On Lanyrd, investing, and selling

Lanyrd blew me away from the day it launched. It’s a way to track speakers and attendees of upcoming conferences, but it’s also a social web application. It was the first site/app I used that didn’t require yet another login (it used the then-new Twitter auth). It was the first Twitter-powered app that was instantly useful the moment I connected my accounts. Being a tech nerd that speaks/goes to conferences and follows lots of other tech nerds that speak at/attend conferences, my first post-login screen at Lanyrd was filled with information about dozens of conferences my friends were speaking at & attending that I otherwise wouldn’t have known about.

Frankly, I was amazed. I went from hitting the homepage of a new app I’d never heard of to having screens full of useful information about my friends and the industry I work in, in about 30 seconds. I immediately dashed off a message to Simon Willison (one of the co-founders) saying Lanyrd was really impressive and if they ever opened up a round of funding to keep me in mind. Simon and Nat got back to me soon after and there were lots of Skype calls and documents sent to lawyers and in the end I got to become the very first investor in Simon and Nat while also being an early advisor to Lanyrd.

Recently they sent out an email announcing an acquisition by Eventbrite and I was surprised to get the news out of the blue but also happy to hear who was doing the acquiring. If you haven’t used it lately, Eventbrite is a great site for arranging/selling/buying tickets for events. As Eventbrite has grown over the last few years, I’ve realized it plays a larger role in my life. In the beginning, it was just a small events site, like a more formal version of Evite and I would attend local industry events for maybe 20 people. Lately, I’ve used it to pay for $1,000+ conference tickets, woke up early to get tickets for high demand small events that sell out within minutes, while still using it for beer bar meetups for a couple dozen friends. I find the biggest problem with Eventbrite these days is discovery; that unless I happened to catch a single tweet from a friend at 11pm one night announcing an event, I wouldn’t know that event existed.

Usually startup acquisitions are bumpy affairs, where a new owner tacks on a new vision for a product, morphs it into their existing infrastructure and inevitably shuts the old site down. I was happy to hear about an Eventbrite/Lanyrd deal because it’ll be a great addition to both properties. My Lanyrd page will extend from technology conferences to every local event on Eventbrite that friends are throwing and attending. The ginormous list of local events offered to me at Eventbrite will filter into things my friends are organizing and/or attending, through my Lanyrd-powered friends. It’s going to be win-win for both companies.

On Investing

Over the last few years, I’ve put some energy, effort, and money into companies I like and want to see do good in the world. To date, I’ve invested in four things: Kickstarter, Lanyrd, Little Bird, and Original. Mostly, I’m investing in friends, people I’ve known for a while that I believe in and have good ideas that can become big. Part of this also comes from working in the Bay Area during the 2000-era tech boom, and watching my friends build amazing things in the aftermath of the bust. I remember seeing the first Flickr shoebox/chat app and asking Stewart if I could invest a couple thousand bucks I had in savings because I thought this could revolutionize the photography world. There were complicating issues at the time (they’d already taken larger rounds of funding) but I told myself if I ever got a chance to see a new app really early on that I felt had greatness and a great team behind it, I’d do whatever I could to help it along.

So far, it’s been a real waiting game. You see demos from friends, you talk over small friends & family style funding, you exchange lots of paperwork with lawyers, and eventually you help the founders meet other people for larger funding rounds while you often get to help steer the product as an early user/advisor. In four years of investing, this is the first acquisition I’ve been through, so I can see why VC firms place lots of bets on lots of companies, since they probably like to see more action than one sale every four years.

On Selling

I’ve neglected to mention it on my blog or Twitter until now, but last Fall, Paul and I sold Fuelly.com to a guy named Andy that runs a bunch of car sites. He had been following us for years, had run similar sites, and had a much larger community of car enthusiasts that could really push Fuelly to new heights. We quietly announced it on Fuelly recently and Andy has the time/energy (that we didn’t) to tackle loads of new features for the site. They recently bought and integrated a popular iPhone app for Fuelly and the upcoming APIs will accomplish a lot of the ideas we hoped to get to someday.

Not all acquisitions end with horror stories from “our incredible journey“, sometimes a person or company comes along that is doing something similar to what you’re doing and offers to take over and build up all the things you dreamed about, without losing the original purpose for the site and service. I think that’s the case for both Lanyrd and Fuelly today.

Credit scores are bullshit: part 2

So we've had a lively discussion about my previous post on credit scores, and an industry expert on credit scoring showed up to argue with many here. The New York Times noticed and published his side of the story as well. He urged me on Twitter to try out MyFICO.com which is supposed to be more accurate. Well, I ended up trying it tonight and got a whopping 2 point difference on my credit score, with it still below 700 (690 vs. 692).

The best part is when it is being explained to me what my problems are, as this image captures:

Gee, I guess 16 years, 3 months just isn't a very long revolving credit history. Heck it is a few years shy of half of my entire life and "FICO High Achievers" average a whopping 2 years and 9 months more than me, which is such an incredible drastic difference that I can see your justification for docking me points on that one. /sarcasm

Like I said before, I understand the need for credit scores and how they are used, but much of the advice the credit reporting agencies have given me turns out to be conflicting bullshit.

They tell me to get a credit card to increase my score, and it ends up reducing my score (because I didn't know about the unwritten rules on how much of your credit line you are actually allowed to safely use). Now they say it's because I haven't had credit long enough when my oldest account is only 14% less than their suggested stellar achievement rankings. 

In summary: still bullshit.

Credit Scores are Bullshit

A couple years ago as I was getting a credit report from Experian (I was about to buy a new car and wondered where I stood credit-wise), I signed up for one of their monthly tracking features. I justified this waste of money because I'd had a credit card number stolen and wanted to watch my credit records for a while. Over the past year, I've watched my credit score start low and go lower, and I've come to the realization that it's complete bullshit.

My credit history is pretty ordinary: I got one of those credit cards that come with a free t-shirt and frisbee in college, mostly because I was amazed anyone would give me credit. The introductory $500 limit quickly went to $2k when I put some ski trips on the card, and I always carried credit at about 35-50% of the card's limit. After college I continued to use the card and watched my limit go to $5k and then $10k (as I carried more and more on it), and a few years after college the card's limit was at $20k. At the same time, finishing my Bachelor's degree and getting a Masters racked up about $25,000 in student loans (in 2011, 4 years of college only costing $25k is quaint!). I also owned a couple used cars with small car loans I paid off in time.

After I moved to Oregon in 2003, I finally got serious about my ~$30k in debt. My previous years of carrying thousands in credit and paying things off in time (but rarely getting ahead) ballooned my credit score into the low 800s. This was great when it was time to get my first home loan, and my second a couple years later. Once I settled into a long-term home, I started paying off my credit cards and school loans aggressively. By 2006, I had no balance on my credit cards and my wife and I finally paid off our school loans. I started closing my unused credit card accounts and shifted towards buying things with my bank's ATM/VISA card instead, so that I never carried a balance and the money came directly out of my checking account. I also followed the Get Rich Slowly mantra and focused heavily on building my retirement savings and over the years of maxing out my retirement with the help of an investment planner, I have a pretty good nest egg going.

You can imagine what all this fiscal responsibility did to my credit score the past few years. It dropped below 800 soon after I paid off all my cards and started closing accounts. For a few years I had no open credit cards and no open balances. I paid off two car loans and was paying ahead on my house loan, and each year I'd watch my credit score fall in the 700s. A couple months ago my credit score was barely above 700, and the main negative flag on my account was having no open credit card accounts, so before I took a recent trip I decided to finally sign up for one of those personal airline cards my frequent flier program has been pitching me and use the card on my vacation.

Today I learned that my credit score dropped into the high 600s and my risk just went from low to medium. The culprit? The credit card account I opened had "too low of a limit" (it started at $5k) and I had "too high of a balance" on it as I used it on vacation (I paid off the card as soon as I returned, two weeks before the first bill even showed up).

Financially, I'm in the best shape of my life right now. My house will be paid off in about 5 years at the rate I am going, I have a great retirement portfolio that I contribute aggressively towards and it continues to grow, and my business is doing well even as we've expanded with a new employee and several contractors. 

I had the highest credit score at a time in my life when I was leveraged to the hilt and I lived paycheck to paycheck. Now that I have my own business, a healthy retirement, and can pay for everything I need/want, I have a low score and I'm dubbed a higher risk even though my ability to pay is very high. I used to think a credit score was all about your ability to pay, but it's clear now it's more about how profitable you will be to banks.

Credit card changes before the deadline passed

Late last year, FRONTLINE did a great piece on the credit card industry and specifically covered the passage of the Credit Card Accountability Responsibility and Disclosure Act of 2009. The act is a good one, requiring companies to comply with new rules that make rate increases carry a 45 day warning with no retroactive rate changes on balances, and reduce late fees, obscure terms, and other gimmicks the industry is known for.

One drag was that it passed back in May of 2009, but it wasn't set to be enacted for 9 months (on FRONTLINE Chris Dodd claimed he was powerless against lobbyists to make it law sooner), but that happened to be just last week.

The credit card industry, ever the jerks, did everything in their power over the last 9 months to prepare for these new rules. You should probably take a look closely at your recent credit card statements, because chances are your cards slipped up to higher rates with no explanation because it was the last chance companies had to do it before the deadline.

My wife and I have excellent credit and we've both vowed to never carry balances for the past few years (after spending most of college and five years after drowning in credit card debt) so I'm used to seeing low rates that we don't even use because we pay them off, but I was surprised to find my cards now have interest rates of 10%, 17%, and 20% respectively. My wife's has a credit card that is hovering around 20% as well.

In the future, you will be notified but it's probably worth taking a look to see if they tried to get you just before the deadline passed for rate increases requiring 45 days advanced warning.

The New Honesty

Three times in the last week, I've been reminded by a cashier that what I was buying wasn't worth the money:

  • Long Beach Airport, Terminal 3. A single Larabar was $5. Cashier says "you sure you want to get that, it's five bucks"
  • Las Vegas, concession at Interbike somewhere. I grab a Crunch chocolate bar and the cashier says "dude, that's three dollars, you sure you want it?"
  • Las Vegas, Mandalay Bay parking lot food service for the US Crit finals. Parched, and with no water supply I ask for a 8oz bottle from the bartender. He says "this is $4.50, you actually want it?"

Sometimes there is an upside to a recession.

A used car scam I once almost fell for

I saw someone I know selling their old car on craigslist and it reminded me of the time I sold my last car using similar means. I almost fell for a couple guys that showed up, test drove the car, then tried to buy it at a vastly discounted price. They were quite persistent and almost wore me down after a couple hours but dropped a few clues that they had done it before. It really felt like I was being conned, and I’ve been meaning to write it up since it happened years and years ago, so I might as well now.

I listed my car at $3,000, about 10-20% below what bluebook was telling me, but I knew the car had a ton of miles on it (120k) and I just wanted the thing sold (I probably would have taken anything $2500 and over). The first person to respond to the ad went like this:

  1. A guy called within an hour of posting the for sale notice.
  2. He had a sob story about his sister that needed a car very badly to get to school, and how he’s ready to buy one for his sister asap.
  3. He showed up with a friend who he said knew a lot about cars. They both rode along for the test drive.
  4. We stopped at a supermarket parking lot after driving a bit, and the mechanic friend gave the car a once over, looking under the hood and looking around the entire car
  5. Mechanic friend comes up from the tailpipe with oil all over his fingers, says the engine block must be cracked, sending oil through the system.
  6. Guy sounds kind of bummed about the “cracked engine block” and we drive back to my place where I drop them off.
  7. Before he leaves, guy offers $1,000 for the car, since his sister still really needs to get to school and his mechanic friend promises to fix the engine at a later date for a higher price.
  8. I refuse, saying it’s a ridiculous price. He offers $1200. I say no thanks, and leave.
  9. The guys hang out in front of my building, calling 15 minutes later with an offer of $1300, and waits another 15 minutes to call again with an offer of $1400. I say no both times.
  10. Three days later I sell the car for the list price, from someone paying cash and looking to refurbish the car top to bottom.
  11. Original guy calls after one week from the same number, using a different name, asking if the car is still for sale.

I remember feeling weird about this guy and with enough red flags going off I walked away from it as soon as I could, but looking back on it, it was pretty obvious this was a common con-man style approach. I bet you could run a pretty decent business lowballing people and reselling their cars immediately after for market prices.

  • He called soon after listing, trying to nab underpriced cars before anyone else has a chance to consider them
  • The sob story was supposed to prey on my emotions, to help out another person in need
  • Even though I don’t work on cars, I now know that if there really was oil being sent through the exhaust, the car would spew blue smoke when driven, which it didn’t. The oil was smeared on his fingers from another part of the car, for this bit of theater. At the time I didn’t call them on this move but I did say it sounded highly unlikely to me.
  • Friend said he could fix the engine himself for $1200 so the guy could offer less and say “well this car will do for now for my sister, but it’ll cost me so much more to fix, can you discount your price a bit more?” This is also a bit of theater.
  • The lowball offer and slightly higher offers backfired on the guy, pissing me off. I knew the car was already discounted about $500 what it should have listed for, why on earth would I take 1/2 of that still?
  • Calling me back a week later under a new name was hilarious. I don’t know if that was a mistake but it made me think he called a lot of people selling cars.

Keynote Index Fund

A few months ago I was thinking about Apple’s rise in value after the iPhone and how Steve Jobs does a great keynote every year, and naturally I thought “I wonder if there’s a way to make money off quick investments around the keynotes?” Then I thought “What if you did this every year, for just a day or two of investment?”

I ran the numbers and here they are, on this new 1-page website: Keynote Index Fund

Crap I love: Wesabe

After working on my own for a year, this past summer I finally got around to examining my finances. I did what most people do: I got a copy of the latest Quicken, spent a week entering data into it, and then I stared at graphs wondering how on earth my spending always seemed to go up when my income went up, even though it didn’t feel like I was going on new shopping sprees.

I quickly found Quicken to be a bear. The category system is a pain, and every charge can only have one category attached. Making new categories and arranging subcategories would frequently crash Quicken 2007 for the Mac, making me lose work in the process. Like every other time I’ve tried to use some piece of financial software, I eventually gave up.

About a month ago, I started using the Wesabe beta (co-founder Marc Hedlund is a friend of a friend). The app has lofty aim of helping you track spending, realize your goals, and share tips with everyone. There are also social effects, where people using the same merchant can post reviews, allowing you to surf around for a new mechanic or grocery store based on other members’ satisfaction and spending.

For me, the main draw was simply having a powerful web version of something like Quicken, but flexible like flickr or delicious. Instead of categories, there are tags. And you can put any number of tags on something, and sort spending per tag. This is a really big breakthrough. A few things I discovered from doing this:

  • I tagged every gas station purchase with gas and auto. With a single click, I could see how much I spent just on gasoline each month and I could also see how much I spent overall on owning cars (by tagging all payments and repairs with auto).
  • Among the dozens of gas fill-ups I had this year I noticed some were for roadtrips, so I could tack on a tag for that single trip (and add the tag: travel), then tag every other purchase from that trip with the city name. One click on the roadtrip city name and I could see how much that trip cost me, and I could also see how much travel in general cost me each month.
  • I’ve taken to tagging any purchase that is a gift to myself, or an extravagance, or any non-necessary thing with: extra. In a click, I can see how much money I waste each month on silly gadgets, bike upgrades, and wacky t-shirts. There was never an easy way to get that kind of data from Quicken.

The other smart thing Wesabe does is make data entry easy. My bank gives me some ugly metadata that usually just features the address of the business where a charge was made. In Quicken, I’d have to memorize 1590 Booth Bend road equalled Lowe’s Hardware and I’d have to categorize every purchase by hand. Wesabe is pretty slick in that you put a description in once for a merchant, then the app finds each and every purchase ever made at that same chunk of metadata, and automatically copies the tags and description for the first one you marked. Thanks to this feature, I tagged and described an entire year’s worth of purchases in about 90 minutes. Now, I do weekly updates from my bank data and it takes just a few minutes to keep everything up to date.

The app is still new, and about the only drawbacks I’ve found is that the history reporting and graphing doesn’t feel completely built out yet (and I’ve heard lots more is to come in that realm). I’m used to Quicken’s graph magic and Measuremap and Google Analytics where you can click on any bar graph and figure out what exactly caused a spike. At the moment, the bar graphs simply report your patterns in spending but lack any sort of “zoom” feature to get more detail.

It didn’t take long for me to fall in love with Wesabe. At every point where Quicken stood in the way of my progress with ease-of-use roadblocks, Wesabe makes it painless. Now that it’s open to the public, the Tips and Goals sections might get built out more and the social aspects will kick in, but at the very least, the accounting section of the app is truly killer and helping me finally get a handle on my spending.

Wesabe (free, probably paid pro options in the future)

Give yourself a raise

Here’s something obvious and kind of dumb I figured out this week. When you pay off a debt, you suddenly have a lot of extra money in your pocket, especially on an annual basis. I recently finished paying off my student loans and my wife is about to finish hers, and our old car is just about done with payments. All told, we’ll be saving around a thousand bucks a month that would normally been sent away, which isn’t too bad at all, especially on an annual basis ($12 grand in my pocket!). Then I started looking at all my bills as annual raises.

I bet if you check your own budget and monthly bills, you can find some ways to save. When you finish paying off that $300/month student loan, you’ll get a $3600 raise. If you ditch a second car you were paying $500 per month for a loan/insurance/gas, it’s like giving yourself a $6,000 annual raise. If you have a $850 monthly rent and you, say, move in with someone you’re dating and they pay the rent, you’ll make $10,000 more this year.


Amazon is now offering a $79 unlimited 2-day shipping option and I have to say that’s absolutely brilliant. It probably would take only 4-5 items delivered in one year to pay for itself, and make xmas shopping much cheaper.

Lots of businesses have programs to reward their heavy customers while still making a profit off their casual ones but I never would have thought Amazon could come up with a compelling package like this. Pretty cool that you can share it with four folks as well.