This month I am leaving my role at Trustly. Reflecting on the past 30 months, the Trustly Americas business has grown tremendously—as indicated by 2021's year-over-year revenue growth of 537%.

I’ve learned much about the payments industry, and am richer for the experiences I’ve had as part of the Trustly team.

Pay — With Your Bank?

Trustly’s team in the Americas was formed from the acquisition of PayWithMyBank, a Silicon Valley startup, in 2019.

I started talking to Trustly in January 2021. The team in the U.S. was still small, with an office that had seldom been used due to the COVID pandemic.

Open Banking: A New Hope

I heard that Trustly was a FinTech specializing in Account-to-Account (A2A) payments through Open Banking. But I didn’t know what that meant at the time.

Merchants who accept payments by credit cards and debit cards are assessed something called an “interchange fee”. Most consumers are blissfully unaware of this fee charged by the card networks (Visa/Mastercard). The cost is usually paid by the merchant.

The promise of Open Banking is to provide a seamless online payment experience without the burden of interchange fees — which are typically 2%-3% of a merchant’s revenue.

I was inspired by the Trustly mission: to provide an affordable alternative to Mastercard and Visa. Trustly was part of the rebellion to help online merchants against an oppressive duopoly. I decided to join the rebels.

To learn more about interchange fees, you can read about them:

• on the Trustly blog
• in this example of fees across merchants, issuing banks, processors, and card networks.

US Dollars to Brazilian Reals

The Trustly Americas business is concentrated in the U.S. and Canada, but its Engineering team is deeply rooted in Brazil. When I first joined, our strategy required all Brazilian employees to agree to relocate to the coastal city of Vitória.

Trustly has since expanded its remote work culture to allow employees to work “anywhere” in Brazil, Canada, the U.S., and beyond.

Foreign Exchange

Revenue for Trustly Americas grew 537% in 2021.

Reflecting the growth of the business (and leveraging the shared culture), Trustly opened a new office in Portugal at the end of 2021. Expanding to Lisbon allowed us to tap into new pools of talent, and also helped with timezone alignment with the U.K. for our launch of Trustly Direct Debit.

The location in Lisbon was also a bridge between two sides of the business:

• Trustly Americas (HQ in Silicon Valley)
• Trustly AB (HQ in Stockholm)

The new Lisbon office and team reflected the combination of the broader company. “Fica ligado!”

Rockstars: on the Big Stage

We scaled the Trustly Americas Engineering team from 50 to 100 within my first 12 months with the company. In growing the Engineering team, we embraced the concepts of squads, tribes, and guilds — balancing the needs of specialization & focus with overall alignment & ownership.

To grow the team, we partnered closely with our “rockstar” recruiting team in Brazil to broadcast our hiring goals. We even leveraged our online happy hours for serenading potential new hires and sharing open roles via QR code.

We scaled the team, and we also scaled the service.

Every year, the payment volume at Trustly has grown impressively—for everyday purchases as well as outlier events. Trustly can handle occasions like the Super Bowl which have a high burst of transactions in a short amount of time.

RTP? IRL!

At Trustly, we introduced new payment types to our merchants like Real-Time Payments (RTP). Building new capabilities for customers is what we do!

But Trustly is also mindful of how work is done, and who we collaborate with. After the height of the COVID pandemic, we gathered In Real Life (IRL) to share experiences in SF, Napa, Vitória, São Paulo, Lisbon, and other places to build connections and trust(ly).

Payments Are Global

Trustly was not my first time working in a global team. I’ve had the good fortune to work with different cultures across North America, South America, Europe, the Middle-East, and APAC.

My experience at Trustly is one that I will remember fondly, for the team we built, the products we delivered, the relationships we forged, and the experiences we shared.

I tried to gain a better understanding of Portuguese—even while on the airplane to either Brazil or Portugal. Ultimately, I relied on the English fluency of my Trustly colleagues. But no matter what language we speak (or what foods we eat) our similarities are more numerous than our differences.

“Nós somos Brasileiros!”

Obrigado Trustly!

Trustly in Q4 2023 is a completely different company than the one I first encountered in January 2021. That is not an exaggeration.

We grew the team, opened new offices, explored new strategies, built new payments capabilities, and improved operations.

My time at Trustly pushed me in new directions, geographies, and challenges. Trustly aspires to build a world class payments service, rivaling the largest companies in FinTech. It’s not an easy path, but nothing worthwhile comes easy.

As I said earlier, I’m richer for the experience (and soon, onto another).

“Amanhecer de um novo dia!”

Transcript of my Q&A with Seth Kimmel of Contrary Capital

For Today’s Q&A, we have Ron Pragides.Ron is currently the VP of Engineering at Trustly. Previously he was an engineering lead at Carta, AppDirect, BigCommerce, Twitter, and Salesforce, as well as an advisor to many startups.

Welcome!

I like to get a sense of how people got to where they are today.

Can you tell us a bit about your path growing up, why you decided to study what you did in college, and how you eventually got into software?

I was born in Chicago and grew up in a town that has the largest number of Frank Lloyd Wright designed structures — a fact that I didn’t appreciate until after I moved away.

I was always interested in math & science. My first computer was a TI99/4A and first programmed on it in BASIC trying to create games that mimicked what I enjoyed playing on the Atari 2600. The only storage capability was an external tape recorder accessed by standard audio connections.

In high school, I operated an online bulletin-board system (BBS) on an Apple IIe with 128k RAM, 3 floppy drives, a RAMDisk, and a 2400 bps modem — which of course needed its own phone line. I loved interacting with people online.

This was the early days of computing when “hard drives” were relatively new, large, and expensive (a 10MB hard drive cost $1000).

So not really a surprise that I majored in Electrical Engineering at @ECEILLINOIS @UofIllinois — which gave me exposure to all things related to circuits, logic, and programming. I really enjoyed Digital Signal Processing (DSP) and had ambitions to apply that to Digital Imaging.

My first job after graduation was at @TXInstruments in their Defense Systems & Electronics Group. I wasn’t fulfilled in that role so I searched internally for a project that was a better fit.

I learned of a skunkworks R&D group called Digital Imaging Venture Projects (DIVP). I found out the name of the SVP leading that group and sent him a message saying that I was interested in Image Processing and that I thought I’d be a great fit.

That brazen outreach led to internal interviews and transferring groups within my first year out of college. Eventually the group was renamed Digital Light Processing (DLP). My responsibilities included writing VHDL to program digital circuits into FPGAs, writing embedded firmware for real-time video & graphics processing, board-level hardware design, and system integration.

What I learned from that tour of duty was: I found the software engineering (VHDL, embedded firmware) much more gratifying and iterative than hardware engineering (fabricating boards, soldering components, testing electronics).

That convinced me to “move up the stack”.

I relocated to the San Francisco Bay Area to work for Sun Microsystems in their High-Performance Graphics Division. I had started an MSEE program at @utarlington, and finished with transfer credits from @Stanford.

Fun Fact: that Sun campus is now the HQ for @Meta (née Facebook).

Another Fun Fact: I joined Sun the same year we introduced @java to the world.

You moved to the Bay Area/SV in the mid 1990’s. How has it changed since then, and what are your thoughts on the debate of whether it will remain the epicenter of technology going forward?

When I arrived in the Bay Area, all of the tech jobs were in Silicon Valley. There wasn’t really a tech scene in SF.

I chose to live in San Francisco to be in an urban setting, which meant I had to commute to Silicon Valley (first Menlo Park, then Sunnyvale) on a daily basis. At the time, nearly all of the successful tech companies were hardware-related. The tendency was for large corporate complexes where hardware testing and bring-up could occur.

With the “Dot Com Boom” in 1999, software-based Internet business were dominant. SF was ground zero. Suddenly all of the techies that wanted to live in SF could actually work there as well. I joined an e-commerce start-up called Della & James that eventually merged with its largest rival to become @WeddingChannel.

Hubris was everywhere. Sock puppets appeared in Super Bowl ads.

Then the bubble burst. Startups were folding.

My company decided to shutter its SF office and concentrate everyone in LA. I declined the offer to move and remained in SF to ride out the storm.

There was a massive exodus. No traffic on the US-101. Things looked bleak for tech. After a year, the tech industry in the Bay Area came roaring back. That was one instance when people questioned the area’s resiliency.

There are smart technologists all over the planet, and other areas have been trying to topple the SF Bay Area’s dominance for years.

Crafting great wine starts with terroir: the combination of climate, soil, and slope.

The SF Bay Area terroir consists of: great local universities, tech companies to learn & hire from, network of investors, other trades required for startup formation, entrepreneur culture.

• UNIVERSITIES: UC Berkeley, Stanford University
• TECH GIANTS: @Apple, @Google, Meta, @netflix
• INVESTORS: From Individual Angels to @a16z

Silicon Valley will always be a destination for technologists. Like Broadway for Live Theater, or Hollywood for the Film Industry.

Who were your most impactful mentors early in your career? What did they teach you?

I’ll answer this slightly differently.Who are people that I learned the most from early in my career (either patterns, or anti-patterns):

• My first manager ever: Leticia Benavides at @TXInstruments. She was very supportive, pairing me with senior engineers to learn from, giving me challenging projects, and allowing me to pursue other projects in the company. She showed me good management.
• Individuals who stayed at the same company for decades not because they loved their job, but because they were: no longer curious or learning new things, not challenged on the job, complacent doing the same thing, every day. I knew that was NOT what I wanted for myself.
• [Unnamed] Top Architect who legitimately was a genius but: reminded you he was the smartest person in the room, micromanaged people in his org, told people in other orgs how to do their job. That showed me the type of leader I never want to be.

You’ve seen several decades of changes in the way that software is built at scale.

What methods have stood the test of time, and what new developments have made you the most excited?

In my career:

• I’ve only worked at two companies that were large and public at the time I joined.
• All of the other companies I joined were privately-held startups (or scale-ups) at the time I joined.

My perspective on building software is tied to building companies. Building software at a Startup (depending on how early) should be the essence of what became the @ycombinator motto:

MAKE SOMETHING PEOPLE WANT

And at the start that means: Don’t over design, Don’t optimize prematurely, Deliver iteratively, Incorporate User Feedback.

Building Software at Scale only happens after achieving Product-Market Fit.

Build a better mousetrap, and the world will beat a path to your door.

Which I’ve seen a few times, and generally that means the code: starts as a monolith, has tech debt, needs to be optimized.

And so the tasks become: growing the Engineering team, refactoring the code, breaking-up the monolith (carefully), analyzing performance, ensuring you can scale horizontally.

Of course AWS, GCP, Azure have made a huge impact of the ability to quickly scale. But I’ll try to be technology and platform agnostic and stick to strategies that help with scale, in no particular order: test automation, infrastructure as code, typesafe languages, query optimization, leveraging Open Source, feature flags, queuing, caching.

My perspective comes from “scaling teams” in service of “scaling software”.

For scaling software:

• avoid Single Points-of-Failure (SPOFs)
• measure & reduce stress across all components

The same is true for scaling teams.

How have you managed to stay highly effective in leading engineering teams in a remote-first capacity? What are the pros and cons? Do you think it’s better or worse overall?

I’ve led geographically distributed teams across multiple countries: Argentina, Australia, Brazil, Canada, India, and Portugal.

That’s in addition to distributed U.S. teams in: Austin, Boulder, Los Angeles, New York, Palo Alto, Salt Lake City, Seattle, San Francisco.

Most of that experience has been with teams in clusters around offices.

But the issues are the same with respect to:

• managing timezones
• defining autonomous teams
• providing clear sense of ownership
• aligning with priorities
• keeping everyone well-informed

Clear communication and rapid decision making are crucial for productive teams. Co-location is the most efficient way to achieve both.

Distributed teams can approximate this with “timezone alignment” — think of teams in timezones, not offices.

“Cultural awareness” is also key. People in different cities (or countries) have their own context and values. Generally people in Sydney, SF, and Stockholm have different communication styles. The same is true for people in Mumbai vs. Montréal. That’s why companies define Values for all employees to align to.

As a result of COVID-19, tech companies have embraced “remote-first” — which is an extreme version of geographically distributed teams.

We’re relying even more on collaboration tools to keep our teams aligned, informed, and inspired.

Nothing connects people better than in-person contact. But that doesn’t have to happen every day. Companies can augment “remote-first” daily operations with occasional team gatherings to build camaraderie.

At @Trustly we’ve held in-person gatherings in Napa, Lisbon, and Vitória.

Although I’m normally based in the SF Bay Area, this week I’m in Brazil visiting with members of the team. It’s the first time I’ve met some of them in-person.

Tech talent exists all over the planet. More companies now recognize this, and are tapping into the global talent pool.

Last question: who are three people I should consider interviewing next?

1. @hershtapadia, CEO @allstacksapp
2. @aaryaman_007, CEO @PeachPayInc
3. Anshu Sharma, CEO @SkyflowAPI

Thanks so much again Ron. This was awesome!

Thanks for the Q&A Seth and congrats on Contrary Capital!

“Over the past year, Trustly has seen significant growth, both in Europe and North America, with North America now representing close to half of total group revenue compared to around one-fifth a year ago.”

— Johan Tjärnberg. Trustly CEO

Our Engineering team scaled in response to the growth of our North American business. But it is hard to remember how much the organization evolved in 2021.

How we started

At the end of Q1 2021, the Engineering Americas team had a total of 54 full-time employees in Brazil. Most of our current PMs and Engineering Managers had yet to join the company. Development workload was split between Financial Institution Connectors (FIC) and Core (“everything else”). Sprint planning for Core ran for multiple hours and included 20+ engineers.

Hiring Product Managers and Engineering Managers

By the end of Q2 2021, Engineering Americas grew to 68 full-time employees. During that quarter, most of our PMs and Engineering Managers joined the company. We recognized that we had to evolve how we planned and organized our work. As a result, we explicitly formed Product Development squads dedicated to Vector, Risk, and Payment Processors. This enabled us to separate our road mapping and planning activities into smaller, focused groups. And notably, DevSecOps (which includes IT Support, SecOps, DataOps, and DevOps) grew by 50% from the prior quarter.

Starting to achieve scale

At the end of Q3 2021, our Engineering organization increased by 33% to 90 full-time employees. We started to hire team members in Lisbon. We maintained the same Product squad alignment from the prior quarter, with sprint planning sessions for Vector, Risk, Payment Processors, FIC, and Core (backend + frontend). But due to our hiring growth, the Core team consisted of 20+ engineers, with roadmap definition shared across multiple PMs. We realized that we would need to adjust the organization again for more even further dedicated squads. The DevSecOps team grew by another 50% — but we hadn’t yet added managers to that part of the org.

Introducing Squads, Tribes, and Guilds

In evolving the Engineering team, we were inspired by the concepts of Squads, Tribes, and Guilds as described by Spotify. As we grew the Engineering team for the Americas, we adapted these concepts to align with the needs of our business.

At the highest level, we started considering the Engineering Americas team as two Tribes:

• Product Tribe: aligned to Product Management
• Technology Tribe: focus on Scalability, Reliability, Resilience, Security

Each of these high-level Tribes is a collection of Squads. Squads in the Product Tribe are co-led by a Product Manager (PM) and an Engineering Manager (EM). Squads in the Technology Tribe have their direction set by our CTO and our Architects.

We also have a QA & Automation squad that is a hybrid. Individual QA Engineers are embedded in Product squads, but Automation (and Release) services are provided to all squads.

Along with our evolution into multi-disciplinary Squads and higher-level Tribes, we also formally introduced Guilds into the organization — starting with a Front-End Guild and a Back-End Guild. Each of these Guilds provide connection, knowledge transfer, best practices, and consistency in how we develop across all Squads. Each Guild is directed by a hands-on Engineering lead (specifically NOT a Manager).

How it’s going

As of today, we are now a team of 109 full-time employees across Brazil, Portugal, and the US. Our team added new PM and Engineering Managers (including in DevSecOps). We realigned Engineering Americas into two high-level Tribes, each comprised of more granular squads.

We also established a Platform squad to focus exclusively on tech initiatives; this team will need to grow significantly in 2022.

Reflecting on an eventful 2021

• We doubled the Engineering team from 54 to 109 full-time employees.
• We expanded our team footprint to include: Brazil, Portugal, and the US.
• We evolved our road mapping and planning processes from two Product squads to eight Product squads, in alignment with PM areas of ownership.
• We formalized the idea of a Technology Tribe to dedicate Engineering resources for Scalability, Reliability, Security, and Resiliency.

I look forward to 2022, which will be a year of continued growth (and additional evolution) for the Trustly Americas Engineering team.

This post was originally published on the Trustly blog. Follow me on twitter:@mrp

We’re swimming in an ocean of information about Stock Option Pools and the promise of future liquidity. Each year, a new wave of advice washes upon the shore.

Let’s dive right into the deep end…

Prepare Your Company (Y Combinator)

The market figure for a Series A option pool — by far — is an unissued and available option pool that represents 10% of the company as of immediately following the closing of the Series A.

However, some investors may ask you for a higher pool. Alternatively, you may wish to keep the pool smaller than the market norm, either to limit dilution or because your company is based in, or recruiting from, a geographic location outside of Silicon Valley, where the equity compensation expectations are generally lower.

Legal (Y Combinator)

the most important thing founders can do is to take the time to understand their cap table and how outstanding safes and convertible notes, as well as the Series A new money and option pool increase, will change the cap table.

Typically, the dilutive effect of safes, notes and option pools are interdependent with the Series A valuation and investment round terms. This is because safes and notes conversion terms are impacted by the Series A valuation, and the option pool is pegged to a percentage of the post-Series A cap table (e.g. 10% of the post-Series A cap table).

What’s A Reasonable Starting Point For An Option Pool? (Brad Feld)

The starting point — on average — for an option pool after the Series A financing is 15% to 20% so this is certainly a reasonable starting point. Recognize that there is a nuance here between “pre-money” and “post-money”. I like to talk about the option pool as “post-money” so the valuation doesn’t impact the pool as part of the financing — it makes it a little simpler to discuss.

In each subsequent round, the new size of the option pool will likely be part of the financing negotiation. Most Series A investors expect you to use up most of the option pool for early hires so that when it is time to raise a new round, you’ll likely need additional options to incent your future employees.

The Option Pool Shuffle (Venture Hacks)

Discuss your hiring plan with your prospective investors before you discuss valuation and the option pool. They may offer the truism that “you can’t hire good people as fast as you think.”

Rewarding Talent (Index Ventures)

Traditionally, ESOPs are set to 10% at seed. This is the recommendation of Seedcamp, and still the norm in both Europe and the US. However, some accelerators, including Y Combinator and The Family, now advocate 20%. They recommend that seed investors should increase their valuation of the company to accommodate the larger ESOP.

This doesn’t mean you should allocate or promise all of this amount to your early employees. But it recognises the importance of stock options for securing top talent when company cash is particularly constrained.

Valuation and Option Pool (Fred Wilson)

the option pool request needs to be reasonable and based on some kind of budget. I generally ask the entrepreneur to put enough options into the “pre-money pool” to fund the hiring and retention needs of the company until the next financing. My thinking on this is that I don’t want to get diluted between financings. So I like to see a headcount based hiring plan with expected options against each hire combined with a retention plan for all current employees who will need additional option grants.

In most of the early stage financings I’ve done in the past few years this work on the option pool has shown a need for around 10% in unissued options. I’ve seen it as big as 15% but that is rare. I’ve also seen it as low as 5%, but that is even more rare. But the point is this; don’t guess or negotiate this number. Do the work, figure it out, and put it in the pre-money and then negotiate price.

Sizing Option Pools In Connection With Financings (Fred Wilson)

agree with the entrepreneur that the option pool will have enough unissued options to fund all the hiring and retention grants that need to happen between the current financing and the next one. Then we’ll do the same thing at the time of the next financing. That makes sense to me. And it is pretty easy to do.

Employee Equity (Sam Altman)

One problem is that startups try to have very small option pools after their A rounds, because the dilution only comes from the founders and not the investors in most A-round term sheets. The right thing to do would be to increase the size of the option pool post-A round, but unfortunately this rarely happens — no one wants to dilute themselves more, and this leads to short-sighted stinginess much of the time.

Option pools are complete fiction; boards can increase them whenever they want. It should never be used as a reason for not making a grant.

Employee Equity: Too Little? (Fred Wilson)

Since I started in VC, the percentage of a company that non-founder employees owned was always in the 15–20% range after the team is fully built out. In recent years, I have seen that number creep up to the 20–25% range and if you extrapolate current trends out a few years, it could easily be 30%.

Startup Best Practices 16 — Option Pool Planning (Tomasz Tunguz)

At some point, the company will have granted most of the shares in the ESOP to employees, and will have to create new shares for the next wave of hiring. This is called expanding the pool. A Series A company would likely expand its ESOP as part of a Series B financing, adding perhaps another 5–10%, depending on the hiring plan of the company. Series C and later companies tend to add 1–2% each year to the pool; or more if they plan to hire executives who can command about 1% or more of outstanding shares.

Funding your Startup — The Impact of the Option Pool Shuffle. (Marcus Gosling, LTSE)

your goal should be to minimize founder dilution by creating the smallest option pool needed. Your actual hiring plan and the equity you need for those future employees should drive the size of the pool, not any supposed standard.

Options, Options, Options (Tom Wilson, Seedcamp)

Overall I don’t think there’s enough value given to startup options in Europe. Perhaps this is down to the risk tolerance of us Europeans and our tendency to favour a certain salary over equity. I’d like to see European startups be more aggressive with their option grants and spend more time educating employees as to the potential value that such option grants could present. It feels like there’s value being left on the table there. The US market appears to be ahead in this regard probably buoyed by the fact founders there can point to more success stories of startups scaling to exit. For any startup, one thing is for certain, talent is absolutely critical and therefore spending time devising a strategy around how options can be used to attract and retain world-class talent is time well spent!

Option Pool sizing — by the Numbers. (Marcus Gosling, LTSE)

Our data shows that over 50% of startups reserve between 10 and 20% of their capitalization table for the option pool. You can also see how the option pool increases at each successive stage of financing, due to VC demands, and what type of compensation premiums non-founding CEOs command relative to founding CEOs.

The range of percentages exemplifies how determining option pool size is more art than science. Ideally, you want to create an option pool that is sufficient for your anticipated hiring purposes until your next financing round. But finding the right balance involves skilled negotiation.

Employee Share Option Plans: A Practical Guide (Cake Equity)

the company creates an ‘option pool’ where it sets aside options that can be allocated to employees. The standard option pool size is often 10% of the fully diluted capital in the Company, but it can vary. The documents required to set up an ESOP include:

• The Plan Rules, and
• The Individual Offer Letters.

How to create and use an option pool (Vestd)

On the whole, somewhere between 5% and 15% of a company’s total equity is a normal option pool size. This is entirely up to the founder, and is an important business decision, which will likely be driven by whether you are issuing options to co-founders or to employees more broadly.

Modeling Dilution (Pulley)

The complexity around the calculations for pre-money SAFEs is why YC strongly recommends using post-money SAFEs. This approach lets you estimate your dilution plus or minus 10% because it ignores the option pool. This estimate is a rough way to know how much of your company to give away, but it should not be the final estimate to rely upon when you close your A.

How Does a Startup Option Pool Work? (Capbase)

Your stock option pool is a percentage of the value of your company — not a percentage of available shares. So, if you add shares to your company through subsequent rounds of funding, if you want to maintain the relative value of your pool, you’ll need to add shares to it as well.

Otherwise, as the overall number of shares in your company increases, the value of your stock option pool will go down. That’s why employees who join your company earlier on — say, before Round A — may end up with more shares than employees who join later on.

Cap Tables from Formation to Exit (Capdesk)

companies often face the challenge of forming a solid strategy to attract new talent that will contribute to building and scaling the business. In a company’s early days, it is often impossible to compete with established businesses based on salary, so founders have to approach recruiting in other ways. For example, they can offer attractive working lifestyles, flexible working hours, better company culture, or promise share options and thereby give employees the opportunity to participate in the company’s value.

Option Pool Data (Capdesk)

Option pool sizes are significantly larger than the 10% reported by Index Ventures. An average of 17.3% (median 19.9%) of the fully diluted equity was found to be dedicated to employee option pools. We believe this represents [an] evolution of the market, moving in line with the example set by American startups…

Employee Stock Option and Phantom Share Plans (Ledgy)

We conducted our own research and came to similar results. On average, Swiss startups allocate 9.73% of shares to participation plans, German startups 11.07%, French startups 14.59%, and the UK startups 12.78%.

How to decide the size of your employee option pool (Carta)

Investors prefer larger option pools because that usually means your option pool will last longer, potentially reducing their dilution. Because of this, they may pressure you into creating a larger pool than you need, citing industry benchmarks. This is where your hiring plan comes in — by thoughtfully mapping out your key hires over the next year or two and how much equity they need, you can show investors how you came to your number and may be able to negotiate a smaller, more realistic pool.

When it comes to the size of your employee equity pool — you have options.

Companies across the globe are embracing a new reality: more work can be done remotely. This trend is not new. Companies like Automattic (founded in 2005) and GitHub (founded in 2008) were intentional in hiring a completely distributed workforce.

Due to the COVID pandemic (and social distancing mandates), employers learned to rely online collaboration tools. Videoconferencing has been around since the days of Skype. But in 2020, companies worldwide scrambled to embrace the latest incarnation — Zoom became a household word and synonymous with the concept of remote meetings. Videoconferencing provides a replacement for in-person, real-time synchronous team meetings.

Similarly, a host of online tools exist to enable asynchronous team collaboration. Recently, our leadership team discussed the need to be intentional in our use of these remote collaboration tools.

Humans have evolved over millennia to work in small groups to achieve specific tasks. New collaboration tools seduce us with their promise of instant communication with anyone in the organization. But it’s a double-edged sword: If every employee is compelled to be hyper-responsive at every moment, it leaves little time for the deep thinking required for knowledge work. I have strong opinions on the pros and cons of these tools.

Collaboration Tools I Use Most

Email vs. Slack: Once upon a time I was very diligent at Emails, but then Slack came along and seems to be how most organizations are run these days. Therefore I’m far more responsive on Slack — despite the fact that Slack is the equivalent of 100 Inboxes. However, my preferred way of working in this environment is to have a few important standing channels for groups that need to communicate with each other frequently. An analogy would be instead of an email d-list to have a standing Slack channel. I’ve found this works quite well, and is something I encourage for every team.

Email for internal communication is now relegated to the kitchen sink as every tool dumps stuff into an Inbox. While I know that we can filter and route emails to different folders/tags, I find that the juice is usually not worth the squeeze. However, Email is absolutely the preferred way to interact with external 3rd parties. Email is a good place to document items for future reference (again, a younger me earlier in my career was very diligent in maintaining these timestamped records of decisions). But with newer collaboration tools, I believe there are better ways to provide this documentation. (See below.)

Google Docs are remarkable for collaboration (both real-time and asynchronous) but is nearly impossible to find the right documents in the massive pile of Google docs that inevitably get created. Google Docs are also — aside from Google Sheets — usually transactional, in that they serve a particular purpose (a specific presentation or meeting) and then quickly become superseded.

Google Drive helps in some regard to organize the mass of documents, but my preference is to combine Google Docs with some external index into them (such as Notion or Confluence pages). I’ve found both Notion and Confluence I’ve found to be a great way to build an intranet / internal Wiki, with Spaces organized by Department, Team, etc. Each of the Confluence pages can, in-turn, link out to specific Google Documents. In many cases, having Confluence pages as the anchor and index to Google Docs helps with organization and discoverability.

Asana is a tool I’ve seen used well for maintaining standing topics for meetings, priority lists and commitment dates, and cross-team collaboration with sub-tasks that link out to department specific tools (e.g., JIRA, Salesforce, etc).

How I Work Best

Slack is the best way to communicate with me, and I’m generally more responsive with DMs or @ mentions in channels. I like having some key Slack channels with groups that have to communicate often — an analogy to an email d-list. I’m also a big believer in using Slack threads to organize conversations by topic. I’ve recently learned about the /remind feature in Slack, which can be useful and a replacement for Calendar reminders (see below).

Calendar is visible for scheduling but with meeting details kept private. I specifically block out time for Lunch and Focus time — Clockwise is helpful in this regard. I’m open for a meeting whenever my calendar shows availability. In fact, I like it when milestones or due dates (e.g., filling out this form) are scheduled on my calendar as reminders and in the past I’ve done that for my teams as a 15 minute “REMINDER: XXXX [No Meeting]”. This is a practice I haven’t done in awhile but have found it effective in the past for my teams.

To-Do/Notes in the old days I had a habit of sending myself a ToDo email every morning. I don’t actually do that anymore but instead — if I’m organized in my thought — will set calendar notifications for me as reminders to finish a task. I have also recently started using Slack as a way to take notes for myself: creating a private channel where I am the only member. (This can also be accomplished by DMing yourself, but sometimes I like to use the private channel to also preview a message that I intend to post on Slack).

Clockwise is a useful tool for reserving essential lunchtime (which is too easy to overlook) as well as dedicated Focus Time. Clockwise also has a useful feature to put meetings on “autopilot” and automatically find the best time for all attendees. I think it is worth paying for a corporate license.

Google Sheets are a useful & flexible tool, but often a purpose-built commercial tool is better for the long-run. (I’m also particular about trimming unused columns and rows from Google sheets).

If There Was A Problem, Would You Solve It?

Ultimately, all of these tools are only useful so far as they provide employees a workflow that enables focus. It’s far too easy for companies and employees to fall into the trap of incessant communication, preventing them from achieving a state of flow. This is the hazard that Cal Newport of Georgetown University describes as The Hyperactive Hive Mind:

A workflow centered around ongoing conversation fueled by unstructured and unscheduled messages delivered through digital communication tools like email and instant messenger services.

Problem solving is what we expect of knowledge workers. Communication plays a major role in identifying problems and aligning on goals. But incessant communication is literally “too much of a good thing” — Activity is Not Progress. The deep thinking required to solve problems can only happen if periods of high-bandwidth communication are balanced with dedicated focus time.

So go ahead, “collaborate” and “listen”. But don’t forget to also “stop” long enough to actually solve problems. After all, isn’t that the point?

The term Black Swan was made famous by Nassim Nicholas Taleb in his book of the same name, which he describes as an event that has three attributes: (1) it is an outlier, outside the realm of regular expectations; (2) it carries an extreme impact; and (3) in spite of being at outlier, we devise an explanation for its occurrence after the fact.

The COVID-19 pandemic certainly qualifies as a Black Swan event, but 2020 has been a year that tested our resilience for a multitude of reasons:

• Everyone on the planet was affected by the COVID-19 pandemic. The World Health Organization has tracked over 61.8 million reported cases and 1.4 million fatalities since the start of the pandemic.
• The global health crisis has triggered a worldwide financial crisis, as governments have closed down their economies to reduce the spread of the virus.
• The U.S. unemployment rate spiked to 14.7% in April. As of this writing, there are still 10.1 million unemployed Americans and an additional 7.1 million not in the labor force who currently want a job.
• The #BlackLivesMatter movement gained global prominence after the death of George Floyd while in police custody. Demonstrations in protest against police violence took place not only in the U.S. but also in cities around the world.
• California, Oregon, and Washington were engulfed in the most active fire season on record, with multiple fires ignited by lightning strikes. Nearly 8.2 million acres burned and over 10,000 buildings were destroyed. Air quality in the western U.S. remained at hazardous levels for weeks. Smoke blanketed the Seattle area on September 8th. The sky over San Francisco was an orange hue on September 9: “the day the sun didn’t rise”.
• The Presidential Election was held in the United States, which was historic for several reasons: the two highest presidential vote counts (81 million for President-Elect Joe Biden, 74 million for incumbent Donald Trump), the first woman Vice President-Elect (Kamala Harris), and the baseless accusations of fraud by the sitting President (despite the statement of secure elections by the Cybersecurity & Infrastructure Security Agency).

2020 demonstrated the need for resilience: we’ve all had to withstand and recover from many profound events. With 2020 coming to a close, I recently shared my thoughts on Resilient Engineering Teams and Careers in my role as Executive-in-Residence at Terminal.

My Career Journey

I’ve experienced three Black Swan events during my career: the 2001 Dot-Com Bubble (boom & bust), the 2008 Great Recession (the financial housing crisis), and the 2020 COVID pandemic. You never know when a Black Swan event will occur. You may encounter several Black Swans throughout your career, so it’s important to be resilient when they happen.

I’ve held different roles spanning Engineering Individual Contributor (IC) positions through Engineering Management roles. My career journey was not a direct, binary path to management. Between 2000 and 2004, I straddled the line between Engineering IC and first-level Engineering Manager. Without knowing the differences between those roles, I had to try them out for myself. I had to get comfortable with my own choice in terms of what I wanted to do, where I got my energy, what I wanted my career to be.

It’s important for Engineers not to conflate Career Progression with Becoming an Engineering Manager. The best companies provide parallel tracks for Engineers to contribute to their team and to grow their careers. Engineers start their career on the ground floor and eventually face a choice: to progress as a technical lead, or take the path of leading as a manager. After seeing both sides, I eventually chose to focus on Engineering Management. Even though this was my path, it’s not the destiny of every Engineer to become a manager. It’s up to each individual to plot their own career journey.

I’ve had the opportunity to work across different teams, different companies, and different business verticals. My former colleague Amit Kulkarni (CEO, Heymarket) suggests that we can think of our careers in terms of epochs. Upon reflection, I’ve mapped my own career to four distinct epochs:

• 1992–1998: Large Public Companies
• 1998–2004: Startups & Dot-Com Bubble
• 2004–2014: Scale-Ups & New Business Models
• 2014–2020: Platforms & Network Effects

I’ve had the privilege of joining amazing companies, some of which have grown to become iconic businesses. I’m proud of all the organizations that I’ve had the chance to help build.

Each person’s career is a combination of teams and roles, woven together into a unique tapestry of industry experience. No matter what happens, be prepared for Black Swan events that might come. And remember to be resilient in how you think of opportunities for yourself.

Developing Resilient Careers

There are five principles that I believe will help anyone develop a resilient career, and I hope most of these resonate with you:

• Be a Lifelong Learner
• Stop & Look Around
• Know Where You Get Energy
• Decide for Yourself
• Live Courageously

Be a Lifelong Learner. What does that mean? The things that interest me now are different from what I was interested in 5 years ago (or 10 years ago). Whenever a subject has been intriguing to me — from a career perspective, a business perspective, or just how the world works — I’ve tried to learn more about it. We now have multiple ways to learn about any topic: tech-talks, meetups, conferences, news & social media, MOOCs (Coursera, Udemy, etc), books, podcasts. It’s amazing to live in a time when we have Internet-connected supercomputers in our pockets. Go ahead and read some (or all) of the books that Marc Andreessen recommends. If there’s anything that you’re curious about, go learn more about it! There are few barriers to acquiring knowledge, and there’s also no penalty for stopping once you feel like you’ve had your fill.

Stop & Look Around. One of my favorite film characters is Ferris Bueller, famous for his mantra “Life moves pretty fast, if you don’t stop and take a look around once in a while, you could miss it.” I’m going to embrace and adapt that: Industry trends move pretty fast. If you don’t stop and look around once in a while, you could miss the next one. Try to be aware of industry and technology trends as they are happening. Shifts in trends that are apparent now, in hindsight: (1) the transition from mainframes to PCs (mid-1970s to the early-1980s); (2) the emergence of the Internet for commerce & business software; (3) the ubiquity of mobile phones and their evolution into handheld Internet devices. Changing trends sneak up on you. So every once in a while, pause and reflect on what you’re seeing around you. Being observant can inform where you direct your career and how you focus your time.

Know Where You Get Energy. Be true to yourself. Start by figuring out: What You Love. If you had your choice of anything, what would you love to do? Start there but also figure out What You Are Good At. The overlap between those two things, if you can find it, defines where your passions lie. In the context of your career, obviously you want to know What You Can Be Paid For. The overlap of these different circles shows what can be a profession and also a passion of yours. But to make the circle complete you should strive to focus your energy on What The World Needs. There is a really special place at the intersection of: What The World Needs + What You Can Be Paid For + What You Are Good At + What You Love. The overlap of these four different circles is described by the Japanese term Ikigai, which means “a reason for being”. (I was reminded of this concept by my former colleague John Greene, who recently joined an early startup in search of his Ikigai.) If you can actually align what you LOVE, what you’re GOOD AT, what you CAN BE PAID FOR, and what THE WORLD NEEDS — no matter what it is — it’s pretty rare. If you can find your Ikigai: you’ll be fulfilled, you’ll be fully engaged, you’ll be directing efforts to a worthwhile endeavor — and it’s not going to feel like a job, because you love it! This is a powerful way to think about how a vocation, a mission, a profession, and a passion can all line up.

Decide For Yourself. When I was growing up in the suburbs of Chicago, my parents had certain ideas for me. For most of us, our parents do a lot to shape us and our views of the world. My mom was a registered nurse. My dad was in real estate and also had a background in accounting. Each of them, in turn, would have wanted me to follow in their footsteps. Of course, my mom really wanted me to be a doctor, for the prestige that holds and what that means in the community. (My parents immigrated from the Philippines, and for their generation it was really important for people to want to be doctors.) I just couldn’t do it. I was not interested in the medical profession, regardless of whether being a doctor was an important job or whether it would impact other people’s lives. I understood those things, but I wanted something different. I wanted to do something in the Engineering realm—I knew that would bring me joy and satisfaction. I had to make that choice for myself. Just like anyone that embarks upon their career: you have to live with your decisions. This applies not just to your field of study. It doesn’t apply just to the career path you choose. It happens every day: the decisions you make on the job, the projects you choose to accept (or decline from, or volunteer for), the roles you choose to step into, the companies you choose to join (or start, or leave). Of course, there are people in your life that influence you: your parents, your spouse, your kids, and your friends. But it’s important for you to take all those as inputs, and maybe find a quiet place and really reflect—not just in one session but over time. Over a few nights. Sleep on it. Because whatever you choose—whether you take the red pill or the green pill—you have to live with the consequences. Don’t blame your parents if you choose to be a doctor because they want you to, if it’s not really where your passion is.

Live Courageously. You need to live with your own decisions and you need to make your own choices. Don’t make choices to please others—make one that’s informed for you. After that, take the leap. Trust your instinct. Trust in yourself. Trust in the ways you’ve thought about your decisions. Remember that you’re the one who is in control, and you’re the one who can put things into motion. Don’t wait for life to happen to you. Actualize and make true your decisions and your choices.

(That is actually me in the photo—a much younger me).

Building Resilient Teams

Creating resilient teams is important no matter what company you’re at, or where you are on the planet. This history of humankind demonstrates that we accomplish great things together, as teams. Here are my recommendations on building resilient teams:

• Hire for Potential, Ability, and Culture
• Set Clear Goals
• Divide-and-Conquer
• Build Trust with Transparency
• Provide Meaning and Purpose

Hiring. You need to hire for potential. Think of a young Tiger Woods. Early in his amateur career, people knew this kid had potential on the golf course. Be open to where talent can come from. Keep on the lookout for folks you can hire that (in 2/3/5 years) could be amazing and will be additive to your team. With the right nurturing and coaching, you can groom individuals to become amazing teammates and strong contributors. High-potential individuals should make up a portion of your team. People continually evolve and grow in their careers—don’t lose sight of that fact.

Great teams also need people with amazing ability & skills who are already top performers. You need to hire some superstars; the equivalent of Michael Jordan in his prime. (I grew up in Chicago, so I’m partial to the Bulls of the Jordan era.) Michael Jordan was a consummate perfectionist; he was at the top of his game, and he was always pushing himself. He was always pushing and challenging his teammates, too. And if you’ve watched the ESPN documentary on Michael Jordan, you know that—every once in a while—he might not have been the nicest person to hang out with. But his teammates appreciated how Michael got the most out of every single one of them. As you’re thinking about team formation, strive for a combination of current superstars that can lead by example and high-potential individuals that can become the next generation of leaders.

You also need to hire for culture. When you’re building a team you are implicitly creating a Team Culture. You want camaraderie. The team will need to be resilient through failures to eventually experience successes. Hopefully you will celebrate success like the USA Women’s Soccer Team after a victory; you can see the pure joy that they have. But there’s also going to be the hard times. You need to be able to work with people through the ups and the downs, because that will inevitably happen. Make sure that when you hire for your teams that you have: the right characters, the right personalities, the right people on the playing field. You’ll know you can lean on them and trust them.

Set Clear Goals for your teams. Most teams and companies know WHAT they’re doing (i.e, what product they want to build). Most companies furthermore, have an opinion and very clear statements of HOW they’re going to do it (i.e., how they’re going to layer on different pieces of functionality, or parts of code, or different services). But surprisingly, teams and companies usually aren’t well-informed on WHY they’re doing it.

• WHAT: We’re building widgets.
• HOW: Here’s how we’re going to build the widgets.
• WHY: Remind me, why are we building these widgets?

I’m inspired by Simon Sinek and his book “Start With Why” as well as his TED talk on “How Great Leaders Inspire Action”. Sinek urges leaders “Start With Why” which is the opposite of what teams & companies usually do. In his TED talk, Sinek describes “The Golden Circle” (shown above). I like to describe it as a tasty piece of candy: start with the creamy center, which is the WHY. That is the very reason—the True North—of why you’re doing something. For a project to really inspire the team, everyone has to understand the WHY. This is something that a lot of companies and teams might skip over when they’re thinking about processes, organizing teams, and distributing work. If you’re on a team and you don’t know WHY your team is doing something—you should ask! If you’re leading a team, you’re usually preoccupied with the procedures and processes. As a leader, periodically ask yourself: “Is everyone on the team aware of WHY we’re doing this?” You can never reinforce the WHY too much. It’s a really good way to continue to inspire and align people, and remind them of the overall mission.

Divide-and-Conquer. There are Computer Science algorithms based on Divide-and-Conquer. It’s also a way that I generally try to solve problems, and how teams should organize as they grow to face larger problems. Let’s start with the smallest atomic unit of a team: squads. A squad is a small, tight, autonomous team. Everyone trusts each other because you’ve hired well. Everyone knows the mission as to WHY you’re doing things. This is a unit, a very tight corp working towards a singular mission.

As a company grows, to divide-and-conquer you need to aggregate squads into tribes. An example of different tribes that I’ve experienced: a tribe for “applications” and a tribe for “platform”. The “applications” tribe focuses on end-user functionality. The “platform” tribe builds infrastructure components. Each tribe subdivides their problem further to define areas of ownership for their constituent squads. This method of organization gives each squad autonomy, an area of focus, and subject matter expertise that they can obsess over.

Over time, companies grow to tackle larger problems. Strive to organize teams in a way that creates: (1) autonomous squads at the most granular level; (2) tribes for higher-level goals solved across squads; and (3) a collection of tribes that, in aggregate, work towards the company mission. Constructing teams in this way gives power to each individual: each person will have the focus to deliver and will understand their contribution to their squad.

Tribes and squads are focused on their own subset of the product. If you stop there, you could lose the ability to think holistically about the overall organization. As you continue to grow, you’ll want to introduce guilds into the organization. Guilds are cross-cutting and can be considered an overlay across tribes and squads. You might want to create a guild for “front-end” topics. Similarly, you might have an “infrastructure” guild to decide on backend architecture. Each of the guilds that you form should have sufficient representation from the tribes and squads to contribute to their decisions. It’s a different way of Dividing-and-Conquering: a combination of guilds (for strategic choices) across tribes and squads (for project delivery) provides full coverage. Tribes and squads see the trees, while guilds see the overall forest.

The concepts of squads, tribes, and guilds comes from “Scaling Agile @ Spotify” written by Henrik Kniberg & Anders Invarsson. This is how Spotify organized their teams. It’s also how I’ve seen teams in the past — we just didn’t have the terminology until Spotify formalized it.

Build Trust with Transparency. Transparency with team members helps keep them motivated & inspired, because they know exactly how the company is doing and how their work fits into the larger picture. With transparency, individuals across teams will have enough information to understand that, in aggregate, all teams are contributing towards a higher-level set of goals.

If managers aren’t transparent with what they’re expecting, they can’t expect their employees to trust them. Ideally, the organization will have transparency across-, up-, and down- the org chart. After all, you’re building a team—and competition is not within teams. When employees win, managers win (and vice-versa). When individual teams win, the company wins. Competition, if it exists, should be outside the company walls.

When does a team operate well, no matter what kind of team it is? It’s when you trust each other, and you allow information to flow to all the different team members. Then everyone can act on the information in an appropriate way for their role on the team.

Meaning and Purpose. I assume you don’t want to provide “just another job” to your team members. Of course you should hire people for what they’re good at—their potential and their ability. As part of the offer process: explain WHY the team exists, WHY the company exists, and WHY it’s going to make a difference in the world. If you can unlock that, and you can get people to see the importance of your mission—then you will keep them aligned and motivated.

You can’t necessarily control what people love. But if you’re building teams—as a manager or a team member—you can always remind folks WHY their work is important for the team, for the company, and hopefully the planet.

Farewell to 2020: a year that tested our resilience.

My journey at Carta is coming to an end. I’m thankful to have been part of the mission to Create More Owners:

Employees sit on the debt stack of a firm, while owners sit on the equity stack... But what if issuing equity were as easy as paying payroll? Could we make ownership as ubiquitous as salaries?

These were questions Carta co-founder & ceo Henry Ward asked—because he saw the world differently than most. At the end of 2018, I wasn’t sure if I agreed with him, but I couldn’t ignore him. He was challenging the status quo.

I was intrigued, and did more diligence on Carta before deciding to join.

The Road to Carta

In late 2017, Andrew Parker (formerly of Spark Capital) wrote about the company:

eShares is announcing a rebrand today. The company is now called Carta… And when I think of the mission of the company most broadly and concisely: we map asset ownership.

Carta was mapping a route through the financial services industry, with Wall Street as its final destination. Its aim was to rebuild the infrastructure of Capital Markets. And the company was making progress at breakneck speed—like a Tesla in “Ludicrous Mode”.

This sounded like a worthwhile journey, with exhilarating twists and turns. Carta would definitely not be on cruise control, and I wanted to help steer.

On-Ramp

My on-ramp with Carta started with 2 days in Salt Lake City, onboarding and volunteering with my new hire cohort. We took our seats and strapped ourselves in for the ride.

My first week wrapped up with a “Company Day” walk from our SF office to South Park — the birthplace of Twitter and currently a focal point for many prominent VC firms. Given Carta’s ambitions, it was fitting that our SF office was steps away from the biggest names in Venture Capital.

If Carta outgrew our SF office, we would need to find a new location of equal significance. That would happen just a few months down the road.

Brazil

Carta has amazing team members in Rio de Janeiro spanning Engineering, Support, and Implementations. The team members in Rio are a crucial part of Carta’s operations, and are the most enthusiastic participants in company-wide Hackathons.

As in other parts of South America, the culture in Rio is warm & welcoming. And despite the distance, Rio’s timezone aligns well for collaboration with SF & NYC.

We drive on the same side of the road.

Moving Up in SF

Carta outgrew the SF office in SoMa and moved to the Financial District in June 2019.

The new Carta HQ is across the street from the former SF Curb Exchange, and is literally looking down on a stock exchange built for a prior era. The location was appropriate for a company with long-term aspirations to replace stock markets.

Canada

Through a common investor, Carta was introduced to a talented team that was seeking to be acqui-hired. We moved quickly on the opportunity.

On October 15th we hired 51 former Kik employees to open our first office in Canada.

I traveled to Waterloo five times in four months to support the deal, both pre- and post-close. In that time, I became familiar with the 60 mile (100km) car ride from Toronto Pearson Airport—the most arduous part of the journey.

Global Team

Within 12 months, the team at Carta doubled in size to nearly 1000 employees. It has been a pleasure to work with team members across: SF, Palo Alto, Seattle, Salt Lake City, NYC, New Jersey, Waterloo, and Rio.

Many Office Cultures. One Team. One Dream.

2020 Vision

We began 2020 in Salt Lake City with the Sales & Marketing team. This kick-off coincided with our broader alignment into Business Units, each led by a top-level “trifecta” of Business, Product, and Engineering.

In Q1, our Product & Engineering team continued improving Carta’s flagship product with updates to drafting & issuing securities, enhancements to the exercise ledger, and better control of capitalization table (“Cap Table”) access.

I’m proud of what the team delivered from our roadmap.

World Trade

Carta was born in Silicon Valley, but will grow up in NYC. In February 2020, we moved into the 81st floor of One World Trade Center. Our team enjoyed these views for about a month. By March, the Coronavirus pandemic dictated the need for social distancing.

I planned to visit NYC the week of March 16 to interview candidates, but decided to cancel my trip. That same week, Mayor Bill de Blasio ordered restrictions on restaurants, cafes, bars, and other establishments where citizens normally congregate on NYC streets.

The Coronavirus pandemic is affecting businesses from Wall Street to Main Street. In response, the U.S. Federal Government has passed legislation to assist struggling businesses, including the Coronavirus Aid, Relief, and Economic Security (CARES) Act. It is one of many actions the government is taking to keep stability and liquidity in the financial system.

More information about the CARES Act is available on the Carta blog.

Community

We hosted tech-focused events at our offices in Waterloo, San Francisco, Palo Alto, and Rio. Some of the groups we’ve hosted at Carta: SF Python Meetup, Silicon Valley Python Meetup, Waterloo Data Science & Data Engineering Meetup, WomenHack

Gatherings like these are now on pause because of the Coronavirus pandemic, but I know these events will resume in time (when it’s safe to meet in-person).

My Next Chapter

Due to the Coronavirus-induced downturn, Carta is separating with 161 of its team members. I am among them.

Last year, Andrew Parker announced he was leaving Spark Capital in his blog “Next Chapter”. When I chatted with him, Andrew said he planned to keep a wide aperture for identifying his next endeavor. I intend to do the same.

Carta was my first exposure to working in Financial Services. I’ve learned about finance, equity, and capital markets. I’ll bring this experience with me — even after Carta has faded from my rearview mirror.

And I’m proud to be on the Cap Table.

Is Housing a Right or a Commodity?

Human Rights and the United Nations

In March 2017, Lailani Farha — the Special Rapporteur on the right to adequate housing — presented to the UN General Assembly a report on the “Financialization of Housing” and its impact to human rights. Farha argued that residential financialization (in the form of mortgage-backed securities) caused housing prices to spike, resulting in a crisis of unaffordability, displacement, and homelessness across the globe.

In that same session, Farha shared her observations of the widening wealth gap in two countries: India and Portugal. Farha noted that in India (a country with 1.3 Billion residents), over 58.6 Million households did not have adequate housing. She also stated the lack of affordable housing in Portugal was exacerbated by that country’s austerity measures in response to the Great Recession.

Farha’s report to the United Nations made these assertions:

1. Financialization undermines democratic governance and community accountability.
2. Financialization of housing exacerbates inequality and social exclusion.
3. Financialization detaches housing from its connection to communities and to the human dignity and security that are at the core of all human rights.

Farha urged governments to “redefine their relationship with private investors and international financial institutions” to provide housing for all their citizens, with the goal of eliminating homelessness by 2030.

“Housing has been financialized: valued as a commodity rather than a human dwelling, it is now a means to secure and accumulate wealth rather than a place to live in dignity, to raise a family and thrive within a community.”

Lailani Farha, UN Human Rights Council (2017)

Property Rights: from Serfdom to Ownership

Real Estate is a legal term used in jurisdictions derived from English common law, including India, England, Wales, Northern Ireland, United States, Canada, Pakistan, Australia, and New Zealand. The history of English Land Law can be traced back from Roman times, to Anglo-Saxon Law, to Feudalism, and ultimately to Modern Land Law.

The evolution of English Land Law mirrored the diminishing political power of the aristocracy. Changes in property rights reflected the ascendency of individuals from serfdom to land tenants (or owners). In the 18th century, the philosopher and economist Adam Smith declared that the “right to property” was an acquired right, in contrast to the natural rights of “liberty and life.” In 1776, Smith published The Wealth of Nations in which he described both the landlord-tenant relationship, and the rent expected from a tenant in exchange for occupying the landlord’s private property.

Today, real estate is the largest ownership class on the planet. In 2015, global real estate had total value of USD $217 Trillion — nearly 60% of all assets. Residential real estate accounted for USD $163 Trillion, or 75% of this total. Land ownership is a lynchpin of capitalism and is absolutely a source of wealth.

“As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce.”

Adam Smith, The Wealth of Nations (1776)

Financialization, Liquidity, and Regulation

Adam Smith couldn’t have imagined the financial instruments we have today which include Collateralized Mortgage Obligations (CMOs) and Collateralized Debt Obligations (CDOs). These investment vehicles allow portfolios of mortgages to be bundled together and sold to investors in the form of bonds or other financial instruments on the secondary bond markets.

CMOs are mortgage-backed securities with pass-through cash flow organized into tranches (“AAA”, “AA”, etc.) by maturity and prepayment risk. CDOs are backed by fixed-income assets and divide their cash flow in tranches, based on maturity and risk of default.

The securitization of mortgages promotes liquidity. Most lenders are in the loan origination business, and unless they can resell mortgages through CMOs (or CDOs), they will eventually run out of capital until their loans are repaid over time. If lenders resell their mortgages, they recover their working capital quickly and can lend it out again.

But financialization only works if the risk of underlying obligations is properly assessed, and “AAA”-rated securities are actually high-quality investments. During the Financial Crisis of 2007–2008, not enough scrutiny was placed on the subprime mortgage market in the United States. This led to upheaval in the banking sector with the bankruptcy of Lehman Brothers, and the acquisitions of Bear Stearns and Merrill Lynch (by JPMorgan Chase and Bank of America, respectively). These failures started a chain of events including a 770-point drop in the Dow Jones Industrial Average (its biggest single-day decline), the Federal takeover of Fannie Mae and Freddie Mac, and the government bailout of the Big Three U.S. automakers.

In the aftermath of the Financial Crisis, the United States enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010. Dodd-Frank reorganized the financial regulatory system, assigned new responsibilities to the Federal Deposit Insurance Corporation (FDIC), and created the Consumer Financial Protection Bureau (CFPB). Also codified in Dodd-Frank are protections against systemic failure of the international financial system, so called macroprudential regulations.

“[February 1997 to October 2006] was a period of intense speculative enthusiasm — for houses and for financial instruments based on mortgages as investments — and it was also a time of great regulatory complacency… That boom ended disastrously.”

Robert Shiller, Yale University (2018)

Government and the Welfare of Its Citizens

The financialization of homes should not be summarily condemned. Capital Markets have a positive impact in global property development. Mortgage securitization promotes liquidity in lending, which results in private sector improvements to real estate markets.

However, a purely market-driven approach to real estate will not provide housing to all citizens. The 2017 report by the UN Human Rights Council describes some outcomes of unconstrained housing markets:

• Housing removed for speculation: “A significant portion of investor-owned homes are simply left empty.”
• In Australia: “average-income single female workers can afford to live in only one suburb of Melbourne and cannot afford to live anywhere in Sydney.”
• In Manhattan: The High Line “attracted wealthy investors to a mixed income neighbourhood, radically transforming it with luxury housing units costing in the multimillions, and displacing longer term residents.”
• In Vancouver: new public transport facilities in Burnaby, “led to the development of expensive condominium towers” and displaced longtime residents.

The most troubling result of unchecked real estate markets: increasing wealth inequality. Rich households that own property in prime urban locations will become richer. Lower-income households will spend an outsized portion of their paychecks on rent, and become poorer. If these conditions endure, the population will ultimately become polarized into a wealthy aristocracy and a struggling lower class. In the limit, society will devolve back to resemble the Feudalism which prevailed in the Middle Ages.

Capitalist societies thrive when there is a vibrant middle-class. Governments can allow wealth generation to occur, but should also enact regulations to provide affordable shelter for those at the lower end of the economic spectrum.

“Most of the crimes which disturb the internal peace of society are produced by the restraints which the necessary, but unequal, laws of property have imposed on the appetites of mankind, by confining to a few the possession of those objects that are coveted by many.”

Edward Gibbon, The History of the Decline and Fall of the Roman Empire (1776)

Holding Nations Accountable

In March 2019, Lailani Farha followed-up her 2017 report with letters to six nations expressing concern about policies which “undermine the enjoyment of housing as a human right.” These letters were a plea to regulate investment in residential real estate in support of adequate housing:

• Letter to the Czech Republic
• Letter to Denmark
• Letter to Ireland
• Letter to Spain
• Letter to Sweden
• Letter to the United States of America

Examples of government policies to ensure inclusive housing, from Farha’s 2017 report:

• British Columbia, Canada: “introduced a 15% foreign homeowner tax.”
• Vancouver, BC: “1% tax to both foreign and domestic investors, on vacant homes.”
• London: “builders will be required to ensure that 35% of new homes that are built are genuinely affordable.”

“Let us be clear at the outset that the liberty of individuals to carry on their business should not be abrogated unless the larger interests of the many are concerned. It is the purpose of government to see that not only the legitimate interests of the few are protected but that the welfare and rights of the many are conserved.”

Franklin D. Roosevelt, Looking Forward (1933)

To be cultural, to have a culture, is to inhabit a place sufficiently intensive to cultivate it — to be responsible for it, to respond to it, to attend to it caringly. — Edward S. Casey

Agriculture — the science of cultivating plants and livestock — was a key milestone in the development of civilization. Early humans were hunter-gatherers: in order to eat, they followed herds (for hunting) and sought edible plants (foraging). Around 10,000 years ago, humans began to domesticate plants and animals as a way to make food supply more accessible and predictable. As a result, humans evolved from nomadic hunter-gatherers into clans and tribes that settled into fixed locations. These settlements developed into the towns and cities that formed the basis of modern-day society.

Likewise, the intentional development of company culture can evolve a burgeoning startup into a scalable, enduring business. Much has been written about company culture and its importance in growing an organization. But what exactly is Culture? Culture is the set of customs, norms, and behaviors of the group; it’s how the team members interact and collaborate to achieve their common goals.

It can be tempting to think that Culture forms organically on its own — that as you scale a team, optimal behaviors will rise to the surface in Darwinian fashion. Nothing could be further from the truth. The most productive and optimal culture doesn’t emerge organically — it must be thoughtfully considered and planned. Culture should be intentional.

By establishing cultural norms and behaviors, a company defines its criteria for hiring, developing, and maintaining alignment among its team members.

Terroir

Viticulture — the cultivating and harvesting of grapes — dates back nearly 7,000 years. Viticulture is intricately tied to winemaking (vinification), and has been an integral part of human history since the end of the Neolithic period. Evidence of wine produced from grapes has been found in China (7000 BC), Georgia (6000 BC), Iran (5000 BC), Greece (4500 BC), and Sicily (4000 BC). Successful cultivation of grape vines is determined primarily by terroir — the climate, soil, and slope of the vineyard; this is why the best vineyards (and winemakers) are clustered in specific regions across the globe.

The success of a vineyard depends on the conditions of its terroir. The climate should provide 1500 hours of sunshine during the growing season and 27 inches of rainfall throughout the year to produce grapes suitable for winemaking. Soil appropriate for vineyards is slightly rocky or sandy, has pH just above 7, has good drainage, and is moderately rich in nutrients. The slope of the land determines how evenly and intensely sunlight is distributed onto the plant canopy; vines planted on slopes benefit from more direct sunlight and are less prone to frost.

Earlier this year, I decided to join Carta* for its unique business terroir:

• the market opportunity (a big piece of the financial services industry)
• the mission (to create more owners)
• the momentum (to propel into new market segments)

These are crucial factors for cultivating a company and making an imprint on the business landscape.

Climate

Among the aspects of terroir, climate is the most important factor in determining the inherent quality of cultivated grapes.The majority of the world’s wine-producing regions are found between the temperate latitudes of 30° and 50° in each hemisphere.

A viticulturist closely monitors the effects of temperature, rainfall, and sunshine on a vineyard. Similarly, company leaders need to understand the levels of ownership, collaboration, and engagement of their team members. Gauging the climate of an organization is crucial for identifying obstacles and maintaining a feedback loop from the team. Taking the pulse of the organization can be accomplished through one-on-one conversations and formal employee surveys at regular intervals.

During my first 30 days at Carta, I began to get a sense of the culture that would help the organization achieve its goals. Within my first 90 days at the company, I had spoken with over two dozen Directors and individual contributors to get a pulse of the Engineering team. From these conversations, I learned a lot about the Engineering organization:

• Team members joined for our tech stack and our company size.
• Employees stay at Carta because of our team and learning opportunities.
• We are doing well at improving our code and growing our company.
• We can do better at hiring and communicating across the growing team.

In May, I shared these findings with the entire R&D organization. One month later, we provided the results of a more formal Employee Survey across the entire company. Our employees give the company high marks for each of the following:

• Alignment & Involvement (88%): I know how my work contributes to the goals of Carta.
• Company Confidence (87%): Carta is in a position to succeed over the next 3 years.
• Engagement (87%): I am proud to work for Carta.
• Management (86%): My manager genuinely cares about my well-being.

These results indicate that the climate is right for sustained growth; conditions exist to grow a thriving organization.

Planting

Terroir alone is not sufficient for a successful vineyard. It’s crucial to plant varietals that are suitable for the terroir. There are two principal species in the grape family: one native to Europe and another native to North America. The European grape (Vitis vinifera) is characterized by its tight skins and high heat requirement for ripening. North American grapes (Vitis labrusca) have skins that slip easily from the fruit pulp and require less heat to ripen. Each of these grape species has multiple sub-species with their own flavor, color, texture, and size. Grapevines are sturdy plants that can survive 50 to 100 years. Carefully selecting and planting grape varietals in their ideal terroir can spawn a vineyard that spans generations. Château de Goulaine in the Loire Valley has been making wine for over 1,000 years; it is believed to be the oldest known wine business still in existence.

Having both a strong business model and a favorable market position are necessary but not sufficient to build a generational company. It’s important to hire the right team for each stage of the organization, seeding the company with employees to help it grow. The needs of any company — especially a fast-growing startup — change over time:

• Team members appropriate for the founding stage of a company are generalists — they can kickstart a company from early idea to its first product. These employees will embrace the ambiguity of a company’s earliest days to take it “from zero to one.” This is the most tenuous stage of the company. Most early-stage startups die on the vine, but the lucky ones begin to take root.
• As a company achieves product-market fit, it gains customers and grows into a mid-stage startup. The burgeoning company will need to hire specialist roles that didn’t previously exist. The ambiguity of the early days begins to subside. Teams grow to the point where full-time managers are necessary; some managers will be promoted from within, while others will be hired into the organization. The company shows early signs of flourishing, and its branches start to bear fruit.
• The most resilient companies grow to become late-stage startups. Companies at this stage have a base of existing customers that provide significant recurring revenue. It becomes apparent the organization will be self-sustaining for many years. Growth of the organization will be stunted unless hiring starts to accelerate. New branches of the organization begin to form.

As companies take root and grow, employees are hired to provide fresh perspective and industry experience. Planting new employees into the terroir of a successful company results in a complex blend of new and vintage ideas.

Training

Vine training is the act of building a support structure for grape vines, so the plants grow vertically and have ample air circulation. Training is also used for canopy management: encouraging foliage expanse while preventing excessive shading of the grapes.

Grapes are one of the world’s oldest cultivated crops, and have been vine trained since the times of Ancient Rome. In the 1st century AD, Roman writer Pliny the Elder gave advice to vineyard owners about what type of vine trainings worked best for certain vineyards. For most of history, regional traditions dictated what type of vine training was used in a given area. But from the 1960s, New World wine regions started developing their wine industries, and new vine training systems were developed.

Growers must consider the climate conditions of the vineyard when choosing a vine training system. The amount of sunlight, humidity and wind will dictate which training system is best for a given terroir. Vine training ensures the long-term health of a vineyard, and optimizes the growth of its fruit.

Company leaders need to ensure the long-term health of their organization while optimizing the growth of their team members. A well-defined career ladder provides a lattice structure for teams, guiding employees in their professional growth and identifying opportunities for long-term development.

At Carta, we’re updating our Career Level Definitions for all roles within R&D. We revisited our career ladders and revised them to use a common rubric across disciplines. Our version of “vine training” for our R&D team is a career ladder expressed in terms of the following themes:

Think of a career ladder as a “trellis” — as team members climb it, they grow within the organization, which in-turn strengthens branches across the company.

Harvesting

Harvesting is one of the most crucial steps in the wine-making process. Timing of the harvest is determined by the ripeness of the grapes — as measured by sugar, acid, and tannin levels. Tasting is the only way to measure tannin levels, which requires experience and skill. Winemakers decide when to harvest the grapes, depending on the style of wine they intend to produce. Harvesting can be done either mechanically or by hand. Premier wineries hand-pick their fruit, which results in gentler handling of the crop and the selection of only healthy bunches of grapes.

Harvesting the fruits of your labor — whether you’re tending a vineyard or building a company — takes time. The prerequisites for success are:

• choosing a favorable terroir
• understanding the climate of your domain
• planting the appropriate varietals
• creating a trellis to train and grow your crop

After planting a vineyard, it will take time before it bears strong fruit. When fruit begin to appear, you should test them for readiness: select samples from different areas of the vineyard and survey them. Once your vines yield high-quality output, be ready to harvest.

You might transform that vintage into something that spans generations.

* Carta is a corporation formed to track, value, and transact every asset on Earth. The mission of Carta is to Create More Owners, by moving people from the debt stack (payroll) onto the ownership stack (equity).

If Carta sounds like the kind of company you’d like to join, check out our job postings. We hire a crop of new employees every two weeks — help us grow our Culture!

I joined Carta in February, and it’s been a whirlwind! But my experience with Carta began even before my first day on the job.

While waiting for my first day, I was pleasantly surprised by the new hire welcome package that was shipped to my home. After opening the package, I knew my decision to join Carta was the right one. I was already familiar with the included reading material:

• Radical Candor by Kim Scott
• Zero to One by Peter Thiel
• The Lean Startup by Eric Ries
• How to Win Friends & Influence People by Dale Carnegie

I already have these books in my library, but I still appreciated receiving them. This reading selection provides some insight to the values of the company.

I’m based in San Francisco, but my first two days with the company started in our Salt Lake City office. I was part of a new tradition at Carta: all new hires now congregate in Salt Lake City for employee Launch. Our on-boarding process evolved from the Carta 101 class that our CEO taught when the company was much smaller. At the end of Launch, my new hire cohort put our values into action: helping a local nonprofit through volunteering.

Within my first week, I experienced two other Carta traditions:

• a weekly Show and Tell meeting for cross-department announcements
• a monthly Company Day update from our CEO and time for employees in each office to bond with one another.

We keep a regular cadence for these rituals to foster communication and connectedness across the team. My first week in the San Francisco office ended with a Company Day walk to nearby South Park, where I got to know some of my new colleagues.

I also coordinated with my counterpart (VP of Product) to work one day from our other SF Bay Area office. Our Palo Alto location has allowed us to attract talent from other Silicon Valley tech companies. In fact, Carta started not too far away from our Palo Alto office — which appears in the opening scene of the Culture at Carta video.

I’ve already experienced my first offsite with the R&D Leadership team. We’re a newly formed team, including recent additions like myself. The offsite was an opportunity for us to review progress from the prior quarter, to propose goals for next quarter, and to discuss what we do well (and, not so well). I was the scribe for the all-day offsite and captured our wide-ranging discussion. I published 27 pages of conversation notes, which we shared with the broader team in the spirit of transparency.

I also spent one week working from our NYC office. As a FinTech company, it’s fitting for us to have a corporate presence in Manhattan. While the West Coast is traditionally strong in technology, the East Coast is the undisputed center-of-gravity for finance. Carta has hired key talent from financial companies in both New York and New Jersey. We’ve outgrown our SoHo location and are already looking for a larger NYC space.

Carta is growing fast across all of our locations. We’ve run out of space in San Francisco, and will soon be moving to a larger SF office. We’re growing so fast that we Launch a group of new employees every two weeks. Our most recent new hire cohort had a record 23 new employees!

I’ve been incredibly impressed by the candor and transparency of our leadership team, which was apparent at our most recent Company Day. Our CEO acknowledged the challenge of maintaining our culture as we scale. When asked to summarize our company culture in one sentence, his response was this:

We are Helpful, Transparent, and Fair. —Henry Ward, CEO

If Carta sounds like the kind of company you’d like to join, check out our job postings. Maybe you can be part of an upcoming Launch and help us continue to scale.