Tag: Codifying Chaos

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.

This post originated on my substack Codifying Chaos.

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.

This post originated on my substack Codifying Chaos.

Don’t allow yourself to be in between two things

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.

This post originated on my substack Codifying Chaos.

For whom the taxman calls, all cash dissolves.

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.

This post originated on my substack Codifying Chaos.

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:

1. 8:00-8:25 = Ideate Occupancy Model
2. 8:25-8:40 = Write/Test Occupancy Model
3. 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.

This post originated on my substack Codifying Chaos.

Done is better than perfect.

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:

1. Observe your environment. Take note of what catches your attention.
2. Analyze your environment for problems and ideate solutions for those problems. Think about the cost of doing business.
3. 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 post originated on my substack Codifying Chaos.