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A Postmortem of a Startup

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Re: A Postmortem of a Startup

#111

Post by ketzo »

clpm4j wrote: post #98

If a government truly wanted to fix a housing "crisis", wouldn't a ban on any type of corporate entity from buying single-family homes be an efficient solution? E.g., LLC's can no longer purchase single-family homes. Only real, live human individuals can purchase single-family homes. They could also try to implement some type of ban on any single individual person from purchasing more than 1 (or choose a number) sing…

Depends on whether you think renting a home is a way to solve the housing crisis.

If your definition of “solved housing crisis” is “everyone can buy a home,” a ban on corporate ownership could help a little.

If your goal is instead “everyone has a place to live,” no, corporate ownership is not inherently problematic.

Re: A Postmortem of a Startup

#112

Post by mleonhard »

> We want to stress from the start that the ultimate failure of the company lies with us.

This statement discounts how much random chance contributes to success & failure. Could the world's best founding team find and build a successful business in that field? Maybe. And even if they could, is it failure to be less good than the best? Not at all.

> Stay lean until you have proven revenue.

They raised a pre-seed round and used it to search for business opportunities. This seems like the normal way of doing a startup.

> TIME AND MONEY SPENT ON NON-ESSENTIALS - These included an office, website and branding, a trip to America, contractors, and unnecessary employees.

Having an office can boost energy and productivity. Taking a trip to US to connect with new advisors, investors, and other founders seems like a pretty normal thing to do.

I think these founders are being too hard on themselves. They got an amazing education in entrepreneurship. They don't need to feel bad about it.

Re: A Postmortem of a Startup

#113

Post by poulsbohemian »

clpm4j wrote: post #98

If a government truly wanted to fix a housing "crisis", wouldn't a ban on any type of corporate entity from buying single-family homes be an efficient solution? E.g., LLC's can no longer purchase single-family homes. Only real, live human individuals can purchase single-family homes. They could also try to implement some type of ban on any single individual person from purchasing more than 1 (or choose a number) sing…

I am a realtor and sit on my state's realtor association legislative steering committee, which this year sough to work with legislators on a bill that would limit mass corporate control over housing units... it's surprisingly more complicated than it first appears, and an area where realtors take a view that might be contrary to consumer expectations - we generally like the idea of limitations on corporate ownership, as it in theory creates the greatest opportunity for individual homeownership...

Anyway, some of the scenarios we ran into are things like the 2008 mortgage crisis - what happens if you end up in a market where there is a lot of inventory that no one can afford to hold? In my market, it's starting to look like a lot of builders (read: corporations) built too many houses either that weren't what consumers wanted or demand has shrunk (it is a town with a lot of federal jobs that are evaporating at the moment...). So can a builder hold that inventory indefinitely (assuming they can afford that) as a corporation? Likewise, people often don't want to hear this, but landlords do create efficiencies in the market - there are people out there that either don't want to own a home or can't qualify for a mortgage, and a landlord makes it possible to provide housing for those people as a kind of intermediary. We can argue over what it takes to qualify for a mortgage, but that's really a separate issue. We of course get into the issue of vacation homes or even situations like can I as an individual own a place for my business and a home - after all, they are both real estate, so how tight can we make these rules around ownership? Point being - the basic idea is sound, and some states like CA apparently already have laws on the books, but it's a more complicated matter than just one person == one house.

Re: A Postmortem of a Startup

#114

Post by monkeydust »

shalmanese wrote: post #81

When I coach startup founders, I walk them through a very simple 4 step process when we meet: 1. What have you learnt since we last met and how has that altered your priors? 2. What do you now believe is the most important problem you should be solving? 3. What's currently blocking you from solving that problem? 4. How do we overcome those blocks? Crucial to this process is that Q1 is not what have you done , it's wh…

This is good especially 1. bit of Bayesian thinking thrown in.

I find a lot of founders ask for feedback, advice and just carry on doing what they were going to do anyway, perhaps convince themselves that the advice backs up their thinking when it doesn't. Not everyone of course but a lot, hence why I like your question.

Re: A Postmortem of a Startup

#115

Post by n4r9 »

spacebanana7 wrote: post #29
mytailorisrich wrote: post #22

Earlier quoted context omitted.

Supply is somewhat constrained and demand is also artificially inflated (at national level it is 100% caused by immigration, which is kept high by the successive governments). Everyone relies on the property market going up. Beyond the obvious reasons, another important one is that fixed rate mortgages are not fixed for the life of the mortgage but only for, usually, 2 to 5 years after which rates jump so everyone is…

It's curious to think about what house prices in the UK would be like without immigration. With a sustained negative fertility rate over the past few decades, there could've feasibly been stable prices with no new houses built at all.

Well, house prices outside of London have increased roughly in line with inflation over the last couple of decades.

ONS data states that the average house price outside of London and the South East rose from £134k in 2005 to £192k in 2019 [0].

The Bank of England's inflation calculator states that £192k in 2019 costs £139k in 2005 [1].

Looking at London specifically, house prices more than doubled from £303k to £684k over the same period [2]. That's a 63% increase in real terms. Immigration would have some effect on this, but so would UK citizens moving to London or foreign nationals buying up property as an investment.

[0] https://www.ons.gov.uk/economy/inflationandpriceindices/adho...

[1] https://www.bankofengland.co.uk/monetary-policy/inflation/in...

[2] https://www.home.co.uk/guides/house_prices_report.htm?locati...

Re: A Postmortem of a Startup

#116

Post by spacebanana7 »

n4r9 wrote: post #115
spacebanana7 wrote: post #29

Earlier quoted context omitted.

It's curious to think about what house prices in the UK would be like without immigration. With a sustained negative fertility rate over the past few decades, there could've feasibly been stable prices with no new houses built at all.

Well, house prices outside of London have increased roughly in line with inflation over the last couple of decades. ONS data states that the average house price outside of London and the South East rose from £134k in 2005 to £192k in 2019 [0]. The Bank of England's inflation calculator states that £192k in 2019 costs £139k in 2005 [1]. Looking at London specifically, house prices more than doubled from £303k to £684k…

The data actually implies UK citizens have been consistently moving out of London. The absolute white British population in 1971 was 6,500,000 but was only 3,239,281 in 2021 [1].

Of course not all UK citizens are white British, and the negative fertility rate would've applied downward pressure, and it's conceivable that white Londoners emigrated to Australia etc at a higher rate than other parts of the UK. But none of these factors can really explain a 50% decline in population in the same way that internal migration can. It certainly becomes very difficult to reconcile the numbers if any signifiant number of people from predominantly white areas had been moving into London.

I agree with you that most of the change in average UK house prices is driven by London. In a zero immigration scenario it seems likely that London prices would be radically lower with the rest of the country having much less, if any, change.

[1] https://en.wikipedia.org/wiki/Ethnic_groups_in_London

Re: A Postmortem of a Startup

#117

Post by n4r9 »

spacebanana7 wrote: post #116
n4r9 wrote: post #115

Earlier quoted context omitted.

Well, house prices outside of London have increased roughly in line with inflation over the last couple of decades. ONS data states that the average house price outside of London and the South East rose from £134k in 2005 to £192k in 2019 [0]. The Bank of England's inflation calculator states that £192k in 2019 costs £139k in 2005 [1]. Looking at London specifically, house prices more than doubled from £303k to £684k…

The data actually implies UK citizens have been consistently moving out of London. The absolute white British population in 1971 was 6,500,000 but was only 3,239,281 in 2021 [1]. Of course not all UK citizens are white British, and the negative fertility rate would've applied downward pressure, and it's conceivable that white Londoners emigrated to Australia etc at a higher rate than other parts of the UK. But none o…

Yes, London house prices would likely be lower. But we'd also be poorer on average, since immigrants are a net benefit to the economy. Moreover the combination of a starkly aging population with higher costs of labour would cause a real strain on the public purse, like Japan is seeing. On balance I much prefer the current situation. Though I guess I would say that, having an immigrant parent.

Re: A Postmortem of a Startup

#118

Post by spacebanana7 »

n4r9 wrote: post #117
spacebanana7 wrote: post #116

Earlier quoted context omitted.

The data actually implies UK citizens have been consistently moving out of London. The absolute white British population in 1971 was 6,500,000 but was only 3,239,281 in 2021 [1]. Of course not all UK citizens are white British, and the negative fertility rate would've applied downward pressure, and it's conceivable that white Londoners emigrated to Australia etc at a higher rate than other parts of the UK. But none o…

Yes, London house prices would likely be lower. But we'd also be poorer on average, since immigrants are a net benefit to the economy. Moreover the combination of a starkly aging population with higher costs of labour would cause a real strain on the public purse, like Japan is seeing. On balance I much prefer the current situation. Though I guess I would say that, having an immigrant parent.

I have an immigrant parent too. Also agree the UK - and Europe generally - would be likely in a state of Japanification without migration.

Still, I think it's valuable to understand the economics at play. Especially in a business context.

Re: A Postmortem of a Startup

#119

Post by dukeyukey »

rhubarbtree wrote: post #34
AJRF wrote: post #4

Thanks for writing this! > Housing in Britain is expensive because getting planning permission is difficult. Isn't the real problem that supply is artificially constrained because house prices and the economy are interlinked in a way in a special way in the UK economy, such that the majority of home owners don't want it changed (because more supply == downward pricing pressure) I think the only entity that could mean…

I’ve posted this before, but I think the reason house prices are expensive in the UK is that they are an asset. If the rich can buy that asset and make a return, they will buy it. So price equilibrium is where rents are at an absolute maximum that can be born by tenants. As the price is determined the potential yield, the price then rises as high as possible. Building more houses won’t change this situation until the…

> but I think the reason house prices are expensive in the UK is that they are an asset

Houses are also assets in other countries. It's not uniquely a British thing.

Re: A Postmortem of a Startup

#120

Post by dukeyukey »

clpm4j wrote: post #98

If a government truly wanted to fix a housing "crisis", wouldn't a ban on any type of corporate entity from buying single-family homes be an efficient solution? E.g., LLC's can no longer purchase single-family homes. Only real, live human individuals can purchase single-family homes. They could also try to implement some type of ban on any single individual person from purchasing more than 1 (or choose a number) sing…

Why would that solve a housing crisis? Functionally making it impossible to rent a SFH seems like a dick move.
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