Sep 9, 2020
BE SURE TO SEE THE SHOWNOTES AND LISTEN TOTHIS EPISODE HERE.
Eve Picker: [00:00:11] Hi there. Thanks so muchfor joining me today for the latest episode of Impact Real EstateInvesting.
Eve: [00:00:18] My guest today is Michael Leeof BLDG BLOX a civic technology company dedicated to empoweringneighborhood stakeholdership. Their goal is to help shape better,more resilient and inclusive cities. In this podcast, we're divinginto Michael's current primary focus, an online platform calledBLDG. It's a platform for neighborhood collaboration and it'spicking up steam. So, listen in to learn more.
Eve: [00:00:57] Be sure to go to evepicker.comto find out more about Michael on the show notes page for thisepisode. And be sure to sign up for my newsletter so you can accessinformation about impact real estate investing and get the latestnews about the exciting projects on my crowdfunding platform, SmallChange.
Eve: [00:01:21] Hello, Michael, I'm excited tohave you here today.
Michael Lee: [00:01:25] Hi Eve, thanks forhaving me on. I'm very excited to be here.
Eve: [00:01:26] It's a pleasure. So, you’re awayward architect, much like me, and you've built a very cool app,which I'd like you to tell me a little bit about.
Michael: [00:01:36] Absolutely. So, youmentioned the background in architecture. Just a little back story.I was trained as an architect. I moved towards public art andcultural consulting. And back in 2016, my co-founder introduced meto a lot of developments that were happening in the blockchainspace. And so blockchain can be very complicated withcryptocurrency and things like that but for the sake our app andthis conversation, essentially, we were looking at decentralizedtechnologies. Ways that we could create and distribute more value,track it and, with our background in architecture and urban design,we saw an opportunity for that to impact the way we do real estate,the way we deal with communities and community growth. And so, wecreated a company called BLDG BLOX and for the past few years we'vebeen developing this app. We just launched it at the beginning ofthis year before everything happened with covid. It's called theBLDG app, it's live and the app is a online bulletin board tomanage projects with your community. So, these are real estateprojects, these are coworking spaces, mutual aid groups,non-profits. Any organization or new initiative that is looking tobuild alongside, build consensus, build value with the communitiesthat are involved.
Eve: [00:02:53] Okay. So, you use blockchainand do you use other technologies on this app? I'd love to know alittle bit more about the technology.
Michael: [00:03:02] Sure. It's a webapplication, so you don't have to download anything. You go tobldg.app, BLDG app and it's all online. Similar to how you useKickstarter, Instagram. So the front end is fairly user friendly,you can use Google or Facebook to log in and on the back end we'restarting to implement and integrate everything that goes on in theapp. Typically with a lot of social media apps, web applications,you don't really know where the data is going and what's beingtracked. On ours we are starting to link it to the blockchain. So,all the activity is very transparent. And our goal is to be able tomake all that data transparent, compile it in a way that otherorganizations, whether it's, it can be investors as well, can startto see how a project, in this case a real estate project, isacting, what kind of value it's distributing, how people engage itand start to value, again, in this case, social impacts in a waythat can be measured more dynamically. So, we're starting to usethis transparent ledger system as a way to create a new foundationfor impact. That's kind of the way we're seeing it.
Eve: [00:04:12] How interesting. And who willhave access to that ledger and all that information?
Michael: [00:04:17] When the blockchaininformation becomes live, when all these transactions become live,anyone can see the information. And on the application, itself,when those metrics are up, we'll have a much more user-friendly UIfor people to understand: OK, this project is involving this amountof people this is not a value transferred, these are the number ofcommunity members involved in a project. This information will allbe tracked holistically in the app as people use it, and we'llpresent it to different project owners, so they know how muchimpact. however they define impact, is going into the project.
Eve: [00:04:55] Well, that's reallyinteresting. So, I'm going to change some of the questions I wasgoing to ask you. I was going to ask you, how is this differentthan other social media apps like Facebook or perhaps Nextdoor orMeetup? But, you know, the data collection that you're doing ispretty radically different than any of those, right?
Michael: [00:05:16] Right. That's generally theethos of a lot of people who work with this new technology, withblockchain. And what you see with a lot of applications is youdon't really know what data is being collected and how it's beingused. We generally know that it's monetized privately with advertsand things like that. We want to be able to open up, democratize,the power of data and open it up so that people can use it in alldifferent ways. In this case, and this is really the long termvision of this first app and other functionalities or apps that weproduce under the umbrella of BLDG and BLDG BLOX, is that we canstart to track data dynamically and then use that for, for example,driving certain people to invest in certain projects or to decidewhich projects they think are really impactful for their communityand be involved in those. Data can be used in a lot of differentways that I think we just haven't gotten to that point yet. Andthis new infrastructure really motivates us to expand and explorethose possibilities of data and make more informed decisions, moreempowering decisions.
Eve: [00:06:24] I did play around with the appa little bit, and I see when you go to some of the communities,they have sort of slightly different functions. So, when you createa new page, what are your options? How do you set up a community?What sort of communities can you set up?
Michael: [00:06:40] So you can log onto the appright now and create a project page. It's fairly straightforward,takes about a minute or two to create one. And then the idea is youwould send that page just like an Instagram page to anybody thatyou think is part of the community or wants to be part of thatcommunity. They can sign up and join right away and then everybodyinvolved can start to post questions or polls or ideas or differentthings that they want to offer. There's different tags for events,for polls, for ideation. And the idea, again, is to allow anyone tobring to the table whatever they want to and start discussions orstart voting or start to see if they can gather the resources, theyneed to push that particular project forward. And so we're alreadystarting to see projects that are more university-based orsocially-based with mutual aid groups, especially now during Covidunder the quarantine, and the projects are fairly diverse andeveryone is on there basically to try to pool resources, help oneanother and make decisions together. And that's really what the appis geared towards.
Eve: [00:07:48] Interesting. So, could you usethis as a community engagement tool if you're a real estatedeveloper?
Michael: [00:07:55] That's definitely the goal.We've already started to work with co-working spaces where theowner of the coworking space is the real estate developer or theone that developed it. And the idea, and our thesis here, and wewant to get deeper with the real estate industry and with prop techand people that are looking at more of these impactful ways to doreal estate, is integrate this application with their developmentprocess and allow, and we're starting to see real estate firms dothis more and more, allow people who are maybe the tenants of thebuilding or people who live nearby where the community board thatis involved with the decision making of that building to beinvolved and help make further decisions, help maintain theproject, help gain equity in the project, whatever that might be inboth financial and non-financial ways, and generally nurture thisidea of community buying and stakeholdership with the people thatare involved, which I generally believe, my thesis behind all ofthis is that the more people that are involved, the more doors thatare open for a community to have buy-in and participate, the moresuccessful a real estate project will be in the long term. And sothat's really our ethos when it comes to how this impacts the realestate sector.
Eve: [00:09:11] You know, I have Small Change,which is a crowdfunding platform. And because we are members ofFINRA and use a crowdfunding regulation that permits anyone toinvest, we're highly regulated and we can't really host discussionson our website. So, what sort of page would you create for SmallChange that might help people educate themselves and talk to otherpeople? What would that look like?
Michael: [00:09:38] So, Small Change is a greatexample because you can look at it as an organization that housesprojects under it. And so, with Small Change itself, you can usethe page to interact with the people who are crowdfunding on thepage, host more evergreen information. So, tutorials or tips thatwill help anyone that wants to engage with Small Change. And then,on a secondary level, all of the projects, because presumably anyproject that is crowdfunding on your platform wants to havemeaningful impact not just in this crowdfunding process, but alsolikely once the project is erected and live, and people areoccupying it. They want to make sure that their project lives on inan impactful way and impactful stakeholders are part of it and itcontinues to have that kind of general consequence with theneighborhood that it's being built in. And so, each one of theprojects could have its own page and then people can continue tosupport the project financially and non-financially, which is a bigemphasis on our platform. If certain projects need help withphysical aspects of the building, with the architectural design,with the construction documents, that's one thing they can solicit,and members could offer. If they need help with programming ormaintenance or they need help with integration with localorganizations and institutions to be involved in their project.That's the type of, sort of playground, as some of our users haveput it, that these types of projects could create so that theirconstituents can come together and contribute things that typicallyhave been very difficult to contribute in the past beyond thefinancial aspect. And we're already working with some crowdfundingplatforms to see if we can expand the initial financial supportthat has been opened up to a larger audience and then see if theycan continue, that audience can continue to support those projectsin non-financial ways as well, with their expertise, with theirnetwork, with their in kind donations and categories like that.
Eve: [00:11:34] Interesting. You know, there'salways sort of a push pull with real estate developers who are,that's kind of an evil would at the moment isn't it, developer? Howthey communicate with the community. It can be very difficult andthere can be a lot of friction so it sounds like this might helpbond some relationships.
Michael: [00:11:57] That's precisely what wewant to hit on. We understand the friction there. I myself, I go tocommunity board meetings and I see, I live in Bushwick andBackstein, New York City and Brooklyn and there's developmenthappening all the time. And when you go to these meetings withdevelopers and the community, it's very palpable, the tensionthere. And our approach to this and our understanding is, becausethere isn't a good way for communities to collaborate withdevelopers, for that communication to actually scale and takeplace, the resulting situation is one of great tension andopposition. And we're seeing that. We're seeing a rise in NIMBYism,a rising neighborhood opposition. Just last year, we had the wholefiasco around Amazon's HQ2, in Long Island City. And so, we'relooking at projects like this. And we see that not just at thehighest, at the very top with Amazon, Google, Facebook, where theircampuses have been consistently opposed, but also at a much smallerscale. So, with mixed use housing in New York, that's a big pointof tension. And there's always this negotiation, which tends to bevery tense, tends to be not so good-willed, or at least get to thatpoint.
Eve: [00:13:10] Right, veryconfrontational.
Michael: [00:13:12] Very confrontational. Andwe want to transform that environment. And I really believe that ifwe had the right tools, that environment would be different. And ifwe can transform that environment to one where people feel liketheir voice is being heard, they're participating in it, we canturn it into a from a lose-lose situation, into a win-win. Becausecurrently there's so much risk on the side of real estatedevelopers because they understand that, with all these tools ofsocial media and the way communities are mobilizing, it's very easyto oppose projects. And on the other side, communities arestruggling with the idea because they want to see meaningful andimpactful development, but because they're not able to come to thetable with developers in a meaningful way, those tend to becomevery risky for them and it's easier to oppose. And so, it'scurrently a very lose-lose situation. But if we can insert the kindof right tools and the ways for people to communicate, we're hopingwe can flip that on its head.
Eve: [00:14:05] Have you thought at all about,and this is a really difficult question so I apologize in advance,but have you thought at all about communities that poorer, haveless investment, may not have access to computers and, you know, anonline app and how this would fit into those communities, how youwould make it accessible?
Michael: [00:14:27] That is definitely adifficult challenge that we're struggling with on an ongoing way.And part of our answer, at this point, goes into design of the app.So, we didn't want to have a downloadable mobile app. We think thatcreates another point of friction. It's just a website you go into,you can sign in with any email. And so, we definitely want to makeit technologically as accessible as possible. The other way thatwe're trying to get over that is working very closely with theorganizations that sign up for the app. And so, presumably anybodythat creates a project page, there're a real person or realorganization. They have a physical presence wherever they are, andtheir projects are mostly physical. So, spaces and buildings andsuch. And so, we constantly communicate with them to make sure thatwe can bring in even constituents that don't use a computer ordevice very often. We can bring in their input, we can have a wayto capture that data, that advice, those comments, different waysthat people who aren't on the computer all the time can contribute.And so, this is a way that we're dealing with the issue. But wedefinitely see that as an ongoing hurdle. We want every demographicto be involved. This is even more sensitive in places that peopledon't have access to those resources. And this is what makes theCovid19 situation so unfortunate. Before everything happened, wewere constantly holding workshops, we were showing people how itwas done, we were pairing people who do use the computer fairlyoften with people who weren't, trying to make this engagement asdigital as it was physical. And now we're trying to adapt to thesituation and make sure that even, you know, if you aren't astechnologically fluent or don't have access to those resources,your information and your voice can make its way to theapplication. That's definitely a very sensitive and difficult pointand we're always working on that.
Eve: [00:16:18] Unfortunately, that pandemichas disenfranchised those communities even further. It's reallypretty sad. So, tell me again how you arrived at this app. Yourbackground, you're an architect. You've gone to a pretty unusualroute.
Michael: [00:16:36] We have gone an unusualroute. And the one thing we've always interested in is the process.Even when I was studying architecture and practicing architecture,the process in which buildings were designed and created seemedvery linear, depending on what was being created. It didn't takeinto account the community that was being impacted the most. Andthis, of course, is a common theme in real estate as well. And so,the concern is how do we bring as many people into the process aspossible? And when we looked at the current tools, at the timearound 2015 and 16, we just came to the conclusion that no matterwhat you did with things like Facebook pages, or on Slack, it'svery difficult to scale decision making, engagement, to exchangeresources and distribute resources. And that's how we came to thisidea of creating a new digital tool. And again, we were luckybecause it timed well with the emergence of blockchain anddecentralized technologies to explore this. And if you look at theblockchain sector, we see a lot of people with real estatebackgrounds actually exploring this as well. So, you have groupslike Elevated Returns and HARBOR, RealBlocks. These are real estatefirms that are introducing ideas of fractionalized, equity. Andstarting to use real estate equity more like corporate stocks ofshares, making them more liquid accessible. And my ultimate goal isto introduce this idea of sweat equity into the real estate marketand any general organizational market. And that's kind of how wegot to this idea of the application and starting off with one thatbrings communities and organizations together.
Eve: [00:18:22] Interesting. So what otherprojects are you thinking about? You said this is one of, you know,one of a number.
Michael: [00:18:30] Well, so, we want to start,and we are starting with the BLDG app as the first step. And withinthe app and around the app we want to create more functions andmore components. For example, right now on the app you can create aproject page and start to engage with the community, distributeresponsibility, you can see what backgrounds your community membershave, whether they're an engineer or a marketing person and soforth, and start to bring those resources together to try to driveand motivate those project further. We're going to implement moreof that blockchain data system that I just explained and have it sothat other companies, other investors, can look at these projectsand make decisions on their own behalf based on this data andwhat's going on. And whether that's in another app or in this one,we want to continue to grow out more functions where people havemore opportunity to engage in their local real estate projects, tocontribute to them, to help make decisions and then eventually getto the point where people can earn sweat equity in those realestate projects based on their contributions to those projects, notjust the financial contributions, but also, like you see instart-ups or in general any corporation, people can earn equitybased on their commitment or how long they've been there or theirgeneral value to that company. We want to get to that point. Andso, we are constantly going to expand on the tools that real estatecompanies that investors that community stakeholders can use todetermine that value for any given local project.
Eve: [00:20:04] Interesting. So, then I have toask you, what's the big, hairy, audacious goal for this app? Like,where would you like it to be in five years or in 10 years?
Michael: [00:20:13] In five or 10 years I wouldlike it to be a place where new products are born or existing onesare continued and everyone involved is, quote unquote, rewarded fortheir contributions. That's the type of economy that myself and myteam are really working towards, that no matter how small scale theproject, no matter how new or no matter how big and burdensome,like a large mixed-use project for example, people's contributionsallow them a level of equity or a level of buy-in to thoseprojects. And people who are involved are constantly discoveringnew opportunities as they commit themselves to those projects.Because we all understand, to a certain degree, that the success ofa real estate project is based on so many multi valuable factors.The environments, the general safety of it, the vibrancy, theculture that's there, the diverse community that's there and wewant to be able to quantify that value in a way that's constantlyevolving and anyone that helps contribute to those forms of valueare rewarded with something that allows it to have buy-in to thoseprojects.
Eve: [00:21:22] So has that happened yet atall, in any form?
Michael: [00:21:26] To my knowledge, we havenot seen that happen financially in the real estate sector. Thereare social impact, real estate firms that are experimenting with,for example, reduced rent based on if you help maintain theproperty that you own. We're seeing different kinds of economicdeals being put into place that are trying to incentivize peoplewho actually have equity to maintain it and they can get some valueback with its reduced rent or other opportunities like that. Iwould like to see that pushed and evolved even further where, youknow, you're the doorman that lives in your building, or maybe theperson who, the tenant that has a educational business in yourbuilding, these people can continue and are incentivized tocontribute and earn an actual financial stake in the project in thelong term. We understand that these are the types of people andprograms and activities that give a building or a city the valuethat it has. And we should be able to recursively reward the peoplewho are actively contributing to that value, not just see it as amutually exclusive thing that happens within our buildings.
Eve: [00:22:34] Yeah, yeah. Interesting. Sofinal question for you. What's next for you? You sound super busyand I know what it's like working on something like this, it's allconsuming. Covid19 has shifted things a bit, so what's next?
Michael: [00:22:50] So definitely. Bringing upCovid19, you know, we are all struggling with this transition to amore remote environment. And I think, like you mentioned before,the disenfranchised communities are suffering even more now. Theydon't have access to all of these tools. That's another reason whywe wanted to create this space. We didn't want to create anotherjust hammer or tool for the digital environment we wanted to placewhere people can bring their Zoom conversations together or theyare resource sharing on Google Drive to one place. Our goal for thenear future is just to help these communities, one by one,transition to the site, make use of all the tools and try to gettheir community together, because this is a time when communitiesare kind of just being torn apart naturally because we arephysically distinct from each other and distanced. We want to helprebuild this community, or these communities, by transitioning themto these online tools. We're very excited and very hopeful. We'realready getting a lot of feedback from people saying that, youknow, the current tools are very unscalable. There are 10 or 20different tools that they have to manage all at once. And it's verydifficult to scale on that promise to their constituents thatthey'll stay involved, that they'll keep them involved in theirprocess.
Eve: [00:24:04] Very difficult. Verydifficult.
Michael: [00:24:07] Right. And we want to beable to push a bit of that momentum and help support thesecommunities. Anyone that signs up to the site organically, we reachout to and we say, hey, can we help? You know, tell us about yourorganization, what are the challenges you're struggling with? Isthere any way we can help any features you think we couldimplement? Because the app is constantly evolving. And we're alsoconstantly reaching out to organizations that we think we can help.We're seeing everywhere, you know, people who are less active onFacebook or their own websites and media channels because we knowthat internally they're struggling with how to transition into thisnew environment, especially now. And we are constantly trying tooutreach to them and say, look, we know you're struggling. We knowyou need different kinds of support and these tools were doing OKwhen you were meeting in person or working in person but now thatwe've transitioned, it's very difficult to keep things in order andkeep everyone involved. So, at this point, we just really want tohelp as many organizations as possible transition and make use ofthe resources available. And we want to be one of those stableresources.
Eve: [00:25:15] Well, I think it's a terrificidea and I'm going to start by suggesting it to a couple ofdevelopers who raised funds on Small Change and are perpetuallystruggling with how to relay progress to the investors. So, I thinkit would be a great way to create a little community of investors.So that's a starting point for us and you and I will be talkingmore about how it might work for Small Change, I'm sure.
Michael: [00:25:39] Absolutely. That would befantastic. I mean, anyone that's raised on Small Change or ishearing this and thinks that this might be interesting, socialimpacts, real estate investing is, is definitely interestingbecause when I speak to a lot of real estate developers, they areall interested in this idea or already committed to this idea. Andyet it's difficult to find places where you can communicate withother like-minded people, share those resources and in termsof impact real estate investing, we definitely want to help fosterthat type of conversation and that resource sharing.
Eve: [00:26:11] Maybe that's the first page tostart?
Michael: [00:26:13] It might be. That mightvery well be.
Eve: [00:26:15] Something around this podcastpage. And I just did a retrospective for the year and in the firstyear I recorded forty-nine podcasts, which is probably why I'm sotired.
Michael: [00:26:27] Well you're doing somethingincredible for the community and we definitely want to build onthat momentum. I mean, there's so much experience and lessons to behad.
Eve: [00:26:37] That's what I was going to say.The people I interviewed are, each and every one of them, a rockstar doing their own thing. And that's a that's a lot ofexperience, too, corral. It's really interesting. So, I'lldefinitely be in touch. And thank you very much for taking the timeto talk to me today.
Michael: [00:26:53] Thank you Eve. Thank youfor having me on.
Eve: [00:26:59] That was Michael Lee of BLDGBLOX, a civic technology company dedicated to empoweringneighborhood stakeholdership. His online platform bldg.app iscurrently in its beta phase. Michael's goal is to help civicorganizations, communities and companies build community and scaledecision making. The app is designed to support community buildingin a myriad of ways. It can be a tool for organized publicengagement for new projects, it can support initiatives withcampaigns that mobilize their communities or local causes, or itcan even serve as a shared workspace. I'm excited to see itunfold.
Eve: [00:27:45] You can find out more aboutimpact real estate investing and access to the show notes fortoday's episode at my website evepicker.com While you're there,sign up for my newsletter to find out more about how to make moneyin real estate while building better cities.
Eve: [00:28:04] Thank you so much for spendingyour time with me today. And thank you, Michael, for sharing yourthoughts. We'll talk again soon. But for now, this is Eve Pickersigning off to go make some change.
