Best Day Worst Day

Six Days in the Motor City

*This post is inspired by my buddy Mark, who recommended I come back with a post contrasting California and Detroit life*

I had lasted six days in Detroit. Six days without having to fill up my gas tank. But it was finally time, it couldn’t last forever. I was running out of gas and I needed to fill up.

In that span, I had driven 390 miles, traveled to Canada for the first time, learned what a “Michigan Left” was, cheered for the hometown Tigers at Comerica Park, and learned how to say “I am honored to meet you” in Vietnamese (yes, I was meeting a girl’s father for the first time).

And in six days, I learned a lot about how it is like to be a Detroit native.

Driving

Pretty sure I broke a dozen traffic rules during my stay in Detroit. In Michigan, there is this thing called the “Michigan Left”. I have never seen it anywhere before. The lane to turn left basically turns 90 degrees…. BEFORE you actually turn left. It doesn’t seem like a bad thing, it is just… different.

There’s also lots of traffic lights that flash yellow continuously or flash red continuously. I mean I have seen it in California before… but in Detroit, it is pretty common.

On the road, there are a lot of American cars… although considering it to be Detroit, I did expect a 80-20 ratio of American to foreign cars. In actuality, it was probably more of a 65-35 ratio. In California, that ratio would probably be flip flopped. There are many Priuses in California.

On the freeway, people in Michigan apparently are unaware of what a carpool lane is as it does not exist around Detroit. For those who don’t know, a carpool lane is a lane that you can only drive in if you have at least two or three people in the car. It is very common in California. As a result of this lack of Carpool Lanes in Michigan, there are lots of exits that actually exit from the left side rather than just from the right side.

Food

Jimmy John’s is pretty popular in Detroit, as are the usual culprits (Mickey D’s, Burger King, Wendy’s, KFC, Taco Bell, Pizza Hut).  There’s also a Culver’s fast food as well (milkshakes and butter burgers). As typical of states outside of California, In N Out does not exist.

It is also important to note that Asian restaurants aren’t that great in Detroit. I know I only had a small sample size, but I think it is hard to beat Asian restaurants in the San Francisco area, just because of the big Asian Population in the Bay Area.

That said, Detroit does have good food. During my stay I went to three restaurants that I absolutely loved. “What Crepe?” probably had the best salmon crepe I have ever had. The Ahi at Kona Grill was superb. And the food and view at Coach Insignia was spectacular.

People

People in Detroit often tell me that they don’t like Detroit that much. I think they only tell me that because I am from California, for when I look at their smiles and their cheerfulness, I get the sense that they love Detroit.

People in Detroit don’t really pay attention to technology news that much. In California, people are unique/weird in that we could talk hours on end about Google, Start-Ups, Dropbox, etc. Not sure people have that same passion about tech in Detroit.  If you are a kid in the Bay Area, you probably got your own computer by age 12. Some people in Detroit still don’t have their own computer after graduating from college.

Luckily, there’s still many topics to bond with people about and the people in Detroit are really friendly.  Made quite a few friends in Detroit while I was there. Even random people I met at the Tigers game bonded and took pictures with me. Really made me feel at home at Detroit.

Also shout outs to Linda, Brian, Alina, Candice, Daryl and especially Kim for making me feel really welcomed.

Other Thoughts

-Movies Theaters have “luxury” seats?  They do in Detroit. It is basically a nicer seat and it is assigned to you. Kim and I can both attest… they’re pretty bouncy and fun.

-Weather was generally in the 50s while I was there. Kind of typical of a California day… in early March. So not that bad. I kind of expected worse.

-I learned never to stay in 2.5 star and below hotels again… got about 8 bug bites during my stay at Red Roof Inn. Hampton Inn and the Marriott = 10x better.  It is worth the extra money… and it is not even that much more.

-Two Buck Chuck (the wine at Trader Joe’s) is $2.99 in Michigan. It is only $1.99 in California (to my knowledge). I guess I am just glad that Trader Joe’s exists in Michigan. I love that place.

-Windsor, Ontario is really close to Detroit. It is literally maybe 1-2 miles away. Canadian gambling is really weird… I ended up winning $73 Canadian Dollars, but even the Sports Book Cashier person didn’t even know how the odds and payout work. Oh yeah, US Border people are jackasses.

-Went to a piano bar in… downtown Royal Oak I think? It was pretty cool, definitely a place I would go to again. Witnessed a fight… security is pretty rough with drunk people. They were putting a chokehold on the guy.. Caused him to pass out for about 5-10 seconds.  That was kind of scary.. Not sure if that is legal.

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As I started to pull out the gas nozzle to insert into the car, I discovered there was one last thing I was going to have to learn in Michigan: how to pump gas into the car.

Apparently, there’s no cap that I need to remove from the gas tank and you can’t just squeeze the nozzle for it to start. So being entirely perplexed, I asked a guy named Wayne that was filling up gas next to me and he told me I had to press the “On” button first.  So quirky.

Fittingly emblematic of the rest of my Detroit trip, the two of us struck up a friendly conversation and we exchanged contact info. 

I left Detroit filled with fond memories, new friendships, and a little more quirky than before.

I am glad to be back in California, back to our technology hub and 70 degree weather. Yet I know I’ll be back in Detroit someday and I’ll be back with a smile. 

Compounding Returns Of Intelligence.

Stephen Cohen

“We tend to massively underestimate the compounding returns of intelligence. As humans, we need to solve big problems. If you graduate Stanford at 22 and Google recruits you, you’ll work a 9-to-5. It’s probably more like an 11-to-3 in terms of hard work. They’ll pay well. It’s relaxing. But what they are actually doing is paying you to accept a much lower intellectual growth rate. When you recognize that intelligence is compounding, the cost of that missing long-term compounding is enormous. They’re not giving you the best opportunity of your life. Then a scary thing can happen: You might realize one day that you’ve lost your competitive edge. You won’t be the best anymore. You won’t be able to fall in love with new stuff. Things are cushy where you are. You get complacent and stall. So, run your prospective engineering hires through that narrative. Then show them the alternative: working at your startup.”

One of the big reasons why I do start-ups. I never want to lose my competitive edge. I never want a cushy job. Please push me to the max. 

Groupon’s Earnings Call: A Deal Too Good to Resist

Later today at 4:30 PM EST, Groupon will be webcasting their first earnings call as a public company. Market expectations are that Groupon will announce Q4 revenue of $473 Million and $.03/share in profit (~$19 Million in profit as Groupon has 637.3 million shares outstanding). 

At $19 Million profit pro rated over 4 quarters, at Groupon’s current valuation of $15.5 Billion (GRPN opened today at $24.19 a share) would give them a P/E ratio of 203. A $473 Million Q4, would give them a revenue multiple of roughly 9.6x revenue. Those are pretty high growth expectations considering…

-Amazon, probably the most comparable public company to Groupon, is trading at only about 1.77x Revenue

-Page Views for Groupalia.com (Groupon in Latin America) dropped from Q3 to Q4. It is one of their biggest markets.

-Groupon sales have typically gone down during holidays such as Thanksgiving & July 4th as less people check their emails

-A sign of Daily Deal fatigue… >170  Daily Deal sites have shut down internationally. LivingSocial posted a $558 Million loss in 2011.

-Their new product offerings have an even lower profit margin than their daily deals. 

-About half of businesses polled would not do business with Groupon again.

-A great show of confidence in their own company… in their $900 Million round in January, $800 Million of it went to pay out executives & investors rather than being reinvested into the company. This when they didn’t exactly have the biggest cash flow.

When Groupon was in the $23 range, Morgan Stanley said that they thought Groupon would beat expectations… but that the stock price was fairly valued to reflect that.

At its current price, shorting Groupon would be a steal. After their earnings report today, I expect Groupon stock to drop like a rock. Take advantage of the market’s irrationality, short the stock. 

My Recommendation: Big Sell Rating on Groupon

Update: Groupon is now hitting $25.50 on the market. That’s a $16 Billion Valuation. Hurry and sell my friends. Sell. 

Midnight Thoughts

Thoughts in my head as I ponder right before sleep takes me adrift:

“Be Passionate - in life, in relationships, in work, in personality”

“The clock is ticking. Live your life, don’t live someone else’s. Rebel.”

“You are young, take a typical stable full-time job. Get experience and then use it to make money.” (Don’t ever think this. Ever.)

“You are young, you have mentalities/ideas that experience can’t buy. This is a once in a lifetime opportunity, do not waste it. Stay hungry, stay foolish. Change the world.”

“Rules are put in place for protection, they are not morally the line between right and wrong. Don’t let rules limit you from your passions or your potential.”

“Never be ashamed of who you are. Embrace it, wear your perceived “flaws” proudly on your chest. It is who you are.”

“Love yourself. Love your family. Love your friends.”