Sunday, December 13, 2015

The Effort-Outcome Model For Evaluating Your Portfolio Life

One of the perils of living a portfolio life is the need to decide how to allocate your time and energy among potential initiatives.  The challenge is that most initiatives are full of uncertainty.  In an effort to structure my thinking about my own life, I decided to create a classic chart, with one axis representing the level of personal control I had over the outcome, and the other the expected value.

I dealt with the uncertainty over outcomes by creating a bar that I thought was roughly equivalent to the 20th and 80th percentile outcomes, and added a yellow star to indicate the median outcome.  Here is the chart:

As you can tell, I've anonymized the different options.  It's not surprising, therefore, that I've chosen to focus more effort on the top outcome, which offers both the greatest personal control, and the highest median expected value.  But I can envision plenty of other cases where I might need to make a tradeoff between expected value and personal control over outcomes.  Personal control matters, because it indicates how much your efforts are likely to help; going "all-in" in terms of effort on an initiative where you have little personal control over the outcome is wasteful.  But expected outcomes also matter; you might personally control an outcome, but if the value of the outcome is negligible, such effort is also a waste of time.  Note that this is necessarily an incomplete picture--it doesn't take into account total effort/investment required, or how much you enjoy the work--but most useful tools focus on a subset of the situation.

How does your own life look?

Sunday, November 15, 2015

Paris, ISIL, Evil, Law Enforcement, and War

We stand with Paris.

Like everyone else, I was appalled and saddened by the recent attacks in Paris.*  One of the strange things about modern life is that the news media intimately acquaints us with vivid images of atrocities and suffering even as their geographical distance makes it nearly impossible for us to do anything to help.  We're human, and when events make an emotional impression on us, we feel the need to act.

After the attacks of 9/11, people around the globe lined up to donate their blood.  Blood banks in America collected an extra 600,000 units of blood after 9/11.  But since blood is a perishing commodity, more than 200,000 units were discarded, unused.

I'm no more immune to this urge than anyone, but I'm cognizant of how the hot surge of emotion can overcome reason, which is why I'm going to try to work out my thoughts about the attacks with as much caution as I can muster.  Hopefully this essay will help people think through these issues as well, rather than being discarded, unused.

Evil
The attacks seem obviously evil, but I think it's useful to examine why they seem so to us.

The first thing is that they involve killing.  It may seem obvious, but death is generally the greatest ill we can encounter in life, and it is permanent and irreversible.  This means that we should strive to avoid taking human life.

Indeed, the basic function of a government is to keep its citizens safe.  We grant the government a monopoly on the legal use of force, and in return, we expect fair treatment and protection.  This is one of the reasons why we react so strongly to police officers who murder innocent people.  It is a violation of the basic prohibition against killing and a breach of the implicit contract with the state.

As a side note, this principle explains why gun control is essential.  Giving citizens unfettered access to guns means giving people the power to kill other people.  I don't know about you, but I don't trust the average citizen with the power of life and death.  I'm not sure I trust any citizen with that power.  Most arguments against gun control boil down to the ability of armed citizens to deter crime.  Yet arming citizens to take on criminals is like swallowing a spider to catch a fly--it might work, but it's a pretty suboptimal alternative.

Thee second factor that speaks to the evil of the Paris attacks is that they targeted the innocent.  The people killed weren't criminals, combatants, or even aware of being targeted.  They were simply attending a concert, dining out, or attending a soccer game.

In a statement claiming responsibility for the attacks, ISIL said Paris was targeted because of France's role in the airstrikes against ISIL, and for being a "capital of adultery and vice."  These two justifications violate two different principles--the first being that military force shouldn't target innocent civilians, and the second that disagreeing with social mores does not justify violence.  We'll discuss the issue of war later on in this essay, so I'll focus on the issue of "morality" in general.

In a world with a multiplicity of philosophies and religions, it's difficult to talk about morality.  Difficult, but not impossible.  Whether you subscribe to Mills/Bentham utilitarianism, Kant's Categorical Imperative, or the teachings of Buddhism, the most fundamental right is that of freedom and self-determination.  You don't have to be an enthusiastic fan of Bitcoin or dream of owning your own island to appreciate the importance of freedom.

Groups and cultures that seek to restrict individual freedom are generally in the wrong.  It is wrong for certain cultures to require women to wear restrictive clothing.  It is wrong for France to bar women from wearing restrictive clothing.  Let people wear what they want, have sex and marry whom they want, and inhale what they want.  It's none of our business.  If there are externalities like the healthcare costs of alcohol or tobacco usage, tax the heck out of those substances to pay for those externalities.

Sometimes, freedoms come into conflict, as with abortion, where a woman's right to control her own body conflicts with the rights of the unborn child growing in her body (and those of the father).  Here, we have to decide on what we think is a fair process for making a decision (passing laws, judicial review) and accept that humans and their compromises are imperfect.  If you agree to the process (e.g. by remaining a citizen of the United States), but you don't abide by the resulting compromise, you're essentially like a spoiled child on a playground who tries to take his ball and leave.  This doesn't mean obeying every law, but it does mean accepting the consequences of civil disobedience in service of a cause.

Yet none of these careful nuances matter in the case of the Paris attacks because ISIL plays no role in the laws and behaviors of French citizens!  Using deadly force to punish the people of another nation for behaviors that have no impact on your own life is both meddlesome and foolish.  Any group or culture that believes in taking such action is irrational and evil on the face of it.

Law Enforcement and War

Given the evil of the Paris attacks, the question is, how should one respond?  The French government responded with airstrikes on ISIL's "capital" (more on this later) after President Hollande called the attacks "an act of war."

A key part of any such response is to decide if your actions are law enforcement or war.

Law enforcement consists of the state taking action to apprehend criminals and put an end to their crimes against individual citizens.

War consists of the state taking action against an enemy that represents a threat to the state.

Law enforcement officers should avoid the use of deadly force unless there is no alternative.

War is predicated on the use of deadly force, and assumes that diplomatic alternatives have been exhausted.

Given that ISIL claimed state-level responsibility for the Paris attacks, I think the French government has the right to consider it an act of war.  Yet the process of defending against such attacks has far more in common with law enforcement than war.  Terrorists aren't like armies massing on your border; they are hard to detect and often hide inside your own population.  Even the world's most powerful military struggles with nation building, as the US military has found at great cost over the fast 14 years.

The other problem with war is what is euphemistically called "collateral damage," because it sounds better than "innocent people killed in the process of trying to get the bad guys."  The desire for vengeance is deeply human and instinctive, but airstrikes are likely to kill innocent civilians, most of whom probably hate living under ISIL rule.

The reality of war is that lots of innocent civilians die.  The question is whether the alternative is worse.  During World War 2, the Allies didn't bomb the Nazi concentration camps.  Doing so would have killed innocent prisoners.  But doing so might also have prevented many deaths.

If President Hollande and other world leaders decide to invoke the concept of war, I hope they commit themselves to their chosen course of action and have the fortitude to see it through.  ISIL has done a remarkable job of making enemies of nearly all of the surrounding states in the Middle East, the United States, Europe, and Russia.  This gamble will pay off if ISIL's enemies content themselves to minor moves and overheated rhetoric; the resulting morass will let ISIL congratulate itself for standing up to "corrupt Western powers" and help it recruit more fighters.  I hope it turns out to be a bad gamble.

What You Can Do

On the one hand, I know that changing a Facebook profile photo is a small gesture.  On the other hand, millions of small gestures add up.  Each time someone sees a tricolored profile photo, they feel a sense of collective purpose.  I don't see anything wrong with that.

In addition, I think that one of the best things we can do in the coming days is to stay calm and try to act with patience and reason.  One of the great things about democracy is that it generally reflects the will of the people.  One of the awful things about democracy is that it generally reflects the will of the people.  ISIL is an evil force that we need to fight.  But we need to fight in a smart, disciplined, effective way.

* There is an entirely different discussion that we could have about why attacks in Paris have a global impact, while similar attacks in Beirut, and worse atrocities perpetrated by the likes of Boko Haram attract little comment or outrage in the Western world.  I suspect that the reasons are a combination of affinity and shock.  Affinity in the sense that most Americans identify more with Paris (especially those who have visited it) than Beirut, let alone Nigeria (this is part cultural and yes, part unintentional racism), shock in the sense that Paris is generally thought of a safe, cosmopolitan city, far from war and suffering.  Perhaps I'll take up this subject at greater length another time.

Sunday, November 08, 2015

What KRS-One Teaches Us About Silicon Valley

I am an unapologetic booster of capitalism in general, and Silicon Valley in particular.  It's even in the name of this blog!  Yet I've found myself playing the role of skeptic in an increasing number of conversations lately.

As our current bubble (yes, I said it!) reaches new heights, it seems like all anyone in Silicon Valley can talk about is how they're "crushing it," "killing it," and building the next great "unicorn."  Never mind the violence of the language (which deserves its own separate essay--is it any wonder that so many women have been repelled by the current zeitgeist?); what's striking is the monomaniacal focus.

That's why I enjoyed David Heinemeier Hansson's recent essay asking startup folks to "Reconsider" the standard unicorn-hunting model.  But while DHH makes some great points, I think he overlooks the psychological barriers to swimming against the currents.

Here's where I'm going to issue a content warning--I'm going to use a quote that contains slang terms that aren't family-friendly.  Stop reading now if you're concerned.

I know a lot of successful young people.  These are entrepreneurs who have achieved a level of success that 99.999% of humanity would trade their lives for in an instant, but aren't the subject of regular magazine covers.  Their material needs have been met, yet most of them are still casting about for their next startup, trying to become a venture capitalist, or in most case, both at once.  Yet when I talk with them, few of them actually want either of those lives.

The problem is that in Silicon Valley, if you're not an entrepreneur or investor, you're nobody.

The old-school rapper KRS-One has said, "Capitalism is a pimp and ho system.  You are either a pimp or you're a ho."  In Silicon Valley, if you don't fit into one of the two standard buckets, no one knows what to do with you.

As shallow as it may sound (and make no mistake, it is shallow), if you go to any event that features "networking," if you're not an entrepreneur or investor, you might feel like a leper.  People you meet instantly start looking over your head for another, more valuable target, and disengage from the conversation as if you were radioactive.  It takes a lot of intestinal fortitude to ignore what everyone else seems to think is important.

Yet that's precisely what you need to do to be happy.

Don't let the trade press and social media tell you what is and isn't important; all they care about are clicks and shares.  By that logic, Donald Trump is the most important person in America.

The funny thing is, when you stop trying to be something you're not, the right kind of people--thoughtful, interesting--will gravitate towards you.  "Whew," they'll say, "Finally, someone I can talk with!"

And if, after you decide that you don't need to chase unicorns, you find that you actually do want to start a company or invest in startups, more power to you!

My hope is not that you'll become an entrepreneur or investor, or that you'll reject those labels.  It's that you'll figure out what you actually want to do--not what others want for you--and do it.

Friday, October 30, 2015

You're not indispensable (except when you are)

When Jesse Noller's essay explaining why he had essentially left his software community made it to the top of Hacker News, I read it with great interest.

Noller was one of the pillars of the community, but by pouring all his time and energy into the community, he neglected his marriage and family, and ultimately lost both of them.

Here's a passage that really struck home for me:
"You can’t be emotionally all in on everything. You can’t make another 24 hours appear to be “present” for everything. Instead, I stole time and ran my emotional credit card like it was limitless. 
I stole time from my family, from work, from everything. I stole it from me, I gave time, emotion and empathy freely to anything and everyone. 
My values - what I should have been caring about - were, putting it bluntly, completely and totally fucked.
Online communities are an interesting animal; they’ve given me so much, and I’ve made friends all over the world. It’s opened career doors and more for me, it’s supported me when I’m or my family was down. 
However, “community” is not the gift that keeps on giving, it is the gift that keeps on taking and taking and taking. If you don’t set clear and absolute boundaries, it will drain you dry and move on. 
I see the warning signs that were posted all over now, looking back. A good friend and mentor warned me, Dusty, my now ex-wife was telling me. The fact I had a rough relationship with my oldest daughter was telling me. All the signs were there. 
Take, take, take, give, give, give - for what? To change the world? Can a programming community change the world? Can it hug you when you’re sitting alone at night on the couch staring at a black TV? The friends you make, if you can touch them, can. 
Otherwise, No. 
Will it raise your daughters or be there for your wife? 
No. 
That was my job; and I bombed."
When I was a young employee of D. E. Shaw, I never took any vacation time, despite having an unlimited vacation policy.  I always felt I was too "indispensable" to be away from the office.

Of course, when I got the chicken pox, and was quarantined at home for two weeks (several of my co-workers hadn't had the disease, and during the Dark Ages, there was no chicken pox vaccine), the company somehow managed anyway.

It is very rare that you're truly indispensable at work, even if you're a founder CEO.  If you are, you've done a piss-poor job of building your management team.

In contrast, you truly are indispensable at home.  No number of nannies, cleaners, tutors, and other helpers can substitute for having a husband, a wife, a father, or a mother present.

There is a famous quote that most of you have heard that seems appropriate here.  It was spoken by Brian Dyson as part of a graduation speech at Georgia Tech in 1991:
"Imagine life as a game in which you are juggling some five balls in the air. You name them – work, family, health, friends and spirit … and you’re keeping all of these in the air. 
You will soon understand that work is a rubber ball. If you drop it, it will bounce back. But the other four balls – family, health, friends and spirit – are made of glass. If you drop one of these, they will be irrevocably scuffed, marked, nicked, damaged or even shattered. They will never be the same."
You're not indispensable.  Except when you are.

Sunday, September 27, 2015

Fighting the Imposter Syndrome

The great Eric Barker just wrote generally about fighting the effects of the Imposter Syndrome, in which successful people are convinced that they are frauds, and do not deserve the success that they've achieved.

Imposter syndrome is extremely widespread, affecting 70% of successful people, according to a study by psychologist Gail Matthews.  If it affects you, you might think you're alone, but it probably affects your successful friends as well.

I believe that entrepreneurs are especially prone to imposter syndrome, in part because their press clippings tend to paint a glowing picture of them and their companies that would make the most outrageous Facebook-brag look modest.

Eric's post offers some great advice for those who find themselves feeling like frauds:
"Focus On Learning: Forget appearing awesome. You can get better if you try, so focus on that.
“Good Enough” Goals: Stop trying to be prefect. (Yes, that was a typo. I’m not fixing it. It’s good enough.)
Take Off The Mask: Talk to someone you think is facing the same issue. You’re not alone."
Let's take each of these in turn.

Focus On Learning
The entrepreneurs I admire most are the ones who admit their lack of omniscience and focus on learning.  This doesn't have to mean following the advice of others; rather, it means keeping an open mind, yet taking a skeptical and experimental approach to the world.  If you focus on the status you've achieved, you'll worry about losing it.  If you focus on learning, you'll realize that no one can take away what you've learned, and that there is always more to learn.

“Good Enough” Goals
If you measure yourself against others, you'll never be happy.  There's always a bigger fish.  Even Mark Zuckerberg, who has achieved more at a young age than anyone since Alexander the Great, could still be disappointed.  Adopting modest goals doesn't mean that you cut off achievement; at one point, Larry Page and Sergey Brin offered to sell Google to Yahoo! for $1 million, and were bargained down to $750K by Vinod Khosla.  The deal only fell apart because Excite refused to pay that exorbitant sum.  Oops.

Take Off The Mask
This is where having real friends and loved ones comes in.  In my own life, I have been the subject of both adulation and scorn.  But I never let either affect me that much because I am fortunate to have a spouse that loves the real me (and married me long before either the adulation or the scorn) and true friends who don't really care about who thinks what in the Silicon Valley bubble.  For goodness sake, maintain relationships with people outside the Valley.

You shouldn't feel bad if you find yourself falling into the imposter syndrome.  But you don't have to suffer alone, and in silence.  Follow Eric's advice, and you'll be able to see yourself as you truly are, and understand that what others think doesn't matter that much.

The Implied Assumption of Success

One of the mental traps that I try to avoid is what I'm going to term "the implied assumption of success."

This trap occurs when entrepreneurs say something like, "If I raise $2 million instead of $500K, I'll be able to get much farther, so I should raise $2 million."

The issue, of course, is that the implied assumption of success glosses over the fact that your chances of raising $2 million are probably very different than your chances of raising $500K.

I was struck by another version of this when I read the seemingly contradictory facts that mobile browsing traffic was 2X that of native apps, and that native apps accounted for 80-90% of our time on mobile devices.

The punchline is that both are correct.  Far more people visit mobile websites than use mobile apps, but people spend far more time on the few mobile apps that they bother to use.
"Deepest engagement for the longest period of time happens in apps, so apps matter, and they matter desperately for brands who want to connect to customers. But since, as we’ve seen in our research, apps-per-smartphone users is maxxing out at an average of 50-60, and no-one besides Robert Scoble is going to install an app for each company, service, or site he or she interacts with, your mobile web experience has to be good, and it has to be strong."
In other words, a person who downloads and regularly uses your app is way more valuable than someone who just visits your mobile website.  But this doesn't mean you should invest all your efforts in your mobile app.  Indeed, consider the plight of major retailers--of the top 30 US retailers, only 2 of them drove more than 50% of their mobile usage via app: Amazon and Walmart.

The implied assumption of success tricks us into investing in desirable, but lower-probability initiative.  When you are considering several alternatives, make sure that you account for the probability of success, not just the magnitude of potential benefit.



Friday, September 25, 2015

Entrepreneurs who slack off after raising money aren't entrepreneurs

Paul Smith recently wrote about the phenomenon of entrepreneurs who slack off after raising their seed round:

"Here’s what I see three quarters of startups doing immediately after they raise a seed round: 
  • After months of working 60 hour weeks (and the rest, usually) to launch and demonstrate early growth to convince investors they’re worth it, the founders start working 9am til 5pm, five days a week — they’re taking it easy before the hard work starts;
  • Because raising money offers a financial opportunity to address their work/life balance, their Facebook feed slowly fills up over the following weeks and months with snaps from weekends away on city breaks, at parties and gigs;
  • They almost certainly find the time for a holiday, or a trip home to see the family, because they deserve it;
  • A new apartment or house is high on their priorities since they can now pay themselves proper wages;
  • There’s finally time to make amends to a long-suffering partner — perhaps they can finally plan that dream wedding they’ve talked about for months.
If this is still occurring in the weeks after the raise has happened, these startups will likely be dead before they raise Series A.
I agree with Paul that these are terrible signals.  What is mind-blowing to me is that this even needs to be said.

Personally, I always find that I work *harder* after raising money than when I bootstrap or self-finance.  My mentality is that once I raise money, a bunch of people have put their trust in me, and I am going to work like a maniac to avoid letting them down.

Yes, the investors are typically professionals who can afford to lose their investment, but that's not the point.  If it's not okay to discriminate against people for not having money, it's not okay to discriminate against people for having money.

As a founder, you've agreed to become a good steward of your investors' money.  If you don't treat it more carefully than you treat your own, you've abdicated your founder's responsibilities and become an employee.

I can still vividly remember the moment I realized this distinction.  Back at my very first startup, during the height of the Dot Com boom, I asked my employees to do some work to avoid wasting money.  One of my product managers said, "Why are we going through all of this hassle just to save $25K per month?"

It was all I could do to keep from launching myself at him.

Founders have a higher duty than employees.  In the book, "The Horse and his Boy" from the Chronicles of Narnia, King Lune of Archenland describes the duties of the king to his long-lost son, the crown prince:
"For this is what it means to be a king: to be first in every desperate attack and last in every desperate retreat, and when there’s hunger in the land (as must be now and then in bad years) to wear finer clothes and laugh louder over a scantier meal than any man in your land."
You could hardly come up with a better definition of what it means to be a true entrepreneur and leader.


Thursday, September 24, 2015

Extreme Altruism and You

This morning, I read a long profile of an extreme altruist, who believes in a) giving away as much as possible and b) focusing on whatever will provide the greatest benefit, regardless of whether that means helping loved ones or strangers.

In one passage, she worries that she'll have to give up her dream of becoming a mother:
"But once Julia opened herself up to the thought that children might not be necessary – once she moved them, as it were, to a different column in her moral spreadsheet, from essential to discretionary – she realised just how enormous a line item a child would be. Children would be the most expensive nonessential thing she could possibly possess, so by having children of her own she would be in effect killing other people’s children. Julia talked about this with Jeff and she grew very upset. Once the prospect of giving up children felt real to her, it felt terrifying and painful."
In the end, she agrees to her husband's logic:
"He calculated that if the child gave away around 10% of its income, then they would likely break even – that is, the money their child would donate would be equal to the money they did not donate because they spent it instead on raising the child. Of course, this did not take into account that it was better to give money now rather than later, especially to urgent causes such as global warming and Aids, so some discounting would have to be factored into the calculation. All this made Julia feel better for a while, and even though she realised that it would be pretty weird to tell a child that they expected it to pay for its existence in the world with a certain percentage of its income, she figured she was going to be a weird mother anyway, and her child would probably be weird, too, and so perhaps to a child of hers all this would seem perfectly sensible. Finally, Julia decided, sometime before her 28th birthday, that she would try to get pregnant. Their baby, Lily, was born in the early spring of 2014. The thought of leaving Lily in order to go back to work upset her, but she knew that she had to start earning again so she could keep donating. She felt that there were people in the world who needed her money as much as Lily needed her presence, even if their need did not move her as Lily’s did."
For people like me, who are wired with a "normal" level of altruism, this kind of thinking seems batty at best, and monstrous at worse.  I'm not ashamed to admit that I care a heck of a lot more for my kids than anyone else's, and that I pour a disproportionate amount of money into rendering their childhood safe, health, happy, and fulfilling.

My guess is that the instinctive revulsion most of us feel to the idea of extreme altruism is based on the basic principles of evolution.  Natural selection favors those who pass on their genes; people who agonize over whether or not to have children, and then refuse to care more for their children than strangers are pursuing a losing strategy as far as Darwin is concerned.

That revulsion I feel is billions of years of self-preservation taking one look and doing the cartoon "cuckoo" gesture.

But, our modern environment is radically different than what existed for most of human history.  The challenges that face most of us these days aren't figuring out how to scratch out enough food to avoid starvation.  It may be that extreme altruism, while individually maladaptive, is what our species needs to survive, since our own essential instincts will cause us to consumer more than our environment can support.

While it may be tempting to dismiss extreme altruists as wack jobs, I seem them as a useful experiment--an insurance policy that explores on way that human behavior may need to evolve to suit a new environment.

Just as long as they don't ask me to join them.  I'm running a different experiment!

UPDATE: Slate's Laura Miller did a great job of encapsulating most of my feelings in a single passage:
"Do-gooders take something we all want to believe is quintessentially human—the willingness to extend ourselves to strangers—and place it in direct conflict with something that is even more fundamentally human: caring for our own.
The result is a bit like a reverse version of the famed Uncanny Valley effect, in which a representation of a human being becomes more disturbing as its resemblance to an actual human being increases.
Do-gooders are already human, of course, but as they ratchet up their selflessness, they begin, ever so slightly, to depart from the fold. They look like us and talk like us, but they abide by rules that we understand we could only adopt were we to abandon something that feels essential to ourselves."

Monday, September 07, 2015

A Capitalist Visits Burning Man

"You?  And Ben?  Going to Burning Man?"

When my friend, co-author, and business partner Ben Casnocha and I announced that we were going to Burning Man, the reactions we received, both in person and on social media, ranged from disbelief to shocked disbelief.

My typical in-person response was, "Why are you so surprised?  Is it because I hate the outdoors?  Despise hippies*?  Don't do drugs?  Avoid parties?  Enjoy sleeping?  Dislike electronic dance music and any dancing outside a ballroom?"

* It's important to understand the context of my allergy to hippies; I grew up in Santa Monica, with classmates who had names like Rainbow, Cinnamon, and Blaze.  Wealthy hippiedom was the dominant culture, and was less focused on generosity and giving and more on ostentatious self-righteousness.  Throw in the fact that hippiedom during this era was anti-science and anti-technology, and you can understand how my feelings developed.  Spending the summer in Santa Cruz in 1999 didn't help.

The irony is that I believe that many of Burning Man's attendees go for the hedonism, cloaked in the guise of community.  Since I don't have any vices that Burning Man satisfies, the only reason to go was for the art, community, and experience.  I can't speak for Ben, but judging from his own Burning Man post, we went for the same reasons.

When people ask me to describe Burning Man, I've taken to calling it, "a crowdsourced bizarro Disneyland where the attendees run the attractions."  What I mean by this is that Burning Man shares a couple of crucial characteristics with Disneyland, but differs in almost every other way.

How Burning Man is like Disneyland:

  • It's a safe environment.  I wasn't worried about anything, other than choking to death on the omnipresent dust, or getting run over by an art car.  Part of this may be due to the Burning Man spirit; more cynically, I'd argue that the price tag and inconvenience make Burning Man unattractive to criminals.
  • It's clearly distinct from the everyday world.  Just like Disneyland, passing through the entrance takes you to another world.  Money isn't allowed.  Normal rules of behavior don't apply.  You expect everyone to be friendly.
  • There's an endless array of things to do.  Everywhere I went, there were exhibits, ranging from the half-assed to the breathtaking.  With 70,000 attendees, there were probably thousands of camps that welcomed visitors.
How Burning Man is not like Disneyland:
  • No central organization.  There's no helpful cast members who ask if you need help if you look confused for a couple of seconds.  In fact, the least friendly, least helpful person that Ben and I met the entire time was the volunteer who was staffing the central information building.  When I asked him how to find the "Geek and Greet" dinner for BRC's tech staff and vendors.  He answered gruffly, "Look on the map."  When I couldn't find it and went back, he said, "Try harder."  If that happened at Disneyland, he would have been summarily executed.
  • Constant hardship.  The dust is an enormous pain.  Even on the rare occasions when there isn't a dust storm blowing, the dust gets everywhere and makes any and every activity difficult.  I can't even imagine trying to have sex while covered in dust!  I also spent the entire time carrying a heavy backpack (to make sure I had enough water) and futzing around with my goggles and scarf to make sure they weren't leaking dust.
  • Wildly varying standards of quality.  Camps and exhibits ranged from carefully engineered to slapdash, and from awe-inspiring to profoundly lame.  The highs are higher, but the lows are lower.
  • Not family-friendly.  Duh.
I'll post my raw notes at the end of this piece (written down at 7 AM in the driver's seat of a Toyota Avalon, which is where I slept the night), but I'll focus on the highlights, lowlights, and lessons learned.


Highlights:

  • The spirit of radical inclusion.  I love welcoming communities, like Stanford or the Unreasonable Institute, and I found a similar feel at Burning Man.  One guy, Jeff, politely asked us to move our car (it was on top of his canvas tarp), then gave me a three-minute silent hug to welcome me to Burning Man.  I love this kind of openness (though as I noted to Ben, if he had started to move his hands down my back, I would have broken things off--not that there's anything wrong with that).
  • Enthusiasm.  Ben and I both noted that there's something incredibly appealing to us about sincere enthusiasm, whether from the scientist who told us about the geography and ecology of the Playa, or the burner who was getting ready to celebrate her 10th wedding anniversary at Burning Man.  She and her husband met at Burning Man, got married at Burning Man, and celebrated their anniversary every year at Burning Man.
  • The maker spirit.  Simon Fire Edition 2.0 was what people love about Burning Man--enthusiastic engineers who put their electrical, mechanical, and computer engineering skills to work to build a delightful and whimsical attraction.
  • The enormous scope of the event.  The playa is 2 miles across, making it the size of downtown San Francisco (but a lot more logically laid out and navigable).  I especially enjoyed the view from the 4th floor of the Altitude Lounge, which let me see nearly the entire playa.  I went in the afternoon, then went back at night to check out the night-time view.
  • The view at night.  When the sun goes down, the entire playa becomes a bizarro version of Disney's Main Street Electrical Parade.  Flashing colored lights and gouts of flame are everywhere, and rather than lasting 30 minutes, they go all night.
Lowlights:
  • Did I mention the dust?
  • When a port-a-potty in the middle of the desert has been in use for the better part of a week, it's not a pleasant sight or smell.  Each stall contains a small mountain of human excrement which is all too visible and pungent.  I can only imagine the horror of being a woman in that environment.
  • For me, the nights, while visually stunning, are pretty unappealing.  It ultimately depends on how you feel about raves, drugs, and EDM.  The entire playa becomes a gigantic, psychedelic rave.  To me, this is the least interesting part of Burning Man.  The party sounds and feels like any other party, just in the middle of the desert.  Parties rarely offer the chance for thoughtful conversation or reflection.  (In fairness, if I were in the market for a Playa girlfriend, perhaps I would have felt differently, since then the vast quantity of gyrating, scantily-clad, intoxicated women would have been a feature, not a bug.  One of my campmates was incredibly affectionate with the woman who was obviously his girlfriend.  She was an interesting character, who was a circus acrobat from New York who did nude photography of other circus performers.  When we asked her how she'd met her boyfriend, she replied, "I met him yesterday night.")
  • Not truly a lowlight, but it did strike me that Burning Man is a remarkable case study in capitalism.  Rather than a monetary economy, it runs on an attention economy, and there is only so much attention to go around.  Attracting visitors to your camp is a winner-take-most affair; just like at a trade show, the biggest parties sweep up 90% of the party-goers.  Tons of camps were open for business, but were completely empty.  At one point, Ben and I walked past a puppet show, where the performers were performing without an audience.  (To be fair to the audience, the puppeteers weren't very good.)  When someone actually stopped, the performers were ecstatic.  Attendees who set up camps for visitors invest colossal amounts of money, time, and hard work with uncertain psychic return.


Lessons Learned for next time:
  • Rent a trailer with a toilet, sink, power, and air conditioning.
  • Noiseproof your sleeping area (if you're a light sleeper)
  • Treat it like Disneyland.  Get a copy of the guidebook, and plan out which camps you'll visit and when.  At the very least, mark the places you want to visit on the map.
  • Take advantage of the mornings--it's not yet hot or dusty, and there's still plenty to see and do 
Ultimately, I'm glad I went to Burning Man.  I freely admit that I optimized my trip to minimize downside, rather than maximize upside.  I kept the visit to 24 hours (which is actually up from my original plan of 8 hours, which would have allowed me to avoid trying to sleep in the middle of the desert).

Ironically, Burning Man was less of a physical challenge than I expected; the worst part of the trip was actually the charter flight back to the Bay Area, where I became ferociously airsick, and had to pull a Ziploc out of my backpack in case I needed an airsickness bag.

If I were to return, I'd follow my own lessons learned, and spend longer on the Playa.  We actually spent a little time in the trailer of an experienced Burning Man staffer, and it both incredibly pleasant and a huge relief from the external hardships.  Of course, renting a luxury trailer to eliminate the hardships of Burning Man is both a) expensive, and b) against the Burning Man ethos of self-reliance, so I don't know when I'll make a return trip.

Of course, if one of my readers is a member of a luxury camp and has an extra spot, let me know!  Same time next year?

Raw notes:
  • Insanely dusty.  Dust storms are constant.
  • Hands are constantly dry and covered in dust 
  • Not as hot as expected (though this year may have been unusual)
  • Trailers are awesome (provide shelter, refrigeration, air conditioning, a toilet)
  • Port-a-potties suck, and fill up with excrement
  • It's easier to interact with people during the day, versus the nightly raves
  • Lots of EDM, especially at night.  Occasionally heard a little jazz or 80s music.
  • The Playa is visually stunning at night--colored flashing lights and flames everywhere. 
  • The radial structure makes it easy to navigate, but it's still hard to find stuff
  • It's an attraction where all the attendees *are* the attractions
  • People send vast amounts of time and money to set up free clubs, art galleries, restaurants, etc.
    • I speculate that they are seeking meaning, or at least meaningful connection
  • Attracting visitors is a winner-take-most affair; just like at a trade show, the biggest parties sweep up 90% of the party-goers.  Tons of camps were open for business, but were completely empty 
  • The view from the 4th floor of the Altitude Lounge was amazing. 
  • Simon Fire Edition 2.0 was what people love about Burning Man--enthusiastic engineers who put their electrical, mechanical, and computer engineering skills to work to build a delightful and whimsical attraction.
  • People meet at Burning Man, get married at Burning Man, and celebrate their 10th anniversary at Burning Man!
  • Silently giving and receiving a three-minute hug is a very interesting experience.  You are communicating with another human being in a very unusual way.
  • I can see the appeal of Burning Man to celebrities--you have the chance to be anonymous (especially during a dust storm) and yet still be treated well
  • A party at Burning Man still sounds like a party, and if you don't like drinking, drugs, and dancing to ear-shattering EDM, they still suck
  • Over and over again, we kept saying, "That looks like something out of Mad Max."
  • I actually wished I had worn a watch; I was afraid that the dust would kill my phone!

    Thursday, August 27, 2015

    The Odds Are Always Against Startups

    Y Combinator CEO Sam Altman just released a fascinating set of statistics about the firm.

    The numbers are pretty stunning; Y Combinator's 940 companies are now worth more than $65 billion.  That's an astonishing mean value of $69 million...and recall, that Y Combinator buys into those startups at a sub-$1 million valuation.  Now that's a great business!

    But while Y Combinator itself is a great business, I want to point out that embedded in those stats are the fact that the odds are always against startups.

    I'm fond of telling audiences that only 10% of venture-backed startups succeed, by which I mean achieving an exit of $100 million or more.

    Y Combinator estimates that 40 of its 940 companies are now worth more than $100 million.  That's 4.3%.

    Even if we double this number to account for the fact that many Y Combinator companies are too young to have reached their final stage of growth, we still only get 8.6%.

    Meanwhile, YC has produced 8 "unicorns," which implies a ratio of 8 / 940, or 0.9%.

    In other words, even if you get into the world's greatest, most successful accelerator (Y Combinator), your chances of building a unicorn are only 1-2%.

    This is one of the paradoxes of startups: Collectively, startups are a fantastic business that contribute greatly to society.  Individually, the odds against any individual startup and entrepreneur are incredibly long.

    Friday, August 21, 2015

    Ambition vs. Meaningful Goals

    Leo Widrich at Buffer recently wrote about how he has been reflecting on the dangers of ambition:
    "[Ambition] gets in the way of doing the great work of our lives, of living out what we’re already naturally gravitating towards. It also blinds my awareness especially of accepting things how they truly are—instead of making them fit my ambitions. It’s like trying to straighten something out forcefully that isn’t meant to be straight, which instead wants to follow its natural course."
    The key related point I'd like to make is that we need to be very clear about our implicit definition of "ambition."  I think it's telling that Leo never bothered to define ambition; we consider it so fundamental and common that it needs no definition.

    Google's quick definition of ambition seems to reflect the unsaid words in our heads: "desire and determination to achieve success."

    Yet this simply kicks the can down the road--what do we mean by "success"?  Again, Google does a good job of reflecting the common belief: "the attainment of popularity or profit."

    Put it all together, and I think you get an accurate definition of how people use the word ambition:

    "Ambition is the desire and determination to attain popularity or profit."

    The problem with ambition is that it combines a good thing (desire and determination) with a bad thing (allowing others to define what is important).

    When you focus on what others define as important--popularity and profit--you abdicate responsibility for your own life.  and even if your ambition is rewarded, and you achieve popularity and profit, it doesn't bring any intrinsic meaning to your life.  It just means you're good at playing someone else's game.

    Don't settle for being ambitious.  Instead, develop the desire and determination to achieve personally meaningful goals.  That's how you do the great work of your life.

    Friday, July 31, 2015

    The Ultimate Startup Success Plan (based on 10 years of data)

    First Round Capital, the first and foremost of the "micro" VC funds, recently released a retrospective set of lessons learned based on 10 years of investing data.  It's an incredible trove of data, some of which I love, some of which makes me feel uneasy.  But since I always believe in working with the world as it is, rather than pretending it's something it's not, I've decided to synthesize First Round's lessons into the ultimate startup success plan:

    1. Get a female co-founder.
    "Companies with a female founder performed 63% better than our investments with all-male founding teams."

    2. Get started young.
    "Founding teams with an average age under 25 (when we invested) perform nearly 30% above average."

    I don't like supporting the ageism of Silicon Valley, but the data is the data.  It may make sense to seek out younger co-founders so you have a mix on your team.

    3. Go to an elite college.
    "Companies with at least one founder who attended an Ivy League school, Stanford, MIT, or Caltech performed 220% better."

    Again, I don't necessarily like the data, but this is the single largest effect First Round found.  Find a co-founder who went to the right schools.

    4. Work at a brand name company.
    "Teams with at least one founder coming out of Amazon, Apple, Facebook, Google, Microsoft or Twitter, performed 160% better than other companies."

    5. Keep starting companies.
    "Our investments in repeat founders didn't perform significantly better than our investments in first-timers — mainly because successful repeat founders’ initial valuations tended to be over 50% higher."

    The investors' loss is your gain if you're a serial entrepreneur!

    6. Find a co-founder.
    "Teams with more than one founder outperformed solo founders by a whopping "

    Presumably the winning strategy is to recruit a female co-founder who went to an elite college and worked at a brand name company!

    7. Whether you need a technical co-founder depends on whether yo163%u're an enterprise or consumer company.
    "Enterprise companies with at least one technical co-founder perform 230% better; consumer companies with at least one technical co-founder perform 31% worse."

    I'm actually quite skeptical here; Apple, Google, and Facebook all had technical co-founders, as did recent successes like WhatsApp.  But again, the data are the data.

    8. Move to Silicon Valley.
    First Round's data found that their non-Bay Area/NYC companies slightly outperformed.  But this outperformance is based on investment returns; Bay Area/NYC companies are so much more expensive that their high valuations drag down returns.  As an entrepreneur, you're better off in Silicon Valley.

    9. Referrals aren't the only way in to a VC firm.
    Another example of data not meaning what you think it means.  First Round found that referrals underperformed direct contacts from entrepreneurs and finding investments via press coverage and events.

    I would argue that since VCs ignore most direct appeals from unknown entrepreneurs (I know I do!), a company has to be particularly good to punch through the noise.  Similarly, a company that was accepted into an accelerator, or is being written about in the press, is significantly more likely to have traction.  And since hype tends to bring higher valuations, the data suggests that the hype was justified, since despite paying higher valuations, First Round still made more on this type of investment.

    10. There's no reason to move to San Francisco.
    First Round's data showed that over the past 5 years, 75% of their investments were started in San Francisco.  This doesn't mean it's a good idea to move there.  Indeed, First Round didn't report that SF-based investments did any better (which I'm sure they would have reported if it were true).  Furthermore, I strongly suspect that more than 75% of companies are being started in the City these days, which suggests that your odds of being selected by someone like First Round are actually better if you're outside SF!

    When I combine all these lessons together, I can now paint a picture of the perfect startup:

    A 25-year-old female co-founder with a technical degree from an elite college, and who worked for Apple or Google is partnering with another young co-founder to start her second company, an enterprise software venture that is accepted into YCombinator and moves to Mountain View.

    If you match this description, please contact me right away!

    Sunday, July 19, 2015

    The Only 4 Reasons Investors Say "Yes"

    Alex Schiff is a great guy and the creator of one of my favorite products, Fetchnotes.  I met him when he was raising money for Fetchnotes (in the end, I decided not to invest because while I loved the simplicity of the product, I concluded that there weren't enough self-organizing people like me to represent a big enough market...sadly, I was right, and I've seldom been sorrier to be proven correct).

    Alex recently wrote a terrific "lessons learned" post about his experience with Fetchnotes, which demonstrates that he is also a talented writer (before he dropped out of school, he was a journalism major).  The whole post is well worth reading, especially for first-time entrepreneurs, but I want to highlight one paragraph in particular which I think does a great job of summarizing why investors say yes:
    "There are only four ways an investor says yes: 1) you have massive traction, 2) you have social proof from other trusted investors/accelerators/mentors, 3) they have a personal passion for the problem/industry/product, 4) they have a personal relationship with the founder. If one of those doesn’t apply, you might get someone to take a really deep dive, but in the end there will be some stupid, idiosyncratic reason they say no at the last minute."
    I frequently talk with entrepreneurs who are smart, talented, and capable, but who are trying to raise money too early.  Alex's list is a great checklist for anyone thinking about raising money.

    1) Do you have massive traction?

    As I've written before, nothing matters more than traction.  I often joke that if we made contact with an alien civilization that practiced baby cannibalism, and one of its members started the next Uber, investors would find a way to rationalize investing.  "Who am I to judge another person's culture?  After all, we're talking about alien babies, not human babies.  And C'hixelgleep is really killing it when it comes to making the numbers!"

    It's only if you don't have traction that you have to fall back on the others.

    2) Do you have the imprimatur of trusted investors/accelerators/mentors?

    As much as I decry the groupthink of investors, brand-name accelerators are a powerful sign of quality.  I've had one company get offered a spot in YC, and turn it down after failing to negotiate down the equity component of the standard YC deal.  I urged the founder not to screw around, and told him that *I* were to start a company, I'd apply to YC even though I already have a vast network of friends and contacts throughout the Valley.

    One interesting point is that trusted mentors can also be your gateway to receiving investment.  One of the reasons that entrepreneurs still reach out to me (other than desperation, of course!) is that I have a pretty good hit rate when I introduce a company to investors.  The fallacy lies in believing that I or other mentors have any real power to push a particular company, independent of its merits.

    First, I only endorse or recommend companies that I believe in.  My reputation is not for sale or rent.

    Second, the only reason that investors continue to take my introductions is the fact that they know that the prior point is true.  The instant I tried to game the system, I'd lose my credibility.

    Third, investors always make their own decisions anyways.  All I can do is provide access; you have the close the deal on your own merits.

    3) Does the investor have a personal passion for the product/industry/market?

    Personal passion is helpful, but unlike traction, it's not definitive.  Remember, I loved Fetchnotes (and still use it every day).  That didn't convince me to invest in the company.  Most investors can distinguish between product quality and business prospects.  A great product is necessary, but not sufficient.

    4) Do you have a personal relationship with the investor?

    The obvious thing here is to raise money from friends and family.  But unless you're fortunate enough to come from a long line of Drapers, or went to Stanford with Peter Thiel, this won't help you much when it comes to raising an institutional round.

    (Side note: There's a reason why friends and family are usually the first money in.  That investment is an irrational bet on you.  And if you're unwilling to take their money, that's also a strong indicator of how much you believe (or don't believe) in what you're doing.)

    It's almost impossible to build a personal relationship while courting an investor (though it is possible; one intrepid entrepreneur got my money by showing up at every event that I spoke at, just to give me updates on his business--fortunately for him, his business was going well).  Instead, build relationships before you need to raise money; it's a lot easier to get a meeting with a VC who is a personal friend than it is via sending cold emails.

    Bear in mind, however, that when an investor is considering an investment, they are wearing their "investor" hat, not their "friend" hat.  I invested in one entrepreneur who was shocked when he was unable to raise a Series A round for his startup.  He couldn't believe it, because he had a wealth of personal friendships with VCs, and they happily signed up to speak or sponsor previous events and gatherings he had organized.  The facts of life are that, in the words of Cyndi Lauper, money changes everything.

    As I wrote earlier, I encourage you to check out Alex's entire piece, which should be required reading for any first-time entrepreneur!

    Tuesday, May 12, 2015

    Don't Feel Guilty, Feel Committed

    I like to say that I don't feel guilty about things.

    For example, I don't bother replying to Christmas cards.  Every year, I receive boxes of cards.  I never send a single one.  And I never feel a single pang of guilt.

    Yet even though I don't feel guilt, I'm not a sociopath.  I try to help people, and I feel terrible if I let someone down.

    Contradiction?

    Nope.

    Here's how I draw the distinction:

    There's a big difference between guilt and commitment.

    Commitment means doing what you promise you'll do.  I'm very committed.  If I say I'll do something, I'll do it.  And if I can't do it, I'll feel terrible.

    Guilt means letting someone else make promises for you.  I don't believe in guilt because I don't believe that I have any moral obligation to keep commitments that I didn't make.

    Remember those darn Christmas cards?  I didn't ask to receive them.  So I reject society's illogical belief that I need to reciprocate.  That doesn't make me a bad person, just an independent one.

    Sunday, May 03, 2015

    The Problem With Populism

    As I read an editorial, Americans Need Jobs, Not Populism, by Jack Markell, the Democratic governor of Delaware, I was struck by the following thought about populism--left and right:

    The problem with populism is that it puts the focus on feeling good, rather than getting what you want.

    Whether you're a Tea Partyer, or you're still mourning the Occupy Movement, participating in populist movement is all about feeling good.  It feels good to fill and surround yourself with righteous indignation.  But what it doesn't do is have a real impact.

    Making change usually doesn't feel good.  It usually feels frustrating and boring.  You're constantly swimming upstream, while the rest of the world floats downstream, sitting in a inner tube and sipping on a cocktail.  It's a lot more fun to join a mob so you can shout slogans and high-five the true believers.

    Making change is unselfish work.  Populism is selfish fun.

    Saturday, May 02, 2015

    A Modest Proposal for Saving San Francisco's Bohemian Neighborhoods

    I read with some interest this longform piece on how the desire of the wealthy to live in cities is effectively exiling the bohemians who made those communities attractive to gentrifiers:

    The essence of the argument is this:
    "American bohemians are in a state of slow-motion flight, perpetually facing the threat of exile at the hands of wealthier people attracted by the products of their lifestyle. It clearly erodes the vibrancy and character of the country’s greatest metropolises. And it begs deeper consideration of how we allocate the finite and long-undervalued resource of dense urban space."
    While I am firmly and resolutely square, and only venture to San Francisco for weddings, funerals, and business meetings, I can't help but prescribe a solution to the bohemian crisis.  My solution is all the more delicious because it relies on the power of capitalism!

    1) Treat bohemian neighborhoods like shopping malls or theme parks.

    We can't change the fundamental economic dynamic of wild bohemias, so we need to resort to farming.

    In my home town of Santa Monica, the city was only able to revitalize its downtown when developers constructed the Third Street Promenade, a carefully-designed faux-downtown with a tightly controlled and curated set of shops and residences.

    Even the Walt Disney corporation has gotten into the act, with "Downtown Disney" at Walt Disney World--a facsimile of city life that is wildly popular with "guests" who have paid a pretty penny to travel from their own cities to a giant theme park in the middle of the Everglades.

    Why not apply the same principles to real downtowns?  Heck, this is exactly how Times Square works in New York.

    Here's how you could do this:

    2) Focus on building mini-neighborhoods.

    Building a fake bohemia requires strong central control, either by a real estate developer, or a community association.  The central authority would exert control over and entire block, allowing it to carefully curate both businesses and residents.

    Thus, the bohemia-builder would grant below market rents to art galleries and bodegas, then charge through the roof for someone who wanted to bring in a Whole Foods or microbrewery.

    Artists would apply for a term as an Artist-in-Residence.  Each AIR would receive subsidized or even free housing for a pre-set term (I'm thinking 4 years), which could be renewed by the central authority.  The AIRs would also provide input on which new artists to bring in as AIRs.

    You might set aside 25-33% of the space for subsidized tenants (businesses and residents) that would provide the needed "character," then make up the lost revenues by charging yuppies even more to live in a vibrant bohemia that was also safe and clean.

    3) Build a bohemian brand.

    One goal might be to build the WeWork of bohemian neighborhoods--a reliable brand that stood for a fun, high-quality customer experience.  Sure, such corporatism might repel bohemians, but the dirty little secret is that most artists would be willing to tolerate a bit of capitalism if it allowed them to continue living in their beloved San Francisco.  They might even enjoy living in well-maintained, crime-free neighborhoods that included art galleries and hipster diners.

    To some extent, this entire essay is a bit tongue-in-cheek, but the more I think about it, the more lucrative the idea seems.  I wonder who I'd pitch to fund AirBohemia?

    In Memory of Dave Goldberg

    1. I met Dave when I was raising money for Ustream back in 2007.  At that point, the founders had just launched the site, and it was growing like mad.  But without a clear revenue model for live streaming, we were operating the company on a shoestring.  The founders weren't taking any salary, and the technical operations (hosting and software) were being run off my personal credit card, and I was getting *very* anxious to raise money from other investors.

    At the time, we lived in a pre-Angel List world, and it was hard to find people who were willing to risk their money on a raw startup that was competing head to head with what was then one of the most hyped startups in the world (Justin.tv).  We met Dave when he was an EIR at Benchmark.  Fortunately for the founders and me, Dave saw something he liked.

    Not only did he write the single largest angel check we took in, he also brought in enough of his friends to give us breathing room.  He was also generous with his time and contacts.  The rest, as they say, is history.

    2. I wish I had spent more time with Dave.  Sadly, I didn't stay in touch as well as I should have.  I told myself that I didn't want to bother him, given his responsibilities as CEO of Survey Monkey and as a dad.  This was true, but I also assumed that I had plenty of time to catch with him in the hazy "future," perhaps after our kids were older.  I also thought I might reach out to him since we were probably both going to be in Boston for the Harvard Business School reunion (since I'm Class of 2000 and Sheryl is Class of 1995, our reunions always coincide).  Alas, the future is never guaranteed.

    3. I mentioned on Twitter that one of the things I admired most about Dave was his ability to balance being a husband and father with his work.  Indeed, I envied him; I had long since concluded that I lacked the superhuman capacity to take on a CEO role and manage the rest of my complicated life.  Dave made it work, and under challenging circumstances that included being married to one of the world's most powerful (and busy) women.

    Given this tragedy, I think we should admire Dave all the more.  With his high-powered career, it would have been very socially acceptable for Dave to spend less time with his family, with the assumption that he'd always have more time with them in the future.  I can't imagine the pain that Sheryl and their children feel right now, but I'm sure that they are grateful that the way he chose to live his life left them with an overflowing bank of love and happy memories.

    None of us can guarantee that we'll be around; I'm not that old, and I've already lost far too many friends.  You have to balance past, present, and future.

    4. As I get older, I think more and more about leaving a legacy.  In Silicon Valley, that usually means focusing on the products or companies we've built.  I think that's an incomplete picture.  Products and companies (and for that matter, books) are important, but they represent one extreme of one's legacy.  As usual, I believe that you should take a "barbell" approach.  The parts of your legacy you should care about are the extremes--the legacy you leave for those closest to you, and the legacy you leave for the world.  Even though the well-deserved tributes that people will write about Dave will focus on his public legacy, it is the rich private legacy he left for those he loved, and who loved him, which I believe he would care about more.

    Friday, April 17, 2015

    How To Hack The Learning Process


    Step 1: Read books.

    For all that we mock the traditional publishing industry, any book that makes it through that process has gone through many quality filters.  If you further limit yourself to books that have withstood the test of time, reading books is the best way to inject concentrated, high-quality knowledge into your brain.

    Step 2: Write up your notes each time you finish a book.

    Consolidate your knowledge by writing your own summary afterwards.  1) This action "fixes" the knowledge in your brain.  2) You can always refer back to your summary afterwards to refresh your knowledge, and since you wrote it, it will be uniquely accessible to you.

    You can find a lot of the books I've read here:
    The Book Outlines Wiki

    For example, I recently read a book on coaching, counseling, and mentoring to help me in my own executive coaching practice; taking notes will help me retain and apply what I learned:
    Coaching Counseling and Mentoring
      

    Wednesday, April 15, 2015

    Compassion is not a zero-sum game

    I always remember one English seminar I took while I was at Stanford.  We were discussing Rebecca Harding Davis' travails, and one of my more militant classmates flatly stated, "Look, she was white, and she had money.  I don't want to hear about her problems."  (You probably won't be surprised to learn that my militant classmate was also a wealthy white woman).

    I find this lack of compassion appalling.  The thinking seems to be that we need to compete on our miseries, and that ultimately, we must all defer to a starving genocide victim somewhere in Sub-Saharan Africa.  I don't believe that compassion is a zero-sum game.

    Having problems, even first-world problems, is emotionally draining.  Having difficult choices, even if all the options are enviable, is still difficult.

    Tuesday, March 10, 2015

    Life, Death, and Living

    I was struck today by the juxtaposition of two different stories on two different, extremely successful people.

    On Sunday, Simpsons co-creator Sam Simon passed away at the age of 59.  Simon had been told that he had only months to live back in 2012, but he defied those odds, and lived long enough to give away much of his cartoon fortune, mostly to his favorite cause, animal welfare.

    Yet what I found inspiring about Simon is that his illness wasn't a wake-up call.  In fact, Simon had long ago realized the importance of living the life you want, as opposed the the one others expect you to:
    "He amassed an extraordinary art collection, managed the former WBO heavyweight champion Lamon Brewster for eight years, and became a professional poker player. And he gave away money. Lots and lots of money, particularly to animal-rights causes. In 2002, he established the Sam Simon Foundation, which rescues dogs and trains them to work as service animals. He started a vegan food bank in 2011. A boat in the Sea Shepherd Conservation Society’s fleet of anti-whaling vessels bears his name, as does the Norfolk, Virginia, headquarters building of People for the Ethical Treatment of Animals. Toward the end of his life, he began purchasing circus elephants, bears from bear pits, and chimpanzees from shitty roadside zoos, so that they could live out the balance of their lives in animal sanctuaries."
    When you're blessed with talent, it seems churlish to complain that it can become a curse.  But while Simon was blessed with enormous talent--he was the head writer for the show "Taxi" at the age of 27 (!)--he walked away from his profession long before his final illness.  While he kept working--even as he was dying, he was a consultant on the show "Anger Management," he avoided the rigors of being a showrunner or head writer.  He worked as play, focusing on the experience, not the achievement:

    “I get more out of it than they do,” he admitted cheerfully. “It’s really good for me to be able to go someplace once a week and have an office and pitch some jokes.”
    When Alex Pappademas, the writer of the piece I'm quoting asked Simon in 2013 about whether he wished he'd stayed more involved in the TV business, Simon replied that making TV shows wasn't his job.  Here's what Simon had to say:
    It really takes over your life,” Simon said. “It’s a really hard thing to do. You can’t do it part-time, and I just look back on some of my decisions, and deciding not to work full-time was the best thing I ever thought of. So that means that, you know, since I was 35, I’ve done whatever I’ve wanted and done it wherever I’ve wanted, and with a lot of money to spend and stuff. So, y’know, that’s another reason I don’t feel as cheated by the cancer. There wasn’t all this stuff I was waiting to do. I was doing it.”
    While Sam Simon's life was cut tragically short, it was not left hanging.  Simon focused on living the life he wanted.  Was it selfish of him to "deprive" the world of his genius?  My friend Ben Casnocha has written about the difficult choice that our friend and co-author, Reid Hoffman, faces: Do you save the world or savor the world?  It's hard to do both.

    Sam Simon did a tremendous amount for animal rights--that definitely fits into the "save the world" column--but he didn't let that stop him from savoring the hell out of his all-too-short life.

    Then today, I read Google CFO's Patrick Pichette's announcement of his retirement.  Pichette has had an incredibly successful career, but found himself pondering the same save/savor dilemma:
    "A very early morning last September, after a whole night of climbing, looking at the sunrise on top of Africa - Mt Kilimanjaro. Tamar (my wife) and I were not only enjoying the summit, but on such a clear day, we could see in the distance, the vast plain of the Serengeti at our feet, and with it the calling of all the potential adventures Africa has to offer.

    And Tamar out of the blue said "Hey, why don't we just keep on going". Let's explore Africa, and then turn east to make our way to India, it's just next door, and we're here already. Then, we keep going; the Himalayas, Everest, go to Bali, the Great Barrier Reef... Antarctica, let's go see Antarctica!?" Little did she know, she was tempting fate.

    I remember telling Tamar a typical prudent CFO type response- I would love to keep going, but we have to go back. It's not time yet, There is still so much to do at Google, with my career, so many people counting on me/us - Boards, Non Profits, etc

    But then she asked the killer question: So when is it going to be time? Our time? My time? The questions just hung there in the cold morning African air."
    When is it your time?  The fact is, the world is never going to tell you that it's your time.  The world is busy claiming as much of your time as it can.  Recently, I've joked that I'm the hardest-working lazy man you'll ever find.  I'm lazy in that I'm always trying to find ways for other people to do most of my work.  The flaw in my plan is that I then turn around and try to accomplish three times as much.

    I'm not as financially robust as Sam Simon (who received royalties on every dollar "The Simpsons" earned) or Patrick Pichette (the longtime CFO of one of the most valuable companies in the world).  But money isn't the barrier.  It's that ongoing choice between saving and savoring.  And the rest of the world always needs saving.  Here's what Pichette chose:
    "This summer, Tamar and I will be celebrating our 25th anniversary. When our kids are asked by their friends about the success of the longevity of our marriage, they simply joke that Tamar and I have spent so little time together that "it's really too early to tell" if our marriage will in fact succeed. If they could only know how many great memories we already have together. How many will you say? How long do you have? But one thing is for sure, I want more. And she deserves more. Lots more.

    Allow me to spare you the rest of the truths. But the short answer is simply that I could not find a good argument to tell Tamar we should wait any longer for us to grab our backpacks and hit the road - celebrate our last 25 years together by turning the page and enjoy a perfectly fine mid life crisis full of bliss and beauty, and leave the door open to serendipity for our next leadership opportunities, once our long list of travels and adventures is exhausted."
    I've already made a lot of choices in my life to make sure that my family got its full measure of my time and energy.  Yet I am always aware that I could do more.  What if I stopped working and focused on tutoring my kids?  What if I created the world's greatest summer camp, modeled on YCombinator?

    I guess part of it is that I do savor my work; as I've long said, my life's mission is to help interesting people do interesting things.  If I wasn't spending time with entrepreneurs, helping to bring new things into this world, I wouldn't really be savoring my life either.

    But as the lessons of Sam Simon and Patrick Pichette show, it's up to us to decide how we spend our time.  Saving the world brings a certain kind of fulfillment, but it often keeps you from living the life you want.  Make time for savoring, and even if you aren't given the chance to live the full Biblical threescore and ten, you'll still have found a way to live a truly full life.

    Monday, February 23, 2015

    People Don't Really Believe in Equality of Opportunity

    Provocative assertion of the day:

    People don't really believe in equality of opportunity.

    In order for there to be true equality of opportunity, every child has to have the same opportunities to succeed.

    Yet what parent among us has ever resisted the urge to give our child an advantage?

    Move to a better neighborhood for its schools?  That's inequality of opportunity.

    Pay for afterschool enrichment and activities?  That's inequality of opportunity.

    Inherit money from your parents?  That's inequality of opportunity.

    The desire to give your child an advantage is the product of millions of years of evolution.  Genes trump ideology.

    That being said, we should strive against our selfish nature to provide greater equality of opportunity.

    A social safety net doesn't try to ensure equality of outcomes; its goal is to provide a reasonable minimum standard of living.

    The same is true for equality of opportunity; the basic education and services the state provides should be enough to allow each child a reasonable chance at a middle-class life.

    Not every child can go to Harvard, but every child should have the opportunity to get a useful education.  The hard part is drawing the line for that minimum standard.

    Tuesday, February 10, 2015

    The Dataclysm (Facebook) Relationship Test

    I finally got around to trying out the Dataclysm "Relationship Test". The theory is that your spouse or partner should be one of your closest connections (more on this later).  What's interesting to me is how my Facebook network reflects the key networks in my life.

    The biggest cluster of connections is what I call Startupland.  It's a giant collection of investors and entrepreneurs, mostly from Silicon Valley.  What this tells me is that these professional relationships are wide-ranging and open.

    The densest cluster of connections is what I call Team 2000.  This cluster consists of all my Harvard Business School classmates; since I graduated in 2000, it reflects both our intensive use of the Internet, and our desire to stay connected.

    The widest-ranging (i.e. covering the most screen real estate) cluster of connections is what I call Greater Stanford.  This represents a union of people I know from my undergraduate days at Stanford, and people I know from the Palo Alto community from having lived here since 2000.  This is the most diverse cluster, since it doesn't focus on the world of business or startups.

    There are two other key clusters that are both extremely dense (though not as dense as Team 2000) and tightly focuses.

    The first of these "globular clusters" is what I call the Weeklyverse, which is centered around David Weekly.  I always like to say that everyone knows David; this graph proves it.  Coincidentally, David ranks as my most important connection according to Dataclysm (my wife is my 49th connection), but we are both happily married (to other people) so I don't think it will have much impact on our relationship.

    The second of these globular clusters is what I call the Unreasonable Realm, which consists of all the folks I've met while mentoring for the Unreasonable Institute, both in Boulder, Colorado and elsewhere.  Like Startup Land, the Unreasonable Realm includes entrepreneurs and investors, but with a primary focus on social impact rather than making "fat bucks".

    A couple of surprising things:
    • I was shocked that neither Ben Casnocha or Ramit Sethi made the Top 10 (though both ranked above my wife).  But I guess Facebook can't measure how much people actually talk with each other outside their platform.
    • The biggest surprise in the Top 10 was my old friend Laura Dent, who topped the Ex-DESCO list.  Hope you're doing well, Laura!
    • The person with the most mutual friends is my dear friend Bull Gurfein, which should not surprise anyone considering the combination of A) being at the center of the Team 2000 network, and B) being one of the most outgoing men in history.
    • I should note that a lot of the people who are closest to me appear far down on the list; this probably reflects my age.  My wife, for example, hates Facebook, and still grumbles about how sharing one of my events on Facebook caused her to receive torrents of friend requests, which she assiduously ignores.

    Monday, January 26, 2015

    Ben Casnocha and Reid Hoffman

    I was delighted when my friend Ben Casnocha published his essay about what he learned from working with Reid Hoffman.

    Ben described the subject of his essay as "10,000 hours with Reid Hoffman," but its roots go back even further.  Ben had long been interested in learning from the massively successful; one of the book ideas we had batted back and forth many years ago was "Right Hand Man," which would interview the various assistants and chiefs of staff who helped the rich and powerful accomplish more.  I'm sure Ben could have learned a lot from any number of people, but I doubt he could have found someone who could teach him more than Reid did.  Selfishly, this essay is a great way for me to learn from a fascinating and incredibly productive partnership.

    And even ignoring the fact that these are two of my favorite people and valued allies, the essay did what Ben always seems to do: make me think.  Here are few of the random thoughts and reactions that I had:

    Save vs. Savor

    Author E.B. White once captured the essence of why. “I wake up in the morning unsure of whether I want to savor the world or save the world,” White said, “This makes it hard to plan the day.”

    Decision making becomes hard when you want to do both. Which is it today: saving or savoring? Usually you do have to choose. It’s the very rare project that involves close friends and ongoing intellectual stimulation, and change-the-world impact.
    The Save vs. Savor question gets at the heart of how to live the "good life".  Assuming that you're fortunate enough to afford the necessities of modern life (food, shelter, and connectivity), you have the luxury of deciding how to allocate your time.  Will you choose to defer gratification and invest that time for future benefits?  Or will you choose to spend that time on something which will deliver present benefits?

    I've jokingly said that I'm a "First World Problems Counselor" because I recognize that being rich, famous, and powerful doesn't prevent you from having problems.  Far too often, we dismiss the problems of the successful by saying things like, "I'd love to have his/her problems!"  There's a reason why the rich and famous flock together, and it's not because they're busy plotting how to rule the world.  It's because hanging out with peers is one of the few times that they get any sympathy about their plight.

    Having the resources to do anything you wish is a classic example of the tyranny of choice.  As crazy as it may sound, it's harder to be mega-rich than to simply be financially comfortable.  That's because money reduces unhappiness, but doesn't increase happiness.  As Spider-Man teaches us, "With great power comes great responsibility."

    The sad paradox is that people who are kind and generous struggle more with this tyranny than those who are selfish and self-centered.  The egomaniac doesn't worry about saving; he focuses on savoring.  But better to struggle with the tyranny of choice than to experience the despair of learning that money can't buy happiness.

    My own answer to this dilemma is, like most of my philosophies, simple and unambitious.  Long-term outcomes are difficult to predict, but moment-by-moment activity is not.  I focus on activities that allow me to spend time with people I like, and let the outcomes take care of themselves.  That's why I'm happy to piggyback on the good work of others such as the Unreasonable Institute.

    Simplicity

    When there’s a complex list of pros and cons driving a potentially expensive action, Reid seeks a single decisive reason to go for it—not a blended reason. For example, we once discussing whether it’d make sense for him to travel to China. There was the LinkedIn expansion activity in China; some fun intellectual events happening; the launch of The Start-Up of You in Chinese. A variety of possible good reasons to go, but none justified a trip in and of itself. He said, “There needs to be one decisive reason. And then the worthiness of the trip needs to be measured against that one reason. If I go, then we can backfill into the schedule all the other secondary activities. But if I go for a blended reason, I’ll almost surely come back and feel like it was a waste a time.” He did not go on the trip. If you come up with a list of many reasons to do something, Nassim Taleb once wrote, you are trying to convince yourself—if there isn’t one clear reason, don’t do it.
    I love the simple brilliance of Reid's heuristic.  It lines up nicely with one of the lessons I took away from The Outsiders; these ultra-successful CEOs used the simple approach to make key decisions about acquisitions.  Rather than creating massive spreadsheets to quantify "synergies," these CEOs would create 1-page writeups with simple math and conservative assumptions.

    When you focus on "one decisive reason," it's easy to consider the issue, rather than getting lost in arguing over a series of assumptions and values.

    Every weakness has a corresponding strength

    I sat down with Reid one day and shared a self-evaluation of my work, my goals, and my strengths and weaknesses. When I discussed how to compensate for certain weaknesses, he told me, “Most strengths have corresponding weaknesses. If you try to manage or mitigate a given weakness, you might also eliminate the corresponding strength.”
    I'm a big believer in tradeoffs.  Far too often, we act as though the world has a single linear scale of value.  You can see this in Silicon Valley's endless quest for "rockstars," "10x programmers," and "A players."  There's no question that all men (and women) are not created equal.  But a person's value depends on the context; some programmers might be great for a solo skunkworks project, but would be terrible at leading a large, client-facing initiative.  It's also the case that a person's strengths are what drives her value, not her ability to mitigate her weaknesses.  The smart manager finds roles that play to a person's strengths, while avoiding her weaknesses, rather than trying to "fix" people.

    I hear echos of this in another Reid concept, which is that it's critical to understand a person's "superpower."  Don't send the Human Torch to fight a forest fire (unless you need to quickly burn a firebreak).  The corollary is that you should figure out your own superpower so that you can share it with others.

    The values that actually shape a culture have both upside and downside

    One of the reasons people have trouble understanding tradeoffs is that when a situation is suboptimal, you don't necessarily need to make tradeoffs.  Think of this as being in the middle of the performance envelope; you can easily make improvements that lead you to be being better off in all dimensions.

    However, once you reach the edge of the performance envelope, you're at the frontier, and in order to advance in one direction, you will almost certainly have to accept a retreat in another direction.

    Be clear on your specific level of engagement on a project

    Here’s a handy way to categorize different types of engagement on a given project. Reid uses this shorthand.
    1. Principal – You’re driving the process. You’re the man. You have ball control.
    2. Board Member – You’re probably an investor. You’re regularly meeting with the principal. You’re thinking about the project even when you’re not formally scheduled to be doing so. You’re continually up to speed on the latest and greatest.
    3. Investor – You’re a supporter (financially or with periodic bursts of time), but you’re not actively involved in the project. You’ll meet with the principal occasionally. If you’re called to do something, you have enough context such that you can be helpful on a reactive basis, but you won’t have up to date knowledge.
    4. Friend. You enjoy talking to the principal. But the moment you walk away from the breakfast or lunch – that’s it. You’re not thinking about it anymore.
    This is another awesome Reid heuristic.  What I especially appreciate is his dedication to setting these expectations appropriately.  Far too many investors promise a greater level of engagement than they're actually willing to deliver; I've even been guilty of this myself, though unintentionally.

    I'd add to this by noting that every human being probably has limits on the number of such roles he or she can pursue.  Imagine that you had a limited number of human bandwidth units (HBUs), say 100.  In that case, the relative costs of the different levels of engagement might be as follows:

    Principal: 75
    Board Member: 10
    Investor: 3
    Friend: 1

    Being explicit about your relationships allows you to track how (over)committed you are, and whether you can take on more engagements.

    Don't believe me?  Think of each HBU as an hour of your time; no one can really work much more than 100 hours per week for a sustained period of time.

    Sketch three possible outcomes for a project: the likely upside, likely ‘regular’, and likely downside scenarios.

    Ben's post talks about how we brainstormed these scenarios for "The Alliance."  It's interesting to see how things played out.  The good news is that we definitely didn't experience any of the downside scenarios; the book was well-received, and sold well.  In 2015, we'll be able to tell whether we'll experience a regular outcome (a bestselling book that provides some brand enhancement) or an upside outcome (turning The Alliance into something many organizations adopt).  The early results are promising!

    Trade up on trust even if it means you trade down on competency.

    I'd actually argue that this should be amended from "competency" to "experience." I don't believe in hiring the incapable, regardless of how much I trust them.  But assuming capability, trust is far more important than experience.  Not only does it reduce risk, it creates a better working environment and thus is likely to deliver better long-term results.

    Make people genuine partners and they’ll work harder

    [Reid]’s inclusive because he knows when people are personally invested in the public success of a project, they’ll work harder, they’ll care more, and the final product will likely benefit (which also benefits his reputation). I’ve seen Reid do this with partners at Greylock, executives at LinkedIn, and with me in the two books we co-authored. As a co-author instead of a ghostwriter I felt far more committed to the project than I would have otherwise and the quality improved accordingly.
    I'll echo and amplify Ben's point.  While I would have worked hard on "The Alliance" regardless, the fact that Reid was dedicated to making it a true partnership meant that I was willing to make great sacrifices (including things like staying up all night to meet deadlines).  Many of the people I talk with about the book are surprised when I tell them how involved Reid was in the writing; they assume that like most rich and famous authors, Reid simply wanted his name on something.  After all, Charles Barkley once protested that he was misquoted in his own autobiography.  The fact that Reid was willing to invest his time and intellectual energy in the process demonstrated his partnership far more than any flowery words.  As I've noted about parenting, kids are smart--they quickly learn to ignore your words and draw conclusions based on your actions.  If you say you love them, but never spend time with them, they won't be fooled.

    There is no shortcut to being a genuine partner.

    The people around you change you in myriad unconscious ways

    The people you spend the most time with will change you in ways you cannot anticipate or ever fully understand after the fact. The most important choice of all is who you choose to surround yourself with.

    I feel incredibly lucky to have learned so much from such a special man. May we all have the opportunity to partner with and learn from the special people in our lives. May we all take the time to savor this amazing world. And may we all have the wisdom to try to save it a little, too.
    One of my go to quotes is the perfect summary of this point, and of Ben's entire essay: “The principle difference between heaven and hell is the company you keep there.”  I'm glad I got to spend time with both Ben and Reid.