Please enjoy and share your thoughts as we look forward to being of service.
ON THE FUTURE OF REAL ESTATE
In the wake of the housing market collapse of 2008, one entrepreneur decided to dive right into the failing real estate industry. But this time, he didn’t buy any real estate to begin with. Instead, Glenn Sanford decided to launch the first-ever cloud-based real estate brokerage, eXp Realty.
Contracting a virtual platform VirBELA to build out the company’s mega-campus in VR, eXp Realty demonstrates the power of a dematerialized workspace, throwing out hefty overhead costs and fundamentally redefining what ‘real estate’ really means. Ten years later, eXp Realty has an army of 14,000 agents across all 50 U.S. states, 3 Canadian provinces, and 400 MLS market areas… all without a single physical office.
But VR is just one of many exponential technologies converging to revolutionize real estate and construction. As floating cities and driverless cars spread out your living options, AI and VR are together cutting out the middleman.
Already, the global construction industry is projected to surpass $12.9 trillion in 2022, and the total value of the U.S. housing market alone grew to $33.3 trillion last year. Both vital for our daily lives, these industries will continue to explode in value, posing countless possibilities for disruption.
In this blog, I’ll be discussing the following trends:
- New prime real estate locations;
- Disintermediation of the real estate broker and search;
- Materials science and 3D printing in construction.
Let’s dive in!
Location Location Location
Until today, location has been the name of the game when it comes to hunting down the best real estate. But constraints on land often drive up costs while limiting options, and urbanization is only exacerbating the problem.
Beyond the world of virtual real estate, two primary mechanisms are driving the creation of new locations:
(1) Floating Cities:
Offshore habitation hubs, floating cities have long been conceived as a solution to rising sea levels, skyrocketing urban populations, and threatened ecosystems.
In success, they will soon unlock an abundance of prime real estate, whether for scenic living, commerce, education, or recreation.
One pioneering model is that of Oceanix City, designed by Danish architect Bjarke Ingels and a host of other domain experts. Intended to adapt organically over time, Oceanix would consist of a galaxy of mass-produced, hexagonal floating modules, built as satellite “cities” off coastal urban centers, and sustained by renewable energies.
While individual 4.5-acre platforms would each sustain 300 people, these hexagonal modules are designed to link into 75-acre tessellations sustaining up to 10,000 residents. Each anchored to the ocean floor using biorock, Oceanix cities are slated to be closed-loop systems, as external resources are continuously supplied by automated drone networks.
Electric boats or flying cars might zoom you to work, city-embedded water capture technologies would provide your water, and while vertical and outdoor farming supply your family meal, share economies would dominate goods provision.
Joined by countless government officials whose islands risk submersion at the hands of sea level rise, the UN is now getting on board. And just this year, seasteading is exiting the realm of science fiction and testing practical waters.
As French Polynesia seeks out robust solutions to sea level rise, their government has now joined forces with the San Francisco-based Seasteading Institute. With a newly designated special economic zone and 100 acres of beachfront, this joint Floating Island Project could even see up to a dozen inhabitable structures by 2020. And what better to fund the $60 million project than the team’s upcoming ICO?
But aside from creating new locations, autonomous vehicles (AVs) and flying cars are turning previously low-demand land into the prime real estate of tomorrow.
(2) Autonomous Electric Vehicles and Flying Cars:
Today, the value of a location is a function of its proximity to your workplace, your city’s central business district, the best schools, or your closest friends.
But what happens when driverless cars desensitize you to distance, or Hyperloop and flying cars decimate your commute time? Historically, every time new transit methods have hit the mainstream, tolerance for distance has opened up right alongside them, further catalyzing city spread.
And just as Hyperloop and the Boring Company aim to make your commute immaterial, autonomous vehicle (AV) ridesharing services will spread out cities in two ways: (1) by drastically reducing parking spaces needed (vertical parking decks = more prime real estate); and (2) by untethering you to the steering wheel. Want an extra two hours of sleep on the way to work? Schedule a sleeper AV and nap on your route to the office. Need a car-turned-mobile office? No problem.
Meanwhile, aerial taxis (i.e. flying cars) will allow you to escape ground congestion entirely, delivering you from bedroom to boardroom at decimated time scales.
Already working with regulators, Uber Elevate has staked ambitious plans for its UberAIR airborne taxi project. By 2023, Uber anticipates rolling out flying drones in its two first pilot cities, Los Angeles and Dallas. Flying between rooftop skyports, drones would carry passengers at a height of 1,000 to 2,000 feet at speeds between 100 to 200 mph. And while costs per ride are anticipated to resemble those of an Uber Black based on mileage, prices are projected to soon drop to those of an UberX.
But the true economic feat boils down to this: if I were to commute 50 to 100 kilometers, I could get two or three times the house for the same price. (Not to mention the extra living space offered up by my now-unneeded garage.)
All of a sudden, virtual reality, broadband, AVs or high-speed vehicles, are going to change where we live and where we work. So rather than living in a crowded, dense urban core for access to jobs and entertainment, our future of personalized, autonomous, low-cost transport opens the luxury of rural areas to all without compromising the benefits of a short commute.
Once these drivers multiply your real estate options, how will you select your next home?
Disintermediation: Say Bye to Your Broker
In a future of continuous and personalized preference-tracking, why hire a human agent that knows less about your needs and desires than a personal AI?
Just as disintermediation is cutting out bankers and insurance agents, so too is it closing in on real estate brokers. Over the next decade, as AI becomes your agent, VR will serve as your medium.
To paint a more vivid picture of how this will look, over 98 percent of your home search will be conducted from the comfort of your couch, through next-generation VR headgear.
Once you’ve verbalized your primary desires for home location, finishings, size, etc. to your personal AI, it will offer you top picks, tour-able 24/7, with optional assistance by a virtual guide and constantly updated data. As a seller, this means potential buyers from two miles, or two continents, away.
Throughout each immersive VR tour, advanced eye-tracking software and a permissioned machine learning algorithm follow your gaze, further learn your likes and dislikes, and intelligently recommend other homes or commercial residences to visit.
Curious as to what the living room might look like with a fresh coat of blue paint and a white carpet? No problem! VR programs will be able to modify rendered environments instantly, changing countless variables, from furniture materials to even the sun’s orientation. Keen to input your own furniture into a VR-rendered home? Advanced AIs could one day compile all your existing furniture, electronics, clothing, decorations, and even books, virtually organizing them across any accommodating new space.
As 3D scanning technologies make extraordinary headway, VR renditions will only grow cheaper and higher resolution. One company called Immersive Media (disclosure: I’m an investor and advisor) has a platform for 360-degree video capture and distribution, and is already exploring real estate 360-degree video.
Smaller firms like Studio 216, Vieweet, Arch Virtual, ArX Solutions, and Rubicon Media can similarly capture and render models of various properties for clients and investors to view and explore. In essence, VR real estate platforms will allow you to explore any home for sale, do the remodel, and determine if it truly is the house of your dreams.
Once you’re ready to make a bid, your AI will even help estimate a bid, process and submit your offer. Real estate companies like Zillow, Trulia, Move, Redfin, ZipRealty (acquired by Realogy in 2014) and many others have already invested millions in machine learning applications to make search, valuation, consulting, and property management easier, faster, and much more accurate.
But what happens if the home you desire most means starting from scratch with new construction?
New Methods & Materials for Construction
For thousands of years, we’ve been constrained by the construction materials of nature. We built bricks from naturally abundant clay and shale, used tree limbs as our rooftops and beams, and mastered incredible structures in ancient Rome with the use of cement.
But construction is now on the cusp of a materials science revolution. Today, I’d like to focus on three key materials:
- Upcycled Materials:
Imagine if you could turn the world’s greatest waste products into their most essential building blocks. Thanks to UCLA researchers at CO2NCRETE, we can already do this with carbon emissions.
Today, concrete produces about 5% of all greenhouse gas (GHG) emissions. But what if concrete could instead conserve greenhouse emissions? CO2NCRETE engineers capture carbon from smokestacks and combine it with lime to create a new type of cement. The lab’s 3D printers then shape the upcycled concrete to build entirely new structures. Once conquered at scale, upcycled concrete will turn a former polluter into a future conserver.
Or what if we wanted to print new residences from local soil at hand? Marking an extraordinary convergence between robotics and 3D printing, the Institute of Advanced Architecture of Catalonia (IAAC) is already working on a solution.
In a major feat for low-cost construction in remote zones, IAAC has found a way to convert almost any soil into a building material with three times the tensile strength of industrial clay. Offering myriad benefits, including natural insulation, low GHG emissions, fire protection, air circulation and thermal mediation, IAAC’s new 3D printed native soil can build houses on-site for as little as $1,000.
Nano- and micro-materials are ushering in a new era of smart, super-strong and self-charging buildings. While carbon nanotubes dramatically increase the strength-to-weight ratio of skyscrapers, revolutionizing their structural flexibility, nanomaterials don’t stop here.
Several research teams are pioneering silicon nanoparticles to capture everyday light flowing through our windows. Little solar cells at the edges of windows then harvest this energy for ready use. Researchers at the U.S. National Renewable Energy Lab have developed similar smart windows. Turning into solar panels when bathed in sunlight, these thermochromic windows will power our buildings, changing color as they do.
- Self-Healing Infrastructure:
The American Society of Civil Engineers estimates that the U.S. needs to spend roughly $4.5 trillion to fix nationwide roads, bridges, dams and common infrastructure by 2025. But what if infrastructure could fix itself?
Enter self-healing concrete. Engineers at Delft University have developed bio-concrete that can repair its own cracks. As head researcher Henk Jonkers explains, “What makes this limestone-producing bacteria so special is that they are able to survive in concrete for more than 200 years and come into play when the concrete is damaged. […] If cracks appear as a result of pressure on the concrete, the concrete will heal these cracks itself.”
But bio-concrete is only the beginning of self-healing technologies. As futurist architecture firms start printing plastic and carbon-fiber houses like the stunner seen below (using Branch Technologies’ 3D printing technology), engineers have begun tackling self-healing plastic.
WATG Designs 3D-Printed Freeform House with Carbon-Fiber Reinforced Plastic. Source: WATG.
And in a bid to go smart, burgeoning construction projects have started embedding sensors for preemptive detection. Beyond materials and sensors, however, construction methods are fast colliding into robotics and 3D printing.
While some startups and research institutes have leveraged robot swarm construction (namely, Harvard’s robotic termite-like swarm of programmed constructors), others have taken to large-scale autonomous robots.
One such example involves Fastbrick Robotics. After multiple iterations, the company’s Hadrian X end-to-end bricklaying robot can now autonomously build a fully livable, 180-square meter home in under 3 days. Using a laser-guided robotic attachment, the all-in-one brick-loaded truck simply drives to a construction site and directs blocks through its robotic arm in accordance with a 3D model.
Source: Fastbrick Robotics.
Meeting verified building standards, Hadrian and similar solutions hold massive promise in the long-term, deployable across post-conflict refugee sites and regions recovering from natural catastrophes.
Imagine the implications. Eliminating human safety concerns and unlocking any environment, autonomous builder robots could collaboratively build massive structures in space, or deep underwater habitats.
Where, how, and what we live in, form a vital pillar of our everyday lives. The concept of “home” is unlikely to disappear anytime soon. At the same time, real estate and construction are two of the biggest playgrounds for technological convergence, each on the verge of revolutionary disruption.
As underlying shifts in transportation, land reclamation, and the definition of “space” (real vs. virtual) take hold, the real estate market is about to explode in value, spreading out urban centers on unprecedented scales, and unlocking vast new prime “property.”
Meanwhile, converging advancements in AI and VR are fundamentally disrupting the way we design, build, and explore new residences. Just as mirror worlds create immersive, virtual real estate economies, VR tours and AI agents are absorbing both sides of the coin to entirely obliterate the middleman.
And as materials science breakthroughs meet new modes of construction, the only limits to tomorrow’s structures are those of our own imagination.
ON THE SPACE RACE
We are witnessing the next great space race… but this time, it is not the U.S. vs. USSR. This race is between Elon Musk and Jeff Bezos.
The aerospace industry has always been driven by competition.
In 1927, Charles Lindberg competed against eight other teams to achieve the first non-stop transatlantic flight to win the $25,000 Orteig Prize.
In the 1960s, it was America versus the Soviet Union that resulted in Sputnik, Yuri Gagarin and Apollo 11.
Fast forward another 40 years, and in 2004 the $10 million Ansari XPRIZE sparked the commercial space industry.
Now in 2019, on the brink of the 50th anniversary of Apollo 11, the competition that will rocket humanity into the cosmos is between two passionate and brilliant multi-billionaires: Jeff Bezos and Elon Musk.
This blog outlines each of their capabilities, as well as their near-term and long-term vision for the final frontier.
Let’s jump in…
Jeff Bezos & Blue Origin
“Do we want stasis and rationing, or do we want dynamism and growth?” — Jeff Bezos.
Jeff Bezos and I first met through a college student organization I founded while I was at MIT. The group (which still exists today) is called Students for the Exploration and Development of Space (SEDS). At the time, I was chair of the organization, and Bezos was president of the Princeton chapter.
While Jeff was a passionate space enthusiast, rather than pursuing aerospace out of college, he first followed his intellect to Wall Street, after which he proceeded to found Amazon, which would ultimately reward him with a personal net worth in excess of $150 billion.
Today, Jeff has remained true to his passion for space by committing $1B per year to underwrite his space company, which he named Blue Origin (or “Blue”) as a tribute to Earth.
History of Blue Origin
Bezos founded Blue in 2000 with the vision to create “a future where millions of people are living and working in space.”
Of course, the first step for any serious space company is to build the rockets capable of shooting people and payloads off the Earth into space. In this category, Jeff has a planned sequence of bigger and bigger rockets.
The first of these vehicles is named for Mercury astronaut Alan Shepard. New Shepard is Blue’s suborbital rocket intended for suborbital space tourism. Following 10 successful consecutive launches and landings, New Shepard is expected to fly its first human astronauts to suborbital space by the end of 2019.
Next up is Blue’s New Glenn rocket (named after pioneering astronaut John Glenn), which will be able to lift substantial payloads and people to the Moon.
Like SpaceX’s Falcon 9 (see below), New Glenn is designed for reusability by vertical propulsive landing of its booster stage. Blue hopes to first fly the New Glenn rocket in 2021.
Near Term Target — Blue Moon
In May 2019, in a presentation at the Air and Space Museum, Bezos unveiled Blue’s near-term mission to colonize the Moon for exploration, science, and resource utilization.
(NOTE: To my readers, I always capitalize the word “Moon” when it refers to Earth’s Moon, versus a generic moon… there are over 100 moons in our solar system. I think our Moon deserves at least the respect of capitalization!)
Bezos views the Moon as an incredible gift to our spacefaring species, one which will help humankind and space entrepreneurs break open the space economy.
With an abundance of frozen water, the Moon can provide fuel (oxygen and hydrogen) and critical elements for life (breathable oxygen and drinkable water).
As Bezos laid out in his May 9th 2019 address, utilizing resources from the Moon instead of bringing equivalents to space from the Earth's surface provides an extraordinary advantage: it takes 24 times less energy to lift one pound off the moon compared to lifting one pound off Earth.
As the first step in this vision, Bezos announced the Blue Moon Lunar Lander, which would travel to the Moon aboard the New Glenn rocket, and soft land 3.6 metric tons of rovers, cargo and humans on the lunar surface.
Jeff Bezos reveals Blue Origin’s Blue Moon lander.
Importantly, this announcement and the fact that Blue has been working on Blue Moon for the past 3 years give added confidence to U.S. Vice President Mike Pence’s recent statement that: “It’s the stated policy of this administration and the United States of America to return American Astronauts to the Moon within the next 5 years (2024).”
“It’s time to go back to the moon, this time to stay.” — Jeff Bezos.
Disrupting Planetary Chauvinism with O’Neill Colonies
In his May 9th Blue Moon presentation, Bezos added a perspective-shifting announcement driven by the teachings of the late professor Gerard O’Neill, a professor of physics at Princeton, the founder of the Space Studies Institute, and a man I consider a mentor. That shift addressed a key question that Professor O’Neill asked his students during a summer studies project, namely: “Is a planetary surface the best place for humans to live while they expand into the solar system?”
O’Neill eventually determined that the answer to this critical question is “No."
So instead of humankind living on other planets, O’Neill proposed that humanity build massive rotating cylinders, now known as O’Neill Colonies, manufactured from resources already outside the deep gravity well of a planet. Specifically, materials from the surface of the Moon or from asteroids.
Bezos revitalized and resurfaced O’Neill’s work by proclaiming that the vision for Blue Origin after reaching the Moon was to support the development of O’Neill Colonies, where humanity could live free of the deep gravity forces of planets. Each rotating colony would be able to support an independent population of 1 million individuals.
Not one to be overly optimistic, Bezos realizes that building these colonies will take generations and require overcoming an unimaginable number of engineering challenges along the way. But through Blue Origin, Bezos is actualizing some of the most fundamental prerequisite steps to achieving his vision of a universe of dynamism and growth.
Now let’s take a look at the other major force targeted at making humanity a multiplanetary species. A man whose incredible engineering prowess and vision has redefined what is possible in space.
Elon Musk & SpaceX
Born in Pretoria, South Africa, Musk sold his first computer code at age twelve.
After earning a degree from Wharton and dropping out of Stanford’s Ph.D. program, he repeated his software success with a $307M sale of Zip2.
Musk followed Zip2 by building and selling PayPal (formerly X.com) to eBay for $1.5 billion.
With $180 million in his pocket, Musk set out to pursue what he considered the two most important missions for humanity: (1) Taking humans off fossil fuels via a thriving solar economy; and (2) Making humanity a multiplanetary species.
I first met Elon in late 2001 as he was selling PayPal to eBay and beginning to formulate his plans to open the space frontier.
SpaceX: Making Humankind a Multiplanetary Species
SpaceX was founded in May 2002 as Elon’s instrument to develop the rockets needed to get humanity off the Earth to the Martian surface. SpaceX is a company born out of Musk’s courageous persistence and commitment.
In 2008, after three failures of his proof-of-concept ‘Falcon 1’ launch vehicle, Musk had run out of money. Thankfully, after a life-saving infusion of capital from his friend and PayPal cofounder, Peter Thiel, SpaceX succeeded on its fourth attempt. In December of 2008, SpaceX was awarded a billion-dollar NASA contract to develop their next-generation vehicle, called Falcon 9.
Falcon 9 has transformed the space industry, reinventing what people consider possible and driving down launch costs 10-fold, making reusable rockets a reality.
While the Space Shuttle could deliver payloads to the International Space Station for over $54,500 per kilogram, the Falcon 9 does the job for less than 5% of that cost at $2,720 per kilogram.
In seemingly automagical fashion, in 2015, SpaceX landed their first Falcon 9. Now, landings are routine for Falcon 9, with 33 successful landings out of 39 landing attempts.
Next on Falcon’s development path was the demonstration of Falcon Heavy, today the most powerful operational rocket in the world.
Falcon Heavy, which is composed of three modified Falcon 9 rockets strapped together, made its debut in early 2018 by launching Musk’s cherry-red Tesla Roadster past Mars and towards the asteroid belt.
In April of this year (2019), Falcon Heavy flew for the second time, with the successful and spectacular landing of all three Falcon 9 boosters.
Beyond delivering large payloads to Earth’s orbit, Falcon Heavy is capable of sending significant payloads to the Moon and even to Mars.
Beyond delivering large payloads to Earth’s orbit, Falcon Heavy is capable of sending significant payloads to the Moon and even to Mars.
But the true workhorse for SpaceX is a vehicle once called BFR (standing for Big F***ing Rocket), today named Starship. Starship is central to Musk’s plan to put humans on the Moon, Mars, and beyond.
Musk has hinted that development costs for Starship will total $5B. If this number is accurate, developing this interplanetary spacecraft will be an order of magnitude less expensive than the $50B (in 2018 dollars) required to develop the Saturn V used in the Apollo program.
The rocket is designed to be able to explore the full extent of the solar system, using Mars and its abundance of resources as a fueling depot.
(From left to right) SpaceX’s Falcon 1, Falcon 9, Falcon Heavy, and Starship/BFR size, reusability, and payload comparison.
Using these vehicles, SpaceX is actualizing Musk’s vision to open up the solar system for human colonization.
Long-term target: Making Mankind Multiplanetary
“I think fundamentally the future is vastly more exciting and interesting if we’re a spacefaring civilization and a multiplanet species than if we’re or not. You want to be inspired by things. You want to wake up in the morning and think the future is going to be great. And that’s what being a spacefaring civilization is all about.” — Elon Musk
Musk views a Mars colony as a contingency plan for humanity and a beacon of inspiration for humankind.
Each of SpaceX’s launch vehicles are tools in service of the movement towards building colonies and cities on the surface of Mars. Musk’s goal is to have humans on Mars before 2030 and a full city on Mars by 2050.
To achieve this goal, Musk and SpaceX are planning 10 launches between 2027 and 2050, one launch every 22-24 months, when Earth and Mars are at their nearest distance.
Outlined in Musk’s 2017 International Astronautical Congress presentation, these launches could begin as soon as 2024.
At the time, Musk addressed this bold timeline: “I feel fairly confident that we can complete the ship and prepare the ship for launch in about five years,” he said. “Five years feels like a long time to me.”
Moving beyond Mars, Musk wants to further explore the solar system, using Mars as a fueling depot on the way to other planets, moons, and asteroids.
Near-Term: Commercializing the Moon
Since Musk’s 2017 presentation, given the support and direction of NASA and the U.S. Vice President, SpaceX has been refocusing their Starship and Falcon Heavy development efforts towards bringing humankind back to the Moon, rather than going directly to Mars.
In September 2018, Musk announced plans to fly SpaceX’s first private astronauts and Starship’s first customer, Japanese fashion innovator and globally recognized art curator Yusaku Maezawa, around the moon by 2023. The contract with Maezawa is helping SpaceX fund Starship’s development.
Dubbed #dearmoon, Maezawa’s goal is to inspire the world through art, by selecting 8 artists to join him on his maiden Starship voyage around the Moon.
If you had your pick, which artists would you send with Maezawa?
Building on Musk’s Moon momentum, SpaceX won one of 11 NASA contracts to start developing a Falcon Heavy-compatible Lunar Lander.
While SpaceX hasn’t released details of their Lunar lander concept, it is possible that SpaceX will use their rocket-landing skills to land Starship directly on the Moon.
Both Bezos and Musk are driven by their passion and belief that Humanity’s ultimate future requires our expansion into space. Both are developing privately funded, reusuable, human-carrying vehicles, and both, in the near-term, are heading towards the Moon.
Beyond those similarities, Musk is heading towards the surface of Mars, and Bezos is heading towards the construction of large-scale space colonies.
One thing is for sure: regardless of who succeeds, everything humanity has ever held of value on Earth… metals, minerals, energy, real estate… are in near infinite quantities in space, and the greatest wealth ever anticipated will result as humanity reaches towards the stars.
Thanks to pioneers like Elon Musk and Jeff Bezos, we are on the verge of accessing this infinite cache of materials and energy for the continued expansion of humanity, and our progress towards increasing abundance.
As a result, we are about to see the greatest economic boom in human history, leading to a period of prosperity beyond our comprehension.
I, for one, wish to thank both Elon and Jeff for their passion and persistence. I am clear that their hurdles ahead are the most difficult of any humanity has ever undertaken.
The work that Musk and Bezos are doing today, IMHO, is perhaps the most important for the continuation of our species.
Ad Astra Per Ardua (to the stars with hard work).