Happy Birthday Sophia

I can’t remember the last time that my inbox was this quiet on a Monday morning that isn’t a holiday. I suppose the Monday after the Super Bowl is an unofficial holiday and maybe we should just combine it with President’s Day at this point.

On another note, we spent the weekend celebrating Sophia’s 35th birthday which is tomorrow. On Friday, we got our group of friends together for an amazing dinner at Ilcha on Union. It was elevated Korean bar food and the hype was justified. Even more memorable than food was the fact that our friends and I probably let loose a little too much. We drank like we were celebrating a 25 year old birthday, not a 35 year old one.

Needless to say Saturday was a bit of a wash for me. We ran a few errands and took it rather easy for most of the day. At night, I took Sophia to Itria in the Mission which was another restaurant that we had been wanting to go to for the last year. The crudos and the pastas were amazing there.

This birthday would mark the 5th birthday that we’re celebrating together. I suppose this is really early on in our lifetimes as 5 years is really nothing in a relationship. But it also means that Sophia has put up with me for over 5 years which is no small feat. I count my blessings everyday that I met someone who volunteers to be with me for life. I’m a lucky dude.

Not getting out of your own way

98% of the people I meet doing this job at Secfi are awesome people. They’re smart and generally always willing to learn. Most of my job is working with these awesome people and helping them with a complicated financial situation in which they are not familiar with. And they’re incredibly grateful for it.

Today was one of those days where I worked with someone in that 2% and it was brutal. This particular prospective client had been working with myself or someone on my team for the last 3 months…. largely looking for free advice. I typically don’t mind giving it.

I like to think that I understand my value prop. I generally always aim to give unbiased advice and like to put myself in their shoes. I would never recommend something that I wouldn’t do myself if I was in that situation. But I also get that many people won’t take the advice for one reason or another. Sometimes it goes over their head and sometimes they just view things differently than I do. That’s okay with me.

This particular individual was possibly the most bizzarre situation I’ve dealt with in my 5 years at Secfi. He keeps asking for advice, and then pretty much tosses it aside completely in the middle of our call. It felt like he was trying to get us to affirm his really shitty financial plan which we of course wouldn’t do.

On that shitty plan - it quite honestly felt like this guy has created a plan based on doing the complete opposite of what someone should be doing in this situation. Without diving into specifics, his plan entails doing nothing now, but then double down in months when the risk is much higher, and the benefits are much lower.

It wasn’t a decision based on risk, but solely just a misunderstanding and focusing on the wrong things. I couldn’t believe the situation and how hard headed this guy was. Unfortunately for this guy, he can’t get out of his own way.

Grass is always greener

One of my weekly lunch spots by the office is this new restaurant called Hed Thai. It’s smack dab in an alley way in the FiDi and just opened a couple months ago. I was stoked to see that there was an Isan style Thai joint opening up by my office and they have these great lunch sets.

I’ve become friendly with the owner’s husband, Dennis, who runs the front of the house. Today we had a long conversation about living in San Francisco vs Bangkok. He had just moved with his wife to San Francisco a few months ago so they could open these restaurants together.

I have always loved southeast Asia and had on many occasions thought about moving there. I figured that Bangkok would be a likely place where I would set-up given that it’s a large city which I would need. I joked that every week when I start daydreaming about moving to Bangkok or Asia, I have to go to Hed to get my Thai food fix.

It was a fairly notable conversation because while I was dreaming about moving to Bangkok, he was talking about how happy he was to be out of Bangkok and here in San Francisco. He had mentioned that he loved it and did a good five years there, but after awhile, the craziness of Bangkok just gets to you.

It was a great for me to remember that the grass is always greener on the other side. For as much as I get sick of SF from time to time, there are millions of people who would love for the chance to live here. It puts things in good perspective.

Going public or staying private

Ever since the ‘08 crash, most startups have taken much longer to go public. Back in the day, internet or tech companies would go public after only a few years with little revenue traction. This shifted dramatically after ‘08 presumably due to the fact that VC money was more readily available.

Fast growing startups could live very comfortably off VC capital and grow without the issues of being a public company. There would be no fluctuating stock price to worry about, no burdensome filings, no scrutiny from the SEC, etc. They could just focus on their goals without the outside noise.

During the pandemic, I had predicted that the trend would likely reverse in the 2020s and companies would flock to the public markets earlier than the predecessors such as Airbnb and Palantir.

So far that prediction has been a mixed results. Lots of companies did hit the public markets sooner through SPACs, but what we quickly found out was that many of these companies that did go public through a SPAC were definitely not ready to be public companies yet.

With the IPO market completely dried up right now, it will be interesting to watch what the rest of the decade will look like. Companies like Stripe seem to be hunkering down and avoiding the public markets for as long as possible.

On the flip side, VC money is now more expensive and we may see a world where companies will need to go public earlier.

The next big one

I was just reading about all the sad news in Turkey and Syria right now. There was a 7.8 magnitude earthquake and this could be one of the deadliest in the last 100 years. The death count keeps rising and it’s pretty damn devastating to see all the photos and videos coming from the rescue efforts. I’m hoping that the rescue efforts catch a break from the weather.

I walked by a newspaper stand today and the headline of the Chronicle was pondering what an 7.8 magnitude earthquake in San Francisco would look like. Growing up in SF and now living here, I can’t help but think when the next big earthquake will hit. When I interned for the city in high school, the scientists had projected that it was a matter of time, not if.

The thought of such a large natural disaster scares me. But at the same time, we’ve been fortunate to live in a place that has prepared for the next big earthquake for quite sometime. I still remember my mom keeping packs of water and food in the basement just in case there was disaster though. I suppose it’s a reminder that it’s always good to be preparted.

Electric vehicle hype

I’ve been on an electric vehicle kick lately. I’ve never really been a car person. I had my high school 4Runner from age 16 until 23. Then when I moved back to SF from NY, I stayed carless for the first year until my little sister gave me her high school Jetta. I’ve been driving the same car since. It gets decent gas mileage and it’s the perfect beater car for San Francisco.

Lately, I’ve been eyeing a lot of electric vehicles. Teslas have been pretty popular in San Francisco for some time now, but it’s been really cool to see the legacy carmakers actually catch up and start shipping new electric vehicles.

I randomly saw this Tweet from Sam Korus at ARK and I was also surprised to see that there were pretty much no >300 mile range EVs from the time Tesla introduced one in 2015 until 2021. I suppose I had never really thought about it - but looking back, I don’t recall many other electric vehicles besides Teslas until recently.

I’m pretty excited to see what the market looks like for EVs in the next couple of years. As much as I want to pull the trigger on something soon, I also know that the market is catching up to Tesla which is a good thing for consumers. EVs will be better and cheaper in the near future.

Celebrating a good week

I had a great week both personally and at work. There were no major wins, but I just had a solid week. I slept well, woke up at 6:30am every day and was in the office by 8. I was productive the whole week at work and was able to work out 4 days Monday-Thursday. I sit here writing this blog post on Friday afternoon with an empty schedule ready to attack my to-do list.

Unfortunately weeks like this feel more and more rare as I get older. My life personally gets busier by the year. My growing responsibilities at work means I often have to put out unexpected fire drills and change up my schedule.

Weeks like this are rare nowadays and it’s not lost on me. I’m feeling real good going into the weekend and I’m going to enjoy it. In a tough environment, it’s good to celebrate these small wins.

Market Rally

Quite a few people have been excited about the market rally the past week. It’s nice seeing some green to start out the new year.

For myself, I remain cautiously optimistic. Bear market rallies happen often and can shatter some hopes. I am nowhere near ready to declare that we are in for a soft landing this year. Although one can hope.

I haven’t changed my plans when it comes to investing. I’ll continue to buy stocks every month as I always have.

My individual stock picks haven’t changed since a month and half ago. My thesis for these picks remain the same. I may start nibbling a bit more on sizing especially as I’m sitting on a good amount of cash from tax loss harvesting. But overall, I’m staying cautious.

Startup positivity

The last year has undoubtedly been a tough one for startups. And it likely will continue or get worse until it gets better. I’ve always prided myself as someone who is optimistic and always looking at the positives, but this year has taken a bit of a toll on me mentally and my positivity at work has suffered.

I learned pretty early on at my time at Secfi that startup folk would need an overly positive attitude in order to survive. The job is hard and you’re constantly getting sucker punched in the face left and right.

My first few months on the job, we lost a major partner and was unable to continue generating revenue. It was a gut punch and my first immediate thought was that we were fucked. Little did I know that this would be the easiest and smallest of all the crises that we would face in the future.

We ended up taking the opportunity to get things above board and build out the business to scale. We took many months off from generating revenue, and instead focused our attention on improving our product, tightening up from a compliance standpoint, and implementing a lot of process efficiencies.

Something horrible ended up possibly being the best thing for us and put us in the best position to succeed going forward. I’m not sure if we’re in the early stages of this startup crises, the middle, or towards the end, but I need to remind myself that iron sharpens iron in this crazy startup world. Hopefully we’ll be much better coming out of this than we were going in.

Stripe

The tech news of the week has been centered around Stripe. It all begun when they sent out an email saying they were looking to go public or organize liquidity for all in the coming year.

This was of course not news to anyone that follows Stripe closely. It’s been fairly public knowledge that many are coming up on the 10 year expiration of their equity grants and the company would need to take some sort of action. This is not unusual with companies like Airbnb and Palantir notably running into the same thing in the last couple of years.

The bigger news hit last night with Stripe reportedly raising $3B at a much reduced valuation. I haven’t had a chance to do much reading about this, but it’s reportedly to pay the tax bills that they are required to withhold on.

The media has seemed to focus a lot on the downround of the company. My personal take is that this is great leadership by Stripe to just take one on the chin and just keep moving forward. The reality is that no one can control the market and great companies will have to ride the highs and the lows of the market.

Stripe seems to be sticking to a plan and ignoring the market forces involved here. Of course, that does come with backlash as they were likely ready to go public many years ago. Hindsight is 20/20 but a lot of employees would’ve been much wealthier if they had done so.

On the flip side, we don’t know where Stripe will be in the next few years. There’s a good chance that the company will be in a much better position in the long-term because of the route they took. We’ll have to see where this ends up - but I think a lot of other companies need to follow suit sooner or later and come to terms with the new reality of their lower valuations.

The next phase of life

I took Friday off and took off to Palm Springs for a quick golf trip with my close friends. I had initially decided to not go, but changed my mind as I realized that these golf trips will be pretty rare in the near future. It’s a sad realization, but also something I’m glad I’m thinking about today so I can enjoy this stage of my life to the full extent possible.

I turn 33 in a little over a month and for better or worse, I’ve quickly realized that I’m wrapping up one phase of my life and entering into a new one shortly. That was evident on our trip to Palm Springs this past weekend. My friends and I didn’t step foot in a bar and we were in bed by 11 every night.

This is probably the first time we’ve done a guys trip and hadn’t gone out one night. Of course, there’s a lot of positives to this - I felt amazing on Sunday and played some decent golf. It was nice not being hungover on the Sunday after a trip. Whether I like it or not, the transformation has started.

Things will change for a lot of my friends and I soon. Until it all changes officially, I’m going to continue to have fun and enjoy this stage of my life for as long as possible.

Gaming

I saw that Nintendo Switch is releasing an updated version of Goldeneye on the platform soon. It brought me back to my childhood and makes me want to go buy a video game platform. I played a bunch of Goldeneye as a kid. I beat the game and then when friends would come over, we’d battle each other and then yell at each other for cheating by looking at each others’ screens.

One thing I never realized when I was in my heyday of playing video games was just how much I was learning from playing games. There’s of course the hand-eye coordination behind it all. But there’s a whole lot of strategy behind playing video games as well. These strategies can teach you patience, risk-reward, social coordination, leadership, resource allocation…. the list goes on.

My Dad would always yell at me for playing too many video games growing up. I believe that this generation of parents will likely encourage their children to play more video games. And I believe that’s going to be a net positive for our future generation of business leaders and entrepreneurs.

The "slow" growth model

I had a great due diligence call with a company we’re working with yesterday. They are led by a strong and experienced management team who has taken a previous company public. During a period where everyone went to growth at all cost, this management team decided to stick their plan.

The company has been around for over 11 years in a fast growing tech industry. Many of their competitors started later, grew faster and some have even exited before this company. The growth at all cost model had been popularized and rewarded in the previous 5 years. During this period, this company was probably a bit overlooked and even “unsexy” due to their slower growth rate.

Nowadays, they are sitting pretty with consistent growth in a market where many of their competitors are struggling. They have a product in which customers love and they have a low employee churn. They have enough capital for years and can trigger how much cash they want to burn for growth each year.

As I learned more about the company yesterday, I couldn’t help but think that their time is now. They’ve just built a damn solid company where they could control their destiny. Unfortunately not many startups created the last 10 years have that luxury today.

The downsides of startup life

I’ve never been shy to write about the downsides of working at a startup. I’ve been doing it for 4.5 years now and I do believe that the VC backed startup life is way too glorified often.

I started in 2018 when the SoftBank capital as a moat era was ending. I had thought that would be the end of the glitzy startup portrayal in media and social media, but then we went into the post-pandemic world of 2021.

Perhaps now is the time that the glorification of startups will end. This pullback and market situation is brutal enough that it’ll scare away most folks and leave behind the people actually dedicated to building.

Don’t get me wrong - I love working at a startup and it has been one of the most rewarding experiences. But anyone that has been through this before knows how brutal things can be. Someone told me years ago that working at a startup is like getting sucker punched in the face every other day and I can safely say that feels very fitting.

Many people I interview and outsiders have an unrealistic expectation of what it’s like working at a startup. The most common thing I hear from folks is that they want to work on everything rather than focus on one thing. That’s all fun and games until you have the work of 4-5 different people sitting on your plate.

For those that truly love building though, there’s nothing more rewarding than growing a startup. People just need to make sure their expectations are properly set.

Getting into a routine again

Since my wedding a month and a half ago, I’ve been letting myself go and having a bit too much fun. This is probably a bit natural as I tried to get in really good shape going into my wedding. And then afterwards, it was the holidays and I just wanted to relax. That means eating a lot unhealthier, drinking a bit too much, and not working out as often as I usually have.

I’ve started to finally feel the guilt the the few days which is my body telling me that I need to tighten up a bit. I suspect a lot of people are in the same boat after the holidays and the new year.

My trick for getting back into things is just settling back into my routine.

The first thing I’ll do is to set my workout schedule for the week in advance on Sundays. That allows me to know exactly what my schedule looks like for the week and lowers my chances of backing out.

Secondly, I usually set boundaries around when I can go out and have fun. While the holidays and being on vacation gives you the social okay to have a beer whenever, saying yes to drinks every Tuesday is not a habit I want. I’ll usually make a deal with myself that I do not drink on weekdays except when it’s a special work or personal occasion like a birthday.

Lastly, when it comes to food, I also just look to put myself back in some sort of routine as well. My normal course of action is to eat healthy lunches and cook healthier dinners during the weekdays. The deal I make with myself is that I can be a bit more liberal with my food over the weekend.

Setting these “routines” has largely worked for the last few years. It works for me as it’s a healthy balance that I believe is reasonable and sustainable for the long term.

Mental vs physical exhaustion

Early on in my career, I would be able to work 80+ hour weeks at my job. It wasn’t uncommon that every few weeks in a quarter, we’d be so busy that many of us would be in the office 14+ hour days. By the end of that stretch, I would be physically exhausted but after a few good nights of sleep, I’d be back in good position to do it again.

Nowadays, I don’t nearly work that many hours thankfully, but I do feel that I am even more exhausted after a week than I used to be. Part of it could just be age. I was in my early and mid 20s when I was pulling those hours. But perhaps the bigger part of it is that the work I’m doing now is just much more mentally exhausting.

When I was an Associate at my firm, I would just grind out spreadsheet after spreadsheet for 14+ hours a day. It could be mentally stimulating at times, but it was a different part of my brain… I suppose the side that works with numbers and calculations.

Nowadays a lot of what I’m doing requires deep thinking and brainstorming. If it isn’t deep thinking, it’s dealing with people. The work nowadays is just much more mentally taxing than grinding out a spreadsheet for me.

It’s a much different kind of exhaustion from work and simply sleeping it off doesn’t always work. For this reason, I believe weekend time off and vacations are vitally important. I believe the risk of burnout from mental exhaustion is much higher than the risk from physical.. at least for me.

Gambling

I was reading this morning that it may be a matter of time before casinos open up in New York City. The revenue that would come in is just too big to ignore and it seems like New York may be up next to legalize gambling.

It was a bit fitting as I’m in Lake Tahoe for the weekend and we will undoubtedly head to the casino on Friday and Saturday at the stateline. I understand the downsides of gambling, but as a reasonably responsible adult, my friends and I love the casinos.

Gambling led by sports betting has hit the point of no return. Despite gambling still being illegal in San Francisco, you don’t have to go far to find a bookie where you can place sports bets. I know a lot of friends who have accounts in different states as well.

At this point, states need to come to the realization that this is happening and gambling is an opportunity. San Francisco may want to take note of what’s happening. Perhaps legalized gambling may be that jolt to bring energy back to the city.

Tahoe (+1 for SF)

It’s almost everyday that someone is trashing San Francisco on Twitter. For all the problems that San Francisco has, I don’t know too many major metropolitan cities that provides you access to a vacation area like Lake Tahoe.

It’s truly one of my favorite places during all 4 seasons and it’s a blessing that you can get up here from San Francisco in under 4 hours.

I made it up to Tahoe today for the first time this winter. I needed a change of scenery for a couple days of work as I’ve had a tough week and a half.

On top of all this, I’ll be able to hop on the slopes over the weekend nice and early. When Austin or Miami gets a Lake Tahoe, I’ll start considering moving.

Working from paradise

I spent the morning looking at flights to French Polynesia aka Tahiti. Someone on my Twitter TL had a post saying that it’s cheaper to go to paradise than it is to go to Disneyland and that got my interest.

After coming back from my honeymoon, I’ve definitely have the travel bug a bit and I’ve been doing a bit of dreaming at nights thinking about some of the trips Sophia and I can take this year.

One interesting part about Tahiti is that it’s only a 2 hour time difference from San Francisco. I can theoretically still work on San Francisco time. Of course there’s many other factors to consider… like the fact that you need to actually work rather than just lounge on the beach.

Sophia and I spent some time in 2021 working from New York and Mexico. It was an amazing experience and I’ve had the itch to do it again soon. I’m fortunate to be working at a startup that will allow me to do that, but I do wonder what the impact is on overall productivity.

I feel like I’m disciplined enough to get my work done, but I know not all companies will trust their employees to do the same. It’s a huge employee benefit perk, but I do see how productivity can suffer. I wonder if the remote first companies will allow employees to work from anywhere and if that will continue to become a trend post-pandemic years.

It will be interesting to watch and see how this trend develops.

The misconception with tax strategies

Every week I take a call with a startup employee or founder who is looking for “creative ways to minimize tax”. There are of course, many ways to plan around your taxes and ultimately come out ahead, but these individuals specifically are almost always looking for a silver bullet solution.

In order words, they are looking for a simple win-win solution that will help shield them from taxes. They want to stay in California and not pay California taxes. Or they want to take advantage of the ISO tax benefits without exercising. That unfortunately does not exist. Nearly every legal tax strategy comes with a “but”.

Some simplified examples:

• Eduardo Saverin (one of the Facebook founders) was likely able to avoid paying US taxes on the Facebook IPO. He just had to renounce his US citizenship and no longer can come back to the US.

• You can use various trust structures to avoid gift and estate tax in the future, but each trust has strict requirements such as you gift the shares completely to charity in the future or the shares are permanently in the beneficiary’s name. You may avoid taxes on the transfer of shares in the future, but you’re quite literally giving them away.

• You can take advantage of tax breaks on stock options if you exercise earlier. You may even qualify for QSBS which is the biggest tax break for early stage founders and employees. However, it requires that you buy the shares today and risk that cash if your company does not make it.

Of course, things are a bit more complicated than the above. This was meant to be a simple view to prove my point that there’s no perfect and easy tax strategy. There is a cost to all proactive tax plans… quite often that cost is worth taking.

But for those that are looking for an easy answer to avoid paying taxes as an American citizen, you may need to lower your expectations.