Category: Technology

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Best Time to Build a Business is Now

Had a conversation with a friend the other day who works for a municipality. There is a software that they use, basically every county uses it. There’s one vendor for everyone. It’s a monopoly. Support is bad (days for the initial response), product is bad (still requiring windows 10 and haven’t began testing for deployment in windows 11), and prices are high (no market competition = high prices). The issue is anytime a new company begins to disrupt they buy them.

To be clear, i’m not against monopolies if you got there through innovation. I’m not even against M&A as that is a solid strategy that fuels startup funding and what folks like Lina Khan are doing is showing how little some understand about the free markets and game theory. However, in this instance it’s a clear case of anti-competitive behavior and the reason it hasn’t become a case is because the acquisitions aren’t large enough to garner attention.

Back to the conversation with my friends, one was saying they didn’t know how to code this. My case to him was that it was unnecessary. He had the right knowledge.
1) problem set
2) deliverables and requirements
3) understanding of current constraints
4) industry experience and relationships

In this case, the issue would be the why to build. If the real core why is to disrupt by adding competition, there are risks there and they’re all surmountable. Just have to be clear enough on the why to not sell when the money is a high multiple and look for a better exit with good partners to keep the competition alive.

Given the state of tech today, it’s the easiest time to build a company with $0 in funding so long as you’re willing to put in the work. What about you? Feeling the itch to innovate? What’s stopping you from starting as an intrepreneur where you’re at? Whats stopping you from starting as an entrepreneur and launching out? Now that you know what’s stopping you, you’re a very powerful person so what’s the plan to remove those obstacles?

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The Journey So Far

Been talking about work and life. Wanted to present some stages for how this worked for me.

College -> Worked full time while schooling full time. Worked flexible jobs so I could do school. I felt busy (laughable now). Developed several skills for post college career. Helped start a non-profit during this time that I worked in alongside my career for the next 12 years. Got my first 8-5 job 3 days after graduation due to work I was already doing and relationships I had formed.

First 5 years -> Wanted a different career. Was paid low, worked long hours but was non-exempt with an unlimited overtime due to my role. Had to consistently be on-site and thought working remotely was what I wanted. Got next job because of a particular skill and someone I knew.

Next 6 years -> New job, first year I thought this was a stop gap. Turned out I loved the team and stayed for 6 years. Was empowered to help build teams. Was paid better because of the first 5 years pushing myself into expertise in key job functions. Started managing others and realized that leading, coaching, and building teams was a skillset I enjoyed. I also had to be in the office most days and was still learning to love what I was doing. Really enjoying my work kicked in the last few years here. Left here to go work in a global non-profit because of the non-profit work I mentioned back at college stage.

Next 3 years -> Worked at a non-profit overseeing global technology and some security functions around that. I was able to come and go. No requirement of office hours specifically. I realized I liked having an office to go to and also liked the flexibility of not having to go there. Most days I was there and found that was easier. I thought this was my dream job. Turns out getting your dream job in your early 30’s is a bad idea. 2 friends bought 2 businesses and asked me to help merge the thing together. I left to go do that.

Next 5 years -> Worked for some friends helping build out an MSP by integrating 2 together. Learned more skills on business functions and found I like working on the overall operations to make something healthy. Went through my first sell side transaction with a PE backed firm. Stayed on for a few years to help move towards integration and learned about negotiation in a larger org.

Last 2 years -> First job, that didn’t immediately form from a pre-existing relationship. Moved to another PE backed technology firm. Used lessons from the past 2 decades to help grow the firm. Began work to redesign our Professional Services Automation system. Helped with the integration efforts of 4 acquisitions in the first 6 months. Began to learn about building a true 24/7 operating team. Said yes to some things I regret saying yes to. Said no to some things I should have said yes to. Have learned much in the past year.

3 points:
1) Everything you do is training for the next thing you will do.
2) Relationships are key to your growth.
3) It’s a wild ride. Enjoy it.

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Nerdy AI Post

Nerdy AI Post. I’ve always thought the best way to talk about anything is to at least understand it well enough that you might do it. Doesn’t mean you have to be the best, but you should at least know how all the dots connect.

I had some spare time recently, and have been wanting to grow my understanding of the underlying stack to get a to a GPT Chat Screen so I worked towards the install. In that address the 127.0.0.1 address means this is an GPT Chat running locally on the computer. Was an enlightening task that not only required me to learn more about models, but also about containerization. The other odd thing I did, was actually point this to an Intel i7 to really see what the performance hit is. Now I know. You DO NOT want to run this on an i7 ever. This is why everyone uses GPUs.

If you want to know something, sometimes the lowest cost option to get there is to simply roll up your sleeves and play for an afternoon.

Like if you agree. Comment if you want to change my mind.

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Learn DNS. It’ll help you.

I try to avoid technical posts these days in lui of financial posts. Not because I don’t understand the tech. Honestly, it’s because I understand it to the point of boredom, cash flow and financials are much more interesting and so my goal has shifted to be able to help translate the technical things in light of overall business context. This is where true value is added. That said, Warning. Geek Post:

One truth I’ve discovered over years.

Anyone who thinks they understand DNS, probably doesn’t understand DNS. This function is a foundational layer of the internet. Even if you aren’t a technical person, your business depends on this to work right. If it doesn’t, then your apps don’t work and your email doesn’t send. At this stage in the game understanding the concept of it just a little below the surface will help you tremendously when your email is broken and the tech guy is throwing a bunch of jargon at you.

Please read a few articles on this.   👇

This should help:
https://jonahdevs.com/youre-closer-than-you-think-the-only-6-dns-concepts-you-really-need

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Humanlike Beings

I rewatched the video demo of the Figure robot the other day that prompted a thought. The question that arose was less about robots but rather the person interacting with them. Go to the very end of the video and you see an interaction where the conversation isn’t quite finished, but the person interacting with the robot begins to walk away. In any normal interaction, this would be considered a bit rude. Not so to a robot who does not consider things in that way.

The question with any technology is not only “How does this change our world?”, but also “How does interacting with something in this way change us?” What normalizing that type of behavior will do to our other, non-automaton relationships. Whatever we want our more meaningful interactions to look like should inform our lower level interactions.

As AI and robotics gain ground, everyone should do the work to consider what it means to interact with humanlike beings on use.

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Financial Measures and Levers

There are two primary levers that you have in your life for financial measures.
1) Income
2) Expense

In choosing the assets you own, you need to consider these levers.
Expenses usually come from the assets you own. If you’re most Americans, your house and cars are the largest expense buckets and most of your wealth is tied up in your home. Anything else is probably in stocks somewhere. That’s fine, and those are also not cash generating assets in the truest sense.

Increasing your income can happen through raises and job changes, but the fastest way to do this is by owning more cash generating assets. Have you thought about this?

Two questions to ask yourself:
1) What is your wealth target?
2) What is your wealth generation strategy?

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Directionality of AI

I had a discussion with a friend over the weekend about AI. There are some assumptions about the value it adds and I wanted to address one of these in particular. The reality is that it’s not going to remove jobs so much as it will make very boring jobs obsolete. The issue is that some believe this reduction of overhead will lead to greater profit and that’s simply not true. It could be if all other things were static and the world simply does not work that way. Growth and Death are a fact of life and this equally true for organizations. If you’re not growing you’re dying. Markets expect that also.

That explained, I believe there are three potential options for AI results in an organization. Any and all of these are simultaneously possible in the same market and all have their own unique strategy tradeoffs.
AI’s three future business fundamental options:
1) AI makes service costs a deflationary race towards $0.
-Many services are commoditized. If your vertical isn’t yet, then just wait about 10 years. Because of the cost red ocean effect of commoditization, this allows you to keep competitive pricing while also allowing the margins to stay the same.
2) AI will allow for maintaining revenue levels and increasing the user experience.
-With the easy problems solved for you’re able to reallocate costs to staff for and service higher level business functions. This provides the end user with a better, more consultative experience.
3) AI will allow you to increase your capacity and reach without cost increases.
-If you can take on 2x, 4x, 10x more clients without increasing costs then you have a greater chance of survival in a disruptive situation. The capacity gained will potentially allow companies to continue growth and gain market share without reducing services.

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Technology Business or Technology Enabled Business?

Over the past few years I’ve had to rethink my understanding of the underlying finances of a business. This is necessary when developing your investment thesis. FinTech is a good example. If you look at the trajectory it shows what people are discovering. A NeoBank that was treated as a SaaS company during ZIRP is being realized as simply a bank because the unit economics support that. This is why so much in a lot of companies needs to be written down.

The prevalence of the thought that “every company will be a tech company” simply isn’t true once you apply the unit economics of the vertical that the business exists within.

Everyone else seeing this same rework to investment thoughts?Technology Business or Technology Enabled Business?

Over the past few years I’ve had to rethink my understanding of the underlying finances of a business. This is necessary when developing your investment thesis. FinTech is a good example. If you look at the trajectory it shows what people are discovering. A NeoBank that was treated as a SaaS company during ZIRP is being realized as simply a bank because the unit economics support that. This is why so much in a lot of companies needs to be written down.

The prevalence of the thought that “every company will be a tech company” simply isn’t true once you apply the unit economics of the vertical that the business exists within.

Everyone else seeing this same rework to investment thoughts?