Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 1398

I recently connected with one of the principals of a Toronto-based construction management firm called Ripple Projects , which focuses primarily on contemporary custom homes (credit to 52 Pick-up for the introduction).

They’ve only been in business for a few years, but the founders spent many years prior to this doing similar projects at similar companies, such as Wilson Project Management .

Since they don’t yet have a lot up on their website, I asked if he could share one of his recent projects with me. He was happy to do that and so, with his permission, I’d now like to share it with all of you.

It’s a renovation and expansion of a semi-detached house at 109 Hazelton Avenue in Toronto’s upscale Yorkville neighborhood. The end result is roughly 3,000 square feet with 3+1 bedrooms and 5 bathrooms. If I remember correctly, it sold for close to $3 million.

Here are a few before pictures. It wasn’t in bad shape – just a bit dated.

And here are a few after photos.

I personally would have gone with something even more modern, but that’s just me and I wasn’t the client. It’s still a phenomenal project. So if you’re in the market for a new custom home, I would encourage you to give Ripple Projects a call. I was really impressed by our conversation.

Note: I have zero affiliation to the company. I just believe that good people deserve exposure.

This morning I woke up to a fascinating post by designer Tobias van Schneider called: The agency is dead. Long live the agency.

What he’s talking about is the phenomenon of design agencies being gobbled up or “ acqui-hired ” by product firms such as Facebook and Google. The latest of which is (or was) Toronto-based design agency Teehan+Lax . The partners have closed up shop and are in the process of moving to San Francisco to join Facebook Design.

But what he’s really talking about is the pull from services to products.

When you’re a services firm, you do work for outside clients and they pay you for that work. But there are only so many hours in the day, which is why the marginal cost of taking on new clients is relatively high – to scale up you generally need lots more people.

On the other hand, when you’re a software company creating products, the marginal cost of serving additional customers is almost nothing. Sure, there are some variable costs, but the impact to your cost structure is not nearly as significant as when you’re a services firm. That’s how a company like Instagram can be bought for $1 billion with 30 million users and only 13 employees.

So products are a bit of a holy grail in some circles. You can achieve greater scale. You can focus on fewer projects as opposed to jumping around from client to client. And you can make a lot of money.

But it’s often easier said than done. Back in 2012, Teehan+Lax wrote a great post where they talked about the allure of products and the challenges they faced in trying to build their own:

37Signals* was the worst thing to happen to services businesses trying to make products. They fucked it up for all of us, because they made it. For those of us old enough to remember, 37Signals was a services company like Teehan+Lax. They had clients and did work for hire. Of course, 37signals isn’t a services company anymore. They make amazing digital products and their success is enviable. (*37Signals became Basecamp )

So why is it so hard to transition from services to products?

Clayton Christensen, the father of disruptive innovation, says, “you can’t start a disruptive business from inside an incumbent one.” The incumbent business will always take the resources from the disruptive one. He argues that if you want to create a disruptive business you need to isolate it from the incumbent business. The disruptive business needs its own values, processes and resources to be successful.

Regardless of whether you’re trying to build something disruptive or not, amazing products are hard to build. They take focus.

But what’s also interesting about services and products is that there’s a parallel in the world of architecture and real estate development. As an architect, you’re basically a service provider. You have clients and they pay you for the work that you do. However, as a real estate developer, you offer a product: physical space. The cost structures are not nearly as beneficial as with software, but it’s a product nonetheless.

And similarly, we’re already starting to see some developers bring architecture in-house . Will we see more of this in the future? Will there be a similar pull from services, to products?

Image: Flickr

On Friday my friend Paul Crowe (of BNOTIONS ) wrote the following Facebook post (rant) about the retail landscape here in Canada. It was a direct response to the claims that the recent loss of Target, Mexx, and Sony is “a warning sign for our economy.” If the text is too small below, you can also click here to read it on my wall .

I would say that competition did impact these retailers, but the key message remains the same: there’s nothing wrong with failure and companies going out of business (although success is obviously a more ideal outcome).

And it shouldn’t necessarily be interpreted as a bad thing for our economy. In fact, a lot of the time it’s something quite healthy. When companies stop being competitive, the market is supposed to punish them. That’s how this game works.