Tag Archives: startups

Why return to office is actually good for you

In the last three years there has been a torrent of people telling us how life-changing work from home has been and there is no turning back. A lot of these conversations start by someone claiming that they saved 3-4 hours a day on commute, and are actually 10 times more productive at home while cuddling with pets and having tea with the wife, all at the same time.

Let’s break down why it’s an exception or a temporary arbitrage at best, and a death spell to all of these jobs at worst, and why these myopic people may need to actually embrace some of the RTO even if it ends up negatively affecting their personal idyllic bubble.

We will set aside such trivial facts that 1. not everyone is good at WFH (or likes it), 2. not every manager/org is good at managing WFH, and 3. not every job or project type is suitable for WFH. Let’s just wave a magic wand and say all these and lack of socializing/fighting for promotions/brainstorming in person are non-issues, and work from home is extremely efficient for all parties involved.

Then we run into an immediate problem: your cozy WFH job can be done not from your home, but from a home in Ahmedabad.

Your WFH job could even possibly be done by an English-native expat beach-bumming it in some tropical paradise like Koh Phangan for like a $1000/month.

Why not? There are plenty of engineering (in my case) graduates in Southeast Asia and anywhere else that’s 10x cheaper than the US. We’ve had plenty of precedents where manufacturing jobs were moved overseas, and during COVID progressive-looking tech companies claimed it’s only fair to pay the same salary anywhere in the US.

Well guess what? That Reddit move hurts everyone who lives in the high cost of living (HCOL) areas, because now they get the same salary as people working from Kentucky but have to spend a ton more on basic necessities.

You could say, screw the HCOL people, they are spoiled anyway, who cares, let them migrate or otherwise fizzle away, the future is everyone WFH from Kentucky and there is no turning back. But why Kentucky and not Bangladesh, Thailand or Guadalajara? If WFH was so efficient, why should the company pay you even a Kentucky salary, when they can pay you a Pakistan salary? The typical hurdles like remoteness, time zones, language barrier and lower-quality education are slowly being removed, with education improving, current remote and asynchronous tools getting better (and Latam being in the same time zone anyway), countries churning out more and more hundreds of thousands of Computer Science (and other engineering) grads.

The fact that for the last 20 years despite having all the modern work tools we’ve only been moderately successful at outsourcing – and many companies are still willing to shell out top bucks for salaries in the US cities – indicates that WFH is probably not going to take over in a massive way. Something still doesn’t fully click with remote, and if you care about your US salary, that’s probably for the better.

Does #SharingEconomy work? Can you make money renting out cars on Turo?

TLDR: Of course not : ) To grow your income, it’s better to invest in your individual strengths (e.g., improving coding skills) and spend less time playing other peoples’ games.

My overall take on sharing services (Airbnb – can never figure out how to cap this word! Uber, Turo, etc): they are temporary exploits of outdated technology and regulation, and people who rely on these services for income too much will not be happy in the long term. There are lots of posts out there tearing up both Airbnb and Uber. I personally don’t believe they are doomed, just do not consider either one as a stable long-term income option. But today let’s take a look at another poster child of the sharing wave of the future: Turo, formerly known as Relay Rides.

Casually browsing the Interwebs you might notice some numbers getting thrown around that may give you an impression that it’s an easy way to get an additional income stream. But after a quick round of research things become significantly less rosy. Let’s do some quick math – first, the fun part:


Let’s say we start on the pragmatic side and offer up a boring but practical car for $40/day. After Turo’s cut of 15% (actually 25% with extra protection features, but let’s say we are too cheap) and a pretty optimistic utilization rate of 70% (which means pretty much a non-stop stream of customers to be serviced), we settle at a healthy $714 of revenue per month.


For simplicity, let’s consider a new or a lightly used leased car. It is actually a violation of your lease contract to rent it out on Turo, but technically doable and does not affect our calculations too much if we chose to buy instead.

If we take a pretty average lease of a Corolla or an Elantra, it will set us back by about $1500 in down payment+tax+registration plus a monthly payment of about $100, let’s say for 36 months. Let’s also assume that we magically get enough miles to go with it (basis for this assumption: even though you may need up to 3k miles/month for heavy utilization, you can find takeover leases that may actually fit that need for a short period of time, or again, price out a purchase, which will not be very different). That will give us $141.67/mo if we spread out all those expenses over the lease period.

Next, operational expenses. A typical heavy utilization rental takes about three days. This means we rent out 7 times a month. If we decide to do an express wash every time, and a more thorough wash once a month, that’s $65/month in cleaning. Let’s also set aside about $70 a month for arranging the pickups and resolving any logistical problems (e.g., if someone runs late, or an occasional TaskRabbit for a delivery if you are out of town). Let’s also set aside $100/month for repairs – even if there is a warranty, you can and will get into out-of-pocket situations, and about a grand a year does not seem unreasonable. Finally, we need to add the car to the personal insurance to be able to drive it between the rentals, e.g. to the shop. Let’s throw in about $20/mo for some kind of  a super-minimalistic plan (which technically we could skip, but that would be uncool).

All in all this gives us $396.67 in monthly expenses.

Bottom Line

These numbers leave us with about $317.33 in taxable income per car. Which, for a purely theoretical exercise, falls pretty close to what this guy is proudly reporting from the field, considering he got his Chevy Cruze almost for free.

To put things in perspective, if you try to scale and operate, say 5 cars like that, you will be making slightly less than a burger flipper at McDonald’s. For that money, you will have to deal with an average of about 2 customers every day (that includes cleaning the car) and any associated overhead such as people flaking, running late, scratching or staining the car, screwing you over on gas, disputing mileage or just randomly giving you a crappy review. If we tighten the numbers to, say, 90% utilization or even completely remove the cost of the car itself! or find perhaps a higher-end vehicle combination that might yield closer to $1000 in profit per car (though I doubt that number can be achieved in a stable long-term way), that’s still not really the business I would like to be in.

To consider scaling further and doing this full time, you would have to deal with 15-20 cars which gives us 7 pickups+cleanings every day, including the weekends. At this point, a private parking lot near a major airport and a carwash would come in handy, too.

The LendingClub debacle: what does it mean from a lender’s perspective

Short-term: it means nothing. The sky isn’t falling and my adjusted return rate over 3 years is still 13.77%. And MMM et al are still collecting a sweet chunk of referral change for sending the general interwebs population in that direction.

Long-term: will see. Short of catastrophic operational disruption (which I don’t think is the case here), I expect things to move along the same way in this established business (ok, so the startup tag on this post looks pretty ridiculous by now, of course). The threat I’m still concerned about is some economic event which may cause people to default much more. But what will take the biggest hit in that case – equities, funds, real estate or peer-to-peer lending – is anyone’s guess.

Stock #options exercise window – awesome!

A couple of years back, Sam Altman wrote (paraphrase) that the 90-day stock option exercise window is complete bullshit which adds to the nonsensical ways startup employees get screwed over  – as if building a successful company wasn’t hard enough.

I’m really glad to see the sentiment is getting heard, and yes, the startup employers need to be  seriously reminded of this – here on the webs, as well as during the employment and especially the offer negotiation. And companies that adopt sane options policies need to be praised. Zach Holman started a list of these employee-friendly outfits that I sure hope will grow over time. As of today, it is:

  • Amplitude
  • Asana
  • Clef
  • Coinbase
  • Expensify
  • GitLab
  • Persista
  • Pinterest
  • Quora

P.S. Bonus points – when stock options suck and there is no way around that, here is a classic little post (not from me) on how to stop worrying and in 5 minutes maximize the deal you get for years to come.

How much did employees make on that Square IPO?

If you are a recent midlevel Square employee, you are likely to have gotten 10k-25k RSU’s vested over 2 years. That’s about $130k-$325k pre-tax over 2 years, assuming today’s stock price. (the throwaway-authored reddit post could be completely made-up, but these numbers are not far from what I’ve seen at Uber and 3 other startups)

Folks who joined before Square introduced RSU’s (which, looks like, were issued for at least the last 2 years) likely had to pay for their stock options, and it doesn’t look pretty:

21 million options have been awarded at a value above the $13.07 closing price of Square’s stock today

“Awarded at a value above the price today” means “currently worth less than toilet paper”. Of course, those 21 mil options could have been bonuses on top of RSU’s, which would make this a bit more palatable.

If you got in a bit earlier with a strike price of $1 and an options grant of 25k, then we’re looking at $300k before tax. I have no idea what a typical options grant was in those days, again just going by what I’ve seen at 4 other startups. If you got a royal grant of 100k, then it’s closer to real money – $1.2 million before tax, but clearly that has quickly dried up in value as the strike price went up and over the current ~$13 stock price, leaving the people who joined at the later stages of the stock options program with not much.

Also worth noting is that a decent engineer with a $150k/year in salary at Square (according to Glassdoor, which unfortunately does not offer a time filter on those salaries, but let’s assume for a moment that it’s a relatively recent number) – the same engineer could probably pull $200k (or maybe even $250k) at the big 4, all things considered. That’s at least $100k extra for the 2 year period. That does not make one filthy rich, but apparently neither did the Square IPO so far.

I do believe however that it’s a viable business, and the stock price may (or may not) go up during the lock-up period significantly.