The Flat Years
My investing journey, Part 3: 2013 to 2016
Sep 28, 2026 · @Deniz Erkan
When people look at my record, their eyes go to 2020. Mine go to the four years before the builder's edge took hold, where the line is flat.
Reconstructed time-weighted returns from monthly account balances; S&P 500 price index
From 2013 through 2016, my accounts barely moved: +5.1%, +0.5%, +0.2% and +0.1%. The S&P 500 rose 30% in 2013 alone. On a chart it looks like a bad stretch of investing. It was not investing at all.
What the chart does not show
Those were the years my first venture-backed company, the first company I founded, was going down. It was a true moonshot: a high-octane, all-consuming startup that I had given six years of my life to, along with all of my personal savings. By the end, I was in New York City with no money left, other than my 401(k) from Microsoft, which I could not touch. With no income, in one of the most expensive cities in the world, I had never felt so financially vulnerable.
Losing that company felt like losing a child. And it was not only the company. Everyone who had believed in me watched it happen. It felt like a slow, long, public humiliation, and it was very, very difficult. Any founder who has been through it will understand. It was the hardest period of my life. I was in a lot of pain; looking back, I would call it depression. The flat line on my investing chart is that period. I was not investing at all. I had no money to invest, and I was not in a place, psychologically, to even think about the financial markets.
Starting again
In 2014, Raed and I started our second company from the ashes of the first. What little I had left, I needed to live on, so we borrowed money from friends and family to start it. It became the most successful company we built. At its peak it reached $50 million in annual recurring revenue with 20% operating margins. In a technology world where most companies burn cash, we built one that made money, and that made it an outlier.
Building it also finished my education as an investor. Around 2014 or 2015, the theory I had absorbed from Buffett and Munger finally met my daily work. Every week we chose which networks, clouds and chips to build on, and I realized those builder's choices were the same judgments an investor makes about which technology companies will win. I understood, clearly for the first time, where my knowledge began and where it ended. I kept studying options too, in theory, the way I had since 2009.
By 2017, the company was doing well, and for the first time in years I had personal cash to invest. I went back into the market. This time, my style was set.
Some years you are not investing. You are building the thing you will invest from.
Next in the series
Engineered compounding,
Deniz Erkan
Disclosure: This letter describes my personal investment history. Returns are reconstructed estimates from monthly account balances, are not audited, and do not reflect fees or taxes any other investor would pay. Index comparisons use price returns, excluding dividends. This history is separate from the Runtime fund and its algorithmic strategy. Past performance does not predict future results. This is not investment advice.