Cities from Scratch - Marc Lore's Telosa Dream

Brilliant billionaire brainstorm or asinine arrogant attempt?

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Today’s update is a ~10-12 minute read.

Hi friends,

American billionaire Marc Lore (pronounced “Lor-ee”) has been making headlines lately for his plan to build “The City of the Future” from scratch somewhere in the American West or Appalachia.

Lore plans to call his new city “Telosa” (from the Greek word Telos meaning “higher purpose”) and depending on who you ask, he’s either an inspiring futurist changing society for the better, or an arrogant billionaire trying to play god. As someone who writes a newsletter about how cities are built and also loves making fun of people, I’m obviously incredibly interested in this topic.

Source: The Athletic

Today I’ll talk about Lore’s plans, see how they stack up against some other planned cities from history, and explain why I’m optimistic/pessimistic on his grandiose vision. Let’s dive in.

Today’s focus: Marc Lore and Telosa

So, who is Marc Lore? Aside from looking like a slightly more approachable Lex Luthor, he is mainly known as the former CEO/founder of several successful ecommerce companies, notably Jet.com (sold to Walmart for $3.3B USD) and Quidsi (sold to Amazon for $545M USD). He also previously led Walmart’s online retail business, and was once dubbed “the LeBron James of ecommerce.”¹ Interestingly enough, he also qualified for the 1996 US Olympic Bobsled Team, but that’s less relevant for this newsletter. Today, I’ll mostly be focusing on his plans to build a city from the ground up.

Why is he doing this?

In his own words, Lore wants Telosa to be…

“…as vibrant and diverse as a New York City. Combined with the efficiency, safety, and cleanliness of a city like Tokyo. Combined with the social services, sustainability and governess model of a city like Stockholm.” (source)

This certainly makes for a captivating tweet or headline, but what does this actually look like in practice? Based on various interviews and the official Telosa charter, I’ve boiled the main areas Lore is interested in down to:

• Energy: Telosa will make heavy use of renewable energy, with solar panels on skyscrapers distributing energy to a community grid, electric vehicle (EV) charging stations throughout the city, and various other green energy capabilities.

• Sustainable Design: The city will feature cutting-edge sustainable architecture, ban fossil fuel-powered vehicles, and make heavy use of smart agriculture methods like indoor/vertical farming, to reduce supply chain costs and promote Telosa’s self-sufficiency.

• Mobility/Transportation: Lore is a fan of the “15-minute city” concept, which aims to make all possible resources someone might need (parks, hospitals, schools, grocery stores, etc.) available within a 15 minute walk/bike of their residence. There will be a strong emphasis on public transit, with ample space for pedestrians, protected bike lanes, and driverless cars throughout the cite. Lore has also made a substantial investment in a flying car company called Archer, that he hopes will operate within Telosa in the next few years.

• Government and Demographics: Lore wants every citizen to be involved in the decision-making process (you know, like a democracy). In a manner more commonly used by corporate recruiters rather than would-be city makers, Lore also espouses the value of a diverse population, and wants Telosa to be "the most open, most fair and most inclusive city in the world."

• Economy: This is where Telosa really starts to differentiate itself, and for my money is one of the more interesting aspects of Lore’s plans. Lore is a fan of Georgism, an economic philosophy invented by 19th century economist Henry George, that basically argues that land itself is not inherently valuable, it’s only worth something because society bestows value upon it. Georgists believe that private land ownership is thus unfair, and furthermore that most socio-economic inequality stems from the way that capitalism handles land ownership.

  • For example, 100 years ago a plot of land in the middle of the Mojave Desert would have been essentially worthless. Today, it’s worth millions of dollars because it’s right in the middle of downtown Las Vegas. The land itself didn’t really change, but tourism, gambling, and Britney Spears’ 2013 residency all made that area incredibly valuable. Therefore, Henry George (and Georgists everywhere) would say that the profits from that land shouldn’t just go to a single owner, it should be distributed amongst the community/people that actually made the land valuable.

    

    “The worst part about private land ownership was the dementors.”

  • To this end, Lore has stated that Telosa’s land will be owned by a public trust, which will invest the revenue from land ownership and then equally redistribute the profits to residents.²

• Lore uses the term "Equitism" to refer to this form of societally beneficial capitalism. He hopes that in the same way that Telosa’s physical infrastructure/design will serve as a model for city planners, his approach to land ownership will similarly inspire politicians, economists, and idealistic grad students looking for a thesis topic.

I was pleasantly surprised to see a lot of concepts we’ve talked about in previous newsletters make it into Lore’s plans. However, it’s one thing to dream big, and quite another to effectively build and govern a city. Lore and his team haven’t even decided on a location yet, though it will likely be in the American West or Appalachia. They are aiming to have the first 50K residents move in by 2030, at an estimated cost of $25B USD, with the end goal being 5 million residents total, at an estimated cost of $400B USD.

How cities (usually) come to be

In light of these grandiose plans, it’s important to understand how building cities from scratch is different from how cities usually develop, and what advantages/disadvantages this might give them.

Historically, cities sprung up around centers of commerce like railroads, ports, etc. or by natural resources like bodies of water. By and large cities grow slowly, and do so for reasons of practicality or necessity. Over decades, if not centuries, of cumulative decision-making and reactions to stimuli like new technologies, changes in public sentiment or policy, natural disasters, etc. cities are shaped into their modern-day forms. In this sense they are more akin to living, breathing organisms than a completed project with a concrete end form. In previous newsletters we’ve already covered a few examples of cities changing due to various circumstances:

• Amsterdam has such progressive, bike-friendly infrastructure and policies because a ton of fatal car accidents happened in the ‘70s and ‘80s and people protested and lobbied their politicians.

• Taipei adopted a unique waste management system because they reached a breaking point where they were running out of landfill space and it was disgusting.

• And of course, New Yorkers just love garbage, which is why their streets are always filled with it.

It’s clear that urban growth is a continuous, multi-faceted endeavor, often without a clear “goal” in mind. So, what happens when people try and skip this process of trial and error and just throw cash at a patch of land until it becomes a city? Luckily for us, Telosa isn’t the first time someone has attempted this. And in order to evaluate Marc Lore’s chances, I think it’s helpful to analyze how other “planned cities” from history have fared.

Planned cities: Do they all suck? Maybe.

Though there are exceptions, generally we can categorize planned cities into three main groups based on who the primary driving force is: individuals, corporations, or governments.

Planned by individuals: why don’t you just take it out and measure

Call it a manifestation of arrogance, benevolence, or some combination of the two, but there is ample precedent for one (usually super rich, usually male) person trying to build their perfect city.

• Saudi Crown Prince Mohammed Bin Salman is planning a ~$500B USD city in the desert called Neom, complete with a 106-mile-long carbon neutral train and mansions the size of football fields. As of 2021 there has not been any real substantial progress made, and there’s no shortage of controversy surrounding the land intended for use.

• Charles, Prince of Wales (next in line for the British throne) has spent decades working on his “experimental town” of Poundbury, one of the more successful (though on a much smaller scale) planned cities that we’ll see today. Critically however, there is no emphasis on high-tech enablement in Poundbury, and the city’s origins are more based Prince Charles’ reaction against new architectural schools of thought, rather than him trying to pioneer innovative methods/ideas.

The advantages of an individual-led planned city are the credibility, publicity, and (sometimes) business acumen that said individuals bring with them. However, the celebrity of a single leader can often lead to these cities being criticized as vanity projects. Prince Mohammad has stated in his own words that he wants to “…build his pyramids” which certainly seems to support this theory.

Objectively speaking, the majority of them fail to raise the necessary capital, attract a significant population, or even get built at all. Even Bill Gates tried to build a futuristic city in the Arizona desert, though as of 2021 nothing has really come of it. It would seem that, even for the richest, most powerful people in the world, building cities on your own is hard.

It’s so simple, all you have to do is everything.

Planned by corporations: totally not a dystopia, anyways enjoy ToyotaTown

The second form of planned cities are those associated with a specific company or corporate entity,³ and are often built to highlight a specific capability or technology.

• Toyota Motor Company is building “The Woven City” (an homage to Toyota’s humble beginnings as a loom manufacturer) 2 hours southwest of Tokyo. The space will highlight electric vehicles, micromobility options (scooters, e-bikes, etc.), and autonomous driving capabilities, along with other futuristic technology. While all impressive, it’s hard not to notice that most of the “crucial” technology in the city is manufactured by Toyota itself.⁴ Unlike Telosa, they have already broken ground on the site and plan to be finished by 2024, though they are also planning on a much smaller scale, aiming for just ~2,000 residents when fully completed.

• Sidewalk Labs (a subsidiary of Alphabet Inc., Google’s parent company) had big plans to upgrade a stretch of waterfront in Toronto’s Quayside area, offering many of the same capabilities as Toyota’s Woven City. However, Sidewalk Labs officially backed out of the project in 2020, after highly-publicized concerns over data security and pushback from local residents. This is a key distinction between the Quayside development and Telosa, the former attempting to refurbish an existing urban area, and the latter starting from scratch on greenfield land. It’s easy to avoid local pushback/protests if there aren’t any “locals” to begin with.

Lately it’s become fashionable to malign pretty much everything that corporate giants do; Sidewalk Labs being associated with Google makes them an easy target, and Amazon’s plans for “warehouse towns” around their distribution centers have attracted similar derision. Whether or not this criticism is justified (and I think it usually is), the bottom line is these cities usually spring up for economic reasons, rather than to advance society or improve on urban governance like Telosa is (supposedly) trying to do.

Planned by governments: usually the most successful, can still suck

The third kind of planned cities are those planned by governments, and in my opinion are the most “successful” of the three varieties we’ve just looked at.

• Songdo International Business District was designed by the South Korean government to highlight Korean technology and offer a more modern alternative economic center to Seoul. In this narrow sense, Songdo is arguably a success, boasting features such as sensor-lined streets that relay information to smart vehicles, an incredibly high concentration of LEED certified buildings, and even pneumatic tubes that take trash away from residencies like something out of the Jetsons.

  

  Songdo Business District. Source: Mansion Global

• The issue is, after over a decade of construction and ~$40B USD invested, the population is still sitting around ~100K, or just about 1/3 of the intended target. Aside from their population woes, Songdo has also failed to attract the promised corporate investment in any meaningful capacity. Originally intended to be completed by 2015, then 2018, and now late 2022, Songdo still holds promise, but thus far has massively underdelivered relative to its stated goals.

Other government-led examples often come as a result of new areas being established as a nation’s capital, like Washington, D.C. in the US, Canberra in Australia, or Brasilia in Brazil. The key distinction with government-planned cities is that they have the political authority to directly (or indirectly, though economic incentives) relocate a substantial amount of the population. This is important because planned cities often struggle with populating their newly-built urban areas, and even then, government backing is no guarantee of success.

Planned cities: the good, the bad, and the ugly

From these examples, we can identify some common elements that help us understand why planned cities succeed/fail and use these to evaluate Telosa’s prospects.

Planned cities are generally successful when they…

• Are not out to reinvent the wheel. The have reasonable goals, relatively low population targets, and practical motivations for building what they build and where they build it.

• Have legal/political/economic authority to both build the city, and attract residents.

Planned cities fail when they…

• Don’t attract enough residents through economic, political or social motivations.

• Don’t raise the necessary capital, or do, but then go overbudget. Even Saudi Crown Prince Mohammed Bin Salman is struggling to come up with the $500B USD necessary for his planned city, despite his immense personal wealth.

• Don’t have enough momentum, or succumb to the many, many, many, logistical, economic, legal, or political hurdles to building a brand-new city and eventually come to a standstill.

Based on these examples, it’s clear that planned cities are a mixed bag of objectives, opportunities, and outcomes. Obviously “success” or “failure” are subjective terms, but I think it’s fair to evaluate them based on the extent to which each project fulfills its original stated goals. Knowing this, let’s look at how Telosa stacks up.

Reasons I’m optimistic about Telosa

As easy as it would be to just dunk on a billionaire building a city in the desert, I am optimistic about Telosa for several reasons:

1. Hyper focused niche: Lore’s attempt is special because he is outspokenly advertising the morality and value system of the city from the onset. While it may serve as a deterrent for people who believe his “woke-topia” is a foolhardy exercise, he probably doesn’t care so long as he is able to attract enough people for whom this value system is desirable. And if you’re trying to get people to move to the desert, you need them to really want to come.

2. Publicity: Lore’s idea is already generating substantial media attention. Some good, most skeptical, some outright bad, but as they say, all press is good press. This is good for Lore because…

   • His financing model relies on outside investment.

   • His geographic location choices likely will have to attract people to relocate there, rather than drawing on an existing population.

   • His economic/futurist prospects will need businesses to relocate, or at least substantially invest in offices there.

   The publicity he’s garnered so far is promising, but he’ll need to maintain this media attention if he wants to attract the financial and human capital necessary for his vision.

3. Georgist philosophy in action: This is one of the more interesting ideas coming out of Telosa. As far as other planned cities go, it’s an interesting play to openly advertise an alternative economic philosophy. Hard to say if it will pay off, but at the very least it’s a reason for optimism as it potentially adds an extra layer of appeal to the city.

4. Clean slate: As we saw with the failure of Sidewalk Labs in Toronto, building on new land, with a fresh start can help you avoid some of the issues you’d find with refurbishing pre-existing developments. You can use the most cutting-edge technology, the most advanced infrastructure, and the most modern design philosophies from the start.

5. Lore acknowledges his weaknesses: While he might seem overeager to some, Lore has not gotten to where he is today by being dumb. Maybe stubborn or idealistic, but not dumb. He is very vocal that he lacks the city planning knowledge (and the wealth) to being his utopia into existence through sheer force of will alone, and seems to have hired a very capable team of transportation planners, engineers and even an urban historian to help plan this city of the future. The lead design firm Bjarke Ingels Group is famous for designing Google and Apple campuses, but has also attracted a lot of controversy for working with morally questionable regimes.

Reasons I’m pessimistic about Telosa

Okay so now that I’ve made an attempt to be objective, let’s take some time to absolutely rip this idea to shreds. I’m no prophet, but if I had to bet on Telosa’s chances, I think it will fail, I think it will fail miserably, and I think it will actually end up hindering real progress towards some of the stated goals that Lore has. Let’s talk about why.

Logistical Issues: It’s. A city. In. The desert.

First up, location. Telosa’s final site decision is still up in the air but promotional materials and interviews from Lore seem to indicate that the American West, specifically a desert location, is the likely choice. This raises a whole host of logistical problems, namely around water procurement. Existing cities in desert-like climates such as Phoenix are already facing potential water shortages and would likely be less than enthused to share the already scarce supply. Telosa will not be located next to an ocean like Dubai, so they can’t rely on desalination for water either.⁵

The reason Telosa is looking for desert land is because it’s cheap, and the reason that land is cheap is because it’s not super easy to live there.

Then on top of that there’s also a host of other political/logistical issues like establishing a government, applying for zoning and building permits, connecting to existing resource and transportation infrastructure, all of which take immense time, money, and effort.

Buildings and roads are not a community

Secondly, Lore has stated that he’s not just out to showcase new technology, he really wants to build a community in Telosa. But to do that, he needs people to live there first, and that’s harder than it may seem. Dr. Sarah Moser of McGill University has spent her career studying these kind of planned cities, and notes that in her years of research she has found that not a single one of them has actually ever achieved their population targets. And pretty much all of them had less ambitious goals than Telosa does.

Even if you can attract people to your new city (which is hard to do), getting them to form a community is another thing entirely. Some residents in Songdo (the South Korean planned city we just looked at) have described the city as a “Chernobyl-like ghost town” and compared living there to being in “a deserted prison”. Not exactly reassuring, especially considering Songdo has an ~18-year head start, and government backing, over Telosa.

The Telosa team has floated some ideas on how to attract residents and businesses, like establishing a VC firm and providing capital only to startups who are willing to be based out of Telosa, but that can’t account for the entire population. Then there’s also the fact that Lore wants Telosa's residents to be racially, culturally, and socioeconomically diverse. That sounds great, but you can't populate a city the way you can hire workers at a private company, through interviews and with explicit/implicit quotas. What happens when folks want to live in Telosa for the flying cars, but don’t want to participate in shared land trusts? Or believe in sustainable public transit but hate the ideals of equality and diversity?

If these questions sound ridiculous, then you have never been to a local American town hall meeting, or spent more than 5 minutes on Twitter, because these people are out there. And you can’t have a city of 5 million residents without having some conflict of ideas. Of course all cities have different kinds of people in them, but not many of them have such openly stated moral and community standards like Telosa intends to have. And the more restrictions and characteristics that Lore tries to aim for with his residents, the more hurdles and ethical issues he will need to face.

Georgism: Sounds cool, might also be totally off base

The third major reason I’m pessimistic is Lore’s belief in Georgism (or as he calls it “Equitism”) as a solution to inequality. As a reminder, Georgism is the idea that inequality stems largely from private land ownership. Whether or not you agree with this, it is significant in the pantheon of planned cities because it means Telosa is actually attempting an alternative economic/governing practice. It’s admirable in its ambition. However, I think it’s misleading to say that this approach will be some panacea or magic solution for economic inequality, since socio-economic divides can exist for a lot of reasons.

• If you ask an expert in housing policy, they’ll talk about how lack of access to affordable housing puts poorer tenants in a perpetual cycle of barely paying rent and being stuck in their current situation.

• If you ask a sociologist, they might talk about how the deck is stacked unfairly against children growing up in single-parent households and it’s actually a gap in marriage rates between college and high school graduates that perpetuates inequality.

• And if you ask me, a guy who loves subways and buses, I might talk about how unequal access to public transit and/or skewed distribution of transportation hubs leads to fewer job opportunities and creates pockets of more or less “desirable” neighborhoods, exacerbating inequality in that way.

The list goes on and on. A shift towards overseas manufacturing taking away jobs from the lower class, rising tuition costs, the loss of Judeo-Christian values in our society, etc. etc. You can ask 50 different people and get 50 different answers.

Dennis Gilbert, a professor of sociology and the author of the book The American Class Structure in an Age of Growing Inequality, notes that “Home ownership…has played a role in inequity, but it isn’t the fundamental problem.” (source) So while Equitism may be a step in the right direction, I don’t think it will be the world-changing social innovation that Lore seems to think it will be.

Now, some of you might be thinking "Max, you’re not being fair, of course he's not gonna solve everything in one go, that’s unrealistic, all cities have these issues, etc." And to that I would say:

YES.

OF COURSE.

THAT IS MY POINT.

Once you start to peel back Telosa’s veneer of Silicon Valley-buzzwords and tech-enabled everything, the city is probably going to look like, and face the same problems, as most other cities. And if that's the case, then you don’t need to spend $400B USD on a Jetsons-esque playground in the desert, you could use that money for badly needed infrastructural improvements for the New York City subway system. Or send a few million to the cash-strapped Chicago Public School system. You could donate to green candidates for Rio's city council or support expansion of bike lanes in London. You get the idea.

That brings me to the final point I want to make about planned cities, which is that even if we could be successful in building cities from scratch, maybe we shouldn’t even be trying to at all.

The dangers of planned cities

The biggest issue I have with planned cities is that focusing on them may deincentivise us from improving the cities we already live in. Maybe an individual like Lore can afford to say "screw it I'll just start over," but that isn’t an option for the vast majority of people.⁶ Another failed planned city came from Y Combinator, who, after initial assessments and site scouting back in 2016, decided that…

“No one was starving to go start a new city….(w)hat they wanted was a better city they already lived in.” - Ben Huh, project lead. (source)

To Dr. Moser, who studies these planned cities for a living,

“…projects like Lore’s are at best a distraction from the boring work of building functional cities…At worst, they end up being vehicles for private interests to extract concessions from local governments desperate for capital that could lead to economic development.” (source)

Such a perfect quote for this topic I didn’t even need to meme-ify it at all

I really do think that Telosa has some admirable goals, and I am rooting for Lore to succeed. But I don’t think he will, and I think his attempt may actually end up detracting from some of the more grounded, tangible improvements that could be made in the cities we already have.

Conclusion

So. What did we learn today? We learned that planned cities are an interesting concept, but they aren’t always the perfect solutions that their benefactors want us to believe they are.

• On the one hand, they are a phenomenal opportunity to build with the benefit of hindsight and modern technology, skipping the urban planning/design errors of our forefathers.

• On the other hand, cities are incredibly complex, and usually develop slowly for a reason. It’s hard to micromanage and anticipate all the challenges that may arise from the start.

That’s the thing with these planned cities. They could be great. But so far none of them really have been. And for all the reasons I’ve laid out today, I don’t think Telosa will be any different. After all, even Lore himself thinks it's a "moonshot". To be clear, I really do hope he succeeds. Maybe it’s the brash American optimism in me, or just that I want him to keep trying so I have more material to write about, but I’m rooting for Telosa.

If he creates a city where public transit is abundant and accessible, people are happy, innovation is encouraged, and inequality is lessened, then that's an enormous win. If he pioneers new ways of city building and urban governance, then that would be incredibly exciting. But I’m not holding my breath.

That’s it for today, but I do want to hear what you all think as well. What do we think Lore’s chances are? If you were to start a city on your own, what rules/structures would you have? What laws would you impose and what would you call it? It’s a fun thought exercise, and if I want anything to come from this newsletter, I hope you learn a little bit and have some fun with it.

Thanks for reading,

-Max

1. Because he’ll never be as good at ecommerce as Michael Jordan.

2. This is an oversimplification, but if you’re interested you can read more on Georgism here.

3. There’s a fascinating history of “company towns” that sprung up near mines, railroads, lumber yards, factories, etc. in the 19th and early 20th centuries that mainly served as housing for the corporation’s employees. They tended to be pretty oppressive, and didn’t develop much of a cultural or community identity, so while fascinating from a historical POV, we won’t focus on them too much today. Most importantly, they did also inspire the hit song “Sixteen Tons” by the great Tennessee Ernie Ford.

4. There’s nothing wrong with that, they’re a private company and they can do what they like, but a healthy dose of skepticism is well-earned for any company who provides a “solution” to the world’s problems that they also stand to profit off of.

5. Which, on a semi-related note, isn’t really a sustainable solution either.

6. This is also why any argument about dividing a nation by "this city will have these rules, and anyone who wants to live there can just move” is frustrating, because that kind of mobility is often not available to many people. It’s a little unrealistic to assume that people can so easily up and leave a place that they might right now be calling home.