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Posts tagged with ‘startups’

Why Detroit? An Answer in Three Parts

by Tim

A month or two ago, someone came by the Rebirth Realty house to chat about that project and the community we’re building here. Of course, since the projects are so intimately intertwined, we ended up discussing Castle as well.

Max handled most of the questions, pitching the idea and elaborating in all the right spots. Eventually, the question came: why start Castle in Detroit? I jumped in right away with my answer.

One: Detroit = Real Estate

As I wrote about in an earlier blog post, Detroit is synonymous with real estate—in my mind anyway. The negative side of the association is, of course, blight; we practically define the term “ruin porn.” The positive side, however, is the massive opportunity for redevelopment. The secret’s out by now of course; previously abandoned buildings are coming back to life all over the city.1

Two: Property Management Here Is Terrible

The bar here in Detroit is low. Very low. Ask any rental property owner in town to recommend a property management company, and they won’t be able to honestly provide you with a single name. The market is here, but it’s radically underserved. The larger area of Southeast Michigan has some great options, but firms who operate in the suburbs generally hesitate to head into the city. We’ve heard it over and over again: a property management company in Detroit that’s actually good can make a killing. We’re not really in it for the money,2 but we do have to make payroll every other week.

Three: Our Roots Are Growing Deep

As it turns out, living in a place for more than two years earns you a certain familiarity with it. We started with the VFA network of Fellows and supporters, but now we have our own networks too. Of particular importance are the connections in the investor and real estate communities, both of which operate on personal relationships. Why would we uproot ourselves now, just when we’re starting to see returns on our network-building efforts?

In short, we’re in the right place, in the right market, with the right connections. Combine the old real estate saw of “Location, location, location” with the startup mantra of “Team, market, product,” and you can see why we’re pleased to call Detroit home.

  1. I won’t pretend the revitalization is evenly distributed, but there are rehab projects in even some of the farther-flung neighborhoods. Credit goes to the many community development corporations there.
  2. So Millennial, I know.

What Age of Empires Taught Me About Startups

by Tim

Back in middle school, a friend of mine introduced me to a game called Age of Empires. The two of us loved that game, sneaking down to his computer room in the middle of the night to play it whenever I slept over at his house. It’s probably my favorite game of all time.

For the uninitiated, Age of Empires1 is a real-time strategy game that puts you in control of a medieval civilization2 bent on world domination. Your job is to build a mighty empire and eliminate your enemy’s every last unit.

The cover art for the aformentioned classic RTS.

The game has three key mechanics: resource harvesting, technological advancement, and military conquest. The player uses villagers to gather resources, which the player can use to create more villagers, military units, and buildings. The player can also spend resources on researching new technologies, which improve current units and unlock new ones.

As a novice player, I focused on technological advancement, figuring it was important to always have better units than my opponents. As soon as I had enough resources, I would spend them on new technologies. I prided myself on always reaching the final technological stage—the Imperial Age—before anyone else.

As it turned out, my strategy earned me nothing but destruction. While I was spending all my resources on technologies, my opponents were building massive armies and invading my domain. Time and again, I witnessed their unending hordes destroy my few advanced units, killing my soldiers and pillaging my villages. What was I doing wrong?

After observing some more talented players in action, I saw that my priorities were exactly backwards. The best players spent all their resources on making more villagers, who could in turn harvest more resources3. Sure, they initially languished in the Dark Age, but by the time I was limping along the technological finish line of the Imperial Age, they had almost caught up and had a full army to boot. Once they did catch up, my advantage evaporated, leaving me defenseless in a sea of hostile knights and archers.

To put it in startup terms, the best players always put growth ahead of technology. By using their resources to harvest more resources, they harnessed the power of exponential growth. Even my best technologies could only double or triple resource extraction rates. As the plot below busily illustrates, the exponential curve blows away even the best linear trend.

Not the best-designed graphic, but it gets the point across.

At Castle, we’re doing the bare minimum to produce something workable—the so-called MVP. (Look for another blog post on the topic soon.) Instead, we’re focusing on growth, figuring out how we can acquire as many users as possible. As the Book of Paul notes, “The only essential thing is growth.”

  1. To be specific, Age of Empires II: The Age of Kings (plus The Conquerors expansion pack).
  2. I preferred the British for their Longbowmen, although the Japanese and their Samurai were also top-notch.
  3. The tragedy of the commons is on full display in Age of Empires. A game that drags on long enough leaves the entire map devoid of any trees, mines, berries, or livestock.