Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 1357

Yesterday Shopify went public on both the Toronto (SH) and New York Stock Exchanges (SHOP).

For those of you who aren’t familiar with Shopify, they are a Canadian company that provides e-commerce solutions to small and medium sized businesses. I’ve been a paying customer of Shopify many times before and they offer great products and services.

But this isn’t an investment blog, so what’s the big deal?

Well, the big deal is that Shopify – which was started in Ottawa – raised over $120 million of venture capital funding, went public (raising another $131 million ), and now sits with  a market cap close to $2 billion dollars . And that is a great thing for not only the founders and employees of Shopify, but also for the larger Canadian tech ecosystem.

Yesterday my friend Evgeny (of 500px ) tweeted this out:

My big hope is that @Shopify IPO will produce Canadian version of PayPal mafia and the community will benefit from the next wave of leaders.

— Evgeny Tchebotarev (@tchebotarev)

May 21, 2015

//platform.twitter.com/widgets.js

What he’s getting at it is that when a successful company goes public it generates a tremendous amount of wealth for a lot of people (the founders, employees, investors, and so on). And invariably many of those people are going to recycle their capital back into the local economy by starting new companies and/or investing in other startups.

But this isn’t some sort of trickle down economic theory. Startup ecosystems just seem to operate very much in this way. There’s almost a natural cycle: start or join young startup, exit company (sale or IPO), make lots of money, become angel investor in and mentor for new startups. And since this cycle compounds, it’s probably the most important prerequisite for a thriving tech ecosystem.

So while this IPO has been no doubt a great thing for Shopify, let’s not ignore what a “ Shopify Mafia ” could mean for Canadian tech.

Image: Shopify Toronto via Officelovin

At the beginning of this year, my friend Amy Bath wrote an interesting post on her blog comparing condos and boutique hotels. It’s called: Could condos be more like boutique hotels? It’s a great read and it touches on something that I think we will see more of going forward.

The idea is that boutique hotels – many of which invest heavily in things like programming and “cultural engineering” – could serve as a model for condos and developers who want to further differentiate themselves by doing more with their common areas and amenities. I think it’s a great idea. 

But let’s backup for a second.

In many cases, I feel that developers tend to privilege the brands of their specific projects over their own corporate brands. This likely has something to do with the entrepreneurial nature of how development projects often come together, but I personally don’t think it’s the best approach.

It’s the equivalent of a car company downplaying its own brand and instead creating a new one for each and every car model that it comes out with. That’s a lot of work and it’s harder to build brand equity that way. So I think the trend is probably away from this approach.

But as that happens, developers will inevitably start to wonder how they can differentiate them themselves: How do I make my bricks and mortar less of a commodity? The same way that Apple made computers not about processor speeds and memory, but about something so much more. You create a brand story and an experience.

And one of the best ways I think you could do that is through exactly what Amy is talking about: programming and cultural engineering.

I’ve written about the Ponte Tower in Johannesburg before. At 54 storeys, it is the tallest building in Africa. It’s located in Hillbrow , which is an inner city neighborhood known for its crime and poverty. 

In the 1970s when the tower was built, Hillbrow was an Apartheid-designated white-only neighborhood and the tower was filled with affluent residents. But that didn’t last long and eventually the wealth fled for the suburbs.

Here’s a brief 6 minute video talking the Ponte Tower. Let’s call it the real estate perspective. Click here if you can’t see it below.

[youtube https://www.youtube.com/watch?v=3EIKmmSifqw?rel=0&w=560&h=315]

Now, here’s a Real Scenes documentary talking about the thriving electronic music scene in Johannesburg. I think it’s fascinating to look at a city from a particular subculture and, compared to the first video, I get a very different feel for the city. Click here if you can’t see it below.

[youtube https://www.youtube.com/watch?v=Ykt2f6o7-e8?rel=0&w=560&h=315]