Grabbing The Dragon’s Tail: An Example Of Ambition & Terror (No Property Left Behind)
One of the more surprising things I’ve noticed while working on Y Combinator is how frightening the most ambitious startup ideas are. In this essay I’m going to demonstrate this phenomenon by describing some. Any one of them could make you a billionaire. That might sound like an attractive prospect, and yet when I describe these ideas you may notice you find yourself shrinking away from them.
Don’t worry, it’s not a sign of weakness. Arguably it’s a sign of sanity. The biggest startup ideas are terrifying. And not just because they’d be a lot of work. The biggest ideas seem to threaten your identity: you wonder if you’d have enough ambition to carry them through.
This struck a chord with me. Paul Graham’s mantra for startups is “Make something people want.” Since I’ve been working in Detroit I’ve had a variation of that mantra in my head: “Make something people won’t.” Meaning look for big important things are great ideas but also something other people aren’t likely to take on because they’re big and “weird” and scary. Sometimes easier said than done!
I think the most common fear people talk about related to projects is the fear of failure. But there’s also another very real and sometimes more crippling fear: the fear of success. Fear of success comes into play when you’re trying something big, because if you’re successful the impact on your life and the world will be significant and largely unpredictable. Like Paul says, it threatens your identity. You will not be the same person after and you will not be seen the same by others. Your life will change and the world will be different.
I think Biggie was succinctly getting at something similar when he said, “Mo money mo problems.”
Let me give you an example of a big idea that’s terrifying me right now.
Every year Wayne County has a huge tax foreclosure auction. As far as I can tell, it is the biggest property auction in the world (please correct me if I’m wrong). This past year just over 13,000 of those properties were in Detroit, each being auctioned for an opening bid of only $500. We mapped and tracked the whole thing live at WhyDontWeOwnThis.com and tallied 1,132 unique bidders buying 5,815 properties for a total of $20,580,806.
[Note: you can see a pre-auction Detroit News video on the project as well as The Land Blank experiment with Andy.]
That’s a lot of action, but it also means that 4,510 properties were left on the table. At $500 a piece, if you wanted to buy all those properties you would have needed $2,255,000. That’s a number that I would call both big and small, right?
So imagine this scenario. What if we set up a crowd fundraiser for the 2012 Wayne County Tax Foreclosure auction trying to raise $2,255,000, using last years leftover numbers as the base. The way it would work is as follows:
• People pledge funds with their credit cards but no one is charged anything until the auction
• The auction happens online, so we write a script that tracks all auction clocks and bids on properties at the last possible moment only if they have received no other bids
• At that point we extract the appropriate amount of funds from all funders equally. So say for the sake of easy numbers that there are 500 who’ve pledged money into the pool, when one $500 property is bought $1 is taken from each of them to cover the cost
• This repeats until each funder has hit their pledged limit and the pool runs out. If there isn’t an opportunity to spend the entire pool then people are never charged the remaining amount
Now let’s say this year’s auction plays out similarly to last year’s. Let’s say 4,000 properties receive no other bids, and the group ends up buying 4,000 properties. Is this a good thing or a bad thing? Well, there’s where the terror starts to kick in. Now that you’ve grabbed the dragon’s tail, what do you do?
Thinking through this scenario specifically, there are certainly very good reasons why it would be better for these properties to be purchased by the group than returned to the county. Following the auctions closely over the last 3 years, unsold properties basically wash back out to sea and become difficult for people to acquire. Put it this way: say you find out about the auction one day too late to buy that lot down the street. Yesterday you could have bought it for $500 no questions asked, but today you’re dealing with the full force of government bureaucracy, red tape, inadequate staffing, and general un-user-friendliness. In short, you’re sort of screwed.
But if the properties were owned by a group who was not seeking profit and had no red tape, you’d simply ask the group if you could buy the lot. The group would do a quick review to make sure you’re not an absentee speculator and for $500 you could buy the lot from them. Or say, maybe the group wanted to be very fair but also realistic about time and attention costs, so they sell it for $1,000 with $500 paid up front with a very lenient schedule for paying off the rest. Still an incredibly fair deal, with a nonprofit markup that makes the process sustainable.
Going further, the group makes a concerted effort to get these properties in the hands of people who will use and care for them, either individuals or neighborhood associations. The group doesn’t want to own them, the group is owning them because it is the best solution for getting someone else to own them. They advertise them and make ownership applications ridiculously user-friendly, always favoring the local buyer over the more distant buyer. This has dramatic impact on improving people’s understanding of the city, networking between people in and out of the city, and spurring local ownership and redevelopment.
Now that all sounds well and good, where’s the rub? Well, here are some of the rubs:
The group is now the largest land owner in Detroit. While exciting, the group discovers why some of these properties did not sell: rotten, expensive, hulking, dangerous. Not all, but many. And the tax clock starts ticking. Owning something doesn’t make it free into the future. Uncle MoTown wants his lootsauce. Your now on the way to becoming a deadbeat yourself. The terror escalates. Someone working for the city or county doesn’t like what the group has done and starts issuing fines and legal summons. The terror breaks through the top of the thermometer. The women feint, the men cry, the rock comes through your window and your spouse wants a divorce. You have created the greatest real estate quagmire in history. Congratulations on your big “successful” idea.
OK, maybe it doesn’t have to be that bad. After all what’s the worst that can happen? If the group can’t find buyers for properties, after 3 years of not paying taxes they simply wash back out to see again to be re-auctioned. No harm no foul. Since no one bid on them at auction and no one wanted to pay $500-ish for them over the course of 3 years, how did you do anything wrong?
Anyway, thinking through a personal example of big ideas and terror. I actually think this kind of property pooling would be a fantastic idea, it just needs the right kind of partners and buy-in and legal support. LOVELAND would be down to build the technology for it as an expansion of Why Don’t We Own This? and our partnership with The Land Blank experiment. I registered nopropertyleftbehind.com (nothing there yet) if anyone’s interested in brainstorming and mitigating terror.
Until then I’m both attracted to and terrified of the dragon. I can see his tail right there…