Sidewalk Labs’ Toronto project was dead on arrival

Last week, Sidewalk Labs, the Google sibling behind a controversial plan for a “smart city” development on Toronto’s waterfront, finally pulled the plug and backed out of the project.

The official reason from Sidewalk’s CEO Dan Doctoroff was that “unprecedented economic uncertainty” resulting from the coronavirus pandemic derailed the project. “It has become too difficult to make the 12-acre project financially viable without sacrificing core parts of the plan,” he wrote in a blog post.

But by the time I showed up at the Quayside site to report on the debacle in late January—well before the damage to be wrought by the pandemic would become clear—people were already speaking about the Alphabet-backed project as though it were dead. They said Sidewalk had made too many concessions, that the company had scaled back the footprint of the development site and relinquished ownership over valuable intellectual property and data, perhaps to the point of untenability. The dream had shrunk to a pale shadow of its initial ambition.

Jim Balsillie, former co-CEO and chairman of BlackBerry (formerly known as Research in Motion) and a leading opponent of the project, told me then he considered Sidewalk’s proposal to be “a defanged and mangled mess” that is “being put in an ever-smaller box.”

I dug back into my reporting notebook this morning to see what else foretold the project’s doom. Here’s a tidbit from my conversation with Balsillie that didn’t make it into my story.

“Have you seen Monty Python and the Holy Grail?” Balsillie asked me. He compared the Sidewalk project to the British comedy flick’s seemingly un-killable, blood-squirting Black Knight, who claims that the mortal wounds inflicted upon him are “but a scratch.” The knight, limbless himself, threatens, “I’ll bite your legs off!”

Balsillie said he viewed Sidewalk as being in the same situation. “We’re at the point where he says he can still spit on us, and we’re deciding whether to put a bucket on his head as we walk away,” Balsillie said.

I asked Dan Doctoroff at the time whether he had studied Amazon’s failure move forward with its plan to build its HQ2 in Long Island City. He said he learned that “there’s real benefit in sticking it out, and listening really matters.” Did he believe Sidewalk’s project would move forward? “I’m very optimistic, but there’s no guarantee.”

I think Doctoroff already saw the writing on the wall then. Even if economic shutdowns related to the pandemic provided the final blow, the project had lost its legs well beforehand.

Robert Hackett

Twitter: @rhhackett

Email: robert.hackett@fortune.com

THREATS

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Cast your vote. The Atlantic's Franklin Foer is raising an alarm about the various vulnerabilities of the U.S. electoral system. He warns that Russia is poised to take advantage of them—from poking holes in state-by-state voting systems to sowing divisive disinformation. As if that weren't bad enough, Alex Stamos, the former security chief of Facebook, says TikTok could be a source of disinformation this year. Is nothing sacred?

Hua-waiting outside in the cold. Tiny tech-wonderland Estonia passed a law that's being described as the "Huawei law," after the Chinese telecom giant. The new rule will require network equipment providers to submit to thorough security reviews by the government and its intelligence services. Meanwhile, a ban on U.S. companies supplying tech to Huawei is hurting its business; the company is struggling live without the Google Android software that's powered its smartphones for so long. 

Placing an order for takeout. As the coronavirus pandemic pushes more people to order food from home, dealmaking is underway. Meal delivery service GrubHub is reportedly entertaining a takeover offer from Uber, according to the Wall Street Journal. Grocery deliverer Instacart is considering raising new venture capital at a valuation of $12 to $14 billion, 50% higher than its last appraisal by private investors, The Information reports. A pizza delivery platform just raised $43 million. And the founder of Webvan, the famous dot-com flameout, is back. 

Celebs get exposure.

ACCESS GRANTED

In the field of information security, practitioners casually toss around the phrases "white hat" or "black hat" when identifying a person as either a good egg or a rotten one. The dividing line is not so clear-cut though. In its latest magazine issue, Wired profiles Marcus Hutchins, a cybercriminal turned global hack-thwarting hero, in a hopeful tale that should inspire everyone to come to the "light side" of the Force. 

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ONE MORE THING

The success of a "contact tracing" app rolled out in Iceland yielded mixed results, despite being downloaded by 38% of the island nation's population—a greater proportion of the populace than in any other country. “The technology is more or less … I wouldn’t say useless,” Gestur Pálmason, an Icelandic Police Service detective in charge of overseeing contact tracing efforts, told MIT Technology Review. But "it wasn’t a game changer for us."

Manual tracing, aided by phone calls, had a more significant impact, he said. The good news: Iceland has gotten its coronavirus infection rate under control; only three new cases were confirmed this month.