The Lasso Way

Sophia and I watched the series finale of Ted Lasso last night. It was bittersweet as it has been one of our favorite shows post-pandemic, but it ended at the right time, in the right way. The show has been a brain cleanse and a reminder that there is a lot of good in the world.

We live in a tough world and society. It doesn’t take much to feel a bit jaded about your life or circumstances. A 5 minute scroll through Instagram can take a huge mental toll on your psyche. It can be really easy to compare yourself to others by money, looks, goods, etc. The bad news cycle perpetuates negative thoughts in our brains.

I know it’s just a silly and albeit corny TV show at times, but there’s a lot to learn from Ted Lasso. I’m not sure if the writers intended this to act as therapy for some folks, but it certainly played part therapist for me.

If anything, I’ll remember that there’s a right way to do things and a wrong way, no matter the outcome. Thanks Ted.

Running on anabolic energy

I started executive coaching with a former colleague a few weeks ago. One of the first exercises we went through was something called an energy audit. During the debrief, we discussed something called anabolic energy. Basically, this is the energy you draw upon in a fight or flight situation.

It’s a great energy to use in certain moments, but it’s also something that cannot be sustained in the long-term. You can’t keep drawing on anabolic energy indefinitely or you will drain the tank.

Today, I put my coaching sessions to work perhaps for the first time.

I didn’t have a great night of sleep last night and went into 5+ hours of calls to start my day. By the time my last call ended at 2pm, I was zapped and my first instinct was to grab a coffee and power through. In other words, I was going to try to activate my anabolic energy to get through the rest of my work day.

Instead, I came to the realization that I was basically running on fumes. Instead of trying to power through, I ended up just laying down on my office couch and took a 15 minute power nap. I woke up feeling energized and as I sit here right now, I’m feeling optimistic and ready to crush some work.

I wonder how many of my problems today can be fixed simply by just taking a nap.

Party weekend

Hope everyone had a good Memorial Day weekend. I had a bit of a party weekend mixed in with a lot of resting. We went out on Friday night with an old friend from college. While we ended up leaving at around 11pm, the next day was not fun as we were all nursing huge hangovers. Sophia and I ended up pretty much staying home all day only stepping out for a couple hours for dinner.

On Sunday, we celebrated our good friend’s birthday at Dolores Park. A day time event turned into night. It was a good ole fashioned all day party. Surprisingly, I wasn’t in that bad of shape on Monday, but I spent most of the day just recovering anyways.

Sophia and I are in a bit of a party phase right now. We’ve been going out a lot more trying to milk the last of this stage of our lives. We’ve both been of the mindset that we should try to go out as much as possible before the whole starting a family thing. On the flip side, nursing hangovers at age 33 is not the most fun nor productive thing.

I’m going to try to enjoy things for now. We’ll snap out of it soon enough.

The hard thing about hard times

I’ve fielded a lot of calls from startup employees and executives this week. The common theme this week and the previous year is a lot of regret. People wish they sold shares into strength during the height of the bull market. People wished they planned better. People wished they diversified more. You get the idea.

There’s a lot of shoulda woulda coulda. You can’t control what happens in the past, but you can control the future. Unfortunately, what I’m seeing is that a lot of people are compounding their mistakes right now.

Someone who was not properly diversified got whacked by the tech markets crashing so they sell everything to get out. Now that individual is sitting on a whole bunch of cash and will miss the run back up.

Someone who didn’t sell in the bull run will hold onto to shares hoping for 2021 pricing to come back and may be left waiting a long time, or perhaps forever.

Of course, not everyone’s situation is the same. You can get lucky in this world. It may be a smart move to do one of the two examples I mentioned above. But for most, holding onto the past is going to come back to haunt them once again.

That’s the hard thing about hard times. As in when times are good, you can still act irrationally when times are bad. Many made a bad bet in 2021, and then will look to double down on that bet. On the flip side, many will learn from their mistakes and correct course. History has shown us that more times than not, the latter will end up in a better position.

The early stage remote vs in-person debate

I had lunch with a founder who just launched his company about a year ago today. It was great to meet in person and just interact. I’ve been starving for more in-person interactions lately. I’ve made a much bigger effort in the last month to meet people in-person and I’m loving it. Something with the pandemic has made me almost dread doing in-person meetings at times, but after I’m done, I’ve always been glad that I made the initiative.

On the topic of in-person, one thing he said to me that was interesting as that he regrets that he hired remotely right now. It has come with a lot of challenges getting the initial company off the ground.

I can completely understand why. When Secfi first started, we were spread out between Amsterdam and San Francisco. But we had our founders and others fly to San Francisco quite often. I’m not sure if we would have been successful if we hadn’t been in-person in the early days. There was just too much going on and too many changes happening too quickly.

Things are a lot different now and we’re able to functional well remote, but we’ve got much more defined processes in place.

The Tiger problem

The secondary market news of the last week is that Tiger Global is looking to run a strip sale a large chunk of their startup portfolio. Their LPs seem to not be happy with the future prospects of the fund and are likely demanding the fund to return as much capital as possible.

The prospect of hundreds of millions (if not Billions) of dollars of startup equity up for sale in a depressed market is not generally a positive thing for the ecosystem. Most of the shares will undoubtedly be sold at severe discounts.

The effects of this have been felt immediately. I spoke to a few partners and unfortunately buyers have been pulling out their bids once the news broke.

I don’t know how this will all end. It’s hard for me to see a lot of buyers for a lot of Tiger’s positions in the short-term, even at a big discount.

Back to basics

I had a nice short weekend trip up to Bodega Bay. I played a round of golf on Saturday and it was ugly, as expected. I took my first lesson in a long time last week and I knew that things are going to have to get worse before they get better.

I had a been in a stagnant position where I just couldn’t get over the hump. I was constantly making swing changes that would help for a bit, and then unravel later on. Which would lead me to my next “fix”. It was a terrible cycle and I was fed up with it.

I’ve had a lot of fun trying to teach myself a golf swing. Learning about swing mechanics and trying to be my own golf coach is definitely going to help down the road. But in the meantime, I needed to call in the pros here.

My first lesson revealed that I had some fundamentals horribly wrong. The last few months, I had diagnosed a lot of my issues correctly but didn’t realize the fixes were simply fixing fundamentals. Instead I was applying more complicated fixes that made things a whole lot worse eventually.

I can’t help but think how many solutions to problems out there are simply just getting back to the basics. I worked in consulting for 3 years and we were often brought in to fix “complicated” problems. While we hated to admit it because we were judged by our billable hours, most fixes were relatively minor when you broke the actual problem down.

Partnering and competition

As startups grow, there’s a lot of partnership opportunities with other startups and companies. These partnerships need to be mutually beneficial in order to work. You need to give as you receive in order for these things to work out correctly.

Unfortunately, one trend I’ve seen over my few years is that a lot of startups are overly protective when it comes to partnering. They view other startups as threats or competition rather than partners. That of course can be true, but more often than not, these things are not a zero sum game.

I think a lot of this has to do with the fact that most startups are inherently neurotic. They’re coming in to disrupt an industry and they view it as a race to the top. Founders often have a winner take all mindset. In reality, very few industries fall in the winner take all category.

I’ve tried to keep an open mind with a lot of our partners, despite the fact that there may be some overlap with potential customers. That has led to some great partnerships where we share the pie, but quite often it’s a bigger pie to start with.

Slowing down and enjoying the ride

When I was first started my career at PwC, I was that stereotypical hungry and young employee who was gunning for promotions and career advancement as fast as possible. I pushed to get promoted to Senior Associate early in 1.5 years where the standard time was 2 or 3 years. And then I tried to gun for promotion to Manager again at the 4 year mark which was about 2 years earlier than average.

I worked hard and lots of hours. I don’t regret it as the more I gave into my job, the more I got out of it. I learned quickly and got the attention of a lot of senior leaders. I was okay with it. I was young and energetic, ready to learn and quickly move up the corporate ladder.

When I was up for early promotion to Manager, I felt that I had deserved it and worked harder and was more productive than other Managers. I still believe that is true to this day. Yet I didn’t get the promotion. The feedback that I got was that I was still a bit immature but largely that they didn’t want to set a precedent that people can get promoted at 4 years. I was devastated and angry.

When I had a chat with my partner about this, one of the things that he said to comfort me was that I needed to slow down a bit and enjoy the ride more. He emphasized that life and success wasn’t all about getting promoted as fast as possible. While acknowledging that he appreciated my effort, he also said that I was missing out on a lot and needed to refocus more on learning and just having fun with life.

He was right. I was so focused on getting promoted and grinding out work as fast as possible. And I wasn’t enjoying it during some of the best years of my prime. I think it’s perfectly okay to be career focused, but nowadays, I also make sure that I’m enjoying the ride as well.

Resilience through the bad times

My freshman high school football class was highly touted. When our group came in as freshmen, we had a lot of promising players and the varsity coaches immediately took notice. I joined with the rest of the group my freshman year and barely played my freshman year. My body was still developing a 5’4” 135 pound skinny kid is seldom going to find playing time.

It was one of the hardest years and my first introduction to hard work. Practice kicked my ass and I didn’t get to play. We had a good year overall on junior varsity, but it was a struggle and I thought about quitting many times and again after the season ended. Was all this worth it? I ended up sticking around and working hard. I finally hit my growth spurt and I was 5’10” and 160 pounds by the time sophomore year started.

I ended up starting the entire year but it was a horribly disappointing year in terms of performance. A lot of my touted classmates got pulled up to varsity as sophomores. The coaches were first year coaches and really had no business coaching a team. I can’t recall exactly, but I think we won a total of 4 games and lost a lot of close ones.

After the season, I had a lot of doubts once again. Varsity was going to be even tougher with tougher competition and coaches. They were going to demand a lot more out of me and the team. I had a lot of teammates who felt the same and a lot of promising players ended up quitting after sophomore year. My resilience was being tested once again.

I ended up sticking around. My junior year we lost in the championship game, the famous Turkey Day game in San Francisco. We exceeded expectations with a lot of players who graduated the previous year. We fell short of our goals, but it was a magical season that taught me a lot of life skills. My senior year we ended up losing in the playoffs after another amazing season. I ended up making first team all San Francisco and it was probably the biggest accomplishment of my life at that point.

That was over 15 years ago now and I’ve had a lot of time to digest things. The biggest lesson I learned from playing football is that you need to go through the tough times in order to reap the benefits of the good times.

In today’s day and age, employees seem to be flocking to greener pastures as soon as they can. It’s something that bothers me. I understand that work is different than high school sports. You have to take care of yourself and your family financial so it’s not a perfect comparison. But quite often, when I feel down in this tough bear market, I think about what would have happened if I quit after my freshman or sophomore year.

I would not be who I am today. And I would not have reaped the benefits of those 2 amazing years on varsity my junior and senior year. I wouldn’t trade those years for anything.

Hopefully most people who decide to stay loyal to their startups in this tough environment will be rewarded on the back end when things come back up.

The future of work from home

I’m starting to become more and more convinced that the future of work will be largely in office again or at best, hybrid. Some companies can pull off the remote work culture, but I think the majority of startups and companies will start to see the benefits of being together is too great to ignore.

I hate to say the fully remote world is a ZIRP phenomenon but there’s definitely some truth in that statement as well. Employers can and need to demand more in this current environment.

The days of asking for fully remote work, demanding San Francisco salaries and equity while working in exotic locations like Tulum may be coming to an end. I’ve spoken to quite a few engineers and friends who are planning those days to end officially by the end of the year.

For now - they’re still enjoying what they can right now. I have a few friends looking to do some bigger trips this summer to take advantage.

Mother's Day

I celebrated Mother’s Day yesterday by visiting my mom’s grave. It’s been over 25 years that my Mom passed away due to breast cancer. It’s been amazing to see the progress in technology and research since my mom was diagnosed. If my mom had been born 15 years later, she likely would have caught the cancer earlier and in all likelihood still be alive today. Although that’s admittedly a sad thought for myself, I’m happy that more people have not had to grow up without a mom.

I was 7 when my mom passed. Growing up with a single parent father definitely had a major impact on my life. I was in a relatively fortunate position to have lots of family, friends, and resources to overcome any major issues. But it was still hard at times. I can reflect back to many moments in my childhood which were difficult.

I know my mom would be happy with the way that I’ve grown up. I’ve lived a blessed life and I know that was the only thing my mom wanted for me and my sister. Last year, I married Sophia whom my cousin said reminds me of my mom. That was a special moment for me during my wedding.

Unfortunately my time with my mom was short. It was even shorter for my younger sister. I hope that the best way to honor her is to live life the way she wanted me to live. It’s something that I’ll always keep in mind as I grow older and perhaps start my own family.

Roam

Our team has been trialing Roam HQ for the last week. The tool is meant to be a virtual HQ where each person has an office that you can knock on to quickly chat. We also have meeting rooms with video as well as a lounge for all of us to hang out in.

We wanted to try out this new tool as a way to stay better connected and enable more collaboration. Being mostly remote, a lot of us missed the ability to just pop into someone’s office or quickly chat about something. Those interactions have largely gone into Slack messaging which could be counterproductive.

So far, things have been great. We’re chatting more and Slack has calmed down significantly which has helped my anxiety personally. We’ve used the tool to connect and have fun with each other as well.

We’ll see how things go in the next few weeks, but I’m optimistic that this is a tool that can really help us work better together.

Generative AI startup losers

It feels like every day, I see a new generative AI startup or project being launched or announced on Twitter. AI startups have single handedly been the reason why VCs have deployed any capital in the last year. The hype is on.

It’s yet to be seen where the winners in the AI stack are going to win, but I have a hunch that the losers are going to fairly easy to spot. My perhaps not so hot take is that most projects that are effectively generative AI wrappers or lenses for consumers probably are shooting themselves in the foot by raising VC money.

Most of these projects raised money when revenue was skyrocket as people were experimenting. Getting an AI interior designer for your living room or gathering legal research are all great things that consumers want. But many of these are features that will be built by larger products that already exist.

Once these features are built into your every day applications such as Photoshop or Notion, many of these startups will unfortunately fail or have to be sold for less than the founders hoped. On the flip side, many of these startups can effectively be run bootstrapped and print money - it’s not a bad gig to just be a profitable small business!

Unfortunately, I think the allure and prestige of being a VC backed founder has been too much for most of these founders to pass up.

VC job preservation

A month ago, I spoke to a friend who works in VC and he mentioned that he’s basically just in job preservation mode.

I also just saw this tweet from Ali Moiz, the founder of Stonks.com:

Ummm...quite a few VCs seem to have lost or changed their jobs. Lots of Associates, Principals, even a few Partners. I sent out a bunch of emails to stonks users today, and seeing dozens of auto-responders specifically from investors that are "no longer with the firm"

It’s a really tough time in the industry. A lot of firms are sitting on a ton of dry powder but have not been deploying for the last year and a half. I know quite a few prominent VCs who have done 0 deals in the last year. This is of course partly strategic as the tech sector goes through a valuation reset and investors are waiting to see where things land.

A lack of deals means a lack of work for a lot of people who work in VC. No one is immune in this down market.

The state of Twitter

It’s been over half a year since Elon took over Twitter. Back when the deal was getting finalized, I was cautiously optimistic about the acquisition. As a user, I thought that the platform could use a lot of new features that would take an energetic new management team. I was also worried that one of the most important platforms would fall into the hands of an erratic billionaire.

Taking Elon out of things, the platform in my opinion has objectively gotten worse. I have never been great with social media but Twitter was my go-to social media platform for the wealth of information and ability to make meaningful connections.

Nowadays, the platform is largely a waste of time for those who don’t pay for Twitter blue. Tweeting as a non-paying user is largely worthless as the tweets are severely nerfed. By forcing people into paying users, Twitter has lost a majority of their best content.

My timeline is now filled with blue check mark tweets… half of which are more or less ads disguised as content. The only thing better so far that I’ve seen is the parody accounts of people buying Twitter blue to impersonate real people. That was been hilarious to watch.

I have no idea where this is headed. Elon has proven a point in that you probably needed only 20% of the headcount to actually run Twitter, but we have yet to see it develop into anything remotely what he has promised. Maybe he’ll actually turn things around or maybe he’ll turn his $44B prized acquisition into nothing.

The worst shot of my golf career

I played golf on Sunday and might’ve hit the worst golf shot in my short 3 year golf career. On 18 at Presidio, I was about 180 away and in between clubs. I was tired and didn’t want to chunk my shot like I had been on the back 9 so I took the higher club and decided to swing harder. I thought last hole, what the hell.

I overdid things and ended up cranking a high drawing… okay high hooking shot straight onto the cart path. The ball bounced on the pavement and flew up right over a large group of people by the club house taking a photo after some sort of event.

I narrowly missed the group of ~25 as the ball bounced short and flew right over them and the clubhouse. Luckily no one was hurt except my ego and my confidence on the golf course. I was very quick to get to the parking lot and get out of there.

It was a culmination of a terrible weekend of golf. My swing is in complete ruin right now as I tried to make some major changes last week. I rushed things and didn’t get enough practice nor instruction to make things work. Instead of playing some rounds, I should’ve been at the range some more.

In golf as in a lot of things in life, you need to go backwards before you can move forward. I’ve been delaying the inevitable with small patches of fixes here or there, but it’s about time I take a step back and reconstruct my swing the right way. That’s going to require a lot of time.

State of secondaries

We’ve spoken to a bunch of individuals looking for liquidity lately. Almost everyone will ask me for my take on the secondary markets. Here it is:

There are buyers out there right now, but they are largely opportunistic and taking advantage of people desperate for liquidity. And there are a lot of people desperate for liquidity. Despite looking for liquidity, a lot of sellers have held firm and have decided to wait for the market to rebound.

A lot of people are expecting things to get better in the next year. And they will. But what they’re also not realizing is that multiples will not come close to where they once were. Coming that with slowing revenue growth in startup world, and it may take years for companies to get back to previous valuations.

I don’t expect sellers to wait much longer. I expect volume to pick up significantly in the second half of the year as people round out year 2 of the bear market.

Culture and morale

Since the market started turning in 2022, we’ve been focused as a team on team morale. Anyone that works at a startup right now has been feeling the pressure. Rising interest rates have dried up the capital markets. Sales cycles have slowed. Nearly every startup and tech company has gone through at least one RIF over the last 18 months.

It’s easy to be down right now. Bonuses and salary increases have dried up. Equity grants have dropped significantly in value. I’ve personally gone through a lot over the last 18 months and it’s undoubtedly has been the hardest period in my career. Knowing the challenges that we’ve faced and will continue to face in this bear market, we’ve put an extra emphasis on doing the best we can for our people.

First, we want to make sure that growth does not stop. We’re placing extra emphasis on supporting our people in achieving their personal and career growth trajectories. Everyone at the company is still working through career and growth plans.

We are also giving our people the opportunity to expand out of their traditional comfort zones. Bear markets like these are a great time for employees to take on new strategic projects.

On top of all this, we’re placing an extra emphasis in culture and camaraderie. We’re all in this together. Your culture is what happens when shit hits the fan and shit has hit the fan a lot over the last 18 months. We’re doing a lot of work to ensure that our culture and values do not disappear even when times are rough.

False promise of liquidity

I was chatting with some people in my Washington Huskies fan Discord group about recruiting kids in the day and age of NIL. Since a couple years ago, schools/fans can more or less legally pay college athletes to play sports at their school. We had a funny discussion on whether each person would be a halfway decent recruiter, given that pretty much none of us work in sports or have played more than high school level football.

I came to the conclusion that I would be better than average given my day job which consists of building relationships, negotiating, and yes giving money to people. Someone else made a joke about how brutal it would be speaking to a bunch of kids (and their parents) asking for money upfront without actually earning it yet. I had a good laugh and then realized just how similar this is to startups and tech.

We get a lot of inbound and requests from founders and employees looking for liquidity. That should be no surprise, because I also like money. However I’ve noticed that over the last few years, there’s been such a large disconnect with reality when it comes to liquidity. For example, I had a founding employee reach out last month looking for liquidity on his shares after reaching a collective $1M in revenue. Yes, that’s collective.

I don’t blame individuals for looking for cash to better their lives, but I do believe that the last few years of the bull market have unfortunately created an unhealthy promise that you join a startup and you’re guaranteed liquidity at some point in time. The reality is that almost all startups fail and most startup shares end up worthless.

Liquidity comes when your company has hit certain milestones. ZIRP unfortunately moved those milestones earlier and unfortunately we now have a situation where founders and employees expect that to be the norm. That is no longer the case and it won’t be going forward, yet there is still a perception among employees that it is so.

I don’t believe this is healthy for the startup ecosystem in general. The get-rich-quick world is now over and people need to get back to joining startups for the right reasons.