Remember the Flip video recorder? In 2009, it was a sensationa dead-simple, pocket-size recorder that let ordinary people capture and share moments without lugging around a camcorder or figuring out complicated settings. Cisco acquired Flip’s maker, Pure Digital Technologies, for $590 million in stock. Two years later, Cisco shut Flip down entirely.
The Flip wasn’t a failure. It solved a real problem elegantly. But it was what I call a “gateway product”an innovation that reveals what customers want but that gets supplanted by something that delivers the same outcome more simply, cheaply, or conveniently. In this case, the rise of smartphones made a dedicated device obsolete.
The history of innovation suggests that most game changers proceed through a series of gateways. We had fax machines before email, PalmPilots before BlackBerrys before iPhones, TiVo before streaming, MapQuest and GPS units before Google Maps. Each one mattered. Each one made money. And each one was eventually swept aside.
The strategic challenge is to figure out what the shelf life of your gateway offering is.
Gateways solve real jobswith inherited constraints
Gateway products genuinely solve customer problems. That’s what makes them successful, and that’s what makes them dangerous. Their success validates the desire of customers to achieve given outcomes while obscuring the fact that the method of doing so may be temporary.
The fax machine eliminated the delay of postal mail. But it still required paper, a dedicated phone line, and a compatible machine on the receiving end. It imported friction from the old system even as it improved upon it. Email didn’t just do the fax’s job fasterit eliminated the infrastructure entirely.
When your product requires customers to maintain scaffolding from a previous era, you’re building on borrowed time.
The dedicated device trap
One of the clearest gateway signals is a stand-alone device built for a job that could eventually migrate to a general-purpose platform. GPS units, point-and-shoot cameras, MP3 players, handheld translators, portable DVD playersall were gateways. The job each one performed was real and enduring. The form factor was not.
This doesn’t mean dedicated devices always lose. Sometimes they win on performance or experienceprofessional cameras, high-end gaming consoles, studio monitors. But the burden of proof is on the dedicated device to justify its separate existence. If a product’s primary advantage is that nothing else can do the job yet, leadership needs to plan for “yet” becoming “now.”
When your moat is mastery, you’re vulnerable
Gateway products often develop loyal followings among people who’ve invested time in learning them. PalmPilot users mastered Graffiti. BlackBerry devotees became virtuosos of the physical keyboard. TiVo owners learned the interface and programming logic.
The learning curve feels like a moatcustomers have sunk costs, and they’re reluctant to switch. But mastery-based loyalty evaporates the moment a competitor makes it unnecessary. Smartphones didn’t require users to learn a new input language; they just worked. Streaming didn’t demand programming skills; it just played.
If your customer retention depends on what people have learned rather than what they love, you’re more vulnerable than your churn numbers suggest.
5 questions to ask about your product
What frictions or complexities does our product require that customers would prefer to eliminate entirely? Every negative is an opening for a competitor who does away with it.
Are we competing on getting to an outcome or on the current method of doing it? If your differentiation is about how rather than what, you’re racing against obsolescence.
If someone started fresh today with current technology, would they build this the same way? This is the greenfield test. If the answer is noif they’d build something that makes your product unnecessaryyou have a gateway.
What temporary technological gap are we exploiting? Flip cameras existed because smartphone cameras weren’t good enough yet. GPS units existed because phones lacked sensors and software. Identify your gap, and monitor it relentlessly.
What’s our plan for when the gap closes? This is the question most leaders avoid. Acknowledging that your hit product has an expiration date feels like disloyalty. But the alternative is being caught flat-footed.
The right strategic stance
None of this means gateway products are bad businesses. Nokia and Blackberry built hugely profitable business empires on technology that would eventually be supplanted.
The strategic error is being lured into believing that it will be a permanent franchise. That can lead, in turn, to overinvesting in extending the product’s life, building organizations optimized for a form factor that’s becoming obsolete, and missing the chance to be the company that makes its own product unnecessary. Apple famously undermined its own hugely profitable iPod to launch the modern smartphone revolution, leading to enormous value creation.
The smart play is to harvest margins while they last, watch for substitution signals, avoid the trap of defending your method, and position your firm to ride the next wave rather than getting swamped by it.
Gateway products can be supremely valuable. They are like paying tuition to learn about the future.
Being a night owl can be bad for your heart.That may sound surprising but a large study found people who are more active late at night when most of the population is winding down or already asleep have poorer overall heart health than the average person.“It is not like, that, night owls are doomed,” said research fellow Sina Kianersi of Brigham and Women’s Hospital and Harvard Medical School, who led the study. “The challenge is the mismatch between your internal clock and typical daily schedules” that makes it harder to follow heart-healthy behaviors.And that’s fixable, added Kianersi, who describes himself as “sort of a night owl” who feels a boost in “my analytical thinking” after about 7 or 8 at night.Heart disease is the leading cause of death in the U.S. The American Heart Association has a list of eight key factors that everyone should heed for better heart health: being more physically active; avoiding tobacco; getting enough sleep and a healthy diet; and controlling blood pressure, cholesterol, blood sugar and weight.Where does being a night owl come in? That has to do with the body’s circadian rhythm, our master biological clock. It follows a roughly 24-hour schedule that regulates not just when we become sleepy and when we’re more awake but also keeps organ systems in sync, influencing things like heart rate, blood pressure, stress hormones and metabolism.Everybody’s circadian rhythm is a little different. Prior research had suggested night owls might have more health problems, as well as risk factors like higher rates of smoking and less physical activity, than people with more typical bedtimes, Kianersi said.To learn more, Kianersi’s team tracked more than 300,000 middle-age and older adults in the UK Biobank, a huge health database that includes information about people’s sleep-wake preferences. About 8% of those people classified themselves as night owls, more active physically and mentally in the late afternoon or evening and up past most people’s bedtime. About a quarter were early-birds, most productive in the daylight hours and likewise early to bed. The rest were average, somewhere in the middle.Over 14 years, the night owls had a 16% higher risk of a first heart attack or stroke compared to the average population, the researchers found.The night owls, especially women, also had overall worse cardiovascular health based on meeting the heart association’s eight key factors, the researchers reported Wednesday in the Journal of the American Heart Association.Unhealthy behaviors smoking, insufficient sleep and poor diet appear to be the main reasons.“It comes down to the problem of a night owl trying to live in a morning person’s world. They’re getting up early for work because that’s when their job starts but it may not align with their internal rhythm,” said Kristen Knutson of Northwestern University, who led recent heart association guidance on circadian rhythms but wasn’t involved in the new study.That affects more than sleep. For example, metabolism fluctuates throughout the day as the body produces insulin to turn food into energy. That means it might be harder for a night owl to handle a high-calorie breakfast eaten very early in the day, during what normally would still be their biological night, Knutson said. And if they’re out late at night, it can be harder to find healthy food choices.As for sleep, even if you can’t meet the ideal of at least seven hours, sticking to a regular bedtime and wake time also may help, she and Kianersi said.The study couldn’t examine what night owls do when the rest of the world is asleep. But Kianersi said one of the best steps to protect heart health for night owls and anyone is to quit smoking.“Focus on the basics, not perfection,” he said, again, advice that’s good for everyone.
The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Department of Science Education and the Robert Wood Johnson Foundation. The AP is solely responsible for all content.
Lauran Neergaard, AP Medical Writer
When Mikala Mahoney was laid off from her marketing job last summer, first she was shocked. Then the anxiety flooded in.
I realized that over the past few years in my career I had created a false sense of steadiness, she tells Fast Company. Friends had regularly told Mahoney she was fortunate to have landed a good, stable job as a marketing coordinator at Paramount+. In a moment, that illusion was in pieces.
Mahoney threw herself into the job hunt, quickly landing her next role. A few months later, she was laid off again.
After losing her job twice in less than a year, this time she decided to bet on herself.
Following the traditional path as a salaried employee with a steady paycheck, healthcare, and benefits had long been viewed as the safe bet. But with many peoples paychecks from their 9-to-5 barely covering the cost of housing and groceries, layoffs at their highest in the U.S. since 2020, and nearly 26% of unemployed people having been jobless for more than six months, the unemployed-to-self-employed pipeline has never been stronger.
Mahoney spent two months unemployed before she made the decision to go all in on her content creation business. She has also been documenting the process for her following on TikTok.
Ive always been making content, Mahoney tells Fast Company. Still, she never envisioned herself as a solopreneur, or what that might look like in practice.
I think there’s a different sense of hustle that you need to have in your self-employment, that you aren’t necessarily forced to confront when you are working with a consistent paycheck, she says.
Mahoney is not alone. The unemployed-to-self-employed pipeline has become its own content niche on TikTok. This sits within a wider trend of solopreneurship in the U.S.: Nearly 36% of traditional workers now have side gigs, according to MBO Partners’s 15th annual State of Independence in America Report.
Whether a backup plan in the face of forever layoffs or a first step toward breaking free from the shackles of a boss, the rising number of people wanting to go it solo and run their own company of one reflects a shift in the balance of power from companies to workersespecially as the social contract has broken down.
Increasingly, workers are turning their side gigs into full-time gigs, either taking the leap to solopreneurship on their own initiative, or as a result of factors outside their control.
Then, there are those who have yet to experience traditional employment in the first place. Recent college graduates are struggling to find entry-level jobs and, while the overall unemployment rate edged up to 4.4%, for younger workers ages 16 to 24, unemployment in September 2025 was 10.4%.
When 24-year-old Sophia Stern graduated from college in 2024 she spent hours scouring LinkedIn each day, an effort she kept up for roughly six months.
I was desperate for anything, she tells Fast Company, noting that all she received in return were rejection emails from AI bots.
At the time, she started a side hustle helping local businesses with their social media marketing. I realized, like, oh, this doesn’t need to be a middle ground in between different jobs. This can be a job. If it didnt work out, she would at least gain valuable experience in an industry she was hoping to break into.
And it honestly might be better than continuing to search for a job, because the job market is just so terrible right now, she recalls thinking.
After launching a website for SoSo Social, offering social media management and community outreach to small businesses around New Jersey, New York, and Philadelphia, Stern landed her first two clients within a month. Less than a year on, her client base has quadrupled.
From launching an online business or monetizing a social media account, to selling templates or paid subscriptions, it has never been easier for workers to take their talents back into their own hands and find ways to monetize them.
In fact, the MBO Partners report counted 72.9 million independent workers in the U.S., 5.6 million of whom reported earning more than $100,000 annually.
Still, being pushed into self-employment before youre ready, versus taking the leap on your own timeline, makes a big difference. That was never what I envisioned for myself, Mahoney admits. My goal has always been to grow my platform, but I always wanted to do it alongside a steady and stable job.
Stern, too, wouldnt have considered starting out on her own this early in her career if other options had presented themselves. I really was forced into it, but in the best way possible, she says.
Whether a side hustle, stopgap, or entire career pivot, solopreneurship often offers a lifeline in a job market increasingly throttled by hiring slowdowns, increased competition, and economic uncertainty. Not dedicating 40 hours a week to one employer protects workers from the powers that be.
But solopreneurship, with its unpredictable income and lack of benefits, is not the panacea for all corporate illsjust ask any self-employed person.
Mahoney and Stern are not closing the door on full-time employment. Both are still open to the right role if it comes along. Ive learned the big lesson that nothing is permanent, Mahoney says.
This time, however, she has a safety net of her own making to fall back on.
Since Brian Niccol took over as Starbucks Chairman and CEO in 2024, hes promised a grand turnaround for the coffee giant by going back to its roots in lovingly designed, customer-centric stores.
The messaging wasnt enough to break six straight quarters of global sales decline. Global sales grew 1% at the end of the 2025 fiscal year, but they left the U.S. behind. Now, Starbuckss Q1 2026 earnings have beat analyst estimates and seem to be cementing a turnaround, marking the first time same store sales have increased in the U.S. in eight quarters.
Starbucks same store sales were up 4% in the U.S. and 5% globally during the first quarter, thanks largely to a 3% rise in overall transactions. Despite well-documented store closures, the company says it still added 128 net new stores over the last quarter.
Our Q1 results demonstrate our ‘Back to Starbucks’ strategy is working and we believe we’re ahead of schedule, said Niccol during earnings. It’s great to see the sales momentum driven by more customers choosing Starbucks more often, and this is just the beginning.
[Photo: Starbucks]
As I reported last year, Niccols thesis has been that better hospitality will drive more people to return to Starbucksand that adding seats back to stores post-COVID is a way for the company to stand out. Improved store experience is just one piece of his strategy, which has also included fresh ad campaigns, an operationally simplified menu with lots of protein, beloved merch drops, and most recently, collabs with Mr. Beast and Khloé Kardashian.
Starbucks revenue grew by 6% last quarter overall. However, Niccol is facing tighter margins than he was a year ago. Costs ranging from uplifting Starbucks stores, to increasing staffing and pay (albeit not appeasing unions), to tariffs on ever-more-expensive coffee beans have decreased margins from 16.7% to 11.9%.
When I asked Niccol about the effects of coffee pricing on Starbucks last year, he mostly shrugged off the question, noting it was actually a relatively small line item for the company. But like many of its rising costs, it no doubt adds pressure for Starbucks to continue to grow, and to sell more product from each store in order to bolster profits when margins shrink.
Need a break from the news? We thought so.
After days of dealing with Winter Storm Fernwhich has left 600,000 homes without power in the South, and thousands others digging themselves out from under more than snow (especially here in New England)overwhelmed and exhausted people everywhere have discovered one, rather dark meme that has the internet obsessed: the nihilist penguin.
What exactly is the nihilistic penguin meme?
This clip, from Werner Herzog’s 2007 documentary “Encounters at the End of the World,” of a lone penguin walking out into what looks like a never-ending tundra after stubbornly choosing to leave his penguin colony, went viral at the beginning of the year. Doomed, he seems to saunter on by himself, into his unknown fate toward the mountains.
“One of them caught our eye, the one in the center,” Herzog explains as he narrates the documentary. “He would neither go toward the feeding grounds at the edge of the ice, nor return to the colony. Shortly afterward, we saw him heading straight for the mountains, some 70 kilometers away. Doctor Ainslie explained even if he caught him, and brought him back to the colony, he would immediately head right back for the mountains. But, why?”
Well, by the looks of it, many people relate to the clip, with TikTokers sharing, commenting, and making their own version of the video. Why do they relate?
According to social media posts, there seem to be two interpretations of the clip: One, bleak as it is, is that we are all that penguin, going toward our certain deaths. (According to the Doomsday clock, we are all one step closer to destruction.)
A second is more optimistic: that the penguin’s actions are a symbol of endurance.
As one TikTok user explains, “if this penguin doesn’t penetrate your psyche so deeply that you are compelled to finally drop everything & chase your dreams. then you’re doomed forever bro.”
Doomed forever bruh, indeed.
Fans of Popeyes Louisiana Kitchen will be sad to learn that more than a dozen locations have shuttered this month across two Southeastern states.
The closures come after Sailormen Inc., a major Popeyes franchisee, filed for Chapter 11 bankruptcy protection in Florida on January 15.
Once the bankruptcy proceedings began, Sailormen immediately moved to shutter 17 Popeyes restaurants in Georgia and Florida, according to court records.
The company is now seeking to reject the leases at those locations where the beloved fried chicken fast-food restaurants formerly operated. The closures took place as recently as this week, according to a January 26 court docket.
It’s unclear if more restaurants will close. Fast Company reached out to Sailormen and Popeyes for comment.
Why did Sailormen file for bankruptcy?
As Fast Company reported earlier this month, Sailormen cited a number of factors that led up to its bankruptcy petition, including high inflation and borrowing rates, and foot traffic that never fully recovered from the COVID-19 pandemic.
Restaurant Brands International (RBI), which owns Popeyes Louisiana Kitchen along with major chains such as Burger King and Tim Hortons, has faced increasing competition in the so-called fast food chicken wars.
Notably, younger generations are turning to fast-growing brands like Raising Canes and Daves Hot Chicken.
With more than 5,000 locations worldwide, Popeyes is still the far larger chain, but RBI reported a decline in same-store sales for the brand for three consecutive quarters last year.
Which Popeyes have closed?
Sailormen said in a court filing that it closed eight locations on January 19, five locations on January 20, and four locations on January 22. It characterized the restaurants as “underperforming.”
The full list of locations is below:
Florida
2005 Ohio Avenue North Live Oak, FL 32064
1601 South US Highway Ft. Pierce, FL 34950
5156 S. Dale Mabry Highway Tampa, FL 33611
2729 S.E. Highway 70 Arcadia, FL 34266
175 South Highway 17 East Palatka, FL 32131
649 S. McDuff Avenue Jacksonville, FL 32205
1124 N. Young Boulevard Chiefland, FL 32626
27740 US 27 Leesburg, FL 34748
200 Green Way Keystone Heights, FL 32656
812 South 6th Street Macclenny, FL 32063
1833 Kings Road Jacksonville, FL 32209
2015 North Wickham Road Melbourne, FL 32935
Georgia
401 N. 1st Street, Jesup, GA 31545
2106 Memorial Drive Waycross, GA 31501
1610 S. Georgia Parkway West Waycross, GA 31503
68 West Coffee Street Hazlehurst, GA 31539
3319 Altama Avenue Brunswick, GA 31520
President Donald Trump announced Tuesday that he has signed an executive order to “cut through bureaucratic red tape” and speed up reconstruction of tens of thousands of homes destroyed by the January 2025 Los Angeles area wildfires.Trump’s order, signed Friday, seeks to allow homeowners to rebuild without contending with “unnecessary, duplicative, or obstructive” permitting requirements, the White House said in a statement.The order directs the Federal Emergency Management Agency and the Small Business Administration to find a way to issue regulations that would preempt state and local rules for obtaining permits and allow builders to “self-certify” that they have complied with “substantive health, safety, and building standards.”California Gov. Gavin Newsom scoffed at the idea that the federal government could issue local rebuilding permits and urged Trump to approve the state’s $33.9 billion disaster aid request. Newsom has traveled to Washington, D.C., to advocate for the money, but the administration has not yet approved it.The Democratic governor said on social media that more than 1,600 rebuilding permits have been issued in Los Angeles and officials are moving at a fast pace.“An executive order to rebuild Mars would do just as useful,” Newsom wrote on social media. He added, “please actually help us. We are begging you.”Fewer than a dozen homes had been rebuilt in Los Angeles County as of Jan. 7, one year after the fires began, The Associated Press found. About 900 homes were under construction.The Palisades and Eaton fires killed 31 people and destroyed about 13,000 residential properties. The fires burned for more than three weeks and cleanup efforts took about seven months.It wasn’t immediately clear what power the federal government could wield over local and state permitting. The order also directs federal agencies to expedite waivers, permits and approvals to work around any environmental, historic preservation or natural resource laws that might stand in the way of rebuilding.Los Angeles Mayor Karen Bass said in a statement that instead of trying to meddle in the permitting process, the Trump administration should speed up FEMA reimbursements.Bass called Trump’s move a “political stunt” and said the president should issue an executive order “to demand the insurance industry pay people for their losses so that survivors can afford to rebuild, push the banking industry to extend mortgage forbearance by three years, tacking them on to the end of a 30-year mortgage, and bring the banks together to create a special fund to provide no-interest loans to fire survivors.”The mayor said rebuilding plans in Pacific Palisades are being approved in half the time compared to single-family home projects citywide before the wildfires, “with more than 70% of home permit clearances no longer required.”Permitting assistance is “always welcome,” said Joy Chen, executive director of the Eaton Fire Survivor’s Network, a coalition of more than 10,000 Eaton and Palisades fire survivors, but it’s not the primary concern for those trying to rebuild.“The number one barrier to Eaton and Palisades fire survivors right now is money,” said Chen, as survivors struggle to secure payouts from insurance companies and face staggering gaps between the money they have to rebuild and actual construction costs.Nearly one-third of survivors cited rebuild costs and insurance payouts as primary obstacles to rebuilding in a December survey by the Department of Angels, a nonprofit that advocates for LA fire survivors, while 21% mentioned permitting delays and barriers.In addition, Trump’s executive order also directs U.S. Homeland Security Secretary Kristi Noem and FEMA acting administrator Karen Evans to audit California’s use of Hazard Mitigation Grant Program funding, a typical add-on in major disasters that enables states to build back with greater resilience. The audit must be completed within 60 days, after which Noem and Evans are instructed to determine whether future conditions should be put on the funding or even possible “recoupment or recovery actions” should take place.Trump has not approved a single request from states for HMGP funding since March, part of a wider effort to reduce federal funding for climate mitigation.
This story has been corrected to reflect that Trump last approved an HMGP request in March, not February.
Christopher Weber and Gabriela Aoun Angueira, Associated Press
Dutch semiconductor chip machine maker ASML recorded a record net profit of 9.6 billion euros ($11.5 billion) in 2025 on sales of 32.7 billion euros fueled by AI-driven demand, the company reported Wednesday as it also announced plans to slash its workforce by about 1,700, about 4% of its workforce.The growth comes despite Dutch government restrictions on exports of machines that can be used to make chips that can be integrated into weapons systems. The measures, initially announced in 2023 and later expanded, are seen as part of a U.S. policy that aims at limiting China’s access to such technology.“In the last months, many of our customers have shared a notably more positive assessment of the medium-term market situation, primarily based on more robust expectations of the sustainability of AI-related demand. This is reflected in a marked step-up in their medium-term capacity plans and in our record order intake,” ASML President and Chief Executive Officer Christophe Fouquet said in a statement.In a message to employees, the company said it was cutting jobs in order to become more streamlined and efficient. It said ASML was “choosing to make these changes at a moment of strength for the company. Improving our processes and systems will allow us to innovate more and innovate better, generating further responsible growth for ASML and our stakeholders.”The job cuts are intended to sharpen ASML’s focus on engineering and innovation by streamlining the company’s technology and IT departments, the message said.The company said it expects 2026 to be “another growth year for ASML’s business” driven by sales of its extreme ultraviolet lithography systems.
Associated Press
A third round of “No Kings” protests is coming this spring, with organizers saying they are planning their largest demonstrations yet across the United States to oppose what they describe as authoritarianism under President Donald Trump.Previous rallies have drawn millions of people, and organizers said they expect even greater numbers on March 28 in the wake of Trump’s immigration crackdown in Minneapolis, where violent clashes have led to the death of two people.“We expect this to be the largest protest in American history,” Ezra Levin, co-executive director of the nonprofit Indivisible, told The Associated Press ahead of Wednesday’s announcement. He predicted that as many as 9 million people will turn out.“No Kings” protests, which are organized by a constellation of groups around the country, have been a focal point for outrage over Trump’s attempts to consolidate and expand his power.“This is in large part a response to a combination of the heinous attacks on our democracy and communities coming from the regime, and a sense that nobody’s coming to save us,” Levin said.Last year, Trump said he felt attendees were “not representative of the people of our country,” and he insisted that “I’m not a king.”
‘No Kings’ shifts focus after Minneapolis deaths
The latest round of protests had been in the works before the crackdown in Minneapolis. However, the killing of two people by federal agents in recent weeks has refocused plans.Levin said they want to show “support for Minnesota and immigrant communities all over” and oppose “the secret police force that is murdering Americans and infringing on their basic constitutional rights.”“And what we know is, the only way to defend those rights is to exercise them, and you do that in nonviolent but forceful ways, and that’s what I expect to see in ‘No Kings’ three,” Levin said.Trump has broadly defended his aggressive deportation campaign and blamed local officials for refusing to cooperate. However, he’s more recently signaled a shift in response to bipartisan concern over the killing of Alex Pretti in Minneapolis on Saturday.
Previous ‘No Kings’ protests have drawn millions across the US
In June, the first “No Kings” rallies were organized in nearly 2,000 locations nationwide, including cities, towns and community spaces. Those protests followed unrest over federal immigration raids and Trump’s deployment of the National Guard and Marines to Los Angeles, where tensions escalated with protesters blocking a freeway and setting vehicles on fire.They were organized also in large part to protest a military parade in the nation’s capital that marked the Army’s 250th anniversary and coincided with Trump’s birthday. “No Kings” organizers at the time called the parade a “coronation” that was symbolic of what they characterized as Trump’s growing authoritarian overreach.In response, some conservative politicians condemned the protests as “Hate America” rallies.During a second round of protests in October, organizers said demonstrations were held in about 2,700 cities and towns across the country. At the time, Levin pointed to Trump’s sweeping immigration crackdown, his unprecedented promises to use federal power to influence midterm elections, restrictions on press freedom and retribution against political opponents, steps he said cumulatively represented a direct threat to constitutionally protected rights.On social media, both Trump and the official White House account mocked the protests, posting computer-generated images of the president wearing a crown.The big protest days are headline-grabbing moments, but Levin said groups like his are determined to keep up steady trainings and intermediate-level organizing in hopes of growing sustainable resistance to the Trump administration’s actions.“This isn’t about Democrats versus Republicans. This is about do we have a democracy at all, and what are we going to tell our kids and our grandkids about what we did in this moment?” Levin said. “I think that demands the kind of persistent engagement. “
Meg Kinnard can be reached at http://x.com/MegKinnardAP
Meg Kinnard, Associated Press
Tech founder and provocateur Travis Kalanick made millions betting on key parts of the young adult lifestyle with Uber (transportation) and dining (ghost kitchen startup CloudKitchens). Can he hit a trifecta with a bet on tech-focused, community-driven apartments?
Kalanick has partnered with Oliver Ripley, founder of the luxury hospitality company Habitas, to launch Sekra, a bid to tackle the massive multifamily housing market with a firm that will focus on building and managing upscale rental apartments. Its a market thats sure to grow: Ripley estimates 80% of people younger than 40 globally rent, and thats only going to increase as stubborn housing affordability impacts remain a key issue. In the U.S., the number of rental households has grown steadily, hitting more than 46 million last year, according to the Census Bureau, with strong growth in the percentage of Gen Z members renting.
The idea is to apply layers of technology and hospitality to create a more profitable brand of rental housing; while Sekras tool and tech stack are still under development, other apartment companies have saved money by automating repairs, streamlining operations, cutting energy bills, and making the touring and leasing experience faster, reducing vacancies.
There’s a real opportunity to do something different in the multifamily space, to build a global brand that sits at the cross section of community, culture, and longevity and wellness, Ripley says.
[Photo: Sekra]
Ripley describes Sekra as taking both a hardware and software approach. The hardware portion includes building a proprietary tech platform for operations and iterating with residents (other tech in the market such as Elise.AI has seen significant growth in recent years). The in-development resident app will incorporate programming, content, and in-unit internet of things functionalitysuch as the ability to control appliances or lightingthat will give residents an integrated experience that will command above-market rents.
It also includes building a space that encourages socialization and better sleep, including consulting with sleep experts, installing noise insulation and blackout shades, and using circadian rhythm lighting.
The software part means hiring ambassadors for the properties and curating the community and its residents. Ripley says the onboarding for new residents will be done by the Sekra team, the residents themselves, and through the resident app.
The application of technology to a branded living experience may be harder than it looks. Evidence exists that tech can save apartment owners money: A survey by the National Apartment Association about AI usage found operators achieved 10% savings in payroll and a 15% increase in retention rates.
According to Joel Steinhaus, a former WeWork exec who cofounded a coworking firm called Daybase, theres a big opportunity: The housing market is huge and there arent any dominant brands in the market. But theres a reason for that. It’s just hard to contemplate being relevant to someone in their personal space when they want to make it their own, he says.
For context, a 2024 resident survey of 172,000 renters taken by industry group the National Multifamily Housing Council found that the most desired community features are fairly basic, including cell reception, a fitness center, covered parking, and a poolall sought after by more than 70% of respondents. Features like maker spaces, party rooms, conference rooms, vegetable gardens, dog parks, and others were cited by 50% or fewer renters.
Sekra, which has quietly raised $12.5 million from a cadre of tech and real estate VCs and investors, including Fifth Wall, Moinian Group, and Harvey Spevak, the chairman and managing partner of Equinox, seeks to open its locations later this year, zeroing in on sites in coastal U.S. cities as well as in Riyadh, Saudi Arabia, and Dubai. Sekra will both renovate and operate existing buildings and eventually build its own new, ground-up projects.
As Ripley says of the gigantic global rental market: It just felt like an industry ripe for disruption, ripe to be messed with.
[Photo: Sekra]
Go With The Flow
A portmanteau of Sekhmet, the Egyptian goddess of healing and protection, with Ra, the Egyptian sun god, Sekra seeks to combat a few hurdles facing renters and the apartment market: the challenge of buying a home, the lack of socialization and authentic community during a global loneliness epidemic, and the blandness of much of the high-end housing stock. Early renderings show a hotel lobby-esque experience, with a muted color palette, textured materials, and plenty of curved lines.
Its not the first tech-bro-helmed startup seeking to revolutionize the apartment market. WeWork founder Adam Neumann launched Flow, his own rental platform, in 2022, and has quietly built a company valued at $2.5 billion, which includes 1,000 rental units and nearly 500 condo units in South Florida, control of an under-construction 4-million-square-foot riverfront district in Miami, and holdings in Riyadh.
Ripley argues that his experience with Habitas in building hospitality brand suited to young travelers makes him an ideal candidate to change the way apartments operate. Sekras seeking to create points of differentiation in areas that have long been puzzles for multifamily operators: creating authentic communities and applying tech to help streamline operations. Both goals have a profit motive. Better community means fewer move-outs and vacancieskey measures of rental housing profitabilityand more efficient operations lead to lower operating costs. Ripley claims hell be able to double retention rates.
Steinhaus says that building community in real estate, as he has in his coworking firm, means being cognizant of the mistake of making too much effort. Creating community means being the host of the party, not the life of the partytoo much forced fun and performative programming may make it impossible for organic community development to take root.
When asked to define programming for Sekra, Ripley mentions elements empowered by residents, and some familiar concepts: game nights, movie nights, lectures or talks, therapy nights or wellness programming, and book clubs.
Brendan Wallace, CEO and cofounder of Fifth Wall, an investor in Sekra, believes Ripley and his team, with their hospitality background, are the ones who can build a single tech ecosystem that addresses all of these challenges and do a better job managing and increasing profits.
Many current owners lack an understanding of the elements of hospitality and community building, Wallace says. We see this when we talk to owners. They have big ideas, and even similar notions, but they end up being poorly executed and feel kludgey.
