Thursday, December 12, 2013

Tech communities - the business case, and potential side effects

Recently, tech communities such as The Embassy Network have been getting lots of press attention.  These may well be some of the first instances of modern upscale communal living- a significant development, as it could be the first step of the mainstreaming of communal living.

Communal living and the innovation adoption lifecycle

The adoption of new ideas or products often begins with "innovators" - typically people who are young, well educated, wealthy, and willing to take risks.  These folks have the cash and the capacity for risk to handle the inevitable challenges and failures of testing out new ideas. 

Once something starts to catch on, a larger number of "early adopters", who might have less wealth to risk but more social connections, spread the word to the majority of the population.

chart from Wikipedia user Multichill

Tech communities - just for some, or the start of a trend?

Software engineers and other tech workers certainly fit the description of innovators.  However, for all the hubbub, it's important to note that they did not invent modern communal living.  Students, religious communities, immigrants, queer people, and punks have all formed self-governing residential communities.  A few factors that work in their favor include:
  • Limited economic resources - group living is intrinsically cheaper
  • Geographically concentrated employment - it's easier to live together if everyone has reasonable commutes.
  • Sense of greater purpose - can help promote unity
  • Mostly unmarried population
  • Discrimination by larger society - leads to seeking of safety in numbers


Limited economic resources Geographically concentrated employment Sense of greater purpose

Mostly unmarried population Discrimination by larger society
Students


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Religious communities

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Immigrants

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Queer people

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Punks

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x

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Tech Workers



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Tech workers are unique in that they actually have abundant cash.  However, the tech community has a lot in common with college students, and crucially, many tech workers are recent grads.  The "sense of purpose" factor is also important - at tech communities I've visited, there were a lot of startup and founder types, and no so many rank-and-file coders from large companies.

Tech communities - the next sharing app?

Housing's capital-intensive nature has limited the formation of large scale communities.  However, here is where the tech industry's capital-light approach could come in.  Similar to how startups like AirBnB or Lyft provide large amounts of short-term housing or transportation without having to own any rooms or cars themselves, a communal living startup could get started by master leasing houses and entire floors of apartment buildings. 

Affordability and inclusivity?

If it does scale up, there are several social issues on the horizon.  Currently, except for the Berkeley Student Cooperative, every community (of all types, not just tech communities) I've encountered has an extensive and very competitive application and interview process where existing residents choose new ones.

However, our entire system of rent control and fair housing is based on the idea that individuals and families individually lease or buy apartments from developers and landlords in a purely business transaction.

Unlike other groups that currently live communally on a large scale, most tech workers don't have to personally deal with gentrification or housing discrimination, and may lack knowledge on the subtleties of these issues.  At one tech community I visited, the residents were all white or Asian, and there were no children or senior citizens.  Policy, either at the community or government level, will be needed to avoid entire neighborhoods from turning into equivalent of an exclusive college or social club.

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