Our office in San Francisco

We are now looking for another office in San Francisco after our current lease is trying to 3x the monthly rent. In a market where people are reporting that almost 40% of offices in downtown San Francisco are vacant, I do not see how they end up leasing the space out. But that’s not my problem.

It is my problem to figure out where our next office will be. I’ve written recently about how there is a complete lack of energy in San Francisco. Most people who still remain in the Bay Area seem to want to work from home. Contrast that to New York where people are in the office almost every day.

We’ve got some decisions to make as a team here in San Francisco. As of right now, we have at best 5-10 regular attendees in the office. Our New York office already has that same amount and it’s a much easier flight from Amsterdam where our 3rd office is at. We’ll need to decide if we want to invest in space in New York rather than San Francisco as our headquarters. At this point, it seems like this is the logical decision especially with our capital partners being based in New York.

We’ll need some sort of space in San Francisco. The choice will be between a co-working space or signing another lease somewhere. The flexibility of the co-working space is really nice, but that also comes with some major issues. We do know that we are going to downsize the San Francisco office significantly from a 60+ person office down to probably a 15-20 person office. It just doesn’t make sense right now for us to be paying for such a large space and no attendance.

Brainstorming over Zoom

I’ve been in back to back meetings for the last week. It’s been a long week of long Zoom calls meeting with leadership and various teams on planning for the 2nd half of the year. I’ve also put a lot of emphasis on getting feedback from as many teams as possible to revamp some of our processes during H2.

Ideally, we would all be in person and work through it in a conference room. Unfortunately, we’ve had to resort to Zoom and it’s been exhausting, but fulfilling. I’ve learned a lot about working on Zoom, especially in the group context and have come a long ways from April 2020.

Here’s some of my favorite tips and hacks when it comes to group brainstorms over Zoom:

• Lower you expectations when it comes to Zoom. Video conferencing has severe limitations and everyone knows it. Some people expect it to completely replace in-person meetings and by doing so, you’re setting yourself up for failure. Know it’s limitations.

• Have one moderator that keeps things on track and ensures that everyone has a voice. You can’t talk over people on Zoom and it’s often hard to see the people that are less assertive trying to speak up. One person needs to be watching the group and ensuring that everyone can speak.

• Keep everyone on track by asking each other a lot of questions. It’s really easy to get distracted on Zoom and multi-task. People get bored easily and Zoom makes things much worse. Make sure that you are keeping each other honest and challenging each other at all times.

It’s not perfect, but Zoom gets the job done. With a few minor tweaks, life is a lot better over Zoom.

China and liquidity

I woke up to the news of the Chinese government squashing a group of protestors who are attempting to get their life savings out of their bank. It appears that some Chinese banks are going through a liquidity crisis and have resorted to freezing accounts. On the surface, this seems like a terrifying prospect and perhaps a sign of a worsening economy.

China is already dealing with strict government mandated lockdowns. I can only imagine the plight of the Chinese now that there is a potential liquidity crisis looming. I don’t know how this all ends, but I’m hoping it’s resolved soon.

All this stuff scares the living shit out of me. I can only imagine what it’s like to have your life savings locked up with no way to retrieve it. It’s a stark reminder that I need to do a better job saving in this market. All this could get a whole lot worse.

A change of scenery

I had a great weekend up in Lake Tahoe. A change of scenery for a few days of work and a weekend to let loose was great. After a good 3 days of closing out the work week, my friends and I went to gamble a bit and then watch the American Century Championship which is a celebrity golf tournament at Edgewood in Tahoe.

I had been struggling a bit with productivity the last couple of weeks, feeling a bit down and demotivated. I believe this was attributed to just a long last few months of grinding mixed in with the perceived negative sentiment of the world right now. Being up in Tahoe with a switch-up on my day to day routine was a nice breather and I seem to have my mojo back.

It was a good reminder to switch things up when they everything starts to feel stale. I’m a creature of habit and sometimes I fall into the same boring routine for weeks and months on end. It can get boring real quick. I’ll look to kick things off in H2 2022 with a bit of a clean slate when it comes to my schedule. New food, new workouts, new work locations… it’s all on the table.

Future of NFTs

I’ve had a lot of discussions with friends and colleagues about NFTs and the drop in value. Lots of mainstream media seems to be picking up a lot of the failed projects primarily around celebrity projects failing to live up to expectations.

As someone who has participated in a few NFT projects and spent a decent amount of money in the space, I truly believe that this will be good for the ecosystem in the long run. There were way to o many get rich schemes more akin to pump and dumps than real businesses and projects. The vast majority of people that bought NFTs over the last year were in it for the quick profit. I know as I have a lot of friends who were in that boat.

Over the long run, I do see value in NFTs. In the most basic sense, you can compare them to collectors items in which people spend a good amount of money on even in this day and age. If you think collecting items and art is a worthless endeavor, then I’d imagine you’d feel the same about NFTs.

Beyond the collector aspect and online swag aspect of NFTs, I believe we’re still just touching the tip of the iceberg when it comes to NFT use cases. There’s are and will be unique ways NFTs can be utilized in real world use cases beyond the get rich schemes.

Of course, the challenge will be adoption and the pipes and infrastructure for crypto is just not there yet. As my stance has always been, I’ll be participating in NFT/crypto projects that I want to be part of. There is great learning potential there and I want to be part of the evolution of this new technology.

The (lack of) energy in San Francisco

Yesterday, I tweeted about how going into the office in San Francisco is a bit depressing nowadays. There is noticeable drop in people compared to pre-pandemic times and the energy overall is just lacking. Compare this to other cities who have fully come back and it’s a bit sad to see. I can tell that I’m not the only one that feels this way as the tweet had a lot of interactions on it.

As much as I want to blame San Francisco politicians for this, I believe this is created by lax tech culture of the late 2010s. Employees and companies were in boom times and there was a shortage of labor so companies did everything possible to make employees comfortable. A lot of tech workers in San Francisco would quit their jobs if their companies forced them to go back into the office. Call it what you want… the future of work… tech 2.0… privilege. It is what it is right now in SF.

I am saddened by this and realize that we likely won’t ever get back to the point of bustling San Francisco downtown in the 2010s. There is a change in culture and remote work. Yes, things will rebound and get back to some semblance of normalcy, but I think our best case is probably 50% of the peak in 2010. Perhaps 75% if the market starts to shift significantly in favor of employers.

I can’t make Google or Facebook force their employees to come in and fix this lack of energy in SF. However, I was glad to find out that I wasn’t the only one who felt this way. I had multiple people that I have never met DM me asking to grab lunch or coffee in SF as they had felt the same way. I see this as a great way to meet new people who are building just like me.

I’m not sure what will come out of this, but I’m excited to meet some new friends for lunch next week and see where it goes.

H2

H2 2022 is here. Crazy to think… this was a fast 6 months. It was just yesterday we were closing a record 2021 and the markets were still booming. Things have clearly changed since then.

I’m not sure what H2 will look like in terms of the market and economy. Many are saying we are already in a recession and they may not be wrong. Quite frankly, in terms of work, I’ve gotten to the point where I need to care much less.

Planning for Q3/Q4 over the last few weeks have done wonders in terms of clearing my head. I’ve been too focused on external factors and not focused enough on the things that we can control. So for H2, I’m keeping things simple and focusing on myself, my team, and my company and the things we can be doing better.

When times are tough externally, it’s a perfect time to focus on building and that’s what we intend to do at Secfi. Our mission at the company hasn’t changed and will not change based on the economy or the market. I’m looking forward to this change of pace and the newly found headspace.

Tired

The 4th of July holiday came at a perfect time. I feel absolutely dead this weekend. It was a brutally long week of work and I feel like I haven’t been getting proper rest. I reluctantly went out to grab a dinner on Friday, but came back absolutely gassed.

I was dead all day on Saturday and when I went to bed, I started feeling like I was getting aches and the chills. I suppose it’s some sort of stomach flu that hit when my immune system is at a low. I feel a lot better now after sleeping nearly all day.

I’d imagine this is my body telling me that I need some more rest and sleep. I plan to do just that the rest of today and this week. Being a shell of yourself is not the way to live life.

Cassidy Hutchinson

I’m just starting to catch up to the news of Cassidy Hutchinson’s testimony. I definitely have no desire to write about the politics or the legal side of things here, but I did want to applaud her for what she did.

I find it impressive that a 26 year old presumably went against her political affiliations and prior allegiances in order to tell the truth on what happened on January 6th. I can only imagine the immense pressure that she is under from all parties involved.

By taking the stand and telling the truth, she invited herself to a lifetime of vitriol and hatred. Her name will forever be associated with the events on January 6th and her corresponding testimony. Not many 26 year olds would have done the same thing.

At the end of the day, the truth matters and the American public deserves the right to know the truth. She did the right thing for herself and her country.

Private company deals

Yesterday, I wrote about how I’m accumulating a larger cash position in the next few months in order to prepare for a a worsening economic situation. One exception to that strategy was an investment in a private company that I had been eyeing for a few years.

This was the first new investment I had done all year long as the markets have been slowly on a downturn. I have largely been sitting idle on the public markets. My overall position the last 6 months have been defensive. But on the private market side, I saw these investments as longer time horizons so I was okay with the pricing uncertainty due to the markets.

With this investment, I have now put a good amount of money to work in 3 different startups ranging from Series B to F. Each of these investments come with widely different theses.

The first company was a Series B that I invested in last year had the potential to be a game changer in a growing industry. It was a rich valuation which I acknowledged, but I saw it was an opportunity to potentially 10x in the next 5-10 years.

The second company was a Series B that I invested in earlier this year. It was an amazing opportunity to gain exposure to an earlier stage company in the space industry. Furthermore, the Founders and backers were hard to bet against in this industry.

This latest investment is the latest stage company that I have invested in at the Series F. It was just too good of an opportunity in an industry that my current portfolio had no exposure in (purposely not discussing the industry due to confidentiality reasons). The company is led by a repeat founder that has sold a company for over a billion dollars in an adjacent industry.

I’m excited about these initial investments as I continue to build out my personal private company portfolio. Given the uncertain times, I feel a lot better putting my money to work in companies that are expected to exit in 3+ years and are well capitalized.

Preparing for the worst

Sophia and I chatted a bit this past week about how we should be looking to save a bit more. With the market down and the possibility of a recession coming up, I’ve realized that we need to prepare for the worst case scenario.

Overall, I am happy where we are at financially, but it could be a lot better. Like most, we’ve been susceptible to lifestyle creep over the last few years. I’ve been guilty as well and a lot more loose with my cash the last couple of years post-pandemic. As someone who was really aware of the lifestyle creep, it was hard not to spend more during the past 2 years. The promise of the “Roaring 20s” was something ingrained in my head as I traveled a lot and bought toys. It’s time to settle down a bit.

I’ve also underestimated how much cash I should be holding onto. In the last few years, I’ve been putting a lot of money to work by investing in the public markets or startups. That’s great of course, but in a downturn, I’d feel a lot more secure for Sophia and I if our cash balances were a lot higher.

We’re not an extravagant couple by any means, but we hope to start a family in the near future and that changes the equation. The bear market did us a favor by opening our eyes a bit that things aren’t always going to continue to go up and downturns do happen. It was a nice sign that I need to make some lifestyle and money changes to protect my family’s future.

Summer break

I joked on Twitter that the VC and startup community should band together and declare a summer break where we all just return in 3 months. We’d be tanned, rested and ready to build again. It’s been a long 2.5 years since the pandemic started and we’ve been through a lot. We could all use a summer break.

While this summer break will exist only in my dreams, I do have big plans for the summer. The capital markets and therefore deal flow has come to a screeching halt this summer. Yes, we’re open for business at Secfi but the scale is a fraction compared to last year. My friends that are investors or work in M&A have declared a mini-summer break.

While the situation isn’t ideal, it does present a good opportunity for a reset that I’m looking forward to.

First, I plan on completing a lot of things that I’ve put on the backburner such as some testing and licensing requirements. Studying on the beach doesn’t sound so bad.

Secondly, it’s a great opportunity to focus on improving and streamlining processes. With deal flow down, we can focus on internal changes within our org so we become a much more efficient machine. I have a laundry list of items that have been pushed back that I want to tackle this summer.

And last but not least, it’s a great time to focus on product and build. We have big ambitions for the coming year at Secfi and this “summer break” will allow us to get a big jumpstart on initiatives we have planned.

It may not be a true summer, but it’ll be a nice change of pace. I’m looking forward to it.

Sales in everything

A couple weeks ago, I was talking to some friends who work in different industries. Think physical therapy, conservation, science, etc. Naturally, they had asked what I do for work at Secfi and without diving into boring details, I summarized that my role like every other role is mainly just a form of sales.

They were a bit surprised and I got the usual response I normally get. “But you aren’t like a typical sales guy?”

There’s always this interesting perception that the Sales guy is that guy who can sell his shirt off his back. Smooth talker. Well dressed. You know the stereotypes. In reality, I think sales is far from that - more on that on a different post.

More importantly, sales is in every single thing you do in business. Let’s use a few examples:

Business development / Partnerships - you’re selling an agreement

Marketing - you’re selling the company or a product

CEO - you’re selling the company to investors and prospective employees

If you work at a business or startup, whether you know it or not, you’re in a sales role. It’s unfortunate that a lot of people don’t understand this. They think pedigree and resume alone will get you to where you want to be. But at the end of the day, you need to be able to sell yourself and/or your company/product to get somewhere if you’re going to move up the chain.

Optimism

It’s 90 degrees here in San Francisco today. I’d obviously rather be at the beach than the office, but the summer weather is great regardless.

I loved Fred Wilson’s post today titled “Staying Positive”. There’s power in community and realizing that you aren’t the only one going through tough times alone. Fred’s post helped me feel better about everything going on right now. It’s not just me and Secfi, but nearly everyone.

I’ve written a lot about optimism and staying positive. I know things will pass, but these posts every now and then are a nice reminder that I need my keep my chin up.

Besides work and the market, there’s a bunch of things to be grateful for. After a quick doctor’s appointment, I went to go get ice cream today. Not everything is so bad in life.

Winning

I’m headed to the Warriors parade and taking my little sister with me. Normally, these parades would be an excuse to start partying at 9am for me, but being on a Monday, I just don’t feel like it. Instead, I’ll be taking my sister to the parade. She’s 11 and has been alive for 6 parades (4 with the Warriors and 2 with the Giants). I think that’s a crazy streak and my childhood is definitely jealous.

I was 4 when the 49ers won the Super Bowl and don’t really remember much. Then I didn’t get a parade until I was 20 in 2010 when the Giants won the World Series. What a last 12+ years to be a Bay Area sports fan. The Warriors were cellar-dwellers when I was growing up. The 49ers and Giants couldn’t get over the hump.

In the last 12 years, we’ve had a Warriors and Giants dynasty. The 49ers have knocked on the door with 2 separate regimes as well and seem to be making a push. It feels good to be on the winning side of things.

Speaking of winning, there doesn’t seem to be much “winning” in the startup or investing world right now. I’m glad the markets are closed today, we can all use a bit of a break.

In the startup world, lots of companies are going to have to make some tough decisions over the next few weeks. Whether that’s layoffs, a sale of company, or raising a downround - I expect most decisions to be really difficult ones.

Like others, I’m looking forward to getting back to a period of winning. These droughts don’t last forever and the wins will start coming back for those who can bear through the pain.

Team

I’m excited to watch my Warriors hopefully close out the series in Game 6 tonight. Going to Game 7 scares me considering how Boston has won 3 of these game 7s these playoffs. My hunch is that Boston is out of gas and we should be able to roll to a NBA championship tonight.

This would be the Warriors 4th championship run cementing their legacy as one of the greatest dynasties in the history of the NBA. What’s more impressive is that this dynasty has been with the same core 3 players, Steph Curry, Klay Thompson, and Draymond Green.

I think it’s pretty damn impressive for a trio to stay together and accomplish what they have done over the last 10 years. Their first championship was 7 years ago and they’ve been through many ups and downs together. They lost 2 of those NBA Final series during the period.

I love this Warriors team because of this. They are the model of offensive efficiency that plays a beautiful game. It’s all built out of selflessness. Other players come to the Warriors and simply shine despite having 3 superstars on the team. We’ve seen it this year with Gary Payton II, Andrew Wiggins, Kevon Looney, etc.

I can only imagine what many core group of co-founders or early employees could accomplish if they stayed together for 10 years. Unfortunately most don’t make it due to personal conflict, ego, etc. In this day and age, 3 years with a core team seems like a decade.

I’ve been with Secfi for almost the last 4 years now. I can only hope to have a fraction of the success in business as the Warriors have had in basketball, but my goal is to be here for the next years with my same core group. We have something special going right now and I’m committed to sticking it out.

Exhausted

I’m on day 3 back from vacation and I’m already tired. The doom and gloom news cycle has been exhausting to read. My Twitter feed filled with layoffs, company teardowns, FUD, fraud accusations, etc. It’s not a fun time right now.

We joked at a management team meeting today that we wish we could just freeze everything and come back in 3 months. Wouldn’t that be nice?

Unfortunately, that’s not how life or business works and we’re going to have to address everything head on. I suspect that this summer will be difficult as we head on these turbulent times.

The good news is that it gets better. It always does and we need to look forward to that. We have to hold out hope that the shitty times don’t last forever while not lying to ourselves that this may fix itself quickly. Holding out on a miracle is a great way to be disappointed.

I can’t wait until we’re through this period. In the meantime, I need to remind myself to sleep more and take care of my mental and physical health in the meantime.

Shouldering the blame

I’ve been a bit annoyed at Twitter today with all the couch CEOs blasting founders and executives for “mismanaging companies”. The arguments are typically the same, saying that CEOs forgot that the point of starting a company is to make money and their hiring was a product of greed.

While I agree that anything that Founders/CEOs should take the blame for any issues with the company as that’s part and parcel of the job, I absolutely hate the simplified narratives that many people love to put out there. Most of these people are those that have never started or helped run a company.

Starting and running a company is absolutely difficult. Often you see a window of opportunity and it’s your job to go after that full speed. There’s almost always pressure from employees, investors, and the board to grow the company.

Many seem to like to pull the hindsight card here but in reality, most would have made the same decisions as these Founders/Execs/CEOs.

Another trip for the books

I pretty much took the last 2 weeks off completely from writing during my Hawaiian vacation. I had originally wanted to try to keep up and be productive in the mornings, but I realized quickly that “being productive” meant checking emails, working, and then writing. I stopped that early on to ensure that I could take the time off that I needed and be present.

It was an amazing 2 weeks on the islands. The first 5 nights were spent in Kauai visiting my sister. Then we hopped over to Honolulu to visit some friends for 4 nights. Then we ended with a bang in Maui for my best friend’s wedding.

Overall, the trip had a little bit of everything. There was a lot of chill and down time in Kauai, then lots of eating and sightseeing in Honolulu. Followed by partying and celebrating in Maui. Of course, beach time was scattered throughout the entire week.

The wedding in Maui was definitely a highlight. Through many events starting Wednesday and culminating with the wedding on Friday, we were able to hang out with a lot of old friends, share stories, and celebrate our friends’ marriage.

The sad part of all this of course is the realization that these kinds of events are coming to an end shortly. As it stands right now, none of our core group of friends have kids so we were all able to fly to Maui and party together for almost an entire week. Things will be changing in the next year or two as our group of friends start having kids and other responsibilities.

For now, I’ll be sure to cherish these times we have together. There won’t be too many more chances in the future.

Sentiment

I wasn’t old enough to be working full time during the last recession, but I can’t remember when the sentiment has been this low. This is also including the COVID pandemic. At least during COVID, people expected COVID to end and it became a matter of when, not if.

Today, the New York times had a clickbaity article titled “It’s Doom Times in Tech”. The subtitle ponders the question, “Will this meltdown permanently damage the tech world, or is this one more temporary blip?”

I laughed when I saw the headline. People need to start realizing that the last 1.5 years were the anomaly. There was too much cash in the system and valuations were too ridiculous as a cause of that. Yes, we’re in a market reset. Comps are now below the historical averages. I expect comps to reset back to the historical averages soon enough.

What a lot of these doom and gloomers are missing are that the comps were out of whack last year. While a 80% pullback in valuation is not good, these corrections will happen and you can argue they are healthy.

There are going to be tougher times ahead but innovation is not stopping. Great companies will continue to be made. Tech is not dead and will not be dead.