Piss & Vinegar: Notes from my first startup

Me, giving Marc Brammer the finger right before his wedding ceremony, where I was his best man. Ten years earlier he was my boss.

The Coronavirus has put a hold on many of my upcoming speaking engagements. I rediscovered this piece that I wrote in 2012 during another crisis, Hurricane Sandy. It's about my first ever startup, Innovest, and my boss, Marc Brammer. Ten years after Innovest, Marc married my sister-in-law and is now my brother-in-law. They say a startup is like a family....

In my mental rehearsals for my first meeting at Innovest I would walk into a hip reception area where flat screen televisions and expressionist art would cover the walls. Then, from behind a reception desk a woman in a grey skirt and white blouse would say, “Mr. Brammer will be with you shortly.”  And then Marc Brammer, Innovest’s Research Director, would emerge wearing a fancy suit, haggard expression and grey hair. “Sorry to keep you waiting,” he would say. “Some punk is driving my trade into a brick wall and I had to straighten things out. Please have a seat. Did Diane offer you anything to drink?” 

Innovest was not that Office. And Marc Brammer was not that boss.

The door to suite 400 at 675 Third Ave opened to the desk of Jeremy Umali whose chin-length black hair was cut asymmetrically so that it covered one diagonal half of his face. He wore a faded grey t-shirt with the name of his favorite punk band, “AGAINST ME,” written across the chest. 

He didn’t acknowledge me when I walked in. His eyebrows were furrowed in concentration as he leaned into his computer. 

I was wearing a navy blue suit, white shirt and burgundy tie. After a few minutes Jeremy noticed me from behind his hair for the first time, “Hey, are you here to see Marc?”

He pointed me to a conference room in the back of the office where a gangly man with a protruding Adam’s apple and ripped jeans sat me down.  

“Shit, I forgot to offer you coffee” was Marc Brammer’s first sentence to me. 

“Fuck it, let’s get started anyway” was his second sentence. 

He began politely. Asking me why I had been living abroad (I had been living in Scotland for four years at that point). Had I read his report on the Korean Car industry? Did I have any feedback?

He then asked, “Why do you want to move back to New York?”

“I don’t know. It’s home, I guess.” I smiled sheepishly. I was still getting over my nerves at finally getting to talk to this man.

“Well I don’t know why you would want to move back to New York. This country has become a fascist beer putsch where evil fucksticks like Jack Welch and Don Rumsfeld have imprisoned us into their warped cock-ocracy."

Outside of the conference room a small group of people were debating their favorite Monty Python movie. Marc overheard their discussion, shot out of his chair and screamed at them.

“‘LIFE OF BRIAN’ WAS THE BEST MONTY PYTHON MOVIE, YOU MORONS!” 

He returned to his seat across from me, exhaled to regain his composure, and said "Those dipshits are really starting to annoy me. Anyway, what can you tell me about the capital markets?” 

A lot, it turned out. Marc Brammer would be my boss for the next three years. 

During that time I would learn that what drives Wall St. is not greed, but men who are terrified of their own vulnerability.  

I would predict the subprime crisis, the collapse of Bear Stearns and the collapse of Lehman Brothers. 

I would become part of a subversive Underground Railroad in the capital markets that is drawn by the puzzle of finance rather than its status or spoils. Happiness for us is a warm spreadsheet – not a round of golf in Augusta or a Hermes tie. 

During my first meeting with Marc Brammer many of these themes were foreshadowed.

In addition to being a “Life of Brian” fan, Brammer was one of a core crew of Innovest analysts who saw how the quiet storms that Wall St. often dismissed would reconfigure the market. He correctly forecasted that Detroit’s addiction to SUVs and massive amounts of debt were going to disembowel earnings once oil prices shot up and the credit cycle turned. These prescient calls had earned him, and the firm, a cult following. Innovest connected dots that people didn’t even know existed in the same constellation. 

 Innovest was also viewed with sideways curiosity for its miscreant corporate culture. The appropriate tagline to Jeremy’s “Against Me” t-shirt would have been “and fucking proud of it.” Innovest was going to teach those suits a thing or two about the markets. And even if they were wrong, they would proudly piss people off. The firm became a magnet for the outcasts who could crack Wall Street’s codes but never fit in at its elitist golf clubs. 

Marc had zero tolerance for the bland, auto-pilot jargon that filled the pages of Wall St. research reports. He called our competitors inside of Wall Street “The Golfers,” and insisted that we produce research that “told the Golfers to go fuck themselves.”

When we spoke that November in 2005 he was looking for someone who could analyze banks. I had spent the previous two years working for a non profit in Edinburgh, Scotland that specialized in building small banks that extended credit to some of the poorest people in the world. I didn’t know how to analyze a bank like Citigroup or Bank of America.  

But I had an idea of what not to do when lending money to poor people. 

At that moment in 2005 lending money to poor people was the central driver of economic growth in the United States. Millions of low-income Americans had access to mortgages for the first time. These new homebuyers were driving property values and capital markets to record highs. My hypothesis was that there was little evidence that these borrowers would be able to pay back their debts. I believed that the conventional tools that Wall St. used to analyze banks were overlooking this impending storm.

In reality, this was a completely unfounded hypothesis. I had no idea what Wall Street’s conventional tools were. In fact I had been to dozens of other interviews on Wall St. during that time where this very hypothesis terminated the conversation. For good reason. There were rules on Wall St. You valued a banking stock by determining the value of all loans getting paid back and subtracting the costs of making those loans. You didn’t fuck with that rule because it was working. Banks’ return on equity was an unprecedented 20%. Meaning that each dollar invested in a bank’s stock  yielded $1.20 in return. 

You got hired on Wall St. by demonstrating above all that you wanted to be exactly like one of them.  That you would never disagree with your boss, even if you knew he was wrong. That you so badly sought his approval that you would do and say anything to receive it. These were the Golfers that Marc so vehemently despised.  These Golfers immediately saw that I was a disruptor not a sycophant and that I would ask uncomfortable questions.

Marc saw the same thing and embraced me as a like-minded guerrilla warrior. One that needed sun and water, piss and vinegar. 

On March 14, 2006, two days after my first wedding anniversary, Marc put me in charge of the financial sector research team at Innovest. My starting salary was $45,000 per year. Three months later in June, 2006 I launched my first product, which became the first public prediction of the 2008 financial crisis. Marc called it “The Mother of All Fuck Yous to The Golfers.”

It is now 2013. Innovest was acquired in 2009 and I now work inside of Wall St. My colleagues are not punk-rock miscreants. They are “the Golfers” that Marc and I scorned.

Each morning as I walk up Third Avenue toward my Finance office, I begin to recognize the familiar faces that work with me. We are all dressed in the same uncomfortable suits. I know that by the end of the day someone will have thrown a chair across a conference room. Someone will have lied to me. Some 60 year old man will have put his arm around me and imparted some obsolete nugget of bullshit wisdom from “when they were starting out in the industry.” And I will swallow, smile, and thank them for the insight. 

Later in the day I may intentionally dribble piss on the bathroom floor in a pathetic act of civil disobedience. I may loosen my tie. 

This book will make many people uncomfortable. It will undress many of the myths, and myth-makers that have concealed themselves. It will shine a light on a sleeper cell of innovators determined to use finance to build something of real value in a field that destroys innovation to save itself.

But this book is unapologetically and completely honest. I am honest about what I’m proud of and what I hate about myself. I will dwell in many clashes in which I was humiliated and emasculated. I have revisited many of them, superimposing some imaginary revenge fantasy where I vanquish my enemies. But I do not indulge those fantasies here. 

This book does not declare victory because it cannot: the lunatics absolutely still run the asylum. 

This book is a humble prayer that I am not alone. 

This book might get me fired.