After 5 years and 2 months of running my business, I finally got to see the ultimate “odometer flip.” Simpli hit its 1 millionth dollar of revenue today, September 9th, at 2:11AM PST.

I am ecstatic about this. After everything this company has been through, to finally hit $1 million means we are doing a lot of things right. Simpli continues to grow, and our customers continue to grow with us. This is a very exciting time.

Here’s to $2 million…and beyond!

EDIT 9/18/2006: People really seem to be getting the wrong idea about this blog post. Rather than removing it completely, I figured I’d clarify a few points. This is $1M since we started with this billing system approximately 3 years ago. It is not $1M this year or this month (I wish… we’ll get there!) It also doesn’t mean I’m a millionaire. That whole $1M has been invested or spent on things like colo space, electricity, servers, office space, salaries… you know, all that stuff needed to run a business. 🙂

I was gone from the Internet for 6 days…and I survived! Shocking, I know. Simpli survived and things went smoothly for the week thanks to Seth, Ben, and Mike all picking up where I left off. I also made some great personal decisions while I was at Burning Man and partied hard. I had a lot of fun. I definitely would say it was a good week. 🙂

But since this blog isn’t about Burning Man, let’s move on. The most interesting recent development in my life is my new(ish) obsession with poker. Digging back through my blog, I realize I haven’t posted about online poker since March. Two big things have changed since March:

1) I stopped playing online tournaments and started playing cash games. This was the biggest change I made. The tournaments were tough; the smaller buy-in tournaments were full of people who would play any two cards, which made them more likely to suck out on me. You can’t play well against a completely unpredictable player (Doyle Brunson calls them “loose cannons.”) The larger buy-in tournaments were nearly unaffordable, and were sometimes also full of loose cannons and otherwise full of really, really good players.

2) I started reading poker strategy. I mean not just reading a little bit, but obsessively. I learned how to calculate odds and outs on the fly. I learned how to account for styles of different players. And then, after reading Doyle Brunson’s “Super System” book to the point where I could quote every good point he made, something started to change.

I started to win.

As I gained steam, I went into higher and higher-limit cash tables. (I always play no-limit hold’em, but the cash tables have limits on how much cash you can bring to the table.) Currently I’m playing $100 max tables and I bring $50 to the table. I’ll likely start playing the $200 max tables and bring $100 to the table soon.

Even accounting for the week I spent at Burning Man, in the past 30 days I’ve made over $1000 playing poker online, and I’m averaging $150-$300 profit a night. I typically play for 2-4 hours late at night. When I start getting tired, I set a goal for myself (“I’ll play until I hit $250” was my goal last night, with a total of $100 invested, and last night was one of my worst poker nights in the past month). Once I hit that goal, I bow out for the night. (Last night I logged off with $257.20.)

True to my word, I’m using all poker winnings to pay off debt. I have a system there, too: I let my account hit $1200, and then withdraw $1000 and EFT it to my checking account, where I then push it into debt payments. Last night I withdrew my first $1000.

For right now, poker is a fun “side job” that’s definitely more interesting to me than taking contract work or doing web dev. In all honestly, with as little as I pay myself from Simpli, an extra $1000 or $1500 a month will go a LONG way. Right now my goal is to make $1000 a month and use that to pay down debt quickly so I can be debt-free before the end of the year. That’s a tough goal, but depending on how much I win and whether I get a roommate, I might actually make it.

Realistically, I know poker could be my entire life. I know that I am, right now, a very good poker player. If I wanted to continue to obsessively study for the next year or so, I would — no question — have what it takes to go pro. However, I don’t think I’m interested in the pressure that arises to make rent from playing poker. I’m pretty sure at this point that I just want to leave it as a fun side job, but not use it to pay any of my day-to-day expenses. But, as S pointed out, $200 a day x 365 days a year = $73,000. Not bad for a couple hours’ work.

I’m just about to head out and pick up the RV so my friend Erik and I can head off to Burning Man. This will be my second year, and we’re heading out in style in a 25′ (rented) RV.

I will be without Internet access, email, or phone coverage until September 4. For those of you attending Burning Man, I will be at the Bioluminati camp at Wheel of Fortune/Brave@6:30 (right behind Camp Arctica.)

I should arrive at the camp very late tonight (probably between 2-3AM.) I still have a ton of stuff to do before I go… ugh! (You can never be too prepared for a week in the desert with no supplies other than those you and your camp members bring!)

I will post pictures when I get back!

Some are still commenting on my last post, “Erica predicts your news headlines for 2007.” The most common comment I’ve heard from homeowners is that they’re afraid I might be right, but they hope that I’m wrong.

Since hope is a very poor investment strategy, let me reiterate what is prudent if you are a homeowner:

1) Consider this. Are you willing to stay in your house for at least 10 more years? If you are, fine. Stay put… and wait out the coming bust. But you better be 100% sure you can either stay there for 10 years yourself or rent it out at a profit.

2) If you do not wish to stay at your current place, put it on the market NOW. Do not wait even a single month longer. Find a comparable house on the market and price yours 10% below it. You should receive offers if you have the lowest-priced house in your range.

3) Assuming you can sell your house, take the money and bankroll it (Fed funds or short-term CDs are good “safe” investments right now; they’re currently pulling in about 5.5%, which is much more than you’ll make on your house in the next 6 years.) The stock market is all over the place and I do not recommend most stocks as a long-term investment vehicle right now. Then rent. And plan to rent until 2010 or 2011.

You don’t have much time left (months, not years) to sell your house if you wish to sell. Bay Area prices have hit their peak and are starting to drop. This is echoed all over the country. San Francisco median year-over-year prices are already dropping. The East Bay is dropping radically. San Mateo County seems to be holding a bit more value; this will likely be the county that gets hit least in the Bay Area. If you can get out now, pull the trigger, price 10% below comps, and get out.

Historically, keep two factors in mind. 1) The “0” years are, historically, some of the worst years our economy has had in its history. 1930 — depression. 1980 — 18% interest rates. 2000 — I shouldn’t even have to remind you how much stocks got hammered. 2010 is going to suck, and suck hard. Jobs will be cut. Companies will go out of business. There won’t be as many “bubble” parties here in the Bay Area, and venture capital will be harder to find. Avoid problems NOW by paying off ALL of your debt (that means cars and houses, too, not just credit cards!) and curtailing spending. Make sure to have at least 6 months’ cash reserves on hand in a low-risk investment vehicle such as a CD. 2) Housing is cyclical, so we can judge how hard we are going to get hit by previous booms.

How long do you have to rent before it’s a good time to buy a house? Let’s take a look at this chart of the 1980’s real estate bubble to give us a feel for how the current bubble will end.

1985-1986 (2002-2003): Housing is booming, inventory is low.

1987 (2004): Housing still booming, prices increasing, inventories low.
1988 (2005): People start to question the boom. Realtors assure us the boom will continue. Houses aren’t like stocks, after all.
1989 (2006): Prices are very expensive; affordability an issue. Sales slow and prices drop. Mention of risky loan types.

Hmm, that’s right now. The Bay Area is still hitting record-high prices, although sales are down more than 30% from last year. What’s next?

1990 (2007): Prices take a serious plunge. One article claims that housing booms are a bad thing and we should hope prices stay low. Increasing mortgage rates are blamed for the bust. The word “recession” is mentioned. Gloom and doom.

That’s next year. How many times do you think you will hear the words “looming recession” next year? More than you want to, that’s for sure…

1991 (2008): A “dead cat bounce”? Some folks wondering if the bust has bottomed out or not. Sales are abysmal (e.g., -42%). Other parts of the country showing some signs of recovery.

2008 is when you might tell me that I was wrong about all of this and that we’re starting to recover. WRONG. 2008 will NOT be the bottom. Remember, we still have our “0” year ahead of us.

1992 (2009): No one is buying; housing is an investment that no one will touch. Desperate political efforts being made to encourage house buying. Rock bottom prices and lower mortgage rates encourage some purchasing. The year ends with some buying. Another “dead cat bounce”? It’s not clear.

Another dismal year for housing. But business spending will likely pick up in the 2008-2009 timeframe. There will be signs that the economy might be recovering. But we haven’t hit our “dead year” yet.

1993 (2010): It’s definitely a buyer’s market. Some people are saddened by the fact that current prices are 50% of what they were in the 1980’s. The housing bust in Southern California is clearly negatively impacting the California economy and the national economy at large. Sellers are desperate to sell (and some people taking extreme measures like putting huge “for sale” signs on their lawns for passing planes to see). Folks who waited out the boom to buy at the bottom are being handsomely rewarded for their patience. Proof-positive of the contrarian investing style — be greedy when everyone is fearful and fearful when everyone is greedy. The “slump” may be ending.

2010 will be the year to buy a house… if you can. Take those cash reserves and head into the market with gusto. Ignore your friends telling you you’re crazy and the inevitable stories of “I lost 50% of my home’s value.” Use fundamentals (rent times 200) and if the numbers work (look for a 150-175 number times rent to really know it’s a buyer’s market), jump in with both feet.

1994 (2011): Housing begins its comeback. People who had the intelligence to wait for the bottom are buying now at great values. Even rising mortgage rates are not shaking the recovery.
1995 (2012): Some parts of the Southland are recovering others are not. People with “negative equity” are in despair.

2011 and 2012 will be the beginning of real sustained growth in the economy. Housing will show some signs of coming back from the dead. Businesses will again hire. This time, the economy will put things in the right gear and move forward. You will not see much in the way of equity gain on your newfound house, but you bought it to live in and hold, right? Right? (Or you bought it to rent out and the fundamentals make sense. Either way, you’re in a great position.)

1996 (2013): A tentative recovery is still in the making.

Some others are beginning to buy houses now. Some don’t think you’re so crazy to have bought in the bleak pit of late 2010.

1997 (2014): Finally, housing has recovered.

And if you bought in 2003-2004, your house is worth approximately 75% of what you paid for it then. I hope you have a nice equity cushion!
…But if you bought in late 2010, your house is worth perhaps 110% of what you paid for it… and you paid less than anyone else did.

I hope I’m still writing a blog in 2014 so I can come back and see if I was right and how this bubble stacked up against a previous one. So far, it’s played out right as those “in the know” expected. I hope you, too, can invest wisely and do well in the housing market.

I’ll throw a housewarming party in late 2010. You’re invited. 🙂

Because it has Stick Figures In Peril.