Rent to own?

August 23, 2022

Also, this week:

  • 🤯 Finance is a form of time travel

  • 💬 Slack vs. Microsoft Teams

  • 🤔 Coinbase is not sure if they list securities or not

  • 🏦 Central bank simulator

🏡 Rent to own?

In May, we wrote about "the Mortgage dilemma" and that currently, many are excluded from the housing markets (especially in the cities). Many exciting companies are trying to solve this problem in different ways: Adress, Finite, Coowner,  OBOS part ownership +++.

The last kid on the block in the US is Adam Neumann's new real estate company, Flow, which will buy properties and allow "renters to receive the benefits of being owners." You might remember Neumann's name from the TV series WeCrashed or the documentary "WeWork: or The Making and Breaking of a $47 Billion Unicorn". Long story short:

WeWork was a start-up valued at $47bn that later went public for just $8bn with a founder who wanted to "elevate the world's consciousness" and invented his controversial financial metric, "community-driven EBITDA." Link

Now a16z has invested $350M into Flow without anyone knowing what it does. The best speculation I've found so far is this:

Flow aims to be a real estate investor, landlord, and property manager of a highly amenitized, tech-enabled residential building network in which residents will be renting a Flow unit with the option to purchase that unit over time. @s_afiaziz

Simon Taylor from Fintech Brain Food argues that another reason for a16z investing in Flow might be that they (and other large VC funds) have raised so much money it would be impossible to deploy as $10 - $50m checks in the lifetime of a standard venture fund. Real Estate is, however, an asset class that can swallow this much money.

This will surely be an interesting story to follow in the coming years!

Whatever you say about Neumann as a founder, he did change the office rental experience for start-ups and multi-billion dollar company in public markets, generating billions annually.

🤯 Finance is a form of time travel

Speaking of mortgages, I came across this comparison the other day and thought it was worth sharing:

One fun way to conceptualize finance is that it's a form of time-travel. A mortgage is just a way to collect some of the next thirty years of your income, bundle it up, and use it to buy a house today. The price of a risky biotech stock is the blended result of two futures, the common one where they fail and the rare one where they succeed. This is quite socially useful; the present expected value of X happening in the future can be transported to the present, where it can fund investments that make X more likely to happen. – Byrne Hobart

💬 Slack vs. Microsoft Teams

Two years ago, we wrote about Microsoft Teams outcompeting Slack with more than four times the number of active users. Now it's not even close. But if you compare how many messages were sent I think the graph would be pretty different.

🤔 Coinbase is not sure if they list securities or not

There is some kind of insecurity here (pun intended)!

🏦 Central bank simulator

If you need a break from work this week, I have the perfect game for you: A Central bank simulator where you are the top banker in charge of the central bank. Your role is to maximize economic potential by putting the right amount of money in circulation to increase the GDP of your village: the number of apples it produces. Your only lever is to change the central bank interest rate. Link

That's it for this week 👋

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Marius Hauken, partner Stacc X