Sunday, December 29, 2013

Vacation Highlights, Part 2

As I mentioned in Part 1, Alisha and I went for a brief getaway to Santa Barbara.  Here are some of the highlights:

Stuff that was great:
  • The view from the Santa Barbara mountains.  We drove up into the hills to visit the Chumash Painted Cave (more on this later), and stopped several times to gaze out over the hills and beaches.  It's a spectacular view.
  • The snow leopards at the Santa Barbara Zoo.  Snow leopards are rare enough, and all the previous times I've seen them, it's been from a great distance.  At the Santa Barbara Zoo, the snow leopard enclosure lets you get up close and personal.  I was about 6 feet away from a pair of snow leopards.  We got to watch them pounce on each other and play.
  • The Santa Barbara Courthouse. I was surprised when TripAdvisor listed the courthouse as the #1 attraction in Santa Barbara.  After all, this is a vacation spot--I wouldn't expect a working government building to top the list.  But when we walked to the courthouse, we were impressed with its beautiful architecture and view.  The overall effect is that of a historic Spanish monument, complete with beautiful ceilings, expansive murals, and intricate metalwork.  Amazingly enough, it's all a lie.  The courthouse was built in 1929, and has no real historic antecedent.  Apparently, most of downtown Santa Barbara was destroyed in an earthquake in 1925.  In place of the boring, completely banal American city that had been there, the Santa Barbara City Council rebuilt everything in a Spanish Mission style and christened the city "The American Rivera."  Against all odds, this rebranding stuck, and I'll bet that most visitors think they're visiting a historical landmark, rather than the work of the architectural equivalent of a Hollywood set designer!  Make sure that you climb the clock tower for a 360 view of the entire city and surrounding majestic landscape.
  • The crispy cauliflower, fried calamari, and coconut beignets at Intermezzo.  Intermezzo is a more informal establishment run by the same group as Bouchon.  Alisha and I went for what I like to call "American tapas"--appetizers and dessert.  The crispy cauliflower included Parmesan cheese and capers for a sharp kick.  Much the same was true for the calamari, which included jalapeno slices and a spicy aioli.  But the true masterpiece were the coconut beignets.  These were fantastic--filled with coconut custard, and served with a scoop of coconut ice cream.  The sweetness of the beignets was countered and complemented by a tart pomegranate sauce.  The overall effect was fantastic.
  • The food and service at The Palace Grill.  Everything we had was delightful, from the plantation fried chicken salad (with Cajun seasoning) to the Cajun crawfish popcorn.  Alisha had a steak sandwich that had a great smokey flavor as well.  But as was the case with all our restaurants this trip, the dessert stood out.  The Louisiana bread pudding souffle was dynamite, combining souffle and bread pudding (with Grand Marnier) with a sweet whiskey cream and chocolate sauce.  The table-side presentation (first opening the souffle, then filling it with whiskey cream) was a nice touch, and was representative of the friendly, attentive service.  We found it hard to believe that the bread pudding was only $5.50.

Stuff that was not so great:
  • The drive up to the Chumash Painted Cave.  It's only 2 miles and about 10 minutes of driving, but the narrow winding mountain trail--with no guardrail, as Alisha pointed out--feels like a multi-hour ordeal.  We crawled along, terrified by the occasional car heading down the hill.  The road was really only a single lane, and full of hairpin turns.
  • The description of the Chumash Painted Cave.  The Chumash Painted Cave is officially a California State Historic Park.  I pictured an American Lascaux, complete with guided tours.  Instead, when you get to the cave, you have to park in a tiny bulge on the side of the road (not marked, by the way), and climb up a set of stone steps to a cave opening which is barred with a steel cage.  From the front of that grillwork, you can look into a small cave and see two groups of paintings.  The entire viewing takes about 60 seconds.  It was a very cool 60 seconds, but a bit disappointing after the terrifying drive up.
  • The chicken and waffles at Intermezzo.  We love chicken and waffles.  It's hard to mess up fried chicken and waffles.  But the Intermezzo version was a disappointment.  It wasn't the fault of the waffles--the waffles were great, with a rich flavor and perfect mix of crunch and squish.  But the fried chicken was blah.  While I appreciate the difficulty of making a good boneless fried chicken, the Intermezzo fried chicken was covered with thick, doughy breading that drowned out the chicken flavor.  The fried chicken from The Palace Grill was easily 10 times better.  Heck, even KFC chicken tenders would have made the chicken and waffles a highlight.
All in all, Santa Barbara was a great vacation destination, especially for people looking for a convenient getaway near Los Angeles.  Next time we return, I'd like to take more time to explore the surrounding wine country.

Saturday, December 28, 2013

Glamorizing Villainy: Ink Trumps Intention

This Christmas, Martin Scorsese debuted his new movie, "The Wolf of Wall Street," which chronicles the sleazy rise and fall of Jordan Belfort, a penny-stock manipulator who stole hundreds of millions from unsophisticated investors.

The critical reception to the movie has been warm (77% on Rotten Tomatoes), but as with many of its predecessors (Wall Street, Boiler Room) it has come under fire for glamorizing its villain protagonist.

When people think about "Wall Street", they think about Gordon Gekko and "greed is good" (which he never actually said).  When they think about "Boiler Room", they either think of Ben Affleck's speech or Vin Diesel selling a phoney stock.

Pride goeth before a fall, but movies sure do a great job of making pride look like a lot of fun.

Christina McDowell, the daughter of one of the criminals featured in "The Wolf of Wall Street," wrote a powerful criticism of this practice:
http://bit.ly/1h4hLZg
"Let me ask you guys something. What makes you think this man deserves to be the protagonist in this story? Do you think his victims are going to want to watch it? Did we forget about the damage that accompanied all those rollicking good times? Or are we sweeping it under the carpet for the sale of a movie ticket? And not just on any day, but on Christmas morning??"
The thing is, the filmmakers generally don't intend to glamorize the villain.  Oliver Stone made "Wall Street" as an anti-Wall Street polemic. Scorsese probably sees Belfort as a villain as well, just as he saw the characters in "Goodfellas" as bad men.

The problem is that ink trumps intention.  The time that a movie or book lavishes on a villain trumps the intended criticism.  And the standard "pride goeth before a fall" formula is particularly prone to this.

By letting the villain drive the story, storytellers portray the villain as energetic, forceful, and charismatic. The villain also gets most of the good lines. (Can you think of a single line of dialogue spoken by Martin Sheen, the conscience of "Wall Street"?)

The same principle applies in fact as well as fiction.  Want to hurt a villain?  Don't feature him, ignore him.  The more you rail against clever schemes and villainy ("I can't believe he's getting away with it!") the more you make the villain a compelling figure.  Or if you need to warn the world, make sure you emphasize the boring and pathetic aspects of the villain.

Friday, December 27, 2013

Vacation Highlights, Part 1

This winter break, Alisha and I decided to try something new, and are taking a 48-hour getaway to Santa Barbara.  Rather than writing at length mid-vacation, I'm just going to post some of the highlights; I might write a lengthier post after the vacation wraps up.

Stuff that was great:
  • The BBQ tri-tip slider with candied bacon from the Old San Luis BBQ Co.  This San Luis Obispo Q tri-tip slider is simple: A soft roll, some Santa Maria-style BBQ tri-tip, sauce, and candied bacon, but it is divine.  Don't get just one!
  • The sauces at the Brasil Arts Cafe in Santa Barbara.  Alisha got a tri-tip sandwich with fries.  The sauce that comes with the fries in lieu of ketchup is amazing.  It's a mix of onions, tomatoes, and something magical.  The cafe also provides an awesome hot sauce, with whole mini-peppers in it.  We had a great lunch there.  The cafe also has great service and atmosphere, complete with Brazilian music, and a capoeira studio in the back of the restaurant.
  • The braised pork belly and chocolate chip bread pudding at Bouchon in Santa Barbara.  What's not to love about pork belly, which is the foundation of bacon?  The braised pork belly first course at Bouchon is amazing, pairing the braised pork belly with a crisp potato croquette, arugula, and a poached duck egg.  We wished we had ordered more than one!  The chocolate chip bread pudding was also a standout.  It's basically like eating a warm mixture of chocolate chip cookies and cookie dough, all topped with vanilla ice cream.
  • The look and decor of the Hotel Santa Barbara.  This is a beautiful boutique hotel, located in a historic building in downtown State Street.  Most important, the beds are incredibly comfortable.
  • The Santa Barbara Museum of Art.  Because Bouchon is so popular, we couldn't get a reservation until 8:45 PM.  That left us plenty of time to enjoy Thursday night at the museum; every week, the museum is free to the public for one night a week.  They obviously know the way to my frugal heart!  This is an awesome, well-curated, well-run museum.  It's also a perfect size--big enough to contain a great collection, small enough to avoid the museum fatigue that I find sets in with monumental collections.  The main exhibition was "Delacroix and the Matter of Finish," which featured the works of the French Romantic master, along with a previously unknown painting.  The museum did a great job of providing context for Delacroix's work, comparing it to both Neoclassicism and Academic Art, as well as showing the difference between his work, and the reproductions made by his apprentices.  The galleries let you get up close and personal with the paintings; I could bring my face to within inches of the canvas to see the details of the individual brushstrokes.  I also learned something I hadn't realized before--one of the reason Delacroix's works seem so dynamic is his use of diagonal composition.  Rather than the static, somewhat distancing horizontal lines of the Neoclassicists, Delacroix used diagonals to convey a sense of motion, and to bring the viewer into the same visual field as the subjects of the painting.  If you want to check out this exhibit, you'd better hurry--it runs through January 26, 2014.

Stuff that was not so great:
  • The BBQ chicken at the Old San Luis BBQ Co. was a bit bland.  This might simply be a matter of the contrast with the awesome tri-tip, but it didn't grab me.
  • The main course I had at Bouchon, a pan-seared sea bass, had great flavor, but not great texture.  When I get sea bass, I'm looking for a delicate, melt-in-your-mouth texture.  The sea bass I got, while flavorful, seemed overcooked.  It was also a pain to detach the meat from the chewy, crispy skin.  Perhaps this was intentional, and I was meant to eat the seared skin, but I gave it a shot with one bite, and found both taste and texture displeasing.
  • The elevator in the Hotel Santa Barbara.  It's kind of cool to have a historic elevator, but technology has advanced quite a bit in 100 years.  The elevator is slow, cumbersome, and noisy (I can actually hear it from my hotel room).

Tuesday, December 24, 2013

Hipster Hatred and Conspicuous Consumption

Like many people, I'm not fond of hipsters.  To me, skinny jeans and Hitler mustaches look ridiculous, not stylish.  Which is why my antennae went up when I read about Brooklyn's (hipster ground zero) latest specialty store, the Brooklyn Porridge Company, which serves artisanal porridge.
http://bit.ly/18KgmEn

A bowl of gluten-free, non-GMO, porridge costs $7.95.  Porridges include "the Truffled Heart with shaved parmesan, artichoke hearts, and white truffle oil."  Self-importance sold separately.

But rather than dwell on the absurdity of artisanal porridge (what's next, premium butt wipes for men? Oh wait, we already have them: http://bit.ly/1fFqTjh), I'd like instead to scrutinize my own reactions and figure out why we hate hipsters so much, and whether that hatred is justified.

1) Running an artisanal, gourmet porridge shop seems like it's being cute for the sake of being cute.

It's important to note that artisanal porridge dish in a high-end restaurant doesn't seem as annoying to me; the goal of haute cuisine is to surprise and delight with unexpected juxtapositions.  But setting up a store to sell nothing but gourmet porridge seems like showing off, just like restaurants that only serve grilled cheese or peanut butter and jelly sandwiches.  The infantilization of diners by offering kids food as expensive cuisine is just the icing on (ironic) cake.

2) Eating at an artisanal, gourmet porridge shop seems like it's being cute for the sake of being cute.

My impression is that the people who eat at a gourmet porridge shop are the type of people who want to tell others that they ate at a gourmet porridge shop and then document the experience with a FourSquare check-in, an Instagram photo, and an arch Yelp review.

What the two points above illustrate is the distaste that I (and presumably others) have for self-conscious acts of performance art.  In neither case is the focus on creating or eating tasty food.  The story is more important than the substance, which rubs me the wrong way.  Storytelling is incredibly powerful in food, but I prefer it deployed in a sincere, authentic way, not for its own sake.

3) Artisanal, gourmet porridge seems like a wasteful indulgence.

This is one of my fundamental objections to hipsterism, which is the same objection I have to yuppies and frat boys.  When people spend money in ways I perceive as wasteful, it rubs me the wrong way.  I work hard for my money (not as hard as some, harder than others) and when people spend money in a manner that seems frivolous, it makes me feel like they don't appreciate hard work.

Many feel the same way when reading about the over-the-top conspicuous consumption of the mega-rich, even if they earned their money honestly.  For example, even well-liked billionaires like Richard Branson take flak for buying jumbo jets and private islands, or hiring famous rock stars to play a kid's bar mitzvah.  "Spend your money how you want," we seem to say, "But don't rub our nose in how much you have compared to us."

I also get a sneaking suspicion that spendthrifts have other sources of unearned money, be it trust fund or inheritance.  And if there's anything we dislike more than people throwing around earned money, it's people throwing around unearned money.

In summary:

A) Hipsterism seems like a self-conscious performance art which focuses on style, rather than substance. (And really, there is no valid justification for men wearing skinny jeans)

B) Conspicuous consumption is irksome enough when the deserving rich engage in it; it's even more annoying when we think someone is throwing around unearned money to show off.

In the end, it's justifiable in my book to be annoyed by hipsters, but hipster hatred seems like the same kind of over-the-top and inauthentic performance art that makes hipsters so irritating.

Monday, December 23, 2013

Don't Mistake Winning for Accomplishment

We love winning and winners.

In sports, we hand out trophies and belts to scorers and champions.

In business, we celebrate CEOs who increase their stock price.

In politics, we anoint winners and losers based on the votes they win.

What do these have in common?  In each domain, it's easy to keep score.

In sports, everyone knows the score.

In business, you always know exactly how much a publicly traded company is worth.

In politics, polls and elections provide constant validation (or despair).

And because it's easy to keep score, we end up focusing on winning.

In doing so, we mistake winning for accomplishment.

In the startup world, it's not that easy to measure accomplishment.  We try to keep score with the metrics we have (headlines, rounds of funding, vanity metrics), but unlike sports or politics, these metrics don't define success.  At best, they are loosely correlated.

Stop worrying about winning.  Start worrying about accomplishment.

Sunday, December 22, 2013

Credit and Blame

Credit and blame are two faces of the same coin, and both aren't worth as much as you think.

When I was young, I was very concerned with credit and blame.  My old mentor, Thor Johnson, called me "a shameless self-promoter," and he meant it as a compliment.

When things went right, I made sure I was positioned to take credit.  When things went wrong, I made sure that someone else got the blame (I had to be pretty subtle about that!).

Yet now that I'm older, I realize that focusing on credit and blame is a waste of energy, especially in the startup world.

Credit only matters when there's a success for which to take credit.

Blame only matters in big organizations, where you're trying to avoid getting fired by a pointy-haired boss after some disaster.

Both are a second-order concern, orders of magnitude less important than making sure your startup is actually successful.

When an entrepreneur comes to me and tries to take credit for success, I just smile and remind him or her of Winston Wolf's line from "Pulp Fiction": 'Let's not go sucking each others' d--ks just yet.'  There will be plenty of time for that after the company sells.

When an entrepreneur comes to me and tries to blame external circumstances, I'm not interested.  I only care about figuring out the causes of failure in order to avoid it in the future, assuming there is a future.

In other words, credit AND blame are both a waste of time.

When you raise a lot of money, you raise the degree of difficulty

Investors are fond of telling entrepreneurs about how dangerous it is to raise too much money too early on.  We advise entrepreneurs to minimize fundraising until they achieve product-market fit, and are ready for scaling up.

The problem is, entrepreneurs don't want to hear it.  It's like telling Americans to lose weight by eating less and exercising more.  It doesn't matter how right you are if you can't get people to change their behavior.

Therefore, rather than explaining the perils of down rounds and the benefits of being able to select your investors, let me boil it down to one thing:

When you raise a lot of money, you raise the degree of difficulty

If you raise a lot of money, you need to demonstrate major traction to raise more.  After all, if investors have already given you $20 million, and you haven't taken off, another $20 million isn't likely to make a difference.  And an organization that's big enough to spend $20 million is pretty expensive to keep alive.

In contrast, if you raise a little money, you can raise more money simply by showing promise.  After all, if you're able to do this much on a shoestring, think of how much you could do with more resources!

In other words, raising money raises the degree of difficulty.  The curve gets tougher, until only runaway success is sufficient.

Now it's always possible that you happen to have a startup that can't possibly succeed without a pile of money, yet can turn a pile of money into runaway success.  But I (and your investors) probably don't want to bet on that.

Lazy Consistency and Denial

Most of us have the desire to be consistent.  In general, this is a good thing.  Think of how frustrating it is to deal with someone who is always changing his mind.  As just one example, look at how we treat politicians who can be branded as flip-floppers.  "I was for it before I was against it!" doesn't satisfy either side of an issue.

But the desire to be consistent can be dangerous when we get lazy about fulfilling it.

For example, many people in Silicon Valley like to think of the region as a near-perfect meritocracy.  When confronted with evidence that women and minorities are dramatically underrepresented, they face a choice:

1) They could admit this imperfection and examine the ways in which their unconscious biases might be affecting their actions, or...

2) They could attack their critics as attention-seeking troublemakers, allowing them to dismiss the evidence as biased.

Which do you think is more common?

Denying reality is particularly dangerous for entrepreneurs, whose situations are unusually risky and tenuous.  The rich and powerful can afford the cost of ignoring the evidence; startups cannot.

When you encounter discomforting evidence, don't take the lazy way out.  In fact, these are probably your greatest learning opportunities.

Sunday, December 15, 2013

Always Be Crafting

When you're a writer, one of the effects on your life is that you're always processing the events around you on two levels: Your gut reactions, and your writer's eye for the bigger story.

For some writers, this metacognition brings misery.  Think of all the tortured artists throughout history, whose sensitivity made the experience of life painful (e.g. Goethe).

But for me, being a writer actually makes me happier.  Writing improves my mood and fills me with energy.  And I think I know the reason.

As I process the events around me and the information I read, I use them as the raw materials to craft a positive story.  Setbacks become learning opportunities, and triumphs help give meaning to an overall life narrative.

Rather than life seeming like one damn thing after another, life becomes a story that I write with both thought and deed.  And in doing so, I feel a much grater sense of control over its narrative.

If you want to be happy, always be crafting.

Monday, December 09, 2013

How To Work From Home With Kids

When I work from home, I sit on the corner of the kitchen table, which means that I'm right in the thick of the action.  The living room is about 10 feet to my left, including the main television that the kids use for watching television and playing Wii.  They also tend to keep the volume on our tablets turned up pretty high, and Marissa takes after her father's verbosity, so the kitchen table isn't exactly a quiet sanctum.

Yet I still prefer to work from my favorite spot, noisy though it might be.  From here, all I have to do is turn my head to the left to see what the kids are doing, and I can easily hear when someone needs me, when someone calls our home telephone (yes, we still have a landline, though I suspect it's mostly out of habit), or when one of the endless stream of UPS delivery people comes to the door to drop off yet another package from Amazon (darn you, Prime!).

That being said, all that noise and activity can be a distraction, especially when I need to do some deep thinking.  That's where my secret comes in.

The first part is easy--listen to music on your headphones, so that you can more easily ignore the noise of the outside world (but snap back into focus at the sound of a scream or other red alert noise).  The secret lies in what kind of music.

The trick is to listen to music that is extremely old and familiar.  I'll actually dig out old cassette tapes (!) that I made back when I was an undergrad at Stanford.  I spent many an hour with the trusty Aiwa boombox, making mixtapes by recording to tape from CD. (That last sentence was one of the most old-guy sentences you can right, by the way.)  When those aren't available, I set up a Pandora channel based on fogey songs from the 1980s that I've heard hundreds of times.

The familiar music has a number of positives.

First, it puts me in a good mood.

Second, the heavy synthesizer rhythm keeps me working at a good pace.

Third, the lyrics are so nonsensical that they're essentially white noise.  Seriously, what exactly are they singing about in "Africa?"

Finally, studies have shown that listening to the music of your youth actually makes you think, feel, and act younger.

Now if you'll excuse me, I need to go find my Member's Only jacket.

Sunday, December 08, 2013

People Never Completely Agree

Inexperienced entrepreneurs seem to believe that they need their team to agree.  "Get everyone on the same page," is a common mantra I hear from teams I work with.

The problem is, anyone who develops the expectations that all the members of a group (even a group of two) will completely agree about anything is doomed to disappointment.

I've been working on a secret project for some time (don't worry, all will be revealed in the next few months).  My two collaborators are incredibly smart and accomplished, and I have the utmost respect for them (as I hope they have for me).  Yet we often see things differently.

The solution to this dilemma is to reset your expectations, and have a plan for how to resolve disagreements.

My collaborators and I don't expect to agree on everything--that's why we're working together: To produce a better final result that leverages all our brains and experiences.  But we do agree on how resolve issues.

Our general process is to respect one another's ideas, try out every idea that someone passionately believes in, and review the evidence and draw final conclusions as a team.

Each of us knows that we won't always get our way...but we also know that this is a good thing.  The evidence is clear that collective knowledge is almost always superior to individual knowledge.  You just have to be willing to accept and resolve disagreement to tap that collective.

Friday, November 29, 2013

Why So Certain?

I've already written today about the dangers of certainty in the retail trade:
http://bit.ly/1cS1cdm

Yet the problematic nature of certainty extends far beyond checkout follies.

Especially in today's polarized, 140 character world, people default to an aggressive certainty.

Boldness elicits reactions and draws pageviews.

But like the hapless Toys R Us clerk who gave me wrong information with utter certainty, not being able to back up your certainty carries a high cost.

When I was young, I was very impressed with people who expressed strong opinions.  "Wow," I thought, "If he believes something that strongly, he must have really examined the issue, considered all the alternatives and objections, and reached an informed decision."

Ha, how little I understood the world.

Today, when I see people making predictions with utter certainty, I conclude that they are arrogant and slapdash.  Painful experience has taught me that the world is far too uncertain to justify the kind of snap judgements that used to impress me.

Many people will give the rich/famous/successful the benefit of the doubt when they express their certainty.  That too is a mistake.  Except in their particular bailiwick, their judgment is probably no better than yours.  I don't care how famous they are as a journalist, VC, or entrepreneur.

And if that's what I think, I have to imagine that's what other smart, experienced people think as well (though of course, I can't be certain!).

Have We Reached Peak Headline?

Headlines have become more and more important because of social media.

Once upon a time, headlines were critical because they helped persuade news stand passers-by to buy newspapers.

Now of course, most people are likely to ask, "What's a news stand?  What's a newspaper?"

Nonetheless, the importance of headlines remains.  The headline is what convinces you whether or not to click on a link, whether on Twitter, Facebook, or even that old dinosaur, email (where it is referred to as a subject line).

But I can't help but feel that we're nearing "peak headline."  Too many companies are strip-mining the psychology of headlines for traffic; the result will be a jaded and cynical audience that will stop clicking on anything.

Once upon a time, Huffington Post was criticized for simply republishing content.  Now we long for those halcyon days.  Upworthy doesn't even bother with republishing--the typical Upworthy post is simply a YouTube video with a catchy headline.

Now "viral" sites are proliferating with all the speed of a cat-based meme:
http://read.bi/IwyepW

Perhaps the most extreme examples come from the British press, where Fleet Street specializes in bait-and-switch headlines.  Take this recent one, for example:

"Exciting new BRAZILIAN PUSSY FINGERED by overjoyed boffins"
http://bit.ly/1eHoNQb

Don't worry, puns aside, the content is perfectly SFW (this is a story about Brazilian scientists discovering a new breed of large cat), as are other stories like:
  • "Rare BLOWJOB-GIVING APES 'face extinction from interacting with HUMANS'"
  • "Japanese pussies slurp 'meow meow' sex wine"
  • "Man killed by own cock"
I predict that the natural response will be an even greater emphasis on the reputation of the source, rather than simply relying on the catchiness of the headline.  The viral sites that are best able to deliver on the promise of their headlines will be the ones that persist over time.

Hope Enables The Better Angels Of Our Nature

I've seen a lot written lately about the mental impact of poverty.  The trigger was probably this article, which originally began as a long comment on Gawker:
http://bit.ly/Ixkjkg

The author shares her experiences living in poverty, and the psychological struggles she faces.  The key passage is probably this one:

"It does not matter what will happen in a month. Whatever happens in a month is probably going to be just about as indifferent as whatever happened today or last week. None of it matters. We don’t plan long-term because if we do we’ll just get our hearts broken. It’s best not to hope. You just take what you can get as you spot it."

Derek Thompson at The Atlantic provided some context for this statement, writing:
http://bit.ly/1aeGt0t
"As Andrew Golis points out, this might suggest something even deeper than the idea that poverty's stress interferes with our ability to make good decisions. The inescapability of poverty weighs so heavily on the author that s/he abandons long-term planning entirely, because the short term needs are so great and the long-term gains so implausible. The train is just not coming. What if the psychology of poverty, which can appear so irrational to those not in poverty, is actually "the most rational response to a world of chaos and unpredictable outcomes," he wrote."
Together, these passages capture the paradox of hope.  On the one hand, hope is somewhat irrational; if it wasn't, we'd call it "reasonable expectations for the future."  On the other hand, hope that is never fulfilled leads to disillusion and despair.  Hope is a stretch goal--it needs to be slightly but not completely unrealistic.

With hope, we can defer gratification and make plans for the future.  Without it, we fall into the path of least resistance, no matter how negative the expected value.

While you may never find yourself living in poverty (I wouldn't wish that hardship on anyone I know), you can generalize the principles of hope to apply to leadership and management, especially in the startup world.

When hope dies, so does your company.  Fill people with hope.  Just recognize that hope without fulfillment is the same as no hope at all.

If someone asks you, "Are you sure?", you'd better be

I despise Black Friday.  Not only does it involve spending money (never a favorite activity of mine), it also means dealing with the chaos of overcrowded retail stores.

Last night, before sitting down to Thanksgiving dinner, I was dispatched to Toys R Us to pick up some of the Christmas shopping. (Thanks American retailers, for ruining yet another holiday!)

After buying a cartload of toys, I was presented with a $10 off card for a future visit.  "It's only good for tomorrow," the checker told me.

I was puzzled.  The card clearly stated, "Valid 12/1 - 12/7."

"How come the card says December 1 through 7?" I asked.

"That's wrong," said the checker.  "It's only good tomorrow."

It was at this point that I said the fateful words, "Are you sure about that?"

"Definitely," the checker said with a firm, confident tone.  None of the other personnel within earshot said anything.  "We open at 5 AM tomorrow morning.  You can come back then."

Fast forward to this morning.  I drove Marissa and my sister to Toys R Us to look for some items I hadn't been able to find the night before.  As I checked out, I gave today's checker the $10 off card.

"It's not valid yet," she said.  "See, it says so right here."

I could feel myself tensing.  "The guy last night was very specific.  He told me the card was wrong, and that I needed to come back today.  That's why I'm here."

"Sorry," she said, "But you can't use the card."

As we drove back home, I was furious.  I wouldn't mind being prevented from using the card if I had made a mistake, or been negligent.  But I was very specifically told to disregard the date on the card.  I had even asked, "Are you sure?"

When someone asks you, "Are you sure?", you'd damn well better be sure.  Because if I ask someone, "Are you sure?" and the answer is a firm "Yes," I've got no way to escalate without seeming like a raging asshole.

I could say, "I don't believe you. I want to talk with your manager," but that's basically like saying, "You're incompetent, I want to talk with someone who isn't an idiot."  I could also do what my sister suggested afterwards, which is to pull out my phone and say, "Can you say that again for the camera, just in case?"  But neither is a kind thing to do.

Therefore, the onus is on the person being asked.  If you aren't sure, just say so, dammit.

Wednesday, November 27, 2013

Do Or Do Not

Life is too damn short, and there is always too much to do.

None of us has time to waste (especially entrepreneurs), though we always have to decide how to spend it.

The ideal, at which I often fail, is to act decisively and intentionally.

Or to put it another way, do or do not.

Do tackle the hard problems you face, whether in your life or your startup.

Do spend time on the things you love.

Do not waste time on things that don't matter.

Do not allow others to decide things for you.

It's not easy to be decisive and intentional.  There are times when I'm tired and my brain doesn't feel like deciding what to have for dinner, let alone making important business or life decisions.

It's so easy to move my mouse just a couple of inches to my bookmark for Facebook, and lose myself in the fake activity of reading my friends' updates and commenting on things that strike my fancy.

And there's nothing wrong with doing that.  But if you do, choose to do it, and choose how long to do it.

Reading Facebook is fine.  Watching TV is fine.  Browsing Amazon is fine.  But make the decision to do it; don't just fall into it.  Don't feel guilty.  Do suck every drop of pleasure out of it, so you can recharge yourself to tackle things that do matter.

Do or do not, but make sure the choice is yours.

Saturday, November 23, 2013

Hard Power and Soft Power

When people talk about power, they invariable are referring to hard power.

Hard power is the power of authority and might.  Hard power is swift and decisive.  Hard power is the ability of the President of the United States to order assassinations, and have them carried out half a world away by drone strike.

In our focus on hard power, we often neglect soft power.

Soft power is the power of ideas and persuasion.  Soft power is slow and uncertain.  Soft power is the ability of a preacher's daughter (Harriet Beecher Stowe) to pen a first novel (Uncle Tom's cabin) that changed the course of America's history.

In the short term, hard power seems more powerful.  Hard power is like using dynamite to blow a hole in the ground.  But in the long term, soft power prevails.  Soft power is like the ability of running water to carve out the Grand Canyon.

If you want to make change in the world, whether as an activist, a politician, or an entrepreneur, it is tempting to focus on hard power.  And if your time horizon is short, this focus makes sense.

But if you want to make lasting change, and you care more about making the change happen than about the opportunity to take credit for that change and bask in the adulation of the crowd, you should focus on soft power.

Hard power ends when you no longer have a gun to hold to someone's head.  Soft power lets you plant an idea in someone's head that no gun can remove, and that can be passed from mind to mind until that idea becomes the reality of the world.

It is altogether appropriate that we've marked the anniversaries of the Gettysburg Address and the assassination of John F. Kennedy.  Abraham Lincoln wielded hard power like no other president before him.  Yet he lives on in our memories as our greatest president because he used his soft power to speak to the ages.  John F. Kennedy's life was ended by the exercise of hard power--an assassin's bullet. But he will always be remembered for galvanizing the country to put a man on the Moon.

As a leader, you can choose what power you wield.  Choose wisely.

Monday, November 18, 2013

Read promiscuously and make connections

When entrepreneurs ask me where to find good ideas, I advise them to read promiscuously and make connections.

(No, this isn't some kind of advertisement for Tinder or Grindr.)

To read promiscuously means to be voracious and unselective.  I was at the library on Sunday, looking for audiobooks, and as usual, I picked up a selection.  I don't just listen to business books (though I do like them--it was great when I was a student at HBS and could raid our business libraries).  I almost always check out a broad assortment, including histories, mysteries, travel books, and many more.

If you tell me that you read for two hours a day, I'll get a good impression.  If you follow up by telling me that all that time is spent on TechCrunch and Hacker News, I'll lose that good impression.  You can't get interesting ideas by reading what everyone else reads.

To make connections means to read actively, rather than passively.  As I read, I'm constantly thinking about implications, identifying similarities, and trying to generalize to situations in my own life.

This has always been the issue with how we teach literature in this country--we treat literary analysis as an academic discipline.  And while it's cool to be able to explain how crop yields help explain Chaucer's choices in the Canterbury Tales, literature matters because it is universal.  The reason we think a great book is great is because it's relevant to our own lives.

Relevance is in the eye of the beholder; the more relevance you see, the more interesting ideas you'll have.

Now go out there and read.

Say Just Enough, But Not Too Much

Entrepreneurs are passionate, but this passion can be their undoing.

One common mistake entrepreneurs make is to say too much.

It's easy to understand why.  First, entrepreneurs know a lot about their space and their product.  Second, they love the subject so much, they'd happily expound for hours.  Finally, they can't help wanting to show the work they've put in.

The problem is, this leads them to commit the cardinal sin of sales: Saying too much.

It's a delicate art--you have to say just enough to convince a buyer/investor/job candidate, but no more.  Say too little, and they won't be persuaded.  Say too much, and you can talk yourself out of a deal.

Once you've convinced someone, it's time to shut up and ask for the order.

This principle applies to everything, from emails to phone calls to full-on presentations.  It doesn't matter how much material you've prepared--once you've achieved your goal, shut up and ask for the order.

For an email, that means that you should never write more than 100 words, and the last sentence should spell out exactly what you want the other party to do.

For a call, it means getting to the point fast, and then letting the other party ask questions.

For a pitch, it means reading the room and picking the right time to jump straight to the investment thesis slide.

Say just enough, but not too much.

Monday, November 11, 2013

The Power of Surprise

Humans love to be surprised (as long as the surprise isn't a nasty shock). As thinking creatures, our ability to develop an accurate working model of the world depends on our ability to spot the unexpected. Surprise is a great mechanism for rewarding that ability.

Wharton conducted a study of viral videos.  They had research subjects watch videos that either generated about 1 million views, or 100 million views.  The key difference between the two groups was that the 100 million view videos involved something surprising.

I see the same thing in startup pitches.  The most effective pitches involve saying something like, "You probably don't know this, but...." The surprise is key.  Every investor hopes that a company has discovered a rich market that seems obvious in hindsight, but which others have overlooked.  Being surprised by a pitch is one of the key indicators of such an opportunity.

So as you prepare your pitch, ask yourself what's surprising about you and your business.  It should probably be one of your key selling points.

Before fixing a mistake, ask yourself if it matters:

If nature abhors a vacuum, startup people abhor mistakes. Most of us got to where we are via a long chain of good grades and aggressive action, which means our instinctive reaction is to attack mistakes like a hungry piranha.

And that itself is a mistake.

It feels good to jump into action, to examine the options, to make a decision, and to execute.  But that doesn't make it effective.

Stephen Covey warned against our innate tendency to focus on the urgent, to the potential detriment of what's important.  He wrote about the neglect of Quadrant 2 activities (important, but not urgent).

Every startup is rife with mistakes; your team could spend all its time fixing them without actually getting anything important accomplished.

As the entrepreneur and leader, you need to resist your own instincts and avoid giving in to the natural and comfortable urge to jump into problem solving.  It might feel uncomfortable, but it will also help you succeed.

The Secret to Facebook is Content

I have never been an avid Facebook user.  Quick posts and personal notes have never been my metier; my Twitter feed essentially acts as an RSS feed of my posts and a commenting system.  But recently, I've come to realize that the secret to Facebook is content.

Specifically, Facebook is the first medium that provides constant, personalized, interactive content. Any time day or night, I can visit Facebook and find new stuff to read.

Consider the evolution of content:

Print: Periodic, broadcast, passive. While I remember the excitement of waiting for the latest issue of The Atlantic, it was an excitement that came once a month, not all of the articles interested me, and I had no one to talk with about it.

Website: Sporadic, broadcast, passive. Remember having to check a website for new content? It's not far-fetched. I still check ESPN.com this way (though websites have since added commenting).

Blog: Push, narrowcast, interactive. Blogs succeeded because they were so much more focused and interactive than the MSM. But the crushing weight of an RSS backlog makes this a love/hate relationship.

Facebook is a fiendishly addictive content engine. It's so ubiquitous that my friends generate a constant stream of content. And because it uses a symmetrical follow system (unlike Twitter's 1-way system) all the content is at least somewhat relevant, in that it comes from a personal friend. Finally, the universal commenting system both makes that content interactive *and* viral, as I get drawn into comments on content from friends-of-friends.

I always check Facebook because I don't want to commit to the time and intellectual effort of reading blogs and articles, yet I find myself still reading 20 minutes later (which, by the way, is plenty of time to read a thought-provoking piece).

I admire the machine, and I love how it helps me stay in touch with friends, but I can't help wishing that the crack had more nutrients.

Saturday, November 09, 2013

As a manager, the default is trust

As a manager or CEO, what is your reaction when someone proposes a plan of action?

Most of us feel like we need to "improve" such proposals. It's hard to say why. Perhaps that helps us "look smarter." Perhaps we feel like we want to help. Or maybe we're worried that if we don't offer changes, it will seem like we don't care.

Stop it.

As a manager, the default is approval, not nitpicking. This doesn't mean to swallow legitimate feedback. If you think the plan is crazy, say so. But you better have a good reason.

When you tinker, you're not saying, "Management adds value." You're saying, "I don't trust you. In fact, I trust you so little that I'm going to slow you down and make more work for everyone."

Trust is shown with actions, not words. Make trust the default and you'll build better relationships and make your startup move faster.

Networking outside your comfort zone

It's critical to network in situations outside your comfort zone, otherwise your skills might erode.

Here in Silicon Valley, it's pretty easy to network. People are very casual and open, and if you're an investor, it's even easier. People constantly seek me out because they want me to invest in them, or to introduce them to other investors. I'm smart enough to realize that I'm taking advantage of structural factors, not my winning personality.

The real challenge, especially for entrepreneurs, is to network with your customers. No one feels the need to butter up a prospective vendor; if you can win your customers over, then you really are demonstrating your skill.

I recently went to an event where I was an outsider; the people there were potential customers, but definitely didn't want to be sold anything. If you can build relationships under those conditions, then you do have a valuable skill.

Don't wait until it's make or break; as with anything you do, networking is a skill that improves with practice. Seek out challenging situations so that when the time comes where you have to go into such a situation and get results, you'll be ready.

Mastering Rapport

I hate traveling for work. It's not that I mind the mechanics of travel; I pack light and optimize everything from my clothing to my snacks. I also have the advantage of being able to sleep any time and anywhere, including on planes while surrounded by crying babies. Rather, I hate being away from home.

As a result, I practically never travel for work unless it's for a major event where I can meet a whole host or relevant people. When I do go, however, I always come back with a thick stack of business cards and a ton of new friends.

Here are my secrets for rapidly (and sincerely) building rapport.

1) Do your homework in advance. Whenever I attend an event, I prepare a mini-dossier of key people and facts. I even include their Twitter or LinkedIn profile photo so I can identify them from across the room, rather than having to rely on badges.

The key though, is not to seem creepy. It's not a college test where you need to show your work. My two tactics are either to ask leading questions that will surface the facts I know I want to discuss, or to play Columbo. "Hey, I've got a vague recollection of hearing about X. Was that you?" That sounds a lot better than, "I was looking at pictures of you last night in my hotel room."

2) Jump on in. This isn't dating, and you don't need a fancy pickup line. Just find someone who is temporarily by themself, walk up, and say, "Hi, I'm Chris."

Be calm, relaxed, and comfortable, and the people you talk with will feel the same and open up.

3) Be patient. Rookies are way to eager to cross people off their list, and will join the scrum around a popular person. It doesn't work in picking up a date, and it doesn't work here. You look desperate and make people feel awkward. Wait for your chance; it will come.

Similarly, when you start talking with someone, give them your full attention, even if they aren't on your target list. First, they might be a great contact. Second, it's rude to stare off in the distance, looking for someone more "important". Third, if you have an animated conversation, full of laughter and energy, it will draw other people over, foster new connections, and show you in a good light.

4) Always focus on the other person. Nothing is more interesting to folks than their own concerns; nothing is more pleasant than being able to hold forth on something they love. Be sincere and curious. Don't worry about delivering your message; reciprocity and the desire to help you will practically compel them to ask what they can do for you.

5) Cozy up to the staff. Show sincere appreciation to the stressed-out organizers, and they will generally want to help you with intros, VIP passes, and other helpful goodies. This includes the assistants and tech people, who will really appreciate the rare attendee who reaches out to them.

6) Participate. At any event, there are opportunities to participate, such as volunteering to come up on stage, or asking questions during Q&A. My secret is to always be ready to go. No one ever wants to be the first volunteer or ask the first question, leaving you a massive opening to exploit. You have to be good, of course, but you can help yourself out by thinking of questions throughout the presentation then loading your best one on the tip of your tongue.

Don't get too greedy though; people who hog the airtime look like assholes. That's why volunteering when no one else dares is so effective--people are grateful you fell on the grenade for them.

At this most recent show, I employed all my tricks. I was able to reach about 75% of my target list, I met tons of other people, many turned out to be stellar contacts, and by the end of the two days, people who had known each other for years, and to whom I had been a total stranger 36 hours before, we're repeatedly referencing me in their presentations and comments.

Now it helps that I love the spotlight and taught public speaking, but these techniques can work for anyone, even shy technical entrepreneurs.

The customer is always right (but not in the way you think)

One of the big frustrations that startups face is the disconnect between the customer-facing and product-facing sides of the company.  From time immemorial, engineers have complained about the wild promises Sales makes, while salespeople complain that engineers have no idea what the customer wants.

The thing is, both sides are right.

Sales doesn't understand the engineering tradeoffs. Engineering doesn't understand the sales tradeoffs.

The traditional approach is to use Product Management to bridge the gap. But far too often, this simply interjects an intermediary that *neither* side trusts. The Apple solution is to give the product people dictatorial powers, by it's not clear that this approach works if your name isn't Steve Jobs.

I'd like to argue for a different approach. The customer should be the source of information, but not the way you think.

Customers don't know what they want. They only think they know what the want. Every entrepreneur has had the painful experience of giving a customer exactly what they asked for, only to hear, "Yeah, I don't know why, but that's not quite it."

Instead, what you need to do is to gather input from customer behavior, rather than customer words. Whenever I've done usability testing, I always record both the screen and the tester. This lets me highlight the clips that show interesting behaviors.

When Sales says something needs to be done, work with them to record and test the customer behavior, then have both teams watch the highlights. Then, lay out a discussion and evaluation framework so people have to focus on principles, rather than opinions.

This takes time, but it saves it in the long run. When everyone sees why something needs to be done, and agrees on the principles, it's far easier to deliver a good result.

You get the job you train others to give you

People have this concept of a Dream Job.   Yet they go about getting their dream job in exactly the wrong way.

Most people chase their dream job like the protagonist in a romantic comedy chases their "true love": A frantic effort to find The One.

Yet getting a job doesn't determine your job. Rather, you get the job you train other to give you.  Every interaction you have with bosses, coworkers, and direct reports helps shape your job.

My wife and daughter like to watch "The Dog Whisperer." Invariably, Cesar concludes that the dog isn't a bad dog; rather, its owners trained it (inadvertently) to behave badly. The same thing happens on the job. But instead of training a chihuahua to yap, you're training people how to treat you.

If you make it easy for people to work with you, more people will want to work with you. When I was younger, a got a lot of plum assignments and autonomy from my bosses because I made it easy for them to work with me. I treated them like a Chinese landlord, and got desired results (and rave reviews) accordingly.

There is a downside; people may want to work with you so much that they'll overload you. My wife has this issue at work--she's so good at bailing out troubled projects that she's constantly deluged with pleas for help. But the good news is that her company will do just about anything to keep her--she currently works 4 days a week, 3 of those from home, but still gets a full-time salary. Just pull a Nancy Reagan and learn to just say no.

Conversely, it you make it hard to work with you, people will avoid doing so. One of patterns I see a lot is that graphic designers feel underappreciated and complain about being pulled into projects too late. This complaint is generally true, but most of them fail to realize that the situation is one of their own making. Most designers are highly opinionated and don't appreciate all the tradeoffs involves in building a product. As a result, they train their companies to shut them out of the specification phase; dealing with complaints is bad, but dealing with the pain of getting them involved early on is even worse.

Channel you own Cesar Milan and figure out how you're training the people around you. The good news is that if the problems you face are self-inflicted, there's a good chance they can be self-repaired!

The best way to get your dream job, like your dream dog, is proper training.

Why an entrepreneur has to be the chief recruiter

Ask any entrepreneur, and she'll probably tell you that her most important job is getting the right people on board.*

* It's not; the most important job is to not run out of money. But people is a close second.

Yet despite his fact, many entrepreneurs offload hiring to others as quickly as possible. This is a big mistake.

Consider the following: Why would the best people want to work for your company?

Perhaps they think the company will make them rich.  What happens when times get tough, and that IPO seems like a remote possibility?

Perhaps they like working for a hot company. What happens when, inevitably, you stop being the new shiny thing and the trendies move on? Remember Friendster? Not many do.

Perhaps you're willing to pay them big bucks, or provide killer benefits. What happens when someone outbids you? Google paid one employee $100 million to reject another job offer.

Perhaps you're working on the coolest new technologies? What happens when Hacker News stops covering you? Java was the coolest kid on the block at one point.  Someday, node.js will be the new Perl.

The only sustainable, reliable way to convince people to join your startup is to make them love the work itself, and that means building a culture that people want to be a part of.

Culture isn't a slogan on a wall, or a bunch of TED Talks. It's how people interact with each other day by day.

The two biggest determinants of culture are how you act, and whom you hire. That's why the entrepreneur has to be the chief recruiter. You have to be the spearhead so that candidates understand how people treat each other at your startup, and to make sure you don't hire anyone with incompatible habits.

A CEO who models the company culture and strictly enforces it has a massive advantage when it comes to recruiting a compatible candidate, even if other companies can offer more money, hype, or technology coolness.

Don't think you have time to do this? That's short term thinking. Think about how much less time you'll need to spend resolving conflicts and arguing about priorities if you build a compatible team that loves working together.

Teams that are compatible give each other the benefit of the doubt and each issue they resolve together increases their confidence in and bonds with each other, resulting in a virtuous feedback loop.

In contrast, teams that aren't compatible hold grudges and grow increasingly irritated with each other; every conflict spirals out of control as it dredges up old scores and scars. Ultimately, the team falls apart.

The ultimate reward isn't just a better performing, more productive team. The ultimate reward is getting to work at a company you love, with a team you love. When you have that, financial rewards are unimportant (though still very nice to have!)

Always follow up the first day after a conference or event

For the final post in my series on attending a conference and event, I think it's important to focus on something that most people neglect: Follow-up.

Assuming that you've attended the event, built relationships, and collected business cards, your final step is to "fix" the value of those new contacts by following up.

In-person events are special because of how they affect us.  Being in a new place, disrupting all of your standard routines, and spending all your time with the same people all contribute to a sense of intimacy, which is what allows attendees to quickly build bonds.  These are the same principles at work in summer camps, offsites, and vacations.

But as with summer camps, offsites, and vacations, the new bonds you build during a conference or event can be as fragile as soap bubbles.  When you get back to your regular office routine and daily life, the experience you went through seems to evaporate.

I like the analogy of old-school chemical photography.  You have to develop the film and fix the prints, otherwise any light will destroy the pictures you've taken.

That's why I always schedule time on the first day after a trip or event to send follow-ups.  The goal is to set up 1:1 calls or other interactions to "fix" the relationship and keep it from evaporating into nothing.

It's all too tempting to tell yourself things like, "I'll just wait until Monday or Tuesday, so that people have a chance to catch up.  I don't want to be a bother."  That's just your brain's inherent laziness, trying to convince you with rationalization.  By the time a weekend has passed, you and all your new best friends will have forgotten each other.  Start following up immediately, or at worst, the next day.  Set aside time on your calendar; this isn't optional.

You might have spent thousands of dollars on conference tickets, airfare, and travel, not to mention the value of your time.  It's worth taking 2 hours the next day to follow up and actually consolidate potential gains.

Friday, November 08, 2013

Why collecting business cards makes sense

Even though I believe that one good conversation beats 100 business cards, collecting cards still has its place.

First, while people won't necessarily remember you after a single encounter, my philosophy is that you need three casual encounters to build familiarity.  Even if a person doesn't remember you after an initial meeting, it still counts towards that three meeting threshold.

Second, collecting business cards lets you pick which folks to follow up with. Simply sending an email or even a LinkedIn request doesn't build a relationship. Rather, you need to schedule a call or in-person meeting (assuming mutual interest, of course; if someone dodges your request, accept it for the rejection it represents, rather than going stalker on the poor sod). Surprisingly few people follow up! When you do send your request, offer some specific times so that you don't force and endless and annoying back-and-forth for scheduling.

Remember, collecting cards is just this first step; the real work is in building relationships.

Network at small events, not big ones

I'm on my way to an VIP advisory board meeting in another city. The annual meeting stretches out over two days--Wednesday evening and all day Thursday--which means that many people won't get in until Thursday.

Networking newbies probably think, "I need to be there on Thursday, when there are more people."  But I know that the key is to be there on Wednesday, when there are fewer people.

As I've written, networking isn't about who you know; it's about who trusts you. I'd rather develop one solid relationship than collect 100 business cards. Being there on the least crowded day helps me do that. Smaller groups are more comfortable, and encourage a deeper interaction. The opening night of a conference is usually the best time to have a leisurely, relaxed, relationship-building conversation.

(This was written on the plane--as it turns out, the opening night was a great time to develop relationships, both before the dinner, during it, and with casual drinks with the folks staying at the same hotel)

Design Your Products for Delight and Growth

The Verge recently ran a great longform article on the birth and death of Everpix, a startup that created a product that its users loved, but which couldn't grow beyond its cult status:
http://bit.ly/1hjPzTd

The always-insightful Andrew Chen penned a great analysis of what went wrong from a growth hacking standpoint:
http://bit.ly/16GNHwJ

"The problem with hyper product-oriented entrepreneurs is that they often have one tool in their pocket: Making a great product. That’s both admirable, and dangerous. Once the initial product is working, the team has to quickly transition into marketing and user growth, which requires a different set of skills. It has to be more about metrics rather than product design: running experiments, optimizing signup flows, arbitraging LTVs and CACs, etc. It’s best when this is built on the firm foundation of user engagement that’s already been set up. In contrast, an entrepreneur that’s too product oriented will just continue polishing features or possibly introducing “big new ideas” that ultimately screw the product up. Or keep doing the same thing unaware of the milestone cliff in front of them. Scary."
Andrew's advice and analysis are sound.  I've seen far too many startups chase feature development as the answer to business problems, rather than really understanding the business.  That's the beauty and the danger of features--they can change a company's fortunes overnight, but they can also be a siren song that never delivers any results.

But the nuance I'd like to emphasize is that growth is, at its core, a product function.  As an entrepreneur, you have to design your products for delight and growth.  As I read The Verge article, there was a single passage that, for me, sealed Everpix's fate:
"At one point, the team considered requiring a user's friends to create an account to download any photos that the user shared with them. It was a surefire way to boost signups — but also felt like the sort of ugly, needy design choice that the team prided itself on avoiding. The idea died."
I hate products that are engineered using "dark patterns" to encourage spamming.  But I feel like the Everpix team settled on a false dichotomy.  People love sharing photos (see: Facebook, Instagram, Snapchat, etc.).  There ought to have been a way to engineer a viral dynamic.  But by rejecting the whole concept of engineering growth, rather than just the specific feature of requiring account creation, Everpix turned its back on the one thing that could have driven the growth they so desperately craved.

This of course is Monday morning quarterbacking; issues are seldom so stark.  But it's important to draw the right lessons from any cautionary tale.

Tuesday, November 05, 2013

The Silicon Valley Luxury Trap

I'm torn about what to write about IfOnly, a new service I ran across last night:
http://www.ifonly.com/

IfOnly is an incredibly cool service.  It allows you to purchase unique experiences like a group swim clinic for up to 10 of your friends with Olympic champion and TV broadcaster Summer Sanders--a mere $8,000.

I immediately looked up Kobe Bryant, of course, and found that I could get signed, game-worn shoes for $8,000, or request a quote for a post-game meet and greet at a Lakers game.  Of course, being a cheapskate, I doubt I'd actually go for it, but I love knowing that it's possible.
http://www.ifonly.com/celebrity/kobe-bryant

I also think IfOnly has done a good job of providing a high-end experience.  I could get those same Kobe Bryant shoes on eBay, but the experience isn't nearly as classy:
http://bit.ly/17Du77M

And eBay is practically Rockefellerian in comparison to Hollywood Is Calling, which, for the low low price of $19.95, lets you hire the guy who played Mr. Belding on "Saved by the Bell" to wish your friend a happy birthday.
http://www.hollywoodiscalling.com/

Plus, because 70% of the purchase cost goes to the charity of the celebrity's choice, I get to help out a good cause, rather than simply enriching a collectibles dealer.

The issue is, IfOnly has raised a staggering $15 million from a who's who of investors.  $15 million is a bet on a mass market, not a niche.  I'm afraid that IfOnly will fall into the Silicon Valley luxury trap.

Silicon Valley investors (aside from me) are rich.  Many have been rich long enough to forget that most people don't have worries like, "Will the contractors finish my new 7-car garage before the rainy season?"  As a result, they end up backing companies that appeal to them...and no one else.

In the dot com era, Jim Clark of SGI and Netscape fame tried to start a company called MyCFO to provide financial services to the super-wealthy (average net worth: $150 million) who thought a $25K/year retainer was a bargain.  He raised almost $70 million for a company that didn't have a prayer of serving a large market.
http://bit.ly/1apL9Ah

MyCFO ended up getting sold to a traditional wealth management firm after burning through that $70 million (!) and coming under Federal indictment for dodgy tax shelters.

I want IfOnly to succeed and be around (I've got a long bucket list!) but feel skeptical of its mass appeal.

You Can't Balance Your Life By The Decade

I recently ran across an awesome New York Times editorial by Erin Callan, who was the CFO of Lehman Brothers in 2008 (she had the foresight/luck to resign a number of months before the financial crisis brought down the firm):
http://nyti.ms/1b2a4wr

In particular, I'd like to draw your attention to two passages:
"I didn’t start out with the goal of devoting all of myself to my job. It crept in over time. Each year that went by, slight modifications became the new normal. First I spent a half-hour on Sunday organizing my e-mail, to-do list and calendar to make Monday morning easier. Then I was working a few hours on Sunday, then all day. My boundaries slipped away until work was all that was left."
Sound familiar?  This kind of creeping workaholism is endemic in the startup world; just tonight, my wife noted that I was so absorbed in my reading that I failed to acknowledge when she asked me a question (I was reading the Keith Rabois Twitter exchange about blogging entrepreneurs).

No one is going to maintain the boundaries between your work and the rest of your life other than you and your immediate family.  You and you alone have to take responsibility for making this balance work.
"Sometimes young women tell me they admire what I’ve done. As they see it, I worked hard for 20 years and can now spend the next 20 focused on other things. But that is not balance. I do not wish that for anyone. Even at the best times in my career, I was never deluded into thinking I had achieved any sort of rational allocation between my life at work and my life outside."
I find this passage both touching and instructive.  Back when I worked for D. E. Shaw, one of my mentors told me that of all the people he knew who said, "I'll work for Wall Street for 10 years, then retire and do my thing," none of them ever did.

You can't balance your life by the decade because the actions you take change you, even if you don't realize it.  Callan seems to have been more self-aware than most, yet even she ended up trapped in a situation of her own making.

Monday, November 04, 2013

Happiness Doesn't Depend on Events

The research finding of the day comes courtesy of Eric Barker and Bakadesuyo:
"Ed Diener and Martin Seligman screened over 200 undergraduates for levels of happiness, and compared the upper 10% (the “extremely happy”) with the middle and bottom 10%. Extremely happy students experienced no greater number of objectively positive life events, like doing well on exams or hot dates, than did the other two groups (Diener & Seligman, 2002)."
We always envy the fortunate.  We see what they have, and think, "If only I had what she had, I'm sure I'd be happy."  But the fact is, we're wrong.

Whether you have the luck of Gladstone Gander, the endless wealth of his Uncle Scrooge, or the constant misfortune of his cousin, Donald Duck, your circumstances don't determine your level of happiness.  You do.

P.S. Man, did I love my Donald Duck comic books when I was growing up.

Trusting Too Much Is Better Than Trusting Too Little

Here's a great item from Eric Barker's Bakadesuyo blog:
http://bit.ly/HxinYf
"People were asked how much they trust others on a scale of 1 to 10. Income peaked at those who responded with the number 8.

Those with the highest levels of trust had incomes 7% lower than the 8′s. Research shows they are more likely to be taken advantage of.

Those with the lowest levels of trust had an income 14.5% lower than 8′s. That loss is the equivalent of not going to college. They missed many opportunities by not trusting."
The finding that one should trust, but not too much, fits with a lot of other human principles.  The Losada Ratio for positivity, shows that teams which are mostly (but not completely) positive perform better.  Analysis of romantic relationships show that couples who are mostly (but not completely) positive are happier.  And optimists do better with a dash of pessimism for realism.

I believe strongly in trust, which I've called the fundamental operating system of Silicon Valley:
http://bit.ly/Hxiz9V

Yet I've also counseled entrepreneurs to plan for the worst to minimize the risk and impact of being fired by their investors:
http://tcrn.ch/g1ZRhh

It's nice to have a simple, absolute rule to follow.  But as usual, the optimal strategy is more complicated.  My own recommendation is to give people the benefit of the doubt, but always contingency plan for betrayal.

Should entrepreneurs blog?

Keith Rabois touched off a mini-Twitter firestorm the other day when he posted a tweet saying, "I don't know of a single successful CEO or entrepreneur who blogs regularly."
http://bit.ly/1b0gv4V

Sadly, as I often note, 140 characters isn't enough for a nuanced response, which this topic deserves.  Here are my (often conflicting) thoughts about whether entrepreneurs should blog:

1. There are definitely entrepreneurs (and wantrepreneurs) who substitute blogging and commentary for actually getting things done.

The Valley and the startup world are full of people who seek notoriety, which has little correlation with success:
http://bit.ly/1aBbTnA

Just this morning, I had breakfast with a very successful entrepreneur who shall remain nameless; we talked about how the Valley was full of people who weren't that successful, but who managed to build the appearance of success (yours truly is a pretty good example!) based on their notoriety.

The worst are the posts which present little original thought, but instead spew random quotes (to appear learned or hit) and brogrammer jargon.

2. On the other hand, there are entrepreneurs for whom blogging is a critical part of their success.

I pointed out to Keith that brilliant entrepreneurs like Dharmesh Shah (HubSpot) and Rand Fishkin (Moz) are both great bloggers and great leaders.  Part of this is that they are natural writers.  The other is that both sell content marketing software; blogging is a critical part of eating their own dog food.

Even if you're not selling content marketing tools, I like entrepreneurs who write sincerely, and share authentic stories, like Joel Gascoigne (Buffer).  That kind of blogging adds value, as opposed to being yet another blowhard tackling the issues of the day (once again, yours truly is a good negative example).

3. Blogging for the sake of "blogging" is almost always a mistake.

Writers write because they have to.  When I don't write, I feel miserable and intellectually constipated, and my wife has to suffer through my verbal overflow.

But if you're not a natural writer, and you decide to blog because "successful entrepreneurs blog," you're as guilty of cargo cult entrepreneurship as any n00b.  Blog to share ideas, not to have blogged.

4. It's really hard to blog when you're CEO.

I first started blogging after I had brought in an outside CEO to run my first startup.  When I was CEO of Ustream, my blog was essentially on hiatus.  The point is, I've never tried to be a blogging CEO.  I've always found being CEO to be nearly all-consuming.  I have to tip my cap to folks like Rand and Joel who manage this feat!

5. There's a difference between blogging and having a corporate blog.

One of the key distinctions Keith drew was between a real blog and a corporate blog.  If you want to blog, write it yourself, in your distinctive voice.  A corporate blog that puts words in the CEO's mouth is inauthentic and ineffective.

Hopefully, these thoughts don't turn you off of blogging; I continue to believe that entrepreneurs should blog--but they should do so for the right reasons, and in the right way.

Sunday, November 03, 2013

Networking *isn't* about who you know

The classic saying about networking is that it's not what you know, it's who you know.  Sadly, this gives people the impression that networking is all about who you know.

The true master networker isn't someone who knows a lot of people; it's someone whom a lot of people trust.

If a "master networker" can't get things done, is he or she really worthy of that title?

In the end, it's not what you know and it's not who you know.  It's what you can get done.

Don't Mistake Notoriety for Reputation

I've been writing a lot about reputation lately.  But one thing I've neglected to do is to point out the key difference between reputation and notoriety.

When people talk about "reputation," they often mean notoriety.  Notoriety is what people who don't know you think of you.

You get notoriety from being written about in TechCrunch and appearing on TV shows.  Notoriety comes from the impression you make on the people who are in your audience.

Reputation, on the other hand, is what people who do know you think of you.  Each time you interact with someone, even if no one else is watching, you're building your reputation.

Notoriety feels good.  Many people (me included) love being the center of attention and soaking up the adulation of an audience (even if that adulation is fake--a fact that everyone who invests money for a living understands is a real danger).  But reputation is far more important.

Reputation is what convinces an investor to take a chance on you.  Reputation is what convinces a former co-worker to quit her job and join your startup.

Don't worry about developing your notoriety; a good reputation is far more helpful to success.

Why You Should Focus On Building Your Reputation

After writing about the importance of reputational capital, I realized that in many cases, it's more important to focus on building your reputation.

The key insight is this: As an entrepreneur, your control over the financial outcome of your startup is limited.  Luck is a necessary but insufficient factor in nearly every startup success.

On the other hand, your control over your reputation is far greater.

You can spend your entire career starting companies and doing the right thing without ever hitting that home run.

Yet if you're working hard, helping others, and adding value whenever you can, you will definitely develop a good reputation.

As an investor, I learn a lot about my entrepreneurs along the way.  I won't lie; when you deliver a great return on investment, it certainly helps me feel good about you.  But the correlation is weak; there are "unsuccessful" entrepreneurs that I love, and "successful" ones that I avoid.

Doing the right things will sometimes result in a great outcome.  It will always result in a good reputation.

The Performer and the Script

The very wise and very successful Saad Khan says that he only invests in "badasses."  I'm on board with that; given the likely length of the investor/entrepreneur relationship, life's too short to waste on people you don't like.

Yet like many simple rules, it's incomplete.  Investing in great people is a critical part of being a VC or angel investor, but I liken it to casting a great actor--even the greatest actor can't overcome a bad script.

Meryl Streep has been nominated for an Oscar 17(!) times.  She also provided the voice of a queen ant in "The Ant Bully."  Scripts matter.

The thing is, even though scripts matter, the performer matters more.  Meryl Streep can make even middling scripts (e.g. Mamma Mia!) look pretty good.  The greatest script in the world can't win Megan Fox a Best Actress Oscar (sorry, Megan!).

The ideal thing for a movie studio or an investor is to find a great actor who has a knack for finding great scripts.  Clint Eastwood won fame starring in the TV Western "Rawhide," and could have spent his entire career playing cowboys.  Instead, he formed his own production company, and created a long series of great works, including Best Picture winners "Unforgiven" and "Million Dollar Baby" (both of which also won him Best Director Oscars).

You should definitely ask if an entrepreneur is a badass, but it also pays to ask if she knows a good script when she reads one.

Friday, November 01, 2013

The Math Test That Changed My Life

When I was 7 years old, I started attending The Mirman School for Gifted Children.  It was pretty intimidating.  I had to take an IQ test just to get in, and when I arrived at Ms. Rubin's 3rd grade class, most of my classmates had already spent a couple of years together, rather than sitting around in public school feeling bored (as I had).

Early in the year, we took a math assessment test.  It was a timed test of basic math; I think we had 15 minutes to answer 100 questions.  It was quite a bit more strenuous than anything I had experienced at Franklin Elementary, and I ended up getting an 85 or so.

This was critical because because this particular test was being used to divide the class (of gifted children) into regular and advanced math.

When I showed my parents my test, I felt pretty down.  I had always thought of myself as smart, but I worried that I couldn't hack it at this higher level.  Maybe I was just a big fish in a small pond before.

My dad (who has a Ph.D. in Electrical Engineering) listened wisely, and then asked, "Do you get another chance to take the test?"

As it turns out, I did.  Mirman let students take the test twice, in case a student just happened to have a bad day.

My dad explained that math was simply a matter of practice.  I had done poorly because I wasn't used to answering so many questions in such a compressed period of time.  Since this was the early 1980s, he hand wrote some practice tests for me (no way to search the Internet for samples!), and used his watch to time me as I practiced.

Each time I practiced, my score improved.  When I took the assessment test at school for the second time, I got a 97 and my career as a "math star" was launched.  I stayed at the top of the advanced math class for the rest of my time at Mirman (though I wasn't a superstar like my classmate Masi Oka, who was doing calculus when we were still in the 6th grade), and competed in math contests throughout my high school career (I'm still bitter that a fever forced me out of the Mathcounts competition my sophomore year; it cost me a first-place trophy).

Even today, I still enjoy doing math in my head, and regularly race and beat folks who have to rely on their smartphone calculators.

This experience came to mind when I read this recent piece in the Atlantic:
http://bit.ly/HwoLiP
"Again and again, we have seen the following pattern repeat itself:
  1. Different kids with different levels of preparation come into a math class. Some of these kids have parents who have drilled them on math from a young age, while others never had that kind of parental input.
  2. On the first few tests, the well-prepared kids get perfect scores, while the unprepared kids get only what they could figure out by winging it—maybe 80 or 85%, a solid B.
  3. The unprepared kids, not realizing that the top scorers were well-prepared, assume that genetic ability was what determined the performance differences. Deciding that they “just aren’t math people,” they don’t try hard in future classes, and fall further behind.
  4. The well-prepared kids, not realizing that the B students were simply unprepared, assume that they are “math people,” and work hard in the future, cementing their advantage."
I could easily have ended up deciding I wasn't a "math person" if not for the wisdom and support of my parents.  If you're a parent, make sure you understand this phenomenon, and give your child the boost he or she needs.  You never know when one math test might change the course of an entire life.

Sunday, October 27, 2013

Will Success Ruin Silicon Valley?

Everywhere one looks, Silicon Valley seems ascendant.  Tech companies like Apple and Google are among the world's most valuable and admired, while tech titans like Larry and Sergey, and Mark and Sheryl are given the first-name-only treatment of offline celebrities.

Silicon Valley has even stuck its nose into broader society, helped by the fact that so many of its products are in the hands of the average consumer.  Sheryl Sandberg's book, "Lean In" became a national conversation point.  Efforts like Startup America, while fledgling, illustrate Silicon Valley and Washington DC's increasing efforts to court each other.

But along with these celebratory puff pieces, I've also read an increasing number of critical ones.  Longtime San Franciscans who are getting priced out of their own city are increasingly resentful of startup employees, many of whom seem to display the same sensitivity and modesty as the robber barons of the 19th century.  Sean Parker's over-the-top wedding, for example, wouldn't be out of place in Gilded Age America (or decadent Rome).

On one level, it's a matter of simple economics.  When the demand for housing exceeds the supply, and the supply is limited, prices will rise.  There's no easy way to wish away broad trends, and attempts to hold back the tide of progress are about as successful of King Cnut commanding the waves.  Efforts like rent control just cause worse problems.

But on the other hand, this isn't just a futile lament by the remnants of the counterculture, or the wistful musings of the privileged wealthy who don't want to give up the "ambience" of their city.

Silicon Valley's greatness comes from many factors, but there are several key factors that rising prices endanger.

1) Willingness to try new things.
It doesn't matter how cool you are, when you become rich, you prefer stability to change.  The great innovations in Silicon Valley have come from those who have nothing to lose.

2) Ability to live on nothing.
Bootstrapping a company requires the ability to survive on a shoestring.  Not easy when a 1-bedroom apartment rents for $3,000 per month.

3) Openness to outsiders.
The majority of companies in Silicon Valley are started by immigrants.  And even those who aren't immigrants to America are likely immigrants to the Valley (like me).  If people can't come here to pursue their dreams without first making a mint, we'll lose the hungry outsiders we need.

I don't hear many folks sounding the alarm about these issues.  Mostly, people seem content to treat the current issues as a temporary adjustment or the whining of a few.  Perhaps.  But if these issues have any chance of endangering the formula that drive's the Valley's success, I think it's worth sounding that alarm.

Saturday, October 26, 2013

Passion and Pragmatism

One of the big trends in career advice has been telling young people to "pursue their passions."  Yet this advice is both simplistic and problematic.  I enjoyed this take by music producer Paul Cantor:
http://bit.ly/HjtS5v
"Kids now aren’t taught to find careers. They’re taught to find their ‘passions.’ Then they’re encouraged to pursue them.

Except the world doesn’t bend to everyone’s beckoning whim— it doesn’t really give a shit about your passion— because it needs people to do normal stuff like collect garbage, police streets, put out fires and process applications at the DMV.

Which makes it hard. Torturous, even. Here you were, told that you were awesome and that you wouldn’t have to settle for a life of mediocrity, and that’s all you’ve got. That sucks."
This passage reminds me of a conversation I had recently with an entrepreneur friend.  He was pondering whether to join a new, highly speculative venture.  He's a successful entrepreneur, but hasn't made "FU" money and has plowed a lot of his net worth into angel investments.  And with three kids in private school, he was worried that pursuing his entrepreneurial dreams would place too much stress on the family finances.

Yet even after I helped him analyze all the potential issues with his venture, he still had the entrepreneurial itch.

It's easy for me to tell 25-year-olds to quit their jobs and start companies--the downside is minimal.  It's harder when passion and pragmatism collide.

When Ted Cruz was a long-shot Senate candidate, he went to his wife Heidi and asked her permission to plow their entire net worth into his campaign.  Heidi, a Goldman Sachs VP, was the family's main breadwinner.  She didn't hesitate, and told him to do it.

Foolish?  He won the election.  And even if he had lost, he and Heidi were young enough to make up for the financial hit.  But it certainly highlights the conflict between passion and pragmatism.

I didn't give my entrepreneurial friend a firm recommendation.  I simply told him, "Make sure you can live with your decision, then don't look back."

College Is For Trying

These days, the institution of college is under assault.  Critics charge that colleges fail to prepare students for the real world, other than by saddling them with overwhelming amounts of student loans.  Just recently, I heard a number of my friends argue that too many people go to college (though I like to note that almost all who believe college attendance is too wide-spread are themselves possessors of advanced degrees from expensive elite institutions).

While I agree that college isn't for everyone (my advice to Ben Casnocha was to attend college, but drop out, so that he wouldn't always wonder if he should have gone), I believe that my time in college was both a fantastic experience and essential to my later life.

What I find most amazing about college is the number of things you get to try doing.  At no other time in your life will you have so many opportunities to explore different passions and disciplines.  When you're younger (K-12), the resources aren't there.  When you're older (grad school, "the real world"), you're in a focused environment.  Only college offers the amazing combination of world-class everything and near-total freedom.

When I was at Stanford, I wasn't just a student.  I was also:
* A caveman (we actually made stone tools in one of my anthropology classes)
* A painter
* A sculptor
* A poet
* A woodworker
* A blacksmith
* A psychiatrist
* A photographer
* A journalist
* An actor
* A comedian
* A hybrid-electric vehicle expert
* A movie director
* A politician
* An athlete
* A playwright
* A teacher
* A CFO
* A dancer
* A chef

And that's just the things I can think of off the top of my head.

People say college is for dabbling as if it were a bad thing.  Dabbling is a wonderful thing; otherwise, how would you ever realize your passions?

It's been decades since I gave a dance performance or cast molten bronze, but those experiences stay with me, and give me a stronger appreciation for the lives of others.  And without my various experience, I might not have realized my passion for non-fiction, my fascination with psychology, or my calling as a mentor.

If I had been forced to choose a single field when I left high school, I would have had no clue, and would probably have chosen whatever is the hardest, much like my dad ended up in Electrical Engineering because he had top test scores (in Taiwan in the 1960s, the top students were automatically put into EE--a draconian but effective measure, given Taiwan's success in electronics since then).

When people question what college is for, tell them: College is for trying.

Monday, October 21, 2013

"The Barriers are Self-Imposed"

Jeff Atwood recently wrote a great piece about the classic book, "Masters of Doom," about the origins of id Software, the creators of the first-person shooter:
http://bit.ly/15YdAIe

I still remember the first time I saw Castle Wolfenstein 3D.  I was a junior at Stanford, and for the first and only time in my life (thank goodness!) I was living on an all-male environment (my dorm that year had a male floor, a female floor, and a co-ed floor--I'm not sure why my roommate and I ended up on the male floor).

Down the hallway, Haresh Kamath (now a leading light in the alternate energy field) had a 386 PC, complete with Wolfenstein 3D and other classic games like Star Command.  The members of that hallway spend endless hours sitting around Haresh's computer and playing those games.  Even then, it was clear that id had created something special.

Of course, at the time, I assumed this amazing game was the product of some huge studio.  Nope.
"Carmack disdained talk of highfalutin things like legacies but when pressed would allow at least one thought on his own. “In the information age, the barriers just aren’t there,” he said. “The barriers are self-imposed. If you want to set off and go develop some grand new thing, you don’t need millions of dollars of capitalization. You need enough pizza and Diet Coke to stick in your refrigerator, a cheap PC to work on, and the dedication to go through with it. We slept on floors. We waded across rivers."
John Carmack is oversimplifying a bit; not everyone has the advantage of being one of the most brilliant hackers of all time.  But he's essentially right.  Time is money; if you have the ability to invest the time, you don't need the money.

And Carmack was doing this in the early 1990s, when he had to distribute his software using bulletin board systems.  We were still years away from Netscape.

If you have an idea, and you have the time, you can make it real.