A brief review of the 2020 book “No Filter – The Inside Story of Instagram” by Sarah Frier.
Instagram adds no value to my life. It is mediocre technology with a bouquet of products that are poorly managed, mostly copied, and barely maintained. All of this is reflected in Sarah Frier’s take on Instagram. In her book, which supposedly tells the inside story of Instagram, she is largely focused on the people behind the app. She draws a clear and concerning picture of regular people with no better intellect or skill than you or me coming into a position of power, by luck and location more or less, only to then pursue a strategy of pure narcissism and ambiguity.
Frier calls this out specifically during Twitter’s attempt to purchase Instagram when it couldn’t even present a counteroffer because Facebook swept in with a one billion* dollar offer. Instagram’s 13 employees, a handful from the startup Gowalla, which was acquired by Facebook without keeping some folks, should have gotten an equal and fair share, but all except Systrom and Krieger were left with Facebook stock and vesting schedules instead. And while the acquisition didn’t immediately turn Instagram into a Facebook clone, it arguably sucked the life out of the startup, its people, and its users in exchange for ruthless growth. Inevitably, Instagram became the success it once was because of Facebook.
I found Frier’s account fair and balanced, slightly favoring Instagram and its early employees. The plethora of regulatory issues Instagram faced over the years is largely missing. Reading more about Instagram violating the privacy rights of teenagers or its tendency to build addictive features designed to target teenagers would have added a much-needed edge to this book. Would I recommend “No Filter”? Probably as a summer afternoon read for anyone interested in Instagram’s founders’ personalities. It does reveal insights into the narcissistic tendencies of both employees and users, which perhaps create an interesting psychological angle for some people. Altogether, “No Filter” is a good book with solid research and adequate writing worth reading when you are waiting for your next haircut.
*It was never 1 billion dollars. It was around $300 million in cash and 23 million in Facebook stock. Put together this came out to about $715 million.
Last month, I was excited to test writing on Substack. I took notes of some metrics important to my message, and, after failing to find future value in writing on Substack, I decided to kill it. That doesn’t mean Codifying Chaos is dead. I’ll continue to write here, on WordPress, as a sidebar. More centered around small business. Less focused on the platform. That’s it.
Writing this review didn’t come easy. I spent five years helping to mitigate and solve Facebook’s most thorny problems. When the book was published, I perceived it to be an attack on Facebook orchestrated by the New York Times, a stock-listed company and direct competitor in the attention and advertising market. Today, I know that my perception then was compromised by Meta’s relentless, internal corporate propaganda.
Similar to Chaos Monkeys, An Ugly Truth tells a story that is limited to available information at the time. The book claims to have had unprecedented access to internal, executive leadership directly reporting to Mark Zuckerberg and Sheryl Sandberg. It is focused on the time period roughly between 2015 and 2020; arguably it was Facebook’s most challenging time. Despite a constant flow of news reporting about Facebook’s shortcomings, the book, for the most part of it, remains focused on the executive leadership decisions that got the company into hot waters in the first place. Across 14 chapters, well-structured and perfectly written, the authors build a case of desperation: in an increasingly competitive market environment, Facebook needs to innovate and increase its user statistics to beat earnings to satisfy shareholders. Yet, the pursuit of significance infiltrated the better judgment of Facebook’s executive leadership team and eventually led to drowning out the rational voices, the protective and concerned opinions of genuine leadership staff over the self-serving voices of staff only interested to progress at any cost.
To illustrate this point, the authors tell the story of former Chief Security Officer Alex Stamos, who persistently called out data privacy and security shortcomings:
Worst of all, Stamos told them (Zuckerberg and Sandberg), was that despite firing dozens of employees over the last eighteen months for abusing their access, Facebook was doing nothing to solve or prevent what was clearly a systemic problem. In a chart, Stamos highlighted how nearly every month, engineers had exploited the tools designed to give them easy access to data for building new products to violate the privacy of Facebook users and infiltrate their lives. If the public knew about these transgressions, they would be outraged […]
His calls, however, often went unanswered, or, worse invited other executive leadership threatened by Stamos’ findings to take hostile measures.
By December, Stamos, losing patience, drafted a memo suggesting that Facebook reorganize its security team so that instead of sitting on their own, members were embedded across the various parts of the company. […] Facebook had decided to take his advice, but rather than organizing the new security team under Stamos, Facebook’s longtime vice president of engineering, Pedro Canahuati, was assuming control of all security functions. […] The decision felt spiteful to Stamos: he advised Zuckerberg to cut engineers off from access to user data. No team had been more affected by the decision than Canahuati’s, and as a result, the vice president of engineering told colleagues that he harbored a grudge against Stamos. Now he would be taking control of an expanded department at Stamos’s expense.
Many more of those stories would never be told. Engineers and other employees, much smaller fish than Stamos, who raised ethical concerns of security and integrity were routinely silenced, ignored, and “managed out” – Facebook’s preferred method of dealing with staff refusing to drink the kool-aid and toe the line. Throughout the book, the authors maintain a neutral voice yet it becomes very clear how difficult the decisions were for executive leadership. It seemed as though leading Facebook is the real-world equivalent of Kobayashi Maru – an everyday, no-win scenario. Certainly, I can sympathize with the pressure Mark, Sheryl, and others must have felt during those times.
Take the case of Donald John Trump, the 45th President of the United States. His Facebook Page has a reach of 34 million followers (at the time of this writing). On January 6, 2021, his account actively instigated his millions of followers to view Vice President Mike Pence as the reason for his lost bid for reelection. History went on to witness the attack on the United States Capitol. Democracy and our liberties were under attack on that day. And how did Mark Zuckerberg and Sheryl Sandberg respond on behalf of Facebook? First, silence. Second, indecision. Shall Trump remain on the platform? Are we going to suspend his account temporarily? Indefinitely? Eventually, Facebook’s leadership punted the decision to the puppet regime of the Oversight Board, who returned the decision power due to a lack of existing policies that would govern such a situation. When everybody was avoiding the headlights, Facebook’s executive leadership acted like a deer. Yes, Zuckerberg’s philosophy on speech has evolved over time. Trump challenged this evolution.
Throughout Facebook’s seventeen-year history, the social network’s massive gains have repeatedly come at the expense of consumer privacy and safety and the integrity of democratic systems. […] And the platform is built upon a fundamental, possibly irreconcilable dichotomy: its purported mission is to advance society by connecting people while also profiting off them. It is Facebook’s dilemma and its ugly truth.
The book contains many more interesting stories. There were a wealth of internal leaks to desperately influence and return Facebook’s leadership back to its original course. There were the infamous Brett Kavanaugh hearings, which highlighted the political affiliations and ideologies of Facebook’s executive leader Joel Kaplan, who weathered the sexual harassment allegations against Brett Kavanaugh by Christine Blasey-Ford despite an outrage of Facebook’s female employees. Myanmar saw horrific human rights abuses enabled by and perpetrated through the platform. The speaker of the U.S. House of Representatives and Bay Area representative since 1987, Nancy Pelosi was humiliated when Facebook fumbled to remove a deepfake video about a speech of hers that was manipulated to make it sound slurred. And the list goes on and on and on and on.
The book is worth reading. The detail and minutiae afforded to report accurately and convincingly are rich and slow-burning. That being said, Facebook has been dying since 2015. Users leave the platform and delete Facebook. While Instagram and WhatsApp pull the company’s advertising revenue for the time being with stronger performances abroad, it is clear that the five years of the executive leadership of Facebook covered in this book point towards an undefiable conclusion: it failed.
NPR’s Terry Gross interviewed the authors Sheera Frenkel and Cecilia Kang on Fresh Air. It further demonstrates the dichotomy of writing about the leadership at one of the most influential and controversial corporations in the world. You can listen to the full episode here.
When you don’t really need an office, but you kind of do.
On March 12, 2020, I was on a flight to San Francisco when President Trump announced sweeping travel restrictions for travelers from European countries. On March 16, 2020, San Francisco’s Mayor’s Office announced a shelter-in-place order, which would become State-wide soon after it would take effect in seven San Francisco Bay Area counties. I remember the week before as the last week I had a normal office experience. I remember that particular week as a change that could not be undone and forever change the way I work.
When I started Cedar Bay Group two years later, I knew I wouldn’t want an office. The commute is a waste of time. The cost of office space in the Bay Area outweighs the benefits and gains from its utility. And, I knew, I run my startup as lean as I possibly can with minimal staff and maximum flexibility. Eventually, my legal team advised me to find some form of office space that is not my home to build a better case with the Government. Reluctantly, I started looking for suitable office space. As the Cedar Bay Group is based in San Francisco, I started looking for available commercial real estate within the Sunset District where I live. For example, Loopnet surfaced this space at $55 per square foot. That comes out to about $3,200 per month or $39,000 per year. I verified pricing across other websites. The site Officespace was useless.
Making a contractual commitment over a longer term ought to be thought through. In my case, it didn’t make sense to rent office space at these rates, when the majority of the business only requires an internet connection and a laptop. Therefore, a flexible office space seemed more appealing. Now, comparing prices is the minimum effort required for a sound financial investment, but when it comes to co-working spaces with term flexibility Deskpass, Industrious, or Codi all could not compare with WeWork. WeWork’s sales team was quick to offer us a flexible contract that could be executed annually at a discount of about 30% or we could rent it month-to-month with a smaller discount. The WeWork All Access turned out to be a perfect solution for the stage my company is at. It allows us to bring in the entire team if we need to. As diligent as the sales team conducted its business, the billing team wasn’t as smooth and customer-oriented. It took us several emails to obtain invoices with adjusted prices. For some reason, WeWork’s ticketing system kept on closing the request. It wasn’t a good experience, but certainly acceptable considering the deal we struck.
When you work, work with the highest degree of efficiency. If you can’t work with the highest degree of efficiency, don’t (pretend to) work.
There are leaders who preach a hardcore work ethic working hundreds of hours and never leaving the office. Then there are leaders who believe time and income ought to be separated. The former must be freely available. The latter must be automated. And then there are leaders who approach work differently.
Note: most employees will not have the freedom to structure their work. Let alone their work hours or days. If you are an employee, stop reading. Go back to work. Tim Ferris’ “4-Hour Workweek” is minimalism on steroids centered around living large and in the moment. It’s a concept that isn’t universally applicable, but it contains a few cherries ripe for the picking. Notably, the concept of focused, deep work is something I adopted, but slashed in half. Two hours of work with the highest degree of focus suffice to identify, arrange, and mitigate all of my important tasks. It doesn’t matter when those two hours occur. If you’re a morning person, get after it in the morning. If you’re a night person, get after it at night. The only thing that isn’t negotiable is a free-of-interruption session of two hours. No phone. No email. No nothing distracting. In order for me to get things done, I tend to first identify the most complex problem that I am trying to solve. I scribble down all possible things that concern me. Everything. No matter how minute it may seem. As I’m writing this post, I think I use a Pugh Matrix to arrange, or better defer, delegate, and eliminate tasks. It’s a cool system to make priorities. Eventually, I mitigate by either executing part or – if possible – all of the solution. Until I fail. If that happens, I shelf and reevaluate my approach and whether I missed an important metric and information. Once the two hours are expired, I end my work.
That’s really it. I repeat this process seven days a week. With the time reclaimed, I tend to find myself outside hiking, running, cycling or playing shenanigans ultimate on the beach. With the energy conserved, I observed more work with the highest degree of efficiency done. I feel I get more important things done. Does it work for you? Likely not, but give it a try and make it yours.
When I was a kid, my uncle, a computer salesman and technician at the time, brought over a personal computer with Windows 3.1 as the operating system. The tower was about the size of three shoe boxes and heavy. It came with a tube-powered screen – also heavy. The color of the housing appeared to be an awkward in-between tone: something white, something grey, something yellow. I remember, how long it took to boot the machine. I still vividly remember the buzzing sound, the plastic scent, and the feeling of creating something from nothing.
Operating a small business is full of these little moments. A new technology arrives, a new hot thing hits the market, a new method and design supposedly changes everything – there’s is always something going on. There is always something that reminds me of this personal computer stuffed with an operating system that is now the equivalent of a dinosaur in computer science. It operated binary. Its users understood it and adapted to the system. It is because of this simplicity, running one application at a time, deep focus on one thing at a time, loading one graphic at a time, that I could feel some fascination when I experienced it. Certainly being a kid helped too. Nowadays, we don’t allow ourselves to follow this binary code. I find myself not quite zero and not quite one. Yet, I found it helps me to have execution days where I ruthlessly follow the binary code. My startup is still in the first dates phase with prospective clients. We know about each other because I run an aggressive marketing model. We understand how beneficial a partnership could be because I detail our process in-depth and tailored to a client’s needs. But we tend to dance around with details and minutia daring each other to make the first move. Don’t allow yourself to be in between two things. Once all required details have been shared, it is time to sign or move on. Establish execution days that start early in the morning and end late in the day. Compartmentalize each task back-to-back without breaks. Allow yourself to be all zero or all one.
In the silicon valley startup scene, it is a cardinal rule to incorporate your business as a c-corp. Carolynn Levy gave an excellent overview of the legal mechanics for startups at YCombinator. Arguably, the flexibility around equity makes a c-corp structure worthwhile, but as an early-phase entrepreneur, I asked myself if I really needed outside capital and whether I’d want to take it. It is tempting to accept venture capital to ease cash flow worries. Indeed, it helps to hire talented people to build an awesome product much faster. But, I felt, that venture capital isn’t the right choice for my business and my particular ambitions at this stage. As a founder, it is crucial to weigh your existing runway, the freedom that comes with it, and the products you can (reasonably) ship and sell before you reach to end of it against the influx of outside capital tied to terms and conditions.
After doing my typical due diligence on the various different business structures available from b-corp, c-corp, s-corp, limited liability company, and limited liability partnership, I eventually landed on the LLC structure. Vacation and short-term rental management is arguably a service-oriented business. It isn’t capital intensive, requires a large workforce, or must scale expeditiously. The type of product offered by Cedar Bay Group revolves around account management, which has been done before, scaled before, and failed before. Hence it is predictable. It is secondary in nature. Product-market fit or rather service-market fit is arguably easier to test at a vacation rental management startup by generating a lead, selling a client on your idea, and taking a cut from the gross-booking value that is reflected in your bank account. This can be done in a heartbeat without any technology or equipment.
Maybe this all circles back to sales is king. Preserving cash flow by generating sales early on is a prime objective. I have a strong preference to be frugal, yet as efficient as I need to be, but nothing more. An LLC allows pass-through taxation which means the company’s profit and losses pass through each member’s individual tax return. Its liability protection is sufficient for an early-stage startup. Low cost, a minimal administrative effort to maintain, and ease of setup are other benefactors that influenced my decision to form an LLC. To form the LLC, I used Northwest Registered Agents. It was a flawless, fast experience in addition to secure personal privacy that is unavailable if formed without a registered agent.
Whatever your thoughts on incorporation are it is reasonable to talk to a lawyer or accountant beforehand. Choose the most optimal structure based on facts rooted in reality, not based on wishful thinking about the future.
If you’re not building your product, you need to be selling it. Time is the only commodity that is not negotiable. Focus utilizes time. Discipline secures execution.
Starting a business can be a daunting experience. Simple administrative tasks can become black holes that relentlessly and silently suck up your time and energy. Before you know it, the day’s gone. When I started out, I found myself “at work” in front of my laptop for about ten hours per day, but the actual required daily tasks weren’t moving at the desired speed. How can this be? So, let’s talk about focus in relation to time.
The job of a founder can be compared to that of an air traffic controller minus the risk of placing human lives at risk. From the outside, it appears to be toxic chaos. From the inside, it can certainly feel like chaotic toxins infecting your mind and body, but in reality, it is more like an opera: managing multiple conflicting tasks at once resembles the theatric elements. Conducting calculated, frugal spending resembles the music. Once the music stops, the show’s over. It all happens at various speeds. Some days are incredibly busy. Others are credibly busy. For example, I found myself preparing a typical hour of my day that looked like this:
8:00-8:25 = Ideate Occupancy Model
8:25-8:40 = Write/Test Occupancy Model
8:40-9:00 = Coffee/Toilet Break
In reality, I would start ideating for about ten minutes, encounter a problem, research the problem for about twenty minutes, encounter another problem or twelve, and continue to research for about twenty minutes, only to realize that I lost almost an hour with research that does not contribute to the core product. Arguably, some problems need to be thoroughly researched, but I argue that shouldn’t take place during the ideation phase. It’s the sacred phase where your creative juices need to be flowin’ and growin’ your business. Always be mindful of the time and how you use it.
Here’s a story a close friend, fellow founder, and fellow nation-hopper/immigrant shared with me: “Sales is king”, he said. “If I would start a business today, I would focus on sales, sales, and sales.” His business fell prey to the global pandemic when investor money dried up in the heat of uncertainty. It couldn’t be sustained any longer without an outside influx of cash. He goes on to tell me “if you’re not building your product, you need to be selling it.” Building a business really comes down to those, two simple things. For most folks, building product can be a more attractive task. It’s predictable. It’s rewarding. For most folks, selling product can be a frightening task. It’s prone to rejection. It’s confrontation. Learning how to do both, and being equally excited to get to do both, is crucial for the survival of any business. Companies that are profitable are essentially financially independent. Isn’t financial independence a prime objective for any startup founder and business owner?
Now, I’m not concluding this with a profound takeaway. This isn’t hustle porn. I found solace in adopting a net-positive mindset. To me, net-positive means to be excited to get to build an awesome product and service. I know, this will not be forever, and soon I’ll have to move on to other tasks. It means, selling a product really is about connecting with people. It’s about the empowerment of my business and rejection is part of the business. In the long run, rejection will make it better because I got to experience it. Through all of it, focus will come.
I have played around with the idea to start a business for quite some time. It’s a continuous iteration and curation of ideas. I keep a startup-ideas spreadsheet organized by problem, solution, and realistic setup cost. It helps me to funnel all the ideas that hit me throughout any given day.
Initially, Cedar Bay Group was not intended to be a standalone company. I knew I wanted to break into the real estate market. As a property owner, I believe I can empathize with other property owners when it comes to finding, analyzing, and purchasing real estate. Beyond that, I believe I do understand the challenges around property maintenance, continuous tenant management, and cash flow. Now, today’s real estate market is quite an interesting environment. Partially, it is undergoing an evolution exhibited by a growing proptech segment. Yet, it also seems stagnant in other areas around in-person services and process documentation that resembles the late 18th century. Only 15 years ago, the U.S. real estate market was hit by the 2008 subprime mortgage crisis. Some analysts argue the 2023 housing market is about to crash again. If mortgage rates and consumer prices increase, sales of real estate will decrease. Property owners want to hold onto their real estate (if they can afford it).
Affording anything in life really was a leitmotif to break into the real estate market. As someone who has moved more often than some people change their underwear, I understand the financial worries surrounding a real estate transaction. Hesitation can be paralyzing. Uncertainty can be crippling. To mitigate such a predicament, I wanted to further expand services offered around creative financing in real estate. Vacation and short-term rental management is an overcrowded yet underserved segment of the travel industry. On the one hand, it is a pathway to financial independence by generating an income for property owners to help them pay off any mortgages or debt. Contrary to popular belief, however, it isn’t something that should be regarded as easy money, or, worse, viewed as a unilateral business transaction. Guests break stuff. Vacation homes require maintenance. Natural disasters, climate change, and increasingly frequent weather extremes create force majeure circumstances that annihilate dividends and rental income. Any common-sense homeowner will calculate the operating cost of a property against different risk scenarios. The time investment portion of managing a property is the most overlooked part. An average salary of $50,000.00/year translates to roughly $25/hour. A property manager charges an average of 15% per month at an average rent of $2000. That’s a measly $1.87/hour. The service level for tenant and guest satisfaction are other elements often underestimated in both execution and scale. Vacation and short-term rental properties generate an income through high occupancy, or the number of days per month a place is booked out, and an adaptive pricing strategy. Both factors hinge on guest satisfaction. In addition, it takes operating at scale to really offset costs and fortify positive cash flow. It would be naive to assume guest satisfaction, pricing strategy, and managing finances of a property can be done on top of a regular 40-hour work week. Let alone spending time with family and friends. This begs the question: what is done to serve property owners, hosts, and those that offer a place to linger? As a homeowner ask yourself: how do you spend your time? While vacation rental management companies serve different segments of the travel industry, there aren’t many consolidated, full-service options that free up property owners’ schedules while generating consistent revenue from wonderful guest experiences.
Once it became clear to me that a streamlined, scaled service for homeowners could enable them to spend more time focusing on their families and growing their net worth, therefore improving the vacation experience for guests, I knew I had a purpose. But a purpose is not worth writing about without execution. A “done is better than perfect” mindset inspired me to get going and simply start writing a business plan and developing service and pricing models. Now, this is how I approached finding purpose before starting a business. You may want to explore your what, how, and why before you start up a business. There are a million other approaches to finding your specific purpose. As a takeaway, perhaps think about these three steps:
Observe your environment. Take note of what catches your attention.
Analyze your environment for problems and ideate solutions for those problems. Think about the cost of doing business.
Execute. A done business plan is better than a perfect business plan. Find your niche and don’t look further. Just do it already.
This publication is about founding a real estate startup during an economic downturn. Over the course of countless conversations with former colleagues, friends, and family I realized the need for documentation.
So, what does Codifying Chaos mean? It’s an expression I use to structure the unpredictable. It means a moment of reflection, orientation, organization, and execution. It’s similar to Boyd’s OODA loop. Starting a business is chaos. There are moments of extreme uncertainty, worries about cash flow, and ruthless reiteration of service and product.
Writing helps me to structure my thoughts. I already write about the books I read here. Codifying Chaos, therefore, is a method to structure my business decisions and (hopefully) to learn from my mistakes.
Lastly, the underlying startup of this publication is Cedar Bay Group. I will write more about corporate structure, processes, and procedures as the company continues to grow.
Founding a business is a journey of people. Allow me to get to know you better by sending an email to andy@cedarbaygroup.com or message me on Twitter.
misterfergusson 