We had the good fortune of connecting with Shane Neman and we’ve shared our conversation below.

Hi Shane, what role has risk played in your life or career?
For the past few years, the majority of my time has been dedicated to thinking about risk and how to control or leverage it to the maximum extent possible. In my early years as an entrepreneur, I was mostly assessing risk using my gut and also not realizing to take into consideration that there are many things that I don’t know that I don’t know!

However now (after several years of intense studying, reading, watching and obsessing about this subject), my approach to assessing and thinking about risk has significantly changed. The first company I ever founded in 2000 was called Offyx and my partners and I put our life savings into it – I was only 24 years old! We built what amounted to Microsoft 365 delivered over Citrix Technology before the terms “Cloud”, “SaaS”, and “AppStore” were ever coined – we were doing all of it and confident we were going to change the face of computing.

What we never took into consideration is that even though we could successfully create a kick-ass product with a bunch of delighted customers, there are always unknowns and black swan events that can shatter your dreams to pieces. And that is exactly what happened to us: a combination of being too early because of lack of broadband penetration, the tech bubble bursting, and 9/11 caused us to close up shop. I was flat broke! 8 years later when I had just founded EZ Texting, coming off the heels of a second successful startup I founded (JoonBug), I had another “All In” moment as they like to say in poker games. This time not only did I put in all the money I had, but I went out on a limb and sold my car, most of my unnecessary possessions, moved in with my girlfriend to save on rent and took out a personal loan from the bank to fund the business.

Now you might say that I hadn’t learned my lesson given what had happened with Offyx, but the situation wasn’t as clear cut as it first appears. First, it was about 9 years after going broke and your memory is usually short and you tend to forget the pain you go through. But the second biggest factor was the overconfidence I had from starting and running a successful business during that time. Fortunately for me, my bet paid off and EZ Texting eventually became a success and is now the largest SaaS SMS Communications Platform in the USA. Even so, I believe it was a combination of hard work, smart work, and a lot of luck that made this come to be.

There were more than a few moments along the way where I was on the brink of losing the entire business. Now that I am older (44) and run my own Venture fund called Neman Ventures, I am naturally much more careful and risk averse unless I can find an asymmetrical business deal where the downside risk is much less than the upside risk. Through studying others that are gifted at gauging risk and my own experiences, it’s become more and more obvious to me that the only way to manage risk (and more importantly be successful at it) is the ability to do several things well including:

1) Remove emotions from the equation (this has been the hardest challenge for me to overcome and I am still struggling with it!). In many instances learning to control your emotions is even more important than being smart and working hard.

2) Being alright with saying “No” to most opportunities if they don’t meet your risk profile/tolerance – no matter how exciting and full of potential it might be. Remember the quote: “The more you know, the less you diversify.” I’d rather have a handful of winners in a small concentrated but well thought out and risk profiled portfolio than a huge unmanageable portfolio of investments or deals that would likely not even give you the same returns.

3) Not being fooled by the outcomes of your decisions. Don’t become overconfident just because you made a good investment since it might have more to do with luck than your ability. On the other hand, don’t become too hesitant to take another risk on a deal where the odds are in your favor just because you were burned on a similar deal before.

4) Always leave chips on the table to be able to recover if you are wrong – i.e. Don’t go totally “ALL IN” – ever! The most helpful and insightful information and advice on the subject of risk have come from many primers and poker books I have read (along with a few PODCasts and YouTube Videos). Poker unlike finite games like chess is much more similar to real-life where everything is based on odds and skill vs just skill alone. Here are some of the ones that I liked the most: The Biggest Bluff by Maria Konnikova and Thinking in Bets by Annie Duke. Reading about Mental Models has helped me make better decisions in life and business. Nobody covers this topic more extensively and eloquently than Shane Parrish from Farnam Street. His blog (fs.blog) and his two books, The Great Mental Models Vol I & II, are must reads if you are interested in learning how to become a great decision maker. Lastly, I have been taking online classes to learn the basics of poker and to get into the poker mindset. The first step is to learn the basic rules but after that there are a lot of odds tabulations and also gut checking for unknowns like bluffing and just good or bad luck. I’ve come to understand why so many people get hooked on the game. I even hired a professional poker player named Jeff Gross with over $5M in winnings who lives in Miami, to coach me for a few hours a month so I can understand and learn how he thinks. Learning about risk through studying, reading, and playing has helped me tremendously the last few years in my business. Learning to manage risk can help you have boundless gains whereas not doing so can potentially lead to disaster.

Can you give our readers an introduction to your business? Maybe you can share a bit about what you do and what sets you apart from others?
Currently I run Neman Ventures, which is a Single Family office located in the MiMo district of Miami. We do all sorts of investments from Venture, Private Equity, Debt, and Real Estate. My Venture investments range from seed to late-stage companies in tech, prop-tech, consumer staples, apparel, and food. What sets us apart is that we don’t discriminate on good ideas based on industry, and since I have direct experience with my own previous companies, I personally help the founders of the startups as they go through various growing pains.

Some examples of companies I am invested in include Impossible Foods, Convoy, Prose, Universal Standard, Apostrophe, MeetMindful, MapAnything, VinePair, Smylen, Symmetry Systems, PairPlay and most recently ResiDesk. On the Private Equity side of the investments we focus mainly on overlooked businesses or contrarian businesses that may be in a down-cycle; for example I am currently looking at distressed assets in the energy space outside of the US. What’s unique about our approach is the contrarian stakes we take in the private companies and investing internationally.

Lastly, in terms of Real Estate investing and development, I own more than two dozen large-scale properties across the U.S. ranging from commercial shopping and industrial centers, to traditional office buildings, to cold storage facilities, to student housing and residential buildings. We stand out by investing in a diversity of value-add properties in underserved or gentrifying neighborhoods where we can improve the types of tenants and the community over a longer time horizon. With all that said, the single most thing I am proud of as a company is still having the scrappy entrepreneurial spirit despite taking on many large scale projects and investments. We don’t have a large team or fancy offices; in fact we work out of a co-working space. We are able to do this by leveraging software and technology to efficiently streamline our processes and automate most of the redundant tasks we have to do.

The road to where I am today has been as bumpy as a turbulent plane ride through a hurricane. But every time there has been a close call where I thought I was going to crash and burn, I have thankfully come out relatively unscathed with a renewed sense of confidence and a higher level of emotional fortitude. After college I went to NYU Med School where I realized within the first few months that my passion was more in Tech than Medicine. I had worked intensely hard through the Pre-Med track to ace my courses and MCAT scores, so throwing all that away was a daunting proposition.

If I continued the course towards becoming a surgeon (what I was aiming for), I would have the stability of knowing that I will always have a great paying and challenging job – despite the fact that most doctors today are underpaid, underappreciated, and overworked. I also had to face the prospect of letting down my family, friends, and mentors that had helped me along the way. Finally one Sunday evening I finished reading a chapter in Lippincott’s Biochemistry, put down the book, and called my mom and told her I wasn’t going to Med School anymore. She surprisingly and simply said “Ok, I love you,” which was exactly what I needed to hear.

Despite all my anxiety and fear about leaving something I had worked so hard for into the unknown, a week later I was pulling all nighters at Convey.com as their lead software engineer. I worked on developing one of the first blogging systems created even before the word “blog” was ever coined (we called it an online publishing system). After leaving Convey.com, I joined forces with my college roommate who was working at Goldman Sachs at the time to create Offyx. Offyx was a web portal designed to deliver any application through the cloud using Citrix technology. We attempted to “utilitize” computing and eliminate the need for IT staff for SMBs. But after a few years the company didn’t survive for the reasons I explained before and I was left completely broke and unable to find a job as a software engineer in an environment that was overflowing with laid off ex-dot-commers.

Thankfully, I eventually got back on my feet and started two new tech startups over the next decade: JoonBug and EzTexting. They both had their own struggles and growing pains as most businesses do. But then I hit a few major catastrophic moments while growing EZ Texting, which is a SaaS SMS messaging platform for SMBs (think Constant Contact or MailChimp for texting). EZ Texting had a lot of challenges similar to what most young startups face but eventually thrived and became the largest SMB SMS platform in the US now.

But that wasn’t without a ton of sleepless all-nighters, a heavy unaffordable legal bill, and the emotional roller-coaster ride that puts extreme skydiving to shame. Since then I have had a bunch more instances where I hit rocky roads in both my personal and business life, but from these experiences and many more like it I have been able to get through them more with more confidence and calm.

Let’s say your best friend was visiting the area and you wanted to show them the best time ever. Where would you take them? Give us a little itinerary – say it was a week long trip, where would you eat, drink, visit, hang out, etc.
Where to eat: I’m a health freak and plant-based so I would suggest Juice & Java for something casual or Plant Miami if you want to go somewhere fancy. Where to Drink: The lounge at the Faena hotel has a super cool retro cruise ship feel and amazing cocktails for a night where you want to see and be seen. If you want to go somewhere more low key, then you can’t go wrong with Ball & Chain. Where to hang out: The beach! It’s the best part of Miami. After you’ve done that, then I would suggest Wynwood to walk around and see some amazing street art and great shopping.

Who else deserves some credit and recognition?
I dedicate my shoutout to my good friend Sender Shamiss who is the CEO goTRG which is based out of Aventura. goTRG is the largest reverse logistics company in the country and physically processes online returns for companies like Walmart, Lowes and even Amazon. Sender and I spend a lot of time together both during business hours where I frequent his office and on off hours since we are neighbors living in the same community. I would often watch in awe seeing him run a huge company with thousands of employees and make hundreds of decisions a day. He isn’t just the Chief Executive Officer but he is the Chief Decision Maker which comprises 99% of his job duties.

On his days off, he would play poker with a group of people and invite me to tag along or other times he would surround himself with two different ipads and play multiple hands of poker simultaneously! I soon came to realize after speaking with him and spending so much time together that his ability to make seemingly infinite decisions and often predict the right decision, was rooted in his superior poker playing abilities.

Poker was the driving force behind his attitude and the way he played the game of life and business, and it was helping him win more often than not. He’s the one who inspired me to literally “up my game” and start learning about poker, reading about it, start playing it and he’s the one who introduced me to Jeff Gross who has begun to coach me. With that said, I owe all of it to him.

Website: www.shaneneman.com
Instagram: https://www.instagram.com/shaneneman/
Linkedin: https://www.linkedin.com/in/shaneneman
Twitter: https://twitter.com/shaneneman
Facebook: https://www.facebook.com/NemanVentures/

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