1. continuations:

    I have been writing a lot about wealth and income inequality and I am readingThomas Piketty's Capital in the 21st Century (review forthcoming as soon as I am finished). So it seems appropriate to ask how I feel about the wealth being created by tech startups for entrepreneurs, early employees and investors (which of course includes VCs like myself). I have hinted at this here on Continuations in the past in a post about Twitter but it is worth clarifying. I believe that a large component of this wealth is random — or if you so want: luck.

    Maybe the perfect illustration of that random component is Brian Acton, the co-founder of Whatsapp. He famously tweeted about being turned down by both Twitter and then Facebook as an engineer in 2009. If either one of those jobs had come through it seems highly unlikely that Brian would have joined Jan Koum in the fall of 2009 to work on Whatsapp. Which in turn would have made it pretty unlikely that Brian would have made hundreds of millions of dollars when Facebook acquired WhatsApp.

    My personal story is similarly full of randomness. I spent all of 2003 trying to buy a traditional software company with the goal of then Internet enabling it. Together with a friend and partner we got super close to buying the leading trucking software company in the US which was headquartered in Cleveland. The deal fell apart at the 12th hour over a sales tax liability (that later turned out to be trivial — I will at some point blog about the details). In any case, had that deal happened I would have been in Cleveland instead of teaming up withJoshua for the wild ride that was delicious and subsequently joining USV.

    If you want to argue that this entrepreneurial or investor wealth creation is not random to a large degree, then you would have to believe that people like Brian (or myself) have some skill or ability that is thousands or even millions of times larger than that of others. I personally find that preposterous. Just to be clear, I am not denying an element of risk taking, smarts, etc. — clearly you have to work for a startup or become and investor to begin with if you want to have a shot at this (as in the joke of the person praying for years to win the lottery only to finally hear God speak “buy a lottery ticket”). Beyond that though much depends on being in the right place at the right time.

    At the moment  randomness is amplified significantly by the winner-take-all characteristic of many markets. The leading service or app in a category with network effects can be an order of magnitude or more larger than the next competitor and can do so on a global scale. Or put differently, the potential size of the lottery tickets has increased substantially. We have had a similar period in history during early industrialization.

    PS Some further clarification on the randomness aspect. I am not arguing that the emergence of a company such as WhatsApp is unlikely (in fact the opposite). I am talking about the probability of a particular startup becoming that and of a particular person to be a founder of or investor in that startup.

    Had this same discussion over Easter dinner yesterday and we came to the conclusion that generally people who acknowledge that at least a portion of their great success is the result of a “lucky break” somewhere along the way are much more tolerable/humble/fun to hang out with than people who attribute 100% of their success to their hard work/smarts/genius. Those people tend to be assholes.

    Not to say the girl or guy with the lucky break didn’t work their ass off to make the best of it, and of course they did, but there are also a heck of a lot of smart, hard-working people who haven’t had the same kind of success, however they define it.

     

  2. ""Well, I’m really making it for everyone."

    Well, then go ahead and stop because you’ve already lost.

    “Everyone” isn’t an audience. “Everyone” is a byproduct of an incredibly successful thing that was made for a far more specific bunch of people. Don’t ever make something for “Everyone” make it for someone. And make that person love it."
    — 

    - Dan Sinker (via msg)

    This gets back to knowing your customer. REALLY knowing your customer. Name them, give them a history, a favorite tv show, food, and dream vacation. Where did they come from and where are they going? And, most importantly, how does what you make help them get there?

    Gathering my thoughts on this topic for a longer post.

    (via msg)

     

  3. Solve for the Unknown

    Shower thought: everyone encounters two kinds of variables, constants and unknowns. Constants cannot change, but can be used to solve for the unknowns. When a situation has reached a point where you can’t go back and change anything else and all you’re doing is rehashing ways you could have done better, it’s time to accept that variable as a constant, place it in the right spot in the equation, and focus on how that gets you closer to solving the larger problem.

    Not that learning from your mistakes should be overlooked. But in the heat of things, I’ve learned, it’s more prudent to focus your energy on solving for the next—usually bigger—variable, and hopefully solving that equation and putting it to bed. There will always be more variables and more equations, with endless unknowns, so making sure you’re focusing on the right things and not dwelling on the wrong things is super important. It’s super difficult too, because it’s natural to say “what went wrong?” But there will be time for that when the dust settles (I hope), and plowing ahead in search of more answers and solutions is much more crucial.

     

  4. "Bill: You gotta commit. You’ve gotta go out there and improvise and you’ve gotta be completely unafraid to die. You’ve got to be able to take a chance to die. And you have to die lots. You have to die all the time. You’re goin’ out there with just a whisper of an idea. The fear will make you clench up. That’s the fear of dying. When you start and the first few lines don’t grab and people are going like, “What’s this? I’m not laughing and I’m not interested,” then you just put your arms out like this and open way up and that allows your stuff to go out. Otherwise it’s just stuck inside you."
    — 

    Bill Murray in this month’s Esquire

    Bill’s got it right. I love that I’m reading something insightful like this and in my head I’m seeing Carl from Caddyshack mumbling it out.

     

  5. TIL The Beatles Saw a Lot of Early Rejection

    In early 1962, The Beatle’s manager Brian Epstein—who had “discovered” the boys the previous November at a lunchtime performance (I can’t believe that was a thing) at the Cavern Club—got them an audition for Decca Records, and they were promptly turned down. Shortly after, they got in front of George Martin, who was famously unimpressed, particularly with their original drummer Pete Best. Amidst all of this, the original bassist Stuart Sutcliffe died of a brain hemorrhage.

    That’s some serious turmoil and disappointment for the biggest rock & roll group of all time. And time moved quickly for them, but it wasn’t always up and to the right. Even The Beatles had to adapt, tweak, and change things. They had to overcome obstacles. They had to bring in Ringo, and get George Martin to at least say “I’ve got nothing to lose.” Success isn’t imminent, it’s earned. Even if you’re The Beatles.

     

  6. "There’s an idea in the science-fiction community called steam-engine time, which is what people call it when suddenly twenty or thirty different writers produce stories about the same idea. It’s called steam-engine time ­because nobody knows why the steam engine happened when it did. Ptolemy demonstrated the mechanics of the steam engine, and there was nothing technically stopping the Romans from building big steam engines. They had little toy steam engines, and they had enough metalworking skill to build big steam tractors. It just never occurred to them to do it."
    — steam engine time exists outside of the science-fiction community too (via cacioppo)

    (via christinacaci)

     
  7. curiositycounts:

    This is wonderful. I couldn’t agree more with Alfred Hitchcock on his Definition of Happiness. 

    (via)

    Hitchcock has a surprisingly spot-on explanation of what happiness means to him. From the tone of his films I wouldn’t have guessed he had this outlook.

    (Source: curiositycounts)

     
     

  8. The Infatuation with “New”

    New as a marketing tool isn’t really, authentically “new,” its a manufactured new. It’s a carefully planned and controlled launch to capitalize on the emotional response to hearing about something before anyone else does, or trying to catch up if you were late to the party. But that feeling only lasts a short while, which means the marketers have to really blast out of the gates to make it work. And in a world where there is so much other “new” stuff going on, it’s getting harder and harder to command that attention. (Its a natural human response to be taken with something new, we do it every day. Try a new app, and promise yourself “I’m going to use this every day”…but 2 weeks into it, you taper off. This blog is a perfect example, if you look at the frequency of posts from when I started to now, it maps that attention deficit perfectly.)

    New also benefits from control, if you can control the release so the emotional response only has one outlet—you pulling out your wallet—then you’ve done your job as a new marketer. But if I as a consumer can have even a little convenience, that means others can too, which eliminates that rush to be first in line, or the fear of missing out.

    Decentralization has been the enemy of the old guard forever. Whether its the VHS format or the Internet, as soon as people don’t have to wait in a line around the corner you’ve lost. Unless you’re Apple, and you’re incredibly good at building up a launch, then controlling supply and release perfectly to maintain that frenzy. But Apple uses all of those tactics to deliver a GREAT product, so there’s a hype of anticipation rather than participation. And given no one is Apple except Apple, the rest of the business world is grasping at maintaining “new” stuff.

    We see it as a toy company more than most. The big players LOVE new, until it’s old. Tickle me Elmo, Furby, silly bands. It’s a well timed build up, it’s hyped, supply is controlled and a frenzy occurs. It gets free press, stores sell out and have room for the next “new” thing coming down the pipe. I think that’s just about the most wasteful model in marketing. And thank goodness the Internet is starting to disrupt it, because it wastes money, time and energy on irrelevant garbage that is designed to be discarded come January. What decentralization has done is turn the focus back to the product, and its long term value. The industry is still largely hit-driven, but there has been more emphasis on whether or not the product will continue to be interesting after the infatuation has worn off. That’s what we try to do here at Zylie, is focus on how to build ON the value, not replace it with another meaningless trinket. For Zylie, that means more stories, more friends, more experiences and more things to connect children to the adventure. For the kids who already have Zylie, we hear from their parents that we’re hitting that mark. But we’re always looking to improve it, and raise the bar. People should expect more from a product, and we expect more from ourselves.

     

  9. "

    And so it is with luck - unlucky people miss chance opportunities because they are too focused on looking for something else. They go to parties intent on finding their perfect partner and so miss opportunities to make good friends. They look through newspapers determined to find certain types of job advertisements and as a result miss other types of jobs. Lucky people are more relaxed and open, and therefore see what is there rather than just what they are looking for.

    My research revealed that lucky people generate good fortune via four basic principles. They are skilled at creating and noticing chance opportunities, make lucky decisions by listening to their intuition, create self-fulfilling prophesies via positive expectations, and adopt a resilient attitude that transforms bad luck into good.

    "
     
  10. davemorin:

    46 seconds on life from Steve Jobs.

    (Source: davemorin, via skillshare)

     
     

  11. Louis CK AMA

    Read this AMA earlier this morning, was completely blown away not just by the fact that Louis edits his own episodes on a Macbook by himself, but how open and honest and freaking awesome the guy is in general. He answered 50+ questions in a few hours, remembered PA’s from sets he’d done years ago in Canada, answered deep questions about the nature of learning, and still managed to be absolutely hilarious. The guy is a legend. Read the whole AMA exchange here: link

     

  12. Not Everyone is “Crushing It” All the Time

    Betabeat has a surprisingly good article this morning about the realities of what people are deeming “startup depression.” Foster Kramer interviews YouAre.tv’s Josh Weinstein on his 25th birthday about how people deal with it and the stigma that surrounds it. I’ve mentioned before that I think there needs to be more realism in the “startup” conversation, that this “we’re going gangbusters all the time” facade is unhealthy both for those inside and outside the looking glass. For those inside, it creates an unrealistic bar that you measure yourself against 100% of the time. If you’re not winning at everything, if your numbers aren’t doubling every week, if VC’s aren’t banging down your door, if Google isn’t sending you truffles to coax an acquisition, then you’re not doing it right. Starting something requires ridiculous optimism and nearly insane positivity, but there are times when that runs out and the roller coaster hits a trough. And in those moments, you don’t want to pretend like everything’s peachy keen, you want support. And that’s what a community is for.

    For those outside looking in, this mentality distorts the game. People freaked out over how Bloomberg misrepresented the hell out of the Techstars incubator program in their reality show, but this does the same thing, and sometimes there are real consequences. It’s important to exhibit the difficulties of the slog, because that’s a MAJOR part of it. Like Edison said, genius is 1% inspiration and 99% perspiration. But it is getting better, stories like Sugru’s are cropping up more and more, and that’s a great thing. 

    I’d encourage you to read the BetaBeat interview, which was conducted in General Assembly (naturally). It’s still early for a discussion at Hacker News, but I’m sure one will brew up shortly.