Somji Blog – Jaffer Group of Companies

Category: Somji Blog

August 4, 2020

‘I was there’ will sustain

Main Photo: A ‘socially distanced’ Sylvan Lake (courtesy @papercandie – https://twitter.com/papercandie)

COVID-19 has been a humbling experience for tourism and hospitality owners around the world. Every design, financial and strategic consideration in the airline, hotel, sports, travel agency and restaurant industry (amongst many others) relies on the increasing wanderlust of people seeking to be the first to experience a life-changing moment in person. The post-2009 tourism boom has finally ended – and it took a pandemic to do it.

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Description générée automatiquement — *RevPAR was slipping but COVID-19 killed things off for good*

The (someday) post-Covid world will leave a lengthy shadow of fear. Many will point to these last five months as the time period that shifted mindsets from ‘I was there’ to ‘I saw it online and that’s enough for me thanks’.

I disagree. If anything, softness in the market has been developing for years.

While tourism has grown around the world, boosted by the low cost of air travel, the content marketing and digital media industries have already consumed a significant amount of investment and consumer dollars. The content marketing business will reach $107 billion dollars in 2026, built largely from people that consume entertainment electronically from home and attendance at sporting events have decreased – and continue to decrease – significantly. Tastes are beginning to change, sports (and the value of sports teams) have become increasingly expensive for the average fan (driven largely by the ego-induced bubble of the value of sports teams). The vast majority of teams, musicians, and plays are nearly completely reliant on ticket sales, especially where television revenues have struggled to keep up.

So: Is ‘I was there’ culture gone for good?

Doubt it. There are three reasons that makes me bullish:

Social distancing exhaustion is illustrative

People clearly are not interested in staying indoors – and risking health to get outside

As frustrating and alarming as the photos of people abandoning social distancing to crowd a beach or a hiking path, it’s illustrative of how the inability to achieve ‘I was there’ has reminded people of its importance. Most people, simply put, need to be around other people. An in person shared experience still activates the senses in a manner that we can’t seem to simulate without human contact. Zoom fatigue is killing us and building trust between workplaces or within a business is a constant struggle. We can maintain existing relationships digitally but promotion, trust and sales are still extremely reliant on person-to-person communication.

Near-total reliance on tourism is widespread around the world – and increasing

Thousands of businesses, teams and nations are too heavily reliant on tourism to allow it to fail. Though many airlines have consolidated or closed completely during the pandemic those that remain will see benefit in their ability to capitalize on pent up travel demand around the world. Hotels – with significantly stricter and more reliable cleaning programs than short-term vacation rentals – will benefit from increased consumer trust. Sports teams will continue to work tirelessly to integrate the digital experience into the in-person one. Entertainers don’t have much of a choice; there’s little revenue in streaming music sales, concerts remain the most profitable way to earn money. All these stakeholders will be incredibly aggressive in dragging consumers back and it is working. Even cruise ships have convinced people to get onboard (with predictable consequences) – if anything that should be evidence enough.

Content marketing unsurprisingly needs unique content

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Online content marketing requires content – and even this generates clicks

Most importantly, however, in my mind? The most digital of businesses – online content marketing – is reliant on new content and the differentiation necessary to ‘stand out’. As the space gets busier this will require a larger investment in travel, clothing and camera work to be noticed. Flaunting wealth, even in the strangest ways, will still be used to create the envy, fame and popularity that brings the sponsorships and payments to ‘influence’ that makes those stars money. Outside of talent, of course, tourism, travel, and entertainment are still the simplest method for experiential content development.

The tourism industry’s focus needs to be melding the digital and in-person experiences to create reliance on both. I imagine restaurants interactive VR guests that you can interact with at your tables or virtual cocktail creation with the ability to precisely refine ingredients to your whims. Our business will change in creative ways that we have to embrace.

People will still value ‘being there’. If we are to survive, however, we need to embrace technology and ‘level up’ our investment in interactive experiences.

Alim Somji

June 9, 2020

It’s time for self-reflection, hotel brands

I wrote an article at the end of 2018 about the “Soul of Hospitality”, hoping that our hotel brands would see fit to support franchisees by managing supply growth and reducing the expensive – for ourselves and our clients – brand specificity of their new brand approach. Hotel brands are rewarded by shareholders for lean, often exploitative, growth to sell franchises and saturate markets. Hotel owners are a tool of the game. I never envisioned, however, that our brands would ever achieve that particular self-awareness.

I thought COVID-19 and the protests around George Floyd’s criminally wrong death had changed that drastically. Our brands are grasping desperately for liquidity to satisfy shareholders waiting to jump off the boat. Hilton (here) and Marriott (here) pre-sold billions of dollars worth of loyalty points to Amex (and will undoubtedly tank the value of those points further) in order to stay alive. Do what you have to do and all, I don’t blame them, but surely its purpose should be to support, throughout all their associated hotels, those that the hospitality business employs. Maybe this was the time.

Franchise responses have lacked focus, sympathy for their hundreds and thousands of employees

Sadly, their message to hospitality students – per Adweek’s summary of the virtual NYU CEO roundtable for students and Hotel Management’s discussion summary, at least – were a little hollow.

“All of us, as leaders, have a lot of people looking to us… what they need to have is hope, … a light at the end of the tunnel and it’s our job to give them that”
– Christopher Nassetta, President and CEO, Hilton

“We need [governments] to step in to help our hotel owners, most of whom are small business, navigate from where we are until… we can be going forward”
– Arne Sorenson, President and CEO, Marriott

Both of these individuals have accomplished a significant amount to be in the position they’re in. Both have added plenty of new brands to create more brand supply in major markets. Shareholders are happy, undoubtedly, and I don’t deny the importance of that. In June 2020, however, hotels are gasping for air and their largest variable expenses are directly associated with these brands. I do commend the leadership that Hilton, Nassetta’s company, and Best Western have taken in response to COVID-19. It’s something. After all, others have been downright negligent.

What they have not done, neither before or now, is address the value destruction that their aggressive franchise sales tactics have encouraged or the crippling effect that liquidated damages, excessive franchise fees, and restriction that ‘approved’ suppliers (those suppliers that can pay the brands the commissions and access fees that they desire) can have. Hotel franchises don’t quite see it the same way:

“Not every brand is going to make it to the other side… not to be harsh, but there are going to be winners and losers, and some in the middle”
– Christopher Nassetta, Hilton

No more ‘picking horses’

Our hotel brands need to take the ownership they profess themselves to desire. They dictate who the ‘winners, losers, and some in the middle’ will be this year (and every year, really). Hotels support the livelihoods of millions around the world, many of whom are visible minorities. The success or failure of our brands is critical to this goal, absolutely, but hotels themselves need to survive to support them. Organizations like NABHOOD and AAHOA exist because hotels provide growth meritocratic opportunities for so many to grow and thrive.

If we are serious about supporting hotel owners we need to focus on the survival of our hotels. We need to refocus on fair franchising and supporting aspiring minority hotel owners to get their ‘foot in the door’. We need our hotel brands to help ensure that jobs can be supported sooner rather than later. Like so many of us in quarantine, I hope our hotel brands follow the same self-reflection path that so many of us have taken. Our industry depends on it.

Alim Somji

March 10, 2020

Deceit, Evasion — and Progress? Cheating in the sports and corporate world

The month of February was been tumultuous in the sporting world (remember when February volatility felt like it couldn’t get worse?). It started per usual: the NHL and the NBA are rolling towards the playoffs (and just passed trade deadlines), the European soccer leagues are coming to crunch time, and the boys of summer are ready to take the field for another season.

None of this is unusual, simply another month gone by.

Two massive scandals changed that – the two-year European ban for willful disregard of UEFA’s Financial Fair Play and the Houston Astros signal-stealing empire crashing. Specific details are at the bottom of the article.

There is strong, if not irrefutable, evidence that cheating the rules was beneficial. Manchester City spent heavily on players and infrastructure and have been the most successful over the past decade, both by league position and, depending how their non-arms length sponsorship is treated, on paper. The Astros have been World Series winners and finalists in the years in question. On paper both teams have succeeded.

Evidence in the corporate world is plenty. Easiest example: everyone from small investors and the largest companies in the United States have avoided taxation by offshoring cash and IP for decades to avoid taxation. The Panama Papers alone showed the massive operations built to support that fraud and few institutions have been exposed.

This bears the question I’ve been weighing: at the highest levels, does the benefits of corporate cheating outweigh the risk of punishment for getting caught? We want to say ‘no’ but clearly the answer is far grayer than we’d like. So what can be done to stop it?

Short answer, of course, is hard to say. UEFA has continually defended cases at the CAS and continue to tinker with FFP to make it stronger. MLB has done little to confront the issues, hoping that the presence of a champion will outweigh the storm caused after a season is out. Punishment in either case seems to have had no effect. Fines and the threat – or imposition – of criminal action has failed. We continue to do the same things and insist that people are learning.

Teams and businesses will consistently find ways to do what they’re motivated – or paid – to do. Win, grow and be profitable. As such, our deterrents need to specifically target that pathway.

UEFA has the best plan: Manchester City want to be the largest club in the world and build profile and earn significant money by playing in European competition. A participation ban is the strongest deterrent in their arsenal. MLB’s response should hit the history books and through the draft – no champion is better than a dirty champion and every baseball team is heavily reliant on the draft to refresh teams. I’d exclude them – and any others found guilty – from the draft altogether for a minimum of two years.

Corporations are more difficult – if fines will not work, implementation of business specific tariffs might. ‘Garnishing’ revenues of businesses (and all associates entities) for a certain period of time is enforced broadly for personal penalties and debts, surely corporations should be the same?

My broader argument: Something more creative needs to be done. We need to move past the simplistic ‘big teams or companies are evil’ trope. Those teams have thousands of fans, businesses employ millions of people and comprise the majority of pension holdings for workers and citizens around the world. We can want to enforce rules upon rules to encourage climate awareness or corporate rights but that’s a decades long process rather than months. Max Kellerman made this point excellently on the Woj Pod here; people will always do what they’re incentivized to do – whether we like it or not, and it’s absolutely incumbent on us and the world to find ways to incentivize better behaviour across industry.

—

Coles notes on Manchester City: Financial fair play regulations – known as FFP – were introduced to ensure that football clubs were viable business operations in response to a spate of club bankruptcies across Europe. Many reasons for this, but largely owners betting big on new TV deals, trying and failing to qualify for major international competition, using the club as a plaything to get bored of, etc. This, however, also restricted clubs with wealthy owners to build clubs and renown quickly. City and Paris-Saint-Germain we’re both caught multiple times using sponsorship deals from non-arms length businesses (in this case both are government owned, and those state enterprises utilized other state businesses as sponsors to be able to vary the size of sponsorship relative to the operating capital required to meet FFP minimum regulations). These arrangements were patterned after Roman Abramovich and Chelsea Football Club and were extremely successful. More about that here via the Guardian.

Coles notes on the Houston Astros cheating scandal: The Astros have been accused of stealing ‘signals’ that a catcher will convey to a pitcher to suggest type and placement of a pitch. An individual would watch the catcher’s signal and hit a garbage bin a certain number of times (or, yet corroborated fully, send a vibration to a buzzer on the batter) to communicate the next pitch. Whether this worked or not is impossible to say – but the Astros stellar home record and average away record would imply to most teams that it certainly did. The Astros won a World Series, Jose Altuve won an MVP and a home run title. More about that here via the WaPo.

Alim Somji

November 4, 2019

Dispute ‘Evolution’ – Managing disputes in the social media age

A depressing annual event happened this past Saturday (as it does twice a year) – a football (the European kind) match in which I hope both teams lose by a large margin. Liverpool played (and were victorious) over Manchester City in the English Premier League in a fiery, controversy-filled game. I’d say congratulations but I don’t have the heart to do it. I love Manchester United like a sibling, a sibling that has had a rough few years – a bad breakup, a number of years wandering looking for themselves desperately searching for an identity and, finally, starting again. My ‘Eat, Pray, Love’ sibling. A big win for Liverpool, but an otherwise typical match in the Premier League.

Monday’s events changed that narrative; we’ve moved from dispute resolution to dispute evolution.

International teams have come together for World Cup Qualifying fixtures over the next two weeks and, with them, the English team came together. Enter two English players that played in the Liverpool – Manchester City fixture – Raheem Sterling, an offensive superstar entering the prime of his career at Manchester City (and a former Liverpool player) and Joe Gomez, a developing defender on the fringes of the England squad looking to cement a place in the international arena. Stories abound on the true facts of their altercation – stemming from the hostility on Saturday – the event became public, got hold of by the English press, and, as a result, had to be dealt with publicly by Gareth Southgate, the England Manager.

People have always bad mouthed their former employers, ripped past colleagues, threatened (or, in the most extreme cases, taken) legal or physical action. We all know that social media has changed the speed and reach that these actions can have exponentially. Fights – physical or otherwise – are common in all sports teams but rarely, if ever, get reported. Media covering the team face repercussions if word gets out. Players, even with social media, rarely comment publicly. The incident passes, teammates moved forward – liking each other or not – together. The team ‘code’ is respected.

What is most interesting – and educational, in a sense – was the response by the leadership inside the FA (the corporate structure of the England team) and the dressing room to this issue.

Southgate threw out the code altogether. Details started to leak – seemingly intentionally – on the altercation, immediate aftermath, reconciliation and sanctions enforced. The star player was reportedly at fault. Sterling ‘attempted to choke’ Gomez and had to be separated. Sterling then left camp expecting to be suspended. Jordan Henderson, the English captain, brought them together. They reconciled. Sterling returned to camp. The player didn’t pick up a ‘mysterious flu’ or ‘injury in training’ to be quietly punished and no one hid Sterling’s departure. The Manager announced a one-game suspension publicly and took questions after, attempting to walk the line of explicitly disciplining a player while both maintaining respect of authority and discipline in the dressing room and trying to maintain harmony and trust in the dressing room by airing team business outside of it.

This should strike fear – and opportunity – in the minds of all leaders. Social media is the quintessential double-edged sword. Companies – for many very good reasons – are losing their implied code of silence. Obviously, criminal and discriminatory issues must be brought to light; that should have been and must be the case. The difficulty is that less toxic, more mundane issues – conflict between colleagues on direction of a business, social disagreements outside of work, and disputes over recognition or commissions – are often brought to light as well. As expectations of a public shaming and response to issues on social media seem to grow, leaders must be disciplined in walking that line. Social media is a marketing tool for businesses and should remain so. It is not, however, a company’s opportunity to defend itself in the court of public opinion. Working to address issues is. Restaurant and hotel reviews are a great example – restaurants that dispute with public comments never win. Unless you’re apologizing on behalf of the business for a public, significant wrong, the customer is always right online. Your social media should be restricted to the ‘good’, ‘new’ and ‘voice’ of your brand. This is not to say that negative reviews, customer experiences or disputes should not be addressed; the opposite is true. It is a customer’s right to comment or complain publicly. We give them the avenue to do so. Wherever possible – and non-criminal, however – these should be in confidence between affected parties.

Time will tell whether Southgate was correct. It’s inconceivable that he raise and publicize all minor team disputes—he’ll be explaining himself on a daily basis. This wasn’t a ‘Don Cherry’ sized problem. He’s been on the receiving end of racism rather than the one perpetrating it. Sterling has responded maturely from the cruel press coverage he’s been subjected to by the English media in his career. He has no track record and worked extremely hard to prove doubters wrong.

Even so, Southgate felt compelled to respond to the metaphorical restaurant review. We’ll see if he emerges unscathed.

Alim Somji

September 10, 2019

‘Soul’ and Basketball – Dan Le Batard, ESPN and the Soul of a Corporation

A particularly insightful podcast from the Ringer’s Bill Simmons (now two – makes me feel less bad about getting this out once the story is forgotten), brought forward a concept that I can’t seem to shake from my mind.

The precipitating event (it seems like years ago):

Dan Le Batard vs ESPN story from earlier in the week – especially interesting based on the circumstances of his departure from ESPN a few years earlier;

Bill references a conversation with Le Batard about challenging ESPN to punish him (which they did) for making that statement as it presents an obstacle for, paraphrasing as I understood it, ‘falling prey’ their journalistic soul on a subject he cared deeply about. Bill points to his Grantland, 30 for 30 and ESPN: The Magazine experience as moments, albeit pre-Disney takeover, where ESPN created content that provoked debate on the fringes (or perhaps even directly in) the realm outside of sports. Political impartiality, however, is a Disney requirement. America’s largest media outlet must appeal to the entire country without question. Le Batard used his live radio platform to share his outrage at the Racist Tweet scandal. Dan Le Batard dared them to take a stand and they did, in a sense, with a slap on the wrist to try and satisfy all involved.

Can’t say it worked. Bill’s point – and I concur – ESPN sacrificed their right to explore sports at the fringes of politics.

I wrote about the soul of the broader hospitality business being heavily diluted by the forest of new hotel brands being created in the past 5-10 years (more have popped up in the interim, of course, because there still aren’t enough apparently) and it’s a similar point in many respects. ESPN have sacrificed their journalism roots and focused on live-action sport. Some people inevitably feel that loss. Every business student, though, learns the cautionary Kodak tale on reluctance to change; in the face of streaming media and potential decline of written media of all kinds, ESPN chose a new path. I can’t help but feel that this is more nuanced than that though.

The concept of ‘soul’, in a business context, is a fluid intersection of qualitative and quantitative worlds to begin with (and, some might argue, impossible for ‘money-grubbing’ entrepreneurs). I define the soul of a business is the collective ideology of people within a business to describe its differentiating characteristics from its peers. Product, aesthetics, corporate culture, social responsibility, doesn’t matter. Products and services are generally interchangeable; our positioning, ‘look and feel’ of our branding and positioning – that’s what the soul of the business is.

ESPN, I assume, felt that sports content alone – rather than journalism – reflected its soul.

The realization for me (and perhaps for them) is that every change a business makes is a reflection on leadership’s interpretation of what that soul is. Every person in a business connects with that soul through a unique lens. Some people will stay believers, some will question their faith and some will simply abandon it altogether. Bill did. Maybe Dan Le Batard will. Perhaps Stephen A. at some point.

Smart people make these decisions. I don’t really know either of those businesses. Hard to say whether either of them will be successful. If the fundamental people in your business can’t find the soul of your business in what they’re doing, though, then how can you truly grow?

I can’t say I agree or disagree with ESPN’s stance. It’s quite literally not my business. It is disingenuous to me to ignore politics or business completely in a discussion of sport. I think ESPN – while they may not have to take a stance – can’t simply try and sweep their national platform under the rug when it comes to the pressing social issues that affect its viewership, the individuals that comprise its content and the influence that sport and sporting achievement has on the rest of the country.

No idea. Maybe they’re right. I still can’t shake the idea though, clearly. Please share thoughts.

Alim Somji

July 5, 2019

Changing the Narrative: A Lesson from the Los Angeles Clippers

2019 is the first year a Canadian team has won the NBA championship, but, as the draft coverage noted, is also 10 years since the Los Angeles Clippers – and their then owner Donald Sterling – drafted their franchise-player-to-be Blake Griffin.

Who is Donald Sterling? Coles Notes. The audio speaks for itself, really.

Donald Sterling was, and remains, one of the least popular owners of a sports franchise. Ever. He moved his team from San Diego to Los Angeles without NBA permission, was routinely late paying creditors and fined repeatedly, sued four coaches after firing them (and lost four times), was sued for racial discrimination in apartment tenants (he settled), was sued for sexual harassment twice (one settled, one dismissed), heckled his own players, was rated as the ‘worst owners in sports’ by Forbes and the New York Times and had the lowest winning percentage of any team in the four major sports leagues during his tenure as owner – this despite having a winning record and selling out games for the last 4 years.

None of these, unsurprisingly, was enough for the Association to take meaningful action. The NFL treatment, basically.

His wife, rather than the league, finally forced him out following his recorded racist remarks to his mistress being publicized by TMZ in 2014 (though he fought it bitterly – the legal battle is fascinating in itself). Steve Ballmer, of Microsoft fame, purchased the team for $2 Billion dollars – a record at that time. That the Clippers were worth that amount is an article on its own but ‘the worst team in sports’ was in someone else’s hands.

The whole Donald Sterling tape – not suitable for all audiences, obviously.

Fast forward 5 years – the Clippers are a winning, well-run franchise, a leading contender for the NBA Finals’ MVP and have sold out every game played since 2011. Even if Kawhi doesn’t sign – and it appears he won’t – it’s still significant progress.

What can be learned from the transformation?

1) Hires that expect to change the organization

The first thing the Clippers did was probably the largest. Immediately following the transaction’s completion Gillian Zucker was hired as the team’s President of Business Operations. Her predecessor had worked for the team since 1984 and served as President from 2007.

Zucker’s hire showed an intent to shock the system. A well-qualified, experienced (and yes, female) executive in the sports industry laid down a marker for every employee of the franchise – regardless of role – that this Clipper team would be different.

These moves are vital to change culture rather than simply morale. Morale suffers in times of disruption – people afraid of losing jobs, colleagues and status within the organization adds stress. People will jump ship. Success – and recognizing contributions to it – is a huge part of morale and we can’t be afraid of that short-term pain of rehiring talent, rationalizing expenses and rebuilding a new team – of new hires and believers – for the new vision.

2) Show the public a new face – early and often

Zucker’s reputation is largely built on her marketing prowess working to reposition NASCAR races and facilities to a larger demographic. She creatively and bravely sought to reframe the experience entirely in the face of the regional traditional demographic it received. Was it successful? The Clippers needed bravery.

The brand was relaunched in an extremely splashy way – a completely new branding package (there’s a great comparison and description of this here). Hundreds of shirts, hats and merchandise was given away to make a statement of intent that these Clippers shared no history with the years prior.

As much as a public eye can burn a business, changing perception still requires public acceptance. Starting a new product line, and retooling your product offering all require brand recognition for people to connect. Think about Tiger Woods – his self-destruction, humiliation and much-celebrated rebirth all occurred in the public eye. Some will only remember the first two; most will remember all three.

3) Blowing it up can be, and likely is, your best option to rebuild

Don’t try this at home. Or if you’re the Knicks, because with their record they’ll probably pay the ball a max deal and then miss the ground.

‘Lob City’ – the nickname given to the last of the Donald Sterling teams – featured three marquee players acquired during the last years of his tenure. Blake Griffin, DeAndre Jordan and Chris Paul represented the best team the Donald Sterling Clippers had ever had despite their underperformance in the playoffs – two trips into the second round of the NBA Playoffs – and were the face of the team upon Ballmer and Zucker’s introduction to the team.

They kept the band together for two years, introduced new talent and large payouts to the team’s big stars – the Clippers still failed. Enter Jerry West – one of the best players and executives the league had seen – and by the end of the 2017 season Griffin, Jordan and Paul, the last remnants of the Sterling era, were gone. Today’s Clippers represent the new regime, with an intelligently managed salary cap, good young team, an exceptional front office, and a premier destination for the NBA’s best.

Congratulations, Clippers. Please though – leave Kawhi in Toronto.

Alim Somji

May 8, 2019

A Theoretical Quandary of Inner-city Community Building

A month ago, developers, business owners and I were invited to discuss ‘Climatic Resilience of Inner-City Neighborhoods’, specifically speaking about McCauley and the Quarters in Edmonton, by Ashley Roszko, a U of A Masters student. Unsurprisingly (I’m sorry, Ashley) that group of people that love to talk got derailed quite quickly – and I heard something that I’ve been dwelling on for the weeks that followed.

Anna Bubel from Another Way – a literal and metaphorical community builder and a kindred spirit in restoring old buildings – had this take (paraphrasing – please comment and clarify, Anna!):

*One of Anna’s Lovely Projects (https://decolicious.ca/* *) / Photo: Rebecca Lippiatt*

1) McCauley cannot be resilient – and cannot really change – because, 2) 30% of the housing stock is subsidized or supportive housing (the City’s reported numbers are slightly less but I’ll eat my socks if they’re not understated); which is, 3) an major disincentive for people to stay in the community; because, 4) we punish people for being successful by requiring them to move when they cross the income threshold for under-market units. Therefore, no new investment, no new services, no new amenities, no change.

That argument was new to me and I’ve been pondering the theory of it since. Subjectively, in looking at McCauley, this appears logical; it just doesn’t fit my worldview of urban planning.

Through a bit of research and thumbing through some old textbooks I’ve distilled my confusion based on the following concepts:

a) Absent outside forces, cities radiate out centrally in all directions equally (the Central Place theory and Rusk’s Theory of Urban Development from ‘Cities without Suburbs’);

b) Supply and Demand in Cities are cyclical (the heavily debated – not least due to its reported use to justify purposeful underinvestment in African-American neighborhoods in the use – ‘Neighborhood Life-Cycle Theory’; nevertheless, I think the concept has merit): demand and supply are both predictable – new housing can satisfy the demand of those more affluent, older housing will be maintained for less affluent occupancy and the oldest housing will be demolished until it’s viable to replace with newer housing.;

c) Durability of Housing (an excellent article on the concept): without any outside forces, houses are sufficiently durable to meet the basic shelter needs of people equally as it ages and depreciates (in order to accomplish the aging and movement suggested in (b)) and further implies that age of housing directly relates to its desirability and affordability (not strictly true, of course, but on the whole);

Simplified, the resulting growth pattern would be like a drop in a lake where the peaks are new construction and development of affluence (shown in white and ‘+’) and the troughs are aging and relatively lower-class properties (shown in blue and ‘-‘).

Clearly exceptions exist, especially with respect to environmental factors – proximity to a river valley or parks area, specific target amenities in bedroom communities amongst others. We can see this pattern – again, simplified – in our cities.

Just not in McCauley.

My belief is that the threshold income qualifications for housing subsidies create one of those exceptions. The requirements commit buildings, rather than people, to remain rather than age. Once a person earns above the low-income threshold, they are obligated to move in order to maintain subsidized housing stock rather than evolve and receive investment over time. That is nonsensical to me.

By moving people when they earn “too much” they can’t truly settle their families into the area. Moving is always on the horizon. Those that can’t emerge from poverty stay, but those that do – and could potentially help the rest of the community do so – are encouraged to leave. Understandably many people wouldn’t want to stay, sure, but we ensure that they don’t. After all, why not add the trauma of moving schools, friends and neighbors to a family that is finding their feet? The same chronic under-investment predicted in the Neighborhood Life-Cycle Theory prevails. The expectation of a neighborhood’s decline plus the inability for higher earners to reinvest in those same areas all-but-confirms it.

I would argue that strong, sustainable communities are built around multiple generations and demographics living harmoniously, with housing, retail spaces and amenities available and open to all income levels. McCauley has not had that opportunity. The ideal solution is a ‘Habitat for Humanity’ style option. A low-income family is placed in a home and pays what can they afford (based on CMHC’s safe housing spend guidelines), build equity in the home through the differential of their rent and the true operational expenses of the home, and purchase that same property when their finances allow. They move their lives forward, invest in their neighborhoods and help others do the same. Neighborhoods would be stronger for it.

The question is – and I don’t have an answer – how can it be profitable enough for developers to take on the challenge and monitored well enough for government subsidies to not be abused?

All ideas welcome. It’s a problem that needs to be solved.

Alim Somji

February 12, 2019

Data Security by Process Design: The Next Step for IT and IP Protection

I was sitting next to a HoneyBadger Bitcoin employee on a plane a few months ago – he was moving forward their kiosk deployment across Canada and I was half asleep heading home from Seattle – and finally got an answer to a question I’d been wondering for a long time: How do those ‘in the know’ secure their wallet numbers and passwords when everything is hackable?

His answer: pen, paper, safety deposit box. I’m not sure what I was expecting, but that certainly wasn’t it.

That message, in context with last week’s news that QuadrigaCX has now forever lost access to ‘cold wallets’ worth over $160 million – and the record $865 million dollars worth of coins stolen from exchanges around the world in 2018 alone, now makes a little more sense.

Pen, paper, safety deposit box indeed.

Electronic thieves have innovated. Clever phishing emails, fake websites and spoofed email addresses (many of you have seen them I’m sure) have taken over the ‘<insert foreign country here> prince’ emails. Faked wiring instructions from colleagues, fraudulent CRA phone calls and mysterious banking password verifications all seek to get through the IT infrastructure we’ve set up to protect ourselves with verified credentials. You don’t need a hack when you can convince targets to bring you behind the ‘silicon’ curtain – or avoid it altogether. Even blockchain security can’t prevent a compromised user from making changes to secure data.

A ‘Londoning’ Scam – One of the originals. When in doubt, call the hotel directly. Their confusion will be real. That, and your friend is really back in town but just doesn’t want to listen to your story about your dog. That happens.

Unlike an IT hack – a failure of your infrastructure to withstand attack – we are countering a new and different threat: a digital version of the failure of checks and balances that plague many businesses. Growth – especially in small, founder-led businesses – doesn’t often permit the vigilance of enforcement required to prevent financial ‘leakages’ (to use my colleague Salima’s favorite term). Founders need to sell, sell and sell again. Even with expense trackers like Expensify and small business back-office apps like (the rather brilliant, Edmonton-based Jobber), there remains gaps in our ability to provide the requisite checks and balances that will keep our money safe from phantom bills or instructions.

Our solution – the best solution (though we may be biased) – is to fill the gap between costs and approvals by cementing your checks and balances digitally. A strong document management system (we use MFiles – it does this seamlessly) can build processes that manage file interactions – necessitating approvals, ensuring completeness, and protect against versioning errors – that mirror the numerous processes you already use to operate your business. We will also evaluate your processes with you to ensure that those that we are recreating accomplish the security tasks they are meant to.

That said, with or without us, I would implore you to protect your critical processes. Create a strict, two-stage process – both verbal and electronic – on how wire transfers, cheques over a certain amount, payment orders and confirmations, how users’ passwords get changed and updated and the digital permissions required for your employees access secure data. Ensure that passwords are changed at the very least biannually (the more the better, but people absolutely hate this I recognize). And, most importantly, keep a data trail – in some way – of these processes. The more automated and unbiased the better.

And, though it still amazes me that this is still important, ensure that mission critical server, administrator or data vault passwords are written by hand, on pen and paper, and put in a secure area somewhere. Digital records can be hacked. Pen and paper still cannot. QuadrigaCX showed the vulnerability of concentrating this knowledge in a single person. You may not be comfortable providing this information to multiple people.

*The mighty, hacker-proof pen (according to Wikipedia)*

The world may be changing but pen, paper and a good safety deposit box still have their uses after all.

Alim Somji

January 15, 2019

Data in the Sharing Economy

Business has a new, annoying buzz word to go along with ‘synergies’, ‘disruption’, ‘productize’ and ‘jargon’. (If you haven’t had enough, venture over to Forbes’ list here to make your stomach churn further. Never have I hated clickbait so much). We all use them and it becomes increasingly painful to hear.

The ‘Gig Economy’ has become ubiquitous amongst MBAs and millennials, variously defined as the empowerment of underutilized supply, the biggest threat in the hotel/taxicab/power company/cable/restaurant/communications business and the latest, best ‘side hustle’ for people to make a bit more money. We might have predicted it (though, of course, hindsight allows us to have predicted anything, really). Economic theory posits that supply and demand will always tending towards equilibrium regardless of market pressures one way or another. Our vast supply of ‘things’ – cars, homes, hours in a day – that drive the gig economy can now be maximized to the very last minute and dollar.

Our data is no different. The information gleaned from our data has made Google rich, newspapers poor, people amused by the ‘People who purchased this item also purchased …’ section on Amazon and nerds (myself included) to search vast electromagnetic radiation records to search for extraterrestrial life with SETI. The Cambridge Analytica scandal is case in point; every data point in a vast sea of knowledge can be used for profit whether we realize it or not. We didn’t know our Facebook friends could indicate so much of our political preferences, but once someone had the data they found a way to use it. For predictive data analysis, maintaining institutional knowledge across generations or microtargeting for promotions, every data point tells a story, every time. Data – in every business – is now our most valuable IP, conceivably worth millions more than the innovations that created it.

Every business collects data, be it on sheets of paper, floppy disks, CDs or in cloud storage. Our customer history, level of purchasing, payment turnaround, revenue turnover, consulting or service hours and more. There is no corporate ‘Marie Kondo’ to cleanse us of our data lust – we collect and keep everything.

We now know the power this corporate data has. We can predict our clients’ future purchasing decisions, understand which SKUs to purchase and terminate and figure out which client or vendor gives us the greatest return on time or money invested. And every business has it.

We generally let this gold stay in the ground, though. It sits in a warehouse, or a basement, or a garage and degrades. That data can be worth thousands, feeding future growth and getting us back in touch with our best clients. Evidence surrounds us. Immense value can be generated from the throwaway details sitting in banker’s boxes and our unsearchable scanned records. We blame expense, time, manpower and ‘more important things’ to ignore it.

This is no longer reason enough – or true enough – to let our data go to waste.

We at Consentia use AI, exceptionally efficient staff and ‘smart’ hardware to sort, read and enter the precise data you want automatically (and discard that which you don’t), process and verify documents for completeness, meta-tag your information and securely deposit it in your document management system, data vault, accounting system, cloud storage or on floppy disks in large cardboard boxes (if you so chose – for some reason). Whatever you need to digitize, however you want to present it and at a price and schedule that meets your needs (without blowing your budgets).

The gig economy has taught us to take every skill, asset, or piece of knowledge we have – driving our cities, taking tourists to the sites and sounds of our homes, selling power to our utility grids from solar panels amongst others – and derive the maximum value out of it. Our data is no different. It’s time to make it work.

Originally posted on the Consentia.com website –https://consentia.com/2019/01/15/data-in-the-sharing-economy/

Alim Somji

December 18, 2018

A true(r) picture of immigrant life

A recent opinion piece from the CBC – ‘The dangers of self-ghettoization in Calgary’ left me – (and undoubtedly many others) perturbed. The article (https://www.cbc.ca/news/canada/calgary/self-ghettoization-calgary-israr-kasana-road-ahead-1.4864998), written by well-respected journalist Israr Kasana, eloquently and potently argued against the congregation of faith and culturally based groups in specific neighborhoods.

Israr’s viewpoint undoubtedly contains many difficult truths – ones every community in Alberta – immigrant or not – face. Our collective faith, culture and value systems in Canada are undoubtedly major drivers of our choices and communities to reside in, a ‘self-imposed’ stand to counter the pressures of assimilation and homogenization of North American life. Our First Nations communities face it – and have suffered immensely as a result; our Catholic communities face it – a flight from religion in an increasingly secular world and prompted by the grievous wrongs of certain clergy members worldwide; our farming community faces it – the slow departure of sons and daughters seeking a comfortable life in the big city rather than the discipline and wear of working the land. And yes – our newly-arrived immigrant population faces it too.

Most people prefer to surround themselves with other like-minded, similar looking, similar-thinking people. The President of the United States owes his office because of it. Consciously or unconsciously, rightly or wrongly (but really, wrongly) the general public largely encourages it, desire it, entrenches it. Rich people live with other rich people, first-time homebuyers live with other first-time homebuyers, renters live with renters, the poor live with other poor people. As such, the ‘proper place’ that our working poor and newly arrived immigrants ‘should’ live – and do live – are far more indicative of a housing affordability gap and of the challenge of adjustment to new cultures than an malicious intent to isolate themselves from the wider Canadian community. We prefer to live next to our mosques, churches, synagogues, temples, gurdwaras, favorite coffee shops, and transit locations, but decision-making first and foremost is where families can receive the most support within their budget. We cannot – and should not – be ashamed that.

I accept that I may miss some of the context that Mr. Kasana has. I have been extremely fortunate, undoubtedly. My parents immigrated to Canada in the early 1980s, penniless but ambitious like so many immigrants are but I never knew that struggle. I won the childbirth lottery to be born in this country, a proud son of Red Deer, Alberta. I am a Shia Ismaili Muslim – our community has extensive support networks to assist our newly arriving congregation. And, as a volunteer within our Ismaili community institutions, I’ve had the privilege of working with many Canadian immigrants as they try to adjust to this foreign life in the frigid cold.

Life is difficult for our future Canadian citizens. It’s confusing. It’s frustrating. It’s overwhelming. No doubt these families want to be surrounded by others to help make a transition to a new life. English can’t be learned overnight. Budgeting, credit and banking likewise. It takes years to be able to follow the puck in a hockey game – my first generation Canadian wife still cannot. How can we reasonably expect these new residents to integrate – even superficially – when the minimum cultural adjustment required takes years to achieve? I applaud the bravery of our immigrant professionals who sacrifice vibrant careers to be turned down for job after job due to a lack of ‘Canadian experience’. I feel for the blue-collar individuals who arrive on these shores, facing a need to support their families without a strong command of the local language. As Canadians we all should. I don’t begrudge them choosing a home or community more familiar to begin their lives in Canada in.

In an ideal world, we would not have ‘self-imposed ethnic enclaves’, absolutely. People would settle quickly, adjust to their new cultures without yearning of their families left behind and bravely move to other ‘mainstream’ communities. We would have an affordable and transitional housing scheme in every neighborhood, ESL classes at every community league, and free hockey equipment for any child seeking to learn the game. True and supportive integration.

Unfortunately, we have what we have.

Speaking as an Edmontonian, the Edmonton Mennonite Centre for Newcomers, the Bredin Institute, Northern Alberta YMCA and Edmonton Food Bank admirably serve these vulnerable communities. I am certain that many other communities across Canada have similar outstanding institutions.

If we truly want to see better integration, let’s not blame those that have arrived in our cold, foreign lands for the first time. Let’s work towards a cohesive plan to integrate all Albertans into all communities. Let’s support the community institutions and their tireless volunteers that welcome our new neighbors, colleagues and friends. And, most importantly, let’s return the excited smiles and good hearts that our new immigrants and cultural communities bring to their jobs and neighborhoods every single day.

That is a ‘win-win’ situation for all.

Alim Somji