Too much content?

Like most people last night, I watched the House of the Dragon premiere on HBO. It was fantastic and brought back a lot of great memories from the glory days of Game of Thrones. Starting in college in 2012, my friends and I would get together Sunday nights and watch Game of Thrones live. It was a Sunday ritual that lasted for about 2-3 months every year or so. It was usually one of, if not the only show I was watching at a time.

What a different time 2012 was compared to now. Fast forward 10 years and we’re in an age of never ending content. I have a list in my notes on TV shows that have been recommended to me. For better or worse, that list just continues to grow rather than shrink.

Outside of streaming, I get sent a steady list of content via Instagram or TikTok daily from my fiancee or friends. It comes at me so fast and often that I spend a good 5 minutes almost every night checking everything. And of course - football season is coming up shortly which means that my Saturdays and Sundays will be booked for the next 6 months or so.

We’re living in a unique time where there is too much entertainment right now and not enough time. I know I definitely feel a bit overwhelmed. The FOMO is real and I feel like I’m missing out if I’m not keeping up. I have no clue about the correlation between technology/content and the worsening mental health crisis. But I guess I can completely see why kids and even adults are struggling more in school and socially nowadays than 20 years ago.

These streamers and apps need viewers so content is going to continue to increase. If we don’t want a future where everyone is staring at a computer or phone screen 18 hours per day, then this problem is going to need to be solved a different way.

I would love to see a new era of tools and technology that looks to counteract this worsening content problem. An app that helps myself and my potential future kids get outside more instead of logging back in? Sign me up.

AOE 2

My new weekend leisure has been playing Age of Empires II. The AOE series is one that I loved playing growing up. The game has aged remarkably well. There’s a great feeling of nostalgia playing the game but I love the strategy aspect even more. I don’t play video games often anymore unfortunately so this has been a nice treat for me.

Although a video game, I believe real time strategy games is probably as educational as a video game gets. You’re forced to deal with learning about economies and resource constraints. You have to learn to be patient and defend when needed, and take windows of opportunity. Lastly, you’re managing multiple different tasks at once and it’s nearly impossible to be present at all points.

Best of all, the game has forced me to stay in and get some more rest. It’s a win-win.

Work flexibility

I’ve been fortunate to work for two companies that have embraced work flexibility. My first job at PwC is a company with flexibility ingrained in the culture by nature. A lot of the firm that did auditing or consulting would either be traveling or at the client site. Other service lines would be in the office, but we were always able to work from multiple locations. By nature, the firm had to embrace flexibility in order to work.

At Secfi, we’ve been very flexible from the start as our offices are all over the world in San Francisco, New York, Amsterdam or remote. My personal stance is that I prefer to be in the office, but greatly support work flexibility. With that said, I believe flexibility is a two way street.

In order to be able to do things like take care of personal needs during normal work hours, you also need to be flexible outside of work hours. At Secfi, we may take calls starting at 7am to ensure face time with our Amsterdam office, but I may also take an hour break in the afternoon to go workout. I hate 7am calls, but I love being able to take a break in my workday.

Not everyone is cut out for this type of schedule though. I’ve dealt with a lot of employees at PwC who would take flexibility to a new level and not really work when needed. It was brutally obvious to others when that would happen.

Whenever we get a new person on my teams, I tell them the same thing: I don’t care if you take an hour or two during the workday to handle personal things, but you need to understand flexibility goes both ways. You may work early mornings or late nights sometimes. There may be weekend work to make up for the lost time.

I love this schedule and I know others do as well, but it’s not for everyone.

The case of Adam Neumann

I’m a couple days late on this, but I’ve been talking about it quite a bit with colleagues and friends so I wanted to write about it. Marc Andreesen and a16z is leading a $350m round into Adam Neumann’s next venture called Flow.

The details are sparse, but I can imagine that the business is effectively creating WeWork but for residential rentals. The company will acquire large apartment buildings, spice them up to be WeWork-esque and then rent them out. I’d imagine this becomes some sort of membership where residents will be able to visit other cities and stay in those Flow’s as well.

First, I have to admit that I think this seems like an interest idea. Just like WeWork as a product has been largely good for the customer, this seems like an interesting idea. Rent a place with other like-minded folk. Be able to travel to other cities and have a place to stay. I’m not sure how it would work and it may be flooded with a bunch of douchebags that I don’t want to call my neighbors, but who knows. I’m interested.

Of course, a lot of the attention has been put on Marc Andreesen for leading this round. Given Adam’s previous venture, there’s a lot of rightful critics. I don’t disagree with a lot of what has been said about Adam and his antics. He crossed the line on many areas and navigated the grey often.

With that said, if you take the top 20% of Adam Neumann’s antics off the table at what he did with WeWork, then perhaps this doesn’t seem that crazy to fund his second venture. I presume that Marc Andreesen is hoping that Adam Neumann has learned from his mistakes and will eliminate the bad 20% the second time around.

I don’t know how this will all end. Maybe we’ll get WeWork part 2 or maybe we’ll get a really good residential realty company that takes the country by storm. I’d imagine the answer is somewhere in between. If that happens, then Marc Andreesen’s $350m bet may not be that crazy afterall.

Money2020

This is the first year that Secfi will be opening a booth at Money2020. We’ve looked into it in previous years, but the pandemic, cost and time have always prevented us from going officially.

I went to last year’s “Fintech Superbowl” and it was a blast. I met with some amazing fintech founders, operators and investors. I got much more out of it than I thought I would have.

I knew that this year was time to make a big splash. We’re investing big in going to Money2020 this year. There’s too many potential partners and investors attending for us to ignore.

I love in-person events and Money2020 is the grandaddy of them all. I can’t wait.

The ESG lie

One trend that I am fascinated with is the rise of ESG funds and investment opportunities. It’s apparently the new hot investment trend among millennials and Gen Z.

I love the idea of ESG, but absolutely hate the execution of it. The reality is that most investing in ESG is investing in garbage that provides no societal benefit.

Many of the ESG ETFs and funds launched are simply broad based indexes with higher fees. ESG is something that is not defined so you very well could end up investing in a company like Microsoft which many likely wouldn’t consider ESG.

Furthermore, it’s largely been a ploy for managers and advisors to charge clients higher fees for placing clients into ESG funds and investments. Often times, there’s subpar performance that accompanies these higher fees.

Lastly, buy shares in an even legitimate “ESG” company does not necessarily mean that you’re making any meaningful contribution to any ESG causes. I’d imagine there’s some debate on this topic which I may want to write about in the future.

I’m sure there are some legitimate ESG funds out there, but at this point, I think it’s a bullshit trend that needs to stop. Folks who want to make more of an impact should be looking to donate or volunteer their time instead. That could be some real material impact.

The big month ahead

For the first time in awhile, I’ve been home an extended period and will continue to be home until mid-September when my trips start to begin. It’s been really nice being home on the weekends and just relaxing. I had an amazing weekend where I got to the beach, driving range and caught up on some sleep.

I’m planning for the month ahead and it’s an exciting time to be at Secfi. We’ve got some big things planned for the month ahead and I realized today that the next 4 weeks are going to be a bit hectic.

It was a bit anxiety driving this Monday morning so I took some time to do some planning. Most important, I’ve started to do some mental preparation for this especially since this is traditionally a big vacation time. Watching your friends having fun on vacation when you’re working 12 hour days isn’t always the most fun.

Here is my plan of attack for the next 4 weeks.

First, I’m planning on getting on a regular schedule including workouts and only 1-2 nights a week where I stay late in the office. I’ve learned that setting expectations with Sophia ahead of time works best so we all know what to expect. In addition, the dedicated gym time allows me to unwind and destress.

Secondly, I planned a short trip to Seattle to watch a college football game for right after this busy period. I wanted to have something to look forward to after these weeks.

In addition to a trip after this sprint, I’m allotting myself 3 personal days during this period. These days are reserved for emergency days off when I feel like I need a break or if I get ahead of my tasks and run across a few good days to take off and enjoy the summer.

Finally, I’ve gotten myself really excited to start to grind. I’m always reminding myself of the reward at the end of the tunnel instead of focusing on everything that I need to do. Shifting your mindset goes a long way when it comes to getting shit done.

It won’t be easy, but I’m excited and going to hopefully have a lot of fun grinding these next 4 weeks.

Marathons not sprints

I’m feeling great after getting some much needed rest last night. It was a long week at work and I felt that my brain was zapped by the end of it.

Reflecting back on the week, I probably overextended myself a bit. Taking on a few too many things that should have been deprioritized.

It was a nice monthly reminder that startups are more marathons than sprints. Although we’re required to sprint through some of the segments, longevity is much more important.

Next week is another big week with a key hire starting. This will mark an official new era of Secfi and I’m excited. For now, this weekend will be about getting caught up and getting some needed rest and relaxation.

Attrition

We had a happy hour and dinner last night to celebrate two colleagues. One will be moving back down to LA and staying with Secfi. Another will be taking a good opportunity at a pre-IPO company. It was a great night and obviously a bit bittersweet.

Attrition is hard to deal with anywhere, but much harder to deal with at a startup. You don’t want large attrition numbers but at the same time, attrition is always going to happen. The best companies will see regular attrition as they become great training grounds. In a few years at these companies, employees will ideally be highly sought after by other employers or become good feeders into the new generation of startups.

As a startup, you want your employees to be desirable. It means you’re doing something right. At Secfi, I’ve always had the mentality that everyone (including myself) is replaceable. We need to be constantly hiring and training people to take the next step. There comes a time for everyone to leave, and we always need to be preparing the company for attrition.

This week

Man, this week wrecked me…. and it’s not over yet. There wasn’t one major event that was the cause of my stress. Rather it was just a culmination of a lot of shit hitting on Tuesday and Wednesday. After a couple late nights, I’m finally getting my head above water and my checklist under control.

Furthermore, it seems like we had nothing but good news hit our inbox today. Looks like after a crappy week, our hard work and perhaps a bit of luck finally p[aid off.

It was a stark reminder of the ups and downs of startup life. Building a company isn’t a hobby and it’s challenging as hell most times. The reward is always worth it though.

Tornado Cash

The news headline of the web3/crypto world of the last few days has been focused on Tornado Cash which is a crypto token that has been blacklisted by the US Treasury Department.

Tornado Cash is not just an ordinary crypto token. It’s a token that is purposely designed to protect the privacy of those who send and receive the tokens.

Of course, there’s many great use cases of this. In a world where governments and companies are tracking your everyday movements easily, privacy has become a huge factor. Perhaps someone wanted to donate money to Ukraine without fear of the recipient being targeted. Or maybe there’s a large movement of money between accounts, and the recipient or sender is worried about hackers.

The other side of the equation is that Tornado Cash could be used to launder money and for other illicit activities. In this case, the US Treasury Department cited that North Korean hackers used the tokens to move money around. That is the major problem.

Tornado Cash is the latest incident in the ongoing debate of privacy versus regulation. Like most good things in life, bad actors ruin all the fun for the good guys.

I don’t know how this problem is solved. I would love to meet some entrepreneurs who have a good idea though.

How does this inflation end?

On a personal note, I just booked my flights for my bachelor party to Cabo. $730 for roundtrip non-stop from San Francisco. That’s just about double what I paid last year for the same flight in October.

We can blame inflation but the real root cause of all this is due to excessive spending. Let me explain.

The pandemic caused the government to print more like no end. There was excessive cash in the system and people are now looking to spend that cash. There is more demand for consumer goods and services than they is supply right now.

As there is more demand, then consumers are willing to spend more cash to purchase that same avocado, television or plane ticket. Hence the value that my dollar could buy is less today than it was last year.

This cycle of excessive spending by consumers is driving this inflation today.

In basic terms,. the easy answer is to get Americans to spend less. Unfortunately, this is a country where everyday Americans are used to excess. We like our extra cars, our vacations, multiple TVs in the household, etc.

The only way to curtail this inflation is to reduce the amount of dollars in circulation by raising interest rates. This upcoming November will mark the anniversary of the first interest rate fed hike.

The scary part to me is how all this will end. Americans are spending more and saving less. Many of those are spending more than they can afford. Like most, I’m hoping that this will be a soft landing, but there could definitely be more economic pain in the near future.

Random Monday

I have severe writer’s block right now and to be honest, can’t really think of one topic to write about. I’ll call it a case of a the Mondays on a gorgeous day in SF. Until I get back on track tomorrow, I figured I just write about a bunch of random things in my mind instead.

Sophia and I finally found a ceremony location for our wedding in December. We found a small plant shop that used to be a restaurant in the Embarcadero. They have this awesome secluded patio with good views that they’ve been hosting some wedding ceremonies on. I cannot tell you how happy I am that we finally booked the venues and can start focusing more on the fun parts of the wedding like the food, drinks and welcome party location.

I was nice and bored on Saturday. It was a perfect afternoon and I ended up grabbing some beers with a friend. Later that night, we decided to switch things up and play Age of Empires 2 on Saturday night. I don’t really play video games anymore, and AOE2 is a 20+ year old game. We had both played as kids and there was this amazing nostalgia factor. Video game nights are definitely going to be back in my rotation of things to do.

Speaking of AOE2… man there was something about those simple real time strategy games back in the back. Warcraft 2, Starcraft, AOE2…. those were the days. I don’t think they’re as popular nowadays, but those games teach you a lot. You have to learn about resource constraints, economies, building, planning, etc. I know Shopify CEO Tobi Lutke talks a lot about how much he learned from playing Starcraft growing up. I’m a bit addicted again and starting to play some single player campaigns now. I’ll tell Sophia that it’s part of learning agenda.

Holy shit it’s gorgeous right now in San Francisco. It’s 75 degrees and perfect out. The rest of the country seems to be in a crazy heat wave and I’m loving my life in a t-shirt and shorts in the office today. It’s amazing how much better Mondays are when San Francisco is like this.

Good and bored

It’s Outside Lands here in San Francisco this weekend. While I imagine it could be a great time, big festivals are just not my cup of tea so I’m happy to sit this one out. This makes for a really nice and relaxing weekend at home.

Most of my friends are at the festival and Sophia is leaving to stay with a friend in Walnut Creek tonight so I’ll have a nice and quiet sunny San Francisco day to myself. That leaves me good and bored for the remainder of my Saturday.

I used to love these days and nights when I was in my earlier 20s. I was able to get a reset and be with myself, and my own thoughts. I used the time to read, brainstorm and just enjoy being alone. I felt that a lot of my best ideas and motivation came from these days of solitude.

Unfortunately, I don’t get many of these days anymore. Life seems to just move a lot faster now that I’m in my 30s. I’m excited to be nice and bored all day.

On hold for the summer

I’ve spent a lot of time trying to learn as much as I can about the markets and investing over the last 7 years. It was a hobby of mine prior to starting at Secfi and when I joined Secfi, it became part of my job.

One major thing that I didn’t realize was just how much the markets impacted nearly everything in business. For those that work in finance or adjacent, it makes a lot of sense, but you don’t really realize just how connected everything is until you’re living in this world.

When the capital markets dry up, everyone feels it’s impact in one way or another. It’s one gigantic ripple effect. A simple example for those that work in startups.

The public markets going down eventually makes it way to the private markets. Funding becomes harder to come by and companies are not raising capital to grow their businesses. Employees who work at these companies are not going to get much liquidity for their private company shares as the IPO market is dried up and secondaries are also down.

As employees do not have liquidity, they do not spend as much. They are not buying homes. They are not investing money with funds and banks. They do not spend as much buying consumer goods. The ripple effect eventually makes it’s way all the way down the chain.

Capital allocators have effectively taken the summer off while they wait out the storm to get a clearer picture. Down the stream, there are a lot of folks who work in other industries that are also seeing this impact. I spoke with a commercial real estate agent the other day who mentioned that he’s largely taken the summer off as well. I suspect many others are also in the same boat.

Fintech revenue concentration

One trend that I’ve been noticing is that many fintechs that raised money at large valuations in the last 2 years are now in a difficult situation with flat or declining revenue. The common theme here is that a lot of these fintechs had large concentration of customers in the crypto space.

With the crypto boom in full force the last 2 years, many fintech startups had massive revenue spikes as they provided services necessary for other crypto startups to operate. Think of all the things that you need to run a crypto exchange for example: payments, KYC, security, etc.

Now as crypto trading and volume has declined massively, we are starting to see the ripple effects throughout the fintech ecosystem as well.

Like I wrote on Tuesday, many companies will be okay as they perhaps just accelerated revenue. If you Zoom out and average out the growth, it may still be a healthy growth rate for a company.

I am still long fintech, but there’s going to be many bumps and bruises along the way. Fintech will be back and healthier.

Youthful vigor

A friend of mine that works for a fund invited me to speak to their intern class today. It was a nice change up from my day to day. I spent an hour and half speaking about my career path, Secfi and life in general.

The best part about the day was that I got to meet six incredibly talented, smart and motivated individuals. My first impression was that this group is impressive. They asked lots of tough and great questions. They knew a lot about the startup and investing world.

I was in a much different mindset when I was 21 years old and wish I was as mature and motivated back then as this group.

We haven’t hired someone from out of college in awhile but it reminded me that curiosity and vigor may make up for the inexperience. Perhaps we will be dipping back in the pool and looking for that youthful vigor sometime soon.

Startup growth in 2022

Public company earnings generally have been strong but show a declining growth rate. I suspect that a lot and likely most startups will not be in such a luxurious position. After a likely booming 2020 and 2021 of growth, I expect most startups to come back to earth and experience flat or even down revenue.

In the long run, this may be okay as COVID could have accelerated growth for most of these companies.

For example, imagine a company that grew from $10m in ARR at the end of 2019 to $50m at the end of 2021, but stayed flat at $50m at the end of 2022.

There’s multiple ways to look at the company.

The pessimistic view is that the company is flatlining. Their growth has plateaued and they need to make serious changes in order to continue growth.

A more optimistic way to look at it is that the company cleared it’s pipeline and just grew faster than normal in 2020 and 2021. They paid for their success in 2022 when the market and budgets dried up. Their product may be perfectly fine, but they may need time for the market to recover and GTM to build a pipeline.

Many companies would’ve been happy that if you told them at the end of 3 years, they would 5x their ARR.

Of course, all this is an insanely simplified view in a complicated time right now in startup land. There’s many more factors than looking at growth rates of companies. But it is one indicator and an interesting one that many will be focused on as numbers start to leak out about startup performance in this down market.

Planning my wedding

Sophia and I did some big wedding planning this weekend and also started planning our honeymoon to Southeast Asia.

I was initially really against the idea of having a wedding. It all felt like a bit of a scam to me. You pay all this money for 1 night and I’ve heard horror stories of venues and vendors effectively extorting the couple. I always felt that weddings were fine if parents wanted to front the wedding, but it just did not make any fiscal sense for 20 or early 30 somethings to be paying for a wedding out of pocket.

There’s definitely some truth to that statement. I know some who have gone into debt to pay for their wedding. We’re saving for a house in the most expensive city in America and breaking into our savings for a wedding didn’t really make much sense to me. But here I am, planning for my wedding in 4 months and I’m actually excited about it.

I’ve realized that in planning my wedding, it wasn’t that I disliked weddings, I just disliked the traditional ones at cookie cutter venues. It just wasn’t me. So Sophia and I decided to do a wedding in the lounge area of a Michelin star restaurant in Chinatown… one of our favorites in the city. Food is very important to Sophia and I, and it just fit perfectly.

We’re going to have a fire spread of Michelin star rated food in a unique venue overlooking one of the coolest streets in San Francisco. That’s something to get excited about.

Of course, we had to make some sacrifices. The venue is smallish and capped out at 60 people. We unfortunately will be unable to invite quite a few of our friends.

While we won’t skimp out on the things that matter (see food and alcohol), we’ll probably be a bit more reserved when it comes to things like flowers and decorations. I’m okay with that - no one ever goes to a wedding and remembers only the table settings afterwards.

I’m pumped. We’re doing our wedding our way at a cost that sits well with us. It won’t be the most lavish wedding with all the bells and whistles, but it’ll be perfect for us.

Rest and recovery

I was about to give up golf after last weekend. I was south of Seattle in Olympia and we played Chamber’s Bay. The course absolutely kicked my ass. I had never played a links course before and Chamber’s was not a fun introduction.

The first 3 holes, I was going up and down the hills searching for ball. I never recovered after the disastrous start and everything was out of whack the rest of the round. I shot a 55 on the front 9 which is the highest score I’ve posted in a long time. The next day at Indian Summer was not much better except that I recovered a bit on the back 9.

Today, I played Harding with a partner. Everything felt different. I was well rested after a good night’s sleep. I felt loose and ready to go in the car ride over. It was far from perfect, but my swing felt good and natural from the minute I got on the range through the 18th hole.

Last weekend to today was really night and day. It reminded me of the importance of rest, recovery and how much alcohol impacts both of those things. I had flown into Seattle on Thursday night and probably had a few too many drinks. Despite sleeping in a bit the next day, I could definitely tell my body was still tired and a bit off.

I’m getting older now and my body can’t handle the booze like it used to. Sleeping 7 hours is a must nowadays. Getting rest after a hard workout or a long day is a necessity not a luxury.