In this episode, we're joined by Zach Caraces to talk about startup cities, what has gone wrong with American cities? What can we do to fix them? The lack of customer service culture in the cities industry. Platform vs. product cities, why Americans love to travel in Latin American cities. The overlap between what the AI field is learning and urban planning, how planned startups cities should be, Kannapolis NC, and a whole lot more.
William Jarvis 0:05
Hey folks, welcome to narratives. narratives is a podcast exploring the ways in which the world is better than in the past, the ways that is worse in the past, or it's a better, more definite vision of the future. I'm your host, William Jarvis. And I want to thank you for taking the time out of your day to listen to this episode. I hope you enjoy it. You can find show notes, transcripts and videos at narratives podcast.com.
Unknown Speaker 0:38
Zach, how are you doing this afternoon?
Zach 0:41
I'm doing great. Well, thanks so much for having me.
Will Jarvis 0:43
Absolutely. Thanks so much for taking the time to come on the show. Do you mind giving us a brief bio and some of the big ideas you're interested in?
Zach 0:51
Sure, that my brief bio is really that
I've worked in usually some kind of entrepreneurial capacity for my whole career either as a co founder or you know, operator operations person, or the last, you know, about eight years or so, on the engineering side as a founding engineer, as a co founder of something. So I focus in particular on early stage companies, because I'm terrible at bureaucracy and company politics and that kind of thing. And I love the experience of going zero to one on things, the big ideas that I'm interested in, it's really the generalization of this startup way of thinking on to what I think of as frontier verticals or frontier markets, with that are lacking this kind of thinking, in particular, for about a decade or so I've been involved in a space that that I've been calling startup cities for a long time, which is the application of startup entrepreneurship to the built environment and to the building of communities themselves.
Will Jarvis 2:00
I love that I love that. I want to talk about startup cities and and what the future looks like there. We've got a lot of you know, charter cities being built. You know, Scott Alexander has a weekly or bi weekly thread, where on Mondays, I'll talk about give updates on all the new startup cities are thinking that you see, like particularly promising that you're excited about right now any efforts in the startup city space that you think are quite exciting?
Zach 2:27
Yeah, definitely. I think so I like to think of these projects as existing on a spectrum, where we're, some are innovating more on the physical aspects of, of a city. And some are innovating more on the social aspects of a city. And the way I think of it as is that the city is this sort of very complex technology stack that stretches from the kind of laws and procedures and policies all the way to like a sidewalk or a light or a building or you know, very physical like meat and potatoes kind of stuff. And in particular, a lot of the charter cities projects, and you know, some of those are exciting because they carry with them innovation on this, the more social side of the technology stack, right. And in some cases, for instance, a friend of mine, Curtis, from the charter cities Institute, the executive director there. He has pointed out I think, quite rightly, that many of the Africa oriented projects are really innovating on both direction on both sides. They may have this sort of reform in law and governance, social side, but they're bringing really a baseline of physical infrastructure that is it non existent in certain markets in certain areas. So although they're not innovating in the traditional sense of say, you know, pressed timber or like 3d printed houses are like this sort of futuristic stuff you hear just having functioning roads, and good sewage hookups, and reliable electricity is an innovation in those markets. So I, the project that I follow that I guess you'd say I was the most excited about, although I think it's it's in a rough patch right now is a project called Sudan Mother Son in Honduras, Sudha Mata son was, it's a, a kind of, it kind of straddles these two worlds of charter and startup cities in the sense that it has reform aspects associated with it, but many of the major innovations are because there is one really fantastic entrepreneur that is behind the building and owning and operating of the living environment. The other thing that's interesting about Pseudomonas Sion is that it was deliberately built for the local market. You'll often hear in these projects that there's a lot of like let's attract foreign crypto capital or digital nomads or something like this, which I'm not against or anything but what was so interesting and I think we The innovative and brilliant about Pseudomonas son is he did really detailed. The founder Masimo Mazzone did really detailed customer research in the slums of, of Chile Loma, which is the city where this place is located in Honduras, and looked at, you know, budgets and pain points and the kind of stuff that's really about bringing a quality product to market and then solve those problems. The future of these projects, especially in the Honduran context, remains to be seen and that there's, it's in a rocky period right now. So who knows what's going to happen, but I am excited about those in the kind of charter city space in the more startup city space, I think there's potentially some interesting things coming out of dowels in the kind of web three crossover space, such as, for instance, cabin tower city, Tao. And I'm also very interested to see the next project that comes out of culdesac. cul de sac is a low car oriented urbanism developer that has their sort of pilot project is in Tempe, Arizona, and I think they're probably going to do something bigger and more like sort of more interesting, and with more dimensions of innovation as their next project. We'll see.
Will Jarvis 6:12
That's really cool. I just for the audience, can you define what the differences between startup cities and charter cities?
Zach 6:18
Yeah, so and I should, I should say, this is like, this is my own take here, there, the, the nomenclature is always kind of changing and is sort of like been this endless problem in the space of the shifting terms. So I'm as confused as everybody else. But generally speaking, the where I draw the line is that a charter city focuses on having a charter with some host governments such that they are getting some differentiating law or governance aspects inside the city. Okay. Now, what I focus on, and what I term startup cities are simply cities or neighborhoods built by startups, you know, actually run as a product like run by run by startups, there's obviously a crossover because you could have, and I think in some some of the upcoming charter cities projects and current charter cities projects, you have cities that have a charter with, with a government of some kind, and they're also operated in more like a startup. So they're, you know, it's not a totally clean cut. But I don't, my view is that, I think there's a lot of innovation that doesn't necessarily require a charter, and in particular, in wealthier countries. And I think you're probably unlikely to get a lot of the promised innovation of a charter, if you don't have entrepreneurial management, which is, to me the sort of the killer, this sort of like killer feature and the killer differentiator of what is likely to make these things successful.
Will Jarvis 7:53
Got it, it does seem like one of the things that, particularly American cities, lack is like super good management, for all kinds of reasons. I was just talking to a friend of mine, who's a VC last week, who's thinking about running for mayor, I won't name him in his local town. And he mentioned how he went to a conference with a bunch of local mayors. And he noted how almost none of them were paid. This is a pretty wealthy state in the western United States. And almost none of them were paid, which leads to all kinds of perverse incentives, where most of the people are real estate agents, or have some other vested interest that they they have to work on on the side. Because, you know, it's kind of a thankless job, and you're not getting any money for being a mayor. And so it can be all this like self perpetuating cycle of poor management, and then things get worse, and then it you know, less, less talented people want to do the job, and then, you know, things kind of spiraled from there.
Zach 8:45
Yeah, that's a very interesting point around around pay. And I, I totally agree with you that, you know, managing and administering a city should be a very highly paid job that attracts the best talent that we can bring to it, you know, it should, you know, mayor's mayor should be paid like CEOs. Because, you know, hopefully, we would get people that would then behave like good CEOs. Right, exactly. And I think the other the other thing that happens is, I, you know, there is this thing about, you know, sort of money in politics, and that that's like a sort of perverse thing, or something we want to get out and I sort of get where people are coming there. But I think what people overlook is that if you don't have the extrinsic motivator that's pulling in talent for essentially mercenary reasons of like, I want this highly paid job. What you end up are you end up with are people that have intrinsic motivation of some kind? And I think the people's assumption, which I think is not true, is that intrinsic motivations must necessarily be better and lead to better outcomes than the extrinsic motivation of working for you know, a good paycheck, right? I think that is like you It's probably somewhat true in the sense that you'd likely want a mix of intrinsic and extrinsic motivation, like in any other, you know, role. But I don't think that someone who's willing to work for free and has a lot of intrinsic motivation necessarily means that it's going to they're going to be the best leader and make the most rational decisions as a manager. And it's just a weird, it's sort of just a weird aspect of how city management and municipal governments and things have evolved, that we're living in this world where the best people are often not elevated to these important positions. Right.
Will Jarvis 10:33
So it's something like, maybe we should have more Singaporean model where we have, you know, the highest status that you can do is become a civil servant, which is not the case in the US.
Zach 10:42
Yeah, I mean, I am very interested in Singapore for a lot of reasons. And I think there's, you know, Singapore is used sometimes casually, as an example in the kind of charter city startup city space, right. And we can talk about that if you want. But one thing that there's no doubt that Singapore has done well is one, they seem to have much better land management policies than the many places. And the other is that they, they aggressively incentivize people in the civil service. For a long time, my understanding is this, this is not the case anymore. But for a long time, civil service pay was actually linked to GDP growth, which is sort of this sort of wild thing where it's almost like getting a bonus for company growth, but at the level of, you know, Singapore, Inc, right? They don't do this anymore. And I kind of I remember reading a paper a long time ago about this, and I can't remember why they stopped, but must have had a good reason. Those kinds of incentive schemes are fascinating.
Will Jarvis 11:41
Yes, yes. Yes, absolutely. Absolutely. Singapore, you know, it is it is pointed to as as this charter city kind of success. Hong Kong and Macau, I think of a couple of places like this. One problem I see in my mind is that which I think sometimes gets glossed over is there can kind of be one Singapore, you know, they can kind of be one Hong Kong, Hong Kong. You know, Macau is like a gambling hub. And they each have their kind of niche that they focus on, you know, it's maybe finance in Singapore, that you can kind of carve out and it seems like to have a successful charter city, you need to have something like that, where you can kind of monopolize in some local domain, some part of the economy, which you can uniquely do well, do you think that's kind of an important part that a lot of people when they're thinking about these things just kind of gloss over?
Zach 12:27
I do very much think that there, I think there's several elements that get glossed over. And one of the most important is what you pointed out. I've been fortunate to visit all three of these cities. And what you realize is they're they have a very complex history that I think is hard to necessarily generalize on to, you know, Project X and some totally other contexts, right? On my website, startup cities.com, I have a piece called innovation by copy and paste. And I argue a little bit that sometimes in the charter city space, you hear this argument, that's just kind of, if we can copy and paste, you know, thing X from Hong Kong or thing X from Singapore into this other environment that will Hey, then it's going to sort of evolve in exactly the same way. And and I'm just not really sure that that's, that that's true. And I think the experience of people in startups really gives the lie to that because you realize how much how much you are constrained by your context. Exactly. Yeah. Now, the other the other piece of this right, is that there's a strong foreign influence. And all three of these stories, the one whose history I know the most is Hong Kong, and you know, Hong Kong was, it was obviously it was like, literally a colony, right and had the back, you know, this sort of British basis. And it was administered in a kind of purely technocratic sense, in particular, by a gentleman named John Cowperthwaite, who was the finance minister of Hong Kong. There's a wonderful book called architect of prosperity. And it's a biography of John Cowperthwaite. And when you when you read this story of John Cowperthwaite, and his management meetings, it's he was essentially a corporate board with a CEO that was making these extremely technocratic decisions meant to maximize the wealth of the place. So now, some people say, Well, that's great. We should just do that everywhere. Right? But I think a lot of other people would say, Well, I don't really like that. That's, that's, you know, not you know, people are not generally speaking in favor of that colonial pattern of development. Right. So again, how much can we generalize these lessons on to other places? I'm not sure Macau too, right. You know, if you go to downtown Macau, it's full of Portuguese architecture, right. So it's this these stories are strange. And you know, if you go to Singapore, you know what pleases are named after guys named raffles, which I assume is not a local last name, right? Like there's just these places are calm. plaques and there's certainly some things we can learn. But I don't think we can just use a reference class of these three places. And then say, We'd like form a reference class of these three places, and then say, okay, if we just do that here, everything's gonna look the same. That's a mistake.
Will Jarvis 15:15
So it's much more complicated. It does sound like you can, you've been able to outline, there are a couple of common characteristics, like really good governance, you know, it's probably like a CEO board model in the beginning to get things started. Things are running, very technocratic way, there's a set of good policies that seem to matter. But there's also this humanities paper like type thing you have to do, or you have to write out, you know, how is this thing going to be unique? And what are the unique strengths that we can lean into that that each charter city can have? So there's like, there are some hard facts I've given says, tell me if I'm wrong, we're getting the sense. There are some hard and fast rules that like it's just better to do things this way. And then there's some things that so there's some copy paste in that sense, but you can't copy paste the whole thing or you get in trouble.
Zach 15:58
Yeah. And really, I mean, this is my view is that it's a lot of this stuff is very analogous to startup entrepreneurship. I mean, no, no, no person startup is going to tell you that you there's zero patterns that you can learn from any other company about how to do anything, right, yes. And in quite literal sense. Many of the technologies that you deploy, and the practices you adopt, and the tools that you use, these are things from elsewhere that you are not building and you shouldn't build them, because it's a bad idea. But to go from that, you can get a foundation there. But everything interesting and hard about the startup experience and the whole of creating anything from like zero to one, it's not in there. It's everything that is not that it's what is it that we're doing that is different, how does it that we're internally differentiated, externally differentiated? Do we actually understand the customer? Can we confidently deliver this service or product? Can we scale that? You know, do the unit economics make sense? Do we have enough money to make it until the unit economics makes sense? I guess, all of these, these are all the hard and interesting things. And they really are not easily copied from anywhere else. And I would say I would argue that the the city story is pretty analogous to this.
Will Jarvis 17:11
Definitely. It definitely takes talented entrepreneurs and founders to to build these things. Absolutely. That's great. I want to move on a little bit and talk about something interesting. You sent over an email. Why do Americans love to travel to Latin American cities?
Zach 17:26
Yeah, so you know, I've spent, I spent several years of my career living and working in Central America. And what you realize, right is that there are many things that are very dysfunctional, about Latin America, things like security, traffic, you know, lots of this, these things create, like, really, really serious problems. And I think it's naive to not not acknowledge that. But on the other hand, there are things that are really wonderful and joyful, and that people come from all over the world to experience. And a lot of that I think, revolves around what is essentially just the heritage of traditional urbanism. So you go to a city like Mexico City, and all the places that are fun and cool, and that you want to go to, it's like, you know, some family is, you know, selling michalos out of their garage, right on some street corner, and you go there, and it's like, the best michalos in Mexico City. And oh, this is so cool. And I'm just like sitting on a dirty stool, on the street, and whatever. And that is what makes it so fun and exciting, and makes people want to walk around and hang out and fly there. Right. And so it's in a way, it's the inability of the cities to actually their failure to have the state capacity necessary to enforce their rules that makes it feel like a dynamic and exciting place that people want to go to. And in the United States, we have this, we have the blessing of having rules that are actually like quite well enforced in the state capacity often to enforce these rules. But unfortunately, what that often means is that we we, we sort of smother everything fun and dynamic and interesting about urban life. And we instead all pay $2,000 round trip to fly to Mexico City to enjoy it when we could enjoy it here, you know, as well, right?
Will Jarvis 19:21
In substance is that we just have too much high modernism here. We're too worried about you know, you know,
William Jarvis 19:27
the code, quote, Mr. Scott, like,
Will Jarvis 19:30
there's just too much. Yeah, we're trying to plan too much, and we need to let things like breathe a little bit more.
Zach 19:37
I think that's certainly part of it. Right? I mean, I think it's it goes without saying that, like, many of the things that are fun and interesting, are essentially illegal or sort of illegal, or would it be illegal if people had sort of preemptively put rules in with the idea of what should and should not be allowed? I have a I have a piece on my website about this. called mixed drinks with Mexican drag queens, which is focused on the whole, like the whole street culture of Latin America. And there are all these things that just ex-ante would be illegal. Like, you can't, you can't, you can't sell mixed drinks from your garage in the United States. You can't I mean, maybe if you go way out into an unincorporated county or something you might be able to, but none of my customers are there. So it you know, it doesn't work. The street truck has to be in a particular location, highly licensed, you know, cost six figures to get going on, you can't just push a cart down the street. That's the high modernist side that I do think has a big effect on that. But I think there's also another piece, which is that American culture in general just seems to have a, an expectation around externalities that many other places do not. If you spend time in Asia, for example, there is just not the cultural idea that like no one can make a sound or do anything around you that could possibly offend you in some way. Right? There's just you don't get that right, you know, you to block those things. And people honestly, you know, they might be annoyed or whatever, not talking about it. But they're not, they're not like seemingly doing anything to block it, because they don't think that they have the right. In the US, it often feels as though people's idea that their sense of like, the externalities they must be protected from is like, very wide and very, very expansive. And no one can do anything that like bothers me in the slightest. And I will enforce that in law. And so I think it's not just the sort of structural high modernist governance side, I think there's also some cultural aspects here, too. And then just the physical design, right, which is just lower density, which means, which is in part, kind of how this rejection of anything that could be perceived as an externality reflects itself on physical space right around us.
Will Jarvis 21:52
So like extreme nimbyism, so most places are just like very envy and all kinds not just like the zoning of what you can build, but just in general, like, you know, what kind of sounds you can make, you know, what you can do in your front yard, just more allow more things and don't really have this norm that, you know, hey, like, my neighbor can't go put an RV in front of their house. Like that's, that's not the thing. It's like, oh, that's my neighbor's yard. I don't have anything. You know, I kind of more libertarian, they're like, I don't have the right to manage his yard.
Zach 22:20
Yeah. And I think there is, you know, I don't think there's any, like, it's a conscious libertarianism or anything, but I think it's just kind of this sense of, and I think, I think it's also it's one of the it's almost like a kind of broken windows policing sort of thing, where, if the default is like, everyone's doing stuff in their front yard and everyone, you know, the sort of commerce is spilling out into the street, then that's what you think is normal. And so you don't you don't look to stop it, because it's what's normal, right. I love
Will Jarvis 22:47
it, elevate it, just just let it go. Oh, going off of that, what do you think the future of urban planning looks like? You know, particularly with advancements in AI and everything going, you know, what is optimal urban planning actually look like in the real world?
Zach 23:00
Yeah. I mean, that's a huge question. And probably, you know, actual urban planners and urbanists are gonna watch this. And, you know, start started weeping at my answer here. But I think actually, there, there's no doubt certain technological levers here that are very interesting that are on the frontier. And I think it's everything from what I think in a city scale observability. So I'm not that I'm not that bullish on the idea of like, let's put sensors and everything and like, try to optimize the city, this kind of like Smart Cities thing, right? I'm not, I'm not wild on that. But I do think it is the case that there's a lot of interesting data that is being collected now. And obviously, that could be collected even more and you know, in more places, and there is the technology now to kind of aggravate these things and look at them. There's a reader of my newsletter and a friend of mine, Yaniv Loc, who's an city planner from Albania is working on a very interesting product called lair, which he isn't he's an urban planner. And he has these sort of layers of data that he overlays over cities. And many of the things that you see are really fascinating. And, again, it's not this is not like Mega futuristic technology. This is simply making accessible, the huge amount of data and kind of this highly distributed, fragmented data everywhere in one place like Yoni is doing so I think that's a that's a cool approach the AI stuff again, I'm not like, you'll sometimes hear people make these grand claims, which is, you know, the sort of, almost almost like sentient AI is just going to tell us what decisions to make in the city and stuff. And I'm pretty skeptical of that. But I think as an engine for imagination, AI is actually really good. Could could be really wonderful. I have an article coming out, hopefully in about a month or so that looks at realistic Real Estate. Eight workflows, but with using AI tools for these things, so it's things like looking at how looking at how an existing space might look. So like an aerial view of how it might look with greater sprawl, you can, obviously you can transform the interiors and exteriors of buildings very easily now with generative visual AI models, right. And there's some there's some really wild video stuff like I saw this guy, this guy make a, it was a Chinese restaurant that had been converted into a skyscraper. So like, what would the skyscraper version of this Chinese food restaurant look, and it was ridiculous. But it was one of these things where that is, I think that probably never been drawn before in the history of humanity, right like that, that kind of pattern, right. And that's the kind of stuff that I feel very interested in. It's the kind of long tail of human creativity that can be unleashed by by generative AI models, as opposed to people kind of leaning in them, leaning leaning on them for decisions. The other piece, I think of urban planning is the awareness that the high modernism stuff is just not working very well, in that there, we have to treat the city itself more as a computational system, which means actually allowing greater degrees of freedom amongst the nodes in that system, ie people and entrepreneurs and restaurant tours, and all the people to actually do more stuff. So that we ended up with a more interesting and complex system there, the city itself, right,
Will Jarvis 26:36
that makes sense. And how would you rate the current city? Right? If you don't mind me mentioning it, you know, Denver, like, yeah, how much do you like Denver? How what do you think Denver works at some level?
Zach 26:45
Yeah. So I actually think so Denver has its problems. But it is less NIMBY than West Coast cities, and therefore more affordable, and in some ways, like, it is sort of more dynamic, and with fewer of these, like West Coast sorts of problems. It's much more NIMBY than I would like, certainly. And I think the cost of living could be less expensive here. But if I go, you know, if I go on the roof of my building, and I look around, there's lots of cranes building new buildings, which I always view is it's a sign, okay, you know, the city is not totally broken, because it's growing. And also the supply is growing. Yeah, I don't know, I'd rate it maybe a six or seven out of 10. There's, there's actually pretty good, pretty good, like user interface digital service stuff here. And, you know, a reasonable sense that people seem to care about what's what's going on. We have many of the same problems. I think, I think of them as it's essentially just like, ideology run amok, you know, in many American cities, where there's obvious basic stuff around, for instance, security in public spaces and stuff that is just, you know, it just seems impossible to have a constructive conversation around us. And, you know, we certainly have our share of that. Yeah, but really, Denver, Denver is one of these places that I think emerged also at a wonderfully a strategic location. You know, it's sort of it's more certainly more Western east, but not all the way west gate, you know, right by the Rockies, and which is beautiful. We have we have tourism, but it's not a tourist city at all, in the sense that it's not the dominant kind of aspect of the economy. There's a high level of human capital, you know, the Denver's median salary, you know, family income is is like, reasonably high. I like some of that place to live.
Will Jarvis 28:41
That's great. That's great. I, you mentioned some of there, I think is interesting, I think is glossed over in a lot of urban spaces a generally, in the conversation. And that is, I think, one of the most important functions of government is in a city where I live, can any member of my family walk around at any given time of the day? And feel like completely cool doing that? Why? Why do you think and why is like always overdetermined? Why do you think this kind of gets glossed over? And are there easy ways to make this more achievable in non political ways? If that makes sense? Is there design things we can kind of engineer? Is it more lighting? Is it something like that? Like, have you thought about this at all?
Zach 29:25
Yeah, so I mean, I liked that certainly as a maxim for understanding the health of the city, which is like, what would I be fine with? You know, especially if you think about it. intergenerationally. You know, would my will, you know, would my mother who's you know, older would she feel comfortable? You know what, my wife feel comfortable? If I had a kid that's like 10 or 12? Like, could I send them to the corner store? If you're comfortable? Right? I think you know, the answer. For many cities downtown is no and unfortunately in Denver's downtown, it's also no and yeah, it is It's sad. I mean, so one one city council member who I believe she's still in charge of my, like my exact district, her number one issue that she cares about. We're I'm in one of the like, least safe districts in downtown. And the the issue that she hears about the most, though, is the fact that Denver uses trains still to transport things in, you know, in downtown and like, what if those loads might be somehow polluting? Or what if those loads are, you know, toxic in some way, and like, that's the number one issue is like the hypothetical risk from using trains in a town built on the back of essentially mine. And this just feels like a sort of really crazy set of priorities to me, and maybe I don't understand something and there's a much bigger risk than I think from the train loads, you know, I doubt it, but that could be true. And but as far as solutions in this van, like, it's, I feel like this is a it's like a third rail topic. And my, my focus is really that I think, more or more spaces that are that are actually owned and operated. entrepreneurially owned and operated, tend to be safer spaces because there is someone with a vested interest in leaving quality of the unit and the experience of the unit. So is it like do crimes never happen inside a shopping mall? Of course they sometimes do and sometimes terrible things happen. But like the parking lot, you know, outside the shopping mall, or even worse, let's say the the desolate streets beyond the parking lot outside the shopping mall, is probably less safe than like inside the shopping mall. And I think what you see like what you see, in Denver's there are a few mixed use kind of big, big developments that include a sort of public space. There's a place called MacGregor, square up the street. And you really don't, you don't really worry about your security and McGregor square, because it's just this very well managed space. But you can walk one block over, you know, to some some other square that isn't, you know, it doesn't have the same incentives, and you immediately feel unsafe. So it's just, yeah, better incentives equal, better urban environment equals more safe spaces for people. So that's what I would like.
Will Jarvis 32:16
That's great. That's great. I think there might be I think Brian Kaplan wrote an article about how the majority of like, quote, unquote, law enforcement is actually just like private security in the US, you know, that can't really do much, but just having someone there walking around, like, Does this help promote, you know, some sense of safety and security?
Zach 32:31
Yeah, and I think it's also right, there's, there's an, there's an intrinsic motivation, I guess there's a, there's an inherent motivation on the part of entrepreneurs, especially real estate entrepreneurs, they want lots of people, they want lots of people there, because it means they're making money, right? Lots of people in the in the retail store, lots of people in the square watching the football game, lots of people at the restaurant, lots of people living in the apartment buildings like that, that's the that's the drive that's there. And it's just like, harder to be the sketchy person that's gonna, you know, mug, the old lady in a place where there are lots of people. So there's a way in which it sort of like successful real estate entrepreneurship is itself safety creating because it creates population in a location.
Will Jarvis 33:11
Right, right. And more density is good, good for that kind of problem. I'm curious, you wrote a great article for a sixteens future a16z future publication around cities and their API's? What kind of cities API's and what problems do we have with them? And perhaps how could we fix them?
Zach 33:31
Yeah, appreciate that. So the the article is, is it essentially takes, like a sort of technology framing on something that I think is usually framed politically or ideologically, what people sometimes think I'm saying around city API's is like, literal digital API's for like, I don't know, accessing your driver's license or something. That's fine. I like I'm in favor of that stuff. That's great. But that's not really what I'm what I'm talking about. What I'm referring to is that the process of land use itself, showing up to a city and being like, I want to buy this land and do this thing on this, this piece of land. That is the fundamental API of the city, if you understand API, as the integration point between user and system, right? And city, the city is the system and they're, they're going to be the ones that evaluate this plan and decide whether it's going to be allowed and whether it's in compliance and all of this. And then the user say the let's say, a restaurant or someone that wants to open up a restaurant in a city, right? So if you think of it that way, then we could gauge the health and success of cities in their their land use policies in particular, we can we could measure them by the with the rulers that we use for normal API's and technology, namely things like speed, reliability and complexity. You know, anyone who's worked in soft software knows that good API's are easy to integrate with. In other words, you don't have to like, you don't have to learn an awful lot to understand how it is that you need to use it. They're reliable in the sense that if you put something into it, you you understand and expect a certain certain response to come out. And they're fast. In other words, they don't they don't leave you hanging, you know, you you need, you need speed. And if we just, I think, look with objective eyes, on cities, land use API's, they fail all three of those dimensions, not not all cities. But I think I don't think it's unfair to say that a large number of American cities, and in particular, the biggest and most populous cities, and the most popular cities as destination, so live in fail on this, how do they fail? Well, things sometimes take years or a decade before you you hear anything, that's not fast, you have no idea how that your thing is going to be evaluated? Or what even necessarily like what criteria is going to be used, who's going to be making the final call this kind of stuff? So the reliability is not there. Things can be killed for all kinds of random reasons and rejected with no idea. And then oh, it was my was my last criteria here. Oh, and then complexity, right. And they can be remarkably complex in the sense that it's not like there's this sort of simple standard data payload that you're that you're you have to send to the city to get their approval, it can be very arbitrary, or, you know, different between cities very extensive, you might need some extra report. And the the total effect of these very broken API's is to make it harder for normal people to integrate to the system that we call the city. What does that mean? How does that express itself, in practical terms, it means fewer things are built. And we don't even actually know how much fewer things are built. Because many people are so will be so discouraged by this process, they'll never even try. And so they won't even show up in statistics, right. So this is the API problem of cities, in my opinion, is maybe the biggest lever or certainly one of the biggest levers that a startup city could could use to really differentiate themselves from Legacy cities in the United States.
Will Jarvis 37:22
So if it just made everything a lot more legible, and easier to do, people could interact with it and express it and kind of take ownership and build new things in, like on the barge, and there'll be a lot more people doing that, when that would be really good.
Zach 37:35
Yeah, that's right. It would be it would, I think, I think there's good evidence that that there's a lot of pent up energy here in the sense of energy in the sense of sort of capital and entrepreneurial potential and ideas that are waiting to be expressed on the built environment and in our cities. And they're just they're not going to happen because this API is so broken. So you know, one one startup cities sort of story here is if you are able to capture some of that pent up energy by saying, hey, it's a 24 hour turnaround time for approval, and you only have to give us this simple thing. And this is how we're making the decision. So it's totally public and transparent. And like, you know, please send me your proposals, right. That's a very different experience than what cities are offering builders now.
Will Jarvis 38:19
Love that I love that know that much. We can do a lot more with with that. And in American cities, in particular, we're permitting it's such a difficult problem to get through. Just being able to build things more quickly would be very, very helpful. Zach, I want to move on now do a round of overrated or underrated if you're you're okay. Yeah, sure. Okay. Yeah, absolutely. Absolutely. So I'll throw out a term and just tell me whether it's overrated or underrated this and perhaps why perhaps that as to why view you've got something there. So the first one is Kannapolis, North Carolina right down the road for me? Is it overrated or underrated?
Zach 38:59
Underrated as a an interesting story. And as an interesting data point for the charter cities, startups in the space.
Will Jarvis 39:09
That's great. That's great. And can you talk about why a little bit? I know, it was a company town. And, you know, why don't we have as many company towns anymore? We still we have like these companies that were so much No, Apple was worth 2 trillion, but you know, kind of refuses the company town model?
Zach 39:24
Yeah. Yeah. It's very interesting. So I think I, there seems to be some association or some relationship between company towns and like a certain phase of capitalist development. You could argue, for instance, that some of the projects that are in Honduras right now, this sort of charter city stuff going on there. Some of them look a bit like company towns, in the sense that the the developer of the town is also the dominant employer, either the only employer or at least the dominant employer in the environment. And that's I think, what you start getting towards this, this company town dimension, namely Where the the owner and operator of the environment is also your source of a job? Yeah, Kannapolis is absolutely a case like that cannon Mills textile factory, it was like a sort of sheets and towels manufacturer. And they build a whole town around it, why we don't see them as much anymore? I actually, I think that's a really good question. I think some of it, some of it is, is cultural in the sense that, you know, some company towns and for good reason got a bad name. I also just think that the company town form is it's actually quite fragile. And I'm not sure, I'm not actually sure if it's just maybe not a durable urban form, right. Because they these, usually they seem to transition into something else, after a while, I would take issue or maybe challenge you a little bit. I think that a lot of large tech companies in the benefits that they provide, they're offering something akin to a, let's say, a distributed company town experience, because you have you have them, say here, I'll pay for your therapist, I'll pay for your gym membership, I'll pay for your you know, your groceries, I'll pay for a trip, I'll pay for the you know, Google has negotiated contracts with rental car companies, for example, just for their employees. So they're a you know, they run bus systems and stuff, you know, shuttles all this. So it's like, it's not that there's not any of these elements here. It's just that we don't see we don't see the residential aspect coupled now to the the corporate aspect. But I don't know with remote work, who knows that that could possibly change? We'll see.
Will Jarvis 41:35
That makes sense. That makes sense. Yeah, it is notable that it perhaps is something like agglomeration effects just matter less and it with, you know, if you're building software, it just matters less, you need less people all in the same place to build something.
Zach 41:49
Yeah, I mean, you know, the company town that the classic company towns, you know, it's industrial, it's, you know, a whole bunch of people all sewing towels, you know? Yeah, some big machines and stuff. I have also very homogenous, I think that there's a certain degree in which software it's not that it isn't homogenous, in a sense. But there's actually there's so many niches in software that actually it's very heterogeneous in a sense, you know, people skills.
Will Jarvis 42:14
Absolutely, absolutely. The next one, the network state, overrated or underrated?
Zach 42:21
This is This is tough. That's a tough one. Man really? I would say in I would say maybe, maybe underrated in the sense that I think the idea of sourcing demand online for a physical location is is a great idea. And it seems to be that's like the sort of cornerstone of a lot of the ideas around the network state. And you know, biology is ideas, which I like, I would say network state is overrated as a, as a sort of political thing, in my opinion. And I'm also personally very skeptical of this kind of demand sourcing strategy that focuses on ideological or values only alignment. This this, I think, I'm I'm not so sure about this. And that, I don't even know if that that's that's not necessarily intrinsic to the network state idea. But it definitely has become I think, in the in the sort of meme version anyway, a big part of it. And I would say that aspects overrated to me,
Will Jarvis 43:24
gotcha. So it's Pete talking about the more it seems like, this has been a big strain of thought recently, you know, the Benedict option, all the Evangelicals that run off together, or like conservatives are gonna run off together, all the progressives are gonna form a little orb and you know, the desert or something. And, you know, I don't know, it's interesting. Like, this does seem to be like the defining characteristic, it's we're gonna have this engraved around whatever given ideology a group has, and then go build a city around it. Why are you skeptical of this? It does seem to have like a lot of power in people's minds.
Zach 43:53
Yeah, I think it has a lot of power in people's minds, because people think that what they want is to be surrounded by people exactly like them. But in practice, most of the time, you have some like Venn Diagram of overlap with people, but not it's not a big overlap, right. Now, you could argue that the network's they just say, well, the one commandment right? And hey, so that means that's only a little bit of the overlap. And you know that that's fine. That could work that's fine. But how this usually gets expressed I think is more in the spirit of what you're saying, which is this kind of like super alignment over over worldview. My view is that an environment where everyone shares the you know, identical ideology is more of a cult than a city. I think there are not good examples of intentional communities aligned on ideology that scale. You could you know, think of an example of let's say, I don't know like Oneida I'm pretty sure Oneida overnight in New York. My history is a little sketchy, but I believe it began essentially as a value values aligned community and how it ended up you Is they now make silverware because that was how they were supporting their culture. And now everyone just knows that as a silverware thing, and it's just like a nice town like everywhere else. And I think, similar to the company town, that the pressure is actually towards the diversification of people in the, in the space. I think also the this desire for extreme alignment. If you've ever been in an environment, if you know you, the proverbial you have ever been in an environment where there is this extreme alignment, you often end up with, like really ridiculous and intense conflict, which is essentially the narcissism of tiny differences in the words of writing Bertrand Russell, right. So I'm, you know, do we want to generalize the narcissism of tiny differences onto the city scale? The other piece of it is that it seems to be the argument is that the fundamental problem is lack of values alignment, and I'm just not sure that that is the fundamental problem with why cities are dysfunctional. And yeah, it's not that there is I'm gonna be clear, I'm not saying that values don't matter at all, and that there's just like, no room for this or something like that. That's not what I'm saying. I'm just not convinced that it's the thing, the important thing. There's even almost an analogy, I think, here with dating, you know, there's a way in which online dating apps have allowed you surface, like the full half of the Venn diagram of the other person digitally, right. And then you project onto them, oh, my, you know, oh, my God, you know, she, she likes my, this band that I like, and like, we're gonna be so compatible, and then you meet up, and there's actually no compatibility, compatible in the long run with someone who it's like, they actually don't like, you know, 85% of the things that I like, but on this really important set of things. We're aligned with a while, right? Yeah.
Will Jarvis 46:48
It's a really good point, you know, often, what really matters for alignment is very illegible, like, especially in relationships, I see people. And, you know, my favorite is, you know, John Gottman, and he psychologists that all these studies around marriages and what made them work, and he's kind of a crackpot, people don't wanna admit this, but because he backs off, you know, say, backs off, and he didn't have predictive power in the future, you just go back and say, oh, like I noticed in the back of the future, you know, like, these things, tie people together and made them successful, long run in marriages, but big thing I got up his book was essentially, we have no clue what makes people like, get together and stay together for long term, like values alignment thing is, is important, but it's not like you can't like just say, hey, like, I'm a conservative, I want to be with a conservative and you're done. That's it may be a part of it. But it's not the whole thing. There's all these other things that are very complex above it.
Zach 47:39
You know, I think there's another dimension. Not to belabor the point, but you know, there's some, it's, you may know, this evidence better than I do. But my understanding is, there's at least some evidence that people's political persuasions is at least partially heritable, meaning that it's genetic. So you can you could imagine this world of highly aligned like, this is a highly ideologically aligned people that there would actually almost be a sort of very bizarre personality distribution their life if your politics is genetically correlated with other traits, which, you know, it seems like it probably is right. So it's kind of like what kind of weird you know, kind of one dimensional community ends up with only like, the Libertarians are only the Conservatives are only you know, these people are living together. Right.
Will Jarvis 48:25
Exactly, exactly. Yeah. And they, you know, have, you know, you don't get the diversity where there's, there's, you know, everyone's a farmer and, or everyone's a forger, and so you don't get any of this balance, and all these things get can get really wacky, really. Yeah, super interesting. I love that. What one more term here seasteading, overrated or underrated?
Zach 48:45
I think seasteading is underrated. I've followed seasteading for a really long time now, like over a decade now. And I've spent time you know, many people involved in all of this, and it's, look, it's very, it's I would say the the hard version of going in building, you know, building a new community because of the technological aspects. The the weather aspects, I think seasteading? I think also seasteading has oversold the idea of of the kind of institutional innovation that's going to occur by going out into the water. And I think I think there's two reasons for that. One is that as the the case in Thailand, and you know, some other places are shown, it turns out states and unlike people that you know, claiming sovereignty, just outside the territorial waters, and the lines are sort of arbitrary, so we'll just go outside them or they will expand them or whatever. Right. So that's a big barrier. The other is, I think, you know, if I invent something new on my computer, and I use it only just me, it's not really an innovation. It's an innovation when it enters the broader market and gets, you know, some non trivial amount of market adoption, right, and it comes useful to people. And I think that the challenge is like the technological challenge in the fight antral challenges around seasteading are, they have prevented and will prevent the kind of transition from I have this cool idea for how things should work to like this is widely adopted. But I think the the, there's a lot of interesting work that has happened adjacent, like, by the sea sending people about how do you design the platforms? What are the economics of the platforms? Where are the levers for saving costs? What are the business models? All that is fascinating to me. And I think there's no reason to believe that there's not cool stuff that we could build out in the ocean that people would pay and to go and see and write and all that. So in that way, I think it's underrated.
Will Jarvis 50:39
That's great. That's great. Zach, one last question for you. You're young guy, you've accomplished a lot of really cool stuff. You're interested in a very promising space? What are the next 10 years look like for you? What are you thinking about?
Zach 50:53
Yeah, so in my, in my day to day, I, you know, I write I write a newsletter, and that's my involvement in the startup CitySpace. I've done some advising and some other stuff in the in the past. But, you know, my, my present involvement is, I write and I think about this, and I try to keep a good reputation and connect people via that reputation via via the newsletter, to capital opportunities and other kinds of other kinds of things. So that's really the the very short term view here, the longer term view is that I think, my I think startup cities is really starting to cross out of crazy town. And there's, there's just so much more interest in this space than there was even a few years ago. And definitely compared to 10 years ago, it's just like, unbelievable, how much more famous. So what I would like to see and to be involved in our multiple funds that are associated with putting venture capital behind these projects is thing One, two is the mainstreaming of the idea that startups should build cities and the attraction of high quality talent via things like, you know, job opportunities, and job boards, and just like the meaning of it, right, so that when people people think of, you know, smart engineer, whatever they think, oh, I want to what do I want to do, I want to, I want to build cities, I want to build neighborhoods and cities. And that's a sensible and non crazy and actually good and positive thing to want to dedicate your life too. And then, of course, to actually get involved in the space as an operator, which I had a essentially a failed attempt at that in the, from roughly 2012 to 2016. And I learned a lot on that road. And I would like to get back in the you know, sort of in the in the saddle there. But it's something that I'm not willing to do impulsively and then I would only do essentially based on really understanding the strategy and why it is that the strategy is good, because it's the kind of space where it's very easy to rabbit hole into waste a lot of right, you know, chasing a rainbow.
Will Jarvis 53:04
quite intentional about it. It's very wise. It's very wise. Well, Zach, thank you so much for taking the time to come on the show today. Where can people find you? Where should we send them?
Zach 53:13
Yeah, thanks so much. It was really a joy to talk with you. Well, I so my personal website and this is Zack dot dev Z ACH that the EV my newsletter startup cities.com And I really welcome people to come and you know, argue with me in the comments and all that and it's a burgeoning community with a lot of interesting people across disciplines focused on this topic. And then last is I'm Zack Casera Z ACH CAC AR es on on Twitter and you can always email me also at Hello at Zach dot Dev and I'd love to hear from your your readership listenership.
Will Jarvis 53:49
awesome I love that. Thanks so much love to have you on again. I really appreciate it. Thanks for
William Jarvis 53:58
special thanks to our sponsor does market analysis for the support. Bismarck analysis creates the Bismarck brief, a newsletter about intelligence grade analysis of key industries, organizations and live players. You can subscribe to Bismarck free and brief dot Bismarck analysis.com. Thanks for listening. We'll be back next week with a new episode of narratives. Special thanks to Donovan Dorrance, our audio editor. You can check out documents work in music at Donovan dorrance.com
Transcribed by https://otter.ai
130: Zach Caceres - Startup Cities