Sameer "El Jefe" Soleja

Spreadsheets vs. Software

Having an unhealthy love for Excel seems to be a prerequisite to get into business school (Go Blue!). However, I am a technologist first and MBA second. That means that as much as I stand in awe of impressive Excel spreadsheets and the odd pivot table, I love good software more.

Since launching Molecule, we’ve seen some “creative” Excel work by impressive quantitative minds. However, our clients have basically been held to ransom by spreadsheets that only quants could use and manage. Or worse (and more common), trade books have been handled by individual traders in silos.

When you’re working on a team, transparency is important. Everyone at the fund should have confidence that the numbers on their screens – like positions – are accurate. In a spreadsheet, dissecting complex formulas is a headache. Manual data entry is error-prone.

Even worse – we’ve seen funds using incorrect risk calculations for years because of a small error in a spreadsheet. Obviously, the risk that something goes wrong with your spreadsheets increases as the number of traders goes up.

I think that spreadsheets can work for new funds with a trader or two, but there is a breaking point. Here are some signs that you’ve outgrown spreadsheets:

  • You have to keep someone on your payroll just because they’re the only one who can manage your data and reporting.
  • You’re always yelling across the room, “Resave the spreadsheet!”
  • You’re not 100% sure that your numbers are correct, but in your head you have a sense of the risk of the organization.
  • You’ve realized that software offers a much better way to manage your business.

I typically see this transition point happen around the time a company adds a third trader, or reaches $10m in AUM.

If any of these symptoms sound familiar, and you’re ready to explore software options, take a look at our recommendations for running (or not running) a risk system RFP.

Of course, we’re also happy to talk to you about your process and software options. Feel free to email us at info@molecule.io. Having a weird love for software may seem like a prerequisite to email us, but it’s not! You’ll be in a much better place when you know the numbers on your screen are right.

Tools we Use: Asana

In April, I shared Molecule’s Core Values with you. One of the ways that we Do Things A Certain Way, is by building or buying tools to do work for us. It gets a little crazy. We recently counted over 50 apps we use around the company -- to communicate better, to automate repetitive tasks, and to stay organized.

Some of the big ones: Slack, Asana, Pivotal Tracker, and ProsperWorks. One that I personally have a love/hate relationship with is Asana, which we use for project management.

Why we needed a project management tool

When we started Molecule, we basically only did one thing -- write software. No invoicing (because there was no product). No deal tracking (because there were no deals). You get the picture. Everything that wasn’t related to writing software was done by one or two people -- and managed on their personal to-do lists. There were no project managers, and nobody had any desire to run Gantt charts.

Then we got bigger. Delegating non-software tasks became a thing, as did checklists and due dates. Today, we have a team of people working on marketing, business development, account management, design, and operations -- in addition to making software. That’s a lot of stuff to coordinate!

Transition to Asana

Early last year, we decided to try to coordinate our non-development tasks in a better way. Project management tools seemed like they were built for this, and we tried several (including some with Gantt charts). We finally landed on the one recommended by Mercury Fund at their CXO Summit -- Asana.

We tried it on a small team for a couple of weeks, then had a training/brainstorming session where we gave everyone the basics, and had them offer ideas on how to use it. We also got back together a couple of weeks later, to see how people were using it.

We had all non-developers move their tasks to Asana, and to make sure it was really adopted, we started building processes that were wired to the tool. Our release checklist. Our customer implementation schedule. Our ops checklists. We wired some of these to Slack, too, in a more-or-less unholy way.

While Asana became part of my workflow immediately (because I use a task list to clear my mind), it took a while to get adopted by the rest of the team. It took creating rituals around our to-do lists -- in 1:1 meetings and in release planning -- and then drawing people into the tool by using notifications and commenting features, to start to reap the communication benefits we were looking for. Multiple channels (email, Slack, whiteboards) started fusing into logical places. Lots of scattered notes around the office suddenly became actionable, follow-up-able, to-dos -- and we still didn’t have Gantt charts.

We’re still getting used to this type of team communication, and there’s a long way to go. Also, there are things we both like and don’t like about the tool. Here’s the rundown:

Things we like about Asana

  • Everyone can see the same to-dos
  • Good commenting and tagging features
  • Easy to assign tasks and see status
  • Shortcut keys! (this might be just me)

Things we hate about Asana

  • Terrible UX
  • Slow load times
  • Mobile app and notifications system leave lots to be desired

Lessons Learned

  • Have a clear purpose for adopting the tool.
  • Create simple, bright lines: when to use Asana, when to use things like Slack or e-mail.
  • Commit -- test the tool, then move everything over at once.
  • Find situations to use the tool, and remind people to use it.
  • Profit!

American Freedom is a Free Internet for America

Today is a sort of grassroots Internet "Day of Action" related to Net Neutrality.

There has been lots of ink (including my own) spilled about the wonky details of the concept. There has also been a lot of fearmongering about what might happen if, despite massive public outcry, Ajit Pai at the FCC weakens Title II protections for the Internet.

Here's the thing: it's not fearmongering. It's all true.

In America, if you're part of the 83% of the population lucky enough to have decent internet, you likely have the choice of one or two carriers, each of them among the most reviled companies in the country. These companies provide terrible customer service, jack up prices, charge you exorbitant fees, sneak charges into your monthly bill, and even try to prevent cities from creating competition. They maintain their oligopoly power through coordinated lobbying efforts.

Now, the FCC wants to hand these companies more power, essentially saying that they should promise an open internet in their Terms of Service (the agreement you click through to sign up for internet service) rather than have their behavior monitored and regulated, as it currently is. The idea is, presumably, that "unshackling" these well-meaning companies will somehow result in lower prices to the consumer.

Regardless of party affiliation, there's something clearly wrong with that assumption, for these particular companies. This whole mess smacks of the same Things That Are Wrong With America, that I hear from people on both sides of the political spectrum complain about:

  • "Crony Capitalism"
  • Government in the pocket of Lobbyists
  • Some Executive Trampling on my Rights, and
  • "Comcast only lowered my price when I told them I would drop my service."

The open Internet conversation is a small version of the broader debate we're having as a nation, and that is important.

Now to go wait on my AT&T technician.

The Saga of VaR

One of Molecule’s most important product development milestones to date has been releasing our dead-simple, near-real-time Monte Carlo VaR. It’s taken us years to do, unlike literally every other feature we have built.

Why? Part of the reason is that it’s a complex calculation that’s difficult to present simply, consistently, and clearly. Also, it’s both important and difficult to get right -- and to prove that it’s right.

So we enlisted the help of a superstar: Dr. Ehud Ronn, a professor at the McCombs School of Business at the University of Texas. With his help, we built a validation framework and tested our goods.

On Thursday, July 27 at 1pm CT, we invite you to join Ehud and Sameer Soleja, Founder and CEO of Molecule Software to learn more about:

  • Why it was so difficult for us to build - and to get right
  • What a "right" VaR even means - that’s a head-scratcher, we know
  • How we validated our approach and how you can validate yours
  • When Ehud will be able to actually predict the future (Molecule Release #10,317)

Our new VaR is awesome. It’ll make you want to throw your spreadsheets out of the proverbial window. Imagine--you know that your VaR is right, and you don’t have to do anything to make it so! Join us to learn more about it.

There are limited places available for this webinar, so we encourage you to save your spot as soon as you can. Click here to register.

3 Things I Learned at ComRisk

I just got back from ComRisk 2017 in London. This is the first time we've taken out a sponsorship at a conference, and so I wasn't sure what to expect. At best, I thought I'd run into a vendor-driven, salesy conference where consultants spoke in generalities about risk.

Turns out, I was wrong. Almost everyone I talked to was genuinely interested in risk for commodities trading. Many attendees were risk managers. Most were pleasantly surprised that a conference existed just for them; the content was not as hand-wavey as they had feared. All seemed pretty stoked about the conference.

In short, I was a geek in a geeky paradise in the middle of London. Here are some things I learned:

  • SPAN is the bane of everyone's existence. There was a dude from the LME talking about how they calculate risk using SPAN (and how it differs from VaR calculations), and some very confused risk managers trying to figure out the particular way in which they hated it so much.

  • Nobody uses a single ETRM/CTRM for all their deals. I figured this would be the case by now, as you'd think most systems provide good functionality across asset classes. I guessed wrong.

  • The EEX is apparently where all the kids are trading these days. Why I didn't know this, I have no idea.

Also, I was particularly delighted by this:

ComRisk Smoothies

I had the OJ. That is all.