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An MBA in VCs, Marketplaces, And Early-Stage Investing

When I first started managing, I expected that I’d magically have more time since I could delegate important problems to people on my team. But team support takes more time than I had anticipated, with recruiting, weekly 1:1s, debugging team issues, performance reviews — and that's before even talking about the product.

Be careful how you pay the bills

​ ​ ​ How to have ideas (and other ideas) One reason I love writing The Imperfectionist is that it gives me a chance to go deep into the ideas and practices I'm currently captiv...

The Bitcoin and crypto industry is growing rapidly. We empower the builders. List your crypto jobs, up-skill your team, and fill your crypto roles.

Trying to 'game' social media platforms like LinkedIn, Twitter and others with odd spacing, click-bait/copy-paste lists from Wikipedia etc doesn't accomplish what you think

I dropped out of college. When this happened it was a big deal—to my parents anyway. Then it was a big deal when people met me because they were constantly surprised by it. You didn’t finish college?! But for all the warnings and then surprise, there has been literally zero times where my lack of a degree has come up in the course of any business deal or project. So I am always surprised by the lengths people will go to get their degree. I read a fascinating book a couple years ago about the Varsity Blues scandal and the parents who bribed their kids into various colleges—many of which were not even that hard to get into. The parents were so convinced that college mattered that they were willing to do just about anything to make sure their kids got in…even in one case where one of the girls had millions of YouTube followers and didn’t want to go to college. Or another where the daughter wanted to be an actress and the mother was an actress, but she still tried to cheat on her daughter’s SAT’s to get into Juilliard (even though Julliard doesn’t require SATs!) It reminds me of a line from Peter Thiel who pointed out that we can get so good at trying to win that we don’t stop and ask if we’re playing the right game. Here’s something I thought mattered a lot: The New York Times Bestseller list. When my first book came out I worked very hard to sell a lot of copies so I could say I was an NYT bestseller. I missed it (for somewhat suspicious reasons) and hit the WSJ list instead. As it turns out, this had absolutely no impact on the sales of the book or my ability to have a writing career. What mattered was whether the book continued to sell well over time and whether I continued to have interesting things to say. Literally no one ever bought the book because it hit one list…and certainly no one didn’t buy it because it wasn’t on the other. But I found it quite funny in the years since that when people would introduce me for talks they would call me “a New York Times Bestselling author” because they just assumed, and it sounded like something important. So in one sense the term did matter and mean something…yet the fact they couldn’t tell or care about the difference was a reminder to me that it didn’t really matter at all. I would write more than a half dozen other books before I did become “a New York Times Bestselling author” in fact and let me tell you, nothing changed. And when I did debut on the list for my book Stillness is the Key, it was at the #1 spot. But nobody threw me a parade. My speaking fee and my royalties did not go up. The publisher sent me a cool plaque but it wasn’t that cool…my wife asked that I keep it at the office instead of the house. Still, whenever I talk to first-time authors and ask them what they hope to do with their book, hitting the list is almost always at the top of their list. I realize it’s easy for me to say that it doesn’t matter, since I have the plaque in my office, but it’s true. I wouldn’t trade my sales numbers for more weeks on the list. I wouldn’t trade having written books I’m proud of to spend more time there either. Writing a book that I’m proud of, saying what I have to say, growing as a writer in doing it, making something that reaches people, that makes a difference in their lives? That’s way more important. But this is what we do—we put way too little time and energy into the things that do matter (e.g. being a decent person) and way too much time and energy into the things we think matter…but don’t (e.g. getting into a decent college). Sometimes our kids can help us realize this (as the Varsity Blues kids often tried in vain to do). We did an email about David Letterman for DailyDad.com recently (sign up!). After becoming the longest-serving late night talk show host in the history of American television (33 seasons), the king of late night decided to walk away. He went and told his young son Harry, “I’m quitting, I’m retiring. I won’t be at work every day. My life is changing; our lives will change.” Who knows what Letterman expected his son to say, but certainly he expected more than, “Will I still be able to watch the Cartoon Network?” Letterman replied, “I think so. Let me check.” We spent our energy—our lives—slaving away, chasing things that don’t matter. Worse, we tell ourselves we’re doing it for some specific reason—for our careers, for our kids…but it’s all based on nothing! They don’t care! Not like we think they do. Why do we do this? One, I guess it’s because we don’t know, we don’t listen. We only realize the things are worthless once we get them…even though plenty of people had already returned to the cave and told us we were chasing shadows. But I think the biggest reason is actually the biggest thing we chase that doesn’t matter. We chase achievements and money and status because we’re trying to create a legacy. Because we want people to remember us, for our stuff to last. You want to talk about what really doesn’t matter? Other people’s opinions of you when you’re dead! As Marcus Aurelius writes in Meditations, “people who are excited by posthumous fame forget that people who remember them will soon die too. And those after them in turn.” And suppose all those people you want to remember you were immortal, Marcus says, “what good would it do you?” You’ll still be dead! A couple of years ago, I worked on an album that [...]

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Thomas McCrae was a young 19th Century doctor still unsure of his skills. One day he diagnosed a patient with a common, insignificant stomach ailment. McCrae’s medical school professor watched the diagnosis and interrupted with every student’s nightmare: In fact, the patient had a rare and serious disease. McCrae had never heard of it. The diagnosis required immediate surgery. After opening the patient up, the professor realized that McCrae’s initial diagnosis was correct. The patient was fine. McCrae later wrote that he actually felt fortunate for having never heard of the rare disease. It allowed his mind settle on the most likely diagnosis, rather than be burdened by searching for rare diseases, like his more-educated professor. He wrote: “The moral of this is not that ignorance is an advantage. But some of us are too much attracted by the thought of rare things and forget the law of averages in diagnosis.” A truth that applies to almost every field is that it’s possible to try too hard, and when doing so you can get worse results than those who knew less, cared less, and put in less effort than you did. It’s not intuitive, so it can drive you crazy. And it’s hard to pinpoint when it occurs – maybe McCrae’s professor was being appropriately cautious? But there are mistakes that only an expert can make. Errors – often catastrophic – that novices aren’t smart enough to make because they lack the information and experience needed to try to exploit an opportunity that doesn’t exist. Two big ones: Being an expert from an era that no longer exists Investor Dean Williams once said, “Expertise is great, but it has a bad side effect. It tends to create an inability to accept new ideas.” Henry Ford banned his factory workers from documenting new ideas that didn’t work, because he feared it would create a list of things people refused to try again even when new technologies improved their chances of success. What was impossible in one era might later not only be doable, but the key to success. Ford wrote in his biography: I am not particularly anxious for the men to remember what someone else has tried to do in the past, for then we might quickly accumulate far too many things that could not be done … Hardly a week passes without some improvement being made somewhere in machine or process, and sometimes this is made in defiance of what is called “the best shop practice.” Marc Andreessen explained how this has worked in tech: “All of the ideas that people had in the 1990s were basically all correct. They were just early.” The infrastructure necessary to make most tech businesses work didn’t exist in the 1990s. But it does exist today. So almost every business plan that was mocked for being a ridiculous idea that failed is now, 20 years later, a viable industry. Pets.com was ridiculed – how could that ever work? – but Chewy is now worth more than $10 billion. Experiencing what didn’t work in 1995 may have left you incapable of realizing what could work in 2015. The experts of one era were disadvantaged over the new crop of thinkers who weren’t burdened with old wisdom. The same thing happens in investing. Michael Batnick has made the point that having experienced a big event doesn’t necessarily make you better prepared for the next big event. Interest rates have mostly fallen for 40 years, so few bond investors – even grizzled veterans – have lived through a sustained rise in interest rates. But, he writes: So what? Will the current rate hike look like the last one, or the one before that? Will different asset classes behave similarly, the same, or the exact opposite? On the one hand, people that have been investing through the events of 1987, 2000 and 2008 have experienced a lot of different markets. On the other hand, isn’t it possible that this experience can lead to overconfidence? Failing to admit you’re wrong? Anchoring to previous outcomes? Of course. It happens all the time. The feeling of power you get from hard-fought experience is stronger than the urge to change your mind, even when it’s necessary. Career incentives can push complexity in a field where simplicity leads to the best outcomes. Jason Zweig of the Wall Street Journal says there are three ways to earn money as a writer: Lie to people who want to be lied to, and you’ll get rich. Tell the truth to those who want the truth, and you’ll make a living. Tell the truth to those who want to be lied to, and you’ll go broke. Some variation of this applies to many fields, especially service industries where someone pays for an expert’s opinion. There can be a difference between knowing what’s right and making a living delivering what you know to be right. This may be most common in investing, law, and medicine, when “do nothing” is the best answer, but “do something” is the career incentive. Sometimes it’s amoral, but it can be an innocent form of “cover your ass.” Mostly, though, I think an advisor just feels useless if they tell a client, “we don’t need to do anything here.” In the quest to be helpful they add complexity even when none is needed, or when it might backfire. Years ago Jon Stewart interviewed Jim Cramer. When pressed on CNBC content that ranged from contradictory to inane, Cramer said, “Look, we’ve got 17 hours of live TV a day to do.” Stewart responded, “Maybe you can cut down on that.” He’s right. But if you’re in the TV business, you can’t. Most of this I think is truly innocent. Experts believe their complexity adds value because reality is too painful to bear, especially in a competitive career with stress and long hours. A doctor once told me the biggest thing they don’t teach in medical school is the difference between medicine and being a doctor – medicine is a biological science, while being a doctor is often a social skill of managing expectations, understanding the insurance system, communicating effectively, and so on. The gap between the two, which applies to many fields beyond medicine, can lead to mistakes only experts can make, or only an expert can advise. “Half of the 15,000 mutual funds in the US are run by portfolio managers who do not invest a single dollar of their own money in their products,” the FT writes. Doctors have their own version, as one article highlights: Almost all medical professionals have seen what we call “futile care” being performed on people. That’s when doctors bring the cutting edge of technology to bear on a grievously ill person near the end of life. The patient will get cut open, perforated with tubes, hooked up to machines, and assaulted with drugs. All of this occurs in the Intensive Care Unit at a cost of tens of thousands of dollars a day. What it buys is misery we would not inflict on a terrorist. I cannot count the number of times fellow physicians have told me, in words that vary only slightly, “Promise me if you find me like this that you’ll kill me.” They mean it. Some medical personnel wear medallions stamped “NO CODE” to tell physicians not to perform CPR on them. I have even seen it as a tattoo. The trouble is that even doctors who hate to administer futile care must find a way to address the wishes of patients and families. Imagine, once again, the emergency room with those grieving, possibly hysterical, family members. They do not know the doctor. Establishing trust and confidence under such circumstances is a very delicate thing. People are prepared to think the doctor is acting out of base motives, trying to save time, or money, or effort, especially if the doctor is advising against further treatment. It’s a huge problem that affects many fields, and I don’t know a good solution. But it’s good to acknowledge: There is one set of skills that comes from being an expert, and another that comes from being a novice, unburdened by the weight of experience or incentives. The former is obvious, the latter too easy to ignore.

If your plan, your idea or your art doesn’t involve any significant hurdles in moving forward, it’s probably not worth that much. If it were easy, everyone would do it. The tactic is to…

An MBA in VCs, Marketplaces, And Early-Stage Investing

Earlier today, June Huh, a 39-year-old Princeton professor, was awarded the 2022 Fields Medal, one of the highest possible honors in mathematics, for his breakthrough work on geometric combinatorics. As described in a recent profile of Huh, published in Quanta Magazine (and sent to me by several alert readers), Huh's path to academic mathematics was

My Terminal Emulator

Will Smith writes in his biography that: Becoming famous is amazing. Being famous is a mixed bag. Losing fame is miserable. The amount of fame almost doesn’t matter. It’s the trajectory that people cling to. Same with money. I think for a lot of people the process of becoming wealthier feels better than having wealth. If it’s wealth we were after, most of us would feel great, because most of us are unfathomably wealthier than we were a generation or two ago. Or ten years ago. Or five years ago. Or two years ago! What feels great is being on an upward path. That’s when dopamine takes over. That’s when you can extrapolate it and assume it goes on forever, and compare yourself to where you were before, and feel like nothing can stop you. When that path declines – even if it happens when you have a level of wealth you couldn’t fathom a few years ago – the whole sensation shatters. U.S. household net worth is $80 trillion higher today than it was ten years ago, which is astounding. But it’s about $700 billion lower than it was three months ago, which is honestly nothing. Yet one of those figures creates ten times the headlines, ten times the attention, ten times the emotions, ten times the introspection. It has nothing to do with the level of wealth and everything to do with the trajectory. The problem is that an occasional downward path is inevitable in investing. Outside of fraud, it’s completely unavoidable. The reason markets can go up a lot in the long run is because they make you pay the cost of admission of going down a lot in the short run. When people are addicted to the act of becoming wealthier – the numbers going up more than just the numbers being big – and the numbers going down is an integral part of how investing works, of course you’ll find some shattered souls. Some broken egos. Some terrible decisions being made. Same in business. Same in careers. When most people hear this they respond with the classic line, “It’s the journey, not the destination, that matters!” OK, most of the time that’s good advice. But here I think it’s backwards. An addiction to the process of making money is a version of never having enough and never being satiated. It’s a game that can’t be won but offers the illusion of a finish line right around the corner. Maybe that’s OK for some people – if you truly enjoy the game, that’s great. But I think that’s maybe two percent of investors, including professionals. My sense is a lot of people suffer naively through the game expecting it to end, and they’re frustrated when it never does. Or they think they like the game, but what they actually like is numbers going up, which is maybe half the game. An indifference to the process – the path of the journey – and a focus on the outcome and goal is probably the best most people can do with money. Or maybe an acceptance of the process, knowing it’ll be a constant chain of surprise, volatility, setback, and disappointment, but if you can stick around long enough the odds of eventual growth and success are in your favor. That’s very different from enjoying the process, which can quickly turn into an addiction to needing more. Money buys happiness in the same way drugs bring pleasure: Incredible if done right, dangerous if used to mask a weakness, and disastrous when no amount is ever enough.

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An MBA In Marketplaces, And Early-Stage Investing

“The strength of my kids is that they are too young to remember anything bad, and they are making so much money they feel invincible.” The Great Winfield

The biggest trend in branding this year appears to be one of the oldest trends — signature models. From shoes to guitars, old-school brands are flooding the market with products stamped with a creator’s personal brand. A “brand” is just a “reputation.” The bigger you get as a company, the