WEEK 3 BLOG (RICH KENNEY)
The third week and final installment of the NY module was an eclectic mix of industry and their respective representatives. More so than any prior week, I felt that the general thought process of the representatives varied greatly and coupled with the assortment of industries with varying objectives, yielded a few new big picture takeaways. Such takeaways include:
· Dream Big & Go After It
o Urban Rooftop farming—amazing to see how innovative techniques were used to grow vegetables in the most unlikely places. Takeaway here was that even if your idea sounds ridiculous but makes some sense, then go after it (screw the critics). Perhaps one may even discover new technologies that could be patented. In short, I looked beyond carrots and bees making honey.
· Education is Ripe for Disruption (but how?)
o Daniel Pianko’s presentation demonstrated that the traditional higher education approach is under attack due to high tuition costs and relevance to some industries and people.
While I agree with Mr. Pianko that the traditional education model is outdated and could benefit from disruption, I really question his implied message that the whole traditional 4 yr degree and professional studies thereafter have become nearly irrelevant (i.e. MBA’s). I firmly believe that a 4 yr (American degree model with a wide array of subjects is beneficial) and professional studies thereafter is largely a good model. What I take issue with, and this is my takeaway, is that the cost structure and how it is delivered needs to be radically rethought and brought down. Moreover, it’s good that Mr. Pianko is challenging traditional academics, because without the challenge I don’t think traditional academics would change much (they need to feel the pressure—another takeaway). I personally don’t like the whole idea of tenure in academics because this.
Just a side note about one of the speakers, I think it’s ridiculous that everyone should have a strong foundation in the sciences. Obviously some people are exceptionally gifted in some areas and others are not, people should focus on what they’re good at but also obtain a plethora of other subject matter and not just be grounded in one area or sciences. Otherwise, people run the risk of being too narrow minded (and I have experienced this from time to time in real estate having dealt with people from varying industries; it’s a real nightmare).
o HOLD, HOLD, HOLD (Appreciation)
o Often I have thought in real estate that the value of property isn’t just the cash flows that rents generate—and often that’s all investors consider—but also the appreciation that the property garners over time due to its location. And the Rudin business model demonstrated this by implication granted that 25% of their rents are rent controlled and they strictly invest only in NY. In short, my takeaway was that they are mostly interested in a certain rate of yearly appreciation and I assume that’s why they don’t invest elsewhere (location), i.e. Jersey City.
Another big picture takeaway was that technology has infiltrated all business models and saves businesses a tremendous amount of money. In the case of Rudin, it’s their utilities monitoring software.