Here we go again, I’m back in the Silicon Valley, building Toshl and trying to make sure managing your personal finances will never be a pain in the ass again. We’ve been here before. With Miha, the co-founder of Toshl we’ve first flown over to the land of tech, venture capital and poor urbanism back in December, establishing contacts and getting to know the startup/investor scene. Part of the Toshl team visited in January, good times. We’ve gotten to know a lot of great people and made big leaps in the development of Toshl, in more ways than one.
After spending a bit more than a month at home we got a call from a well known startup accelerator to come and join them for a 4 month programme. More details on that later, once we officially announce the news. So we lifted our anchors and flew back to San Francisco. We could see the wondering gazes of other airplane passengers, undoubtedly asking themselves what we were doing with anchors on a plane, but we paid no heed to them.
A nice surprise on the way was re-discovering the Munich airport. With it’s logical architecture, clear signs and generally good organisation it is the antithesis of the Charles de Gaulle airport in Paris. Although it must be said that the good functioning of the airport and high probability of actually receiving the luggage at final destination make the experience a tad more boring than the CDG. A really nice feature at the Munich airport is the meditation/prayer room in the airport terminal. Peaceful, well decorated, welcoming to different religions as well as atheists looking for a meditating break… Naturally I took a quick meditation break.
In San Francisco we’re staying at the wonderful Vox.io HQ, which has lately become the focal point of Slovenian startups in the Valley. The plan was that Miha and I go to US first and find an apartment in Mountain View, closer to our accelerator offices. Three more team members were to arrive roughly two weeks later (on the 19th). While we’re still sticking to the timing plan, the hunt for an apartment proved to be less fortunate.
The rent prices are crazy, especially if you’re staying for only 3-4 months. Roughly $3000 + utilities for a 2 bedroom per month, $4000 + utilities for a 3 bedroom in a nice apartment community. Sure, you can get a cheaper deal, but they’re usually more far off and/or in poorer condition. Not to mention they usually require a 3-year credit history or a person with one to sign a co-lease, none of which we have, not being from the US and all. Sometimes the alternative is submitting all the income data for the employer for all the potential tenants and they hire a company to do a background check on you and your “lifestyle”, which you’re expected to agree to. On top of all that you have pay a $35 application fee for each person, for the privilege of them retyping your application and them doing a check on you….
While these flats are mostly furnished with amenities like the washer and the kitchen furniture and appliances, there’s no other furniture or kitchen utensils, which we’d have to buy for 3 months or rent at pretty expensive prices.
Paired with all that is the town of Mountain View. A nice quaint town of about 74 000 people (according to Wikipedia). It’s where the headquarters of Google and many, many other well known tech companies are located (including Toshl ;)). But all that culminates in one single street that one may call “centre”, filled with restaurants, small shops and a few bars. The rest of it is suburban housing wasteland and an occasional corporate HQ. While the town is certainly clean and almost too safe, it’s about as exciting and full of life as a retirement home while Matlock reruns are on TV.
The wild, wild Castro Street.
Lunching with Miha. If you're curious about the food, it's a tuna sashimi and saba (mackerel) in a bento box.
So taking all that into account and being spoiled by the awesome place on Howard Street in San Francisco, where we’re currently staying, we decided to keep put and stay there for the duration of our program in the US. With that come the long commutes by train to Mountain View, which take about an hour and a half from the house to the office. But luckily the time isn’t wasted, as I can read, debate and write during the time on the train. Just like I’m writing this blog post right now. The Caltrain conductors keep us entertained with their occasional semi-comedic station announcements as they live out their unfulfilled dreams of a show-business career.
They just announced the Mountain View station, time to get off the train…
I’m sure you’ve heard a lot, too much even, about the economic crisis and how it affects the European Union. But in the short bursts of news, the larger picture usually remains hidden or misunderstood. I don’t claim to be an expert on the matter, but macroeconomics do intrigue me. They’re an incredibly fun complex system to try to comprehend and affect our lives much more directly than most imagine.
The latest piece of news is that the EU is deciding on another 15 billion Euro bailout of Portugal with extremely dim economic prospects and on the edge of default or quitting the Euro.
Portugal like a big elephant in the criris room
EU officials will hold a fresh round of talks in Lisbon this week to check whether Portugal deserves the next 15 billion Euro tranche of bailout. Experts say the future of the country worries investors even more than Greece.
via: rt.com
As usual, the problem lies in what doesn’t get said. That one of the principal forces behind the decision on the bailout is the Europan economic giant, Germany. Germany has benefited greatly because of the Euro, it’s true that it’s recent economic success has been in large part due to economic reforms and discipline they have pursued in the last 10 years. Kudos to them on that. It’s true, that more of European countries should be able to pursuit such a path with such rationality and efficiency. That does not mean however that only austerity is necessarily the right path in this moment when economies are in need of more stimulus.
While the German reforms and discipline are commendable, they are far from the only reason for their success. The dirty truth is that Germany profited greatly on the back of peripheral EU economies such as Greece and Portugal. How?
Had Germany had it’s own currency, it’s value would have risen on their good economic performance. That would have slowed exports as they would be more expensive elsewhere because of the higher price of German currency. Needless to say Germany is a very export-oriented economy. As Germany has had the Euro which has been held down by the poor performance of the worse performing countries it has kept the price of the Euro, down thus fueling the German economy. At the same time, that has harmed peripheral countries, because the currency was higher than it would have normally been, plus it enabled an overheating of the e.g. construction sector, due to low interest rates, tied to the Euro stability. You can read more about it in Jean Quatremer’s excellent blog Coulisses de Bruxelles (in French).
At the same time, the Germans insist on not issuing Euro-bonds to ensure the stability of the Eurozone and stable cheap credit for embattled countries. It’s true that it would have raised Germany’s cost of borrowing, but it pales in comparison in what they have gained with the Euro-fueled export boom.
Their policy of running around with a water gun trying to put down individual fires as they flame up is thus incredibly short-sighted. To continue with the fireman metaphor, they’re barely putting down small fires on their way to a giant gas tanker. Unsuccessfully.
It boggles my mind that they are so short to mid-term focused and cannot see that solving the Euro crisis with bold actions is in their long-term self-interest.
If we go beyond that, it’s also morally reprehensible in terms of building the European project. Where is the long-sightedness of German politicians in the after-war years. Where is the solidarity? Where is the Konrad Adenauer of modern times?!
Adam Smith, the well known 18th century author of The Wealth of Nations is today thought of as one of the core authors and proponents of free market capitalism. But while he did emphasise the commercial society, he was far from being the one sided zealot such as the current impressions suggest. I invite you to read the article Recovering Adam Smith’s ethical economics and gain a new appreciation for the work of Adam Smith. The topic is deeply connected with my recent article Freedom from freedom, on how the US is ideologically trapped in misinterpreted 18th century ideology.
My friend Ariel visited us in San Francisco and sang praises of the Costco shopping experience. It’s a shopping chain with a specific business model.
First you need to be a member to even shop there, you can’t even enter without a membership card. The basic membership card costs $55/year or $110/year if you want some extra buyback offers. It’s a brilliant way on their part to make you come to their store over and over again. Plus you have to appreciate the idea of paying someone so you can shop there. Brilliant!
The model is built on quality goods discounted a great deal due to large quantities. Sadly that doesn’t mean that it’s only them that have to buy the large quantities, the packaging itself is larger then normal and the consumer is forced to buy packs much larger than they would normally. I guess that works if you have a 7 member family back home and buy in large monthly shopping rounds, but for more casual customers it’s a complete overkill.
For example, you can’t buy a single loaf of bread, 2 are necessary, all cereals are sold in packs at least 3 times the normal ones, you can only buy 6 red peppers in pack, never just one… You get the picture. For someone like me who likes to try a lot of new products without committing to buy a gallon of it, it’s horrible. It also entails a lot of waste of the products that perish because they were necessary to be bought in such large quantities.
Don’t even get me started on the aesthetic appearance of the stores. It’s quite literally a giant grey block of concrete blocks occupying an entire street without any thought at all to architecture and pleasantness to the people who use it. It’s worse in many respects even when compared to the socialist functionalist architecture. Inside is not much better, simply a giant warehouse with people with oversized shopping trolleys bumping into each other.
I’m the type of person who would rather pay 10% more for their products and have a pleasant user experience while shopping. I enjoy exploring new food I haven’t yet tried before and the nervousness and ugliness of places such as Costco insult my sense of aesthetics as well as create a bad experience for me. I’d rather be enjoying my time. The quality of the products may very well be on par, but that does not balance the fact that I’ve had to buy 4kg of it and had a horrible time buying it. I’m staying with Mercator back home and Trader Joe’s and Rainbow Grocery here.
In fact I think that it can be quite handy for large, price sensitive families. But if you don’t consume a small tribe’s worth of food and actually care about user experience, Costco is a horrible choice to make. I consider it one of the worst manifestations of rampant consumerism and precisely where I wouldn’t want the world to be heading.
The glorious entrance. Membership cards are checked at entry. Those gray blocks are used for the entire outside surface of the store. I dare not call it facade.
Welcome to the warehouse.
Ariel and Miha, brave shoppers undertaking the task in high spirits.
A degustation in progress. Coincidentally, "Bolani" is exactly how I'd describe this store.
If that's the chips packaging I'm afraid to think of the nacho cheese gallons.
Me doing some weight lifting with jars of mayonnaise. Certainly healthier than eating it.
I took a walk on the streets of San Francisco yesterday. It was Christmas day. I don’t hold much emotional attachment to the day, let alone religious one and I find the mandatory shopping sprees absurd. It would have been a day like any other had it not emptied the streets of the majority of it’s usual tenants, who were most likely celebrating Christmas at home somewhere in suburbia.
That void was filled with extra waves of homeless and insane people. Walking on Market street, the main avenue of San Francisco going straight through financial district, there seemed to have been more homeless and crazy people than the ones who were not. A lot of them murmuring to themselves, shouting at passers by, asking for money. I must have gotten asked for change at least twenty times on this short stroll. A lot of these people seemed like they simply needed treatment in a mental institution. But nobody made them go, let alone pay for the treatment. They should. Society should.
A society should be judged on how it treats its weakest members. These people on the streets hold a mirror to the American society. If its citizens see the real picture, not the one filled with empty rhetoric of “greatest nation on Earth”, the picture is deeply disturbing. I’m not saying we don’t have homeless people in Slovenia or Europe in general. Of course we do and we should all strive to do better, nut nowhere in my travels in Europe have I seen homeless and ill on the streets on a scale such as here. Mind you, United States are supposed to be one of the wealthiest countries in the world. They rank 7th in GDP per capita, adjusted for purchasing power parity. So the lack of means surely isn’t a problem, the ideology and the lack of will emanating from it are.
One of the core tenants of American ideology is freedom. It’s the buzzword of political campaigns. They export their concept of freedom worldwide, along with a host of other ideological underpinnings. Who could be against it? Freedom is always good and an end it itself, right? It’s not that simple and here’s how the American perception of it goes horribly wrong.
Freedom can be divided into negative and positive freedom. Negative and positive are not value judgments, but simply terms for different types of freedom. Negative freedom means freedom from something. Freedom from oppression, control, the freedom to do what you like, go wherever, speak whatever. It’s more focused on the individual.
Positive freedom however, usually comes from being part of a community, collective and the possibility of self-realisation in that community. It provides us with freedoms that come with a communal life, life in a society. We forfeit some of our negative freedoms in exchange for positive ones by living in a society. We give up our negative freedom in exchange for living in a society being protected by laws and other social norms.
To give a banal example, we could have the negative freedom to kill other people, but as societies can’t function that way, we have made social norms and laws deeming that unacceptable, and for forfeiting that negative freedom we get the positive freedom of being protected by those same norms and laws against us getting killed. Another example could be giving up the freedom of having sex with whoever for the benefits of a family life (nothing personal against polygamous arrangements, simply giving an average societal example :)). For more reading on positive and negative freedom (or liberty) check out the Stanford Encyclopedia of Philosophy and of course, Wikipedia.
How does that relate to the homeless people on the streets of San Francisco? Well there’s always a balance between negative and positive freedoms. Shift towards the extremes of negative freedoms and you get a Hobbesian world of “Homo homini lupus est“, meaning men being wolves to fellow men, a world of constant conflict among egotistic individuals. Shift towards the extremes of positive freedoms and you get a collectivist society where individual freedoms are trampled for the supposed benefits of the collective, sort of an Orwellian 1984 dystopian world.
The problem with American society is that it perceives freedom mostly according to the definition of negative freedom. The individualistic sense is very strong and that precludes the establishment of more community based mechanisms which would generate positive freedoms for its citizens. Positive freedoms emanating from solidarity and even long term self-interest, like guaranteeing people free education and healthcare. Picking up mentally ill people from the streets, curtailing some of their negative freedoms in exchange for the positive freedoms of care and being an active member of society.
On the other hand, American focus on negative freedoms has had some benefits in helping to produce a vibrant and dynamic economy. After all, I am here, raising funding for our enterprise, because there is a vibrant technology and investment ecosystem here. But that ecosystem exists as much as a result of negative freedoms of enterprise free from disruptions, as of the positive freedoms of establishing a legal framework of fair competition and society actively investing in its development (Silicon Valley can trace a lot of its roots to government military research).
My point in all of this is that the United States have missed the balance and lean too much towards the negative freedoms. The result are homeless people on the streets and a host of other issues who would not have to exist on such as scale had some more pragmatic reason been applied. The loss of some negative freedoms could be minimal compared to the positive freedoms gained. American people are being presented a false choice of freedom versus no freedom. Cling to outdated or misunderstood 18th century ideals at your own peril.
