Hi ,

“Nothing was the same afterward. Within months the surf mags were full of V-bottom and other radical new designs, all dramatically shorter and lighter than the boards people had been riding for decades.” 

- Barbarian Days A Surfing Life, William Finnegan

Is WeWork a tech company or a real estate company? Our favorite framework for answering this question comes from Ben Thompson at Stratechery. Ben suggests tech companies are built on software that needs to have some of the following attributes:

• Software creates ecosystems.
• Software has zero marginal costs.
• Software improves over time.
• Software offers infinite leverage.
• Software enables zero transaction costs.

We won’t spoil his take on WeWork. But there might be an even simpler way to judge tech companies who work in cities. We could ask just one question: is there a sudden rise in interactions between the company and policymakers? A lot of behavior change creates friction as well as opportunities and eventually news - think companies like AirBnB or Uber, or whole categories like drones, delivery services, and scooters. Large scale behavior change in cities usually means interactions with policymakers. We haven’t heard too much about WeWork’s interaction with policymakers.

Then there is the question of cash flow. Growth has been prized over positive unit economics. A few years ago, probably beginning with Indie.vc revenue-based funding, we noticed a growing universe of alternative capital options, some of which used to be available from pre-recession banks. These options put positive cashflow at the center of investability. 

Even one of Uber’s earliest investors has been celebrating the Pegasus startup. These are startups with positive cash flow which allow them to forgo VC investment (or at least skip a few rounds of dilution) without giving up rapid growth. Almost on cue, Stripe Capital launched and Clearbanc scaled up. We think Perl Street will be a good way to evaluate and explore optimal capital options. We’ve also asked founders to work through a Plan B, which doesn’t depend on VC funding. As Fred Wilson points out, in the end, positive cashflow puts founders in control. 

And yet, as positive cashflow comes back into fashion, it’s clear that VC is alive and well.  Startup ecosystems are thriving. The HQ for our most recent investments include Tel Aviv, Los Angeles, Copenhagen, Atlanta, Houston, Buffalo, New York and Boston. But when it comes to VC funding and exits, the Bay Area is still astonishingly far ahead. Founders should still want Bay Area investors on their cap tables. 

Back to WeWork. Tech and real estate are going to continue to interact in fun and new ways. One of the closest observers of these interactions is Dror Poleg, who just released his latest book, Rethinking Real Estate. As you get to the end of Dror’s book, it begins to explore the impact of mobility tech. Autonomous passenger cars receive most of the attention, the early impacts will likely be in the form of a Kiwibot or a self-driving personal mobility device. It’s super hard to predict timelines in this category as only a few years ago this seemed like a self driving bike was a perfect April Fools joke. Anthony Townsend has also just wrapped up a new book on the topic, Ghost Road Beyond The Driverless Car, 

Careers

There are many ways to re-imagine city life at companies across North America, Latin America, EU and Israel. Here are just of few opportunities. Director of Marketing & Communications at Urbint. VP of Sales at Radiator Labs. Technology Marketing Intern at Sapient. Senior React Native Engineer at Starcity. Senior Product Manager at Borrow. Machine Learning Engineer at One Concern. Sales Development Rep at SeamlessDocs. Business Development at Biobot Analytics. 

Rachio has 8 openings. Kiwi Campus has 11 openings. Future motion has 14 openings. Mark43 has 19 openings. Bowery Farming has more than 20 openings.Skycatch has 24 openings. 

And here are opportunities at 17 more companies. 

Urban Us 

Many of the Urban Us startups have been busy. Versatile Natures Raised a $5.5M Seed [Crunchbase]. Roadbotics raised a $7.5M Series A [Built In] and announced change in leadership [Govtech Magazine]. Blokable raised $23M Series A, and revealed plans for a new California manufacturing facility [GeekWire]. It’s not all about raising though. We wish teams would share more revenue numbers publicly, but you can infer progress from data like Google trends for Future Motion or Amazon endorsement for Rachio.

Best,

Liz, Shaun, Mark, Stonly & Anthony

P.S. Don’t forget to join us in NYC Sept 26th so you can meet our URBAN-X Cohort 06 

Evolve Energy – Energy savings using renewable energy, real time prices and home IOT.

3AM Innovations – Situational tracking to improve on-scene awareness for first responders.

Varuna – The operating system for water utilities

Pi Variables – Temporary traffic control and traffic management. 

Hubbster – Shared equipment for outdoor play and exercise. 

Food For All – Prevent food waste and get meals for 50% off. 

Cove.Tool – Automating building modeling that reduces time and cost of early stage design.

P.P.S. We’ve been sharing these updates since we started Urban Us, a little over 290 weeks ago. We track this in weeks to remind ourselves that we don’t have years to upgrade cities in anticipation of climate change.