Tremendous

An angel investor's take on life and business

  • When I was little, my mom and I used to love strolling through the Park Plaza Mall in Oshkosh, WI. Crowds of shoppers bustled past neon signs for Younkers and Maurice’s. Today, all of that is gone.

    All that remains are a few tomblike offices. The once-crowded corridors are so empty that a dance school practices in them.

    Is this the future of office space?

    The Fall of the Office Tower

    From a new report in Bloomberg:

    In New York and London, owners of gleaming office towers are walking away from their debt rather than pouring good money after bad. The landlords of downtown San Francisco’s largest mall have abandoned it. A new Hong Kong skyscraper is only a quarter leased

    A tipping point is coming: In the US alone, about $1.4 trillion of commercial real estate loans are due this year and next, according to the Mortgage Bankers Association. (Other estimates are a bit lower.) When the deadline arrives, owners facing large principal payments may prefer to default instead of borrowing again to pay the bill.

    The value of office buildings are projected to fall by 35% from the peak. Recovery may not come until 2040.

    And You Thought Remote Work Was Bad

    Remote work is killing the office tower. Only half of workers in New York are back in the office, according to building security company Kastle Systems.

    As bad as remote work has been for offices, AI may be even worse.

    Many tech companies have hiring freezes today. With AI making each employee more efficient, those hiring freezes could last for years.

    Fewer, more productive employees means people waste less time coordinating with each other. It’s also a lot cheaper.

    AI hiring freezes mean that even if workers do come back to the office, there will be fewer of them. The demand for office space stays depressed.

    So What Do We Do With Them?

    The aging 70’s and 80’s towers filled with grey cubicles are done. They’re the new dead malls.

    The obvious solution is to redevelop them into apartments. But that’s difficult and costs a fortune.

    The deep floor plates mean that for an apartment to have any light, it must be extremely narrow. Prospective residents won’t like that.

    What’s more, landlords have to add new internal walls and huge amounts of plumbing. This is enormously costly.

    Given the costs and difficulties of conversion, only a couple percent of Manhattan office space could be converted to apartments, according to an estimate from Moody’s Analytics.

    So what happens to these buildings?

    Many probably sit vacant until demand returns, years from now. Others may be demolished.

    And maybe in the mean time, dance troupes can use all those empty conference rooms for practice.

    What would you do with these empty office buildings? Leave a comment and let us know!

    Have a great weekend everybody!

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  • Jack Welch was one of the most famous CEO’s of his time. So how do you buttonhole him at a book signing and get him to speak at a class he’s never even heard of?

    “Is it a ridiculous idea for you to speak at the negotiation class I teach at USC?” Chris Voss asked.

    Chris wasn’t offering a dime. And he’d never even met Jack before.

    But sure enough, Jack turned up that fall and spoke to Chris’ students!

    Chris Voss is the former FBI lead hostage negotiator. In his superb book Never Split the Difference: Negotiating as if Your Life Depended on It, Chris helps us apply those negotiating lessons to our business and personal relationships.  

    I had the pleasure of seeing Chris speak this morning at an event in New York. Here are some of my favorite insights from today…

    Getting to No

    Getting to Yes was an international best seller. But it’s the wrong approach, according to Chris.

    When someone tries to get me to agree to something, I get nervous. Where is this leading, and what’s it going to cost?

    We’re uncomfortable saying yes. And if you’re making someone uncomfortable from the outset, good luck building a relationship.

    “No one tries to get you to say yes if they’re not taking you someplace.”

    Chris Voss

    Instead, try to get the person you’re negotiating with to say no.

    Chris wanted Jack Welch to say no to his question. That kept Jack comfortable and in control.

    Comfortable enough to do exactly what Chris wanted!

    I’ve already used this on one person so far today. 🙂

    Connecting with Sales Prospects

    Chris was on the phone with a man whose son had been kidnapped in Haiti. He had just a few minutes to show this distraught father that he was in good hands.

    So he explained that Haitian kidnappers were not killing victims. Instead, they were releasing them in just a few days.

    And sure enough, a couple days later, the boy walked free.

    The minute you meet someone, they decide if you’re worth dealing with. How do you show them both competence and empathy with their situation?

    By showing that you know what they’re up against!

    Let’s say I’m talking to a founder I just met. Why should she deal with an angel she doesn’t know?

    I can build a relationship between us if I can show I understand her struggles.

    I might say something like this:

    “Many startups are having a harder time selling as corporate budgets contract. Meanwhile, if you’re not doing generative AI, the fundraising market is a mess.”

    Even if I’m wrong about the founder’s challenges, she can correct me. At that point, she’s on my side helping me, and we’ve begun to build a relationship.

    Wrap-Up

    None of this stuff is a trick. Instead, Chris offers ways to empathize, build relationships, and work together with others.

    “As long as you sincerely try to show people that you heard them, they will forgive you for mistakes and will always be willing to deal with you again.”

    Chris Voss

    I strongly encourage you to read Chris’s book. I plan to reread it again soon!

    What do you struggle with in negotiation? Leave a comment and let us know!

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  • Just when we thought AI couldn’t get any hotter, it got hotter. Yesterday, Masayoshi Son announced plans to take the industry by storm.

    From a report out overnight in CNBC:

    SoftBank Group chairman and CEO Masayoshi Son on Wednesday said that the Japanese investment firm plans to shift from “defense mode” to “offense mode” and wants to capitalize on the AI boom.

    “Now, the time has come to shift to offense mode,” Son said during a shareholders’ annual general meeting.


    Softbank has more money than just about anyone.

    Despite some high profile losses, its second Vision Fund still tips the scales at $30 billion.

    And Masa is about to fill up his piggybank.

    Softbank owns 100% of Arm, a British chipmaker. Arm has filed for an IPO which will put billions in Masa’s coffers.

    That money will be heading straight into AI startups.

    Already, the market for early stage AI companies is dangerously overheated.

    Just last week, Mistral AI raised over a hundred million dollars at a $260 million valuation. It has no product or customers.

    In fact, the company is just four weeks old.

    Once Masa dumps a few tens of billions onto the market, the Mistral AI round may look quaint.

    Masa has made some incredible investments, like Alibaba. But Softbank also has a history of giving too much money to startups at excessive valuations.

    Perhaps the most famous is WeWork. Softbank invested over $10 billion at valuations as high as $47 billion.

    Today, WeWork is worth just $163 million.

    I expect Softbank to repeat its mistakes with its AI investments. Look for huge checks going into fledgling companies at eyewatering valuations.

    I already find the AI market difficult to invest in.

    Many companies have amazing tools but few if any paying customers. And that amazing product is quickly upstaged by an even better one weeks later.

    Add in sky high valuations, and it’s a great way to lose your money.

    As Masa trains his firehose of cash on the market, these dynamics will only intensify.

    I will continue to invest in great AI companies at reasonable valuations, as I always have. And I’m also taking a special look at non-AI companies with great businesses that provide real value to customers.

    If no one else wants them, I’m happy to back up the truck.

    What do you think of Masa’s pivot to AI? Leave a comment and let us know!

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

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    I wrote a detailed review of Misfits here.

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

  • A major rally this year has punished short sellers, leading to massive losses.

    From a report out overnight in The Wall Street Journal:

    Short sellers have incurred roughly $120 billion in mark-to-market losses this year, including $72 billion in the first half of June, according to S3. 

    “There are still many investors and hedge funds who think that this rally is ready for a pullback,” said Ihor Dusaniwsky, managing director of predictive analytics at S3. “Or at least that several of the highflying stocks will lose steam and revert back to the mean.”


    The AI-driven rally in big tech stocks is responsible for most of these losses. Jumps in heavily shorted meme stocks have meant even greater pain for the hedge funds and institutions betting against markets.

    Increasing interest rates also mean that holding short positions is more costly.

    To short a stock, a trader must borrow the shares and sell them.

    The trader pays an interest rate for borrowing the shares. Those short interest rates rise along with the federal funds rate.

    I hate short selling as a strategy.

    Best case scenario, you make 100% on your money. Worst case, your potential for loss is unlimited.

    S&P 500 Historical Chart


    Moreover, you’re swimming against the general rising tide of markets. And that short position is costing you in interest.

    Every day, humans are innovating. Together, they form companies and create incredible new products.

    And here in the United States, they do it in the world’s best legal and cultural environment for business. Betting against them is foolish.

    If we zoom in on the market and look at some of the most successful companies, the picture becomes even clearer.

    Let’s take Nvidia. Nvidia began as a small supplier to videogame console makers, going public in 1999.

    Since then, its stock is up more than 900-fold. A return like that always beats a short sale.

    Prophets of doom will always be with us. But I’m betting my money on a bright future.

    What do you think 2023 holds for markets? Leave a comment and let us know!

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  • Dan Siroker raised $12 million at a $350 million valuation for his startup, Rewind AI. The company is just 3 years old. Let’s dig into the pitch he used to do it.

    Rewind AI records everything that happens on your computer. You can ask Rewind questions like “What did I do last week? or “When did I last speak to Jim?”

    Dan’s pitch is the best I’ve ever seen. Here’s why:

    • Huge problem + specifics. Dan frames a massive problem: memory.

    Everyone could use some help remembering things. Almost any human is a potential customer, especially knowledge workers.

    But Dan doesn’t just frame a big problem. He’s very specific about how he solves it, and provides proof that it’s working as a business.

    • Personal connection to the problem.

    I often ask founders, “What made you want to start this business?” I’m gauging how committed they are to the problem, and why.

    Dan clearly explains why he cares about this problem.

    He struggled with losing his hearing in his 20’s, but hearing aids changed his life. He wants to do the same for people struggling with memory.

    • Great demo.

    Many slide decks could describe a dozen companies.

    “We’re helping teams connect.” I couldn’t tell you how many times I’ve seen that.

    Great, but how?

    By contrast, Dan takes us into his product and shows us exactly how it works. We can see its power and clean design.

    Any investor would be impressed!

    • Clear market size.

    Dan doesn’t give us some BS number like “cloud software is a $200 billion market.” That’s meaningless for any particular product.

    He tells us exactly what he charges and shows us how many potential customers exist. Multiply those together, and you have the market size.

    I found his numbers convincing. He’d only need 2.8 million Pro users to reach $1 billion a year in revenue.

    With tens of millions of knowledge workers in the US alone, this seems achievable.

    Market sizing is critical to investors. If you aren’t addressing a big market, you’ll never be a multibillion dollar company.

    • Solid financials. Dan gives us all the key info: revenue growth, customer acquisition cost, and burn.

    We can see he’s very efficient with money. We can also see that this business has great margins.

    • Great team. His team is packed with experienced builders, and Dan is a 2nd time founder.

    No wonder they can ship 11 releases a day!

    • It’s short.

    Dan covers everything investors need to know, all in less than 8 minutes. A lot of founders can’t do that in 30!

    I looked at 33 companies today. I can’t spend hours on each one.

    If you present the key info clearly and concisely, your odds of getting funded skyrocket.

    I hope this video helps you improve your pitch. Abstract advice is one thing, but seeing real success is quite another!

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

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    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

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    I wrote a detailed review of Misfits here.

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  • How do angel investors pick investments? What’s the best way to invest in crypto?

    We dug into this and more at the Single Family Office Summit in New York last month. Here are some of my favorite moments:

    8:11: How I pick investments

    17:08: Clinton Buie of AmateMint Group on how to invest in crypto

    22:53: Barriers to real estate tokenization

    28:42: My thoughts on tokenization of assets

    Being on this panel was an incredible experience for me.

    Single family offices usually manage wealth in excess of $250 million. When I was growing up, my family was on welfare and used foodstamps.

    I never thought people like that would be paying to listen to me.

    This really is a great country! 🇺🇸

    What did you find interesting from the panel, and what did we get wrong? Leave a comment and let us know!

    I’ll be off tomorrow. Have a great weekend and see you on Monday!

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

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    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. 

  • If you’re having a hard time raising money, you’re not alone. Venture funding fell by half in May compared to the prior year.

    From a report by S&P Global Market Intelligence:

    Venture capital investments worldwide dropped 47.8% year over year in May to $18.85 billion from $36.08 billion, according to S&P Global Market Intelligence data.

    The number of funding rounds slumped 38.9% to 1,129, from 1,847 a year earlier.

    One bright spot: funding actually jumped a little from the April doldrums:

    May totals increased slightly from the previous month, when $16.52 billion was raised across 1,057 venture capital-involved funding rounds.

    Here’s what I’m seeing in the market…

    Companies without AI at the core are struggling to raise. Especially at Series A, valuations for non-AI companies are extremely low.

    For founders, this can be dispiriting.

    But as an investor, I view this as a great opportunity. I’m doubling down on some of my most successful companies at rock bottom prices!

    Even for AI startups, fundraising can be difficult.

    Huge slugs of capital are going into a couple of companies like OpenAI and Anthropic. For everyone else, pickings are slim.

    A lot of investors are sitting on their hands. I see only about half as many deals as I did at the peak market.

    Many minority investors are waiting for a big name like Sequoia to come in. Only the strongest of signals gets them to open their wallet.

    I don’t operate that way. I make my own decisions, and the reputation of the other investors is a very minor factor.

    But even I have slowed down my investment pace so far this year. Fewer deals to choose from means fewer deals that I like.

    Soon, I think some great startups will emerge at the AI application layer. I’m excited about companies that apply AI to an industry to make 10x better software.

    Imagine AI tools for buying and selling derivatives, for example. You could describe the risk you’re seeking to hedge and AI could show you the perfect derivative to buy at the best possible price.

    Startups like this will have more defensibility than another chatbot or copywriting app.

    I expect to see this new generation of AI-enabled SaaS companies later in the year. When that happens, I hope to ramp up my investment pace.

    If you’re struggling to raise, my advice is to extend runway and get to breakeven ASAP. It’s hard, but it’s the only way to survive.

    What are you seeing in the fundraising market? Leave a comment and let us know!

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

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    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. 

  • On Saturday, I had lunch with one of my most successful founders. As I dug into my burger, he said something that stopped me cold.

    “We give away swag bags to new customers,” David* said. “The tote bags themselves cost $0.30 each.”

    In that moment, I recognized something I’ve seen time and time again in the best CEO’s.

    They see the big picture. But they also know every detail.

    My lunch companion is running a company with millions in revenue. He supervises a dozen employees.

    But he knows the cost of a canvas tote from Alibaba, down to the cent.

    Let’s take Brett, another amazing founder I met last year. He runs a billion dollar SaaS company that’s growing at an incredible rate.

    SaaS involves a lot of metrics. And Brett knew how his company stacked up on every single one of them.

    And then there’s Aaron.

    Aaron runs a SaaS company with over $20 million a year in revenue. He recently raised a $125 million round led by one of the best firms in Silicon Valley.

    At a meeting with Aaron, one of the other investors asked about selling to the government. Aaron knew everything about government sales, from subcontractors to how lobbyists work.

    And he wasn’t even interested in selling to the government yet!

    Before I started investing, I thought I knew what a great CEO looked like. He would focus on the big picture and leave the details to someone else.

    But when I meet with the best founders, the truth is more complicated.

    They articulate the purpose of their company with the zeal of a missionary. But they also know every detail of the business.

    It’s wise to delegate to a great team. But the best founders know everything the team is doing and make sure they’re staying on track.

    Today, when I evaluate a founder, I look for attention to detail.

    Do they know what’s going on day to day? Or do they think that details are beneath them?

    I want the founders that are willing to roll up their sleeves.

    What traits do you see in great founders? Leave a comment and let us know!

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    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. 

    *Note: Names have been changed to protect privacy

  • Last week, Apple unveiled the Vision Pro. The movie experience is incredible, and photos look amazing. But Vision Pro’s AR capabilities could also revolutionize the way we work.

    Imagine building a 3D CAD/CAM design for a mechanical heart valve. Instead of viewing a prototype on a 2D screen, you could see it in three dimensions.

    We could rotate and zoom the image at will. We could even blow it up to hundreds of times its actual size and walk through the valve, inspecting every element!

    Being able to view designs in 3D could also transform construction.

    TANGObuilder, a company I invested in this year, makes powerful software for structural engineering designs. Now, imagine being able to design a home in three dimensions!

    Vision Pro could even be indispensable on the job site.

    Today, a startup called Argyle uses AR to show construction teams where to put structural elements like pipes and HVAC. Argyle shows detailed AR renderings on hardware like Hololens and iPhone.

    In the future, construction workers may see their environment in greater resolution on Vision Pro. Every structural element could be crystal clear.

    But Vision Pro will have to overcome some serious shortcomings first.

    Again and again, those who have tried the headset say their faces hurt after about 20 minutes. Around half a laptop’s worth of weight strapped to your face can be very uncomfortable.

    In the near term, I think Apple will introduce a better system of headbands to distribute the weight. Longer term, hardware will get smaller and lighter.

    Another issue is battery life.

    Vision Pro requires you to lug around a little battery pack on a cord — no one’s idea of sleek. And even with that, you only get 2 hours.

    If you want more, you have to plug into an outlet.

    However, battery capacity is increasing every day. In the last decade, capacity has more than tripled.

    If Apple can address these weight and power problems, Vision Pro could be a compelling platform for work. I look forward to backing companies that make the most of this revolution!

    Would you use Vision Pro at work? Leave a comment and let us know!

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    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. 

  • Many startups today are hitting the end of the line. The bank account is empty, the raise has failed, and it’s time to say goodbye.

    From a report out today in The Wall Street Journal:

    Fresh capital from venture investors and bank loans is scarce and expensive. Going public is near impossible. Some business models that worked when cash was cheap are unsustainable now. That means venture-backed startups are running out of money and facing hard choices. 

    “The Mass Extinction Event for startups is under way,” said Tom Loverro, general partner at venture firm IVP, in a recent tweet. Loverro said in an interview that none of his portfolio companies has shut down recently, but it is early days in what could be a wave of startup failures. “It’s like the entire industry went out drinking and is now suffering the consequences,” he said about the venture boom of 2021 that he believes is heading for a bust. 

    Why is 2023 seeing so many shutdowns?

    When startups raise a round of funding, it typically gives them 18 months of “runway.” This is the amount of time they have until they run out of cash, given their current monthly burn rate.

    The hot market ended around the beginning of 2022. We’re now almost 18 months past that.

    And startups are running out of cash, right on schedule.

    If this were 2021, they’d just go out and raise a bunch more.

    But today, the market for anything that’s not generative AI is weak. Non-AI companies can raise, but only if they have incredible growth.

    For everyone else, the music has stopped.

    In recent months, several companies that raised significant venture funding have folded, including biotechnology company Goldfinch Bio, wine business Underground Cellar and fintech company Plastiq. 

    California startup Zume, which was developing a robotic pizza maker and was once valued at $2.25 billion, recently entered a wind-down process handled by Sherwood Partners, a restructuring firm, according to Sherwood’s co-founder and co-president Martin Pichinson.

    Notice how companies that involve “stuff” keep popping up among the fatalities? That’s no accident.

    Stuff is really hard. Zume had to buy a bunch of robot arms and trucks — that’s really expensive.

    A software startup just needs some laptops. Their one bill — cloud computing costs — is covered with AWS credits!

    Software startups fail too. But because they scale easily and require fewer resources, they’re harder to kill.

    I had an opportunity to invest in some of the companies that have shut down recently. I passed.

    Of my 20 investments, none have shut down yet.

    But sadly, some surely will. Failure is inevitable in the world of startups.

    If the founder tried his best and kept us updated, I want to be the first check into his next company. Some of the greatest investments of all time are in repeat founders!

    For founders that are still fighting, the key is to reduce burn and hit breakeven. Then, you control your own destiny.

    Be ruthless. Cut staff. Trash pet projects.

    If you survive, you have a chance to thrive.

    And if you do hit the wall, don’t beat yourself up too much. Come up with your next best idea, and try again!

    Are you seeing startups hit the wall? Leave a comment and let us know!

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    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.