Tremendous

An angel investor's take on life and business

  • Carl Icahn Loses $740 Million on Bet Against Malls

    It should’ve been the trade of a lifetime. Instead, Carl Icahn’s bet against shopping malls has cost him $742 million — and counting.

    The Big Short 2.0

    Reporters called it the Big Short 2.0. In 2019, the hedge fund billionaire placed a massive bet that the growth of e-commerce would push malls into bankruptcy.

    Icahn bought over $600 million of credit default swaps on mall debt in 2019. These derivatives would pay off handsomely if the malls defaulted.

    At first, he saw big gains. Sure he had struck paydirt, Icahn doubled down, increasing his bets to a staggering $2.1 billion by 2020.

    Now, those bets are going bad.

    Massive Losses

    Icahn lost $742 million on his mall bet in 2022, according to The Wall Street Journal, with further losses coming this year. In total, Icahn could lose billions.

    Malls have performed poorly since 2019, as he predicted. But the malls he bet against just managed to skirt total default, meaning his trades went sour.

    Icahn is not the first hedge fund manager to be burned by betting against retail.

    Gabe Plotkin of Melvin Capital and Glen Kacher of Light Street Capital lost billions betting against GameStop. Other funds have lost substantial sums shorting AMC Theaters.

    We’ve all predicted the demise of brick and mortar retail for years. And yet, it persists.

    A Failure of Risk Management

    Icahn’s mistake was not taking some profits off the table in 2019 and 2020, when his trades were making millions. Once I see big gains, I always want to lock in some profits.

    When I invest in a startup, for example, I want to sell 10-20% of my shares once I’ve made a return of 50-100x. The expected returns in a swap are lower, but trimming your winners is still the right move.

    Another Hole in Icahn’s Sinking Ship

    Icahn and his company, Icahn Enterprises (IEP), have lost billions this year. IEP stock is down 65% year to date.

    Worse yet, the SEC and DOJ are probing IEP. If they find wrongdoing, I expect the stock to fall much further.

    Much of Icahn’s personal net worth is tied up in IEP stock. He even carries substantial loans on his IEP holdings, raising the risk of ruin.

    If you’re Icahn, now is not the time for big bets. Now is the time to retreat, regroup, and live to fight another day.

    Wrap-Up

    The problem with bears like Icahn and Plotkin is they’re swimming against the tide.

    America grows almost every year. Businesses produce record profits, and stocks go up.

    When you’re betting the opposite way, it’s awfully hard to make money.

    “…I have yet to see a time when it made sense to make a long-term bet against America.”

    Warren Buffett

    What do you think the future holds for Icahn? Leave a comment and let us know!

    If you enjoyed this post, subscribe for more like this!

    More on markets:

    Carl Icahn Loses $1.7 Billion in a Day

    Pelham Capital: A Hedge Fund in Crisis

    Citadel Alums Take $300 Million Loss

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

  • For Venture Funds, Small Is Beautiful

    Startupland is all about getting big, fast. But for venture funds, smaller is better.

    Funds below $250 million have outperformed larger funds significantly in recent years. Smaller funds delivered comparable or better performance in most periods, according to Pitchbook data going back to 2017.

    Twilight of the Megafunds?

    The boom years saw the birth of one megafund after another. A16z even raised a $4.5 billion crypto fund in early 2022, just as crypto markets were falling apart.

    Today, we’re 8 quarters into a severe downturn in tech. If companies can raise money at all, it’s usually a lot less.

    Deal sizes are down significantly, with late stage deal sizes falling nearly 40%.

    Fewer, smaller deals mean those giant funds lack opportunities. When deal sizes are small, what do you do with billions in capital?

    Founders Fund wisely cut its fund size by half, from $1.8 billion to $900 million. Others should follow suit if they want to preserve their returns.

    Do VC’s Care About Returns?

    But returns aren’t really the goal for a lot of big VC’s.

    Venture funds generally get a 2% management fee every year, no matter what. Good performance or bad, that money rolls in.

    On a small fund, it’s barely enough to keep the lights on. But on a $4.5 billion colossus, that’s $90 million a year hitting your account no matter what.

    Let’s say you 2x that fund. That’s a rotten return for LP’s, but the fees are juicy.

    At the typical 20% carry, you clear $900 million in performance fees and another $900 million in management fees over 10 years. That’s a whopping $1.8 billion in fees for a crappy result.

    Misaligned Incentives

    Let’s compare that with a smaller fund.

    If I started a $1 billion fund and 3x-ed it, a solid return for LP’s*, I’d see $400 million in performance fees. I’d also rake in a tidy $200 million in management fees, bringing me up to $600 million.

    I performed great! But I actually made over a billion dollars less than the guy who just hoarded capital.

    The incentives for LP’s and GP’s** are not aligned. The LP wants good returns, but the GP just wants more assets under management.

    No wonder we’ve seen so many big funds in recent years!

    Picking a Venture Fund

    If I go to a car dealership, the salesman’s job is to sell me the most expensive car possible. He doesn’t care about selling me the right car for me, or finding me a deal.

    I can still do business with him, but I have to know his incentives.

    In venture capital, the GP’s incentive is to hoover up as much money as possible and sit on it. Especially at a big name fund, he has no reason to care about returns.

    Look for managers running smaller funds with a strong track record of returns. A good VC should produce at least 15% a year — the minimum you should accept for so much illiquidity and risk.

    Wrap-Up

    In our country, we want everything to be big. But sometimes, small is beautiful.

    I hope to see more small, nimble venture funds out there racking up great returns for LP’s.

    What do you think of VC performance? Leave a comment and let us know!

    If you enjoyed this post, subscribe for more like this!

    More on tech:

    New York Just Behind SF for Venture Deals

    AI Compute Cost Is Going to Zero

    Early Stage NYC Startups Struggle Through Venture Downturn

    *LP stands for Limited Partner. They’re the investors who put capital into the venture fund. They’re usually endowments, pensions, other institutions, and wealthy individuals.

    **GP stands for General Partner. These are the people who run the fund, invest in startups, and take the fees.

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • New York Just Behind SF for Venture Deals

    New York pulled neck and neck with the Bay Area as a startup hub in Q3. The Big Apple inked venture deals at a blistering pace, closing 403 to the Bay Area’s 515, according to a new report from Pitchbook.

    The Beast from the East

    Before COVID, running a startup meant going to SF. Today, startupland is increasingly bicoastal, with SF and NYC the twin capitals.

    The Bay did shoot in the lights out in one area, however: total capital raised. Bay startups pulled in $12.7 billion in Q3, compared to just $3.6 billion for New York.

    New York’s startup scene is newer, so it makes sense that fewer dollars were raised. Early stage companies raise single digit millions while late stage startups can raise billions at a time.

    As NYC startups mature, you’ll start to see those Silicon Valley-style megarounds here as well.

    What I’m Seeing in the Big Apple

    The New York startup scene feels more alive than ever to me.

    Events are happening every night of the week. Founders I’ve known on Twitter have a funny way of moving here.

    Founders and investors that don’t live in NYC stop in frequently. And when they’re not here, there’s a pretty good chance they’re in Silicon Valley.

    Some founders and investors are finding NYC more appealing than the Bay these days. For all its problems, New York is safer than SF with a richer cultural scene.

    NYC Is Producing Top Talent

    Traditionally, Silicon Valley’s universities provided a better pipeline for tech startups than New York’s. But NYU is producing some great founders, and Cornell Tech on Roosevelt Island is cranking out top tier engineering talent.

    This environment is launching some great startups. In the last year, I’ve invested in as many companies in NYC as I have in the Bay — something I never thought would happen.

    Wrap-Up

    Ten years from now, I think SF and NYC will be roughly equal as startup hubs.

    Founders will ping between them raising money. Investors will rack up frequent flier miles hitting the other coast to see what’s new.

    What do you think of the New York startup scene today? Leave a comment and let us know!

    If you enjoyed this post, subscribe for more like this!

    More on tech:

    Early Stage NYC Startups Struggle Through Venture Downturn

    AI Compute Cost Is Going to Zero

    Where’s the Money? — Venture Funding Slips Again in Q3

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • AI Compute Cost Is Going to Zero

    AI is incredible, but expensive — the chips cost $30,000 and require tons of energy. But AI may be about to get 100X cheaper.

    Cheaper, Faster, Better

    A research team at Northwestern University was able to perform complex AI tasks with 100 times less energy than current AI models. From the report:

    Northwestern University engineers have developed a new nanoelectronic device that can perform accurate machine-learning classification tasks in the most energy-efficient manner yet. Using 100-fold less energy than current technologies, the device can crunch large amounts of data and perform artificial intelligence (AI) tasks in real time without beaming data to the cloud for analysis.

    Mastering a Critical Dataset

    The team tested it on ECG data, with incredible results:

    To test the concept, engineers used the device to classify large amounts of information from publicly available electrocardiogram (ECG) datasets. Not only could the device efficiently and correctly identify an irregular heartbeat, it also was able to determine the arrhythmia subtype from among six different categories with near 95% accuracy.

    The nanoelectronic device was able to identify accurately each arrhythmia type out of 10,000 ECG samples. By bypassing the need to send data to the cloud, the device not only saves critical time for a patient but also protects privacy.

    So, How Does It Work?

    The Northwestern team was able to do this using much less energy by using fewer transistors:

    For current silicon-based technologies to categorize data from large sets like ECGs, it takes more than 100 transistors — each requiring its own energy to run. But Northwestern’s nanoelectronic device can perform the same machine-learning classification with just two devices. By reducing the number of devices, the researchers drastically reduced power consumption and developed a much smaller device that can be integrated into a standard wearable gadget.

    Running AI models on huge data sets with basic chips and minimal energy saves a fortune.

    No $30,000 chip to buy (if you can find one). No gigawatts of power to pay for.

    What Happens When AI Costs Fall 99%?

    If you make any product cheaper, people demand more of it. So what would a world with cheap, ubiquitous AI look like?

    AI products could scale to millions of users without charging anything. Only the largest companies can do this today because the compute is so expensive.

    AI tools might start to look more like consumer software: widely used, free, ad supported, and incredibly lucrative.

    We could see more specialized LLM’s for specific tasks. These models may address the needs of certain industries better than ChatGPT or Bard do today.

    Not having to find and pay for H100’s also means anyone with the skills can spin up an LLM.

    With cheap AI, the developing world can get in on the game. Today, it’s not easy for a company in Botswana to pay that hefty Azure bill.

    But if they could run a sophisticated AI model on a laptop, the company in the developing country can compete with the biggest in the world.

    Wrap-Up

    AI is improving productivity by the day. If it gets much cheaper, and sees much broader use, productivity will skyrocket.

    That makes everyone’s life better.

    Do you think this discovery will change computing? Leave a comment and let us know!

    Have a great weekend, everyone!

    If you enjoyed this post, subscribe for more like this!

    More on tech:

    Early Stage NYC Startups Struggle Through Venture Downturn

    Where’s the Money? — Venture Funding Slips Again in Q3

    How I Became an Angel and More with PIN

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • Early Stage NYC Startups Struggle Through Venture Downturn

    Early stage startups in New York continued to slog through the downturn in Q3. Average seed round size fell 16% from Q2, according to a new report from Primary Venture Partners.

    It’s Not the Summer Slump

    The funding market is highly seasonal. There are two big fundraising seasons — spring and fall. Summer is usually slow.

    But the seasons aren’t the cause of this drop. The total funding raised fell 41% from the same period a year earlier.

    In a Dim Report, Healthtech Shines

    One bright spot: healthtech startups.

    This quarter, we saw a spike in healthcare seed rounds. HCIT deals are up 35%, from 14 in Q2 to 19 in Q3. 

    I actually invested in an awesome NYC healthtech startup in Q3 myself. I hope to be able to announce it soon.

    AI Frenzy Cools — For Now

    Despite the enthusiasm for AI, funding actually slowed down in the most recent quarter:

    …AI saw a slowdown to the fundraising frenzy. AI deals are down this quarter by 53%, from 15 in Q2 to 7 in Q3.

    I saw a flood of AI startups a few months after OpenAI released GPT-4 in March. Those new capabilities led to a lot of new companies.

    But now, GPT-4 is over 6 months old. It makes sense that the pace of AI startup creation would slow a bit.

    Once GPT-5 comes out, I expect to see another huge wave of AI companies that use its capabilities. I’ll probably invest in some of them!

    What I’m Seeing in New York

    What I’m seeing in the startup scene here is incredible dynamism. I made two investments in NYC companies in Q3 alone — one SaaS, one healthtech.

    That ties with the Bay Area and, curiously, Phoenix. There are some hustlers down in the Sun Belt! Maybe it’s all those hours locked inside next to the AC.

    Wrap-Up

    In the end, funding levels go up and funding levels go down. If you’re a founder, just build something customers want and scale the heck out of it.

    That’s true in New York or anywhere else.

    What are you seeing in the NYC tech world? Leave a comment and let us know!

    If you enjoyed this post, subscribe for more like this!

    More on tech:

    Where’s the Money? — Venture Funding Slips Again in Q3

    How I Became an Angel and More with PIN

    Meet My Latest Investment: Argyle

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • Where’s the Money? — Venture Funding Slips Again in Q3

    Venture funding continued to fall in Q3, according to a new report from Pitchbook. VC funding was down 63% from the peak 2 years before, with just $73 billion closing in the latest quarter.

    It’s Bad, And It’s Getting Worse

    Funding fell even from Q2’s low level. Q3 funding was 10% below the $81 billion of deals done in the prior quarter.

    The upshot: the market is not getting any better. And we don’t know when it will.

    Across every region, the number of deals getting done is down by about half from 2021. The fact that deal count has fallen less than total funding makes sense. Those hedge fund megarounds into late stage companies are over.

    Is An Upturn Around the Corner?

    But I’m seeing what might be an upturn going on in the market right now.

    I’ve seen more companies seeking funding so far in October than at any time in over a year. Perhaps the writing is on the wall — the market sucks, it’s going to keep sucking, so there’s no sense postponing our raise.

    With generative AI, the opportunities are out there. A guy just made ChatGPT generate CNC machining code based on a drawing, for heaven’s sake!

    To seize those opportunities, ya gotta raise. And that’s what startups are doing.

    The Benefits of a Down Market

    If you raise $1 million at a $8 million valuation today, versus $5 million at $30 million two years ago, that doesn’t feel good. But you’re still set up for success.

    You can hire, advertise, and grow. And unlike two years ago, you’re not setting up unrealistic expectations by taking a monster valuation today.

    If you have a great idea, I encourage you to build it and raise money. If you don’t, someone else will.

    For investors like me, this is heaven.

    Founders have better tools than ever before with AI, so there are more great companies out there than ever. And the valuations have not been this low in years.

    I hope the down market continues for another couple of years so I can place more bets at today’s bargain basement prices!

    Wrap-Up

    Great companies are built every year, in good markets and bad.

    If you’re a founder, you can create one today. If you’re an investor, you can back one today at a great price.

    It’s time to move.

    What do you see happening in the venture market? Leave a comment and let us know!

    If you enjoyed this post, subscribe for more like this!

    More on tech:

    Meet My Latest Investment: Argyle

    How I Became an Angel and More with PIN

    Roelof Botha’s Toughest Moment

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • Pelham Capital: A Hedge Fund in Crisis

    Hedge fund Pelham Capital is in hot water. The London-based giant has lost almost 80% of its assets after years of poor returns.

    From a report out overnight in The Financial Times:

    Pelham Capital, once one of the biggest names in London’s equity hedge fund sector, has lost more than three-quarters of its assets in the past three years amid poor performance, investor withdrawals and team departures.

    Assets are down from $4.5 billion three years ago to about $1 billion today, according to the FT. This drawdown comes from a combination of trading losses and redemptions by disillusioned investors.

    A History of Poor Performance

    Pelham has underperformed the market for years:

    The flagship fund was down 11.8 per cent in 2021 and dropped 29 per cent last year, investors said. This year it has recovered by about 5 per cent, leaving it far off its so-called high-water mark, the level at which it can start charging performance fees.

    Founded by trader Ross Turner in 2007, Pelham posted strong returns at first. But like so many funds, it could not sustain them:

    …big losses in 2018, 2021 and 2022 have dragged down the hedge fund’s overall returns. Pelham’s annualised return since inception to August of this year is about 5 per cent, according to Financial Times calculations applied to historical data.

    Employees Jump Ship

    Pelham’s poor performance means it cannot charge performance fees for the foreseeable future. This means no fat end of year bonuses.

    Facing a bleak future, many top employees have left. Pelham’s COO, CTO, and a portfolio manager have all jumped ship in recent months.

    This is how hedge funds die.

    Bad performance leads investors to pull their money out. A lack of performance fees makes it impossible to retain key employees.

    Soon, you’re left with no money and no staff. Game over.

    High Fees — And Not Much Else

    Hedge funds charge a fortune in fees — a 2% yearly management fee plus 20% of all gains is standard. But their performance is poor.

    In 2008, Warren Buffett and hedge fund manager Ted Seides made a bet.

    Seides picked a portfolio of top hedge funds, betting they’d beat the S&P 500 over the next decade. Buffett bet that the index would prevail.

    Buffett won, as he usually does. He gave his $2.2 million in winnings to Omaha charity Girls, Inc.

    Wrap-Up

    The future for Pelham Capital is bleak. As assets dwindle and the office clears out, the once mighty fund faces an uncertain future.

    Whatever happens to Pelham, I’m avoiding hedge funds. There’s no sense paying 2 and 20 for poor performance.

    What do you think the future holds for Ross Turner and Pelham Capital? Leave a comment and let us know!

    If you enjoyed this post, subscribe for more like this!

    More on markets:

    Citadel Alums Take $300 Million Loss

    The Greatest Trade Ever (Part One)

    The Greatest Trade Ever (Part Two)

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • How I Became an Angel and More with PIN

    How did I break into investing with no experience and no network? How can new angel investors get started?

    I dug into these topics and more in a new interview with the team at PIN. Here are a few of my favorite moments…

    How I Became an Angel

    I learned about angel investing from a wonderful book:

    I came across the concept of angel investing, and after reading Jason Calacanis’s book ‘Angel,’ which offers a practical guide to investing in startups, angel investing didn’t feel like a ‘mystery’ anymore. 

    Jason’s book tells you everything you need to know about angel investing, in plain English. If you’re interested in investing, your first job is to read this book.

    One, Small Problem

    After I read Jason’s book, I was itching to place some bets. One, small problem: I didn’t know any startup founders or investors!

    In the beginning, I lacked connections in the startup world, but I gradually expanded through syndicates and online networking. 

    I started with Jason Calacanis’s syndicate, and from there, my network grew over time. While I occasionally engage in cold outreach, most of my investments come from inbound sources – whether directly to me, through other investors, or investment groups.

    Building a Network

    For any angel, Jason’s syndicate is the best place to start. I wound up joining almost 100 other syndicates as well.

    I haunted just about every New York City startup event. You can usually find me near the free food. 🙂

    Each person I met introduced me to 3 more. Soon, my contacts were sending me great deals.

    A trickle of deals became a flood.

    How Can I Deliver More Than Money?

    Anyone can write a check to a startup. I stand out by being as helpful as possible without getting in the way:

    I review their investor updates closely and address their specific asks. Occasionally, I’m able to provide assistance, like connecting them with resources or experts.

    Recently, I even helped one of my successful companies find a head of marketing, which is a crucial hire for them. It’s gratifying to contribute in a meaningful way.

    What I’ve Learned: Markets and Diversification

    Now that I’ve been investing for 2.5 years, I’m beginning to understand what makes an investment successful. Above all, I focus on the market:

    One important lesson is the significance of focusing on the market. A great product in a suboptimal market can limit growth potential. It’s crucial to choose business models that can scale effectively…

    No matter how good the founder or vast the market, most startups fail. This is why I never bet more than I can afford to lose.

    If you’re new to angel investing, start small. Invest as little as possible in as many companies as you can.

    My advice would be to avoid putting all your capital into a single startup. Instead, spread your investments across multiple opportunities to reduce risk. Angel investing is a long game, and building a diversified portfolio increases your chances of success.

    Wrap-Up

    Finally, as we exit one hype cycle and head into a new one, I urge you to think for yourself. Don’t just do what someone else is doing — not me, not Jason, not anyone.

    …one trait I value is the ability to think independently. It’s essential to avoid the herd mentality and make decisions based on your own judgment.

    Thanks so much to the team at PIN for getting this amazing conversation together!

    What questions do you have about angel investing? Leave a comment and let me know!

    If you enjoyed this post, subscribe for more like this!

    More on tech:

    Meet My Latest Investment: Argyle

    Roelof Botha’s Toughest Moment

    The #1 Thing Investors Get Wrong

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • Meet My Latest Investment: Argyle

    Let’s say you work construction. You lay down the pipes, then your co-worker pours the concrete. Oops – the pipes are in the wrong place.

    Now what? You have to waste a whole day jackhammering all that concrete out, then start over. But there’s a way to avoid mistakes like this and make your job easy. It’s called Argyle.

    Argyle is an augmented reality (AR) platform that helps you visualize your whole construction site. You can see where pipes and HVAC go, where structural supports are, and more!

    Argyle uses headsets like Magic Leap and Hololens to let you see construction plans in 3D. Or, you can see the AR model on your iPhone or iPad.

    When everyone knows what they’re supposed to do, construction gets a lot easier. You’re on time, on budget, and your customers are happy!

    Argyle supports some of the most advanced construction in the world, from semiconductor fabs to electric vehicle battery plants. I’m delighted to call Argyle my latest investment.

    Check out Argyle and build faster, with fewer f—up’s!

    Do you run a construction business? What challenges do you struggle with?

    Leave a comment and let us know!

    There will be no blog tomorrow — I’m heading off on a camping trip. Have a great weekend and see you Monday!

    If you enjoyed this post, subscribe for more like this!

    More on tech:

    How General Magic Invented the iPhone — in 1994

    You Can’t Invest in the Next Uber — Unless This Law Changes

    Meet My Latest Investment: Micro1

    Save Money on Stuff I Use:

    Fundrise

    This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.

    More on Fundrise in this post.

    If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!

    Misfits Market

    I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!

    I wrote a detailed review of Misfits here.

    Use this link to sign up and you’ll save $15 on your first order. 

  • Roelof Botha’s Toughest Moment

    “In early 2000 when the market melted down, we had seven months of runway left and no revenue.”

    Roelof Botha

    That’s Roelof Botha, Senior Steward of Sequoia Capital. In a revealing new interview with Bloomberg, Botha digs into the toughest times at Paypal and why great companies are built in the down market.

    When Paypal Almost Died

    In 2000, Paypal was one of the hottest startups in Silicon Valley. It was growing as much as ten-fold each month — but that growth came at a cost.

    Between sign-up bonuses for new users and rampant fraud, Paypal was losing a fortune. And with markets in meltdown in 2000, fundraising was impossible.

    As CFO, Botha was in charge of this gusher of red ink.

    Back to Basics

    The team at Paypal did the only thing it could do. It focused on improving its product and making customers happy.

    “The only thing we could control was building a business and serving our customers.”

    Roelof Botha

    Bit by bit, the losses receded. In 2002, Paypal agreed to be acquired by eBay for $1.5 billion.

    Botha had survived.

    Today’s Down Market

    Today, founders are in their 8th quarter of the down market. Many I speak to are worn out and numb.

    I know this downturn seems like it will never end. But nothing lasts forever.

    In time, tech will boom again. Deals will get done that probably shouldn’t at prices that would make us blanch today.

    That’s the one area where I disagree with Roelof.

    He says “it’s the end of easy money.” I say memories are short.

    But What About Interest Rates?

    A small number of incredible technology companies are founded every year. This is true in good markets and bad.

    If you’re a founder, your only job is to create one. If you’re an investor, your sole function is to find such a company and back it.

    High interest rates have not stopped innovation in the past, nor will they now.

    “In 1999, with Paypal and Google, [interest rates were] over 6%. Today the 10 year yield is only 4.5%. So great companies are built in recessions, in high interest rates environments, in low interest rate environments, so that’s what we focus on.”

    Roelof Botha

    Startup valuations had to reset to reflect those higher rates and the lower stock prices that come with them. That reset is largely complete.

    So long as your company is priced appropriately (about $6-10 million pre-money for a seed round), the investors are out there.

    Wrap-Up

    I’m a little worried about some of the founders I meet.

    We’re almost 2 years into the most brutal tech market in a generation. And they’ve been grinding it out the whole time.

    This down market will separate the winners and the losers.

    Some founders will give up. Others will persevere.

    Which one will you be?

    What do you think of Roelof’s interview? Leave a comment and let us know!

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