The NBA is back, two sides to Miami real estate transactions, and why buying fintech infrastructure gets way to much thought from founders
Stretch Four Insights Volume 38
This week’s edition of the Stretch Four Insights Newsletter is brought to you by Future. September came and went, and I have some improvements to make. Cardio is still a priority but strength is as well and in September I hit 22 workouts, which was three off my goal. Overall it was a pretty active month burning nearly 12,000 calories but one thing Future does not help with yet is diet which in my case still needs some work. Alex keeps me updated and is adjusting my workouts in real-time which is one of the biggest benefits of Future. With travel in October I can give him a heads up on where I will be and what type of gym access I have and he can adjust my workouts accordingly.
Check out Future for 50% off for the first three months using our exclusive link and let me know what you think.
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Happy Saturday,
I am back after missing last week as I was in Park City with a good friend and his family for a family getaway. Park City is a gem of a place to visit from California because flights are cheap and it is relatively easy to get to from Salt Lake City’s airport (no traffic).
This week I want to highlight some of things I read over the past few weeks including:
The ever evolving NBA’s technology and growth strategy ahead of the new season
The bright and dark side Miami real estate transactions and how cities are trying to convert commercial real estate into residential
A twitter thread on KYC tools for fintechs and how the space has become so big at the expense of fledgling startups that may not make it.
Let’s dive in.
Quote of the week:
What did you get done this week? - Elon Musk
Tweet of the week:
The team at Compound is one I have been getting to know over the past year, and they are producing some interesting twitter threads related to how startup equity actually works. This one highlights the recent Figma acquisition in a compelling way to think through the financial impact employees experience when their startups get acquired.
Chart of the week:
I came across this on my Twitter timeline from a friend Rex Salisbury and it is pretty brutal to think how out of light our costs are here in the United States.
The NBA’s business growth strategy is being fueled by technology
As we gear up for my favorite time of the year the NBA season, I came across a report from CB Insights that highlights the increasing engagement from the NBA to make technology a major part of their business growth strategy. The NBA is a well-oiled machine and in my opinion the best sports organization on earth, so much so that technology companies are reportedly trying to lure the commissioner Adam Silver away from his top spot. Wearable technology seems to be the most interesting investment the NBA is making. Helping players perform better is a priority and companies like NEX and Nextiles are leading the way.
Counter fact: Tickets for the Warriors home opener and ring night celebration versus the Lakers is higher than they were for Kobe Bryant’s last game. The games best players draw an increasing amount of interest and the NBA would be smart to evolve the younger talent as Steph Curry will be 35 in 2023 and LeBron will be 38 this year.
My take: While the NBA is investing in technology to grow the brand worldwide the most important aspect will always be the core product which is the level of basketball we get on a night-to-night basis. With these ticket prices and a looming new TV deal worth an upwards of $75 billion in the works the league will need to make sure top players are playing in games. As injuries and player load management have become ongoing issues and hopefully the technology investments helps with these two areas.
Bird Founder’s Stake Now Worth Less Than His Miami Mansion
Travis Vanderzanden the founder of scooter startup Bird Global, Inc. is selling his Miami mansion and rightfully so.
VanderZanden’s Florida starter home was a splashy one. In August 2021, shortly before the merger closed, the scooter mogul purchased a $21.8 million mansion in a posh waterfront gated community in Coral Gables. Featuring nine bedrooms, 11 baths, an infinity edge pool and private dock, the property checked the boxes one would expect at that price point.
His company Bird Global’s stock price as of this writing is hovering around thirty-five cents a share and the total valuation is under $90 million. Vanderzanden spent time at Uber and Lyft prior to launching Bird so he’s done quite well financially and made other big real estate transactions, but Bird is one of the biggest technology flops ever.
I have never rode a Bird myself, and I generally see them as eye sores in most cities but this is a clear reality of the technology climate we are now in. Last year’s prices simply are not today’s prices.
If you are looking to help Vanderzanden get some cash — check out the Miami pad which he is selling not even a year ago after his purchase. Life happens fast!
Counterpoint: While Vanderzanden is selling his Miami mansion, Kenneth Griffin of the hedge fund Citadel Securities is continuing his expansion to Miami with both his own real estate acquisitions and those of his employees at Citadel. Griffin plans to own a good portion of Miami’s Brickell neighborhood both literally and figuratively. As you can imagine, this creates astronomical rent prices in the Miami area which arrived as a self-proclaimed technology hub during COVID.
While Miami has one reality, other cities like New York, Los Angeles, and San Francisco have other agendas. As Katie Marion writes for Axios, the amount of people coming into downtown offices has not gotten back to pre-COVID rates in most cities. This has led to a growing request of mayors in these cities for developers to convert commercial real estate in downtown hubs into residential units and are looking to provide tax breaks to developers who are able to do this.
My take: Things are changing drastically in most cities, but I think normalcy or the new normal is returning. From my view, living in San Francisco and working downtown is starting to be more normal but it is a new normal. I do not think most cities will ever return to the world we had before COVID where most people went into offices each day, but I do think people will want to return especially if you prefer city living.
A twitter thread on KYC tools for fintechs
This thread was interesting for fintech nerds, like me, — as it hit home on a major wave that is happening and has been happening for as long as I have been in and around the industry. This wave is the role of fintech infrastructure, the picks and shovels , for fintechs like neobanks and other apps that want to provide financial services online. To be successful these companies need to use know-your-customer (KYC) tools. The only problem is many startups first need to acquire customers which has become quite difficult. One of the longest standing players in this space, Trulioo, recently announced layoffs and made another announcement, they are completely cutting their small business market focused business.
Learnings: Startups are often times overly focused on buying the right infrastructure. What they should be focused on is creating a unique customer acquisition model that can bring in hundreds of thousands of users. Once you are doing that the type of KYC product you use becomes a commodity.
Counterpoint: This week former Dropbox CTO Aditya Agarwal of South Park Commons made a post titled Your CTO Should Actually Be Technical. This was an interesting piece on company formation and how out of control it really is. When I moved to San Francisco in 2017 to start my first company, your CTO had to be technical. Fast-forward to 2022 and according to Agarwal, this is not always the case. Some are posing as CTO’s without the ability to actually ship code. He provides five key reasons CTOs and VPEs should be technical at a company and it is a primer for anyone non technical starting a company.
What’s Next
The month of October is here and I am excited for how ModernTax is positioned to close the year strong. We not unlike many other startups have been hit with a completely new fundraising environment, but one thing is clear there are lots of opportunities for tax data to be utilized by financial institutions to provide better services for their customers. This month I will head to Vegas for the annual Money 2020 conference, if you will be there make sure to reach out.
Thanks again to our sponsor Future. Who I am excited to continue working with this quarter.
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Back to the trenches.