Telosa

Marc Lore, le milliardaire qui veut bâtir une ville géante dans le désert

Telosa — Wed, 27 Apr 2022 08:08:38 +0000

Certains milliardaires de la tech rêvent de prolonger la vie ou de coloniser Mars . Marc Lore, lui, a un projet plus terre à terre, mais tout aussi ambitieux : bâtir en plein désert, et en moins de trente ans, une ville de 5 millions d’habitants. Et réinventer au passage la démocratie et le capitalisme. La ville a déjà un nom, Telosa, inspiré du mot grec « telos », qui signifie « accomplissement ». Elle a aussi un site web , dont les vidéos et les vues d’artiste promettent « un futur plus équitable et plus durable » et « un modèle pour les générations à venir. » Mais à ce jour personne, pas même Marc Lore, ne sait où Telosa sera construite. « Nous avons plusieurs sites en tête, et nous allons commencer à discuter avec les gouverneurs de quelques Etats », confie-t-il dans le grand salon de son appartement, au dernier étage d’un luxueux immeuble du quartier new-yorkais de TriBeCa, avec double terrasse et vues imprenables sur le sud de Manhattan.

À 50 ans à peine, ce passionné de sport au crâne rasé et au physique athlétique, dont la fortune est estimée à 4 milliards de dollars, pourrait profiter confortablement d’une retraite anticipée. Jusqu’à l’an dernier, il présidait les activités e-commerce du géant de la distribution WalMart , première entreprise américaine par le chiffre d’affaires et le nombre d’employés. Avant cela, ce natif de Staten Island, l’arrondissement le moins peuplé de New York City, avait fait naître deux grands succès de la net économie. Le site de puériculture Diapers.com, qu’il a cofondé en 2005 et revendu à Amazon en 2010 pour 545 millions de dollars, puis Jet.com , un concurrent d’Amazon lancé en juillet 2015, et racheté un an plus tard par WalMart pour 3,3 milliards de dollars.

Leap before you look

Telosa — Tue, 11 Jan 2022 22:52:53 +0000

EPISODE TRANSCRIPT

REID HOFFMAN: Welcome to Masters of Scale bingo, the game in which you, our lucky contestants, listen out for classic entrepreneurial phrases and situations.

On our bingo card today we have.

“Why doesn’t it exist?” “Why don’t we just create it?” “Find a gap in the market.” “Minimum Viable Product.” “Sometimes you just jump and see what happens.”

Today’s guest is serial entrepreneur Marc Lore. And remember: If you hear any of the phrases or situations from our bingo card in his story, be sure to mark them off.

MARC LORE: There was no way to go work for a startup in 1993 when I graduated college. It was like, okay, I love stocks and numbers and math.

And so I thought I should take a test to be a certified financial risk manager. So I’m with my boss. He said, “Okay, why don’t we just create an exam?”

We told people that we had this idea to create an exam, and people laughed, like, “Hey, you’re like a 24 year old kid. Who’s going to take your exam?”

HOFFMAN: If you’re playing along at home, let’s mark off this phrase as the middle star. “Why don’t we just create it?”

Now, let’s take a step back and dive deeper into this story from Marc and find some more phrases to mark off the bingo card. Once Marc got over the irony of people telling him that creating a risk management exam was … too risky, he took the plunge.

LORE: Financial risk management was a new profession at the time. In banking, it didn’t really exist. I had friends that were becoming CPAs or CFA, the Chartered Financial Analyst. So I’m with my boss, Lev Borodovsky, and we’re talking. And I asked him, I said, “why doesn’t it exist?”

HOFFMAN: There’s another bingo phrase: “Why doesn’t it exist?”.

LORE: And so just in typical entrepreneur fashion, we basically put an outline together of what topics would be on the exam. We picked a date. We said, “Okay, in May, in New York city, we’re going to administer the exam. It’s $500. Send a check, and you could sit for the exam.”

HOFFMAN: The checks started rolling in. That’s right … before Marc and Lev had even built their product.

That’s our next bingo phrase: “Find a gap in the market.”

Marc had found a gap in the market – one that no one else was crazy enough to fill, but that customers were so thirsty for they would pay upfront for this unproven product that didn’t even exist.

LORE: So we’re like, “Oh, we got to actually make this exam now.” So we then got a bunch of professors together and people that are really knowledgeable, and we paid them to write the exam. And then we went and administered it, corrected it, passed half, failed half, sent certificates out saying you passed.

HOFFMAN: That’s an MVP right there – “Minimum Viable Product.”

This new risk assessment exam didn’t just take off, it soared.

LORE: And now it’s given still today in 50 countries around the world. It’s given to, I don’t know, probably 10,000 people a year.

I always like to tell this story to people because when they say, how do you get started, or how would you do that? Sometimes you just jump and see what happens.

HOFFMAN: “Lets just jump and see what happens”.

LARRY DAVID: Bingo! Bingo! Bingo!

HOFFMAN: The most storied entrepreneurs make this jump not just once, but multiple times.

Each time they do, they get better at giving others the confidence to make the leap alongside them.

And that’s important because the earlier other people buy into your idea, the greater your chance of success.

It’s why I believe your willingness to jump is your most necessary asset as an entrepreneur. But this ability is only truly valuable if you can convince others to make that leap with you.

[THEME MUSIC]

HOFFMAN: I’m Reid Hoffman, co-founder of LinkedIn, partner at Greylock, and your host. And I believe your willingness to jump is your most necessary asset as an entrepreneur. But this ability is only truly valuable if you can convince others to make that leap with you.

At the top of the show, we played a little Masters of Scale bingo with some of the most frequent experiences and phrases we hear from guests on the show.

There is one phrase that didn’t make it into our game, but which is a personal favorite of mine – as regular listeners will know: Starting a company is like jumping off a cliff and assembling a plane on the way down.

I also like to have fun with this metaphor. For example: Blitzscaling is like assembling that plane faster, then strapping on and igniting a set of jet engines, while still building the wings.

This metaphor and its variants encapsulate the gravity-defying launch off the precipice all founders must take.

But something the phrase omits is that to reach true scale, it’s not just founders who need to take this leap of faith. You need to convince your crew, your engineers, and most importantly your customers to climb aboard your rapidly descending and untested aircraft.

I wanted to talk to Marc Lore about this because he has taken the entrepreneurial leap again and again, each time evolving the way he assesses the risk involved. And each time, he’s refined his method for bringing others – including customers, investors, co-founders, and suppliers – along with him.

Marc co-founded Diapers.com, which sold for $545 million to Amazon, and Jet.com, which sold for $3.3 billion to Walmart.

Marc has had a lifetime of practice taking entrepreneurial leaps. As a kid, Marc was constantly generating new ways to make a little pocket money.

LORE: I did every entrepreneurial thing a kid could do. And I used to work so hard washing cars, mowing lawns, newspaper runs, sorting baseball cards and selling them at trade shows, recycling. Anything that you could do as a kid, I did. And I used to work in the summer, wake up early in the morning, and work until sun down. Nobody said to do that or anything. It was just in the DNA.

HOFFMAN: In high school, he stepped up to the plate with a baseball card trading business.

LORE: Basically got relationships with all the baseball card manufacturers and bought cards wholesale. And they used to come all unsorted. And so, if you can sort them into full sets, you can go to a trade show and sell the sets sorted. And so, looking back, it was probably about $5 an hour. But it was basically as much as you wanted to work, you’d make five bucks an hour. And we literally would work 12 hour days and make 60 bucks a day. And after a couple weeks you’d go and come home with a few hundred dollars. And it was like, oh, this is fun.

HOFFMAN: Marc showed an impressive drive, but something was missing: He wasn’t yet thinking deeply about how to bring others along with him when he made these leaps.

In fact, his deepest passion as a kid was for numbers – mainly because math gave him a way to escape from other people.

LORE: So my childhood, it was not the easiest. And I think I used numbers as a way to get into my own head, like a numbing thing. So I used to count and do math problems in my head as a little kid, just to go somewhere else.

HOFFMAN: From his love of math grew a love of finance. But it soon became clear to Marc that the obvious path of banking wasn’t for him.

LORE: I really had this longing to want to be an entrepreneur. Especially, this is late ’90s, when there was so much stuff happening in the startup land, and all these great companies being founded. And I thought the only way to do it is to go all in. And so, I basically decided I’m going to quit my job and be an entrepreneur. And I didn’t have an idea, but I just knew I needed to go all in. And I thought I had to make it work because I have a family, and I just can’t afford this not to work.

HOFFMAN: Now here’s an important caveat about the romantic image of the all-in entrepreneur; the founder who heroically leaps off the cliff without a thought for their own safety. There’s always more to it than that:

LORE: I did still always think, hey listen, if, a couple years I give this, go all in, I can always go back to banking. It’s not like I would be out on the street. So I had that backstop.

HOFFMAN: Many people have the passion and the mindset to be incredibly successful founders. But their own personal situations mean they have to weigh the risks of making that leap. For some, it might mean delaying it. For others it may mean finding a less death-defying way to bring their idea to the world. In my first book, The Startup of You, I described this as your plan Z in ABZ planning.

There’s no single right way to do it. And you should bear this in mind when contemplating your first leap. That banking fall-back helped Marc make his choice: to go all in.

LORE: So I went into my boss’s office and just said, “Hey, I’m going to quit and be an entrepreneur.” And he laughed at me. He said, “do you know how much you’re making?” I said, “Did you know you just had a baby? I’m not crazy.” He’s like, “Okay, so what’s the big idea?” I said, “That’s why I’m quitting. I’m going to figure it out. I’m going to do it.” And he thought that was the craziest thing. But he said, “Can I be a first investor and put 25 or 50 grand in?” And that was how I got started.

HOFFMAN: This is where Marc clearly showed what I like to call “entrepreneurial charisma.” He had the mindset and the ability that made it almost irresistible for others to join him in his leaps. So much so that they would help him leap off that cliff, and then gladly throw a bundle of money after him.

It’s this charisma that made Marc’s willingness to jump a truly valuable asset.

Marc soon hit upon an idea with childhood friends Vinit Bharara and Lax Chandra. They created a trading platform called The Pit that let you trade stock linked to baseball players.

LORE: You had to use a baseball card as a proxy for the athlete. So we had one card per player, and the idea was market makers and bid offer spreads and charts and things. And it was super fun. But this was nine months before the big crash of 2000. And so it was very difficult to raise money after that. And so we were doing well as a business, but hard to raise money. We sold it to Topps, the baseball card, bazooka gum manufacturer. But it was a great experience, starting it, building it, and selling it all within 12 months.

HOFFMAN: Now Marc had the results to gild that entrepreneurial charisma.

LORE: The fact that we made money for investors, a very little bit, but just through that, gave us a lot of confidence, and the investors confidence to invest in our next business. That was the catalyst.

HOFFMAN: After the acquisition, Marc worked for Topps, but was on the lookout for his next entrepreneurial leap.

LORE: It definitely started before we formally quit. But we knew we were going to quit. And it was really the very early stages of it. I don’t like the idea. I think it happens a lot that you get things started a little bit. But I do think you have to very quickly decide to go all in or not, because it’s difficult to make something work when you’re half in.

HOFFMAN: Yeah. You have to be the total focus. You eventually have to jump off the cliff.

LORE: Totally focused. Yep.

HOFFMAN: Marc brought this focus to his new idea from the very start.

LORE: Let’s analyze the opportunities as opposed to just follow something we’re interested in. I just had a baby. And I’m thinking, diapers are like a commodity product. And I realized that nobody was selling diapers online. Even Amazon, at the time, were selling it, but at ridiculous prices that made no sense. And I just thought, that’s kind of interesting. It’s such a pain in the butt to buy and carry. And it’s a thing you buy all the time.

HOFFMAN: So Marc once again asked himself that classic pre-leap question: “Why hasn’t anyone else done this?” Another great bingo phrase to add to your score card.

LORE: People said, “yeah, it’s a loss leader. Walmart and Target, they lose money on it. So you can’t make it work, because shipping – forget it. You can’t. It’s already a loss leader.” We could have just stopped there.

HOFFMAN: Of course, Marc didn’t just stop there. But listen to how he sets out the long view that no one else was seeing:

LORE: But I was really interested in this idea that, wait, if it’s a loss leader, it makes sense. It drives moms into the store, dads, parents into the store. So if you can drive them onto the online store, you could actually sell them a lot more stuff, high margin than you can in a physical store. So actually, you could afford for the loss leader to lose even more than you can in the store. That was the real thesis.

HOFFMAN: Now all Marc needed to do was to get others to take the leap with him. First was Vinit Bharara, who joined as co-founder. Now they had to convince diaper suppliers.

LORE: Proctor and Gamble and Kimberly Clark, the two makers of Pampers and Huggies refused to sell us diapers direct because they kept saying, “You cannot make the math work. This is stupid.” Basically. And they didn’t want to sell us just because they thought it was stupid. They just thought, you’re not going to make it. So why would we waste our time setting you up as an account?

HOFFMAN: However, Marc had faith that he could eventually get the suppliers on board. So he made a move that raised the pressure even higher – like leaping off that cliff and tying a hand behind his back. They decided to go out and buy their stock from big box stores at retail prices and sell them to their customers at the same price they paid.

LORE: We said, “We’re going to buy them from Costco and sell them at Costco prices. And we’re going to lose a lot more money because we know in the future we’ll be able to eventually afford to sell them at that price.”

HOFFMAN: This is a canonical example of a classic theory from an early episode of Masters of Scale: “The price that bleeds your business can save your business.” But this wasn’t a desperate attempt to get ahead of competitors. It was a calculated long-view risk that the plane would be airworthy before impact with the ground.

LORE: It was a double thing. We weren’t at scale yet, so we were losing money. And then even at scale we’d lose money, but we felt that the lifetime value math would work by selling the long-tail stuff. We had to simultaneously absorb the losses on the diapers because we weren’t at scale, but also try and build out that long tail of product so that we had the margin to make up for even at scale when they were still losing money, if that makes sense.

HOFFMAN: Marc spent a few years flying under the radar, doing bigger and bigger diaper runs to big box stores, buying on credit, and fulfilling shipments from a friend’s garage. Eventually, the thesis was proven: customers not only loved ordering their diapers online; they also loved the brand, and were happy to buy other things from Diapers.com that had a bigger markup.

LORE: The strategy was playing out. We had launched all the stuff in Baby. Then we launched Wag, which is everything in pet, and then Soap, online drugstore.

And we had every vertical and these specialized experiences.

HOFFMAN: These different verticals were brought together under parent company Quidsi. Customers and suppliers had taken the leap with Marc. It looked like they had managed to build the plane and get the engine running.

Exactly how you convince people to leap alongside you depends on many factors. Your track record; the strength of your network; your pitch, and your entrepreneurial charisma.

In short, it differs depending on who you are, who you’re trying to get to leap with you, and the product you’re trying to launch.

But the constant factor is your ability to get people to trust you, whether you’re launching an e-commerce platform, a new flavor of ice cream, or … a trapeze.

CASSIDY KRUG: So nearly everybody I’ve ever seen come to trapeze for the first time is scared. And even the people who are on the ground and look up and think, “Oh, it’s not that scary,” they get up to the platform, and suddenly their knees are shaking. There’s so much fear inherent in what it is.

HOFFMAN: That’s trapeze artist Cassidy Krug. She’s been training as a trapeze artist for nine years. And when she teaches the art to newcomers, she literally has to convince them to take a leap.

KRUG: The first thing that I tell them is that everyone’s scared. Everyone is experiencing some level of that fear. It’s not unique to them. They’re not particularly scaredy cats. Everybody gets up here and thinks the same thing.

HOFFMAN: In many ways, the battle is half won for Cassidy: her students have already been inspired by seeing her flying through the air. But Cassidy also knows exactly how they feel – and what they need to make the final push.

KRUG: The second thing that I say is going forward is so much better than going backwards. You’ve climbed the ladder, you’ve put the lines on, you’re on the platform. And now all there is left for you to do is jump and experience the joy that comes with all of this.

Once they jump and once they do it ,they will have overcome that fear, and the feeling of that is kind of indescribable.

HOFFMAN: In the case of Marc and Quidsi, it looked like they were about to pull out of their perilous descent. But then someone else started to take them seriously. Someone Marc certainly didn’t want to have following him.

LORE: Yeah, we probably made a foolish mistake. We were told by the manufacturers that we were selling four times as many diapers as Amazon. And so we publicly said it. Which, that was not smart.

HOFFMAN: Bring it!

LORE: That was not smart. We felt really good about that, and we thought that would be potentially good for fundraising because we were going to do a round. And “Hey, we’re selling four times as many diapers as Amazon.” Amazon’s a juggernaut. But I think after they heard that, not that long after they basically gave diapers away for free, basically.

HOFFMAN: One thing might be not poke the bear, right, as a-

LORE: Yes. I strongly recommend not poking the bear.

HOFFMAN: Right.

LORE: It feels good for about two seconds and then-

HOFFMAN: And then the bear starts coming for you.

HOFFMAN: The Amazonian bear had taken the leap off the cliff – not with Marc, but in pursuit of him.

In the vast majority of cases, poking the bear is a bad idea. Because all things being equal, one-on-one with a bear, you’re going to get squashed.

However, there are times that having the bear coming for you can accelerate your growth: it might elevate your brand; or highlight that you do indeed have a much better product.

But you need to have a specific strategy to justify making that initial poke.

One clear case is when Sir Richard Branson took on the established giant British Airways with his upstart airline, Virgin Atlantic. He had a clear strategy.

RICHARD BRANSON: I pretty well knew everything that I didn’t like about the airline industry. I was 28 years old, I traveled a lot on other people’s planes.

And of course what BA didn’t realize was that actually people like to be entertained. They liked to have a wonderful experience. They liked to be in a company where the owner takes an interest in all the details, like a private restaurant.

They turned the guns onto us. I mean, there was a big fat book called Dirty Tricks. And thanks to the loyalty of our customers, we did survive it.

HOFFMAN: With his focus on exceptional service, Sir Richard had convinced his customers to make the leap with him, and it meant he could gleefully poke the BA bear. In fact, doing so made people love the Virgin brand even more.

However, when Sir Richard later took on Pepsi and cola, he hadn’t done enough to bring customers along with him. As a result, poking the bear turned out to be disastrous.

BRANSON: They sort of kneecapped us.

And the lesson to learn from that was we weren’t different enough. When BA tried to do that to us with Virgin Atlantic, we had a quality edge on them. With a can of cola, it can’t be radically better than Coke or Pepsi.

HOFFMAN: Even when you don’t deliberately poke the bear, it will still come for you. When I spoke with Drew Houston of Dropbox for our episode entitled “How to take on Goliath – and Win,” Drew shared with us what can happen when a giant tries to muscle you out.

DREW HOUSTON: Well, the first thing is you have to think about what is the incumbent’s playbook? And it’s not complicated. The basic response for the incumbent is basically to copy your product, distribute it with their platform, and destroy the economics – so give it away for free. If you know that, then it’s easier to respond.

HOFFMAN: In Drew’s case, it was Google gunning for Dropbox’s cloud storage business. Drew saw his key advantage was having a more nimble team that was focused on one core product. But there was more to it than relying on the agility of being a startup.

HOUSTON: If we’re like, “We’re just going to be faster, better,” that rarely works. So what does it mean to have a different playbook? How is our strategy different from the incumbents? Or from a Microsoft or Google?

Well, conventional software is often sold top-down. So you talk to CIO, they compare a bunch of different products, they make a purchasing decision, they buy your thing, they deploy it to their employees.

Dropbox is bottom-up. The employees find out about Dropbox, they start using it organically. Eventually usage reaches a certain point where it reaches the top. But it’s Dropbox already deployed, and then it’s purchased, as opposed to purchase then deployed. That’s a 180 degree difference from the conventional way of doing things.

HOFFMAN: When Marc Lore found Amazon hot on his heels, he didn’t try to fend it off with his playbook. Instead, he saw how his playbook was complementary to Amazon’s. Rather than try to fight Amazon off in mid-fall, he embraced them on the way down.

LORE: But what was interesting is our growth rates slowed, but we were still growing even in the face of that. And I think Amazon took note and said, “Wow, they have a real brand, it’s not just price.” And that’s when they made a bid to acquire us.

HOFFMAN: This is why it’s important to bring people with you as you make that leap. Marc managed to convince his customers and eventually his suppliers, and finally, his biggest competitor. None of this would have been possible if he hadn’t made the leap.

In 2011, Amazon acquired Quidsi, which included Diapers.com, for $545 million. Marc and his co-founder Vinit Bharara had survived the clifftop dive, caught a thermal, and made a spectacular exit.

Surely it was time to celebrate.

LORE: I always talk about the difference between selling and selling out. With Amazon, we weren’t able to continue with the vision that we had. We had a vision. We were very excited about what we wanted to do in the next 10 to 20 years, and when we sold to Amazon, that came to a halt, and that was the most depressing part of it.

The vision was over because Amazon bought us and said, “Hey, just keep doing what you’re doing over here while we do what we’re doing over there.”

And it was like, “Yeah, but we’re competing, and you own us, and we’re competing. Why don’t we just bring everything together and let us run the baby and the pets, and we know consumables.” And like, “Nah, just keep doing what you’re doing over here.” And it was very depressing, and we knew that that was the case going into it. Even the day we sold, it was a lot of money, basically. We had never had a hit like that, and it was a life-changing amount of cash. And Vinny and I, the other co-founder, didn’t even want to celebrate. “Yeah, should we celebrate? You want to celebrate?” No. “Me, no.”

We were actually depressed, which is what shows you how I always talk about missionary versus mercenary. It doesn’t mean missionary, when you’re driven by the mission, doesn’t mean you don’t want the money and like money, but when you have a straight choice like money or not money, you choose the mission. And I think that was a perfect example of where we had all this money, and we were depressed because the mission that we had, it was over.

HOFFMAN: Yeah. I completely agree with you on the mission, missionary, and mercenary. And part of the whole thing, of course, is not that missionaries aren’t capitalists, aren’t how you build amazing businesses. But it’s: what is our place in the world? What are we building towards? It isn’t a transaction, we’re trying to build something that we’re proud of. We go home, talk to our friends, talk to our families, and say, “That’s a great thing that exists.” Right.

LORE: Exactly. Yeah.

HOFFMAN: Marc had convinced Amazon of the viability of the Diapers.com approach. But although Amazon was prepared to make a significant outlay to buy Diapers.com, they weren’t willing to fully embrace Marc’s approach. Amazon then put limits on Marc’s scope to be an intrapreneur within Amazon. He was, in effect, rescued mid-fall before having a chance to finish his airplane. It was a feeling that would convince him to bail out and start building a new flying machine.

[AD BREAK]

HOFFMAN: We’re back, with Marc Lore, founder of Diapers.com and Jet.com.

If you’re enjoying this episode and want to share it with friends, send them the link mastersofscale.com/lore. That’s L-O-R-E. And to hear my complete interview with Marc Lore, become a Masters of Scale member at mastersofscale.com/membership.

Where we left off, Marc had just sold his company, Quidsi, which included Diapers.com, to Amazon for $545 million.

But he didn’t feel elated. In fact, quite the opposite.

So it’s not surprising that Marc was soon on the lookout for the next leap.

LORE: I saw an opportunity, big market. There’s no number two player behind Amazon. There’s tailwinds, and I saw an angle on how to create a business that could compete quite formidably against Amazon.

HOFFMAN: That angle came from Marc’s experience in e-commerce.

LORE: That little hook that we’re different is that logistics are a huge expense for e-commerce players, and many times people buy orders that are really expensive to ship. You buy three things, and they come from three different warehouses – that’s really expensive. Or you buy something, and you’re on the East Coast, and it’s only available on the West Coast, it has to ship across the country.

My thought was, if you could make that transparent to customers and say, “Hey, you can save money if you shop smarter. I can take three bucks off because it’s way cheaper to ship, and you’ll get it faster.”

HOFFMAN: Once again, he’d be asking customers to take a leap with him into a new and unfamiliar business model. So he came up with a way to get them on board.

LORE: We had a competition. We built this technology that allowed people to refer other people and get credit and get ranked on how many people they referred. And the idea was the top 10 would get stock in Jet. And actually the winner, their stock wound up being worth a million dollars, which was pretty cool.

HOFFMAN: This won them hundreds of thousands of customer referrals. Within two years, they sold to Walmart for $3 billion. And this time, the acquisition didn’t leave a sour taste.

LORE: We felt great about the sale because Walmart said, “Hey, we’ve been at this for a long time. We need help. Do you want to bring Jet and Walmart together and really have the capital and the weight of Walmart behind you to do what you want to do?” and that sounded really exciting.

HOFFMAN: Walmart itself was feeling the pressure from e-commerce. The company also saw the value in Marc’s track record and willingness to make daring leaps. Marc agreed to join the company as President and CEO of its e-commerce division.

This was 2016, and, for context, Walmart’s e-commerce operations were a sickly shadow of its colossal brick-and-mortar operations, with online sales growth stalling. Walmart hoped buying Jet.com – and along with it, Marc’s expertise – would be the daring leap it needed to take to save its e-commerce wing from the abyss.

But for Marc, this was like leaping from the sleek, cutting-edge aircraft he had built with his own hands to a poorly-stitched zeppelin that was billowing flames in an uncontrolled descent.

LORE: We had to change the narrative, and we weren’t going to get there with good business decisions. It seems counterintuitive. For example, we dramatically ramped up marketing spend to start getting the growth to accelerate fast. That marketing spend wasn’t smart. If you look at the cost to acquire a customer versus lifetime value, it was upside down. Why would you spend a dollar and make 75 cents, that doesn’t make sense. But there was a bigger purpose, and we needed to get momentum on the top line to get press and things aware that things are changing at Walmart.

HOFFMAN: So Marc set about making that zeppelin soar.

LORE: We innovated. We started testing things that showed that Walmart was different, e-commerce was different. We’re innovating and trying things, taking risk. We bought Bonobos, which was a high-end brand. People said, “Huh. Why? That doesn’t fit with the Walmart brand. Why did you do that?”

And it just started building this buzz of “things are different, sales are moving, they’re innovating, they’re buying companies, Walmart’s cool.” And it worked. We didn’t know it was going to work, but I knew that it wasn’t working the way it was, and we weren’t going to hire the great people unless it works. It was an easy decision as far as I was concerned.

HOFFMAN: Within two years of Marc joining Walmart, e-commerce sales grew by nearly 50%. Within three years they nearly tripled. Among the initiatives Marc headed up were delivery, pickup and a new initiative incubator.

After four years, Marc stepped down from Walmart in January 2021 to focus on a number of new projects. First, he purchased the NBA team, the Minnesota Timberwolves; and second, he has an ambitious plan to build a fully sustainable new American city, Telosa. You can hear Marc talk about both of these initiatives with Bob Safian on Masters of Scale: Rapid Response.

Another project is Wonder, a food delivery business; and VCP, a new venture capital firm that Marc co-founded with Alex Rodriguez. Those three letters – VCP – stand for Vision, Capital, People, which Marc says are the three most important considerations before jumping off that cliff.

LORE: In order to move fast, I think the thing that goes probably a little bit underappreciated is the clarity of vision and strategy with everybody in the organization. So if you don’t have that down on paper, and everybody on the executive team could recite exactly the vision and strategy; where are you going? How are you going to get there? Then you have no hope of hiring hundreds and thousands of people. Everyone would be going their different ways, and doing different things, it’s very hard to scale when you don’t have that communication nailed.

HOFFMAN: The clarity of vision may seem obvious, but don’t make the mistake of assuming everyone is clear. Take pains to make it very obvious, and make sure everyone is on the same page as early as possible. This is what Marc does to convince others to follow him off the entrepreneurial clifftop time and time again.

LORE: I just think it’s really important to spend a lot of time upfront on clarity of what exactly is the vision? 10 to 20 years, put it on paper, 25 words, what do you want to become? What is the strategy like three to five high level objectives for getting there? What are the success metrics, like goals around vision and strategy? Maybe have a few tactics under each strategy, again, all high level.

HOFFMAN: As for the People part of VCP, you need to be just as clear and deliberate about who will do what. If that’s not clear when you leap off that cliff, you’ll waste precious time. And that means getting creative about how you structure your organization.

LORE: A lot of times people build the org structure, it’s just very common like, COO, CFO, But when you’ve got a really clear strategy, I find it’s best to build the org around that strategy so that you may have a non-traditional kind of roles that report to the CEO because they’re so important. I’ve learned, if you want to hire the very best person and be number one at something, they’re going to want to report to the CEO. And so, if it’s that important, carve it out, even if it’s non-traditional.

HOFFMAN: I fully agree with Marc that founders don’t start from first principles as much as they should when they’re thinking about how to structure their organization. You need to start by asking: what’s the persistent nature of the problems that you need to be solving in order to succeed? Then use those answers to inform your structure.

One example of a non-traditional key role that Marc gives is the Chief People Officer.

LORE: A lot of people, entrepreneurs, and even myself early, would hire somebody to kind of just do the HR stuff, not actually drive the bringing in a team of recruiters, thinking about compensation system, thinking about how to promote people. The whole system, getting that right early, bringing in the top recruiters so that you can hire talent fast, and keep everything well coordinated as you do it, that’s probably the most important role to get right early, is to hire a big time Chief People Officer, if you want to blitz scale.

HOFFMAN: I totally agree. And part of it, actually, one of the things on this specific people officer thing that I’ve seen done and have done myself is sometimes not hiring a traditional HR professional, but actually general manager into the role. Because if you actually look at like recruiting talent and organization building, not just as kind of eventually you have to get to the talent systems that the great people officers will do. But actually as a talent acquisition system and thinking about it completely, the way that a general manager would in terms of capital allocation and innovation and trying five different new things is the way of making it happen, et cetera, I think can also be a useful technique there.

LORE: Yep, absolutely. Yeah. I absolutely agree with that.

HOFFMAN: When it comes to building your wider team, you don’t need to convince everyone to make that jump with you – just the people who will be 100% all in and have the skills and grit to stick with you as you freefall.

LORE: Find a team of people that just gel, that are smart, get together, and they have the traits, they’re passionate, they’re optimistic, kind, and bring them together, that they’ll figure out, or hire.

I mean, because that would be very hypocritical of me. I will start a business. I knew nothing about e-commerce when I started or nothing about food or nothing about any, but then you hire people that do. And so it would be kind of hypocritical of me to say, “No, you must have this experience if you’re going to be in this company to do this.” Because the great people will find the people they need to hire.

HOFFMAN: The most important thing to remember when you’re standing on that lonely precipice preparing to leap into the unknown is that you’re taking that leap, but you’re not taking it alone.

I’m Reid Hoffman. Thank you for listening.

See full transcript here…

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Imagining the future: 2021’s boldest design proposals

Telosa — Tue, 28 Dec 2021 06:45:37 +0000

Predictions for the future have not always been entirely accurate.

If sci-fi author Philip K. Dick’s classic novel “Do Androids Dream of Electric Sheep?” had been prophetic, humanoid robots would live among us by now, almost indistinguishable from people. And if Keanu Reeves’ 1995 movie “Johnny Mnemonic” had came to pass, human couriers would, by 2021, have been able to store gigabytes’ worth of sensitive corporate data in brain implants.You may, therefore, wish to take today’s boldest design proposals with a pinch of salt. Indeed, this year has seen architects, designers and entrepreneurs pushing the boundaries of what might one day be possible, including designs for rain-catching skyscrapers and the Tesla Bot android (maybe Dick’s ideas weren’t so far off the mark, after all).Speculative to varying degrees, these are some of 2021’s most eye-catching visions of the future.

A sustainable desert city

Billionaire Marc Lore this year outlined his vision for Telosa (pictured above), a “new city in America” intended to house 5 million people. The 150,000-acre metropolis, built from scratch in the desert, promises eco-friendly architecture, sustainable energy production and a drought-resistant water system. A so-called “15-minute city design” will meanwhile allow residents to access their workplaces, schools and amenities within a quarter-hour commute of their homes.Now, the former Walmart executive just needs $400 billion in funding — and somewhere to build. Planners have yet to announce an exact location, but possible targets include Nevada, Utah, Idaho, Arizona and Texas, according to the project’s official website.

Robot forest rangers

Segev Kaspi

Amid the ongoing threat of deforestation around the world, Israel-based industrial design student Segev Kaspi has envisaged three autonomous forest rangers named Rikko, Chunk and Dixon. Collectively known as Forest Ranger Druids, the droids would be designed to support reforestation and sustainable forest management.

The three robots perform differing proposed functions: Chunk would thin, prune and mow vegetation; Dixon would plant seedlings and cuttings; and Rikko would collect information and provide mapping and monitoring services. Although just a concept for now, the project offers a “possible solution for an urgent problem,” Kaspi wrote on his website.

A 100% recyclable BMW

BMW

With grand visions of becoming “the world’s most sustainable manufacturer in the individual premium mobility space,” BMW this year unveiled designs for a four-seater concept car made entirely from recycled — and 100% recyclable — materials. Dubbed the BMW i Vision Circular, the proposed vehicle will be built using repurposed aluminum, steel and plastic, alongside certified bio-based materials.

The manufacturing process will use 3D printing to reduce waste and offcuts. And, in keeping with forward-looking circular design principles, the German carmaker has also considered the vehicle’s lifespan, which BMW claims will be extended thanks to detachable components that can easily be swapped out for new ones.

Without exterior paintwork, leather or chrome, the concept car looks suitably futuristic and could launch in 2040, according to a news statement.

A new way to gather outdoors

Of. Studio

Inspired by banyan trees and hot air balloons, Ephemeral Station offers a high-tech way for people to gather safely in harsh environments. As well as being a “sculptural and iconic element,” as the designers Of. Studio described it, the proposed self-supporting module has a variety of possible uses, from hosting desert campouts and events like music festivals, to serving as temporary accommodation in extreme conditions.

In addition to offering sun protection to those gathering beneath, the cloud-like structure would generate energy via photovoltaic cells while its “legs” tunnel beneath the surface to collect groundwater for drinking or internal cooling. Ephemeral Station is also designed to move and transform with the conditions, expanding and contracting with changing temperatures, to give it the appearance of a living, breathing organism.

Floating mobile houses

Creative Center/Sony Group Corporation

As part of an initiative to imagine life in 2050, Sony’s in-house design group, Creative Center, dreamed up a series of mobile homes floating in Tokyo Bay. Responding to the threat of rising sea levels, the designers imagined future homes equipped with power and water systems for a new breed of “sea nomads.”

Self-propelled by water jets, each home would come with filters that clean water for drinking as the residence moves through the bay. The structures come with solar panels on their roofs, while autonomous energy tanks would float nearby, attaching themselves to homes in need of additional power.

With separate outer and inner shells to reduce the impact of waves, the homes could also connect to one another to form a larger, more stable structure during storms. It’s not the first floating community that has been proposed — Bjarke Ingels Group revealed an ambitious United Nations-based design for “Oceanix City” in 2019, which could house 10,000 residents.

World’s largest timber building

Anders Berensson Architects

Buildings — and even skyscrapers — made with engineered timber are an increasingly common sight in cities across Europe and North America. But for Anders Berensson Architects, the Swedish firm behind a “science fiction” plan to construct the world’s largest entirely wooden building, the proposed project is less about the possibilities of architecture, and more about finding sustainable solutions for Sweden’s timber industry. Each year, the industry accounts for 970,000 tons of CO2 emissions, according to the Skogforsk research institute.

Dubbed the Bank of Norrland, the building is both made of wood and a place to store it: it has been designed with room for up to 900 million logs for use in construction or manufacturing. And because trees absorb carbon dioxide through their lifetime, the “bank” also stores those emissions trapped within the timber.

The architects say their proposal would provide local farmers with reliable income while preventing logs being burned, turned into biofuels or left to decompose, all of which would return the CO2 to the atmosphere.

The Tesla Bot

Tesla

Unveiled by Elon Musk at Tesla AI Day in August, the Tesla Bot is part of the carmaker’s drive to apply its AI research beyond its vehicle fleet.

Described as a “general purpose” bi-pedal humanoid, the 5-foot-8-inch robot will weigh 125 pounds and be capable of deadlifting 150 pounds. The Tesla Bots’ precise use and timeline for completion remain shrouded in mystery, but it is being designed to perform tasks that are “unsafe, repetitive or boring,” with Musk suggesting that the technology could ultimately address future labor shortages.

And for those worried about a “Terminator”-style rise of the machines, Musk assured attendees at the presentation that the bots can only move at 5 miles per hour, meaning “you can run away from it and, most likely, overpower it,” he half-joked.

Airdropped emergency shelters

Kozhevnikova Angelina/Konuralp Senol/Kyungha Kwon

When the London Design Biennale put out a global call for designs to address issues in “an age of crisis,” the Radical Gravity project proposed a futuristic solution for people displaced by natural disasters, conflict or climate change: emergency shelters that can be airdropped into dangerous or hard-to-reach places.

Developed at the Architectural Association’s Design Research Lab in London by students Angelina Kozhevnikova, Konuralp Senol and Kyungha Kwon at the Spyropoulos Studio, the proposal envisages an airplane releasing up to 500 units, known as Gravitons, that form parachutes in mid-air. After safely landing, they would, in theory, auto-inflate into networks of habitable pods designed to collect rainwater and generate energy.

Rain-harvesting skyscrapers

BPAS Architects

In the bleak future envisioned by South African firm BPAS Architects — whereby the Sahara Desert has expanded tenfold, and oceans cover over 80% of the Earth’s surface — water is exceptionally hard to come by. In fact, in this dystopian scenario, the Earth’s surface is so hot that any rainfall evaporates hundreds of meters before reaching the ground.

The architects’ solution? A water-harvesting skyscraper that reaches 1,000 meters (3,281 feet) into the sky and collects moisture before it evaporates. The water is then transported down the length of the skyscraper to underground storage facilities, after which solar-powered pumps transport it to farming areas or people’s homes for drinking and sanitation.

Created for the design website Dezeen’s Redesign the World competition, the proposed design is intended to help revitalize natural ecosystems decimated by desertification.

…See full article here

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Walmart’s former secret weapon Marc Lore is trying to change the world

Telosa — Thu, 16 Dec 2021 07:14:55 +0000

Full stop, Jet.com founder and former Walmart U.S. e-commerce wizard Marc Lore is trying to shake up the world.

And that’s where Yahoo Finance found Lore on a recent Wednesday afternoon, somewhere between executing on big, bold new ideas (food delivery startup Wonder plus city of the future Telosa), mapping out a vision for basketball teams Minnesota Timberwolves and Minnesota Lynx (which he now partly owns with former baseball star Alex Rodriguez) and having a little fun on Twitter (posting a video of watching Olympic bobsled training, a sport then Credit Suisse banker Lorealmost played back in the late 1990s after passing a sprinting tryout).

“I’m feeling great. Like you said, I’m living my best life,” Lore — who left Walmart as its change-making U.S. e-commerce chief almost one year ago — told Yahoo Finance. “I’ve been out of Walmart about a year. And you know, I was there for a little over four years and I started thinking about all the things I wanted to do in the future. And when I came out of Walmart, I wound up doing them all in the first 12 months. I was like, check, check, check, check.”

Indeed, Lore is checking a whole lot of boxes right now on a list that describes serial entrepreneur.

Lore is the driving force behind food delivery startup Wonder, which is officially out of stealth mode. The basic premise for Wonder is this: Lore wants to democratize good food. He plans to do that by licensing out the menus of popular chefs such as Bobby Flay, making their iconic food inside mobile kitchens and delivering it right to your doorstop.

Lore thinks he could have thousands of these mobile food trucks in operation across the country, but plans to have 1,000 out and about by next year. And he is currently out there raising capital to scale the business (he declines to share how much capital he has raised in our interview).

Marc Lore is living his best life, he tells Yahoo Finance.

“We are in fact democratizing, giving people access to great food, food that you couldn’t otherwise get,” Lore explained.

When Lore isn’t thinking about mobile kitchens whipping up spicy Bobby Flay concoctions, he is also building out a 10-year vision for his recent high-profile purchases: basketball teams Minnesota Timberwolves and the Minnesota Lynx.

The first increment of the $1.5 billion sale of the Minnesota Timberwolves to Lore and “A-Rod” as part of their VCP (Vision Capital People) investment firm became official in July. By 2023, the pair will become controlling owners.

Meanwhile, Lore has posted several Twitter videos of himself practicing jump shots in the gymnasium — not surprising to see as business people always try to better understand a business by immersing themselves in it.

“Obviously, we want to start winning, like any team it’s about winning, but more so how do we want to be viewed by the world? You know, what do we want to be known for and admired for? It goes beyond winning, it has to be on and off the court,” Lore said of his vision for the basketball franchises.

‘Selling versus selling out’

To say Lore is a serial entrepreneur whose motor is always running is putting it mildly. And having followed Lore’s career for a while, I can’t say I am shocked by his feverish pace of activity post life at the buttoned up Walmart.

Lore founded Quidsi in 2005, a business made famous by domain name diapers.com. Amazon bought Quidsi in 2010 for about $545 million. Lore worked at Amazon until 2013, and then founded delivery outfit Jet.com.

The world’s largest retailer Walmart acquired Lore’s Jet.com in 2016 for $3.3 billion in cash. Although some on Wall Street viewed the purchase price as lofty at the time, there is no denying the impact Lore and the Jet.com folks have had on Walmart since the deal closed in September 2016. Walmart shut down Jet.com in March 2020.

Recalls Lore on selling his ventures, “I always talk about this thing selling versus selling out. I think diapers.com or Quidsi, when we sold it to Amazon, it was sort of depressing, because we had a big vision and we were sort of going after it. And when we sold the company, it was sort of like, OK, you guys just keep doing what you’re doing over here. And like stay out of our way a little bit and it was very depressing, because it’s like, the vision was gone, the vision we had no longer existed. And that was sort of like selling out. When we sold to Walmart, it was just the opposite. It was like, here you go, here are the keys, bring Jet.com and bring walmart.com and bring them together. And now the vision you had, it’s our vision too, we’re going to give you capital and you give time to get there faster, with a higher probability of success. Go at it. So that didn’t feel like selling. It felt invigorating, it felt great.”

Creating ‘a more equitable, sustainable future’

Lore concedes he has a lot going on, and we haven’t even gotten to the part of him wanting to create a city from scratch. It’s something Lore teased to me about one year ago on the day he announced he would be leaving Walmart. Since then, the project — named Telosa — has taken on a life of its own and pretty much has gone viral.

For good reason.

Lore is looking to create a utopia-like society from dirt, underpinned by a business philosophy called equitism (as opposed to pure profit-focused capitalism). Total reported cost of the project: $400 billion. Settlers may begin to arrive by 2030, says Lore. No location has yet been picked. Lore says ideally he would like to secure 200,000 acres as that would accommodate 5 million people.

Marc Lore is building cities of the future, and a food delivery operation.

“We are trying to identify the right location, while also bringing on board members that share the same passion we have, believe in the mission. The mission is really to just simply create a more equitable, sustainable future. That’s really what the project’s about, it’s not about building a city, it’s not a real estate project. This is a not-for-profit project,” Lore explained.

Continued Lore, “For society, we’re sort of calling it equitism, because it’s like a more equitable form of capitalism. It’s getting a lot of traction, people like the idea of having these great social services without having to increase taxes to cover it. The social services of the city would essentially be funded through the appreciation of the value of the land underlying it, Lore explained.

All in all, sounds like one serial entrepreneur trying to live his best life.

…See full article here

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Is Marc Lore’s City of Telosa a Blueprint For Smart City Success?

Telosa — Wed, 08 Dec 2021 08:17:54 +0000

Purpose-built smart cities are seen as the ultimate fruition of connected living — at least as they’re depicted in movies and TV shows. Not surprisingly, such grand visions face obstacles.

Fortunately for this idea, hope springs eternal. The latest proponent to lock onto smart cities, former President and CEO of Walmart U.S. eCommerce Marc Lore, believes he can have one up and running within about eight years — assuming that a lot of things go right.

Departing Walmart last January after four years and a blazing run as its eCommerce chief, Lore grabbed headlines in Q3 2021 by announcing his plans for the city of Telosa, a connected and sustainable wonderland sprawling over 150,000 acres in a to-be-determined site in one of six areas being scouted, including Nevada, Utah, Idaho, Arizona, Texas and the Appalachian Region.

Lore is seeking $400 billion in financing and is bringing partners on board to kick off the creation of Telosa, reportedly to begin as a $25 billion, 1,500-acre village housing some 50,000 residents on its way to eventually welcoming five million connected neighbors in the 2030 timeframe.

Design for the eco-friendly architecture, sustainable energy and drought-resistant city of bikes, pedestrians and autonomous vehicles is provided by famed eco-builder Bjarke Ingels.

Smart cities and adjacent undertakings have fired imaginations for years, but actual projects have struggled. As COVID lockdowns went into effect in 2020, Alphabet Inc. subsidiary Sidewalk Labs had to scrap plans for a smart development on Toronto’s waterfront called Quayside.

In a blog post, Sidewalk Labs CEO Dan Doctoroff said that “unprecedented economic uncertainty has set in around the world and in the Toronto real estate market, [and] it has become too difficult to make the 12-acre project financially viable without sacrificing core parts of the plan.”

Doctoroff added that despite the letdown, Sidewalk Labs has “started innovative companies addressing urban mobility, next-generation infrastructure and community-based healthcare, and has invested in startups working on everything from robotic furniture to digital electricity. We continue to work internally on factory-made mass timber construction that can improve housing affordability and sustainability, a digital master-planning tool that can improve quality of life outcomes and project economics, and a new approach to all-electric neighborhoods.”

While not nearly as glittering as the city of Telosa, the November passage of the Biden administration’s Infrastructure Investment and Jobs Act is a boost for efforts to bring greater internet connectivity and 5G speeds to rural America, in part to make AgTech advances — and even smart city experiments — more supportable as efforts progress.

As reported by Nextgov, the $1 trillion spending package carves out “about $65 billion in federal funding … toward expanding broadband access and 5G connectivity nationwide. Establishing better broadband infrastructure would give more Americans in every part of the country access to high-speed internet, helping close the digital divide existing between urban and rural areas of the country.”

The infrastructure bill also makes available more money to fund the Strengthening Mobility and Revolutionizing Transportation (SMART) initiative, wherein states and municipalities can apply for grants to modernize public transit with new digital options, including payments.

…See full article here.

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Investment in new cities set to boom

Telosa — Mon, 22 Nov 2021 08:11:37 +0000

Investments in urban infrastructure aimed at implementing “new visions for cities” will reach US$375 billion by 2030, according to global technology intelligence firm ABI Research.

The research focuses on new greenfield and brownfield urban developments that adopt one or more new design principles, including pedestrianisation, 20-minute neighbourhoods and fresh approaches to green infrastructure, utilities, transportation, and carbon-neutral buildings.

The report features 16 case studies including The Line in Saudi Arabia, Marc Lore’s recently announced Telosa in the US and Tengah in Singapore.

Dominique Bonte, VP End Markets and Verticals at ABI Research, said the investment projections are based on a strong increase in announcements about new city projects and concepts, driven by issues such as the urgent need to address climate change, and the “digitalisation of lifestyles”, which has been accelerated by Covid-19. Other factors cited include a growing focus on equity and inclusiveness, scalable economic development, and more affordable living.

“The very concept of cities will change profoundly and structurally,” Bonte commented.

In January, Saudi Arabia’s Crown Prince Mohammed Bin Salman unveiled plans to build a car-free, pedestrianised city – within the larger NEOM development – called ‘The Line‘, which aims to have all residents’ needs catered for within a five-minute walk. The proposed city will extend over 170 kilometres and have the capacity to house one million residents, according to the Prince, with construction expected to commence in the first quarter of this year.

“We need to transform the concept of a conventional city into that of a futuristic one,” Prince Mohammed said, adding that the city will serve as a “blueprint for how people and planet can co-exist in harmony”.

In September, entrepreneur and investor Marc Lore revealed plans to develop a new city in the US which will be named Telosa. A location has not yet been secured but possibilities include Nevada, Utah, Idaho, Arizona, Texas, and the Appalachian Region. Proposals centre around a city designed for active transport, electric and autonomous vehicles, and drones, as well as an underground network for deliveries and waste management. Lore also puts forward the idea of ‘equitism’ as a new model for society. The land selected for the Telosa development would be donated to a community endowment which would use increasing land values to fund “enhanced city services” around education, housing, healthcare and training.

Learning from failure

At the New Cities Lab at McGill University, Dr Sarah Moser and her team have counted around 150 new city projects in more than 40 countries, including Forest City in Malaysia, NEOM in Saudi Arabia and major developments in Jordan and Egypt.

Most promise green, pedestrian-friendly smart cities but many hit political or financial roadblocks or fail to live up to expectations. Futuristic master-planned cities such as Masdar in Abu Dhabi and Songdo in South Korea have been called ‘ghost towns’, and several commentators have also expressed scepticismabout the latest projects such as Lore’s.

Bonte said: “While many of these new city visions may never see the light of day, they do offer a glimpse into a more humanised, sustainable, and resilient urban future, much of which will be realised by gradually retrofitting and/or upgrading existing urban infrastructure in the next decades. The mega concepts play an important role in defining and promoting new urbanisation concepts.”

He said the bulk of urban innovation will come through smaller brownfield projects.

He added that while the most visible aspects of these projects are linked to physical assets, the invisible digital layers and related processes are equally important. This includes solutions that integrate connected sensors, software management platforms, digital twins, blockchain, electrification, and process automation.

“These transformative solutions enable preventive and remote maintenance practices, automated emergency response and traffic management, and will ultimately realise the autonomous city of the future,” the research says.

…See the full article here

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A City from Scratch? (with Marc Lore)

Telosa — Thu, 04 Nov 2021 22:17:08 +0000

Episode Transcript

Preet Bharara:

A big part of what makes our show special is you, our listeners. That’s why we’d like your help to plan for our future by filling out a short survey. Your responses will help us understand who’s listening, what kind of content our audience is interested in, and how we can reach even more people. Go to cafe.com/survey, that’s cafe.com/survey.

From CAFE and the Vox Media Podcast Network. Welcome to Stay Tuned. I’m Preet Bharara.

Marc Lore:

If the city doesn’t work the way we all dream it can, it’ll probably be because it doesn’t have soul or it won’t be diverse. It’ll be some homogeneous group. And then it just never really turns into something that we’re really super proud of.

Preet Bharara:

That’s Mark Lore. He’s an old friend of mine. He’s also a self-described serial entrepreneur who’s had massive success at nearly every turn of his career, thriving in the hyper competitive world of e-commerce. Earlier this fall, he announced his biggest challenge yet, creating a new city from scratch that he hopes will set a global standard for urban living and become a blueprint for future generations. Mark joins me to discuss why he decided to embark on such an ambitious project, how he thinks about risk, and why the success of his new city, which he’s named Telosa will only succeed with soul at its center. That’s coming up. Stay tuned.

Preet Bharara:

Now, let’s get to your questions. This question comes in a tweet from Greg Burgess, who asks, how long does it take to go to a grand jury and make a decision for a case like Steve Bannon’s? Of course, that’s something we’ve been talking about for many weeks now. Steve Bannon, who was pardoned by President Trump, former President Trump, for his role in a fraud in connection with building a wall on the southern border is now in the cross hairs again, in my view, very legitimately, because he has openly defied a subpoena from the January 6th panel of the Congress. The committee itself, that panel itself voted unanimously to make a referral for criminal contempt of Congress of Steve Bannon to the justice department, and then the house as a whole voted to refer him to the justice department as well. That was on October 21st, 13 days ago.

Preet Bharara:

You might have heard Joyce Vance and I discuss how quickly that could happen. My view is it could be any day. It’s not a complicated case. It doesn’t involve wire transfers. It doesn’t involve international information. It doesn’t involve a whole host of communications. It’s a simple matter of the justice department, notably the DCUS attorney, and Merrick Garland presumably will be heavily involved to figure out whether or not it’s fair and just to prosecute Steve Bannon for a misdemeanor violation because he defied the subpoena without having any basis for doing so. I don’t think it requires other witnesses. It doesn’t require going through any massive kinds of documentary information. I think it’s a simple call. They’re probably deliberating over it internally.

Preet Bharara:

There are very few precedents for this, but there was one back in the early ’80s, and it took about nine days from the time that the house of representatives voted for a referral for criminal contempt of Congress to the time when the US attorney made the charge. So I think this will be soon.

Preet Bharara:

This question comes in an email from Ellis who asks, what are your thoughts on the recent John Eastman revelations? John Eastman, of course, is a figure who’s come into sharp relief over the last number of days and weeks as an outside lawyer for then President Donald Trump, who is actively involved in the business of the January 6th insurrection. Most famously, a few weeks ago, it was reported, and we saw a copy of a memo he wrote that outlined the steps that Mike Pence, then the vice president could take to basically turn the election to Donald Trump.

Preet Bharara:

But it’s not only the case that he wrote that memo, which he, by the way, since then has alternately distanced himself from and also embraced, which is a weird mix of reaction for him. But it’s also come to light that on the actual day of the insurrection, after violence had occurred, after the capital had been invaded, he had an exchange with an attorney for Mike Pence, and it’s pretty shocking. While Mike Pence, the sitting vice president was actually being hidden and protected from a mob through the January 6th insurrection, there’s an exchange back and forth between John Eastman and Greg Jacob, a Pence aide, in which Jacob describes the siege that’s happening at the Capitol at that moment. How does John Eastman respond? Like this, “‘The siege’, which he puts in quotes, ‘the siege’ is because YOU, capital Y-O-U, YOU and your boss, meaning Mike Pence, did not do what was necessary to allow this to be aired in a public way so that the American people can see for themselves what happened.”

Preet Bharara:

And then encourages him even after the insurrection is underway to turn the election to Donald Trump. What do I think? There’s been talk that the January 6 panel will subpoena John Eastman, I think that’s an actual certainty. His testimony, I think, is vital to figuring out the advice he gave to Donald Trump, the advice that came back from Donald Trump, what instructions he gave, what directions he gave, what was the mental state of the former president of United States, and how close we came to actually having an election overturned. It’s crucial to our understanding of who should be held accountable. It’s crucial to our understanding of what happened that, and also as will be important in these debates in court, crucial to understanding what laws need to be changed or what laws need to be passed. Will John Eastman come and testify? I don’t know. Maybe he will find himself in the same position as Steve Bannon.

Preet Bharara:

Now, usually, I answer questions during this portion of the show from regular people. But this week I got a question from someone you may know, it’s my friend and frequent Stay Tuned guest, Ian Bremmer. He’s been on Stay Tuned so much that I sometimes refer to him as my Regis Philbin. That’s a reference to how many times Regis Philbin was on David Letterman show. And Ian Bremmer, twitter form, asks a very, very important substantive question that really goes to the heart of our democracy, and it’s this, what’s your new favorite Massachusetts origin prohibition era cocktail? Ian Bremmer, though he’s not a lawyer, understands the principle, never ask a question that you don’t know the answer to.

Preet Bharara:

The reason he’s asking the question is a couple of weeks ago, Ian and I went out for a drink at a nice place off of Madison Square Park in Manhattan, and he laughed at the boring drink choice that I made, and suggested I try what he had. And I liked it very much. So if you’re looking for a new cocktail, take it from Ian Bremmer, what you want to try is something called a Ward Eight, which according to liquor.com is a turn of the 20th century concoction, one of Boston’s major contributions to craft cocktails. It was created at the Locke-Ober cafe in Boston’s eighth ward. The ingredients in case you’re curious, two ounces rye whiskey, half ounce lemon juice, half ounce orange juice, two teaspoons of grenadine, and garnish with two or three speared cherries.

Preet Bharara:

Of course, I kept forgetting the name of the cocktail and kept referring to it as District Nine instead of Ward Eight. District Nine, of course, is not a cocktail. It’s a 2009 sci-fi film. Thank you, Ian Bremmer for asking such an important question. Stay tuned. There’s more coming up after this.

Preet Bharara:

It’s not every day that someone comes along with the smarts and determination to build a new city, but that’s what entrepreneur Mark Lore has set out to do with his latest moonshot, an urban center that will test a novel model for society implementing nothing short of what he intends as a reformed version of capitalism. Mark Lore, welcome to the show.

Marc Lore:

Thanks, Preet. Great to be here.

Preet Bharara:

I have to begin this interview a little bit differently from how I do other interviews, and that is to make sure we put on the table a few things. We went to the same K through 12 private school in Tinton Falls, New Jersey, the Ranney School. I was trying to figure out how many years. Is it 40? Is it more than 40?

Marc Lore:

I think 40, yeah, to be. Yeah. I think it’s 40, exactly.

Preet Bharara:

40 years. So we’ve been friends for 40 years. You’ve been my brother’s best friend since childhood.

Marc Lore:

40 years.

Preet Bharara:

We’re going to talk about some of this background before we get to the big project that you’re undertaking. But you and my brother started a number of businesses together, including diapers.com. You have been an investor in CAFE, so we have a lot of entanglements. We’ve been friends for a long time, and I’ve watched your growth and success with a lot of pride, my friend. It’s a pleasure to have you on.

Marc Lore:

I have as well, Preet.

Preet Bharara:

We went to this weird high school, which is very, very good, so no offense to the people who are going there now, but it was a little bit of a throwback. You didn’t love high school. Did you?

Marc Lore:

I did not, no. I didn’t love school to be honest.

Preet Bharara:

Why is that? Because as we’ll discover, if you want me to have more of this conversation, you’re basically a human computer. So you didn’t even like math?

Marc Lore:

I mean, sure, I liked math, but I just didn’t like… there was too many rules and guardrails. You weren’t able to be creative and think about unique solutions. You had to show your work. Even if you found a new way to do and solve a problem, it didn’t count or matter. Yeah. I didn’t enjoy it. It was very frustrating.

Preet Bharara:

You’re a bit of a jock, right?

Marc Lore:

I was. I was. I did love sports.

Preet Bharara:

You ran track, right?

Marc Lore:

I did. I did. Started the track team as a matter of fact.

Preet Bharara:

You started the track team?

Marc Lore:

Yeah. There was no track team there.

Preet Bharara:

The Panthers.

Marc Lore:

Yeah. That’s it.

Preet Bharara:

One way that you’ve been described, which I think is accurate, serial entrepreneur, is that fair?

Marc Lore:

Definitely. Yeah.

Preet Bharara:

You started a company with my brother after being in finance for a while called The Pit that you sold to Topps. And then as I always tell the story, because it’s interesting to people, you then started something with my brother a number of years ago called 1800Diapers, which was a play on what was it, 1-800-FLOWERS?

Marc Lore:

Yeah.

Preet Bharara:

Before the internet, you would call that number, you’d get flowers delivered. I think there was also 1-800-MATTRESS.

Marc Lore:

Exactly. Yep. 1-800-CONTACTS.

Preet Bharara:

1-800-CONTACTS, 1-800-Whatever. I love telling the story because it’s not that well known about how when I was US attorney, Vinit called me up, my brother, and he said, I’m starting this new company to sell diapers on the internet. I will say to the crowd, so imagine how my parents felt when my brother, and this includes you, went overnight from being the general counsel of a publicly traded company, Topps, to selling diapers on the internet under the slogan, and this is true, we’re number one in number two. That always brings the house down and people laugh. And I say, yeah, that’s, that’s, that’s right, you’re laughing, my brother laughed too when he sold the company to Amazon for $545 million. How the hell did that happen?

Marc Lore:

Well, it’s funny, just funny story too. When I moved to Mountain Lakes, New Jersey, with my family at the time, back in this was 2006, and my neighbor tells a story about the first time he met me, and he says, “Oh yeah, well, it’s great. Welcome to the neighborhood. What do you do?” I said, “I’m in the diaper business. I sell diapers over the internet.” And he said that night, he went back and told his wife, “Don’t get too friendly with them. I don’t think they’ll be here that long.”

Preet Bharara:

Well, because it sounds crazy. And you quickly went from 1800Diapers to diapers.com. But obviously for people who are not in the know, it was a play for a population of consumers in the country, moms, particularly young moms, who you thought you could sell a lot of stuff to. So you ended up starting a number of other websites operating under the company named Quidsi. Can you tell us about what some of the other ones were, and then how it got successful?

Marc Lore:

Yeah. I guess basically when we started, nobody was selling diapers over the internet, even though they’re bulky, you don’t really like going to the store to pick them up and bring them home, and it was sort of a commodity you didn’t need to see it or touch it, feel it to know what you were getting. And so it seemed perfect for the internet. But when we told people about this idea, especially people in the actual market for diapers, they said, it’s never going to work because they’re a loss leader for brick and mortar companies like Walmart and Target, and now you have to pay for shipping. It’s just not going to be economical. I think what we thought at the time in thesis was well, if Walmart and Target is in these products as lost leaders not making any money on these, there’s a reason, because they drive traffic to the store to sell everything else.

Marc Lore:

We thought, well, online, selling everything else is a lot more than what you could sell in the store, so there’s a lot more margin. So we theoretically should be able to sell the diapers for even a bigger loss leader, lose even more money because we could sell more products to people if we were able to build that relationship. That was the original thesis going in proved to be correct. We did build incredible relationships with busy parents, and we were able to sell them everything else they needed for their baby, including eventually things they need for their pets. We launched a site called wag.com. We launched a website called soap.com, which was basically an online drugstore, yoyo.com, which was an online toy store. Basically, we were in 10 different verticals selling parents stuff in every category. Casa.com was a home site. And so the strategy was proving out. Then we sold to Amazon.

Preet Bharara:

What’s funny is when I would tell people this, people in retrospect think, oh, I wish I had thought of that, as if it was about the idea alone and not about the execution. Does that irritate you when people say stuff like that?

Marc Lore:

Yeah. Yeah.

Preet Bharara:

As if you would have built from scratch.

Marc Lore:

Exactly. A lot of people had the idea.

Preet Bharara:

A half billion dollar company simply by having the idea, oh, let’s sell diapers on the internet.

Marc Lore:

Right. It definitely wasn’t about the idea. I often tell people, it really is never about the idea. I think any idea could really work and turn into a meaningful business if it’s a big enough market. It was about the execution and it was about more than execution. It was really about risk-taking. So Vinit and I, we had to basically… we weren’t able to buy diapers direct from Procter & Gamble and Kimberly-Clark.

Preet Bharara:

Because you didn’t have the relationship with the manufacturers, you had to buy them from a store like BJ’s-

Marc Lore:

Yeah. The Wholesale Club.

Preet Bharara:

… or Costco. I went once with dad… You remember this, right? I went with my dad-

Marc Lore:

I remember this. Yeah.

Preet Bharara:

… and he had more credit at the time than you guys did. And he literally goes into the BJ’s some years ago and he buys $83,000 worth of diapers for your website. I remember the woman who was working at the time, and took the order, and looked at my dad, says, “Can I get you a hot dog or something?” He’s like, “No, I’m good. Thank you.”

Marc Lore:

Remember he was reading through the… Vinit always does the… When he was reading through the receipt and he was going through with his accent, that always cracked me up every time.

Preet Bharara:

How do you think about risk when you enter a new market or think of a new enterprise?

Marc Lore:

How do I think about it?

Preet Bharara:

Yeah. Well, because this is going to be relevant to talking about the city.

Marc Lore:

Yeah. I don’t really think about… if you define risk as sort of probability of success, I don’t really think about that in isolation like I think many people do. Certainly big companies, that’s exactly the way they think about it and why it stands taking big swings, because if something has a low probability of success, they immediately write it off. I think entrepreneurs, and this is what differentiates entrepreneurs from everyone else is when you see a low probability of success, you don’t necessarily write it off. You ask, well, how big is the upside if it does work? If the upside is out-sized relative to the probability, then it’s the shot we’re taking. So if you have a 20% chance of something working, most people would say, you know what, I don’t want to fail 80% of the time. No, thank you. But I’ll say, wait, 20% chance of what? What’s the upside? Oh, it’s a 1000X.

Marc Lore:

Well, that I’ll do, because if that doesn’t work, I’ll find another opportunity. There’s a 20% chance of success with 1000X, and eventually, I’m going to hit one of these things. Maybe not. Maybe you never hit the 20%, but that’s entrepreneurship, is you see that and you go for it, and you put everything you’ve got into something that is most likely not going to work. Give it the best chances it can by working hard and putting everything you possibly can into it, but it doesn’t mean it’s going to work.

Preet Bharara:

So you started diapers.com. That was a success. You were bought by Amazon. You worked there for awhile, then you left. Then you started another even more improbable thing, a direct competitive website to Amazon called jet.com, which was also very successful, which you sold to Walmart for $3.3 billion. At the beginning of either of those enterprises, what did you think the likelihood of success was? Was it 20%, lower, higher?

Marc Lore:

I mean, when you’re an entrepreneur, you don’t think about it not working. You go all in, and you have to operate on the assumption it’s going to work. But if you looked at the objective probability of it working and just for an odds maker, I think you’d probably have to say Diapers was 20% and Jet was probably not much more either. Maybe you could say access to capital at Jet, we had more access to capital, so maybe it was 30 or-

Preet Bharara:

So the likelihood was higher. Now, when you have a track record of success, does it not become easier for people to believe in you and for you to believe in yourself?

Marc Lore:

I think it does. I talk about this framework that I operate by as an entrepreneur called VCP, vision capital people. And I think you need all three ingredients. If you get them right, magical things happen. When you have a successful startup behind you, the C and P, capital and people, you have an advantage. So certainly had an advantage raising capital after success with diapers.com and equally with people, people, like you said, believing in you. You’re able to go out and hire the very best talent. If you have the best people and you have capital and you have a really big, clear vision, you have a good chance that things will work out.

Preet Bharara:

Can we talk about one more improbable thing? It’s one of my favorite stories, before we talk about your city project. I think people find this hard to believe. You at one point qualified for the national bobsled team. How the hell did that happen? You’re working in the World Trade Center some years ago before you started becoming a serial entrepreneur. My memory is, because I remember hearing about it at the time, you’re in your business suit, you’re walking out to get lunch or something, and what do you see?

Marc Lore:

Yeah. So the US Olympic bobsled team was going city to city spending a week in each city trying to raise awareness for US bobsled, raise money. They had set up a track down at the World Financial Center. They were basically just saying, hey, I don’t remember how much it was, like 10 bucks, $20, whatever, and push the sled and they’ll time you. It was just for fun. They were there for a week. As one of the carrot there, they said, if you had the fastest time during the week, we’ll invite you up to Lake Placid and you can take this other test to see if you could actually qualify to train up there and learn how to be a bobsledder. I saw that-

Preet Bharara:

Wait, had you ever bobsled before?

Marc Lore:

No. I never bobsled. I ran track in college.

Preet Bharara:

So you’re in your business suit, you’re leaving the building. You see the bobsled track and you say to yourself, what the hell, I’ll give it a shot. Is that fair?

Marc Lore:

Yeah. I took my jacket and tie off. I had sneakers because I was going to the gym. So I went back, got my sneakers, came back. I had basically, still pants, in a shirt and sneakers on, and yeah, proceeded to push the sled down the track. I remember them thinking it was fast time. It was impressive to them, whatever. I was like, “Oh, okay. That was kind of fun. That was cool.” They think it was a fast time. And then like, I don’t know, a week later, I get a call. This is so-and-so from the US national bobsled team. We just wanted to tell you that you in fact had the fastest time during the week, and we did say that you’d get an invite. So we’re inviting you to Lake Placid. They said, you could come up to Lake Placid and take this test. If you happen to pass the test, you need to stay up here for a month to learn how to bobsled. And then we’d have the time trials to see if you make the US national team. And so I took a month off from work.

Preet Bharara:

That’s so insane. So you took a month off, and how did you do?

Marc Lore:

Yeah. I went up there, and then they had this test. It was speed, jumping, strength, all these tests, and you had to score over 700 points to stay there for the month. And I don’t know, maybe like 30 people passed and I was one of them. And so I stood up there for a month, lived up there in Lake Placid and basically trained every day. And then at the end of the month, there was the time trials and you had to finish in the top 13 to make the US national team. I was like 30th or something. I was towards the bottom on sort of the testing metrics. So I just assume I wasn’t going to be in the top 13, but I gave it a shot and finished 13th. And so now they said, all right, well, welcome to the US national bobsled team. We’re going to be traveling around the world, and we’re going to Germany, and we’re going here and there, and two years is the Olympics. It’s like-

Preet Bharara:

I remember at the time was like, my best friend from high school, Jessica, would say, have you heard the latest with Marc? Okay. So then finish the story, because we’ve got to get to your city.

Marc Lore:

Yeah. No. That’s it. I mean, I had to make a decision. Did I want to travel all over the world for two years before the Olympics and quit my job, or I was a couple of years into my career, and I decided I wasn’t going to quit for two years to do it. I stuck with banking and that was the whole story.

Preet Bharara:

Wait a minute, it just continues to get just crazier and crazier. On a luck, you take off your tie and jacket, that leads you down a path where you actually qualify for the national bobsled team. You have a shot at being in the Olympics representing the United States of America in the Olympics. Having done all that, you’re like, nah, I’m going to stick with banking.

Marc Lore:

I know it seems silly now, but no regret.

Preet Bharara:

You and I have spent a lot of time over the last four and a half, five years talking about this idea you have that some people think is terrific, some people think is outlandish. You yourself have said you don’t know what the likelihood of success is. We have a baseline of 20% that you think makes something worthwhile to try if it’s bold and aggressive and potentially world changing. Let’s talk about the city that you have imagined, Telosa. My first question is given the resources and means that you have, how much you care about society and urban life, why not put those resources to bear on actual cities? You live in Manhattan, in New York city, the best city in the world in my mind, and I think you enjoy it. Why not advocate for improvements and reforms in existing cities, rather than undertake something so massive and difficult by creating a new city? What’s going on there?

Marc Lore:

Yeah. I mean, first of all, I think the best way to impact existing cities is to show how it could be done, and I think doing it with a clean slate from scratch enables you to do things that existing cities wouldn’t even know were possible. And if you proposed it to an existing city, they’d be hard pressed to do it because of the investments they’ve already made in existing infrastructure, in the ways of operating that it would be too much of a risk. But if you saw it working and the benefits, you’d be able to do the cost benefit analysis, and I think more likely to do it, and so not impacting one city, but impacting all cities. And so that’s one thing.

Marc Lore:

The other thing is that this was more than just building a city. It was really sort of proving a new model for society, a new economic model. I think like many of us, we’re just really frustrated with how divided this country has become and how perplexed it is to see despite all the material progress we’ve made in this country, why there are still so many people just barely getting by. One of the things that occurred to me was I think capitalism is a great economic model, but it certainly has its flaws. There were flaws that have been exposed over time. The best example is really monopolies. Monopolies don’t work in a capitalistic economic system. It wasn’t until antitrust laws that really [inaudible 00:26:53] workers protected from that. If you go back in time when there weren’t antitrust laws, workers’ rights were abused, and that hole need to be plugged.

Marc Lore:

I think after doing research and reading about the current system and why it’s still flawed, I came across this book called Progress and Poverty, by an economist called Henry George back in the late 19th century, who proved through economic theory, and I believe it that the real problem is that land ownership is essentially a monopoly that’s not regulated in any way. So there’s a finite amount of land and a few own a piece of land, you basically have a micro monopoly, and can charge and profit in a way that will always make it the case that there’s a class of people barely willing to work. He proves it in economic theory. We don’t have time to get into that, but I definitely bought into it. And then got me thinking down this path of, well, what if things were different? What if the land wasn’t just given to people that put a stake in the ground and said, yeah, this is my 160 acres, and that land was then never to be claimed again by anyone else, because there’s a finite amount of it.

Marc Lore:

I said, what have you started from scratch, and you took land that was worthless, and you had the land bought by rather than give it away to individuals, it was given to, or bought by a community foundation whose sole mission was to help create and build a city over that land so that the land would appreciate to such an extent that the land would be very valuable and the foundation would sell the land and create an endowment, and that endowment would be used to provide advanced social services like healthcare, education, jobs training, affordable housing.

Preet Bharara:

To such a degree that you wouldn’t need a tax base in your theory, or to supplement the tax base?

Marc Lore:

To supplement the tax base. You wouldn’t certainly need to increase taxes to have the most amazing social services. You’d have equal opportunity education, healthcare, housing, job training without having to increase taxes, so it’s sort of the best of both worlds.

Preet Bharara:

Kind of like an urban sovereign wealth fund?

Marc Lore:

It basically is. It basically is. The wealth is created through the rapid appreciation of land that happens when communities are formed and tax dollars are invested in infrastructure. So it stands to reason that the people that created the communities whose their tax dollars are invested in bridges and roads and tunnels and things, that all the appreciation of land caused by that come back to the citizens that made it so. It’s not socialism or anything like that. The land is bought fair and square by community foundation when it’s worthless. And then when it’s worth something, the foundation sells it off. It’s not a government owned sort of thing. It literally is, like, if you can imagine on a small scale, a group of people agreeing that we’re going to create value in the land that we create a community around. When we create that value, we’ll all share in it. That’s essentially what would happen if a community foundation bought land in a desert and helped bring a city of five million people there.

Preet Bharara:

Is there a catch 22 there in the sense that because it’s you, and if people thought, well, there’s going to be a lot of value in this land going forward, because we believe in the enterprise, some may think it’s a lot more than 20%, with the sellers of the land, because you have to buy land from someone. Let’s say you found a patch of land in Nevada. Is there a concern on your part as a pragmatic and practical matter that a seller of that land would raise the price higher up because they think you’ll succeed and there’ll be a lot of value later?

Marc Lore:

I think that is definitely a concern. There is a lot-

Preet Bharara:

So you want to downplay the prospects for success a little bit for the initial land purchase.

Marc Lore:

Or downplay who’s buying the land. I think Disney did that successfully at the time. I think people do that all the time. Will buy up land without disclosing the buyer so that, yeah, it doesn’t increase the value before the land is acquired.

Preet Bharara:

That’s one practical thing. Are people surprised? Because this idea has been germinating for a long time with you. We’ve been talking about it for five years just informally. The idea was on the cover of Bloomberg Businessweek magazine a few weeks ago. Are people surprised when they learn that the idea was born in your head to address income inequality? Is that weird to people?

Marc Lore:

I don’t know. It depends on who it is. Everyone has a different opinion, I think, but I’ve really yet to run into anyone that’s objecting to the idea that we’d be able to offer these incredible benefits to the citizens without increasing taxes. I think the previous thinking is if you want to have the world’s best social services, you need to pay for it somehow, and that is going to be from increasing taxes. That’s where there’s a divide. I think if we find a solution where we could not have to increase taxes at all and have these amazing social services, I think most people have bought into it.

Marc Lore:

The other thing that is a real focus here is to, unlike many other cities being built, they feel more like real estate projects where people aren’t at the center, or they’re technology sort of showcases, like Google tried to do, or is happening outside of this country. But the idea that if we focus on people, put people at the center and start with this set of values, we have three values, open, fair, and inclusive. We want to be the most open, the most fair, the most inclusive city in the world, and that’s what drives us. The mission is to create a more equitable and sustainable future. So yeah, we want it to be more equitable through this idea that I just said, but also want it to be the most sustainable city in the world. There are a lot of things that we’ve learned over time that we could apply now that could make cities more sustainable. The city will be 100% renewable energy, for example.

Preet Bharara:

All these things sound great, but one of the threads of conversation you and I have had and I know you care about is when you plan a city, it can become antiseptic. And you worry that it becomes a city of monorails that have a lot of gadgets and high tech, but it doesn’t have-

Marc Lore:

Soul. Yeah.

Preet Bharara:

… the charm or grit. You said it. I’m going to quote from you, you have said about this project, “How does a city have a soul? It’s not about buildings and roads. It’s about the values and the city standing for something. We don’t know what that is yet, but we want to find out.” If you, billionaire Marc Lore, and other folks plan it and think about every detail of the city center as an initial matter, and think about all the sustainable things you’re going to do, housing, transportation, museums, schools, and everything else, we’ll get to some of those, how do you build a city that has a vibrancy and a soul if it’s pre-planned?

Marc Lore:

Yeah. I think it has to be… I mean, we think about this a lot, and if the city doesn’t work the way we all dream it can, it’ll probably be because it doesn’t have soul. And so that’s obviously really important. Or it won’t be diverse. It’ll be some homogeneous group that goes out there first and then it just never really turns into something that we’re really super proud of. I think on the seeding of the city, and this is controversial in its own right, trying to get the first 50,000 people that move there to be as diverse a group as possible across race, religion, profession, income level, to give it the best chance of organically growing from that point forward-

Preet Bharara:

You got to get that right, because it… How do you prevent it from being very homogeneous?

Marc Lore:

I know. This first 50,000 people, unfortunately, the only solution we could come up with, and if someone has a better solution, we’re open to it, would be to sort of do it and create it like a university class where you’d literally have applications, and you’d build a class of citizens that represent the first 50,000 and try to do it in the most diverse way possible to give it the best possible chance of organically growing, because after the first 50,000, you can’t continue to… it’s not a private city, it’s an open public city. So you’ll have one shot to sort of do this. I think it’s important that we get the right people in the room helping to ensure that that first 50,000 is diverse and also the type of people that are encouraging organic growth from there.

Marc Lore:

In terms of building of the city itself, we can’t have one single architect, for example. It needs to be… I mean, there’ll be a master planner, but we’ll need to engage the best and brightest minds and creative minds to think about different parts of the city, and making sure that there’s creative diversity as well. The worst would be if the city has a very similar look throughout it. I think that we’d be missing soul if it wasn’t organically grown. Our intention is to bring in the beginning, sort of a destination is to potentially talking about this, making music and entertainment sort of a focal centerpiece to bring creative minds and creative talent into the city early, because I do think it will take creative people to expand the city in ways that give it soul and vibrancy.

Marc Lore:

But there are things that we can do also that we’ve learned with nature to infuse that into the city, to make it walkable, bikeable, to have the ability of people to work, live, play all within sort of a five-minute walk.

Preet Bharara:

Will there be cars in the city?

Marc Lore:

The way we’re thinking about it now, because of the benefits of going fully autonomous in terms of vehicles, we’ll probably head down that route where there won’t be any non autonomous vehicles at least in the center of the city, it would all be autonomous, which would allow you to have narrower roads, fewer roads, no street lights and street signs. It’ll be a lot safer. So lots of advantages. All the vehicles would be electric, so it would be better for the environment as well. But the safety is a big thing. It’s more efficient, and you have fewer roads and fewer cars. That’s something that is very possible today. The only reason why autonomous vehicles aren’t more mainstream is because combining autonomous vehicles with normal cars just doesn’t work. The complexities are just incredibly challenging and difficult.

Preet Bharara:

We’ll be right back with more of my conversation with Marc Lore after this. Can we talk about the name for a second?

Marc Lore:

Sure.

Preet Bharara:

Should have done at the beginning. I know from our discussions that Telosa, and also from my study of political philosophy in college comes from Aristotle’s term, telos, which means purpose or end or the highest purpose. My question to you is, have you thought about in the last week changing the name to Metta?

Marc Lore:

Metta. Yeah. I mean, it’s funny. There will be, and we’re talking about this a lot, likely a sort of metaverse of Telosa that’s built simultaneously.

Preet Bharara:

This is new.

Marc Lore:

Yeah. This is-

Preet Bharara:

Breaking news. You’re hearing it right here, folks, for the first time.

Marc Lore:

It is new. We’ve got this feedback, we’re very open to feedback, and we’ve got this feedback from quite a number of people, so we’re now exploring that.

Preet Bharara:

By the way, less people think this is grand hypothetical, not withstanding the amazing millions of challenges that you would face in succeeding on this, you’re years into this project. You have spent millions of dollars of your own money. Am I right?

Marc Lore:

That’s correct. Yeah.

Preet Bharara:

You have actually engaged a chief architect. Could you tell us about what concrete things have happened?

Marc Lore:

Yeah. We’ve engaged the architect from BIG. Bjarke is the founder. Yeah. We’ve been working with them for quite some time now to develop the master plan, and we’ve got it on the Telosa website, cityofTelosa.com. You can see imagery. We’ve got a lot more imagery that’s not up there yet that should be coming up soon. But yeah, we’ve spent a lot of time thinking about the layout of the city. We’ve spent a lot of time thinking about water and water rights, about how to make the city 100% renewable energy, and how much solar and wind would we need, and where would we ideally be located to be able to pull that off. We’ve looked into autonomous vehicles, EV Talls, essentially, passenger drones and how they would play into the city, vertical farming in lots of different areas. There’s so much more to unpack, but we’ve got experts and teams in lots of areas looking at these different problems.

Preet Bharara:

People keep asking me first, where is it going to be? You don’t know that yet.

Marc Lore:

Yeah. We don’t know that yet. I think that 2022, that’s really the plan is to build out sort of what we’re calling the Jonto Group, sort of this board of governors where experts in each area come together to help answer a lot of these really tough questions, and at the same time talking to governors and meeting with states to try to figure out where the best location is, one where it’s doable and where we can get the land. One is getting the land. Two is, okay, you have the land, but can you build a city of five million people?

Preet Bharara:

What’s the timeframe over which you expect the city to grow that big?

Marc Lore:

We’re targeting 2030 is when the first 50,000 people move in. So you’d have the center core of the city built out enough to house 50,000 people, and work and have a high quality of life. And then we grow there over the next decade from 50 to a million, and then from a million to five million over the following decade. So it’s really like 30 years from today, a city of five million people. That’s I think the most realistic goal at this point.

Preet Bharara:

This has been tried before. There are a lot of instances, and I’ve talked about this also. What’s interesting is you think of these kinds of planned cities being a feature of authoritarian governments. Been tried in China, and it often fails. What’s the reason for the failure of other projects to build cities from scratch?

Marc Lore:

I don’t think from my research and what we’ve looked at, they’re really starting with people at the center and focused on how to offer people a higher quality of life, education, jobs, and a place where you feel like you’d want to raise a family. I think a lot of those cities that are pre-planned and built, there’s definitely lacking a soul. There’s not as much… it’s not the kind of place that you’d be excited to raise a family. There’s just a lot of skyscraper-type buildings, a lot of technology, a lot of cement. The way we’re designing this is it’s going to feel great. It’s going to have a really good feeling when you come to Telosa, the amount of nature and how nature is infused in everything. There won’t be skyscrapers. The buildings will be, with few exceptions, will be kept the major focus on culture, arts, entertainment, restaurants, all the things that make… things that you love about the city you live in. We’re going to put a major focus on that early.

Marc Lore:

And then the other thing is a lot of times, there’s a chicken and egg thing with people not wanting to go there because other people aren’t there, and the people that do go there are certain kind of people that doesn’t resonate. So I do think this-

Preet Bharara:

Yeah. That was my worry. It’s going to be a self-screened group of a certain kind, which can work against diversity.

Marc Lore:

No. This is why basically nobody moves in until the 50,000 people have been selected. The people who are applying, selected, okay, here’s the 50,000 people, now, these 50,000 people, just like opening day at a university, 50,000 people move in over the course of a six week period. So nobody’s there. And then six weeks later, 50,000 people are there. People will move in in waves.

Preet Bharara:

On day one, how are people going to work? Or I guess maybe now everyone can work on Zoom.

Marc Lore:

Yeah. No. That’s another whole part of the thinking. A lot of the original people will be entrepreneurs that aspire to build tech companies that could be located anywhere, and-

Preet Bharara:

That sounds very white and male.

Marc Lore:

It doesn’t have to be. No. I mean, it wouldn’t be. The first 50,000 people are going to be diverse across race, religion, income level. There’ll be doctors, there’ll be teachers, there’ll be lawyers, there’ll be construction workers, there’ll be people running and operating restaurants, small business, city workers. It’ll be day one, 50,000 people will have to have jobs across every sector that matters in a city. Do we know if 50,000, by the way, is the right number? Could it be 30,000? Could it be 100,000? We sort of think back in the envelope 50s, right, but whatever it takes to basically have that diversity out of the gate and to cover all the professions that are needed to manage and run a fully functioning, vibrant city, even if it’s small.

Preet Bharara:

Is this the biggest issue that people raise, how you seed the city in the first place? Because it’s going to be a human… It’s not going to be done by algorithm presumably, right?

Marc Lore:

Yeah. Human beings. Right.

Preet Bharara:

Human beings, and human beings have biases explicit and implicit.

Marc Lore:

It will have to be the diversity of the team that actually does the selection is probably more important than even the people that are selected. We’re engaging with some of the best diversity inclusion minds in the world to help us think through this problem about who should be the team of people that actually go through the selection process to try and make sure it is fair and inclusive. Again, our values are a fair, open, and inclusive, and we need to live those values in a way that no other city in the world does or ever has lived.

Preet Bharara:

We’re talking about education, because that’s a very important part of any community. How’s education going to be financed?

Marc Lore:

Well, again, it would be-

Preet Bharara:

Not property taxes.

Marc Lore:

No. It would be property taxes that would fund education up to the point that it is funded today, but then we’ll take-

Preet Bharara:

Can I push back?

Marc Lore:

Yeah.

Preet Bharara:

I think a lot… I’ve always been of the view it’s very odd thing to fund public education through property taxes because some people own land, some people don’t own land. This is a problem that’s at the base of your strategy here, and it works certain kinds of unfairnesses.

Marc Lore:

Oh, totally agree. Sorry, Preet. Let me just explain, because I wasn’t clear. When I said property taxes, I didn’t mean, and I agree with you 100%, it wouldn’t mean local property taxes fund local schools. If you’re in Mountain Lakes, New Jersey, the property taxes of the Mountain Lakes homeowners fund the Mountain Lakes school system. That is not fair at all.

Preet Bharara:

Even people who don’t live in houses, and even if you don’t have children, so it works in both directions, based on your ownership of land, you pay or don’t pay for local education. How would Telosa be different?

Marc Lore:

These are things that still need to be worked through. At the highest level, though, the taxes that you currently pay collectively, if you live in any city, you pay taxes. Those taxes offer education system. That system, we know is lacking. It’s flawed in many respects because there’s not enough financing to bring in the very best teachers. In Telosa, because we’d have this endowment that would have at the end of the day, $50 billion a year spend, a big chunk of that 50 billion would go into education, that would supplement the education system as we know it today to be able to have much better teachers and much better facilities. It would be a much better education system, and everyone in Telosa would have equal access to that system. It wouldn’t be different in different parts, wealthier parts of Telosa, less wealthy parts wouldn’t have a different education system.

Preet Bharara:

Well, would you ban private schools? What if among the 50,000, an entrepreneur there said, I want to start a private school, that’s okay, right?

Marc Lore:

I think it’s a great question. I mean, just thinking about it now, that’s a great question to put out to the Jonto Group to talk through. I don’t see any reason why you… We’re trying to be open and fair. So if somebody had an idea to do and wanted to create a private school because they felt that the public system was lacking, I mean, this public system, we think would be incredible given the amount of resources. But certainly, somebody wanted to build a school, I don’t see any reason why, but I’m saying that without having discussed that with the broader diverse team. I think with all these questions, Preet, it takes many discussions to make sure that you’re not making a decision in one way that has unintentional consequences in another way. But that would be my knee jerk reaction would be sure.

Preet Bharara:

It’s really hard. Every time we talk about this, my mind spins in how complicated all this is. Would this city have a mayor like most cities?

Marc Lore:

Yep. It would be run just like any other city. If you think about it, it’s just like if New York city tomorrow, a community endowment foundation popped up that had $50 billion a year to spend to improve the lives of the citizens that live there, then that foundation would sort of work with the government and say, hey, I’ve got 50 billion to donate this year. We’d like to donate and make the education system better. We’d like to improve the hospitals. We’d like to make housing more affordable.

Preet Bharara:

Where does the 50 billion come from again?

Marc Lore:

The appreciation of the land, the way we’ve calculated it would be worth about a trillion dollars when sold. And so if you sell the land for a trillion dollars, you create a trillion dollar endowment, Telosa endowment fund. And that fund would then be invested in a diversified asset portfolio that generates 5% a year, which is 50 billion, similar to the way university endowment generates cash every year to put back into the university.

Preet Bharara:

When the economy crashes, because it happens from time to time, does Telosa suffer disproportionately because of its reliance on investment?

Marc Lore:

No. Because just like a university endowment or something, the expected returns, the way it was invested and it would be invested in a very diverse way, might be 7% a year, but you’d only spend 5%, so you’d have sort of a 2% cushion. That 2% kind of stays there and grows each year for a rainy day when the returns are negative 7%, you’ve got the 2% each year that you were over 5 that you saved up to cover. It’s like balances out. That’s basically the way any endowment works, like university endowments would have the same issue. You have to make sure it’s a diverse investment portfolio and you want to have assets that are uncorrelated, so if some go down in a really bad situation, others do well in a bad situation, bad economy, for example. So yeah, that’s part of the investment management piece of it.

Preet Bharara:

I think I know the answer to this more on municipal government. Do you commit to the city having non-partisan elections?

Marc Lore:

Yeah. Do you mean for the community foundation?

Preet Bharara:

No. I mean, for the mayor of the city. I mean, there are some cities like New York city, there’s the Democratic Party, the Republican Party, and a variety of other parties as well. But some places, it’s a non-partisan election. You don’t run on a party line. It’s just, you just run and whoever gets the most votes becomes the leader of the city. Have you given thought to how that should be conducted?

Marc Lore:

We haven’t at all. I mean, that’s an area that we haven’t really talked about at all. I mean, I-

Preet Bharara:

I’m going to advocate for non-partisan elections and ranked choice voting. So when you’re committed to talk about those kinds of things. I think the partisan politics in urban areas where so much is about just competence and execution and cleaning the snow and getting the buses to operate and all of that should be non-ideological, nonpartisan. So I come in that thought to you.

Marc Lore:

Yeah. Makes a lot of sense to me.

Preet Bharara:

What’s the argument you’re going to make to governors of states and state legislators as to why they want to be helpful and facilitate the establishment of a new city in their state?

Marc Lore:

I think because if this works the way we think it can, it could set a new model for society that can make America better. That there’s so much all the cities that we already have can learn from. And even if this didn’t work, there would still be a ton to learn. In the best case scenario, there’s an incredible amount of pride for the state to say that the city is a city where it sets a new standard for urban living, offering a higher quality of life, more sustainable, more equitable. I think it’s just a source of pride, and would go down in history as being a, I don’t know, a place for people, cities, countries to learn from.

Marc Lore:

There’s an incredible amount of pride, I would think, to have that happen at the time that a governor is a governor. I mean, I certainly would want that to happen on my watch if I were there, because if it doesn’t work, there’s still so much to learn. I don’t think there’s really a scenario with this, it’s not good for America longterm. I think there needs to be more people just taking shots, innovating, taking risk, and trying to make the country better.

Preet Bharara:

I need to go very quick lightning round, because I know you got to go. Favorite city other than Telosa.

Marc Lore:

Outside of the country or inside?

Preet Bharara:

Inside the country.

Marc Lore:

I’m going to have to say New York city.

Preet Bharara:

Well, that was an easy one. You recently bought, or are going to have majority stake in the professional basketball team, the Minnesota Timberwolves. What is more likely, the success of Telosa, or the Timberwolves having a successful season?

Marc Lore:

Timberwolves are looking good. We have a really good, young team. I’m excited about the season in the future, for sure.

Preet Bharara:

How many hours of sleep do you get? Because I don’t understand how you do all these enterprises in 24 hours.

Marc Lore:

I actually sleep pretty well. I just do a lot of thinking while I’m sleeping. So I’m multitasking.

Preet Bharara:

While you’re sleeping?

Marc Lore:

I wake up with ideas all the time. I get a good eight hours in every night.

Preet Bharara:

You do?

Marc Lore:

It’s important to get eight hours because it allows you to go nonstop for 16 hours every day. I think that’s the… If you can get five hours and then you’re… if you got, I guess, an extra three hours, but you’re just not nearly as effective. So I’ve always found better to get a full 8 hours and then just go nonstop for 16.

Preet Bharara:

I didn’t know that about… I assumed you slept three hours a night. Marc Lore, my friend of 40 plus years, congratulations on all your success. I wish you well with this new project that is very challenging, and I hope to keep talking to you about it. Thanks again.

Marc Lore:

Thanks, Preet.

Preet Bharara:

I want to end the show this week to highlight an email we got a few days ago from an avid listener. As you know, this past Tuesday was election day. It wasn’t a presidential election or even a midterm election, but there were a lot of important local leaders on the ballot, and I was glad to see so many people at the polls in my home state. I voted. I hope you voted too. I know for a lot of folks, people in Virginia, perhaps in New Jersey, that race hasn’t been called yet, the governor’s race, it was not a great day. A friend of mine in Suffolk County, the DA, also lost his race. But I want to tell you more about this email.

Preet Bharara:

Turn out is important in any election. And it’s hard for people when we don’t have the day off. People have work and school and commitments. That’s why Lisa K. Solomon who wrote the email, an educator and designer in residence at Stanford University wrote in to tell us about the #allvotenoplayinitiative. She wrote to us, ‘We don’t get a lot of good news stories these days. So I wanted to share something very special that’s quietly taking place across college campuses this election day called #allvotenoplayday. In some ways, although no play is a mixture of your recent episode with Ken Burns talking about his new Muhammad Ali documentary, your conversation with Bino Venkataraman and trying to prevent the negative scenario that Dr. Fiona Hill was talking about in your most recent episode.’

Preet Bharara:

Well, first of all, Lisa, you’re clearly paying attention to the show. Thanks for tuning in every week. She wrote further, ‘All vote, no play is the brain child of former Stanford basketball player and coach, Eric Reveno, who in 2020 socialized the idea that election day should be a day off from practice and play, and a day on for civic engagement. Over 1,100 coaches signed a petition for 2020, and it was so popular the NCAA created legislation to make it an annual mandate.’ That means that every year on election day, students will turn their focus to their communities and work towards becoming more engaged and passionate citizens. That’s pretty freaking cool.

Preet Bharara:

Lisa told us about the coaches dedicated to engaging their students in civic education, and in many cases, the students inspired to take the lead, like sophomore, Ryan Belk, tight end for the Yale Bulldogs. He hosted bulldog ballot breakfast, Lisa wrote, where his teammates will watch citizen university CEO, Eric Lewis, brilliant Ted talk on the joy of voting, and will host a votes giving to talk about the personal side of voting. Ryan is also a survivor of the Marjory Stoneman Douglas School shooting, and is trying to ignite and amplify the voices of the next generation. It’s incredible to see bipartisan initiatives like this gain momentum and attention in this country. Civic engagement is something I care very deeply about, and I hope you do too, and hopefully, that’s one of the reasons you listen to the show. Our democracy depends on it.

Preet Bharara:

Check out their mission and work at allvotenoplay.org. There, you can find guides and resources for what they call civic drills. Whether you have 10 minutes or 3 hours to spend on civic education, you can make it count. I want to thank Lisa K. Solomon for sharing this great initiative with us so that I could share it with all of you. If you have any stories of inspiration that you’d like to share, I’d love to hear them. Send them to us at letters@cafe.com, that’s letters@cafe.com.

Preet Bharara:

Well, that’s it for this episode of Stay Tuned. Thanks again to my guest, Marc Lore. If you like what we do, rate and review the show on Apple Podcasts or wherever you listen. Every positive review helps new listeners find the show. Send me your questions about news, politics, and justice. Tweet them to me at Preet Bharara with the #askpreet. Or you can call and leave me a message at 669-247-7338, that’s 669-24-Preet. Or you can send an email to letters@cafe.com. Stay Tuned is presented by CAFE and the Vox Media Podcast Network. The executive producer is Tamara Sepper. The technical director is David Tatasciore. The senior producers are Adam Waller and Matthew Billy. The CAFE team is David Kurlander, Sam Ozer-Staton, Noa Azulai, Nat Weiner, Jake Kaplan, Chris Boylan, Sean Walsh, Chelsea Simmons and Namita Shah. Our music is by Andrew Dos. I’m your host, Preet Bharara. Stay tuned.

See full transcript here…

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Marc Lore Presents: Telosa, a Desert City Utopia

Telosa — Mon, 25 Oct 2021 06:46:51 +0000

Serial entrepreneur, investor and NBA owner Marc Lore chats with Nora and Scott about his dream of building a sustainable city in the desert, plus, basketball and his big plans for the Minnesota Timberwolves and Lynx.

The complete transcript of this episode is available below.

Transcript

Nora Ali: From Morning Brew, this is Business Casual, the podcast that gives you a front row seat to candid conversations with some of the biggest names in business, asking them the questions you wish you could ask. I’m your host, Nora Ali.

Scott Rogowksy: And I’m your other host Scott Rogowsky. But I am going as Nora for Halloween. We are here for your ears, bringing you stories of how business shapes our daily lives now and into the future. Now let’s get down to business. Mwahaha. That’s for Halloween.

Nora Ali: Given our current reality, the idea of building a utopian city or a city from scratch feels equal parts appealing and impossible. And today we’re talking to someone who believes he might just be able to pull it off. This fall, serial entrepreneur and investor Marc Lore announced his plans to build a new city called Telosa in the United States. The city, which is estimated to house 50,000 residents by the year 2030 in its first phase of development, will be designed with sustainability at its core, with a ban on fossil fuel powered vehicles and the promise of a 15 minute commute to offices, schools, and amenities. But at its core, Telosa is not just a city.

It’s a test of a new model for society called equitism, which Marc says will create the most open, fair, and inclusive city in the world.

Scott Rogowksy: Big goals here, big ideas, Nora, which is what I love to discuss on the show.

Nora Ali: Some of the biggest ideas I think I’ve ever seen in my life. And I do want to mention Scott that I’ve known Marc for many years. I was an early employee at Jet.com, the e-commerce company that he founded that went on to get acquired by Walmart for $3.3 billion. And I’m also kind of behind the scenes a little bit on the city of the future on Telosa, where I pop my head in here and there to advise on things around diversity and inclusion, communications, technology. So it’s been really fun to see how Marc and his team are approaching the early stages of this supercolossal project.

Scott Rogowksy: So you’re part of this team here and you worked at Jet? I just want to ask you about this. Maybe you know a little bit about it because you work there because I was researching. Marc has this uncanny ability to found these companies that are generating revenue, but not earning profits, but then he sells these companies for hundreds of millions, if not billions of dollars. Like Jet.com, it sounds like Walmart bought Marc and maybe his ideas for the logistics and the shipping, right? I mean, because the site itself, was it successful in your opinion?

Nora Ali: There’s a lot of hypotheses around this very point, Scott. And Marc, after Walmart acquired Jet.com, became the CEO of Walmart e-commerce in the U.S. and Walmart e-com basically exploded from that point forward. So it wasn’t just Marc. It was also all the folks who worked at Jet who then worked on Walmart products as well. So that’s a very good question you bring up and a question that I’ve gotten a lot, having both worked at Jet and covered companies like Walmart and Jet as a news anchor. So yeah, it certainly helps to boost Walmart’s e-comm biz.

Scott Rogowksy: Yeah. And even the Diapers.com story with Marc is fascinating, how Amazon basically shook him down and said, if you don’t sell to us, we’re going to put you out of business. I mean, look, this is capitalism at its, you could say finest or worst, depending on your opinion of it. But Marc has some ideas about capitalism. And even though he’s clearly benefited from it, he definitely believes that there are some inequalities and unfairness in the system. So I guess that inspired him to build out Telosa in the first place, which is not Tulsa or Tesla, but it is very similar sounding.

Nora Ali: This is his big moonshot is Telosa. And on top of that, Marc has teamed up with Alex Rodriguez, baseball legend, to become owners of the Minnesota Timberwolves and the Minnesota Lynx, which I know you’re excited about. So we’re very excited for this convo about making Telosa a reality, about Mark’s approach to innovating with the NBA and maybe even, Scott, to geek out about baseball cards with you.

Scott Rogowksy: That is my primary objective here. I got to show off my collection. I want to hear about his collection ’cause Marc and I go way back in the baseball card biz.

Nora Ali: Oh way back. Here’s our convo with Marc Lore.

[MUSIC BREAK]

Nora Ali: So, Marc, you and I have known each other for six years now, which is incredible to think about, work together in many capacities. The last time I interviewed you was in 2018. I was at Cheddar. You are still the CEO of Walmart e-commerce and now you’re building a city, how they grow up so fast. Marc. So I do want to start by dispelling, maybe a little bit of a misconception around Telosa, around the city you’re building. I think a lot of people might look at the city of the future as just a place to implement new tech, new types of housing, buildings, mobility, recreation.But you have said before that the city itself is just a method or a tactic to test out your hypothesis for a new model for society. So let’s start at day zero. Bring us to the beginning of when you had that idea to test this new model.

Marc Lore: Yeah, sure. I think it was just over the last probably five years was when the seed got into my head. And I think, you know, like so many Americans over the last five years have just been frustrated by why, despite all the material progress we’ve had as a country, there’s still so many people just barely getting by and how that’s created greater gaps in wealth and income in this country. And you know, the country has just become so polarized around this topic. And it just got me thinking, did we get capitalism right? Like so many great things about capitalism, but do we get it right? Is it like, is it a hundred percent? Is it an A plus or is there more room to grow and imagine possibilities that would make it even stronger as an economic model. And I started doing research and I came across this book. This is the aha moment. Henry George wrote a book called Progress and Poverty back in the late 19th century. I didn’t realize it at the time, but apparently it was the second-most read book next to the Bible during its time. And he made a very compelling case as an economist that the real problem with capitalism is land ownership. And I started thinking about it and thinking, you know, capitalism doesn’t work when there’s monopolies. Like we had monopolies earlier in American history and it was just absolutely dismal for workers. And so we do a good job I think of preventing monopolies from happening and creating a competitive environment. But when it comes to land ownership, that’s the silent monopoly. You’re a land owner. You essentially have a monopoly on that land. There’s no, antitrust breaking that up. And furthermore, if you think about how land was divvied up in the country many years ago, it was sort of like right place, right time, hey, I’m claiming these hundred and 60 acres as my own, but put that aside, it was just plain unfair that you could own a piece of land and then communities and people would come there and give the land value by living there and creating homes there, having families there and tax dollars that were spent on building infrastructure to make the city, town better. But also who’s benefiting? The land owner because the land’s appreciating in value. And so I thought, well, what if the land, you know, when it was worthless was actually owned by the community to start. Okay, well, if in the desert, there’s lots of places in the U.S. but in the desert in Nevada, for example, the land is very cheap, a couple of thousand dollars an acre. And I thought, what if you bought enough acreage to create a city of 5 million people, call it 200,000 acres. And so maybe it’s four or $500 million. And when we did the math, we said, if we can get 5 million people to move to the desert and create the city that the land would be worth roughly a trillion dollars, and then the foundation could sell the land, create a trillion dollars worth of value, create an endowment diversified into lots of asset classes and earn $50 billion a year, like similar to like a university endowment or a hospital endowment or something like that. And that $50 billion a year would be a substantial sum of money giving back to the citizens of the community in the form of advanced social services, health care, education, jobs, training, affordable housing. And if people trusted the community foundation to do good, maybe people would donate to the community foundation. You would never donate to a city now because that’s taxes, nobody trusts it. And it would be a virtuous cycle where eventually the community foundation we’d be so wealthy that it would be able to do an incredible amount of good and increase the collective happiness and wellbeing of the citizens. Way beyond what we could even imagine today. And then potentially wouldn’t even need as high taxes. So we’re not talking about some sort of weird socialist communist model of any sort. It’s capitalism, but it’s just returning that value creation back to the citizens. And had we done that in the beginning, I think we’d be in a completely different place now. And so anyway, this is the theory. And in order to test it, I mean, I’d love to be able to test it without building a city of 5 million people with $500 billion or whatever. But unfortunately the only way to really test it is with a clean slate and to do it. But then as we started thinking about, well we’re building this city from scratch, there are incredible innovation that’s happened around technology that enables us to do things that we can’t currently do in existing cities, around sustainability, preparing for climate change and autonomous vehicles, these, all these different things that we can do. So why not do them all at the same time? And so our mission now is to create a more equitable and sustainable future, because we do believe there’s going to be so much to learn from doing this project that we’re basically innovating and pushing the envelope on all areas that pertain to building the city at the same time that we’re testing this model. So it’s sort of the combination of both. That’s got me really fired up.

…See full episode here

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Billionaire ex-Walmart exec says the first ‘settlers’ of his planned $400 billion city ‘Telosa’ will likely be selected through applications — and they could move in by 2030

Telosa — Mon, 18 Oct 2021 06:21:22 +0000

If Marc Lore’s vision comes to fruition, 50,000 residents could be living in an egalitarian utopia by 2030.

Lore, who stepped down as the CEO of Walmart’s US e-commerce division earlier this year, announced last month that he plans to build a futuristic city known as Telosa. Telosa — which gets its namefrom an ancient Greek word meaning “highest purpose” — plans to offer its citizens equal access to education, healthcare, and transportation. Residents would get around in autonomous vehicles, and the city would run on renewable energy, Telosa’s website promised.

While citizens of Telosa would be able to build their own homes and sell them, the city would maintain ownership of the land itself, Lore told USA Today’s Scott Gleeson on Sunday. He called his vision for the city “equitism” — a mashup of equality and capitalism.

“The sole purpose of creating a city in the desert would be so it’s owned by the community, basically take all the appreciation of the land and give it back to the citizens,” Lore told USA Today. “Taxes paid will go back to the city for infrastructure — roads, tunnels and bridges — so everyone would know exactly where their money is going.”

It’s an ambitious endeavor, and an expensive one: The city’s website estimated the first phase would cost $25 billion, with the total cost of the city surpassing $400 billion. It would be funded by investors and philanthropists, as well as government grants and subsidies, the Telosa website said.

There’s no set location for Telosa just yet, but a few regions have been mentioned as possibilities: Nevada, Utah, Idaho, Arizona, Texas, and the Appalachian region, which includes 13 states in the eastern part of the US.

The first phase of Telosa — stocking the city with 50,000 residents by 2030 — would likely include an application process, Lore told USA Today.

“Settlers” of the city would be chosen via a selection process focused on diversity and inclusion, he said, and he’s working to determine the criteria with the help of a team of staff and volunteers that includes architects, economists, engineers, and climate experts.

Lore told USA Today that he also plans to build a venture-capital fund for startups willing to relocate to Telosa.

In renderings of Telosa created by the prestigious Danish architectural firm Bjarke Ingels Group, the streets are filled with robots and autonomous vehicles; there’s a high-speed rail system; and a futuristic skyscraper — dubbed the “Equitism Tower,” USA Today reported — dominates the skyline.

Telosa may be Lore’s most radical undertaking to date, but he has a long history of entrepreneurial projects. In 2005, Lore cofounded Quidsi, the parent company of Diapers.com, which he sold to Amazon six years later for $500 million. After a short stint at Amazon, Lore founded Jet.com, an e-commerce competitor that he sold to Walmart in 2016 for $3 billion in cash, plus stock. He served as Walmart’s US e-commerce CEO for over four years, announcing in January that he was leaving to focus on building “a reformed version of capitalism,” he told Recode at the time.

Like fellow tech billionaires Mark Cuban, Steve Ballmer, and the late Paul Allen, Lore has also gotten involved in the world of professional sports: In July, Lore and former Yankees star Alex Rodriguez teamed up to purchase the NBA’s Minnesota Timberwolves and the WNBA’s Minnesota Lynx.

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Billionaire Marc Lore outlines how he will build the inclusive, Utopian desert city Telosa

Telosa — Sun, 17 Oct 2021 06:26:00 +0000

Marc Lore grew up wanting to be a farmer – reveling at the idea of “something growing from nothing” – all while watching his father unafraid to take chances with ambitious business ventures.

The 50-year-old billionaire developed his appetite for taking risks from his father, Peter, and it’s that foundation in childhood that’s propelling him to now focus on a spellbindingly ambitious endeavor that many experts and pundits are deeming near impossible.

Lore, the former president of Walmart e-commerce and co-founder of Jet.com and Diapers.com, is attempting to spearhead the conceptual and financial building blocks for Telosa, a Utopian city in the middle of the desert announced last month.

Telosa’s location is being targeted in the American West desert or Appalachia with plans to shepherd in a reformed version of capitalism with a focus on societal inclusion over division. Lore envisions Telosa having equal access health care, excellent schooling and safe environments for families, regardless of income. Even further, he aims for Telosa to be a diverse place housing various races, genders, sexual orientations, religions and political affiliations.

But exactly how the “city of the future” is built is both risky and complicated. Experts and researchers have long maintained that too many financial hurdles can stand in the way, with one 2014 study arguing that “the ability of eco-cities to achieve their utopian ambitions may be limited by the realities of operating within a profit-driven, entrepreneurial planning environment.”

Yet that’s where Lore feels like Telosa can be different, and understanding the colossal “how” of the project means understanding the “why” for Lore.

Marc Lore:Former Walmart president reveals plan for $400-billion Utopian city in the US desert

Telosa’s name derives from the Ancient Greek word telos – meaning “higher purpose.” The conceptual art of Telosa looks like it’s pulled from a science fiction movie. Nearly everything appears fueled by solar power energy, autonomous electric cars and high-speed public transportation. Designs from architectural firm Bjarke Ingels Group, the same company that created Google’s headquarters, shows 150,000 acres of eco-friendly architecture, including a beacon-esque skyscraper known as the “Equitism Tower.”

The headlines of Telosa last month honed in on the $400 billion objective that will take massive buy-in from key investors to even get the project off the ground. Factor in Lore’s lofty goals that start with the first phase of 50,000 living residents to be welcomed into the city by 2030, and the public skepticism is hardly hidden.

That’s not lost on Lore, who sees the attempt – similar to those of his father growing up – just as important as the end goal.

“I’m not pursuing this to make money,” said Lore, a co-owner of the NBA’s Minnesota Timberwolves. “I’m doing this because of what it can mean for others and the future. If this entire attempt doesn’t work, then hopefully, there are things to learn from itand it will inspire others to take their shot.”

A ‘global standard for living’

Lore is cognizant of the optics that can come from attaching his name – and value system – to a city starting from the ground up.

But the entrepreneur said his role is mostly to provide a placeholder for the people to create the city’s culture themselves. Telosa’s official website promotes future residents always being connected to community and nature while setting a “global standard for living” with the goal of expanding “human potential.”

“I don’t want to be the ruler of the city; this is more of a public service,” Lore said. “I’m wanting to give it a place to grow and flourish. It’s not meant to be a private city; it’s meant to be a city for everyone – with an innovative way we live.”

Lore calls his model “equitism” and it would allow any Telosa citizen to build their home and sell it, while the city would retain ownership of the land that’s underneath. By that setup, in a dream scenario, Lore believes Telosa’s desert land would eventually balloon in value to be worth $1 trillion. Lore said that land value, which could come out to $50 billion from investments and endowments, would go directly toward the city’s funding to ensure that every family has equal access to health care, good schooling and a safe environment, regardless of income.

Top-down economic models present complications, but they’ve been achieved elsewhere. The concept of community-owned land on a large scale is on display in Singapore, where the government owns 90% of the country’s land and then the proceeds are reinvested in the country. While there’s skepticism, Lore’s hope is to provide a blueprint for other future cities, noting that so many U.S. cities today have become ingrained in politics where bridges of trust have been fractured over time.

“The sole purpose of creating a city in the desert would be so it’s owned by the community, basically take all the appreciation of the land and give it back to the citizens,” Lore said. “Taxes paid will go back to the city for infrastructure – roads, tunnels and bridges – so everyone would know exactly where their money is going.

Hoe does someone become a resident of Telosa?

The selection process for the first 50,000 in Telosa is yet to be determined but will likely be done by application. One thing Lore can promise is that inclusion of varying races, genders, sexual orientations and religions will be a top priority.

Still, selection could be one of the tallest hurdles for Telosa from a public perception standpoint. Simply naming qualifications for citizens can have a discriminatory connotation. One lure to draw people to Telosa will be a Lore-created venture capital fund that could house startups that relocate to the city. But what will the other careers of first citizens be?

“We can’t create a city without some early nudging to move to the city,” Lore said. “We’ll have to kick-start in an unconventional way, but the hope is we’ll position the people to grow a culture.”

Lore said much of the framework for the first “settlers” will be sorted out with aid from his team of 50 volunteers and full-timers made up of architects, historians, researchers, economists, creatives, designers, engineers and climate experts.

Once the first phase begins in 2030, Lore said the hope of the equitism model is to let the people drive the creation of the city’s culture and then accentuate the diversity through respect and an equal value system.

“How does a city have a soul?” Lore said. “It’s not about buildings and roads, it’s about the values and the city standing for something. We don’t know what that is yet, but we want to find out.”

Concerns of division, belief in inclusion

Lore said Telosa will be intentionally apolitical with its creation and potential launch.

“We want to involve Democrats and Republicans, people with differing opinions,” he said. “How do we bring people together? It’s always in the how. We intend to be transparent as one team with one vision.”

One approach to zero in on an inclusive culture, Lore said, is by looking at future citizens from more of a psychological lens versus a sociological lens – focusing on the nuances of what makes individuals tick versus the semantics of the whole.

“One of the things I discovered working with (companies) was how much trust builds relationships and trust impacts culture,” Lore said. “Something magical happens when people trust that you’re living by a set of values and being honest about it. When I was at Jet, the directors made the same salary and that was known. The transparency and fairness mean something.”

In conjunction with financial buy-in, there will be practical challenges to address. But Lore said he sees Telosa as an opportunity to test highly researched theories in a way that’s not possible otherwise.

One of those concerns will be a sufficient water system in the desert. “It will require us to use technology in ways we’re not today so that we can have a city live off of 80% less water per person. That can set up a future we’re prepared for where water is more scarce.”

This isn’t the first time that a Utopian city has been attempted by a wealthy person. Bill Gates announced in 2017 plans to build a smart city outside of Phoenix on 2,800 acres. Millionaire Jeffrey Berns also bought 67,000 acres in Nevada for a smart city.

But Lore sees his vision as different.

“I’m very open to others’ opinions and I want (Telosa) to be based on the collective thinking of people in the world,” Lore said.

Lore has plans to step aside more if and when Telosa is off the ground. In the meantime, that childhood dream of creating something out of nothing is closer to coming to its fruition.

“I don’t have all the answers,” Lore said. “But each day I’m learning.”

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