Jon Horvath

It’s important to be vigilant and constantly be on the lookout for changes that could be made.

 

Jon Horvath was born in Umea, a university town in Northern Sweden. He moved to Canada around the first grade and grew up in Toronto. He went to college at Queens University.

He then attended Kellogg Graduate School of Management at Northwestern University, focusing on Finance and Strategy. After this he worked for a high-profile Equity Research Analyst at Lehman Brothers in San Francisco focusing on computer hardware and semiconductor stocks.

After only a year, Jon was promoted to Senior Analyst and given his own coverage of stocks in the IT distribution arena. After Lehman Brothers acquired asset manager Neuberger Berman in 2003, Jon Horvath was hand-picked to join the founding team of a tech focused hedge fund as an equity analyst. Then, in 2006 he moved to a New York based global hedge fund and stayed here until 2012. While here, he attained the accomplishment of earning a 40 percent return on capital in 2008, a 60% outperformance versus the benchmark long/short equity index.

In his free time, Jon enjoys all kinds of action sports like skiing, mountain biking, snowboarding, and surfing. He enjoys cooking and reading and blogs about crypto currency and macro-economics.

Where did the idea for your company come from?

I am a big action-sports fan, always have been. I was using a do-it-yourself point-of-view (POV) camera way before Go Pro was on the market. Exciting at first, the endless scenery from POV cameras got very tiring and redundant. What people really want to see in their videos was themselves, like a Hollywood movie or TV show. There is a reason you see very little POV on television or movies. I invented a camera that films you from a third person perspective, like you would see on TV or in movies. The company was called atan2 Corp and the product was called Motus, which is Latin for motion. This was an autonomous tracking camera that was mounted in a fixed position and it tracks a tag that you, the rider or athlete wears. So, I guess you can say that the idea for Motus was born of dissatisfaction with POV camera products.

What does your typical day look like and how do you make it productive?

I’m up by 5:30 – 6:00 to trade the market open, the early rise is an occupational hazard of years of working market hours. I feed my daughter and take her to daycare. Then most days I try and get some exercise, maybe a bike ride, surf or jog. Currently I’m enrolled in a data analytics boot camp that takes up much of my time, so the rest of the day is spent on this combined with some charting work and research for my trading. Then, before I know it it’s time to pick up my daughter at daycare and sit down for dinner with the family.

How do you bring ideas to life?

With atan2 I had the idea for the autonomous tracking camera in early 2014 and then I spent several weeks researching what technology could be used to build it. Once I selected the technology, I immediately applied for a utility patent, which was granted in record time. Next, we had to narrow down the technology and choose a supplier. We spent months ordering different ICs, prototyping them and testing them. At the same time, we were testing different types of cameras. We probably spent a couple of years on this and once the technology and components were nailed down, we started working on a prototype. Then, seeing the prototype work as I had imagined several years before was very rewarding!

What’s one trend that excites you?

The trend that I find exciting today is wave pools. Not a lot of people know about this space, but we’re at an inflection point and there’s a few companies that have viable technology to build high quality surfable waves. There is one successful park in the UK, two in Texas and of course Kelly Slater’s Surf Ranch in CA. And at least one park is slated to open Australia shortly, using newer Wave Garden wave park technology. I think inside 10 years’ time surf parks will be common and will forever change surfing making it much more accessible to everyone and driving performance.

What is one habit of yours that makes you more productive as an entrepreneur?

Waking up early that I learned over the years of market hours. All the housekeeping type tasks like reading your email gets done before others are up, and I think it makes me more productive.

What advice would you give your younger self?

I would tell myself to work hard in undergrad on getting a job at a top management consulting firm. These firms, like Mckinsey & Company are full of smart people and you get a lot of exposure to high level execs at the best companies. There you will also learn some industry domain expertise that will enable you to transition into a role as an i-banker or investor or of course you can remain a consultant or become an entrepreneur.

Tell us something that’s true that almost nobody agrees with you on.

The US economy is on life-support. I say this because what we’re seeing are driven by inventory builds to Trump’s trade wars. US corporate earnings in aggregate haven’t grown since 2012, outside of a few very successful companies it’s all smoke and mirrors non-gap numbers and financial engineering in the form of share buybacks. All growth right is driven by debt but there is a law of diminishing returns. This year the federal government alone will deficit spend one trillion dollars in a 20 trillion economy. That is 5% of the economy but we’ll be very lucky to see half that in GDP growth for the full year.

As an entrepreneur, what is the one thing you do over and over and recommend everyone else do?

You have to always re-evaluate your business and customers. Nothing stays the same forever, the market and the customers are always changing, evolving with societal changes. It’s important to be vigilant and constantly be on the lookout for changes that could be made.

What is one strategy that has helped you grow your business?

atan2 Corp was an R&D company for its entire life however we did do a Kickstarter campaign and social media to gain some insight into our customers. We surveyed them on what they would be willing to pay for the Motus product and what types of features were most important to them which really helped us to segment the market.

What is one failure you had as an entrepreneur, and how did you overcome it?

For all intents and purposes, I wound atan2 Corp down just about 18 months ago. I know there is a demand for the Motus product, but we couldn’t find the right product market fit. Stopping the cash burn and moving may have been a hard decision, but I think it was the right one to make.

What is one business idea that you’re willing to give away to our readers?

I don’t have a great business idea right now so let me give you an investing idea. The biggest driver right now is concerted global easing which will very quickly turn into unbridled money printing. The play on this is “hard money” like gold and Bitcoin.

What is the best $100 you recently spent? What and why?

I recently bought a 4TB external hard drive for back-up for $100. I can back up all my PCs plus all the digital pics from our phones and still have lots of room to spare!

What is one piece of software or a web service that helps you be productive?

I would have to say Slack. I first used Slack at atan2 and now I used it at the Data Analytics bootcamp I’m enrolled in. It’s kind of like a combination of messaging and email but the messages go into channels by subject topic. People are invited to these channels and the messages are centered on that channel topic. You could have a strategy channel, or a marketing channel with others, you can send messages, spreadsheets, videos etc. It saves me a ton of time going through finding buried email threads. Incidentally, the company recently went public under the ticker WORK.

What is the one book that you recommend our community should read and why?

I would say Thomas Piketty’s Capital in the Twenty-First Century. It’s a historical analysis of wealth and income and goes back as far as there are records available. It is what brought the inequality problem into the light of day and provides some examples how wealth was redistributed in after similar past extremes of inequality. Let me give you a hint, it doesn’t end well.

What is your favorite quote?

I have several, my favorites are the ones that mark the ends of economic cycles.

For example In 2007, Chuck Prince, CEO of Citi in reference to underwriting risky mortgages said, “as long as the music is playing you’ve got to get up and dance. Were still dancing.”

I’ve seen some good ones with respect to the current cycle that I think mark the top. A prominent venture investor and the CEO of a multi-billion start-up about to IPO both recently espoused their view that we’ve solved the business cycle and recessions are a thing of the past, this time it’s different…

Key Learnings:

• You have to always re-evaluate your business and customers.
• It’s important to be vigilant and constantly be on the lookout for changes that could be made.
• Nothing stays the same forever.