Category: Business

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Business Career

Adam Neumann, a16z, and the importance of “south-pointing compasses”

The all-too-likely outcome of grifter Adam Neumann’s foray into residential real estate management. Tap to view at full size.

I have good news for those of you who wanted a second season of WeCrashed! As I write this, the top story on Techmeme is the New York Times article on Andreesen Horowitz’s $350 million-ish investment in Adam Neumann’s latest business outing, a “residential real estate management” startup called Flow. There’s also a post by Andreesen Horowitz that describes Flow and yet somehow doesn’t get around to explaining what this company does.

Who is Adam Neumann?

If the name Adam Neumann isn’t familiar to you, let me sum him up for you as quickly as I can: he’s the grifter behind what Jacobin aptly described as “the biggest, dumbest scam in American history.” That scam is WeWork, a millennial high-concept version of the office space rental company Regus, that marketed itself as a Silicon Valley-style tech company with Fyre Festival-like hype (in fact, Fyre Festival founder Billy McFarland rented office space from WeWork).

By hyping themselves as more than just an a company buying and renting expensive office space to the generation that could least afford it (but with free beer and wine — at least for a little while), and despite hemorrhaging wheelbarrows of cash, they managed to con their primary investor, SoftBank, out of about $10 billion in investments and into a $47 billion valuation. That fell apart after they filed for an IPO, the mandatory disclosures for which revealed their financial fakery.

Then came the more interesting stories: the tales of Neumann’s bizarre behavior, from often walking around barefoot in a weed-induced haze and insisting that employees do shots of expensive tequila with him, to fomenting not just a cult of personality, but a generational dynasty in the spirit of the emperor from Asimov’s Foundation novels.

Neumann’s antics cost its big investor, Softbank, so much that they considered selling one of their companies: Arm, as in the chips that power just about every smartphone, a whole lot of IoT devices (including the Raspberry Pi), a fair share of Chromebooks, and Apple Silicon computers.

I wrote about this in What if WeWork’s jamoke CEO accidentally changed the processor industry?

The immediate aftermath:

  • The IPO was cancelled 33 days after it was launched and all the WeWeirdness came to light.
  • SoftBank took over WeWork.
  • Neumann’s reward for screwing up? SoftBank would give him about $1.7 billion to step down from WeWork’s board and dissociate himself from the company.

What was Adam Neumann’s follow-up act?

What do you do when you’ve been exposed as the bozo behind the “biggest, dumbest scam in American history?” You look for even dumber people to fleece. So Neumann got into Web 3.0.

Neumann’s Web 3.0 venture, Flowcarbon, a company that purports to “use blockchain technology to put carbon offset credits on-chain, accelerating the creativity and scalability of climate change solutions.”

In spite of a bullshitty-sounding mission and being run by a known bullshitter, Flowcarbon somehow raised $70 million — $32 million in fresh equity, and another $38 million through the sale of Flowcarbon’s fake money — er, cryptocurrency — which go by the name “Goddess Nature Tokens”. Their big sucker — er, investor — this time: Andreesen Horowitz, a.k.a. their shortened name, a16z.

But that was in May, which was nearly four months ago — a whole damned internet year!

You see, as of mid-July, the Flowcarbon project has been, in their own words, “paused indefinitely.”

Third time’s the (c)harm

And so we come to Neumann’s third big questionable business outing: this “residential real-estate management” startup, which took his previous venture’s name and shortened it to Flow.

Feel free to steal this joke: Creating the new company name from the previous one is probably Neumann’s only success in carbon removal.

Backing Flow is — once again — Andreesen Horowitz, who this time threw even more money at Neumann and company: $350 million, which the New York Times describes as “the largest individual check Andreessen Horowitz has ever written in a round of funding to a company.” a16z value Flow at $1 billion.

Flow appears to be yet another institutional investor on a mission to buy up all the available real estate and bring back feudalism.

As the New York Times puts it:

Neumann has purchased more than 3,000 apartment units in Miami, Fort Lauderdale, Atlanta and Nashville. His aim is to rethink the housing rental market by creating a branded product with consistent service and community features. Flow will operate the properties Neumann has bought and also offer its services to new developments and other third parties. Exact details of the business plan could not be learned.

I fear this idea has legs, but I also take comfort in the fact that Adam Neumann is at the helm. Why? Because he’s one of my south-pointing compasses.

The importance of south-pointing compasses

You’ve probably been told about the value of having mentors and role models, because they provide us with a “horizon” — a direction to move towards, something to strive for, and examples to follow.

But what’s equally valuable is the type of person I refer to as a “south-pointing compass,” or what others have called an “anti–role model.” It’s just as important to know what not to do, which is why we in tech like to look for antipatterns. In fact, south-pointing compasses are antipattern practitioners.

I’ve found it very helpful in my career to maintain relationships with a number of south-pointing compasses because they’re so useful. Some of these relationships are parasocial (I know them, but like I know characters in a book, not personally) or arm’s length (I know them, but keep things at the cordial acquaintance level). All of them have at least one valuable thing to teach, even if that lesson simply is don’t do what they do:

  • That striver who always follows the latest flavor-of-the-week management trend, and executes it poorly, only to dump it for the next trend? South-pointing compass.
  • That person who keeps hopping onto the next big language/framework/platform and starts but never completes any projects with that thing? South-pointing compass.
  • That coworker who constantly performs what HR kindly calls “career-limiting moves?” South-pointing compass.
  • James “Google ManifestBRO” Damore, the person Robert C. “Uncle Bob” Martin became (or maybe he was always that way and just decided to reveal his true, regreattable self), Curtis “Mencius Moldbug” Yarvin and their ilk? South-pointing compasses, and holy crap, does our industry have waaaaay too many of them.

So I’ll be watching a16z’s and Flow’s moves. And employ George Costanza from Seinfeld’s only winning tactic: Do the opposite of what they do.

Categories
Business Career Tampa Bay

Warning signs to watch out for before you join that hot new startup

If you’re looking for a startup job, you’re probably wondering “What warning signs should I look for?”. Fortunately, there’s a recent example to learn from: Fast.

Fast CEO Domm Holland in a promotional video for Fast.

Fast was a startup whose product was Fast Checkout, a one-click checkout system for ecommerce. Every step in the online checkout process increases the chance that the customer won’t complete the purchase. Reducing online purchases to a single click is such a big deal that Amazon patented the process in 1997, which has contributed to its runaway success. The patent expired in 2017, and with that came the competition to own the business of providing one-click checkout to everyone other than Amazon.

In 2021, having raised over $100 million in funding from investors that included Stripe, Fast announced that they were opening their east coast hub here in Tampa to great fanfare:

In a collapse that was incredibly (ahem) fast — even for an overhyped company with a burn rate fueled by stunt marketing — they closed down a mere 8 months later.

How do you avoid working at a startup like Fast? There aren’t any hard and (ahem) fast answers, but there are some lessons you can take from its failure and some warning signs you can look out for. Gergely Orosz of Pragmatic Engineer explains in his video, How to (not) choose a startup to join: lessons from Fast:

Big takeaways from the video:

Research the founders.

It’s true: 80% of a startup’s culture is its founder. Look at the founders’ history and be especially watchful for patterns of behavior or signs of the “there’s no there there” syndrome. One of Orosz’ former Uber coworkers tried to convince Orosz to join Fast, but after researching Fast cofounder Domm Holland’s checkered history, he decided to not join.

Ask for numbers.

Ask questions like:

  • How much runway do they have? Runway is how long they can stay in operation if their income and expenses stay the same. In an early-stage startup that doesn’t have any customers yet, runway effectively becomes how many months the company can operate before running out of money.
  • What’s the burn rate? In the context of startups that raised money in order to get started, a company’s burn rate is the rate that the company is spending that money while it’s not yet making money from its operations. Fast was said to have a burn rate of $10 million per month.
  • How much revenue is the company generating? Revenue is the money that the company makes from normal business operations, that is, the money they make from selling either stuff or services to its customers. Fast’s revenue for all of 2021 was about $600,000, which averages to $50,000 a month. Contrast this with their burn rate above.
  • Find out if there’s a clear set of critical business metrics that they track and if they’re available to you. Any startup worth the effort is painfully and continuously aware of the key metrics that determine whether they’re doing the right things or not. The employees at Fast were unaware of how little revenue the company was making or how few customers they had

Other hints

  • Interview your future manager and a founder.
  • Talk to investors.
  • Talk to people who left.
  • Assume your stock grants are worthless.
  • Remember that reward is often proportional to risk.
  • Watch for worrisome numbers, including…
The problem is that the Y-axis isn’t revenue, profits, or anything to do with incoming money. It’s employees.
Categories
Business Career Podcasts Programming What I’m Up To

Talking about personal agility and the Great Resignation on the “Arguing Agile” podcast

You should be a regular listener/viewer of the Arguing Agile podcast, a YouTube show hosted by Tampa Bay techies Brian Orlando and Om Patel that features local techies talking about software development, agility, and everything in between, completely unscripted and unrehearsed — just real conversations about real tech work. In the past year, they’ve published 66 episodes, the latest of which features…me!

In this episode, titled Personal Agility and the Great Resignation, we talk about doing work in the brave new world of post-2020 and discuss things such as:

  • 0:00 Intro
  • 0:24 Topic Intro
  • 0:59 Reasons for In-Person Gathering
    • Working remotely still requires some in-person gathering, because as they saying goes, sometimes, “you have to be there.”
  • 4:19 Team Bonding, Positive Vibes
    • The power of team-building ceremonies and exercises, and why they have to be meaningful and not just “doing team stuff for team stuff’s sake.”
    • In the past couple of months, I’ve had my first chances to meet with my team at Auth0 (Developer Marketing) after working with them for a year and a half — first at a small summit in Salt Lake City, and last week in London.
  • 8:40 Work, Life, & Sustainability
    • Earlier in your life, it’s much easier to work ultra-hard in the quest to advance your career, but you can’t do it for an extended period. This is the exact thing that generates mid-life crises, and physical and mental health issues.
    • Brian: “Jack Welch said a lot of stuff.”
  • 15:50 Interviews: Vetting Companies
    • During a job interview, you shouldn’t be the only one being interviewed. You should also be interviewing them!
    • How can you tell if a manager is a “Rick” looking for another “Morty” to add to his “Morty Army?”
    • I talk about a Chris Voss technique where you look at the reactions on the face of the person who isn’t speaking to get the truth.
  • 19:55 Segue on Microsoft
    • We talk about my time at Microsoft where I was a Windows Phone Champion, Albert Shum’s design for its “Metro” UI, and Microsoft’s thinking during the Ballmer era: “The mobile platform is the desktop platform, but lamer.”
    • I was at a gathering of P2P people at Microsoft in 2001 that was attended by Tim O’Reilly and Dave Winer, where we were told that “IE6 will be the last browser, because the future is applets.”
    • A story from my time at Cory Doctorow’s startup where how I show how hard it is to predict the future.
  • 25:51 Learning
    • A story from how I landed my job at Auth0, where I had to learn about an unfamiliar platform very quickly.
    • The importance of communication when working remotely and keeping Conway’s Law in mind.
    • Strip away the technology, and a teacher from hundreds of years ago would still recognize a present-day classroom and the lecture format.
    • We share stories about learning by doing, with Om talking about his daughter at med school and me talking about a story about the Logo programming language, where children learned beyond what they were being taught.
  • 31:12 Time to Think
  • 37:34 Evolution of Technology & Skills
    • Our first computers: I had an Apple //e and Om had a Spectrum ZX, two serious Generation X machines.
    • I learned how to program at a computer store that tolerated my hanging out: Batteries Included, in Toronto.
    • Learning new languages: Python and Lingo, and picking up new languages to get the job done. This may be the first time on the podcast series where the languages Lisp and Prolog get mentioned.
    • A question that Brian asks during interviews: “Tell me about a time in the last 18 months where you did something to update your skills.”
  • 44:55 Solving Problems
    • Software isn’t a what, it’s a how. If you make software for an industry or field, you’re not in the software industry, but the industry or field that you’re making the software for.
  • 47:51 Personal Agility
    • Between the pandemic and the current economic situation, you need to develop personal agility to survive and thrive in the current job market.
    • A number of people who participated in the Great Resignation left their jobs without having another job to jump to.
    • About not participating in what Scott Galloway calls “the menace economy”: “I want to earn fair profit for my effort, but I don’t want to do it by stepping on somebody’s neck.”
  • 53:24 Monkeys, a Banana, and a Ladder
    • When talking about organizational culture, you’ll eventually come across the “Five Monkeys Experiment,” which we discuss.
    • How office architecture mirrors office organization, culture, and hierarchy — and how remote work systems’ architecture will do the same.
    • The new generation of workers will probably have to be more adaptable than any previous generation.
  • 1:02:18 Returning to the Office
    • The majority of a developer’s day requires focus time, and that isn’t often achievable at the office.
    • The true hurdle may not be technology or office space, but organization discipline.
    • It’s quite possible to kill time unproductively at the office — we’ve all seen this.
    • “If you signed a ten-year [office space] lease in 2018, you’re probably really anxious to get people back in there.”
    • “Butts in office chairs” is the new “lines of code” metric.
  • 1:08:43 The Future
    • There’s so much traditional culture force behind the way work is done. Ebenezer Scrooge’s accounting office in A Christmas Carol isn’t all that different from its modern-day counterpart.
    • Om: “I like to see a sitcom called The Home Office.”
  • 1:13:00 Wrap-Up
Categories
Business Humor

When the term “scooter rental” just doesn’t sound high-tech enough…

…that’s when you get creative:

TechCrunch’s article on scooter rental company Bird laying off 23% of their staff opens with this line:

Shared micromobility company Bird plans to layoff 23% of its staff, according to tech layoff tracker Layoffs.fyi.

Apparently “scooter rental” — a more accurate description of Bird’s business — wasn’t “TechCrunchy” enough, so they went with the phrase “shared micromobility company,” a case of title inflation that will someday join the ranks of “sanitation engineer.”

Categories
Business Humor

Don’t understand NFTs? This “Kids in the Hall” skit from 1994 explains the scam.

The folks at Digg are right — the Laundromat Business Opportunities skit by Canadian comedy troupe The Kids in the Hall predicted NFTs back in 1994!

Just watch:

The business proposition happens in a laundromat. Here’s the part of the skit that pretty much sums up the idea behind NFTs:

Suit (Bruce McCulloch): “Yes!” This is how I think we should proceed — next time you come to do your laundry, you give us a call.

Mark (Mark McKinney): Heyyy! Are you trying to buy my dirty underwear?

Suit: [uncomfortable pause] N-no. I’m not trying to buy your underwear. I’m trying to lease your underwear.

Mark: I knew it!

Suit: No no, sir. It’s not what you think.

Mark: There was a guy in here, a couple of weeks ago. He tried to buy my dirty underwear, only he wasn’t slick like you.

Suit: That was my ex-partner, sir. W-we’re not trying to buy or rent your underwear, we’re just trying to lease your underwear. We just want the title of ownership.

Mark: What?

Suit: Yes, you get to retain possession of your underwear. It’s totally a paper transaction.

Mark: Huh. Is there uh money involved with this?

Suit: Of course, sir, there’s money involved. I’m a business man. There’s fifteen dollars [waves a stack of one-dollar bills so it looks like a bundle of money].

Mark: So, you’ll give me fifteen dollars for the title of ownership to my underwear, and I get to keep it?

Suit: Of course you do, sir.

Mark: But how do you make money doing that?

Suit: We’re idea people. We profit from the idea that we own the deed to your underwear.

And that’s NFTs in nutshell, once you strip away the technology veneer and blockchain bafflegab.

Categories
Business Current Events

Don’t let the “broligarch” buy Twitter

According to the subscription-only tech journal The Information, “Twitter’s board of directors views Elon Musk’s takeover offer as unwelcome, said a person familiar with the situation, suggesting it will fight the bid.”

I certainly hope they do. His move threatens to turn Twitter into early 2010s-era Reddit, when it was a cesspool of bigotry, disinformation, and that MAGA/QAnon test run called Gamergate.

Some thoughts:

  1. His “free speech absolutist” stance is wrong. TechDirt’s recent article, Why Moderating Content Actually Does More To Support The Principles Of Free Speech, outlines why moderation actually enhances a community’s ability to have conversation, right from the first paragraph, which includes “Some of that involves legal requirements, some of it involves trying to keep a community focused, some of it involves dealing with spam, and some of it involves just crazy difficult decisions about what kind of community you want.”
  2. What he truly cares about is his own free speech. Yours doesn’t matter. For example:
  3. What does Musk use his freedom of speech for? Well, there’s the whole “pedo guy” thing, which didn’t add anything useful to a situation where people were racing against the clock in a search-and-rescue operation.
  4. The only time he’s ever faced governmental consequences for things he’s posted on Twitter was when he was he was manipulating the market for his own gain. That tweet from August 2018 — “Am considering taking Tesla private at $420. Funding secured.” was him simultaneously playing to the retail investor crowd and the still-living-in-mom’s-basement crowd (and possibly the crowd where those two Venn circles overlap). As Quartz put it in their article, Elon Musk’s Twitter bid isn’t about free speech, “if Musk has gripes about free speech, they’re with the SEC and not the company he’s trying to acquire.”
  5. The loudest people celebrating Musk’s potential disruption of Twitter are human trash fires, incredible dumbasses, and often an unholy combination of the two: Jack Posobiec. Lauren Boebert. Jim Jordan. Marjorie Taylor Greene. Monica Crowley. Vladimir Putin’s newest bestest buddy, Tucker Carlson.

I’ll end with an observation from my friend, LinkedIn Learning’s Morten Rand-Hendriksen, whom I know from my Microsoft days:

“Elon Musk taking #Twitter private could mean an end to content moderation and a return of the platform as fertile ground for extremism, white supremacy, harrassment, and disinformation. Or it could mean nothing. Either way, if this deal goes through, it’ll change the social media landscape in a very big way.”

A very big way, certainly. But a good one? I doubt it.

Categories
Business Florida Tampa Bay

Tampa’s Peerfit acquired by FitOn

It’s another Tampa Bay success story: Tampa-based Peerfit, who refer to themselves as a corporate wellness platform, have been acquired by FitOn, the mobile health and fitness app known for its exercise classes led by celebrities.

Peerfit have been growing in leaps and bounds, amassing customers and funding, including a $10 million round in January 2020 that was led by Tampa Bay Lightning owner Jeff Vinik and NoCal-based Virgo Investment Group. Peerfit connects employers to fitness and wellness services, acting as a provider for companies that provide wellness benefits — they’re currently used by 13,000 employers. CEO Ed Buckley will remain in charge of Peerfit, and their team (about 50 people, according to Tampa Bay Business Journal) all plan to stay on.

FitOn’s story is one of a good product that had great timing. Launched in 2019, the app provides at-home workouts led by celebrities including Halle Berry, Gabrielle Union-Wade, Lindsay Vonn and Julianne Hough. When the pandemic forced gyms to close, their user base grew to over 10 million, and 80% of their users livestreamed workouts in 2020.

Is this a good thing for Peerfit? For the Tampa Bay scene?

My opinion is yes, and for now, I’ll keep my answers to bullet points:

  • It’s good for Peerfit, part 1: When you create a business with “startup” ambitions (as opposed to having the goal of creating a so-called “lifestyle business”, a model that is unfairly mocked and deserves more respect), your goal is to exit. In general, there are three kinds of exits:
    1. You fail. This could be closing up shop, or getting acquired at a “clearance” price.
    2. You IPO. Typically, to do this, you first have to become a unicorn — a private company with a valuation of over $1 billion. Shareholders are generally ecstatic, and employees generally do really well. This is the least likely scenario; there are just over 1,000 of them in the world.
    3. You get acquired. Shareholders are generally pleased, and employees generally do pretty nicely. This is the most likely scenario, as 97% of exits are an M&A-type transaction. It’s also usually the best outcome for a small- to medium-sized startup, which is where Peerfit fits.
  • It’s good for Peerfit, part 2: FitOn and Peerfit are complementary: one’s provides wherever-you-happen-to-be workouts, and the other provides fitness benefits to companies. FitOn provides capital, reach, and an app in the top 20 in the App Store, and with a 4.9 rating (from almost 230K ratings!). Peerfit can take the FitOn app to corporate customers.
  • It’s good for the Tampa Bay tech scene: It takes more than evangelizing the benefits of choosing Tampa Bay as a place where you’ll live, work, and play to build our tech scene. That’s just telling. Telling helps, but we also need to show, and success stories such as Peerfit are exactly what we need.

Find out more

For more on the acquisition, see: