Silicon Valley’s Mob Ties, An Assassination in LA, ID.me’s Debacle, The Heat is Rising, and My January Book Club Recaps
Stretch Four Insights Volume 13
Join our 1000+ insightful, curious people by subscribing below:
Hello everyone,
Happy Saturday. So here I am in your inbox on the weekend, I am trying to get feedback on the weekly newsletter so check out the way to provide feedback at the end of this week’s edition.
This week I am covering:
A tweet that went viral from a self-proclaimed Silicon Valley outsider
The assassination of LA’s biggest rap star since YG
The ID.me debacle that could impact 160 million US taxpayers
The Miami Heat’s quiet emergence as the NBA’s eastern conference representative in the finals
My January book club recaps
If you are new here, be sure to check out my long-form pieces. One where I cover Web3 and another where I cover a new startup, Column Tax.
With that said, let's get into it. And if you want to hear more or spread the word, subscribe and tell your friends!
Let’s dive in.
Who is Ryan Breslow?
Full disclaimer, Ryan Breslow has the perfect pedigree to succeed in Silicon Valley. He is a white male, he spent at least two years at Stanford, and he has raised nearly $1 billion in venture capital since 2014.
With that said, Breslow has been one of the most interesting founders/philosophers to emerge on Twitter in the past year. He’s grown his following to hundreds of thousands, self-published two books, moved to Miami, and produced more Twitter threads than it seems could be possible. He is the poster child of the new status quo silicon valley founder.
This week his Twitter thread, linked above, went viral in the #VCTwitter category and got everyone in Silicon Valley and the venture capital industrial complex in their feelings. Everyone had to have a take or feel a certain way about it.
In short, Breslow said that his first seven years of building his current startup Bolt were more difficult because two powerhouses who control Silicon Valley have created a mob to stop companies like his from succeeding.
He took direct shots at Y Combinator, which I wrote about in Volume 11, and the “darling child of Silicon Valley”, Stripe.
Stripe processes payments, but they are more like a cult within Silicon Valley circles. The founders are brothers from Ireland and pretty much lauded like the royals of Silicon Valley.
Breslow’s take is that Stripe has tried to make his life a living hell by making mob type moves to block his fundraising attempts from top tier venture capitalists, sending backchannel messages to keep his company from receiving press, and going as far as funding his direct competitor, Fast, which he says did not have any traction yet still received $100M in investment from Stripe.
This is an interesting take, and seeing the responses makes for some great entertainment. Much of Breslow’s thread has validity, as someone who has been in the Silicon Valley scene with boots on the ground for nearly five years Y Combinator and Stripe hold a lot of weight. Rightfully so they have returned a lot of capital and Stripe has half the internet processing payments through their platform.
There is somewhat of a proverbial tax you need to pay to get validity in Silicon Valley. Whether it is getting accepted into YC, moving to Miami, becoming a Twitter influencer, or simply being cool with certain people. I think Breslow, specifically, has a gripe because his business sits so close to the core business of Stripe, payment processing. He is also attempting to build his own cultish-type following as it is clear many people felt a synergy with his point of view.
Drakeo The Ruler
The Assassination of Drakeo The Ruler | Jeff Weiss
I may have an unhealthy infatuation with wanting to go deeper into the why and how there is such an alarming rate of murdering black men in America.
I have skin in the game literally being a black man in America myself, but the emerging amount of rap artists who die while finding their own as an entertainer, entrepreneur, father, and human beings seem to be haunting us more and more each year. It gives us a broader view of the absolute plague that exists within many of our communities.
I wrote about the untimely death of Memphis artist, Young Dolph, in one of my first editions of this newsletter, and in December Drakeo the Ruler, an emerging LA artist, was stabbed to death at a music festival.
If this can happen there while Snoop Dogg was set to perform, backstage and with high-security detail, you have to question — where are rap artists safe? More broadly — Where are black men safe in America?
Weiss writes a brilliant piece on how Drakeo was murdered in cold blood in LA in late December. It is riveting to read as he unpacks how all signs point to this being an inside job and an assassination.
I only got introduced to Drakeo’s music a little over a year ago when he got a feature from Drake. Last October, my wife and I were in DTLA for a wedding and I needed a haircut so I walked to a local barbershop.
While getting my haircut, my barber, Dmacc, could not stop playing unreleased Drakeo songs from his iPhone and all I could think was how he was eating into my already tight timeline. While he cuts my hair he’s raving about how “Drakeo is the hottest in the streets!” and that “I was just ridding around with him the other day and he was playing me this new tape”. Everybody in the damn barbershop knew all the words to songs that were unreleased, people were in unison. Drakeo was their guy.
Living on the West Coast, I have become so much more enamored with the music, but the alarming part for me is how death is so customary out west and in rap in general. Gang culture is taken for what it is, and it is rarely questioned.
It’s a very tough pill to swallow how death can be so “normal” is primarily in black and brown communities. Weiss does an excellent job of humanizing Drakeo. He was making $300-400k a month, supporting his family, and building a business, but it makes you question why he has to die in such a heinous way, and in such a place you would think he would be protected?
I obviously don’t have the answers to living in what might feel like a world apart in a safe neighborhood in San Francisco and certainly distanced from the gang culture the West Coast inhabits. But if history has taught us anything, as a black man in America it doesn’t matter if you aren’t affiliated with a gang. Your skin is a threat in and of itself.
RIP Drakeo The Ruler but we have to see these numbers of black death and the normalization of it change in 2022.
The media’s attack on Blake Lee, CEO of ID.me
How Did ID.me Get Between You and Your Identity? | Shawn Donnan and Dina Bass
ID.me CEO backtracks on claims company doesn't use powerful facial recognition tech | Tonya Riley
IRS Will Soon Require Selfies for Online Access | Brian Krebs
The media has had a week tearing apart identity verification company ID.me. Their CEO, Blake Hall, comes from a pedigreed Ivy League university plus he has a military background to boot. Hall had humble beginnings by starting with a Craigslist-type discount site for military veterans in 2010.
Fast forward to 2022, and the company has morphed into an identity verification empire with three large government agencies and several stage agencies using their service as the default way to verify identity online. They have also self-reported 70 million users and claimed they are adding 145,000 new users per day.
While it may be warranted, the media’s all-out attack on Hall and Id.me seems a bit harsh. There are several companies using similar software in the super-hot identity verification space to verify identities online. There are many companies that will not allow you to create a bank account, brokerage account, crypto account, or any online financial service without going through an identity verification screening. But because Id.me owns exclusive contracts with the US Treasury, Social Security Administration, Veteran’s Administration, and nearly 30 state unemployment agencies and counting to verify taxpayers and benefit recipients identities online the media has a huge narrative to run with.
COVID was quite good for the business and it ballooned to a multi-billion dollar company when so many Americans needed access to unemployment benefits but could not physically go into offices. The claim is that ID.me has bitten off more than it can chew while using tools that discriminate against people of color, who happen to be their primary user base. The wealthier you are the least likely you are to care about signing up online for government services and unfortunately the less likely you are to be flagged by tools like ID.me for identity fraud or questions.
This conundrum leaves us in an interesting place. First, government agencies do not have the capability to build these identity tools in-house so they need services like Id.me and shameless plug (ModernTax Government Solutions launching soon) ;) Second, millions of people are migrating online to get the benefits and services they need. These tools will reduce fraud, increase online access, and overall make it easier for people to get the services they need.
I personally am rooting for ID.me as someone who has been building products and services around the IRS and tax space for the past four years. Overall, online tools make the consumer experience better and give a net positive amount of people better, more transparent access to services they need. The downside is that yes, machine learning and face-scanning tools are at best discriminatory and at worst racist. Many of the products we are seeing today are built by engineers who are not testing models across the complete population of people but that opens another deeper issue within the technology sector in itself.
🏀 NBA League Pass Team:
Miami Heat
The Heat is rising. Within the past week, the team has risen all the way to the top of the Eastern Conference standings and has won eight of their last ten. The Heat is my dark horse favorite to win the East this year. I have a lot of confidence in Jimmy Butler and Erik Spoelstra is one of my favorite coaches in the league. I really appreciate that within the past fifteen years he truly believes in building a culture on the team. The key for the Heat will be the continued emergence of Tyler Herro and if Kyle Lowry and PJ Tucker can stay healthy they’ll be big contributors throughout the rest of the season and a deep playoff run.
January Book Club Recaps
Kings of Crypto: One Startup’s Quest to Take Cryptocurrency out of Silicon Valley and onto Wall Street | Jeff Roberts
I enjoyed this book and my big takeaways are that solo founders can win and win big. Brian Armstrong set his own path in building Coinbase and did not let many outsiders deter him along the way. He did have help now legends in the crypto universe like Fred Ehrsam, Katie Haun, and later in the story Baljis Srinivasan making huge contributions along the way. This story also shows the magic of San Francisco, a liberal city that seems to have a thriving startup ecosystem in spite of its political infrastructure. Libertarianism rules its ethos in terms of capitalism in San Francisco and Coinbase is one of the most interesting business stories in the past 20 years.
Empire of Pain: The Secret History of the Sackler Dynasty | Patrick Keefe
I never force myself to finish books, but this book was definitely worth the 535 pages. Empire of Pain gives one of the most in-depth analyses of the Sackler family the power of the opioid crisis and the profitability of the business. OxyContin was generating $35B in annual revenue in 1996 and the Sackler’s to this day has been able to siphon billions from this treasure chest over the past twenty years. Their family does have an entrepreneurial story that is out of this world that spans eight decades across the decedents of three brothers.
This was a historical thriller book. It opened my eyes to the formation of Oklahoma City and the story of how Oklahoma City businessmen were able to steal an NBA team from Seattle. While I am not a huge fan of Russell Westbrook it gave me some good insight into why he is a shrewd businessman who still personally pays all his own bills. This book is a great one if you love history and the NBA.
What's Next?
ModernTax
We hired two new team members who start next week, so onboarding will be my big focus.
We’ve closed one new deal this month and we have three more in the works.
Next month, I will start to formalize my process for our Series A fundraising round and we are launching a new website next week.
Stretch Four
Next week, I am launching a podcast with a very special guest. We will talk about pre-parenting tools, pregnancy, and managing finances in preparation for having a child.
Your feedback means the world to me so drop me an email at matt@stretchfour.co on what you would like coverage of, provide us with feedback on my format, and what you think is the best day of the week you would like to hear from us.
Lastly, if you found this newsletter interesting and know someone else who would, please forward it to them or tell them to subscribe here. It would make my day if you do!
Back to the trenches.
Best,
Matt