Posts from musings

FEMA is an insurance company

imgresThis is something that has been on my mind forever but because we were one of the many buildings, people, businesses etc whose fate was in the hands of FEMA to pay claims I never wrote about it.  Then this week there was an article in the NYTimes of the painful attempts of many who did not receive their full claims and have until 9/15 before the case is closed.

So here is our story.  We had insurance for our building and for many reasons we ended up going with an insurance company based in Florida for our building instead of Chubb.  Chubb is not for everyone.  They are expensive but not using them was our first mistake.  An insurance broker that our building management agency relied on gave us the option of going with a company called American Bankers.  I knew nothing of this company until after Sandy when I finally found it on the web.  There was nobody to talk to and it appeared to be a FEMA backed insurance company.

I am calling the insurance brokers daily if not twice a day post-Sandy.  They were overwhelmed to say the least.  Weeks and week of headaches, heartache and stress is an understatement.  People from the insurance agency came out to assess the property damage weeks after.  They stayed maybe 45 minutes and left.  We have zero idea when we will be reimbursed for the damage.  Don’t we have insurance for this?

Our building was not in a flood zone until after Sandy.  I have the maps that say that we are right next to the flood zone but not in it.  That changed after Sandy. We finally have a meeting with everyone in the building including the insurance broker and our managing agency.  Here is what we find out.  We have a FEMA backed policy. I went crazy.  If I had known that I would not have called the insurance broker daily for a month and btw I tortured them.  If they had been honest from the onset of what we had purchased I would have known immediately we were fucked.   Here is what that means.  Each month we have been paying American Bankers for insurance but who we are really paying is FEMA.  FEMA is an insurance agency.

Essentially we pay FEMA for these insurance policies that they guarantee through insurance companies (questionable) and when there needs to be payment back to the policy holder based on something like Sandy or Katrina they pay back (if you are lucky) less than 50% of what you need.  Now you can fight them which takes serious time, effort and money because they do not want to pay you anymore than that.  What they wanted, what they asked for, how they delayed it was atrocious.  We jumped through all the hoops several times to get what we were owed.  We never got fully paid back.  We are lucky because our building can afford to fix everything and just be pissed at the insurance agency. It won’t kill us.  For others who rely on that policy who can’t afford the extra it takes to actually put their homes back together is devastating.

I told our Senators about this.  They had no idea, truly.  Essentially FEMA is paid through insurance companies for policies held by them.  Then once they need to pay out they only pay out 25-40 cents on the dollar.  To put it bluntly our government takes money monthly from their people to insure them and then screws them by not completely covering them.  It makes zero sense.

Granted there are people who live in areas that are continually flooded so perhaps policies should change.  It should be like car insurance.  You can not drive out of the lot without insurance.  If you want to buy a piece of property that is in a flood zone then let the private insurance companies set policies (let capitalism work) and people will decide whether they can afford those policies or not and in turn make a decision if that piece of property (home) is worth acquiring.

There are plenty of families whose lives are still disrupted by Katrina (10 years later) and Sandy.  FEMA will never pay them full dollar for what their homes were insured for and they do not have the extra cash to rebuild.   I’ve never seen a reporter dig into this.  Someone should.  The next disaster will create upheaval in the community and peoples lives again and again but there should be some solace if you know that your insurance company has your back.  FEMA does not.

 

 

What exactly is an entrepreneur?

WEFEST6Brad Feld wrote a post in July that we need a new word for entrepreneur.  That post really stuck with me.   So..what exactly is an entrepreneur?  Entrepreneur is defined as a person who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so.   A founder is defined as one that founds or establishes.  These are very different definitions and should be noted.

I started using the word founder when I talk about the person who has started a company vs entrepreneur.  Although founders are very entrepreneurial so are many people and that doesn’t mean that they started a company.

Next April will be the 6th Women’s Entrepreneur Festival.  I am more excited about this event for several reasons.  The event is going to be held at 1 World Trade Center, the event will be taking itself on the road out of the NYU setting, we will be able to have more attendees and we will be able to create a new dialogue with multiple speakers and panels.

WEFestival has always been about celebrating women entrepreneurs.  The attendees are across many verticals. Someone who runs a large division inside a company is an entrepreneur because they have to be innovative in order to succeed.  A doctor who creates innovative products for their patients  makes them an entrepreneur.  Someone who runs the family business is generally entrepreneurial.  The word entrepreneur is about being a leader, being innovative and being able to take risks.  WEFestival has always wanted to champion those women and will continue to do so.

One of the conversations is that women should not pigeon hole themselves.  We have to be more strategic in our our skills using them not only to apply to our families but our businesses as well.  There is a balance between using your heart and using your brain.  There are so many ways to be entrepreneurial and that is what WEFestival embraces.

Bottom line is just because you aren’t a founder doesn’t mean you are not an entrepreneur.

Partner support

imagesI have always worked hard.  God knows why but in my first job out of college I actually took pride in the ridiculous hours that I put in.  I’d easily knock out 80+ hours on the weeks when there was a One-Day-Sale.  On the regular weeks it was always over 60 hours.  If I got paid by the hour it would have been a different story.  I was on salary and if I ever broke down my hours vs my salary I am quite confident that I was being paid less than minimum wage.

Fred was ridiculously supportive.  His job was 9-5.  I’d walk in at the end of the day fired up from the days events raring to go out or either crawl into bed.  He understood that my work ethic was about my desire to make a name for myself and move forward in my career.  I was always looking towards the future.  I rarely just smelled the roses and enjoyed the moment.  Perhaps DNA because I definitely take time out to smell the roses now but I still work like a dog.

Many women (and a few men) have written about the importance of having a supportive partner/spouse.  I was talking to my brother this past week about the earlier years when our kids were young.  It was Fred’s time to shine.  He was taking the 5am train out of the suburbs to go to work returning at 7 just as I was putting dinner on the table for the family.  It was planned perfectly so he could eat with the kids, put them to bed (already bathed and ready before dinner) and then read the a book before returning to his briefcase.  I was carrying the load of raising the family while he was carrying the load of making his mark in the world.  Our roles had changed.  There were plenty of times when I was pissed that he missed the train or that he was so absorbed in his own life that he really wasn’t present but for the most part I was supportive on many levels.

I am starting to see many of the founders that I am invested with, particularly ones older than 30, start to have families.  Some of their partners/spouses are supportive but many don’t really get the life of an entrepreneur.  I think it is particularly difficult for women whose kids are in school full time and they have finally embarked on their start-up only to find that there are so few hours in the day to focus on life at home too.  No doubt it is hard, no doubt it is a balance but more than anything it is about having someone support and applaud your efforts to build something.  Building something is hard enough.

When you build something from scratch it is a 24/7 world.  That business or project (whatever it is) takes over your brain.  Having your other half give you shit about that phone call you have to take, that disaster you have to deal with, the bridge you have to close or that deadline that you have to reach even if you are on vacation just sucks.

The importance of finding the right side-kick in life is key.  If you are a carnivore then hanging out with a vegan for life might prove difficult.  If you love the outdoors and your side kick really just loves the smell of concrete and yesterdays garbage that could be problematic.  If you take work as seriously as play and your partner likes to get up late and just put in enough hours to cover the rent that could be a red flag for the future.  I could go on and on but the point is find someone who supports your dreams as much as you support theirs…or more than likely everything will go up in flames.

The wild wild west

1890cowgirl.317132737_stdOne of my favorite activities around the end of August is reading the September fashion magazines.  Elle magazine turns 30 this year.  I remember when the first issue made its way to the states.  This particular issue highlights what people thought 30 years ago vs today around politics, fashion, religion, workplace, etc.  Certainly interesting data but not that surprising.  Times change and so do people’s thoughts or perceptions around all of these topics.

Certainly the Internet has shifted everything particularly the landscape for companies, employment and the impact of our daily life.  In 1996 there were 35 million people using the web and now there are 3 billion.  Think about that.  Companies have been built around those eyeballs.  Products that we did not even know we needed but now can’t live without.  It is one thing to grab market share in a mature industry yet it is another thing to grab market share on a platform that grows daily.

I keep thinking about the companies that come across my desk that are consumer driven….although if you really think about it everything is to some degree.  Everyone of those founders believe that they are creating something that will grab some of those eyeballs.  That their platform will be the next one huge winner.  That their product will end up in millions of peoples hands.  Then there are the investors who back them because they believe that product is the one that will become big fast or will be a game changer due the technology that is embedded in the product.

There are many reasons that some of these companies succeed, fail or become large, medium or small.  Sometimes it is purely about execution but most of the time it is about time, place, team, investors…and the perfect storm.  When I think about the Internet use in our daily lives (people say that they use social media over 3 hours a day) We are living through a global wild wild west that is changing our future.  Even the global companies that started small in 1999 must continue to be innovative to stay relevant.  Every day someone else is tossing a new idea into the ring.  Betting on the right horse isn’t so easy but it certainly makes for some great conversation.

All bros?

maxresdefaultI read a post on Medium by Rachel Thomas.  Rachel gets tech.  She has a phD from Duke in math.  Enough said.

In her post she highlights some really great statistics that I will share.   Her post is a worthy read.

41% of women in tech end up leaving after 7 years vs 17% of men.  The main reason for leaving?  Discriminatory work places.

Investors prefer identical pitches from a man vs a woman by 68% to 32%.

Women who ask for a salary raise were rated as being more difficult to work with and less nice vs their male counterparts who were not perceived negatively for negotiating for a salary raise.

In 248 performance reviews in high tech, negative criticism such as abrasive, strident and irrational showed up in 85% of the reviews of women vs 2% for men.  Seriously?

The bias is huge.  Things need to change.  Men need to change their thinking more than women.  Especially male leaders.  Sexism is everywhere.  The stories that I could tell are beyond but nobody wants to point fingers.

I have been spending the last few weeks talking to sponsors about the Women’s Entrepreneur Festival next April.  This year it will be held at 1 World Trade Center as we are taking it on the road (no longer at NYU).  One of the subjects I have talked about with sponsors is how unique the event is. When there is 400+women entrepreneurs in a comfortable environment it is amazing how they learn from each other, validate each other and inspire each other.  Our tag line is connect and be heard.

When I read these statistics, I can’t help think about WEFestival. and I will be writing more about that in the months to come.

What I will share is that after reading so many of these statistics, watching first hand behavior in companies overwhelmingly male I have made an investing decision.  This will be adding to my thesis.  Already almost 75% of the companies I have invested in are women founders.  I invest in men too but I will not invest in a company that are all bros.  When I open a deck and see a bunch of smiling guys without one female on the team I close the deck.  Change has to happen from the investors too.  Building companies that have gender balance from the get-go will create different environments for women and if you look at the data around women outperforming men these days (ROI), I am pretty confident this is a very wise choice.

 

Being Mortal: Medicine and What Matters in the End

imgresMy friend told me about the book Being Mortal when it first came out.  I did my usual thing which was I put it on my list.  Then I saw a few articles on the book and finally decided to dive in and read it.  The book is incredible.  The writer is a doctor who not only shares his own personal stories around mortality but gives us clear data on how best to serve aging, death, medicine and to end our lives in dignity.

Being Mortal is a topic that nobody writes about or it seems wants to talk about.  One of the most difficult decisions that families must make  when a loved one gets sick is how to think with your head vs your heart.   Generally it is not one person making a decision but several which makes it even more difficult.

As I read through each chapter I could not help but think about my Mom.  We found out that she had a glioblastoma on November 5, 2010 and she died on December 15, 2010.  We made a decision to have surgery because the doctors were not sure what type of brain cancer she had.  The reality is I am not sure they wanted to tell us.  I took her to the hospital right after the MRI showed a large mass in her brain.  An entire week of tests in the hospital to rule out many things before operating.  After surgery the doctor (and others that we saw) gave us this hope that if we had chemo that somehow we would prolong her life.  There was no doubt in my mind that the life that they could possibly give her for maybe a few extra months (and that is a huge maybe) is not the type of life she would have wanted to live.  She said that she wanted to be able to go to the movies, do the crossword, read her books and travel.  If she could not do that our decisions should be made around those desires.  We realized very quickly that treatment was not going to do anything and more than anything not let her leave this earth with self-respect.

There have been many studies done around hospice care.  Not surprising but most have been conducted by insurance companies to prove that spending millions on medicine to keep someone going at the end of their life is not productive or a good financial decision.  There is always a miracle in there but rarely. One thing that has come out strong and clear is that you live longer only when you stop trying to live longer.

When we told my Mom what she had and about the decisions we were going to have to make she said very little.  She wanted to know if she was going to be able to take the trip she had planned in the next few weeks to Peru.  Some might call me too pragmatic but when we were alone right after that I asked the questions that nobody wants to ask.  I knew she wanted to be cremated so I asked where did she want her ashes to be spread and how did she want us to celebrate her life when she dies.   I told her that she would not be taking that trip.  She knew that there would be no returning to the life she had led but not one doctor told her that.  They should have.  It would have made it much easier for my sister and possibly my brother who supported the decisions that I made.  It was important to me that we all were in unity on the decisions I thought should be made but it is not easy.

The other thing that nobody talks about is the decisions.  The entire life of an illness is about decisions.  They are constant.  It is an endless stream of decisions based on the outcome of the last decision.  It is emotionally draining.

At the end of the day, if I had to make any of these decisions again I would have chose to do nothing.  We would have come home from the hospital after the endless tests that concluded she did not have an infection.  She had a terrible quick moving cancer that there was very little information about.  As one doctor said to me ( who was my gyno not the doctor that treated her ) is that having a glioblastoma is like being struck by lighting.  In my heart I always knew that the decisions we made (I was the one in her will that was responsible for her medical decisions because she knew that I’d be pragmatic, tough and bold when it came to making decisions) were the right ones.  This book has validated everything we did.  We would have done less if the doctors were not so concerned with saving her but being thoughtful about maintaining her quality of life with dignity until the end.  It might have given us more time just enjoying her company.

 

Juggling the hours in tech

time-management1Successful people work hard.  I am not telling you something you don’t know.  The data is out there.  Most of them work hard because they are competitive, focused, driven and they actually enjoy it.

The majority of the people that I spend my days with work long hours.  Their life is blurred between their business life and their personal life.  They would not choose to work any other way.  It is part of their DNA.  Obviously not everyone works like that.  I had this conversation with a friend the other night.  He doesn’t really like starting his day until 11 and there is a point of the year where he needs to really work hard to get business done.  It is about a 4 month sprint of working hard from 11-6/7pm.  He is fascinated that I would get up so early and work so hard every day.  He couldn’t do it nor would he want to.  Most people I know who are in the midst of building their businesses could not even conceive working like that.

Juggling the hours of each day goes under the life balance category.  It is particularly hard for parents.  As our careers are taking off, it is also the time when many begin their families.  Not easy.  I know because we started our family when I was 29 although many start later and many start earlier.  For all the women and men that I work with who are working 24/7 and are thinking about children I tell them all the same thing.  Have children now, do not wait.  It is not about the entrance strategy it is about the exit strategy.  You don’t want to be 65 when your first kid goes off to college.  Speaking founders language seems to work.  Every time I have said that I see the light go on in their head.  I have watched more than a handful have children and have figured it out.  Women who ran farms hundreds of years ago have babies in the morning and churned butter in the afternoon.  Different times, different content but essentially the same thing.

It is a topic I think about a lot.  Then when I read the article in the NYX about Jack Dorsey’s juggling skills this topic has been sitting in the my head.  Jack was moderating a panel of women where they were discussing parenting.  Someone asked Jack how he was able to achieve work-life balance and he responded with “Uh, I don’t have a family.”  Jack works seriously hard and he is also insanely smart and can concentrate all of his energies to the business at hand when the only personal responsibility is to himself.   Not to easy for parents and whether we like it or not, mostly women.

As much as the millennial generation is trying to share in the parenting responsibilities it is still a work in progress.  What needs to be resolved is how do companies for this generation of super driven, hard driving, competitive people who also have families and a personal life create workplaces that support  them.  We are living in a time when every app is trying to make our lives easier and we can just start with ecommerce.  What will it take for companies to change the workplace too so that women don’t roll out at one point and never return.

 

 

A project and interviews

images-2We are undergoing a few projects here at the Wilson house.  There is one that has become a bit of a family collaboration which is a really good thing.  Part of the process has been interviewing architects.  It has been really interesting.  We met four groups in one day.  I can’t help but compare it to the start-up world.  Although we talked about the same thing in each meeting, the conversations were all completely different and we learned a lot from each meeting.  Just like a founder goes out and talks to investors, from the angels at the start to the VC’s when different series take place, each meeting is different.  You connect with some, you don’t connect with others and you learn a lot along the way.

There were two comments made over the course of the day that I continue to think about.  We commented to one architect how his work does not have a theme, that most of his work looks different and that there appears to be a process to each that created different environments.  He said his biggest fear was losing that pursuit of new, new ideas and new concepts.  He told us a story about a good friend that he went to graduate school with who became a professor.  There was a professor that they both revered in graduate school.  His friend now teaches at the same institution that they went to.  He commented to him the other day “Remember that professor that we thought was so incredible and really inspired us well guess what, he is stuck in the 80’s”?  The architect that we were speaking to said that is his biggest fear becoming stuck in a time warp.

I think that the constant creativity and desire for pushing the envelope is something I always look for in an entrepreneur.  To be able to evolve your product, your team and your business is so important otherwise you hit a wall.  Most people hit walls at points.  People stop listening to new music and are super comfortable listening to the same artists that they listened to 30 years ago.  Some people are comfortable in the same haircut that they had at 20 for life.  Some people are happy with the same clothing that they wore in college even at 50.  I get it but from a business angle I want to see someone who is happy with change, they crave it.

Then this architect made a comment that really resonated on many levels.  He basically said that if he doesn’t feel uncomfortable during the process then he isn’t doing his job.  I believe that every founder should feel uncomfortable as they grow businesses because that forces you to be creative.  It is the mistakes, the failures, the sleepless nights, the uncertainty that creates great companies.  There are so many factors when you build something and if at every turn you feel completely as ease then you are not pushing for more.

What is the most interesting is how each architect went through the process of an idea to a home.  All the same but all so very different.  It was a fascinating day, a lot of think about and a great start to a long process.

There is a movement going on

images-3One of the best things about summer is that as a family we do a lot of hanging.  People laugh when I say we don’t leave our beach house but it is basically the truth.  The house becomes an endless vacation to unwind and talk.  The kids bring their friends, we have big dinners, drink lots of wine, read a lot of books and many discussions around culture, politics, books, business and more.

This weekend someone brought up what is happening in the Los Angeles art world.  The art world in Los Angeles is burgeoning.  It is a combination of things.  Cost of space, growth of the downtown area, new opportunities and with that a community of young artists is built.  There is also the ability for many to pursue their dreams without coming from a family with deep pockets.  You can figure out how to make it work through the shared economy.  You can get funded through Kickstarter, you can rent out your place on Airbnb for a few nights to make your monthly nut work, you can become a part-time driver for multiple companies and then there is always the classic waiter/waitress/bartender job but that isn’t the only thing anymore.

That conversation turned into  that we all see that there is a movement afoot.  It isn’t only with the arts.  It is with food.  It is with music.  It is with new companies.  It is with non-profits.  It is with everything.  People are ready for change.  It could be the long tail of the banking industry disaster, it could be the advent of technology, it could be the knee jerk reaction to hovering helicopter parents who pushed their kids to be something that did not necessarily fit with who they are.  Whatever it is we are definitely living in a time where change is happening.

You can see it in the political arena too.  Gay marriage has been legalized.  Weed is slowly becoming legal in every state.  The confederate flag came down.  People are calling out police for behavior once swept under the carpet.  Women are calling out sexual assaults on campus and pointing directly to the ones that did it without fear.  Going to college is changing based on the overwhelming debt that people have to take on.  We saw the MFA’s at USC protest, walk out and perhaps the closing of the program.  GW just announced no more SAT or ACT’s needed to apply and other schools have come before them.  We are seeing people of all ages come out and support Bernie Sanders on one side and Donald Trump on the other.  That is a reaction from nasty politics where money has taken over our system.  It isn’t so much about the people but about politicans staying in power and the people with the deepest pockets making that happen to benefit their own agendas.  People have had enough and with that comes a change in behavior.

You can’t have a movement without history.  We discussed what is happening with McDonalds.  For the first time in the history they are closing more stores than opening them.  How J. Crew is losing market share and profits.  How this generation would rather buy from Amazon Prime than walk in the store for a pair of sneakers.  How everyone in our house under 30 is reading from paperbacks vs kindles.

Bottom line…there is a movement and I am looking forward to see where this all goes.  Let’s hope gun control is leading this movement towards change.

ROI of women

imagesI have read many articles about the impact of women in businesses, women-led businesses and of course women in general.  Someone asked me the other day if change is afoot.  I said if we are having the conversation then something is happening.  We weren’t even talking about the frustration of women entrepreneurs and women in business a decade ago like we are today.

The frustrations can be the same as men when growing a business but not when it comes to raising capital or someone being dismissive about taking time out for a family, or getting pregnant or the sexual comments that get made time and time again in a meeting.  As an optimist I feeling good about the future of women in business.

I have said several times that when more women take a company public, sell their companies and become household names because of that, things will change.  There are plenty of women entrepreneurs coming up the pike who are going to get there and that will change everything for the next generation of women.

One woman that I invested in a few years ago who is an incredibly determined driven entrepreneur sent me this information yesterday.  It is really interesting and also not surprising.  More than anything it was good to see written by someone in black and white by someone who is an analyst.  The information is below.

Women’s Growing Economic Influence

U.S. women accounted for about 47% of total hours worked but only 42% of wages earned in 2013. Despite this, women influenced approximately 80% of U.S. consumer spending in 2013, suggesting nearly a 2x multiplier of earnings vs. purchasing power.  Women’s earnings in the US economy have been growing faster than men’s for the past decade and this trend should continue for the foreseeable future because it is being driven by several trends, including:

  • Since 1960, women’s participation in the work force has grown from 35% to 53%.
  • Women’s wage gap narrowed from 62% of men’s pay in 1979 to 82% in 2013.
  • The disparity between college educated women and men has widened, with 44% of women 18-25 versus 38% of men attending college. College graduates in the US earn $2.1MM over their lifetime, nearly double the $1.1MM earned by the average high school graduate.
  • Women are having fewer children, later in life, which keeps them in the full time labor force longer.
  • Women’s life expectancies are elongating, reaching 81 years in 2013, 5 years longer than men’s.

 

Because men in many households turn their paychecks over to women to spend, 80% of women state that they are the primary decision maker for “most” or “all” purchasing decisions. According to a 2013 study, women in the US accounted for 89%-93% of spending in the following categories:

  • 93% of Food Decisions
  • 93% of OTC Pharmaceuticals Decision
  • 92% of Vacations
  • 91% of New Home Purchases
  • 89% of Bank Accounts

 

Investment Implications

We are buyers of companies that focus on products and services that target women, especially online time-saving applications. We are most optimistic about social and mobile online alternatives.  In our coverage universe, investment ideas from this work include:

  1. Since 2002, women have spent 25% more money in 14% less time, aided by online shopping. This bodes well for online shopping solutions like RATE and TRIP.
  2. Women spend more time on social media, and their purchase decisions are highly influenced by their friends. This elevates the value of social sites. We recommend FB.
  3. Women use mobile devices more than men, so companies with mostly mobile revenue, like P and FB, should garner more upside as women’s purchasing power grows.
  4. Proliferating screens make women harder to reach for advertisers. This should increase the value of NLSN, SCOR and RENT because they measure audiences and find women.
  5. Women are aging, which increases demand for financial services like RATE.