Gut Check

“ . . . the harder the conflict, the more glorious the triumph. What we obtain too cheap, we esteem too lightly . . . ”

• Thomas Paine

The last 18 months have been by far our most challenging period.

During the second half of 2016, some of the early risks we took in order to quickly bring our system online, tripped us up. We missed out on the performance of our system for a period of almost six months. There were times we had to overcome our own doubts about whether we would be able to surmount all the challenges we encountered. There were fellows that had to pickup load from other fellows who had their full bandwidth committed to the re-architecture.

“Had we not brought our strategy online as quickly as we did, but had instead taken more time to further refine . . . ”

. . . we may very well have exhausted our available capital before we released the first iteration. We would have risked survival, potentially rendering our more well developed strategy and system to something akin to a beautiful painting on a sunken ship. It is sometimes necessary to take calculated risks in order to move forward. We risked having outages in our system in order to be able to utilize the system earlier. Those outages, while perhaps a negative impact to our egos, did not put anyone's safety at risk, nor did it add any risk to our capital. To preserve our capital, we simply moved to cash for the duration of the outage and upgrades. Moving forward despite the risks, resulted in nearly 60% gross returns in the first twelve months. Those returns covered expenses and enabled the investments in more robust systems and architecture, to overcome the challenges, and exercise our strategy on a more rigorous and reliable cadence.

Once back up and running, 2017 started off well and it looked like we had picked up right where we left off. By the end of Q3, we were on pace to turn in another year of gross returns between 50-60%. Then, we took a beating in Q4. The result? An overall gross return of 32.63% for the year. When expectations are 60%, and we were on pace to deliver, 32.63% feels like someone went into our wallet and stole it. No one stole it. We own it, 100%. The antithesis of “luck is the residue of great design” is that bad luck is the residue of bad design. We missed some things. We could have designed even better. Take some time to reflect and learn, and let us continue to emerge from challenges a more knowledgeable, stronger, more capable organization. Do not fret too much. The numbers still tell the tale of a lot of good luck—a lot of great design. 32.63% is still a damn good number. The pain comes from knowing we can do better. You know it. I know it. Let's continue to improve and make more of our own luck turn out on the good side.

“Is this not just an internal matter? Do we really want to share this with the world?”

I am not ashamed of what happened, nor should any fellow be. To the contrary, I am proud of the risk we took, the results we achieved, and the way we responded to the challenges. I know we will continue to reflect and learn from what happened, continuously improve our strategy and our decision making, and continue to take calculated risks where prudent. Surviving challenges emboldens the spirit and gives us confidence we will conquer future challenges, continue to improve our performance, and continue to grow.

Thanks again to every fellow for all the extra time, effort, ideas, and for helping each other both with workload and reassuring each other during tough times. I could not be more proud of what we have achieved so far and I continue to be in awe of what I see as our potential. Let's crush it in 2018!