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.

Earnings

It’s earnings season right now which means that most public companies will be releasing their earnings results from the last quarter.

I’ve been on an individual stock buying freeze for most of the last 6 months. I of course am stilling DCA’ing into indexes, but my “liquid” portfolio has been frozen. Things are much too volatile for me right now to be putting more money into individual stocks, especially in the growth/tech sector.

With that said, I’ve been paying particular attention to earnings this time around, not because I am buying stocks, because I am trying to get a pulse for the health of the economy.

Sales trend of software, cloud computing, cars, etc. can be a telling picture of what is happening right now in the world economy. For example, Meta’s YoY revenue fell for the first time ever which is an indicator. Of course, these are just one indicator. Slowing Facebook ad sales does not necessarily mean that we are in a recession, but it does mean that businesses are spending less than they did last year.

So far, I’ve been seeing a mixed bag. Some companies are bracing for a recession, others are saying that we’re not in the recession. My philosophy here is to err on the side of caution and be happy that I’m wrong. I’m preparing for a tough few quarters ahead and hoping for the best.

SF Energy Woes

I’ve been writing quite a bit about how the energy is lacking in San Francisco’s downtown. Everything is just a bit boring nowadays. My office has at most 8 people at a time when there are no visitors, and while my coworkers are great, I just miss the overall energy of the city.

Prior to COVID, there was this startup energy that was different. Groups of individuals wearing the same startup backpacks walking to happy hour. Spontaneous run ins with others in fintech. Waiting in a lunch line with your competitors. I loved that SF and I miss it.

I tweeted about this a few weeks ago and based on the response, it feels like nearly everyone remaining in San Francisco also feels as I do. It was great to see that I wasn’t the only one feeling this way. I had multiple people DM me asking to grab a coffee and lunch.

I was stoked when this happened and I’m meeting my first “Twitter friend” post-pandemic tomorrow for coffee. I don’t know where these meet-ups will go in the future. I think a great outcome will be if we can get a group of startup folk together into a regular happy hour or lunch so we can expand outside our immediate colleagues, but we’ll see.

At minimum, I’m hoping that these regular meet-ups turns into at least bringing back some of that pre-COVID startup energy in San Francisco.

Doing vs. guiding

My work life the last few months have been marked by back to back Zoom calls. Weekly catch-up calls, 1:1s, strategy, planning, brainstorms… I feel like I’ve had ever type of meeting ever imagined.

I had a slowdown in my meetings the first few months of the year as I got to focus solely on launching a new product with just 1 other team member. Over the last few months though, I’ve slowly built my number of direct reports back up and now have more direct reports than ever before. With that, comes more meetings and calls.

I’m not necessarily complaining of course. Moving up the ladder and leading a team is part of progressing in most career paths and I’ve had a crash course in management over my last 4 years of time. It’s an experience you don’t get in any other place besides a startup.

The biggest change for most people that move into more of a managerial role at startup will be that transition where you are “doing” nearly everything to where you are now a manager and “guiding” people through the day.

When you move into that manager role, you need to gain leverage by using your team to accomplish much more than you would be able to. Focusing on doing everything will stunt your team’s development and lead you to a path of burnout as you look to both do and guide.

It was definitely a challenge for me as I was used to just plowing through my checklist at work as fast I could… in other words… get shit done. Taking multiple calls a day to guide my team to get shit done was a gigantic change of pace as I took a step back in almost all areas of the business.

All that said, there may be nothing more beautiful at a startup than a highly functioning team that works together to get shit done. It’s an investment that you need to make as a manager, but one that pays off many times your investment in the future.

Housing prices and shortages

This past weekend, I was in Seattle for the wedding of one of my college buddies. We stayed at my friend’s parents’ home in Olympia where they live on a nice golf course. The nice was huge with a big backyard and everything you’d want in a suburban home. You even had hole #8 right behind you. It may have been the first time I thought that life in the suburbs may not be so bad after all.

Naturally being in my early to mid 30s, the topic of real estate comes up a lot. My friend’s parents made sure to ask me about whether I’m buying in San Francisco sometime soon. The unfortunate reality is that even with Sophia and my joint income, buying a home in San Francisco will likely be out the picture for at least the next 5-10 years unless one of us has a windfall.

I’m not the only one who goes through this. I know nearly all my friends are struggling to buy real estate in the cities that they love. The only ones who are buying homes are those that are lucky enough to have supportive parents. One of my clients awhile ago proclaimed that he was a “middle class millionaire” in San Francisco.

This housing shortage started in California long ago and has gotten worse. It’s definitely not fun to be directly impacted by this. My Dad likes to remind me to buy a house every time I come home. I have to remind him that buying a house in San Francisco 30 years ago for $200k was much easier than it is now.

Unfortunately for now, there’s not much we can do. At this point, my strategy is to save, invest, and hope for the best. I suppose if buying a house in San Francisco doesn’t work out, the suburbs aren’t so bad after all.

Newsletter

We launched Secfi’s first newsletter today. We had been talking about doing a newsletter for a few years now. We always thought it was a great idea to share our thoughts and opinions on the world that we live in. For many reasons, it always got put on the backburner.

The biggest reason was just time and priorities. We didn’t feel like writing a weekly or bi-weekly newsletter was the best use of anyone’s time. Looking back on that - I regret not launching it earlier. A newsletter is a great way to connect with our audience and build the base of a community.

On top of everything, it’s been really fun writing again. I had the pleasure of authoring our first week’s newsletter. Others from the team will chip in from time to time. It’s about an hours worth of work to write it and I have fun doing it. It’s nice to get out of my spreadsheets and powerpoints from time to time.

My life philosophy

I’ve been thinking about existential shit recently. I’m not sure why, but I’m guessing it’s because I’m getting older and because I want to bring my own kids into this world soon.

I was reading Twitter the other day and some guy was posting about his life philosophy and I realized that I’ve never really thought about mine. Sure, I have some values and whatnot, but I don’t know if I’ve ever truly defined my life philosophy.

So I’ve been thinking about it for a bit and on my walk during lunch, I realized that I probably do have a life philosophy already, I just never wrote it down. So here I am today.

Happiness in life is bringing joy to others

That’s it. I truly believe that my happiness in life stems from bringing joy to others which in turn brings joy to myself.

Having everything with no one to share it with is just the same as having nothing. It’s why sharing an amazing meal with someone is much better than eating by yourself. Having every material good and toy in the world absolutely sucks if you have no one to share it with.

No work is ever worth it if it doesn’t bring joy or happiness to people’s lives. We build startups to solve problems and bring joy to others. This is why I love working at Secfi so much - I get to help solve people’s problems on a day to day basis.

I don’t know how and why humans got here. I do know that I’m going to spend my life trying to make other people happy. That’s a life well lived.

Monday funks

I feel like my Mondays have been pretty tough recently. It’s as if I’m in a bit of funk every Monday (and often other days). There’s a bit of imposter syndrome on these days and my self-esteem feels like a low on Mondays. Even the smallest tasks are much harder on Mondays than they are on other days.

I used to think that the cause of this was that I just had tiring weekends that left me fatigued and out of it on Mondays. There was some of that for sure, but over the last few months, I have really stopped going out much which doesn’t explain the Monday blues still.

As recently as a few months ago, I started to think that it was simply just a bit of burnout. I definitely think there definitely some impact here. I’ve taken some vacations and think I’m really due for a larger vacation that’s not tied to an event like a wedding. Something nice and relaxing maybe what I need.

After thinking about it some more on my lunch walk, I think I’ve decided that a lot of it just has to do with my mental mindset lately. I probably have twice as many negative thoughts on Mondays than I do other days.

Curbing this habit used to be a lot easier when I was going into the office and seeing a bunch of my friends. But with remote work, things are just much lonelier and depressing on Mondays. Combine this with a lot of negative news lately going around in the world and it’s create a perfect storm.

I don’t think there’s a complicated fix here. A lot of it just changing my mindset on Mondays, staying positive, listening to good music, surrounding myself with good people, etc. Most of all - I need to make sure not to be too hard on myself on Mondays. This perpetuates my negative mindset.

The unsexy things

I was able to watch the end of the The Open championship this morning over my breakfast. I was somewhat surprised to see Cameron Smith outduel Rory McIlroy down the stretch. It seemed like Rory had a commanding 2 shot lead going into the back 9 and he was going to run away with it.

Rory played well enough to win. He hit 36 putts and 2-putted every hole. He made virtually no mistakes. But the difference was that he wasn’t able to make any birdie putts down the stretch. He came close… a lot but they didn’t fall.

Contrast that to Cameron Smith who was money with his putter all day. He had only 29 putts and that became the 2 shot difference down the stretch. It was epic to watch.

Golf is an interesting sport. Everyone talks about long hitters, powerful swings and shot shaping abilities. Like most, I think that’s the most fun part of golf. But as saw today, it was the unsexy part of golf that won it for Cameron Smith.

Like sports, I’ve come to realize that in the business world, it’s almost always the unsexy and inglorious things that make the world of a difference.

Today, I’ll spend couple hours practicing my chipping and putting. As I begin my work week tomorrow, I’ll be focusing on the unsexy things that I’ve been putting off for some time.

Breaking things down to build it back up

I’m in the process of completely revamping my golf swing. I’ve had an unorthodox swing for some time now and it has worked decently well. I’ve broken 100 quickly and I feel like I’ve had spurts of glory on the course. Of course, a flawed swing rears it’s ugly head often and that’s what’s been happening.

While there is no perfect swing, my swing made things extra complicated in that lots had to go right for me to hit the ball straight. I hit the ball straight often as I was able to recover and build my swing with a bunch of tweaks. I’m now at the point where I realize that my severely flawed swing can only take me so far and I may never get to where I want to if I keep doing what I’m doing.

So I’m breaking everything down and starting from scratch. I’ve decided to completely revamp my swing to eliminate the major flaws. It’s going to be many steps back, but I’m hoping that this will be the springing board going forward for me. Day 1 starts today. With 3 rounds ahead of me in the next week and half, I’m a bit worried about my performance on the course, but the pain will be worth it in the long run.

Over the last few weeks, I’ve had a lot of similar thoughts to what we’re doing at Secfi. We’ve been doing this for 4 years and there’s a lot of things that need to be addressed that haven’t. Sometimes things are just not worth fixing and it’s better to scrap the entire thing and build it back up.

We just had a call with our product and engineering team on one initiative that we’ve worked on the last few months. In light of recent events, we’ve come to realize that we need to scrap those plans and restart from anew. Yes, it sucks. We spent time, resources and money on that initiative. But we also realize that to get to where we want, we need to switch course and start from scratch.

Like my golf swing, I wish we had done this many months back, but there’s no better time to start than now.