Should I exercise my stock options early?

Disclaimers: I am not an attorney, I am not a tax professional, I am not in any way officially qualified to give advice on financial matters of any kind. I am simply an employee of a company that provides some compensation in the form of ISO stock options, and I’ve done some research to better understand how stock options work and how they may eventually be of value to me. My intent here is simply to share some of what I’ve learned. Please be advised that I could be wrong, or could have left something important out. I hope that others will do their own research, and seek out help from people more qualified than I am, in order to make a plan that works best for them. I am also focusing here primarily on Incentive Stock Options (ISOs) as that is what is what is given out at my company, and most commonly given to employees at early stage startups.

Looking for an intro to stock options? See my post on ISO Stock Option Basics.

What does early exercise of stock options mean?

Exercising your options early means you exercise your options before the shares are liquid: pre-IPO, pre-acquisition, etc. 

Whether or not you exercise your options early is a complex topic, and I recommend that anyone with a significant number of options in a successful company do their own research, consult tax and financial professionals, and make a plan for if and when they will exercise options.

In general, unless it will cost you a ton of money to exercise your options, or unless you stand to gain a significant amount of money from your shares, it’s usually best to wait on exercising.

Below are some considerations as you make this plan for yourself.

Why you might NOT want to exercise now

Exercising costs money and comes with risk

Exercising stock options is no different than buying shares in a company. You pay a price for the shares (the strike price), and the company gives you shares in exchange for that money. The value of those shares can go up or down over time. If you buy the shares at $1.00 per share and they go to $10.00 per share, you gain $9.00 per share! But if you buy the shares at $1.00 per share and they go down to $0.50 per share, you lose $0.50 per share.

When you exercise, you are essentially saying that you believe the value of the shares is either currently worth more money than the strike price, or will be worth more money than the strike price in the future.

You most likely can’t do anything with the shares

Unlike public companies, stock options are usually given out at private companies, which means there is no market for the shares. Although you can theoretically sell your shares, in practice it is often impossible to go forward with that. Most private companies have the right of first refusal – meaning if you want to sell your shares, the company has the right to buy them before you can sell them to anyone else. This right of first refusal can easily be used to drag out the sales process so long that selling becomes impractical.

In general, private companies don’t want their shares being sold to just anybody. They want them with their employees and their investors (the people that are truly invested in the success of the company), not random people that now the company has to be beholden to. 

This essentially means that in all practical senses, even if you own shares, you cannot do anything with them today. Only at some unknown date in the future could you decide to sell the shares.

Moreover, your company controls if and when that date comes, as well as how you can sell your shares. There are numerous ways that this can happen (IPO, acquisition, company buyback of shares, allowing employees to sell shares to investors, etc), but the company decides when and if those things happen, and they set the rules for what employees can do in those circumstances.

So, when you exercise stock options, you have to accept that you are paying cash right now for something that a) might not pay off at all, or b) will only payoff when the company enables it.

The Alternative Minimum Tax could bite you

Incentive Stock Options (ISOs) are generally NOT taxed when you exercise them. However, that is not always the case.

When you file your taxes each year, there are 2 calculations done: the normal calculation, and a separate calculation called the Alternative Minimum Tax (AMT). In the end, you end up paying the larger of the two calculations, which for most people in most years is the normal calculation, and AMT doesn’t pay a role.

But, unlike the normal tax calculation, the AMT DOES include the gains from the exercise of ISO stock in its calculation. The gains are calculated by #shares exercised * (current fair market value – strike price). In essence, what that means is the following: if you exercise 1,000 shares at an exercise price of $1.00, and the current fair market value of the shares is $10.00, the AMT includes $9,000 in gains in your income calculation.

Now, $9,000 extra in your AMT calculation is not likely to affect your tax bill in a significant way. But what if the fair market value of those shares was $100.00 instead of just $10.00? Now you have $99,000 in gains that count towards AMT. That most likely will cause your AMT bill to be substantially higher than your normal bill, and you could face a seriously hefty tax bill come April of the next year.

So, if you exercise too many options at once, you can run into a situation where you owe way more in taxes than normal. Talk to a tax professional before exercising your options!

Why you might WANT to exercise now

Ok, the risks above seem pretty legit. Should I just wait and exercise when something like an IPO or acquisition happens?

You can, you absolutely can. However, there are 2 reasons you might consider exercising a portion of your options early, or even right now.

  1. You can get a better tax rate when you eventually sell your shares if you have owned your shares for longer than 1 year.
  2. If you might leave your company before exercising your shares, you can find yourself in a situation where it is difficult or perhaps impossible for you to exercise all of your options within the 90 day window after leaving.

Better Tax Rate Upon Selling Your Shares

Whenever you sell stock, you get taxed. That’s true of any stock. The rate at which you get taxed depends on how long you’ve owned the stock.

  • If you’ve owned the stock for more than 1 year, you get taxed at the long term capital gains tax rate. Depending on your tax bracket, those rates are either 0%, 15%, or 20% currently.
  • If you’ve owned the stock for less than 1 year, you get taxed at the short term capital gains rate, which is just your ordinary income tax rate, and is typically a much higher percentage than your long term capital gains rate.

Remember that vesting stock options does not mean you own the stock. You do not own the stock until you exercise your options. So the clock doesn’t start counting for long term capital gains until you exercise your options.

Example

Let’s pretend you have vested 1,000 shares in stock options, and the strike price of those options is $1.00 each. And now let’s say a company comes along and acquires your company, paying $10.00 per share. Assuming you sell all of your shares, that’s a gross gain of 1,000 * $9.00 = $9,000 for you.

If you exercised your shares more than 1 year prior to the acquisition, you would owe either 0% ($0.00), 15% ($1,350), or 20% ($1,800) in taxes.

But if you owned those shares for less than 1 year, you could find yourself paying 24% ($2,160), 32% ($2,880), or an even percentage in taxes, depending on your tax bracket.

As you can see, the difference in how much you are taxed can be quite large depending on how long you’ve owned your shares and what your total gain is.

Of course, keep in mind that forking over money today for something that only maybe will pay off in the future just because you might get a better tax break in the future is likely not something you want to bet big on. It’s certainly a possibility to exercise a small portion of your options as a way of hedging your bet.

Leaving your company can be difficult, painful, or both

You may not be thinking about leaving your company right now, but most likely at some point in your life you will no longer work where you currently work. When that day comes, you have 90 days to exercise any stock options that you are vested in but have not yet exercised. This creates a couple issues.

Issue #1 – Do you have enough cash on hand to buy all of those options?

Options cost money, remember? If you have 1,000 options that have a $1.00 strike price, you now have 90 days to fork over $1,000 otherwise your options vanish into thin air.

Do the math on the options you have been granted, and make sure you understand how much it would cost you to exercise all of them at once. 

Issue #2 – The Alternative Minimum Tax could bite you

Wait, wasn’t this listed in the reasons NOT to exercise?

Yep, the alternative minimum tax is such a pain that it is both a reason for and against exercising your options early. And amazingly, it’s for exactly the same reason!

In the reason not to exercise section, it states “if you exercise too many options at once, you can run into a situation where you owe way more in taxes than normal”.

Most of the time you have total control over this. However, when you leave your company, you only have 90 days to exercise all of your options, otherwise they are lost forever.

Imagine deciding to leave your company (or worse, being fired or let go), and then realizing that in order to exercise your stock options that you worked so incredibly hard to earn, you’ll have to fork over thousands or tens of thousands of dollars in taxes, all because you had to exercise “too many options at once”! And that’s in addition to whatever it costs to actually exercise your options (see Issue 1).

So why does exercising now vs later matter? Because the fair market value of your company’s shares could go up from what it is today. Remember, the gains calculation for AMT is #shares * (current fair market value – strike price). So as the fair market value goes up, so do the calculated gains and associated taxes.

Do you expect your company to be successful in the future? If so, most likely the fair market value of your shares will go up over time. Each time the FMV goes up, the AMT gains you would realize when exercising also go up, sometimes significantly.

Keep in mind that because this is all about taxes, the year that you exercise in makes a big difference, as your gains are only calculated in the year that you exercise. If you have 1,000 shares, and you exercise all of them in 2020, vs 500 in 2020 and 500 in 2021, or perhaps you spread it out over more years, that can make a big difference. Spreading out your exercising over multiple years is a great way to avoid major AMT hits. However, you also have to consider that the fair market value of our shares will likely change (up or down!) over the course of those years as well. It’s a very tricky balance.

Don’t wait to make a plan. Don’t find yourself in a situation where you have to exercise your options but cannot afford the tax bill. Talk with a tax expert and make a plan that makes sense for you and your family. 

Final Thoughts

Exercising your options early is risky, and not something you want to do without a strong plan and advice from financial experts. I certainly advise talking to a tax professional, and would even recommend talking to multiple tax professionals, as not all CPAs really understand the ins and outs of stock options.

There are certainly situations where it makes sense to exercise early, but ultimately this is a decision that is up you (and anyone else that shares financial responsibilities with you). Your company likely cannot give you advise, and you should be skeptical of them if they try to give that type of advice. The options are yours once you vest them, and that comes with the responsibility of knowing what if anything you want to do with them.

Posted on by TC

ISO Stock Option Basics

Disclaimers: I am not an attorney, I am not a tax professional, I am not in any way officially qualified to give advice on financial matters of any kind. I am simply an employee of a company that provides some compensation in the form of ISO stock options, and I’ve done some research to better understand how stock options work and how they may eventually be of value to me. My intent here is simply to share some of what I’ve learned. Please be advised that I could be wrong, or could have left something important out. I hope that others will do their own research, and seek out help from people more qualified than I am, in order to make a plan that works best for them. I am also focusing here primarily on Incentive Stock Options (ISOs) as that is what is what is given out at my company, and most commonly given to employees at early stage startups.

What are stock options?

First, let’s clarify what stock options are not. Stock options are not stock. If you’ve vested options in your company, you may believe that you now own shares in that company, but that is not the case. Unlike stock, stock options do not follow. If you decide to leave the company, and you do not exercise your stock options, you lose your right to those options, and they get reabsorbed by the company. 

Stock options, rather than stock itself, are the right to purchase stock in the company, at a predetermined price. This predetermined price is called the strike price. 

What is the strike price or exercise price?

The strike price, sometimes called the exercise price, is the cost to you as the owner of the stock option to purchase the stock. The stock option agreement essentially states that you can purchase the stock at this price, regardless of the current market price for the stock. Obviously, the idea is that the strike price is ultimately less than the market price of the stock, allowing you to buy the stock at one price, and sell it at another, making the difference as income for yourself.

This can trip people up. If you are vested in options at your company, and the strike price is $1.00 per share, and the current market value of the shares is $3.00, then if you exercised your options and then sold your shares, you’re only making $2.00 per share, not $3.00 per share, since you had to fork over $1.00 per share for the exercise. 

What is vesting?

Vesting is basically just a fancy term for deferring the actual ownership of the stock options over time. When companies issue stock options, they usually grant the options all at once, but the employee doesn’t take ownership right away. Instead, the options transfer to the employee over time, or sometimes when certain milestones are hit.

You cannot exercise stock options that you have not yet vested.

The most common example I’ve seen is a 4 year vest period with a 1 year cliff. What this means is that if you are given 1,000 shares, you earn nothing for the first year, but at the end of the first year you take ownership of ¼ of the options. Each month after that for the next 3 years you receive 1/48th of the options, at which point you have fully vested your options. 

What is the expiration date?

The expiration date is the last date before which you can exercise your options. If you do not exercise your options before this date, you lose the right to exercise them, and the options get reabsorbed by the company that issued them.

Usually the expiration date is years after the stock is granted – often 7 or 10 years.

What is Fair Market Value?

The fair market value of shares of a public company is determined by the market. People can buy and sell shares at will, and this leads to a price that the market deems fair at any given time. 

Private companies do not have a market for their shares. Instead, they have to go through a process called a 409a valuation to determine what their shares are currently worth. This process is done at least annually, and sometimes more than once in a year if for example the company raises money during that year.

The fair market value can give you some sense of what your shares are worth, but…not really. The process is only done once a year, and it’s a fairly abstract process. A share is really only worth what someone is willing to pay for it, assuming that you’re willing and able to sell it. So determining the value of a share outside the context of a transaction involving shares is somewhat silly. 

In practice, the fair market value is mostly used for tax purposes (see the sections on the AMT tax below). Companies issuing stock options also have to set the strike price equal to the current fair market value.

What happens if I leave the company before exercising?

Your company sets the terms and conditions for what happens when you leave, but generally upon the last day of employment at the company, you have 90 days to exercise your options. Any options not exercised after that 90 days is up will be reabsorbed by the company, and you lose the right to exercise them. 

Some companies have given their employees the right to exercise their options for longer than 90 days after they leave. However, if you were given ISO options, by law, after 90 days of leaving the company, ISO options automatically convert to Non-qualifying Stock Options (NSOs) which are much worse for employees from a tax perspective.

Posted on by TC

A dad’s career through a son’s eyes

The early years

Your “work” was that place I went when I didn’t have school. In some office with a corner where I could draw, I would happily distract you by showing off the masterful, multicolored scribbles I could produce at an alarming pace. And if ever I needed more validation for my efforts, a quick trip down the hall would bring me to any number of happy co-workers and friends, all quick to show their appreciation for what were certainly masterpieces, now lost to time. 

Emboldened by your support, when given the opportunity, I took my talents center stage during your lectures, abandoning the front row seat I was given, complete with paper and crayons, and opting instead for the lower right hand corner of the chalk board as my canvas. Whatever words of wisdom you planned to impart that day to your student body were surely overshadowed by a few indecipherable doodles from your son.

And while the masterpieces of my early days may never be recovered, one strong impression remains – A father who always supported his son, loved his work, and who was surrounded by co-workers that shared the same passion and kindness in their hearts.

The middle years

No longer requiring constant supervision, my trips to your office dwindled. I now viewed your career through the lens of dinner table conversation, filtered through the eyes of a budding young man, and then scrambled together with topics such as girls, friends, school, sports, and music. Simple matters such as sustainable agriculture, human and community development, or government grant funding didn’t stand a chance in my young teenage mind. Needless to say, this era marked the height of my inability to describe what it is you actually do.

But despite my disinterest in your passions, your interest in mine never wavered. This goes for you too mom. I wish I could count the number of events of mine you both attended over the years. I’m sure you missed a few, but I can’t remember any. When I consider the many activities I was constantly a part of, the total number of times you both attended is surely in the thousands. That’s tens of thousands of cheers and high fives, and a priceless amount of love and support. 

The later years

Perhaps it was me starting my own career, or perhaps I was getting tired of looking foolish when trying to explain my dad’s career to my friends, but at some point I realized it might be a good idea to figure out what exactly you have been doing all my life. I must admit, this is still a work in progress – you’ve done a lot. But what’s clear is that you leave behind a trail of successful programs and research, and that what you’ve done and learned through your career is being multiplied by the thousands of students and coworkers on whom you’ve made an impact. Your most recent position as Associate Dean highlights the trust and respect you have garnered over your career.

Although today we celebrate the end of that career, you still hold the position of my dad, and recently you were hired into the newly available position of Paxton’s grandad, both of which are jobs from which I know you will never grow tired, and you will never retire. 

Posted on by TC 2

Measuring a Great Coach

Both good coaches and bad coaches are typically measured by the games they win and lose. What separates a good coach from a great coach, however, is quite different.

In high school, I was fortunate to be coached by one of these great coaches, Dean Stark. Dean recently won his 600th game as the head coach for the Sacramento Waldorf Waves high school varsity basketball team. I’m not sure how many games he’s lost, but in the 2 seasons I played with him we lost a grand total of zero regular season games, and it seems every year his teams are either competing for or winning the league championship, so I wouldn’t be surprised if his win-loss percentage is in the .750 range. Those are Mike Krzyzewski numbers.

In a Facebook post after that 600th win, Dean thanked his players saying “To all of my players, past and present – winning 600 games is only accomplished in being around for a long time and having great young men to work with. I never could have accomplished this without your commitment, sacrifice, heart and skill. You all mean the world to me. Thank you.”

It’s one of the classic marks of a great leader, to give credit to the people he has led. And as much as I would love to believe that I’m part of some extra special group of people that made winning 600 games possible, it’s obvious what the real common denominator is here. In fact, it’s more likely that Dean took a bunch of ordinary individuals and helped them achieve extraordinary results.

What amazes me most is how the lessons he taught as a coach are lessons that transcend basketball; practice with a purpose, mentally prepare, work hard as a team not as individuals, do the little things well, set goals, it’s better to be great at a few things than mediocre at many, etc. These are the principles you hear in leadership, management, and self-improvement books all the time.

Hearing these principles by themselves, they are usually easy to understand, but often quite difficult to put into practice; simple to grasp, but hard to do. What Dean gives his players is the rare experience of living by these principles, as well as a chance to realize the inevitable, extraordinary results that follow.

This experience is more valuable to each player than simply winning or losing any set of games. It’s the kind of experience that sticks with you for life. You leave with an entire toolset of skills that you didn’t have when you started, and the universality of the lessons learned allow you to draw on them again and again, regardless of the challenge in front of you.

Measuring this kind of success goes way beyond wins and losses.  Not only has Dean changed the lives of the hundreds of players that he’s coached over the years, but those individuals have gone into the world and shared their learnings with thousands more.

600 wins is something to be extremely proud of. It is proof that if you live by the principles he teaches, success will take care of itself, and I congratulate Dean on hitting this milestone. I also hope that he knows his success is not measured in the games he’s won or lost, but in the lives he changed, and the impact on the world those people continue to have today. That is the true measure of a great coach.

Posted on by TC 5

40 Years and Counting

Dear Mom and Dad

I attended a wedding last weekend. During the reception, the DJ invited all married couples to join the bride and groom on the dance floor, and then slowly dismissed couples based on how long they have been married; exit the dance floor if you’ve been married less than 6 hours…less than 5 years…less than 20 years…less than 40. As we danced, my mind wandered to previous weddings; weddings where our family has been present; weddings where Nana and OG stayed on the floor until they called 65 years (it’s now over 70); and weddings where you two are often one of the last 3 or 4 couples out there.

Today, you have been married for 40 years! I’m proud of you for many things, but this might take the cake. In a world that is so focused on the next best thing, to stay committed to one person for so many years, through trials and tribulations, is a feat worth celebrating.

At my wedding to Allison, my vows were simple. They can be summed up as “All I know about marriage is that marriage is hard, and marriage is awesome. I promise not to quit when it’s hard so we can keep finding the amazing parts”.

That confidence in how wonderful marriage can be comes from you. And yes, the knowledge that marriage can be really hard also comes from you. But, you’ve set the example for how to work through the hard times in order to keep building a marriage that only gets better with time.

I have vague memories of some of the hard times. I was young, and have no idea what issues you were facing, but I remember you dedicating yourselves to working it out. You weren’t afraid to ask for help when you needed it, and you committed to your relationship with simple things like regular date nights to make sure you were working on you two, not just raising me.

But, what I remember more than any of that is the way you have supported each other through the years. You each have independent lives that you are committed to, and you are each committed to supporting the other in their pursuits. Before I even showed up, you had each followed the other across the country multiple times, supporting your ongoing education and your career opportunities. Throughout my life, I saw examples of you standing up for each other, helping the other work through a tough challenge, advocating for each other, and being the other’s number one fan. And that continues today, perhaps more than ever before.

Perhaps the most important example that parents can set for their children is how to be loving and kind. And despite the love that you show to other people, nothing matters more than the demonstration of kindness that you give each other, each and every day. And while maybe it didn’t seem like it, and maybe it wasn’t conscious on my part, I was watching. And lucky for me, you set an example that I’m proud to try and emulate.

Happy 40th wedding anniversary, mom and dad! Here’s to 40 more 🙂

Posted on by TC 1

Three tips for job candidates from a hiring manager

I spend a lot of time looking at resumes and doing phone screens. Given that my company is receiving hundreds of resumes a week, it did not take long for me to identify a few easy things that applicants can do better. Below are 3 tips for job candidates.

Tip 1: Write a cover letter note specific to the job you are applying for

As a hiring manager, I have my pick of literally hundreds of applicants for a single position. In today’s job market, if I’m just looking for people with the hard skills required for the job, there are essentially endless options. Therefore I get to be much more picky than just finding someone that can do the job.

I want someone that wants the job; this job; the one I’m reviewing resumes for. If I can find someone that is not only qualified, but also excited for the position, I’m significantly more excited about the candidate. They’re motivated by more than just a paycheck. They want to come into the position and get good at it, quickly. They’re drawn by something more than the day to day; the mission of the company; the culture of the company, etc.

For me, not writing a note has a very real, negative impact on your chances of moving onto the next step. When I look at a resume without a note, I can feel myself actively looking for reasons to disqualify the candidate. Why? Because I really don’t want to waste 20-30 minutes in a phone screen with someone that’s just looking to get hired anywhere. Not only is it a waste of my time and the candidates time, but the conversations are often not very engaging. If you’ve written a note, at the very least I have an idea of what you’re excited about, and we can talk about that.

So what should this note contain? It’s pretty simple, but it’s not what most people think.

First off, it doesn’t have to be long. One to two paragraphs is all you need. Remember, I’m looking at hundreds of candidates, I don’t want to read a full page for each candidate. Keep it simple, and keep it short.

Second, don’t write about your skills and experience. I have your resume. I can see your education, skills, experience, etc. Instead, tell me what excites you about the position. Why do you want to work at my company, in this job? For example, my company, Redox, is solving a major problem in healthcare technology. When writing your note, tell me why improving healthcare is important to you. Or, if it’s not healthcare that calls to you, tell me why you want to work in a culture like ours. In general, take 10 minutes to read about the mission, the culture, the values, etc of the company, and make it clear why you’re excited to work there.

That’s it. I’ve seen notes that are 3 sentences long that get me excited about the candidate. It doesn’t have to be complex.

Tip 2: On average, I spend less than 1 minute looking at your resume

This is the reality of the job market today. There are so many resumes to review, you cannot possible spend more than a minute looking at each. So how do you make your resume stand out?

The answer is, you don’t. When it comes to the resume, I have a pretty good idea of the experience and skills I’m looking for. I don’t care if the resume is pretty or not, and I don’t care if you use action words, past tense, bullet points or short sentences. I care about your experience and your skills. Moreover, I’m likely skimming your resume pretty quickly. As long as the key points are written down in a way that I can read them, I’m happy.

I say this because I’ve been on the other side, creating my own resume, and I’ve stressed for hours about how to format it, how to phrase each line, what order to put things in, etc. I wish someone had told me at the time that it doesn’t really matter.

Rather than focusing on making your resume perfect, focus on researching the companies you’re applying to and writing an interesting note as your cover letter.

The one exception to this is when you’re applying for a position that will require to you create something visual. For example, if you’re applying to be a UI/UX developer, put a little time into making the resume look nice. You don’t need to go crazy. I’m not going to hire you because you can create a pretty resume, I’m going to evaluate your skills another way. But, I will be less likely to move you onto the next stage if you don’t seem to care what your work looks like.

Tip 3: Ask more questions than I ask you

At my company, the first step after resume review is to do a phone screen. Most people come into the phone screen expecting to be grilled on their previous experience, to talk through some examples of work they’ve done, etc. And yes, we may very well cover some of that. However, that’s generally not the main thing I’m looking for when in that first interview. We have more assessments later that will allow us to gage your technical skills.

Instead, I’m trying to understand whether your values mesh with the values of our company. Do you want to work in a place that will force you to learn and grow every day? Do you enjoy being challenged by your co-workers? Are you the kind of person that just implements the latest and greatest tool because everyone is doing it, or do you reason from first principles and make sure you’re coming up with a solution that actually solves the problem at hand? Are you focused on providing value to your customers, or are you just interested in doing your job?

So, I will certainly ask questions to get a sense of those things. However, it’s often not that many questions. It’s often 3 or 4 questions over the span of about 15 minutes or so.

When I ask what questions you have, I’m still very much in interview mode. I’m looking to see how inquisitive you are, and whether you’ve done your research. For example, don’t ask me what my company does; show that you’ve researched and tried to understand, then ask a clarifying question. And don’t ask me what our tech stack is; look on https://stackshare.io/ and come in knowing our tech stack, then ask which of the many tools we use are the main ones, or what the future direction of our tech stack looks like, etc. Read our careers page on our website, and come in with questions about our culture, the people, the way we structure ourselves, etc.

The most engaging phone screens I do are phone screens where I end up answering more questions than I asked. It shows me the candidate is really interested in making sure the job is a good fit for them, not just for us.

Conclusion: Do a little more work for a smaller number of job applications

Yesterday, I spent 5 hours doing interviews, and 2 hours looking at resumes. That’s 7 hours of recruiting tasks, and I have many other things that I’m responsible for in my job besides hiring. It can be exhausting.

And I know it’s just as exhausting, in a different way, as the candidate. I know people that have applied to 10 jobs a day for weeks on end without getting a single response. Endlessly searching  job boards, sending out your resume, and often not hearing anything back is extremely tiring if not demoralizing.

And it’s not lost on me that the 3 tips above are more work for you, the candidate. However, I do believe that it’s worth it to put in that extra work, even if that means applying for fewer jobs. From someone doing this a lot lately, it really does make a difference in your chances of moving forward in the hiring process.

Posted on by TC

We are what they grow beyond

My wife and I watched Star Wars The Last Jedi for the second time this weekend.  In it, Luke and Yoda have a wonderful exchange about teaching that stuck in my head. Luke is hesitant to take on Rey as a student, afraid that she will turn out as Ben Solo did, being drawn to the dark side. To which Yoda replies with an instant classic response:

Heeded my words not, did you? Pass on what you have learned. Strength, mastery. But weakness, folly, failure also. Yes, failure most of all. The greatest teacher, failure is. Luke, we are what they grow beyond. That is the true burden of all masters.

There are two parts of this I love.

The first part is the line about failure. As a culture, we’ve started to embrace the idea that failure can be the best teacher. A simple search for quotes about failure will return all kinds of results suggesting that failure is what leads to success. So, the idea that failure is a great teacher is not novel.

However, nearly everything we teach about failure is that you must try and fail in order to learn. And while this is certainly a great way to learn, if this were all we did, we wouldn’t make any progress as a species. What helps us move forward from generation to generation is not that we continually learn from our own mistakes, but that we are able to learn from other’s mistakes. And, in order to learn from other’s mistakes, those mistakes and failures must be shared and taught.

This ups the expectations around failure. Learning to admit your own mistakes is a big step in maturing for a lot of people. It’s not always easy to say “I was wrong”, even just to yourself. But Yoda is telling Luke that even that isn’t enough. Not only do you need to admit your mistakes to yourself and the people around you, but you have to actively share and teach your failures to others. Shout your failures from the mountain top so no one else needs to make those mistakes again. That takes a whole new level of confidence and self-assuredness to do, and can be the differentiator between a good teacher and a great one.

The second part of Yoda’s quote that I like is, “we are what they grow beyond. That is the true burden of all masters.” It’s classic Yoda, saying words out of order, and somehow having that give them more meaning. “We are what they grow beyond” is a definition of the teacher, but it’s a definition that’s dependent on the students actions. The teacher, ultimately, will be defined by what his or her students go on to achieve. Moreover, the quote seems to suggest that the students will necessarily grow beyond their teachers, achieving things the teacher never has or will.

It’s the kind of quote that can give you a sense of urgency if you are teaching. On the one hand, you know that your legacy as a teacher is what your students will go on to achieve. This motivates you to teach them well and set them on the right path. On the other hand, it also suggests that whatever you are able to achieve, your students will grow beyond it. This motivates you to keep growing and learning, in a sense forcing the baseline for your students up as you improve and pass on your skills and knowledge.

I think the best teachers I ever had embodied these values. They not only learned from their own failures, but weren’t afraid to share those failures so their students could avoid making those mistakes. They also taught with a sense of urgency, taking a deep interest in their students and ensuring they absorbed the lessons being taught. And lastly, they were continually learning and growing themselves, ensuring that their students would grow beyond what they were capable of. These are values that we can all learn from and attempt to embody in our own lives. After all, we are all teachers.

 

Posted on by TC 1

Debates Are Overrated

Think back to the last time you witnessed a debate? Maybe it was a political debate between candidates, or maybe a debate on a news show between the host and a guest. Did you learn something? Did you come away from it with a new perspective?

I doubt it.

Debates are setup with two or more people attempting to “beat” the other participants, with each debater hoping to walk away being able to say “I’m right and you’re wrong.” Moreover, debates are often time-boxed, meaning participants have a limited amount of time to make their points. One consequence of this is that the debate ends before either party is able to fully make their point. Unfortunately this essentially means that everyone involved, including those who watched, have wasted a bunch of time. Worse than both people failing to make their point, is that the person with the good “sound-bites” is able to finish, and the person who is desperately trying to explain the nuances of a complicated issue is cut-off. Now there is a clear “winner” of the debate, but who won has no relation to who has a better understanding of the issue.

It’s winner take all, and it’s totally pointless.

Debates not on TV often take on the same characteristics. The debate is time-boxed because you have to go meet your friends for dinner. Moreover, one person is likely a better “debater” than the other, so they appear to dominate the conversation. But again, this has little relevance to who actually understands the issue better.

Doesn’t anyone want to actually understand the issue? Or how about solve an actual problem?

The best debates I’ve seen and been a part of haven’t really been debates at all. They are discussions, and while they are sometimes heated, they differ from debates in a number of ways.

First, there is a clear problem statement, and all participants care about solving the problem more than “winning”. A debate is pointless if two people are just strutting their stuff with no end goal in mind. A good debate should be centered around a clear problem statement, and the goal of the debate should be to solve the problem.

Second, the discussion needs to be allowed to go as long as it needs to. We’re trying to understand how to solve a problem. Shutting the debate down when only half the information has been presented just means the problem isn’t solved. If you need to take a break, fine, but come back to it.

Third, anything is fair game. What I mean by this is, any possible solution presented should be evaluated, any piece of evidence should be considered, any relevant data should be admitted to the discussion.

Lastly, all participants and viewers need to be open to the fact that they might be wrong. The goal is to solve the problem, and when presented with evidence that your view may not be right, you need to be ready to accept that and change your stance.

The debates around school shootings highlights for me how bad we are at problem solving. On one side, you have people advocating for more security at schools, or even arming teachers. On the other side, you have people advocating for stricter gun laws. Regardless of which side you land on, think for a second, how seriously have you actually considered what the other side is saying? Are you open to the fact that they might actually have some good reasons for suggesting what they’re suggesting?

The world is a very complicated place. Unless you are the only expert in the world on a subject, there are likely multiple views on any topic that should be considered. This doesn’t mean every view is right. It does, however, mean that we need to take the time to understand why people think a certain way.

Next time you’re debating a difficult topic, consider changing the debate to a discussion, and focus on solving the problem, rather than winning the debate. I guarantee you’ll learn something.

 

Posted on by TC 1

How many visits does it take to get to ACL surgery?

On August 23rd, 2017, I torn my MCL, ACL and possibly my meniscus. Of course, I didn’t know at the time what had happened. All I knew was that I was in a terrible amount of pain, and couldn’t put any wait on my left leg whatsoever.

Since that day it has taken

  • 5 months
  • 4 visits to the sports medicine doctor
  • 1 trip to the MRI place
  • 1 totally unnecessary x-ray
  • 3 hours of driving for a pre-op appointment that could have been done over the phone

to finally get to my surgery date, which is scheduled for this Friday.

What took so long? Here’s a summary.

  • 8/23 – Tear my ACL
  • 8/24 – Go to walk in clinic, see nurse, doc + bonus sports medicine doc. Misdiagnose as just an MCL tear
  • 9/30 – Check up. At this point my knee feels a lot better, but it is still very unstable at times. Stick with misdiagnosis of just an MCL tear.
  • 12/5 – Go back to sports med doc.
    • Explain that the knee is still very unstable, and despite the MCL healing, something else is still very much wrong.
    • Suspect and diagnose as ACL tear
    • Also have an x-ray here for no reason besides the insurance company said so
    • Schedule an MRI for 12/12 to confirm ACL tear
  • 12/12 – Have the MRI
  • 12/14 – Have the MRI follow up back with the sports med doc
    • Get a referral for ACL surgery
    • Schedule pre-op for 1/15. The doctor doing the surgery is 1.5 hours from where I live, and holidays plus a couple work trips forced this out a month
  • 1/15 – Have pre-op appointment.
    • Also realize there was no reason to drive 3 hours round trip for this pre-op appointment. Could have been done on the phone.
    • Get even more mad when I realize that I had to wait to schedule the surgery till after the pre-op appointment, and if the pre-op appointment could have been done on the phone, it could have been done a month ago!
  • 2/2 – Have surgery…hopefully

I want to be clear. At every step of the way, I’ve enjoyed the people I’ve been working with. The nurses, doctors, schedulers, and everyone else have all been lovely.

However, this is clearly not a system setup with the patient in mind. Every part of this process feels like it’s been optimized for someone other than me. Note that even after correctly diagnosing the ACL tear, it’s still took 2 months to get to surgery! When you step back and look at the system and the process as a whole, you start to see waste everywhere. And now that I’ve seen it, I can’t stop seeing it.

To see just how bad this really is, think about what the ideal situation would be.

  1. Tear your ACL.
  2. Identify that you tore your ACL on the next day at the latest.
  3. Schedule surgery as soon as possible. I can live with a couple weeks wait here.
  4. Do pre-op visit over the phone or via video chat.
  5. Have surgery.

The whole thing could be accomplished in

  • 2 weeks
  • 1 day to work with a doc and MRI place to identify the ACL is torn
  • 1 trip for surgery

My experience highlights so many different problems in the system as it is today.

  • It’s easy to misdiagnose problems. The tests that are definitive are often also expensive.
  • Patients have to give up hours of their life for 5 minutes of time with a doctor. Even for a visit with my doctor that is 10 minutes from my house, it takes at least an hour every time.
  • Doctors end up being gate keepers for the treatment that everyone knows is needed. Why do I have to have a follow up with my doctor just to have him tell me the results of my MRI? Send them to me directly and let me get on with the surgery!
  • Know one knows the full picture. To get an accurate understanding of how much my surgery is going to cost, in my experience, is impossible. The doctor doesn’t know which codes they will be using yet, so they can’t tell me how much it will cost. And the insurance company needs to know the codes in order to say whether I need pre-authorization for the surgery. And the insurance company doesn’t yet have all the claims for all my doctors visits, so they don’t know how much of my deductible I have used. And…yada yada yada.

And remember, this is just for a torn ACL. Think about what this would be like for someone with a much more serious problem. Everything I experienced would be multiplied a hundred times over for someone with a life threatening disease, or a chronic problem they have to deal with for years.

I believe we can create a better system. Technology and government get most of the buzz in healthcare, but they will only play a part in the transformation. We need a system that is focused on the patients at every step of the way, and that requires a complete shift in just about every aspect of healthcare.

Posted on by TC 3

Personal Goals for 2018

I used to never do new year’s resolutions. I tried a couple times, but my heart was never in it and I never developed a system to help me succeed. So I obviously failed.

In 2015, however, I tried again and succeeded. My goal was to run 1,000 miles, and I succeeded by using the Nike Running app to track my runs and to remind me to get out the door. In 2017 I went a different direction, and made a goal to read 36 books. Using the Goodreads app, I tracked my book progress over the year and ended up reading 41 books.

Having succeeded in completing my singular goals in 2015 and 2017, I decided to go for 2 this year.

Read 50 books

36 books last year was a big step for me. I had probably only read 36 books in the previous 10 years or so, so getting to 3 per month felt awesome. After reading at that pace for a year, I think I can bump it up to something closer to 1 book a week. I’ll shoot for 50 to give myself a tiny bit of wiggle room.

In addition to just reading 50 books, I’d like to also like to make sure I’m not skimping on book size too much. I read very few (meaning 1) books over 500 pages last year, so this year I’m going to shoot for 5 of those 50 books to be 500 pages or more.

There are no other qualifications, besides I must read the entire book. No skimming.

Create and publish something twice a month

Reading has become part of my normal routine, so it doesn’t take quite as much focus for me to execute that goal. So in addition to having a goal focused on consuming and learning, I’m also going to have a goal focused on creating.

There are 2 parts of this goal; creating and publishing. Creating is the part I really care about. I want to make creating a habit in much the way reading became a habit for me last year. Publishing is simply a way of forcing me to bring things to a level of quality that I’m not completely embarrassed by. I’m afraid that if I don’t make whatever I am creating public that I’ll skimp on quality and too often say “good enough”  when in fact the product is crap.

I expect that much of what I create will be blog posts for my company, Redox. But from time to time I’ll write personal posts here, and maybe I’ll even create some music or something different. I haven’t put any restrictions what I have to create.

I’m using the Strides app on my iPhone to track my progress on the second goal. I’ll continue using the Goodreads app for the reading goal since that worked well for me last year.

So that’s it. This blog post is the first of 24 works I will publish this year to meet my goal.

Posted on by TC 2