Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 1141

“There is no higher God in Silicon Valley than growth. No sacrifice too big for its craving altar. As long as you keep your curve exponential, all your sins will be forgotten at the exit.” - David Heinemeier Hansson

Snap Inc. went public last week. Offering price was $17. Closing price on the first day was $24.48. Given that the company is not profitable and may never be profitable (their caveat, not mine), many people have been asking: Is a valuation somewhere around $34 billion justifiable?

This is a common question when it comes to tech companies. And the answer usually comes down to something along the lines of this :

The Snapchat story “is all about growth,” Mr. Nathanson said. “It’s not about economics.”

It’s about the future.

I love Snapchat and I think the company is run by a very creative founder. But now that Snapchat Stories was stolen by Instagram, they need, in my humble opinion, something new and killer to stick.

How else will they meet their growth targets?

On a related note, I recommend you read a piece by David Heinemeier Hansson called: Exponential growth devours and corrupts . That’s where the quote at the top of this post is from.

Here is an excerpt:

What sucker wants to earn $10 million/year at a 52.5% tax rate when you can get away with hundreds of millions in one take at just 15%? Nobody, that’s who.

It’s hard to argue that boards, founders, and their financiers aren’t just doing exactly what the incentives are coaxing them to do.

Which is why growth is now everything and residual value is nothing. In fact, the latter can be outright harmful to the former. When you’re being priced on the hopes and dreams of potential, reality can be a dangerous and undesired competitor. Best just to appeal to the exponential curve and let the imagination roam free. An epic capital gains score awaits!

This is a map of the Bay Area Rapid Transit network:

And this is an elegant visualization by Ray Luong of ridership levels over the course of one day: February 4, 2016. If you can’t see the embedded video below, click here .

[youtube https://www.youtube.com/watch?v=owGgbAS7Wq8?rel=0&w=560&h=315]

Note how the lines speed up as they go through the Transbay Tube  connecting San Francisco and Oakland. That’s actually what happens. Within the 10 km-long tube, the trains reach ~130 km/h, which is more than twice as fast as the average speed throughout the rest of the network.

Heads-up: This is going to be a Toronto-specific post.

This week there was a lot of chatter about escalating house prices in this city  (though that seems to be most weeks these days).

Paul Johnston listed a detached house in Dufferin Grove for $1,285,000 and then turned around and sold it for just over $2.1mm, with 17 potential buyers at the table. I also saw my friend post a note this morning that the average price of a detached house in Toronto has now surpassed $1.5mm.

What I am curious about – and this is a question for all of you who live here and/or follow the market – is what response does escalating house prices trigger for you? I asked this on Twitter (via a poll ), but I would be curious to get your thoughts here in the comments.

Do you feel rushed out of fear that you may get priced out of the market? Are you now turning your attention to out of the city? Or are you looking at other housing types, such as condos? I am sure the responses will be split.

My response: condos.