One of the things you're known for is creating thepokerdb. Tell us about the process of doing the pokerdb. Was this your first business venture?
Nat: I suppose it was my first poker business venture. I'd previously run an eBay business but that wasn't at all related to poker.
It arose out of a forum called "PokerStars Crew" that I ran in early 2005. I wanted a statistical ranking system to compete with PocketFives. I also wanted to know more about who the best online poker tournament players were. So, along with a business partner who did most of the technical work, I attempted to put together a database of PokerStars tournament results. At first, all of the results were compiled manually using the "Tournament History" function. We automated the process soon after. It just grew from there and we eventually sold it to BLUFF Magazine about a year and a half after starting the project. It had around 100,000 users and millions of monthly hits when we sold it. It's grown in popularity since then.
In a previous interview you had mentioned you'd "ride the poker wave" for a while and then pursue your MBA. Is getting your MBA something you're still considering? What benefits do you see in doing this as opposed to continuing getting experience working on projects and building contacts as you currently are?
Nat: That's still a possibility. It depends a lot on what the poker wave actually ends up looking like. For all I know, the poker wave could last for many years. Or it could fall apart in a pretty short period of time. So I am just taking it one step at a time and seeing where it takes me.
That being said, if poker stuff does fall apart or if I am no longer interested in working on poker stuff, then getting an MBA is a definite possibility. I think the main benefit from doing an MBA is meeting a lot of talented business-minded individuals. And I could bring a lot of technical and marketing experience to bear for a lot of new companies should I ever get involved in something like that. I would probably only go to a top-level business school -- but not because I would care about the name on my degree or the actual education (those are small factors in my mind). I would just want to meet the most talented people and associate myself with them.
That being said, if poker stuff does fall apart or if I am no longer interested in working on poker stuff, then getting an MBA is a definite possibility. I think the main benefit from doing an MBA is meeting a lot of talented business-minded individuals. And I could bring a lot of technical and marketing experience to bear for a lot of new companies should I ever get involved in something like that. I would probably only go to a top-level business school -- but not because I would care about the name on my degree or the actual education (those are small factors in my mind). I would just want to meet the most talented people and associate myself with them.
On a similar note, what's your thoughts on poker players and/or entrepreneurs leaving school early to pursue playing and/or running a business if they think it could benefit them financially? Many poker players struggle with staying in school when they could leave and make 6-7 figures/year playing cards. At what point do you think it's smart to drop out?
Nat: I don't have a big problem with poker players dropping out as long as they're dropping out because they are making too much money from poker to justify spending time on school-related activities. If they're at that level then they're definitely making more money than they could from any job after graduation.
I think the people who are making a mistake are the ones who drop out because they have short-term results and they simply dislike school. That's too speculative and dumb. People need to show more long-term results (NOT one big tourney score) and they need to have at least six months worth of living expenses saved up and separate from their poker rankroll before they should even consider dropping out. Worst comes to worst, they can almost always just go back to school if things don't work out. But that doesn't mean the decision should be taken lightly.
I think the people who are making a mistake are the ones who drop out because they have short-term results and they simply dislike school. That's too speculative and dumb. People need to show more long-term results (NOT one big tourney score) and they need to have at least six months worth of living expenses saved up and separate from their poker rankroll before they should even consider dropping out. Worst comes to worst, they can almost always just go back to school if things don't work out. But that doesn't mean the decision should be taken lightly.
How soon do you think it will be before poker is regulated in the US?
Nat: Assuming you're talking about online poker, I think it's quite a long ways off. I have very little faith in the ability of our Congress to move quickly in any direction that can have negative political consequences. Online poker can easily be painted in a bad light if people search out the "correct" stories -- and that's regardless of regulation. Very few politicians are willing to be seen as the enabler for some idiot who found a way to lose his family's life savings on Harrah's Poker or whatever. I think the best we can hope for from Congress and regulators is some stripped down poker site that would be limited severely compared to what we're used to seeing on sites like Full Tilt. Maybe like $2/5 NL and $100 tournaments would be the biggest limits allowed. That being said, I don't think that would be SO terrible. Lots of worse things could happen to poker than a limited and regulated poker site being introduced in the US.
You recently moved to the Cayman Islands.. How do you like it there so far? Before the latest move you had lived in Costa Rica. Several poker players and businessmen in poker have moved out of the US. At what earning point do you think it makes sense for someone to think about living outside of the US for tax benefits and other savings. Do you plan on moving back to the US, or plan on being where you are for a long time?
Nat: I like most things about Grand Cayman. It's a little too expensive and there are a few things missing there but for the most part it's very nice.
Overall I believe strongly in tax competition. The US simply doesn't provide the best tax option for US citizens who work online and derive their income from businesses that are not based in the United States. A lot of people have this view of Cayman as some offshore tax shelter where people "funnel" money and don't report it to the IRS. Quite the contrary. I report all of my income. But I get a bunch of 100% legal tax benefits by living outside of the United States.
For instance, the Foreign Earned Income Exclusion (see http://www.irs.gov/businesses/small/international/article/0,,id=97130,00.html) allows US citizens living abroad to make their first ~90k tax free while deriving their income from a foreign company. So someone who is paid $90k (or whatever the exact amount is) living in Grand Cayman doesn't pay a cent of income tax. Of course, I do have to pay income tax for my US-based income. And I do have to pay tax on income not covered by exclusions or treaties of some kind. So it isn't like I'm totally avoiding taxes -- I pay quite a bit of money to the IRS every year. I just minimize my taxes within the law.
I am not sure how long I will live outside of the US.
Overall I believe strongly in tax competition. The US simply doesn't provide the best tax option for US citizens who work online and derive their income from businesses that are not based in the United States. A lot of people have this view of Cayman as some offshore tax shelter where people "funnel" money and don't report it to the IRS. Quite the contrary. I report all of my income. But I get a bunch of 100% legal tax benefits by living outside of the United States.
For instance, the Foreign Earned Income Exclusion (see http://www.irs.gov/businesses/small/international/article/0,,id=97130,00.html) allows US citizens living abroad to make their first ~90k tax free while deriving their income from a foreign company. So someone who is paid $90k (or whatever the exact amount is) living in Grand Cayman doesn't pay a cent of income tax. Of course, I do have to pay income tax for my US-based income. And I do have to pay tax on income not covered by exclusions or treaties of some kind. So it isn't like I'm totally avoiding taxes -- I pay quite a bit of money to the IRS every year. I just minimize my taxes within the law.
I am not sure how long I will live outside of the US.
As with most people involved in the poker world, you probably have quite a few funny stories from your travels. Any you'd want to share with us?
Nat: I do have a number of stories I suppose but nothing that really stands out as being worth repeating. Ozzy, ZeeJustin and I did almost run out of gas while driving to LA from LV though. And we were driving at like 3 AM with a few hundred thousand in cash in the car. That was interesting. Here is what I wrote about it years ago (Dec 2005) when I did a guest entry on Justin's blog:
We headed out of Vegas at around 1 AM after Oz busted to drive back to ZJ's LA apt. The trip was very smooth except for one crisis: we almost ran out of gas. Soon after passing the Zzyzx Rd exit on US-13, ZJ noticed the gas light was on in his car. Luckily, I'd brought my Magellan navigation system, which can help you locate the nearest gas station to your current location. The only problem was that we were in the middle of the Mojave desert and there was literally nothing within 50 miles of us. We determined that our best course of action was to try to make it to Barstow (about 50 miles). About 5 miles shy of Barstow, we found a 76 gas station where we finally managed to fill up. The tank took 19.2 gallons on what I'm assuming is a 20 gallon tank, so we cut it pretty close. Anyway, we made it back to his place in Sherman Oaks and passed out on his couches.
Various other stories like that. Nothing too special.
What's a day in the life of Nat Arem like?
Nat: I usually get up between 9 and 10 am, check email, eat, do some work, etc, etc. I try to go to the gym or get some sort of exercise. I also watch a fair amount of TV on my computer -- I'm a really big fan of watching whole seasons in short periods of time. I am not a huge partier or drinker but I do enjoy going out from time to time.
Where do you see yourself in 5-10 years?
Nat: That's almost impossible to say. Hopefully healthy and enjoying life. That's about all I can really ask for I guess.
What are some of your goals and dreams in life?
Nat: Materially I'd like to own a Ferrari. But I would really like to, one day, be happily married and have a happy and healthy family. I don't anticipate doing it anytime soon but I think I would like to do it down the line.
For more on Nat, you can check out his blog at www.natarem.com
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