

He stated how we develop such expensive and sophisticated rockets only to crash them. He emphasized here that BFR would cost the least amount of money to launch with more capabilities and is reusable. This is a very important point since space projects take millions of dollars just for 1 launch.

The Value of Refilling

In this part Elon Musk made the audience realize how important it is to not just abandon an aircraft after it has travelled its destination. The cost of the main fuel of the spaceship, which are Oxygen and Methane, are very low. So the cost of actually just refuelling the spaceship is lower than getting another spaceship to fly out to another destination.

Part VII. Satellites, ISS, Moon, and Mars

The BFR is a huge enabler for new satellites to go to orbit

● Possibility of sending a satellite that is almost 9 meters in diameter to orbit as a single unit

● It can also send a number of small satellites

● He also stated that we could use the spacecraft to clean up space debris

● Enables launching of satellites significantly larger than anything we’ve done before

Servicing the International Space Station

● Capable of transporting more crew and cargo to the space station

● Relative to the Dragon and Dragon II, more cargo and crew will reach the space station with less cost

Lunar Surface Missions

● Lunar surface missions without propellant production on the moon’s surface

● Enable the creation of moon bases

Mars and Multi-planet species

● Precision landing is now possible on the rocky and dusty surfaces of Mars

● Local propellant production is needed but given the fuel needed to run the rocket, it is possible to make oxygen and methane in Mars.

● He also showed a physics simulation of how landing on Mars is possible

● This would give way to a smoother and safer landing to Mars than ever before.

Why was this discussed?

In this part he mainly showed the benefits of BFR and how it can affect the current space projects. In many cases, the BFR stepped up big in terms of efficiency and cost as well as form and function. This would entice the audience to believe in this project with all the advancements it’s currently making.

Part VIII. Goals for the near future.

2022 Mars Rendezvous and Air transport evolution

● Given the trajectory of the project, Elon Musk claims the landing on Mars to be possible in the year 2022

● Due to the Mars and Earth synchronization every 2 years, they also plan to land 4 ships to Mars by 2024

● This also gave rise to the creation of a Mars base which even spans into a city paving the way for terraformation

● Transportation in Earth using BFR is also possible making international travels happen in mere minutes.

○ In this part he showed how a trip from Los Angeles to Toronto can be traversed in a mere 24 minutes.

○ This is where propulsive and precision landing plays a big part since aboard the ship are actual civilians.

Part IX. Summary and Conclusion

Elon Musk’s presentation on Making Life Multiplanetary through the BFR project is a combination of appealing to the different aspects of what is needed in a space project. First, he tries to address the idea of inhabiting other planets through the new technology in BFR which is propulsive and precision landing. He also discussed the different parts that make up the project and how it can be successful when put together through the iterations of progression in terms of research and technology. He also addressed the pressing concerns of current space projects in terms of reusability, rocket capability, and launch costs. He explained how the BFR is a huge step up in all three categories. Lastly, he gave a concrete project plan for the near future with current advancement. These plans addresses not only space travel but an overhaul in long distance travel in general. This appealed to not only to the astronauts of the world but to mere civilians which gave the project more support.

Hometown Advantage

• 2/3rds of respondents started with their hometown (or home state) as a first customer.
• Government customers are targeted primarily based on public expressions of interest in the problem area or in innovation in general.

Funding

• 75% of respondents self funded and/or raised money from friends and family before raising venture funding.
• 1/3rd of respondents sell to consumers and/or businesses as well as governments.
• Firms selling only to government were more likely to raise venture funding.
• Other forms of funding include grants, debt and competitions/awards. (No ICOs (yet))

Customers

• The most popular sales model is to target discretionary budget spending. This is more popular amongst earlier teams. (You can find budget levels at http://openprocure.us/)
• A quarter to a third of companies also sell via Collaborative Development/Fee Sharing, Subcontractors/Partnerships and/or Private / Non-Profit Funded Projects.
• Very few companies (less than 1 in 10) have a freemium offering.
• The majority of respondents use multiple strategies, but there are a few that focus on just one target Competitive Procurement (RFPs).
• There is a concentration of focus on medium and large cities. Very few are focused on Small Cities, Federal Governments and Special Districts.

Sales

• Average "Average Annual Contract Value" are roughly $35k, and range from as low as $5k to as high as $100k.
• From 2015 to 2016, the majority experienced a moderate growth of 30%. A few grew revenue 5-6x.
• Most expect similar or slower growth for 2017.
• Contract terms are 2 years on average.
• The sales cycle for almost half of respondents were 90 days or less . But if strategies included “competitive procurement”, this number averaged much higher at 270 days. The latter cohort tends to have larger contract values ($56k average for “RFP” focused companies vs $16k average for “discretionary budget” focused companies) and higher gross sales (in the 7- and 8- digit millions for “RFP” focused companies).
• Delays in receiving payments range from 2 weeks to 2 months on average.
• Almost all have some component of service contributing to revenue, even if service itself is not an offering. This suggests that value added service is the rule and not the exception for B2G sales.

Marketing

• Only an average of 3% of growth was from upsells to existing customers.
• Average marketing spend per $1 of revenue by stage:
  Stage (revenue in 2016)
  Pre-seed ($10k - $100k) — 0.1018
  Seed ($100k - $3M) — 0.0694
  A ($3M - $10M) — 0.005

Teams and Tech

• On average, almost a quarter of staff are dedicated to sales.
• Head count per $100k of revenue by stage:
  Stage (revenue in 2016)
  Pre-seed ($10k - $100k) — 9.4
  Seed ($100k - $3M) — 3.25
  A ($3M - $10M) — 1
• Salesforce / Salesforce IQ are the predominantly used CRM platforms. Other platforms used include: ProsperWorks, Pipedrive, Hubspot, InsightSquared, Insightly, Indinero and Marketo
• Product offerings include the following technologies: web, mobile, crowd-sourcing, machine learning, IoT, block-chain, biotech, and quantum computing.

More to come +charts, but please help by spreading the word about our B2G SaaS survey (article | form). Participants in the survey will get a copy of the full anonymized dataset.

24 takeaways (so far) from the 2017 B2G SaaS Global Survey was originally published in Urban Us on Medium, where people are continuing the conversation by highlighting and responding to this story.

Problem

Housing supply falls behind demand in many cities for many reasons including regulations, permitting, weather, site conditions, home construction times, labor availability, labor costs and finance. Options such as prefabricated and modular or mobile homes are seeking the opportunity to meet some of that demand with Accessory Dwelling Units (ADUs) and prefabricated multifamily buildings, but these often face additional challenges.

Regulations remain piecemeal and can be confusing but many local policies are shifting toward ADUs. One example is the recently passed California Senate Bill 1069 which limits local government authority to prohibit ADUs in certain cases, which strengthens or enables local policies in cities like Los Angeles and San Francisco towards the goal of rapidly scaling supply of new housing units. Changes in policy like this are progressing in Portland, Boston, Seattle, Austin and many other cities and states.

Home construction is historically slow to innovate and almost exclusively iterative (many argue the last major leap in multi-family structures were the first skyscrapers built in the 1880s in Chicago), suffers massive waste, and has seen productivity decline along with labor pool shortages in recent years. Efforts such as modular homes, prefab homes, tiny homes, mobilized homes and improved manufacturing software, are evolving but many have failed or remained stagnant due to questions around financing, equity and permitting. Well designed products have had minor success and garnered media attention but demand is hindered by cultural biases around things like curb appeal and size. It also doesn’t help that trailer homes are associated with low income or poor communities. These may be changing as necessity and cultural shifts are creating a new class of renters and buyers more willing to go small, mobile or modular as they revisit norms around economics and status

Financing persists as the biggest barrier to the growth of new housing supply. Traditional banks have financial products designed around assets that fall into specific models, such as site constructed structures and the appreciation of land. Other products such as financing for mobile vehicles enable some structures that are used for housing but reviewed as a vehicle. These come with higher interest rates. New models could arise around financing cash flow from rental income generated by housing such as ADUs. This is boosted by the availability of consistent short-term rental supply thanks to AirBnB.

Competitive Landscape

Beyond traditional builders and solution providers, tech firms like AirBnB and Alphabet’s Sidewalk Labs are exploring the industry. There are also many startups taking a variety of approaches. Architizer (an Urban Us portfolio company) connects architects with manufacturers of an expanding universe of building products. People can use platforms like New Avenue to access architects and planners while managing the process completely. Builders can use software like Manufacton which specifically targets prefabrication builders. They’ve positioned themselves as a one-stop-shop solution for managing the manufacturing, and tracking, of prefabricated building components throughout their entire lifecycle, from raw materials to final installation. Acre Designs aims to replace architects and some appliance makers by providing a select set of design and materials for rapidly building zero net energy homes out of a kit.

Prefabricated home builders deliver complete or ready to complete homes and other structures directly to buyers. There are also builders focused on affordable container homes, tiny (sometimes) mobile homes and prefabricated designer homes.

Keen Development Group focuses on affordability and builds container homes (shipping containers converted into housing) starting at just over $20,000. Similarly, Back County Containers and Boxouse uses containers for homes and start at $25k. More container homes: G-pod, Cargotecture, BOXHOMZ

Avava focuses on backyard units with preset design and components but also provides contractor and permitting services. Avava ships via flatpacks and builds an entire unit in 6 weeks for as little as $115k. Similarly Cover.build offers backyard unit construction and associated services from $100k and up. Getaway.house recently raised $15M with a similar strategy.

Another tiny home builder, Tumbleweed focuses on solving the finance challenge in two ways; keeping wheels on the homes & creating a hotel platform where Tumbleweed owners can offer their units for rent. Though the homes retain a tiny wooden house aesthetic, the mobile element allows for different qualification for banks. By promoting the homes as an investment towards creating rental cash-flow, including creating official Tiny Home Hotel lots, Tumbleweed also reduces some anxiety around the long term value of the units.

The shift to more and better housing stock will likely include better designs and manufacturing processes, including the efforts of prefabricated home builders who keep units small enough to ship on trucks. Some builders are focused on aesthetics and brand, others on a suite of products including commercial construction. For example, Kasita focuses on designing studio units modeled after the iPhone that can serve as ADUs, or part of a low-to-mid rise multi-family structure, as well as dormitory, hotel and workforce configurations. An individual Kasita is priced as $125k or more and can include different smart home options. Blokable builds modular units that can be combined and arranged for various configurations including multi-room, multi-family, and commercial. They’re also enabled by smart appliances, including solar power, water and hvac, and are focused on partnering with cities around various types of affordable housing. Blokable prices units at $65k+ and are focusing on multifamily opportunities.

There are yet other types of ADUs including converting a freestanding garage or converting existing space in the bottom floor. Ori systems and solutions like it may offer a path towards affordable and flexible use conversion.

Impact

Affordable housing touches different aspects of city life. The most obvious issue is economic. As people spend more and more of their monthly income on rent or mortgages, they eventually decide to move to more affordable cities. This in turn makes is harder for local businesses to hire and retain talent. City housing offers density and resulting reduced carbon footprint. Safe and well built housing has health and resilience impact. Flexibility, mainly the ability for housing to shift and ebb as cities change are also key.

Risks

The biggest barriers around financing and liquidity are yet to be universally addressed. Some solutions focus on rental income and lower priced mobilized options. As other barriers ebb, additional stakeholders may step up in subsidizing new types of housing stock, such as the Meyer Memorial Trust who are exploring fully subsidized ADUs in Portland, Oregon.

The use of shipping containers, also seen as a path towards rapid development of new supply, present additional challenges. Those include structural and environmental challenges inherent in using shipping containers as housing such as wasted steel and design constraints, including the loss of space due to insulation. Additional risks include the exposure to materials retained in the units (from past shipments) and the likely inclination to have new container units produced more cheaply than existing stock (increasing environmental impact of steel use).

As mentioned above, policy is shifting and rules around electric hookups and parking space requirements are loosening to reduce the barriers to ADUs. But these new housing rules are not nationally adopted. In many North American municipalities, secondary suites are illegal because they do not conform to the zoning or land use district the property is in, they have been developed without the proper permits, or they do not meet the local building code. For California, where there is a statewide push towards increasing housing stock, the new 1069 law forces local regulators hands but leave enough ambiguity around the process to still add confusion and delays. We expect pushback to persist in efforts to protect parking availability and neighborhood character (see NIMBYism).

Incentives around taxes and convenience may not be aligned for enough homeowners to leverage new rules and options for ADUs. Some units may trigger a reassessment of property values resulting in increased property taxes. And many may opt to keep their backyard untouched.

Critical for venture investing is the opportunity for venture returns. The top 10 home builders made a combined $43B in 2015, with D.R. Horton at $11B.

Thank you Luke Iseman, Jeff Wilson, David Friedlander and Shaun Abrahamson for help with this.

Startup Candidates: Housing Supply was originally published in Urban Us on Medium, where people are continuing the conversation by highlighting and responding to this story.