It’s been two years since I started a note blog.

Few people have reached out, mostly Twitter DMs from people trying to start a similar practice.

Traffic is around 1000 clicks per month.

I thought it would be nice to try to more deeply connect with visitors by adding a newsletter signup link. 7 people subscribed.

People that see my notes are impressed with how much I write, but it’s not that much if you consider I do it every day.

All the single-player benefits I talked about before remain two years later—clarity of thought, better recall, improved writing, and so on. I just wish it drove more conversation.

Note blogging is not a friend catcher but it is the raw material for building one—starting a company, writing essays, producing a podcast, or building a community.

The probability of a recession in the near term based on estimates from economists at investment banks.

• Deloitte: 15%
• Morgan Stanley: 30%
• Goldman Sachs: 30%
• JPMorgan Chase: 35%
• Citigroup: 50%
• Deutche Bank: Likely
• Wells Fargo: Likely

(Source Dealbook)

See also:

• How long will a recession last?
• Running a startup during a recession

This guide is for founders starting a fully remote company in the United States.

We’ll cover:

• How to incorporate without an HQ
• Avoiding common pitfalls with addresses and mail
• How to hire remotely
• Setting up payroll in multiple states and countries
• How to stay compliant and avoid penalties
• How to implement security and stay safe
• Running the company asynchronously

Incorporation

Choose a unique-ish company name that is available in every state.

Company names are unique by state (it’s actually much weirder than that: you can have the same name as a company that is a different entity type like an LLC and sometimes if the other company gives you permission). You generally can’t register a company that has the same name as an existing company even if it’s no longer in business and even if it has a different suffix like Inc and Corp.

For fully remote companies it’s even more difficult. Through the course of growing the business you’ll end up operating in many states. If you are operating in many states, chances are you will end up registering as an out-of-state company at some point and guess what? You’ll need a unique company name there too. If it’s not unique you will probably need to register a DBA (doing business as). Multiply that by the number of states and Common Name, Inc. just generated a bunch of work for you forever.

My company Mosey was originally Mosey, Inc. but we changed it to Mosey Works, Inc. for this very reason.

How to check

At a minimum you should check your home incorporation state and where your founders live. Your incorporation state because, well you can’t register the company if it’s not unique, and the state you live because you will probably register there too. California is particularly good at enforcing this.

You can check if your company name is available by searching the Secretary of State’s business directory. Every state has a public registry (except Texas costs $1.00 for some reason?) that you can search to see if your company name is taken.

You don’t need to match the company name to your product name, those are different things and names change. Try not to spend too much time optimizing this.

Use a virtual mail address as your corporate and mailing address

When you incorporate, make a virtual mailing address your company address and mailing address. Delaware is fine with this and so is the IRS. Most states and agencies are as well. Note: it should not be a P.O. box as most agencies and financial institutions will not allow you to use one. A PMB (private mailbox) works fine though.

Don’t use your home address. You’ll get endless spam.

Set up the virtual mail address to an address in the state you are headquartered.

But where is a fully remote company headquartered?

Many institutions don’t understand that there is no physical office for a distributed company. Your headquarters or main office is the place where the CEO lives or where you have the most officers CFO, Secretary, etc.. These people are all named when you incorporated.

Use your virtual address everywhere. Tell your lawyers to use it. Tell your accountants to use it. Don’t use your home address. List it as the address when registering for any accounts. Yes you can change your address, but it’s a lot of work to change everywhere and you won’t want to deal with that later.

Payroll

Where you need to pay payroll taxes

The address you provide to your payroll provider determines which state you are paying taxes in. If you live in CA you pay CA taxes. There’s a ton of nuance here, but don’t overthink it—where you live is where you pay taxes and where appropriate payroll taxes need to be remitted.

The US tax code makes digital nomads unrepresentable. Working anywhere for an extended period of time (months) means there is likely a tax obligation there.

You’ll need to set appropriate expectations with you employees about moving around. Every time they change their address for tax purposes, they are also going to have to file a tax return in that state.

Workers compensation insurance

Remote locations will use the employees home address. This is unavoidable but it’s not public as it is with the incorporation information. You will update your policy every time you have an employee in a new state.

In my experience, the whole policy gets replaced each time you add a state which can be pain in the butt. You will get a big ol' packet in the mail each time.

Registration and Foreign Qualification

You should probably register with the SoS where the business is headquartered. This is a business decision, but just know that California will come after you fairly quickly.

Whenever you register with the Secretary of State it typically comes with an annual report and some manner of taxes (a franchise tax, corporate income tax, excise tax, etc.). This is a meaningful amount of additional work and experts are split on whether you need to do this for remote hires at all.

This is also where your address discipline is important. Information about each officer and owner will become public and you can typically search for it online. To protect privacy, use the business address and business phone number for each person. (If you already have a board of directors they will be listed too so keep privacy in mind).

HR and Labor Laws

Where you have employees is where you have to follow the state’s employment laws (in addition to federal laws). The rules change as you company changes and as legislation changes. Then there’s emergency orders and even retroactive requirements.

Mandatory notices and posters

This sounds silly for a technology company that is fully remote—where do I put the break room posters if everyone works at home? Well, it’s still up to you and if something happens (it’s very easy for someone to complain to the Department of Labor) those seemingly unimportant notices are what is going to get you into trouble. One way to look at it is it doesn’t matter til it matters, but a better way is to treat this as part of being employee friendly and helping them understand their rights.

Taxes

[More here soon]

Required benefits

[More here soon]

Hiring the team

Timezones

Something I see startups do wrong is hiring in timezones that don’t allow for enough overlap time

A good rule of thumb to start with is that everyone should work from a timezone within three hours of each other. Any more than that and scheduling becomes a meaningful barrier to collaboration.

As a simple example, consider this scenario. You need to schedule an important meeting. You don’t want to annoy the attendees by scheduling over someone’s lunch or making them stay up late or wake up early. Everyone works a standard 9am to 5pm.

Is having friction around meetings a bad thing? Ideally no, practically yes. Put another way, where do you want to innovate—collaborating as a distributed team in many timezones or on your product?

Expectations for working hours and working environment

Greater flexibility in work location is not the same as flexibility with working hours. It’s important that the team has consistent working hours so that synchronous communication and collaboration can happen at predictable times.

Similar to the issue with timezones, working hours makes it easier for the team to get their work done with less hindrances. Irregular work hours leads to bad habits like ‘making up hours’ at night or over the weekend.

Working environments also impact the team. Reliability of internet connection and background noise is a good proxy for the quality of a remote team’s working environment. Bad internet connection impacts everyone you work with and slows everything down. Noisy and distracting environments similarly effects the quality of the individuals work and whomever they are working closely with.

Make accommodations based on people’s needs, but be consistent and explicit about expectations.

Remote teams need to be more deliberate about everything.

Setting up async communications with the early team

Just about anything works with a team of less than 5 people, but I’m of the belief that writing and async work is a practice that makes sense to develop from day 1.

Why writing? Writing is thinking and working out your thoughts ahead of time prevents meetings and leads to better ideas.

Security

As a remote team your bar for security needs to be higher.

I would recommend starting with GSuite right away. Gmail is ubiquitous at this point, but the other important part is using Google as an authentication solution. Logging in with a google account removes storing lots of passwords and makes automation easier to revoke access if someone leaves. For example, you can disable logging in with anything by Google in Slack.

Everyone should use a password manager using a company account. 1Password is great for this. Set the expectation early that credentials should be stored and passwords should be generated using a password manager. Don’t try to clean this up later, get it right from the start.

Do you need a VPN? I’m kind of split on this. Yes you have little control over the network that remote employees use to do their work, but the combination of the above two items helps mitigate them. At some layer, you need to trust the network (even with a VPN), but it seems reasonable to skip the VPN until you really need it.

Infrastructure

There’s plenty written on this topic already so I won’t repeat it at the risk of getting it wrong. If you’re dealing with sensitive data (who isn’t?), start from a strong foundation because it’s easy to iterate on early when you have no data.

My two cents, outsource this completely using some PaaS, or go all in on the AWS ecosystem (IAM for authentication, KMS for encrypting secrets, VPC to lock down ingress/egress) right away. Either way, pretend laptops will get lost or stolen (they will)—there’s a greater chance of that happening as remote teams are more mobile.

The Kardeshev scale measures the advancement of civilization based on energy consumption. It’s a useful way for thinking about where extraterrestrials might be but also where we are in the progress of human civilization.

There are three levels outlined in the original paper but the scale was extended up to six by others.

1. Able to harness all the energy that reaches it’s home planet (nuclear energy i.e. fusion not fission, would be needed to reach this)
2. Able to harness the energy radiated by it’s own star (i.e. a Dyson sphere)
3. Able to harness the energy of it’s own galaxy, drawing energy from multiple stars

See also:

• Energy as an approximation for technology seems reasonable given energy consumption grows in lockstep with economic growth
• David Deutch would argue that knowledge is the thing to measure—matter, energy, and evidence are all that’s needed for knowledge creation
• Abundance of energy also provides the potential for civilization destroying catastrophes: Fermi paradox and pessimism of energy economics

There’s a tendency for new people joining a company to immediately draw from their past and implement the things they’ve seen succeed but there is danger in treating experience as a playbook. It can be introduce prematurely and become too much process at the wrong time. It might not match the context of the new environment and cause more problems.

To avoid these common pitfalls, it’s best to think of past experience as more of a repetoire that is both a way of pattern matching on problems and a catalog of potential remedies. Thinking about the shapes of problems encourages critical thinking about the situation and what is an appropriate thing to try next. This approach is adaptive and error correcting increasing the odds of success in more situations.

Another way to say this is to avoid working with experienced people with a heavy survivorship bias in favor of experienced people that are well practiced fallibilists.

See also:

• Chesterton’s fences exist in leadership and management too

Political views based on a reaction to something else (e.g. wearing masks, anti-science, a decision) is a dead end because it says nothing about what you want from this world. The ideology is entirely dependent on the other thing to react to. In the absence of the reaction there is no substance.

Take the politicization of mask mandates. Currently, there are no lock downs or mask mandates anywhere. What remains to those that aligned with anti-maskers? What do they want and where does it go? It’s a dead end.

(I overheard this in the car listening to a podcast I didn’t catch the name of)

See also:

• Slavoj Žižek likes to say about the storming of the bastille in the French Revolution, “and now what?”.
• One way to think about reactive politics is identity. Identity is a powerful motivator for behaviors. By politicizing more of these reactions it makes it easier to align with the rest of a platform and keep you there.

The grug brained developer is the counterpoint of the big brained developer.

They espouse the following principles and opinions:

• Complexity demon is the enemy
• Prototyping prevents big brained developers from complecting
• Say ‘no’ to things that cause more complexity, but also say ‘ok’ and compromise
• Don’t factor your code too soon, wait for cut points to emerge
• Integration tests are the right balance between usefulness and safety
• Agile is a scapegoat for when things go wrong (you didn’t do agile right!)
• Keep refactors small, introducing too much abstraction summons the complexity demon
• Understand a system before improving (Chesterton’s fence)
• Microservices take all the hard problems, then adds network calls to it
• Master your tools and keep improving them
• Type systems make putting pieces together easier but big brain type systems focused on correctness are a great way to summon the complexity demon
• Minimizing lines of code with ternary operators is harder to debug
• Closures are like salt, there can be too much salt, callback hell is too much salt
• Good logging gives you more clubs to whack bugs with
• Fear concurrency, rely on simply concurrency models that are ideally stateless
• Good API design doesn’t make you think too much, big brain API designers think too abstractly and should focus on implementation or the domain
• Web development is splitting frontend and backend ending up with two complexity demon lairs
• Fear Of Looking Dumb (FOLD) is a major power source for the complexity demon, saying it’s too confusing reduces this power
• Nobody is an imposter if everybody is an imposter

Read The Grug Brained Developer.

In a recent experiment, researchers were able to link two time crystals together by placing them close enough that they could influence each other. The result was a combined time crystal that can represent two states, like binary. This is important because it means it’s feasible to interact with time crystals allowing us to create more complex arrangements. For example, someday this could be used to create a new kind of quantum computer.

Read Physicists link two time crystals in seemingly impossible experiment.

The trust battery is a metaphor for thinking about trust between people. As they work together the trust battery charges.

From Tobi Lütke, founder and CEO of Shopify on the Knowledge Project podcast.

One question I find myself coming back to is whether or not macroeconomics is a useful source of explanations.

On the one hand, the generalization of very complicated human interactions into models helps simplify our understanding of the world. On the other hand, it’s often incorrect.

Besides explanations, macroeconomics would be useful if it gave us an information advantage. In investing, consensus macro forecasts provide no value because if everyone knows the same thing there is no advantage. In tournament like fields favor high-variance strategies so if everyone draws the same conclusions from the same data it’s not useful.

We might be able to spot bad macroeconomics if we focus on good explanations. For example, trends are not explanations so economic theories that look at trends to make predictions are almost certainly wrong. The good ones will hold up in the face of new data. In How are Milton Friedman’s ideas holding up? by Noahpinion, it’s clear that Friedman’s ideas that fit the economy of the 70’s no longer fit the 2000’s making them bad explanations. Unfortunately, outdated ideas can perpetuate for years especially if it becomes imbued in public policy.

See also:

• Nobody grades an economist but maybe we should

A few thoughts about the book.

I was reminded how much humans can endure and survive, even when faced with extraordinary misfortune.

The whole “let’s be the first trans-Antarctic expedition” seemed contrived, but the fight for survival was certainly not.

It seems outlandish that they crossed the open sea in a 22 foot boat. The James Caird looks like a large canoe.

Ernest Shackleton and the entire crew never gave up. The final overland trek through South Georgia island, without tents or sleeping bags or much other provisions, was incredible. It was literally do or die.

The Endurance’s misadventure is a monument to survival that puts life in perspective in a way that few things can. I’m reminded that I can endure much more than I think I can.

Prices of tech stocks soared during the COVID-19 global pandemic in part due to growth. Investors were paying 100x ARR multiples for some tech companies. However, that growth was not permanent and we are seeing tech stock prices revert to the mean.

Ecommerce penetration is one example. Online sales during the pandemic grew rapidly, but now have come back to a pre-pandemic rate. Many tech stocks benefited from this trend, but it turns out it wasn’t long lasting.

Read Reversion to the mean: the real long COVID by John Luttig.

See also:

• How long will a recession last?
• Tech company valuations are growing faster than headcount
• The repricing of tech stocks puts downward pressure on startup valuations

Short-sightedness is nearly ubiquitous in East Asia—80% of students and graduates have myopia in Hong Kong and Singapore. In South Korea, it’s 90%. For comparison, the rate of short-sightedness in California is 59% and in Europe its estimated to be 20-40%.

One reason is that children are not getting exposure to enough daylight because they are sitting in classrooms all day. A recent study suggests that more time outside can cut the number of people who develop myopia.

Read Short-sightedness has become an epidemic from The Economist.

How might vision loss effect the world?

A right-half-plane zero is when the exponential growth rate of an input does not affect the output. For example, eating ice cream increases happiness but creates more unhappiness so you eat more ice cream to make up for it and so on until there is no ice cream anywhere.

A system with a right-half-plane zero needs to be carefully designed because, when subjected to an input, it will have the inverse response at first. For example, when a plane attempts to climb by pitching up, it moves down first. If the pilot over-corrects by pitching up further, the input will cause the opposite effect—causing a stall and eventually crashing the plane.

Read You need to know what right-half-plane zeros are.

See also:

• The Ringelmann effect shows groups become less productive as they grow
• A Mobius strip and Klein bottle are like physical/virtual representations of right-half-plane-zeros

A working paper from the National Bureau of Economic Research found that remote work raised aggregate housing prices by 15% and possibly more. This accounts for half of the overall increase in aggregate housing prices.

Read Housing Demand and Remote Work.

See also:

• This could be a sign that value was not destroyed when NYC office real estate value declined due to remote work but redistributed to housing

In a paper about the impact of remote work on commercial office real estate found that value of offices declined 32% from the start of the pandemic. The authors also found that the effect is likely to persist in the long-run resulting in $500B of value destruction (or potentially redistribution someplace else, like home prices).

We estimate a 32.95% decline in the value of New York City’s office stock at the outset of the pandemic. We estimate that remote work is likely to persist and result in long-run office valuations that are about 28% below pre-pandemic levels.

Read Work From Home and the Office Real Estate Apocalypse.

It used to be an anomaly, now it’s common place. It’s not remote work, it’s just work. We will surly laugh at ourselves in 20 years the same way we laugh at seeing people with big car phones in movies from the 80s—there are no car phones or house phones just a (cell) phone.

This is the age of connected work. There is no here vs there, everywhere is here. If there is no office, all there is to design around is people and the connections that enable them to work together.

Why would it ever be anything other than this?

At an early stage startup (less than 10 people), it’s a big advantage to do everyone’s job first. That doesn’t mean you don’t scale or hire other people, but doing their job first gives the most understanding about what the job actually entails and the knowledge of how it works.

Being a founder, this can feel daunting. What do I know about customer success? I’ve never had to answer support tickets, how do I do that? And so on.

This is the source of the advantage because everything fits into your head. You can make fast decisions. You can learn who would be successful when hiring someone to do this job in the future. You can understand more fully how your business works, what the problems are, and what to do about it.

You will never have this pace of knowledge growth again.

See also:

• Being obsessed with what you are building certainly helps too
• The most effective people care a lot

This is a reflection on using org-roam as a founder in the early stages of starting a company. It’s mostly a draft that I may or may not come back to.

What I’m trying to do generally is have better quality thoughts. I want to answer questions and reason about the clearly.

I’ve found that writing is thinking and drawing from a wide pool leads to creativity.

Taking notes and linking them together (the vast majority of the utility from these tools for thought are just these two things) provides heterarchies that are, in practice, very useful. It helps me digest vast amounts of disparate information. It helps me find several through lines that can change over time. I can separate out the situation from “what’s going on here?”. It’s just enough distance to help me think less narrowly.

Is it practical? It’s a lot of work and it’s easy to dismiss the effort as impractical or a distraction. Turns out, I really do reference these notes and look at them often.

I don’t have “conversations” with my notes, but I often consult them and reference them. The most common reason is when I’m recalling some information or idea with someone else that comes up in a conversation. I realize I’ve had this thought (or something like it) before and go to my public notes, search, and share.

The single best hack for looking at notes again was adding a “random note” button to my published notes. When I’m bored, I click around and let myself wander previous ideas and thoughts. It also keeps the quality up—I’m more likely to go back and fix/update something I wrote if I see it again.

I don’t write more essays or blog posts. My interests are wide but focus is narrow. While I admire pundits with wide ranging essays such as Noahpinion, Matt Clancy, Bryce, and Slate Star Codex, my focus—the majority of the day (and night)—is on building a business. The way I take notes and what I do with them is heavily influenced by this focus and motivation.

I use my notes to write internal memos and product briefs. Mostly when thinking about strategy, the market, and sharing past insights about product, engineering, and sales.

I also use my notes to give advice and answer questions from others. If someone asks me about raising a seed round as a solo-founder or finding the first 10 users I’ve written many notes to draw from.

What else?

Tools for thought are single-player but at least this single-player is better prepared with more clear thoughts to share.

Better thoughts lead to better leadership. When I’ve clarified my thinking it tends to be very solid. Conviction and confidence (or maybe just a well considered approach) are important for others who are taking a risk by working with you. Nobody want to sit through a meeting where a leader is thinking out loud and confusing everyone.

The venerable .com TLD and a single word domain are a multiplier that improves nearly every interaction with your business. Establishing trust when someone sends a link (avoiding “this looks like spam”). Communicating your domain name to someone over the phone (try saying ‘dot S O’ to someone who can barely hear you on a land line). Interoperating with old legacy systems (some forms just don’t accept all TLDs). Signaling status to potential customers and employees (“they have the dot com they must be doing well”). Finally, it’s easier to remember off hand since you only need to recall the name not the name plus the TLD.

These micro interactions with your business add up over time. The easier to find you and establish trust, the better your business will be.

Is it worth millions of dollars for a domain name? I’m still doubtful. Paired with the right branding, maybe. Just keep in mind we’ve had Google for decades now and nobody searches by typing in `{name of thing I want}.com` into their browser anymore (yes, people actually used to do this).

See also:

• Most compounding interest benefits occur at the end, a good domain name might not compound the value of your business, but it certainly improves it
• Don’t combine domain name hacks

There have been 115 tech companies with layoffs since April 2022 and a steep increase in May.

Source Layoff.fyi.

See also:

• Running a startup during a recession
• How long will a recession last?

During the early part of the pandemic (July 2020 to July 2021), the population of SF fell 6.3%—the biggest population decrease in the US. Given the number of tech workers in SF, this could represent a significant redistribution of tech talent to other geographic areas.

From the SF Chronicle.

See also:

• Permanent moves from SF increased 23% but then fell to pre-pandemic levels

Sequoia Capital is the latest big name VC to warn founders about uncertainty in venture capital due to inflation and geopolitical turmoil. Slides here.

The cost of capital has gone up, valuations in public markets have gone down and are paying less for growth, the impact of these shocks will have second order and third order effects (like housing prices up 60+%).

In the short term, profitability is favored to growth in a downturn. While the Nasdaq is down, Morgan Stanley’s unprofitable tech index is down 64%. In the mid to long term, durable growth is best—improving margins and growth.

The drop in the market is steep and recovery takes a long time.

Be quick to cut expenses to avoid a death spiral. “In 2008 all companies that cut were efficient and better.” It’s not about being the strongest, but being the most adaptable.

There’s an opportunity in a down turn. FAANG companies all have a hiring freeze. Your competitors may not adapt and end up in a death spiral.

A burn multiple is the amount of cash burned compared to annual recurring revenue (ARR). For example, if a company burns $10MM to add $30MM ARR the burn multiple is 3.0x. Higher burn multiples are worse and imply the company will run out of money faster. This is a better measure of overall efficiency compared to LTV/CAC because it encompasses all costs (burn).

What’s a good burn multiple? (Source a16z)

See also:

• This is a useful measure to help run a startup during a recession since companies wit a high burn multiple will need to raise money but availability of capital declines (inflation causes downward pressure on startup valuations).
• David Sacks talks more what burn multiples correlate to in this essay
• Net magic number