Builder or Investor?

The summer before my junior year was one of the most impactful couple of months in my life. I had two internships that summer, one at a PE shop in Chicago and one at a medical device startup in New Hampshire. Chicago was the first time I ever really lived on my own. As a social extrovert, this was hard but, ultimately, really good for me. My summer in Chicago was a step function increase in my personal growth. I don’t think it is a coincidence that I met the woman who would go on to become my wife shortly after returning to school in the fall. I was finally mature enough for that kind of relationship, and my time in Chicago had a lot to do with that. 

If Chicago was an accelerant for personal growth, New Hampshire was a catalyst for significant professional development. 

I was working at a medical device company while also living with the CEO and his family. It was an intensive business boot camp. During the workweek, I did a rotation throughout the company working on a new project each week. Combined with daily 1v1s with departmental heads, the internship served as a fantastic introduction to the various dimensions of a technology business. 

Outside of work, the CEO had me do his P90X workouts with him every day before work at 5 am. This may sound early, but it was a luxury compared to the 4 am wake-up calls I had on the weekends for fishing. 

I learned a lot through this experience. I learned the importance of being able to speak just as easily with a dockhand as with a CEO. I learned what a world-class culture feels like and the impact of working at a mission-driven company. I learned that if you want to be truly successful, it is more important to be among the world’s best at something than what that something is. 

I think I learned as much out on the boat talking with the CEO as I did in the office. One conversation in particular sticks out. He told me, “at some point, every successful person has to decide whether they want to be a builder or an investor.” 

The concept of builder vs. investor has informed much of my career thus far. 

After school, I had the opportunity to work at an elite, global investment shop like The Carlyle Group. I got so much from that experience, but I knew pretty early that I wanted to try to find a way back into the startup world as my next step. I knew that I wanted to be part of building companies that make an impact through solving important problems, but I didn’t know the first thing about actually working at a startup. 

I thought through my potential options as follows: 

1. I could go try to work at a startup. 

2. I could go try to work at a big tech company. 

3. I could try to get into venture capital. 

My only tangible skills were financial management and analysis, so if I did pursue being an operator, it would have to be in some sort of financial analyst role. As positive as large swathes of my Carlyle experience had been, it had also made me realize that I didn’t want to be a cog in the wheel at another big company. Spending the previous two years working on billion-dollar oil & gas transactions also made me want to work with more nascent companies. 

So I actually saw my options as follows: 

1. Try to find a startup to join. It would have to be in a financial analyst role, which generally only more mature companies recruit. I would be buying a single lottery ticket, but it would really pay off if the company became super successful. 

2. Try to become a VC. I hoped to leverage my investor’s skill set to land a role at a seed-stage investing shop working with early-stage companies. Instead of a single lottery ticket, I rationalized that I would have visibility on a whole host of different startups. I would develop a broad view of what success looked like, which could inform whatever was next. 

I decided to pursue the VC path. My logic was that I could be a real growth partner to startups. I may not be doing the building myself, but I would be an integral part of that process as an investor. I thought I could be a builder through being an investor. 

And I was wrong. 

Now I don’t regret my choice. It worked out well for me. I thoroughly enjoyed my time as a VC. I learned a lot, built a ton of great relationships, and ultimately ended up here at Wharton, which had been my goal for as long as I could remember.

I didn’t make a wrong choice, but I can see that my logic was fundamentally flawed with hindsight. 

The reality is that VCs aren’t builders. They may think they are, and maybe as partners on boards, VCs are adjacent to the building process, but they aren’t builders. Not really. Especially not junior-level VCs. 

I had this deep desire to build something meaningful. To be part of creating something new that I could hang my hat on, point to, and say, “I did that.” And as much as I wished it could, I realize now that VC was never going to scratch that itch. 

I think a lot of junior and would-be VCs fall into this builder trap. They want to be a company builder, but they don’t have any sort of technical or operational background, so they pursue being a VC. The career provides access to startups has a sheen of sexiness (to its ultimate fault, I would argue).

After a couple of years, all the associates who wanted to be builders end up pretty disillusioned because they aren’t making the impact they had hoped they would.

What generally happens next is these aspiring builders leverage the network they have cultivated and their knowledge of startups to land an operating role at a company. Going from VC to operator isn't a bad route at all (at least I hope not because it is the one I am pursuing!). You will leave VC with a robust network in the space, a high-level view of what it takes to build a successful tech company, and the ability to evaluate what strong companies look like. 

I don't think this path is as good as jumping straight into an operating role at a future unicorn, but it probably has a lower variance. Worst comes to worst, you can always go and get your MBA and use that as a springboard onto the operating side of the table 😊.

You can't really make a wrong choice when deciding between being an operator and an investor, but I do think you can make a suboptimal one based on your ultimate aspiration. 

The number one piece of advice I have for folks interested in pursuing venture capital is to take the time to think about why they want to become a VC. Do they want to be a builder or an investor? 

With the benefit of hindsight, my recommendation is only to pursue being a venture capitalist early on in your career if you want to be an investor. 

If you want to be a builder long term and pursue VC as a path into that world, you'll get broad exposure, but you'll likely be frustrated with how little impact you make on companies (the extent to which VCs make a tangible impact on companies in general is a debate for another post). 

Instead, join a high-growth company. Optimize more for growth and sitting next to brilliant people. Optimize less for the particulars of your role. You can always get into VC down the road. Operating experience will only make you a better, more empathetic, and more credible investor.  

If you want to be an investor and want VC to be your asset class of choice, then great! You won’t make as much money as being a PE bro, but the companies you work with are about 1000x cooler, and you may even be able to invest in some companies that change the world. 

As with most things in life, there isn't one ideal path. The path you choose matters less than what you do while on it. 

But before deciding to jump into the VC rabbit hole, think about what you really want. 

Do you want to be a builder or an investor?

The answer will inform a lot. 

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If you have thoughts on this post leave a comment below or reach out to me on twitter @abergseyeview where my DMs will forever be open.

If you enjoyed this post, you can subscribe here to receive all of my posts delivered directly to your inbox every Monday morning.

If this is the first time you are reading something I wrote and you want to learn more about me, this is a good place to start. It includes some background on me as well as a collection of my top posts.

Your Life's Great Work

There have been times over the last couple of months where I have been struggling.

I have written before about how getting my MBA at Wharton is a realization of a life-long dream. But sometimes there is a double-edged sword to achieving a dream.

I have been orientating myself towards getting my MBA for so long, now that I am here, I have been at a bit of a loss for what I want to do next. This question has caused me an undue amount of stress and anxiety over the past few months, but I am happy to say that I feel like I have worked through it and come out on the other side. I want to share how I grappled with some of these existential questions and where I landed.

The Green Grass of Measurability

There are a lot of things that make the MBA experience unique. One of them is how condensed it feels. Two years is a relatively short amount of time to pack in the learning, relationships, growth, and career moves that you expect to make. If we are being honest this probably creates challenges for all of us at one point or another. A common area where this rears its head is with jobs. Many of my fellow students started recruiting for their summer internship almost as soon as they arrived in the fall. Others are only now starting to work on figuring out their summer plans. This mismatch creates a recipe for comparison and anxiety. Maybe you are practicing cases while your friends are out celebrating. Or maybe you are anxiously twiddling your thumbs as all your friends start to receive offers and you are just getting started on your search.

I definitely fall into this second camp. Now, I knew this was going to be the case. I knew going in that I wouldn’t be part of a straightforward recruiting process. My chief goal at graduate school was and is to launch my own business. And even as I do explore less-entrepreneurial paths, there is absolutely zero part of me that is interested in the sort of jobs that hire using that kind of process-heavy structure. Even still, it is hard to not be envious of the clear feedback loops those processes entail. I have found myself envious of my peers’ ability to measure where they are at and how they are doing within their job search even if the jobs themselves are of no interest to me. The grass really is always greener.

The Great Work Trap

When it comes to big decisions about careers or life or marriage or anything else, the path forward is often littered with mental traps. One of the most common traps that I have written about before is the belief in a “path” that no longer exists (or maybe never really did). Another one I discovered for myself is the Great Work Trap.

My first semester at school I was mostly focused on making friends, getting my family settled in a new city, and remembering how to be a student again. As I started to find my sea legs a bit towards the tail-end of the semester, my attention started to turn to what I would be doing over my summer internship and post-graduation. For those who don’t know, your summer internship during your MBA is generally seen as a very important stepping stone towards whatever you want to do post-graduation. There is a lot of pressure to find the right opportunity over the summer especially for jobs with more structured recruiting processes like banking or consulting.

As I started to spend time thinking about what I wanted to do, I found myself getting stuck. First, I didn’t know exactly what I wanted to do. Having previously worked as a VC, there were parts of the industry that I absolutely loved, but other parts that I didn’t love so much. I also am very interested in getting operating experience either at an early stage startup or through starting my own venture. Do I try to go back into venture and find a firm that is a better long-term fit? Do I try to get a taste for the operating side of things? Do I try to start my own thing at school with the guard rails, free-time, and lowered opportunity costs that it affords?

In some ways, I still don’t have the answers, but after spending way too much time thinking about it and talking with people who are a lot wiser than me, I have learned to let go of some of the questions.

I think I have looked towards getting my MBA as this inflection point in my life and career for so long that I have simply been putting too much pressure on myself. I had been trying to figure out what my Life’s Great Work would be so that I could launch into it like a slingshot after I graduated.

I’ve come around to realizing that life very rarely works that way.

I think the journeys towards the great works of our life tend to only appear in hindsight.

Very few people point to the distance, decide what their career will look like, and then unnervingly succeed in pursuing that vision. I now believe that when done right, careers are much more iterative processes. You run a bunch of experiments. You double down on the things that are a good fit and you cut out the things that aren't. I like to think of Boyd Varty’s concept of tracking. You explore and you find a clue of where you want to be. That clue leads you to the next one. Sometimes you lose the trail and have to circle back around. But if you are patient, you will eventually track your way to where you want to be.

We also put unnecessary pressure on ourselves because we lack perspective. Careers are long. Much longer than we give them credit for. Too many of us, myself very much included, place undue importance on figuring them out as quickly as possible. In undergrad, everyone acted like their first job out of college was the end-all-be-all that would define the course of their life. How many of your friends were still working at their first job even just a few years after graduation? 1? Maybe 2? And yet here we are again just a few years later acting like our life will be a success or failure solely based on the summer internship we get over the summer.

What I am looking for in my work

So now that the pressure is off a bit where have I landed? First, instead of trying to figure out exactly what I want to do, I set out to figure out the aspects of a job that were important to me. Probably the piece of content I have recommended to more people than any other is a great Wait, But Why post on picking a career. It is the first resource I recommend to friends or colleagues who are struggling to figure out what they want to do next and as such a few weeks ago I decided to work through it myself. If you feel like you are just going through the motions and want to try to find some direction in your life, give yourself two hours, a pen, some paper, and dive in.

The post includes a series of mental exercises to think through the “yearnings” that are important to you and slowly sort through what your priorities are. Here is my professional yearnings hierarchy for any job or career prospects.

My Professional Yearnings Hierarchy

The Non-Negotiable Bowl - Lines in the sand that I will never compromise on

1. To be valued

2. To be respected

3. To work with incredible people

The Top Shelf - Absolute priorities that I will be looking for no matter what I do

1. To learn something new every single day

2. To be intellectually challenged

3. To have the opportunity to build meaningful relationships with people

The Middle Shelf - Things that are important to me but that I can compromise on so long as my Non-Negotiable Bowl and Top Shelf yearnings are satisfied

1. To be given autonomy

2. To have skin in the game

Bottom shelf - Things that would be nice to have

1. To be given a variety of work to do

2. To be appreciated

The Trash Can - Things that I may sometimes find myself tempted to want, but that I need to actively fight against letting have any bearing whatsoever on my life decisions

1. To be admired

2. To work at a prestigious firm

3. To work in a career where I can acquire status and fame

You are building your own house

Once I had thought through what I was looking for I had to decide what I actually wanted to do next. Instead of committing to a path, I have decided to focus on becoming the type of person who builds. The advice is the same as I give to anyone who wants to be in a relationship. Focus a little less on finding someone to date and focus a little more on becoming the kind of person someone else would want to date.

I don’t know what my life’s great work is. I don’t know what my career is going to look like.

But what I do know is that I want to be a company builder. That can look like a lot of different things and I can get valuable skills from all sorts of different endeavors. Instead of focusing on finding the exact right career, now I want to focus on going somewhere where I can have my work yearnings met and can build the skills to become the type of leader, builder, and entrepreneur I know I want to be. Whether I put those skills to use next year or many years down the road.

One of the most impactful books I have ever read is the book Chop Wood, Carry Water. One of the stories in the book is about a master architect who has made a career building some of the most beautiful houses in the world. After a long and storied career, he decides to retire but his boss asks him to build one last house. He begrudgingly agrees but he doesn’t put his usual love and care into the project. Once the house is built, he goes back to his boss to finally resign for good and his boss gives him the keys to the house he had just built as a thank you for a career of excellence. All this time the architect had been building his own house and he had no idea. If he had known he would’ve put much more effort into it than he did.

It’s easy to forget that we are building our own house. It’s so easy to get caught up in where we are doing or our next move or what we will do after school.

What’s hard is to remember is that much more important than what we are doing is who we are becoming in the process.

It’s taken me a lot of self-reflection and frustration to remember that.

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If you have thoughts on this post leave a comment below or reach out to me on twitter @abergseyeview where my DMs will forever be open.

If you enjoyed this post, you can subscribe here to receive all of my posts delivered directly to your inbox every Monday morning.

If this is the first time you are reading something I wrote and you want to learn more about me, this is a good place to start. It includes some background on me as well as a collection of my top posts.

My Ethical Manifesto

Recently, I have been making an intentional effort to consciously shape my identity. I have a notion page that outlines a list of choices I make about what I want my identity to be that I read out loud to myself every week. Some of these choices, like “I choose to be a bridge-builder and I seek to find commonalities instead of differences,” are born out of self-awareness. Others, like “I choose to be encouraging and empathetic towards others” are more aspirational aspects of my self-identity that I am actively working on building towards. One of the items on my self-identity list is “I choose to act ethically in all things I do. I don’t take shortcuts and I don’t compromise on my morals.” This semester I took a business ethics course that gave me an excellent opportunity to think deeply about the ethical beliefs and values that I want to guide my personal and professional conduct. Our final project was to write a paper describing the characteristics of a responsible leader. Our professor encouraged us to think of this as more of a personal manifesto than a simple assignment and I thought it would be worth sharing and keeping updated. Think of this as a guide of the kind of leader I aspire to be and the characteristics I will be looking for anyone I choose to work for.

My definition of an ethical and responsible leader has coalesced around six main pillars.

1. Lead from a place of vulnerability

2. Provide others with an ideal to strive towards

3. Treat everyone with honor

4. Courageously challenge the status quo

5. Invert the Fundamental Attribution Error

6. Don’t take shortcuts.

Lead from a place of vulnerability

I believe that one of the most important things that a leader can do to promote a culture of ethical and responsible business practice is to lead from a place of vulnerability. From Enron, to WorldCom, to Theranos, we have seen the danger that comes from leaders who promote a culture where they are above reproach. The challenge for leaders must be to create an environment where immoral behavior is not given the opportunity to flourish. Otherwise decent people do bad things when their environment puts pressure on them be it from peers, authority, incentives, roles, or the system within which they find themselves. Those who are used to professional success are especially prone to suffering from the ‘Bathsheba Syndrome’ of thinking that they are entitled to special treatment and that the rules don’t apply to them.[1] Maintaining an air of humility and vulnerability is one of the most surefire ways to create an environment where there are no shadows for unethical behavior to fester. When a leader acknowledges that they are not always right and welcomes critical feedback they create an environment where issues are brought to light instead of hushed up in darkness. On the other hand, if a leader surrounds themselves with “yes men” and creates a culture where they cannot be questioned, the chances that they act unethically themselves, even if unintentionally, are significantly multiplied. As is the chance that their underlings will cover up unethical behavior out of fear of the leader’s reaction. By leading from a place of vulnerability, by looking at challenges or failures as an opportunity to learn and grow, leaders create a culture that encourages responsible behavior and discourages immoral actions.

Provide others with an ideal to strive towards

              A responsible leader should provide an ideal to strive towards for both themselves and their employees. In Brent Weeks’ Lightbringer series, they have a word for the empire’s commander-in-chief: “Promachos” which means “The One Who Goes Before Us to Fight.”[2] I believe that the modern responsible leader should be one who leads by example. Someone who sets the bar high for themselves and provides their team with an aspirational ideal to strive towards. A Promachos. When given the chance, people tend to rise to the occasion. This is exemplified by the fact that people are more likely to act ethically when they are reminded of their morals or asked to take an honor pledge.[3] When a leader holds themselves and those around them to a higher standard and points their team towards an aspirational purpose, people will be drawn towards living up to those ideals. French novelist Antoine de Saint-Exupéry is quoted as having said, “If you want to build a ship, don’t herd people together to collect wood and don’t assign them tasks and work, but rather teach them to long for the endless immensity of the sea.”[4] People are much more motivated by purpose or mission than they are from the rigid and dogmatic rules that seem like the strategy de jour of the modern workplace. A common pitfall of leaders is getting too involved in telling people what to do instead of telling people where to go. While working as the CEO of Expedia in 2003, Dara Khosrowshahi captured this ideal perfectly when he said a young engineer confronted him and told him that “you’re telling us what to do, but not telling us where to go. If you tell us where to go we’ll do it because we believe in you, tell us where to go and then we’ll do it.”[5] Great leaders create the vision for the company and then trust their people to do what it takes to accomplish that vision. This promotes people having the space to think for themselves and avoids situations where employees stop scrutinizing work through a moral lens or avoid thinking critically about whether their current course of action is the right one.

Treat everyone with honor  

              It is critical for leaders to treat others with honor. With fairness, respect, and empathy. The importance of this is grounded in my personal Christian belief system where all people are created in God’s image. As such, our value is intrinsically based, not on what we do, but on who we are and that means that everyone, whether they be an executive or a janitor, deserves to be treated with empathy, respect, and dignity. This requires us to treat people with honor regardless of what ethnic, social, sexual, or religious group they may belong to. Treating people honorably also means being fair to them. It means treating people like the adults they are and communicating with them in a direct way.  To dole out praise or criticism when warranted. To tell people the truth, not what they want to hear. Ambiguity in the workplace is opportunity for unethical behavior to flourish and a responsible leader must do their upmost to be clear and direct. Netflix is a company that exemplifies this brand of respectful, but direct communication perfectly. Netflix is focused on building a high-performing team and they think of themselves more like a sports team than a family. They honor their employees by treating them like adults and trusting them to make responsible decisions for themselves as exemplified by their 5-word policy for travel, entertainment, gifts, and other expenses: “Act in Netflix’s Best Interest.”[6]

Courageously challenge the status quo

              One of the more important things a responsible leader must do is promote a culture where people feel empowered to question the status quo. Speaking truth to power is never easy, but it is vitally important. A leader is responsible for doing what they can to empower their employees as much as possible and I believe that the best way to do this is to set a tone of questioning how things have always been done. Leaders must push themselves and their employees to always ask “why” and to reexamine previously held maxims in light of changing circumstances. In his inaugural address to students at the University of St. Andrews, philosopher John Stuart Mill stated that “bad men need nothing more to compass their ends, than that good men should look on and do nothing.”[7] If leaders do not promote a culture of questioning established orthodoxy and convention, the chance that their employees will stand up in the face of immoral actions is minimal. One way that leaders can do this is to consciously subvert the pressures that may lead employees to act unethically. An example of how this can be done on a personal level comes from my parents. A common refrain of theirs is to “always live within your means.” Part of this advice is given from the perspective of being fiscally responsible, but the second order meaning is to always have “screw you money”. Having a financial cushion gives you the ability to never compromise on your ethics if you are asked to do something immoral for work. If your boss is pressuring you to do something you know to be wrong, you are much more likely to be able to stand up to them if you have reduced the financial pressure of making ends meet by spending within your means. If you are left with no other option, you can always walk away. It is important to safeguard the optionality to leave, but the best option is to build an organization where people are willing to stand up for what they believe to be right. In the workplace, I think leaders can promote a culture that challenges the status quo by focusing the organization on pursuing “knowledge” over being “right”. A leader who sets the tone by challenging themselves and others to always critically examine why things are done the way they are and question whether they can improve will be a leader who empowers their employees to courageously stand up and be counted when they know that something is wrong.   

Invert the Fundamental Attribution Error

             The Fundamental Attribution Error is our tendency to explain away our faults or missteps while holding others to account for even the most minor of infractions. I believe that a responsible leader should seek to invert the fundamental attribution error by holding themselves accountable based on their actions while giving others the benefit of the doubt and allowing for the possibility of extenuating circumstances. In his 2005 commencement speech to the graduating class of Kenyon College, American author David Foster Wallace outlines the practical application of this maxim in a speech titled: “This is Water.”[8] He discusses how easy it is to fall into the “default setting” of assuming the whole world is out to get you and believing that you alone are a victim of everyone else’s laziness and ineptitude. The challenge he prescribes is to awaken yourself to an awareness of the world around you. To not get mad at the car that cuts you off in traffic because you allow for the potential that they may be rushing their wife to the hospital. Just as a goldfish may live their entire life without questioning what water is, so too can people live their lives without taking agency for themselves and acknowledging that they are part of a larger human existence than the myopathy of their personal perspective would lead them to believe. I believe it is crucial for a responsible leader to cultivate this openness to giving others the benefit of the doubt. Even if sometimes they will be disappointed, I personally believe that it is better to be optimistic and wrong than pessimistic and right. Andy Rachleff, CEO of Wealthfront has a great philosophy for operating called “putting the gun in the other person’s hand.”[9] The idea is when entering a business deal or negotiation to give the person on the other side of the table the opportunity to set the terms. Either they do so fairly and you know that you would like to work with them again in the future or they act in an unscrupulous manner and any short-term pain from the deal is well worth the knowledge that you won’t expose yourself to them again. Inverting the Fundamental Attribution Error allows you to empathetically see the world through other people’s eyes and give them the benefit of the doubt. This may lead to pain in the short-term, but it is the responsible thing to do in the long-term as you will, over time, self-select out of relationships with people who take advantage of your or act immorally.

Don’t take shortcuts  

              It seems to me that much of corporate ethical misconduct stems, not from a place of malicious intent, but from simply making the decision to take shortcuts which compounds upon themselves and leads to situations where people feel forced into unethical behavior. One compromise leads to another and eventually a morally upstanding person can find themselves in unanticipated moral ambiguity before too long. Clay Christensen’s belief that “it’s easier to hold your principles 100 percent of the time than it is to hold them 98 percent of the time” rings true.[10] The slightest compromise of your morals or ethics opens the door to future misconduct. This can be a path towards destructive habits and behaviors for both individuals as well as organizations. An insidious form of this propensity to take the easy way out is seen not just in misconduct itself, but in organizations who are willfully ignorant and turn a blind eye to unethical behavior going on under their watch. Not only does taking the easy way out often lead to morally unstable ground, but it delegitimizes good efforts. In class we talked about how if a kid cheats during a soap box derby, he will never know if he could’ve won without cheating. It is obvious how cheating harms others, but I would argue that much more of the damage falls on ourselves. One of my favorite mantras to think of is the idea that “we are building our own house” from the book Chop Wood, Carry Water.[11] The story told is about a famous architect who is asked to build one final home on the eve of his retirement. Begrudgingly, he goes about the project without his usual precision and enthusiasm. Once the home is completed his boss hands him the keys as a thank you for his years of service. Unbeknownst to the architect, he had been building his own house the whole time and if he had known so, he would’ve put much more time, thought, and effort into it. Taking shortcuts in life degrades the house that we are building for ourselves. A responsible leader needs to consider the impact that their words and actions have on others, but just as importantly they must be cognizant of the impact it has on themselves. A career is a marathon and surviving it with your dignity and ethical self-identity intact is the real winners’ medal. When I think of a responsible leader, I think of someone who steadfastly refuses to give in to the temptation to take shortcuts. I think of one of my all-time favorite literary characters, Dalinar Kholin, and his self-realization that “the most important step a man can take. It’s not the first one, is it? It’s the next one. Always the next step, Dalinar.”[12]

I hope this was interesting and that the transmission from paper to blog post wasn’t too forced. If you haven’t taken the time to lay out the ethical paradigms you aspire to hold yourself to, I can’t recommend the process enough. It is enlightens your own actions and helps you identify environments that align with your ethical compass vs those that may put you in a situation to compromise it.

As with everything I write, this is a snapshot of my perspectives at this point. I am sure that as I continue on in my career and find myself in positions where leadership is more of a focus, that these principles will grow and evolve. I still think there is immense value in charting them out and questioning what you think to be ethical.

Journey before destination and until next time.

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If you have thoughts on this post leave a comment below or reach out to me on twitter @abergseyeview where my DMs will forever be open.

If you enjoyed this post, you can subscribe here to receive all of my posts delivered directly to your inbox every Monday morning (or the occasional Tuesday).

If this is the first time you are reading something I wrote and you want to learn more about me, this is a good place to start. It includes some background on me as well as a collection of my top posts.

Sources:

[1] Wyatt Olson, “Do Fired Navy Cos suffer from ‘Bathsheba Syndrome’?”, Stripes, March 14, 2002, https://www.stripes.com/news/navy/do-fired-navy-cos-suffer-from-bathsheba-syndrome-1.171525  

[2] Brent Weeks, The Burning White, (Little, Brown Book Group, 2019), pg. 27.

[3] Dan Ariely, The Honest Truth About Dishonesty: How We Lie to Everyone—especially Ourselves (New York: Harper, 2012), Chapter 2.

[4] Randy Howe, 1001 Smartest Things Teachers Ever Said, (Lyons Press: An Imprint of Globe Pequot Press, Guilford, Connecticut.), Page 51.

[5] Zameena Meija, “Here’s the moment Uber’s new CEO pick gained confidence in himself”, CNBC, August 28, 2017, https://www.cnbc.com/2017/08/28/when-ubers-ceo-pick-dara-khosrowshahi-gained-confidence-in-himself.html

[6] “Netflix Culture”, Netflix, https://jobs.netflix.com/culture

[7] John Stuart Mill, Inaugural Addresse, Delivered to the University of St. Andrews. Feb. 1st, 1867, (Longmans, 1867), pg. 36.

[8] David Foster Wallace, This is Water, Farnam Street, https://fs.blog/2012/04/david-foster-wallace-this-is-water/

[9] “Building Something People want to Buy, with Andy Rachleff,” Invest Like the Best, Episode 42, https://investorfieldguide.com/andy/

[10] Frances Bridges, “Lessons from Clay Christensen’s ‘How Will You Measure Your Life?’”

[11] Joshua Medcalf, Chop Wood, Carry Water, (CreateSpace Independent Publishing Platform, 2015), pg. 6.

[12] Brandon Sanderson, Oathbringer, (Tom Doherty Associates, 2017), pg. 1132.

Quality

Sometimes you come across a concept that just sticks with you.

I read Zen and the Art of Motorcycle Maintenance a couple of years ago now, but there are a couple of concepts from the book that I find myself thinking of often. None more so than the idea of Quality.

For those who haven’t read it, the book is part fiction, part philosophy textbook, part autobiography, and part holy tome. It is an exploration of one man’s metaphysical journey to uncover the meaning behind the word “Quality” and the toll it took on him.

I’m not sure the book ever truly comes to a definitive answer, but if I had to sum it up I would say that something is of high quality if there is a sense that it is doing what it’s supposed to do. That it’s doing it well. That it’s fulfilling its purpose. That it is acting in accordance with its identity.

Quality is a certain rightness. It’s hard to put your finger on, but it is clear whether it is there or not.

The idea of Quality shows up everywhere once you are looking for it. In the startup world, we call it “product market fit.”

Product market fit is when there is a resonance between what you are building and a problem that needs solving in the world. When customers want your product so badly they are basically ripping it out of your hands. I love Michael Seibel’s description of product market fit in this week’s Invest Like the Best episode. He describes the utter craziness you experience when your company finds product market fit. There is no time to sit around waxing philosophically on whether or not you have found this mythical equilibrium between a product and a market need, you are simply running around like crazy trying to keep all your servers from getting shut down by a complete deluge of users.

I think we see the idea of Quality in our personal lives too.

I remember a crisp fall day in college when my fraternity was asking a sorority to go with us to homecoming (a tradition that I have nothing but fondness for due, in no small part, to the role it played in introducing my wife and I). There was another fraternity that was asking this same sorority, so things were pretty competitive and the stakes laughably high. I spent that day running all over campus wheeling and dealing. Cajoling and entreating. I was trying to get my brothers organized at the same time I was coming up with new ideas for events we could hold. I didn't have a chance to sit around and think, I was too busy problem solving and executing. Now the context around this example is a little silly, but I remember at one point having this shock of clarity where I thought "This is awesome. I am good at this. I like this." Creative problem solving, communication, taking action, working on a team. I was doing something that perfectly fit my strengths. And it felt amazing.

Unfortunately in life, I think we so often experience the idea of Quality through its absence. There may be a wrongness in our lives that we struggle to explain. We may feel tired, disjointed, frantic, and anxious. We may feel like we are doing something wrong but we don't quite know what. We feel somehow less than what we know we could be.

I know I've experienced this dissonance. This dearth of Quality. If Quality is finding that magical apex of purpose where we are doing exactly what we should be, then anything else is a fundamental breach of our identity. There are gradients to this of course, but I believe that over time, the results of sustained actions that run counter to our core self are inevitably disastrous.

If you are in a career or relationship that is discordant with your notion of your own identity and purpose, it will eat away at you. For a day, a month, or maybe even years, it can be tolerable. We can pull the wool over everyone's eyes, including our own. But eventually, it will degrade you in a way that leaves a mark.

Maybe you are just so drained you miss a step in other places of your life. Maybe you are irritable or quick to judge when you know you are naturally easy-going. Worst of all, maybe you start to shift your core identity away from what you know to be true in order to somehow make the days and years more tolerable.

I look around me and see this among my peers and friends. As I get started at business school I see it in my new classmates. I have felt it myself in my career and life. A fundamental mismatch between what I am doing and what I should be doing. I think that it is natural to experience this in life. In fact, I'd go as far as to say that it is part of the human experience.

The unease you feel when acting counter to who you know yourself to be is actually a good thing. It is the latent potential energy that pulls you towards finding that apex of Quality where you are acting in a way that is core to your conception of self. Don't avoid it or pretend it isn't there. Lean into it. Ask yourself why you are feeling this way. What needs to change? Who are you? If you saw your ideal conception of yourself in this situation how would you expect them to act? How are you acting differently? Why are you acting differently?

Quality in sport, business, and life is magical. It is poetry in motion. It is a master at work on their craft. It is an internal rhythm and music that is in sync with the world around it. Like a tool in the toolbox that does exactly what it was designed to do and does it to perfection, living in accordance with your identity is the path to joy. Joy. Not happiness. Happiness is a stimulus-response from external actions. Joy is the music that your soul makes when you find the resonance point where your actions and words align perfectly with your identity, strengths, and purpose.

When you’ve found it, appreciate it and try to hold on to it. It may take years to build towards this resonance but, like a note played jarringly out of key, it can be lost in an instant by acting counter to who you are.

If you aren't there yet. That's ok! I'm not either. We've got time. People forget that life is long and full of possibilities. But pay attention. Pay attention to how your actions and the words you say make you feel. Pay attention to whether a relationship makes you feel better about yourself or worse. Pay attention to whether coworkers act in accordance with your value system or not. Social pressure is a helluva drug and if you surround yourself by people who act in a way that is discordant to you, it will be extremely hard not to eventually adjust yourself to appease them.

Stay strong. Stay curious. Think about yourself, and who you are, and what you were put on this earth to do. You may not have all the answers, but that doesn't mean you shouldn't be asking the questions.

Whatever you do don’t settle. There is no quicker way to ruin your life than to accept a discordant path as "just the way it is". How many drones are there in our society who spend time with people who make them feel less then they are? Who work at jobs they hate? Corporate soldiers committing atrocities against others and themselves because they are just following orders. Wayword tools in the tool kit. Without purpose, form, or function.

If you are reading this and think, “man Erik woke up on the existential side of the bed this morning,” there is probably some truth in that. All this discussion of purpose and identity can sound a little whimsical at times.

But that doesn’t mean there isn’t some truth in here. I hope I am getting to the heart of things. Maybe I am just dancing around it. Either way, I think it could be helpful for you to think about as I know it has been for me.

Our society holds up ideals that, for most of us, are of poor Quality. It worships freedom instead of purpose. Pleasure instead of joy. Memories instead of meaning. It tells us that work is only a means to an end and that relationships are worthwhile as long as they serve us.

I am not wise. I don't know how the world works better than anyone else. I am trying to figure it all out and these writings are a record of my thoughts and how they evolve. But one thing I have learned is that freedom is only a means to an end. True freedom is having the ability to choose what to commit yourself too and then doing so wholeheartedly.

If you are feeling ill at ease with where you are in life, join the club. Most of us do. Finding capital-Q “Quality” in our lives is the rarified air of a select few who choose not to settle for anything less than exemplary. Who refuse to bear the burden of a life lived in discord to oneself. Who stare into the face of the lies we are told, standing unassailably and whisper, "not for me."

It isn’t an easy path, but the right path rarely is.

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Lessons Learned from 2+ Years of Weekly Writing

I wrote my first post on this blog in November 2017. Since then I have (more or less) been writing weekly. I started the blog as part of my job search process trying to find a job in venture capital. It has evolved into something so much more than that. Part professional development. Part mental health therapy. All me.

When I started this blog I wrote solely about the world of venture capital and technology startups. Over time, and especially after I got my job at a venture capital firm, the blog became more personal in nature. I liked this transition. I now write about whatever I want to write about. Turns out that venture capital still continues to be a meaningful part of that. But I also sprinkle in my personal development, views on pop culture, and lyrical waxings for flavor.

In this post, I will share some of the lessons I have learned along this journey so far.

Begin.

I will start with the most important part of writing. Starting it. The most common response I get from people who have read my blog is “I’ve always wanted to write!” Well, what is stopping you? I’m not trying to be insensitive. I know how hard it is. In some ways, it gets easier with practice and in some ways, it doesn’t. A blank page and a deadline are always intimidating. But there is something truly thrilling about it as well. The hardest part of writing something new every week is just writing that first sentence. Once you get going, it generally flows pretty easily. (In fact, if it isn’t flowing once you have started, that is usually a pretty good sign that you picked the wrong topic to write about.) My biggest piece of advice I can give is simply to start. I recently read the book Bird by Bird by Anne Lamott and it is the book I recommend to anyone trying to write more. The anecdote she shares on the back of the book superbly sums up writing.

Thirty years ago my older brother, who was ten years old at the time, was trying to get a report on birds written that he’d had three months to write. [It] was due the next day. We were out at our family cabin in Bolinas, and he was at the kitchen table close to tears, surrounded by binder paper and pencils and unopened books on birds, immobilized by the hugeness of the task ahead. Then my father sat down beside him, put his arm around my brother’s shoulder, and said "‘Bird by bird, buddy. Just take it bird by bird.

If any of you are procrastinators like me I imagine this hit similarly close to home. It’s easy for writing to feel overwhelming. Whether it is a blog post, a novel, or even a tweet, it is always difficult to create something out of nothing. The best way to get over that hump is simply to start putting one foot in front of the other. To take it bird by bird. It doesn’t even have to be about what you ultimately want to write about. If you are struggling to come up with something to write, get out a blank piece of paper and jot down a running stream of your thoughts. You will be amazed by how much easier it is to start writing once your thoughts have started flowing.

The Power of Writing

Writing has gotten me into rooms and conversations that I had no business being a part of. I by no means have a massive following on this blog, but even I have seen huge asymmetric benefits come from it. Writing is the best kind of bet you can take. The downside is capped. For me the downside is time. I sacrifice an hour or two a week to write. It’s not nothing, but it also isn’t that big of a deal. I probably spend more time watching Hearthstone videos on youtube each week so if I need to cut something out that will be the first thing to go. A small sacrifice in the face of the potential upside. You never know who is going to read your work and reach out. You never know if what you’re saying will strike a chord with someone. I have had many personal and professional opportunities crop up solely because of my writing. And the best part is that writing compounds over time. The longer that I consistently write, the more it differentiates me. Things like writing are the best kind of flywheel. The more you do it, the more benefit you see from it, which makes you want to do it even more.

The Pocket Knife of the Mind

Recently I have gotten into pocket knives— ahem I mean multi-tools. My parents got me a fancy new backpack for my birthday and since then I have been into the idea of the “Everyday Carry” (or “EDC” if you are especially hip and yes, this really is a real thing). As part of that newfound interest, I have acquired a couple of new multi-tools. The thing that I have found with multi-tools is that if you don’t regularly use them, you don’t see any use for them. That changes as soon as you have one. Suddenly you see all kinds of uses for it everywhere. Writing is the same way. Once you get into the habit of coming up with stories, you start to see them everywhere. I write a post each week, but I generally come up with 2-3 ideas for new posts each week. When I am in the habit of keeping an eye out for those nuggets of an idea, I see them when they pop up. I am not special. You have these ideas too. You just aren’t used to seeing them that way since you aren’t used to the pocket knife of writing.

Develop a system

So all these little golden ideas I just mentioned. Everyone has them. But almost no one captures them. The world’s best idea won’t do you a lot of good if you don’t remember it when it comes time to start writing the next day.

It doesn’t really matter how you do it. You can use a notebook or an app or you can simply send yourself text messages. I have a page set up in Notion to capture all of my blog post ideas quickly from my phone. Whatever works for you, so long as you are able to quickly and efficiently capture and store those ideas so you can come back to them later and turn them into your magnificent writings.

Inconsistently Consistent

As with much of life, when it comes to putting out content, consistency is key. When I started writing I would do a post every 2-3 weeks. I didn’t have a real schedule and it was only ever when I could carve out some significant time for it. Over time, I focused on writing shorter posts more consistently. The one thing every audience appreciates, no matter how big or how small, is consistency. Set expectations with yourself and your audience and then stick to them. You don’t have to be militant about it. It’s your content, if you want to take a week off, you can. But know that the more consistent you can be the more it will positively impact your readership and the quality of your writing. When you stick to a consistent schedule, you get in a groove. You have an easier time getting started and you come up with more ideas of what to write about. My best advice is to pick whatever schedule that you can stick to consistently. It’s better to write something once a month than to write inconsistently every 1-3 weeks. Your readers will thank you for it and it WILL make your writing stronger.

Chop Wood and Carry Water

Writing is about the process. The quicker you can learn to fall in love with the process of writing, the quicker you will become a better writer. I am a big believer in being process-oriented in as much as you can in life. Writing is no exception. If you focus too much on the outcome you will either a) fall short of your goal or b) attain it at unnecessary costs. Focus on the process. Do I write for professional development and opportunities? Sure, but that isn’t my focus. I write for me. I practice writing so I can improve and hone that skill. I find writing therapeutic. Putting my thoughts into cogent sentences really helps me think through them. Sometimes I find myself surprised by the results. That is my focus. This blog would be worth writing even if no one ever read it. That’s how I am able to stick with it. I love that people read my blog. It means so much when someone reaches out to tell me that they enjoyed something I created.

But that’s only ever going to be the cherry on top. Because I have learned to fall in love with the inherent benefits of the writing process, not just the outcomes of that process. I have learned to chop wood and carry water when it comes to writing. And you can too.

Perfect is the enemy of good

At Carlyle, one of our founders had a saying: “By the time you have completed the most perfect due diligence you possibly can, you will have lost the deal.” Perfection is an impossible standard to strive towards and it is one of the biggest pitfalls that nascent writers have. There is this pressure thinking that if you are going to put a blog post or tweet out into the world it needs to be perfect. You should craft it with care, but perfection should never be the aim. If you won’t settle for anything less than perfect, you will never click that ‘Publish’ button. Do your best, read everything over for typos and then send that sucker on its merry way.

Let me let you in on a little secret I have learned about creating content on the internet. Say something uninteresting and no one cares. The algorithms won’t pick it up. It will be like it never even happened. Hate to break it to you, but no one is combing through your old posts to see how you messed up. If you, at some point, do reach the level of quasi-celebrity where someone is doing that, I imagine you have bigger fish to fry. No one will read your subpar writing, but write something good and it becomes a whole different story. Suddenly people are liking and sharing. The algorithms that buried your mediocrity are now pouring fuel on the fire of your achievement. Writing publicly is a totally asymmetric bet. Write poorly and no one knows. Write well and it will blow up. No, I am not saying to just throw spaghetti at the wall and see what sticks. But whatever you do, don’t try to be perfect.

Find What Works for You

As I mentioned, I originally started this blog as a way to land a job in venture capital. As such, my initial writing focused on researching and analyzing specific companies and markets. I wanted to show that I could do the work of being a VC before I actually was one. Once I actually got a job in the industry, my blog started to change. It became more personal. I started writing about the things I was interested in. My posts became shorter and more consistent. I was doing less research and more thinking. That’s what the blog is now. I write about the things I care about. Yes, venture capital and entrepreneurship. But also boardgames. And Arsenal. And whatever TV show I may be watching or book I may be reading. That’s the beauty of having a personal blog. You can be just that, personal. The internet is so big that writing about what I care about is interesting enough for others to tune in every week. And it is WAY more enjoyable for me to just write about whatever I want to write about. Remember, learn to fall in love with the process.

If you are thinking about writing, go for it. It’s a small sacrifice of time for big potential upsides down the road. Come up with a process and then fall in love with it. Don’t try to be perfect, just try to be genuinely you. The internet is big enough that you will find your tribe. If something you write flops, don’t sweat it because no one will read it. But the second you write something good it will seem like everyone will. Consistency over volume.

If even a small part of you feels like you may want to write, then just start and see where it takes you.

And if you get stuck, just remember to take things bird by bird.

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Don't Stop Imagining. The Day That You Do Is The Day That You Die

I’ve always loved books. Growing up I would speed through (or neglect) school work so that I could read whatever book I was engrossed in. When I was a kid, you could find me curled up in the corner of our couch in our living room reading for hours on end. I wasn’t anti-social. In fact, I am very much a social extravert, but I’ve struggled with social anxiety throughout my life— the irony is not lost on me— and books were always a safe haven that I could escape into. I especially loved fantasy and science fiction books.

I believe that a proper appreciation for fiction is sorely lacking in today’s modern society. Fiction is viewed as “fun” reading and not useful or practical in any way.

I couldn’t disagree more strongly.

First of all, what is wrong with doing something for enjoyment? Are we really so focused on productivity that we can’t do something for the sake of doing it? But more than that, I think fiction is absolutely valuable to the development and maintenance of a healthy person.

Fiction is an abstraction that allows us to discuss and grapple with things that are very, very real. Which is easier to understand: The heroism of a knight slaying a dragon or the heroism of a mother working two jobs to support her children? Both are heroic, but the abstraction of fiction allows us to interact with ideas in a more concrete and objective way than when we face them in real life. Joseph Campbell discusses mythology as the mirror by which our ego is able to view and judge itself. Fiction allows us to take a step outside of ourselves to see things as they are. It asks questions of us and demands answers in a way that so often be ignored in “real” life.

Famed fantasy author Ursula Le Guin has an excellent topic on the subject called Why are American’s Afraid of Dragons?. Le Guin discusses her belief that imagination and healthy escapism are fundamental aspects of what it means to be human. It is what allows us to think of a better future and to strive towards it. These thoughts can be channeled towards positive, aspirational ends or they can be suppressed. As with most core aspects of our identity, suppression of imagination deforms our thoughts into vehicles of jealousy and base cravings.

My favorite quote from the essay (and one of my favorite quotes ever):

For fantasy is true, of course. It isn’t factual, but it is true. Children know that. Adults know it too, and that is precisely why many of them are afraid of fantasy. They know that its truth challenges, even threatens, all that is false, all that is phony, unnecessary, and trivial in the life they have let themselves be forced into living. They are afraid of dragons, because they are afraid of freedom.

I firmly believe that imagination is a muscle and just like any other, it requires exercise to be maintained. Fantasy and science fiction novels are a great way to keep your imagination in tip-top shape. Imagination is crucially important whatever you do. It’s how you see things other people don’t and set yourself apart from peers. It is also only going to become more and more important. As automation affects more jobs imagination and creativity are the qualities that will be most prized.

I hope that I have convinced you of the importance of fantasy. It’s not too late to start working out your most important mental muscle.

I have put together a list of my all-time favorite fantasy and sci-fi books for any that would like to get started.

The Stormlight Archive by Brandon Sanderson

My all-time favorite series by my all-time favorite author. Brandon is the master of world-building and Stormlight is his masterpiece. Set on the broken and war-torn world of Roshar. The world of Stormlight is by far the most unique of any fantasy book I have ever read. There are twists and turns and the most epic cinematic action scenes you will read anywhere. As with most great high-fantasy novels, the Way of Kings takes some time to get going, but it is well worth the wait for the most incredible climax I’ve ever read. The best part of Sanderson is how prolific he is. The second and third installments, Words of Radiance and Oathbringer, are equally excellent and the 4th book in the series is on its way and expected to be released in late 2020.

The Wheel of Time by Robert Jordan

The Wheel of Time is incredible. It’s by far my favorite complete fantasy series. There is a reason the Wheel of Time sits at the head of the modern fantasy pantheon. It starts with familiar fantasy tropes but evolves into so much more. The only thing more impressive than this series’ scope is the fact that Brandon Sanderson finished it in such a compelling way after the tragic death of the original author. The character work is especially strong. Every time you pick the book up it feels like you are hanging out with your close friends. The depth of this series really cannot be overstated. The time is right to at least read the first book (The Eye of the World) with Amazon working on the production of a live television adaption.

Red Rising by Pierce Brown

Far into the future, the human race has populated the solar system and adopted a stratified social structure based on the precepts of Ancient Rome. The Reds are the lowest of all the different castes working as laborers and slaves until one man decides that he has had enough. This book reads like an absolute action thriller. The book’s mix of futuristic and ancient is the absolutely perfect setting for its electrifying plot. My all-time favorite sci-fi book and my trojan horse to get people into reading.

Everything else by Brandon Sanderson

Did I mention how prolific Sanderson was? The rate at which he pumps out excellent books is unreal. I have never read a book by him that I haven’t loved. They come in all shapes, sizes and settings. Some are lighter fair. Some a hefty. Westerns, sci-fi, classic fantasy, and exciting heists. Sanderson writes it all. Most of his books even take place within the same universe and are littered with easter eggs between each of them. There is one character that even makes an appearance in every book. Every book by Brandon Sanderson is worth checking out, but here are some of my favorites:

• Mistborn - The coolest magic system of all his books

• Warbreaker - His best stand-alone novel

• The Emperor’s Soul - The Hugo Award-winning novela

The Gentlemen Bastards by Scott Lynch

The Lies of Locke Lamora is one of my favorite books every. It probably has the most likable and endearing main character of any book. This book is just fun. Set in a fictional city much like historic Venice, the book follows a guild of thieves on their heists, cons, and adventures. The book is laugh-out-loud funny and the action doesn’t disappoint either. I haven’t finished the series and the second book is pretty great, but the series’ initial book is an absolute standout.

The Expanse by James S. A. Corey

A fantastic Sci-Fi series for anyone who loves space westerns. The Expanse follows the exploits of the crew of the Rocinante during a time when the human race first learns that it is not alone in the universe. The Expanse is interesting for the territory it occupies. Far enough in the future that mankind has conquered the galaxy, but near enough that the world feels strikingly familiar to our own. My go-to sci-fi series and one I am excited to dive back into soon.

The Malazan Book of the Fallen by Steven Erikson

The heftiest book on this list. Malazan makes other high-fantasy books look like YA novels. It is what you get when a series is written by an anthropologist. This book series does not hold your hand at all. You get the distinct feeling that you are being provided a glimpse into a world that has existed long-before you happened upon it and will continue on long after you have gone your separate ways. Despite its uncompromising nature, I can promise you that you won’t regret picking it up. I have only read the first two books, but each was absolutely top-notch (Deadhouse Gates was especially epic).

The Dark Tower by Stephen King

Calling The Dark Tower a fantasy series is only suitable because there is no other category it could possibly fit into. Part minimalist western, part fantasy with noble knights, part metaphysical science-fiction, part classic Stephen King horror. This is a book that defies classification but is excellent nonetheless. This is a series where you need to read at least the first three books before you are going to have much of an idea of what is going on. Stick with it. It’s worth it.

The First Law Trilogy by Joe Abercrombie

In fantasy, there are two archetypal subgenres. Noblebright is the optimistic stories where the heroes win out over evil and make friends along the way. Grimdark novels are the brutal worlds where every relationship ends in a backstab and where life is nasty, brutish, and short. The First Law is Grimdark. If you like Game of Thrones but figure it could use some more brutal action, you will love The First Law. I’ve never read a book with as savage and violent fight scenes. Saving Private Ryan with swords. It’s awesome.

The Three-Body Problem by Cixin Liu

One of the more cerebral sci-fi books I have ever read. If you like to stretch your intellectual horsepower while reading this is the book for you. Unsolved physics problems, alien video games, and the Chinese Cultural Revolution combine to make a very good, very unique book.

A Song of Ice and Fire by George R. R. Martin

The book series that needs no introduction. Remember how good the first few seasons of Game of Thrones were? That’s because they had the books for source material. The world you know and love but better than ever on the written page. Buyer beware. I’ve talked about how prolific of a writer Brandon Sanderson is. George R. R. Martin is the opposite. A Feast for Crows came out in 2005. A Dance with Dragons came out in 2011. The Winds of Winter is supposedly forthcoming but, at this point, who knows? The books are great, but if you are going to pick them up, don’t plan on finishing them anytime soon.

The Kingkiller Chronicles by Patrick Rothfuss

Oh, the Kingkiller Chronicles. I almost didn’t put this one up here. The first time I read this series I absolutely loved it. The first book was especially fantastic. The second time through (yes I am one of those weird people who likes reading books multiple times) I realized that the only person who was more into himself than the main character was the other. Mileage may vary here. I am including it because many people absolutely adore it and I was one of them until not so long ago. This is another book whose ending seems further and further away by the day. The first two books were released within 4 years of each other but that was 9 years ago…

There. That should keep you busy for awhile. Keep reading. Hold onto that sense of wonder we all have within us. Don’t fear dragons.

And most of all—

Don’t stop imagining. The day that you do is the day that you die.

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The Best Ship is Ownership

We are overdue for an Arsenal related post, aren’t we? Don’t worry there will be a nugget here for you non-soccer loving people as well, I promise!

Last week, Arsenal had quite the game against our local rivals, Chelsea. We were playing away in a hostile environment and got off to a pretty miserable start. With more than 2/3 of the game left to play, we were down a man and down a goal away from home.

To say things were looking dire would’ve been quite the understatement.

Down a central defender, the vast majority of coaches would have taken off an attacking player and brought on another defender from their bench. And this is exactly what it looked like new Arsenal coach, Mikel Arteta was doing. He readied defender Rob Holding to come on, before deciding against making the switch at the last second. Instead, he asked midfielder Granit Xhaka to slot in at the unfamiliar left center-back role.

This was a strange decision but it paid dividends.

Gabriel Martinelli scored a fantastic goal to get the Gunners back in the game and Arsenal would come back once again to tie the game 2-2 through a superb finish from the captain on the night, Hector Bellerin.

Down a man away from home, a comeback draw feels a lot like a win and fans everywhere were happy with how the team responded to the adverse circumstances they faced.

Asked after the game about his curious decision not to bring on another defender, Arteta told the media that:

“I was thinking about that and said ‘I don’t want to send that message’ to the team and we decided to keep us as we were, give them a chance and I wanted to see how they could respond to that. Don’t make the response for them because I asked them to be accountable for what they do and I didn’t want to make a decision not to let them decide for themselves. It was a great response from them.”

Ever since Arteta took over the team mid-season he has preached a consistent message of accountability.

Of taking ownership of your actions and those of your teammates.

I loved what he did here. Instead of making the easy choice, he left it up to the players to step up and be accountable for their actions. I believe that if you give people an opportunity to rise to the occasion, they won’t disappoint and this Arsenal game was a perfect embodiment of that. While it is still early days, the reaction from the players to their new manager has been fantastic and I think it comes down to that same message of accountability and ownership.

I think this idea of ‘ownership’ is critically important. Ownership leads to the best decisions and the best outcomes. It is turning around Arsenal’s season and I believe it has the potential to change the course of our lives as well.

How Ownership Changes Us

Ownership changes things. Even a small amount of ownership is an extremely powerful motivator. If you own stock in a company you are more likely to buy their goods and products. Ownership gives you a stake in something’s outcome. It gives you an upside in something’s success.

It aligns incentives.

That is why companies give out equity. An actual stake in a company has a totally outsized effect on how people act. A not-so-secret-secret of the startup world is that, for everyone but the earliest employees, equity in a startup will likely not lead to life-changing amounts of money. Even with this being the case, equity still serves as a powerful motivator to do your best, because at the end of the day YOU are one of the owners. When you are an owner, even a small one, at some level you are working for yourself.

Therein lies the rub if you are early in your career.

For most junior folks at companies, they don’t have ownership. Real or imagined.

Sans ownership, the incentive structure is “work hard and you’ll get rewarded by not being fired and, depending on the company, you may have access to some sort of career progression.”

Raise your hand if incentives like that make you want to jump out of bed and run through a brick wall to do everything you can for your employer.

Didn’t think so.

So what are you to do if you don’t have ownership?

Two ideas:

Phantom Incentive Structures

If you don’t have ownership, but you want it, the best way to get ownership is to act like you already have it. A little confusing, but think about it this way:

If we accept that people who have ownership have the most incentive alignment, and therefore will generally exhibit the most desirable behavior, then the solution is to simply act AS IF you have ownership and suddenly you will have the most desirable behavior for a team, company, or project.

It doesn’t have to be actual ownership in something. Just ask Mikel Arteta.

I call this phenomenon ‘Phantom Incentive Structures’. They are incentive structures that only exist because we will them into existence. There are obviously limits with this sort of thing, but my guess is that you will find that the limit to how far you can will yourself to do something is a lot further than you’d imagine.

Build your personal brand. Build your intellectual assets. Build a flourishing network. These days those things matter a lot more than what is on your resume.

The best way to become an owner is to act is if you already are one.

Act like your incentives are properly aligned and you will stand out from the pack as the person who has the best chance of getting that actual alignment.

Taking the Jump

If all else fails, don’t be afraid to take the jump. The best way to build wealth is, and will always be, having some sort of ownership. Otherwise, you are just renting out your most precious resource, time. There is nothing wrong with doing work that you don’t have ownership in, but if your aim is wealth creation and to reach your highest potential, it is going to be a very hard and slow road without some form of ownership.

If there is no pathway to getting ownership over what you are doing why stick around? If a company doesn’t want to invest in you, why should you owe them loyalty?

I know far too many smart, hard-working, ambitious people stuck in dead-end jobs because they are simply afraid of taking that jump. They are comfortable and the idea of leaving a “just ok” job in search of a great one is scary.

Believe me I get it.

But in my experience, people far overweight career risk. Especially if you are young. We act as if every job is the end-all-be-all but the reality is that most of us will have many jobs throughout our career. I also think people don’t appreciate just how much an entrepreneurial skillset is appreciated in the corporate environment.

People think that if they leave the corporate life behind to blaze their own trail and it doesn’t work out, they will have to come slinking back to their old positions. The reality couldn’t be further from the truth. Big companies place incredible value on people who have gone out and tried to make something happen for themselves even if it doesn’t succeed. Most corporations are starved of innovative self-starters and the fact that you went out and tried something means you have this skill set that they perpetually seem unable to build in-house.

The reality is, if you take the jump and it doesn’t work out, the likelihood is that you actually would come back to at least where you would have been anyways if you had just stayed and tried to climb the latter the “old-fashioned way”.

For a young, driven, ambitious person entrepreneurial pursuits basically have zero downside. You learn more and you become a much, much more valuable asset to any other company down the road. Now all of this calculus can change based on an individual’s life circumstances, but I still think the idea that people overweight career risk is a truism no matter where you are in life.

Ownership is crucially important.

It is what achieves the best results for companies and it is what achieves the best results for individuals.

If you don’t have ownership, act like you do. That is the best way to get some skin in the game.

If that doesn’t work, start your own thing. No one can stand in the way of you getting ownership in something you start.

Don’t be too afraid of career risk. The real risk isn’t taking a chance and better on yourself.

The real risk is waking up in 20 years with the regret of never doing so.

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The Wookiee Has No Pants: On Thinking Big in a World of Small

One of my all-time favorite quotes is by Daniel Burnham, the architect responsible for rebuilding Chicago after the great Chicago fire.

"Make no little plans; they have no magic to stir men's blood and probably themselves will not be realized. Make big plans; aim high in hope and work, remembering that a noble, logical diagram once recorded will never die, but long after we are gone be a living thing, asserting itself with ever-growing insistency."

Do we still think like that? Do we make big plans or are we too busy making small plans that won’t be realized?

On December 21, 1968, the Apollo 8 mission launched itself towards the moon. Only 135 days after it was decided it would go to the moon. Mission Project Constellation was initiated by NASA in 2003 to bring men back to the moon. 7 years later it had launched a total of zero crews before being canceled.

The New York subway was opened on October 27, 1904, less than 5 years after the contract was first awarded. In April 2000, the MTA decided to build the second avenue subway. The first phase, consisting of only 3 stations opened 17 years later.

These are just a couple of examples where the dichotomy is stark between what we used to be able to accomplish and the pace of accomplishment today.

Maybe our accomplishments are less tangible and therefore harder to point to.

Or maybe we simply don’t dream big enough anymore.

You want to know who did dream big? George Lucas.

A long time ago in a galaxy far away

I took a week off from blogging for Thanksgiving. I had this post half-finished and had been pondering over it all week. After watching The Mandalorian last night (Baby Yoda is my spirit animal), I was poking around Disney+ and decided to put on Empire of Dreams, a documentary about the making of the original Star Wars trilogy. I was glued to the TV for the next couple of hours watching all the drama behind the drama unfold before my eyes. All the untold stories behind the stories we all know and love and I was struck by just how unlikely the success of my all-time favorite movies really was.

Like, let me tell you, Star Wars was by no means a sure thing when filming began in 1975. Despite his recent success with American Graffiti, Lucas had been turned down from multiple studios to finance the film and the outlook was bleak until he got 20th Century Fox to take a flier on him. Even once he had the backing he needed the movies were beset with problems. The film was shot on difficult sets, the visual effects team had to create technology that had never been dreamt of before, and even the actors raised serious questions about the quality of the film.

And yet I write this almost 50 years later as Star Wars looms as the most important cultural work of the last century.

How was this accomplished?

Because the only thing bigger than Lucas’ dreams was his willingness to fight for them.

Here are a few lessons we can all take from what it took to make Star Wars the success it is today.

Start with something universal

The secret to Star Wars’ success is that at its core, it was familiar. George Lucas was heavily influenced by Joseph Campbell and his study of the underlying commonalities between the myths of different people groups throughout history. In fact, Campbell once called Lucas his “greatest ever student”. (side note: if you want an excellent way to kill some time, there are a lot worse ways than watching Joseph Campbell videos on youtube)

Star Wars’ success is as much due to its play on common themes that resonate within us all as it is due to its visual effects. The young hero embarking on a journey to save the world. The wise wizard providing guidance. The damsel in distress. The witty scoundrel. The inhuman villain.

All these recognizable tropes allow us to immediately connect with the story in a way that we wouldn’t be able to otherwise. Star Wars isn’t a story with nations or people groups. It’s a story about all of us. And that is a big reason why it was so successful.

Give people an ideal to strive towards

They say timing is everything. It’s true in life and business and it sure as hell is true with Star Wars. Star Wars was released at the absolute perfect time to maximize its impact. The Vietnam war had ended and American cynicism was at an all-time high (a time not too different from today). The popular movies of the day reflected this with their portrayals of morally grey anti-heroes and doomsday disasters. The nation was poised for the clouds to break and Star Wars was a ray of sunshine.

Star Wars presented a portrayal of heroism and justice that people were so desperate for. I have written before about how fiction can more easily convey powerful messages than non-fiction and Star Wars is a prime example of that. It’s optimistic tone and higher ideals were universally relatable while remaining poignantly salient. Its message of good triumphing over evil against all odds inspired millions. Without that inspirational spark, Star Wars would not have had nearly the same cultural lasting power.

The lesson here is the power of being aspirational. Provide people the opportunity to rise to the occasion and they will exceed your wildest expectations. Expect the worst and you will surely find it.

Ignore the critics

An especially hilarious anecdote from the documentary was a piece of feedback Lucas received early in the production of the original movie. One of the biggest points of contention studio executives had with the movie was the Chewbacca wasn’t wearing any pants. That’s right. The greatest cultural phenomenon of the last century was almost stymied based on a debate about whether an 8 foot tall monkey bear should be wearing pants or not.

I think this anecdote does a wonderful job of portraying a phenomenon that anyone trying to create something important will have to deal with. The vast majority of people are not capable of this level of creativity. Through either a lack of talent or a lack of desire, they are unable to grasp the most important aspects of a project and therefore nit pick on inconsequential items around the edges. It is much easier to sound smart coming up with ways that something will fail. The true genius however lies in being able to see just how something could be able to succeed beyond your wildest imagination. This is a skillset that I very consciously try to foster as a venture capital investor, but it applies to all of us.

Ignore the critics. They will always try to tear you down because they can’t do what you can.

Optimize for upside

Another fascinating key to Star Wars’ success was that Lucas optimized for long-term upside. He forwent up-front compensation in order to have ownership over a greater portion of the merchandising and licensing rights than would be normal for a movie at the time. To the studio’s credit, Star Wars really was the movie that opened people’s eyes to the power of merchandise, but this was still a masterstroke on Lucas’ part. He generated such an incredible fortune on merchandise, he was able to fund the following films himself, without the need to go through the usual studio financing process. (I bet you didn’t know Empire Strikes Back and Return of the Jedi are “indy” films!) This allowed him to retain absolute creative control of the movies. Had Lucas needed to appease studio executives the way most directors do, it is hard to imagine the movies would have been anywhere near as good.

The lesson here is always optimize for the upside. Play your cards so that you take advantage of the big payout. Focus your energies on winning the war instead of winning each individual battle.

Most people don’t think this way. They are risk averse and will maximise for the short-term. If you can think differently, you will find that you have a sustainable source of edge in whatever you do.

The fact an accomplishment is important by definition means that it is not commonplace. To accomplish what is not commonplace means that you must think and act in a way that is not commonplace. George Lucas did this. He dreamt big and the payoff was massive.

Both for him and for the rest of us.

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What is your North Star?

My dad is from Norway.

The traditions and norms he grew up with are different than those of our country. He has spent more time living in the USA than in Norway, so, for the most part, it is hard to tell the difference, but there are some times where it is a bit more obvious.

One of those times was when it came to me receiving my driver’s license.

In Norway, you become an adult at 18. You can drink, smoke, drive and join the army. I appreciate the logic. If you are old enough to go and fight in a war, you should be able to drive yourself home from the airport and have a drink and a smoke when you get home.

With this policy as a framework, it’s easy to see why the USA’s policies on adulthood might seem strange. It is much more gradual and staggered than in Norway. You can drive at 16, join the army at 18, smoke at 18, and you have to wait until you are 21 to drink.

All of this was weird to my dad, but he was especially skeptical of the whole driving-at-16 thing.

Because of this skepticism, the bar for me getting my license was not just doing enough driving to pass the test proving to the government I could drive safely.

I had to prove it to my father.

We spent many, many, many hours driving together before I finally reached this bar. I must have doubled or tripled the required amount of driving time in order to finally satisfy his European skepticism.

My dad would always find excuses for us to go on long drives (even for the most pointless things). We must have driven up to our cabin in the mountains and back three or four times that summer because he left his sunglasses or a pair of socks he liked.

At the time, I thought all this additional driving was somewhat annoying. All my friends barely needed to drive at all (a fact which now scares the living daylight out of me), and here I was crisscrossing the great state of Colorado in my spare time.

I now look at these drives incredibly fondly.

My favorite part was the great conversations we would have as I drove up curving mountain passes while my dad lounged with his feed up on the dash.

Ok Erik, where are you going with this?

Getting there.

On one such trip, my dad and I were talking about work. What his career had been like. The highs and the lows. My dad came to the United States as a college student and spent some time in consulting before starting his own private equity firm where he has worked ever since.

I was at the stage where I was starting to contemplate what I wanted to do with my life and it was the first time I can really remember talking about his career in some detail.

He told me that the proudest moment of his career was when he purchased a company with 600 employees and sold it a short time later with 1,000 employees. This was a good financial outcome for him, but that’s not why it was his best moment.

He said that he got the most pride, not from the sales multiple, but from the feeling that he had built something. That he had provided 400 people with jobs that they could be proud of. Jobs in which they could find dignity and fulfillment, and most importantly, jobs that they could support their family with.

This conversation stands out as one of the most seminal moments of my entire life.

In some ways, you can divide my life into two chapters. Before this car ride, and after.

Before, I was aimless. I didn’t have a specific path or idea of what I wanted to do. I coasted through life and school without really working towards anything.

Ever since that day, I have had a North Star.

Like my father was before me, I want to be a company builder.

I believe that the highest good that you can do for someone is to give them a job where they can find pride, dignity, and fulfillment, all while being able to provide a good life for themselves and their family.

This has been my guiding North Star and has informed every decision I have made so far in my career.

It is why I wanted to become an investor. So that I could become a partner in the company growth process and provide the capital that companies need to support this growth.

It is why I joined The Carlyle Group out of college. To learn from the best in the world how companies are built and run.

It is why I transitioned from private equity into venture capital. To be able to get involved with companies from the earliest stages where I could be a true partner in the building process as opposed to working with companies once they have matured. In venture capital, I could hop into the trenches and work shoulder to shoulder with entrepreneurs trying to change the world. Where I could invest in tech companies that provide some of the highest quality jobs that you can find.

Venture capital is the absolute highest point of leverage I have found in the pursuit of my North Star.

I aspire to be a builder of great companies. Companies that are providing products or services that the world needs. Companies that delight their customers by building something meaningful.

Building companies is my North Star.

It’s what matters most to me.

It has defined every decision I have made in my career so far and I know that it will continue to serve as a guiding light in the future.

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Things are Looping Up

Life is about loops.

Sometimes it is easy to make the assumption that life is a series of discrete events and choices. We believe that life is like a stone skipping crisply across the surface of a lake. There is a singular point of contact and then we are just along for the ride until the next point of contact.

This assumption is incorrect.

Life is about loops. The iterative processes and actions that define our life, behavior, and businesses.

Things are rarely as simple as action and reaction. This may occur in science experiments that take place in a closed system. Life is more often a series of interconnected systems where the outcomes have some level of impact upon the next impact.

Think about driving. An action that seems like second nature to most of us is actually a complex loop involving multiple neural and physical systems. You are only able to drive because of the short feedback loops between these systems. Moving the steering wheel causes the car to change direction. This feedback is relatively quick and direct which allows your brain to either A) keep turning or B) stop turning.

A key lesson to be learned from driving and applied widely across our personal and professional lives is that a key to operating a system successfully is to keep feedback loops short and direct.

Shoulda, woulda, OODA

A lot of the modern thinking around loops and systems started by Air Force Colonel John Boyd. Boyd developed a concept called the OODA loop that is still widely utilized in military and business strategy today. It is a decision-making framework whereby decisions are made by constantly cycling through the loop of Observe Orient Decide Act. In aerial dogfighting between fighter jets, the fastest or most heavily armored plane is not who wins, it is the pilot who can react most quickly to changes in circumstances. Utilizing the OODA loop methodology, pilots can cycle through decision trees extremely quickly. Less focus is placed on making the correct decision as is focused on making decisions quickly, examining the results, re-orientating accordingly, and then taking action again.

Sound familiar?

OODA loops and the underlying theory that agility overcomes superior resources serve as the bedrock for modern business strategy and technological development. (For a great podcast and loops about in business, check out this episode of Invest Like The Best)

Why startups win

Agile software development and the lean startup movement are two examples of this kind of thinking. In both cases, the lengths of feedback loops are minimized and decision making is pushed as close to the customer as possible. Resources are front-loaded and experiments are run and re-run so that teams can get feedback quickly and make adjustments as necessary.

This is why startups can go toe to toe against massive incumbents and win. Usually, success isn't a case of simply throwing resources at a problem. Startups beat incumbents because they can act and react so much quicker. By the time that a large incumbent has gotten the ship turned in the right direction, the startup already has such a large headstart that it has captured the hearts and minds of the consumer.

Issues occur when feedback loops are too long. A prime example of this is diet and exercise. We all know eating healthy and exercising is good for us. So why don’t more of us do it? The answer is that the feedback loops are long with these activities. You may not see results from your effort for weeks or months. It is easy to get discouraged while the immediate gratification of Grandma’s chocolate cake is immediately available.

Now, this is a massive issue for my industry.

Why the long pace?

Venture Capital is notorious for having extremely long feedback loops. Those startups that are successful enough to have a positive outcome will often spend 5 to 10 years getting there. And this trend is only elongating as companies are staying private for longer. As such, it will take an EXTREMELY long time to figure out whether your decision to invest in one company or another was the right one. Because the feedback loops are so long, it makes it almost impossible to alter your strategy and adjust.

So how do you deal with these long feedback loops? That is the challenge. Here are some ideas I have come up with.

1) Focus on building a repeatable process

Ahh the classic Erik Berg Process suggestion. You knew it was coming. I’m a big process guy. What can I say? When feedback loops are long, the importance of having a good, repeatable process is magnified. Notice what I said. Simply having a process isn’t enough. First, it has to be a good process. Having a bad process is worse than having no process at all because it will likely either reinforce poor decisions or give you false-confidence about your decisions. Second, it has to be a repeatable process. Your perfect process will do you no good unless it is flexible enough to be applied across different opportunities. It also will do you no good if the process is so cumbersome and painful that you struggle to get other stakeholders, entrepreneurs in my case, to get through it. Having a bad process in venture opens you up for MASSIVE issues. You may find yourself with a due diligence process that is so painfully slow and cumbersome, you aren’t flexible enough to be opportunistic on good deals and, even worse, you may experience adverse selection bias as the best entrepreneurs are unwilling to put up with jumping through your hoops.

What does that good process look like in Venture? Unfortunately, there isn’t a one-size-fits-all solution. What works with one segment or geography may not work for another. But it is something that you should spend significant time and energy being thoughtful about. Don’t do things just to tick a box on your checklist, be purposeful and make sure every step in your process drives tangible value for either you or the entrepreneur (ideally both).

2) Document your decisions

With long feedback loops, it is almost impossible to remember the set of facts or thoughts around a decision months or years later. This makes documentation of the utmost importance. If you won’t know whether a decision was successful or not until years later, you need to have enough documentation to be able to come back to it and review what was going through your mind at the time and how that mapped against how things eventually would play out. Were your assumptions correct? Did you anticipate all the exogenous threats? Was your understanding of internal dynamics accurate in hindsight?

You won’t be able to ask yourself the right questions, much less answer them, unless you are documenting decisions effectively. Note that this does NOT mean that you need to write a novel recounting the most minute aspects of every decision. Remember what I said about having an efficient process? This is definitely a case where more does not equal better. How does the saying go? “It was too hard to write you a letter on one page so I wrote it on four.” As in all other aspects of communication, decision documentation should strive for clarity and conciseness. It is better to write one accurate and poignant page than it is to write twelve that are not. (This is also true in blogging and something that I am desperately trying to get better at.)

3) Audit yourself

Hey, remember when I said that it was important to document your decisions? Believe it or not, that is very much predicated on your willingness to go back and actually look back at your decisions. It is amazing how few people and firms do this. More often the self-analysis only goes as far as: “Decision right = skill. Decision wrong = bad luck”.

Have the courage to look in the mirror at all your mistakes. Go back and try to understand where your head was at the time. Use your clear and concise documentation to figure out where you went wrong and how you can react better in the future. The reasons people don’t do this are two-fold. One, people are lazy and this takes time. Sorry, you are just going to have to suck this one up if you ever want to improve. Two, people don’t like admitting they were at fault for their errors. This intellectual humility is what sets the best from the rest.

4) Measure using an intermittent proxy

If you won’t know if something is successful for a long time, try to find indicators with which to orientate yourself even before something is fully baked. Look at the exercise example I used previously. If you focus on how you look in the mirror, it will be extremely hard to stay motivated. If you instead focus on the energy you feel after a workout or the weights/reps you were able to lift, you will have a much easier time staying motivated. You will see progress all along the way instead of only once you reach your destination.

William at Frontline Ventures has an excellent article detailing how he and the Frontline team utilized the intermittent proxy measure of future financings to measure a company’s success. It isn’t a perfect measure (just ask WeWork), but it was good enough to give a directional indication of whether they were on the same track or not. Based on the data they gathered, they realized that they were missing out on deals because their process was too slow. Accordingly, they adjusted their process to be more nimble so they wouldn’t continue to fall into this pitfall.

Staying in the Loop

Life is about loops.

Observe.

Orientate.

Decide.

Act.

Move nimbly and purposefully. Make sure to pick your head up often enough to adjust your direction as necessary. Design good processes that you can repeat scalably and effectively.

Remember: David beat Goliath.

Speed wins and to be fast you need to be able to design tight feedback loops.

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The Path is a Lie

I am not a patient person.

Never have been and never will be. I think waiting is overrated. In my (occasionally) humble opinion, people who tell you to wait your turn are really just telling you to quiet down and mind your place.

We are living in an age where anyone can create anything, and yet from parents, friends, mentors, and school counselors we still hear the same age-old refrains:

“Wait your turn.”

“Get two years under your belt and then you can do something else.”

“Pay your dues.”

“This is the path for that industry. “

That’s the one that gets me the most.

The Path.

What is the path? The path is the lie that we are told. That to do X we have to do A and B first. And C. And D through W.

The path is a lie. And a lazy one at that.

There is no path to creating music. There is no path to creating art. You are the master of your own life’s work. If you want something, make it so.

The path only exists in hindsight when we look backward and all of the disparate dots line up perfectly.

When looking to the future, there is no path.

Why do we get this advice? Because it is what worked thirty years ago for the people who we look up to. It’s what worked when knowledge was scarce and companies were as loyal to their employees as their employees were to them. It’s what allowed them to slowly but surely climb the corporate ladder.

But the world has changed. We have all of the knowledge and tools in the world at our fingertips. Never in the history of mankind have individuals been empowered to create and pursue what they want in life.

And yet most of us don’t take advantage of this incredible gift. The irony is that we have more power and freedom than ever before and yet we waste it. We go to school with big dreams about changing the world and then go into exactly the industries and companies that we were hoping to change.

And at some point, we get thrown headfirst into the real world.

In the real world, there is no path. At least not unless you make an artificial one for yourself.

You want to create something? Go build it.

You want to experience something? Go make it happen.

Want to live somewhere new? Buy a plane ticket.

Want to get out of a relationship? Leave.

We live inside prisons of our own creation.

We are so afraid of what will happen if we color outside the lines. We are like dogs whose electric collars have been removed but who remain comfortable inside the world of their front lawn.

So what should we do instead?

Think big.

Don’t take no for an answer.

Stop settling for good enough.

Fake it till you make it.

Do something you find meaningful instead of just doing what you think you are supposed to.

Ask yourself tough questions and don’t be afraid of hearing the answers.

And whatever you do, don’t listen to anyone who starts telling you about the path.

What worked for them won’t work for you. And life is too short to waste your time toiling away at something that isn’t worthwhile.

In the word’s of Andry Dufresne, “Get busy living or get busy dying.”

I for one plan on living. And I am sick of feeling like I need to apologize for that choice.

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If it's not one thing, it's Structure

Do you ever feel like you are being led along a very specific path?

That the universe is telling you something or that you are being fed very specific breadcrumbs?

I think it happens to everyone. Humans have an excellent ability to see patterns in information. Even if they sometimes don’t exist. Think about shapes in clouds or constellations. We can’t help drawing lines and seeing fluffy elephants.

I feel like this has been happening to me recently. It feels like every new article I read or topic I learn about connects back to somewhere else. Whenever I learn something new, I am placing a star in the sky and eventually, I can’t help but see the pattern connecting them. One new article or podcast and suddenly 10 stars that had nothing to do with one another line up in a constellation that becomes impossible to ignore.

This phenomenon recently happened to me after reading a summary of the book The Path of Least Resistance: Learning to Become the Creative Force in Your Own Life by Robert Fritz. In it, Fritz introduces his theories about how structure defines everything from nature to personal relationships, to organizations. The overriding idea is that all things follow the path of least resistance. In nature, this concept is easy to see as water always travels downhill along the easiest path, but the concept is every bit as true in our lives as well. According to Fritz, the structures of our lives, both implicit and explicit, define a path of least resistance for our behavior. Without changing the underlying structure, we will always revert back to that behavioral path of least resistance irregardless of the amount of energy and willpower we throw against it.

It’s why diets don’t work, means are regressed towards, and people revert to behavioral patterns. Structure defines incentives. Incentives define behavior.

Reading this summary felt like the capstone in an intellectual journey. In some ways, it began 6 months ago when I read the excellent Loonshots. In it, author Safi Bahcall explains why some organizations innovate and others don’t by analyzing the underlying structure of the organization. In other ways, it feels like this is a journey I have been on for the better part of my life.

I’ve always been obsessed with incentives and the idea of structure feels like the missing piece to the puzzle.

In the words of Charlie Munger:

Show me the incentives and I will show you the outcome.

I’ve always thought through this mental framework where actions are explained by incentives and where people, in general, operate rationally based on the information they have. What was missing from this paradigm was a way to explain why people so often act against their own very explicit interests. Structures do this. We may have all the incentive in the world to exercise and eat healthy, but without the proper structures in place, we will never be able to sustain long-term lifestyle change.

I can see this so clearly in my life.

A recent example is working out. I recently wrote about how I have been trying to double down on exercising more. I have been trying to get on a good workout routine for years now and could never sustain anything. Now after two structural changes, getting up and exercising is easy. I went from not being able to get up to exercise more than once or twice a week, to doing it every (work) day. Easily. First, I changed how I was working out. Instead of focusing on becoming a better runner which I sucked at and didn’t enjoy I focused on lifting which I am good at and I do enjoy. The second thing I started doing was preparing my pre-workout drink the night before and setting it next to my alarm. I turn off my alarm and take a sip of caffeine and all the sudden falling back asleep isn’t an option. Two small structural changes to the system and suddenly the path of least resistance is getting up and exercising where it used to be crawling back into bed and going back to sleep.

Another example that has had a big impact on my life is networking. I used to hate it. I thought of it as brown-nosing and avoided it at all costs. It didn’t help that I struggle with social anxiety and just flat out am uncomfortable in many of the environments where “networking” is supposed to occur. Now networking is THE favorite part of my job. Why the sudden shift? Structural change. A former colleague who excelled at networking told me that he doesn’t think of networking as “networking” but simply as trying to make new friends and learn their stories. Suddenly the lens through which I looked at networking fundamentally shifted. No longer was networking some transactional way to climb the corporate ladder, but an opportunity to foster and cultivate genuine, value-add relationships.

That’s the beauty of structure and my biggest takeaway from The Path of Least Resistance. Structure is a powerful force that guides how we think and act.

But at the end of the day, we are the ones who get to shape the sand that the water will flow through.

We are the artists of our lives. Once we are aware of them (not a trivial matter) we can architect structures of our own choosing to pull us towards the actions and behavior we want to practice.

You know me. I’m a big choice guy. Part of everything in life being a choice is that sometimes (often) our choices manifest themselves in the ability to choose how to design structures in our life to get the outcomes we want. Because if your incentive structures are messed up, no amount of hard work or endurance will allow you to get the outcome you want (at least not sustainably).

Next time you are kicking yourself for doing something you know you shouldn’t or going back to bed when you know you should be hitting the gym, think about the structure in your life that is pulling you towards where you don’t want to go.

Believe me, it is easier to change the structure that is defining your behavior than to fight your way up the waterfall of going against your incentive structures.

Personal life. Business. School. Sports.

It’s all just structure.

And the great thing about structures is that they can be changed.

The sad thing about structures is that people almost never choose to do so.

So the question for you and me is, once we are aware of our structures, do we have the courage to change them?

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Churches of Entrepreneurship

One of the most thought provoking books I have ever read is Zen and the Art of Motorcycle Maintenance by Robert M. Pirsig. Even many months after completing it I still find myself pondering several of the ideas explored.

One of the concepts I keep coming back to is the idea of the Church of Reason and how it relates to startups.

The Church of Reason

To explore the concept of the Church of Reason first we must discuss what exactly a church is. At its face, this seems an obvious question to answer. A church is a building in which people worship, predominately in the Christian faith. But what if the building is no longer used for this specific purpose, is the church still a church?

Pirsig gives the example of a roadside sports bar located in an old church. My wife and I for our last anniversary visited a vineyard located in an old church. Whatever example you use, the question remains, are either of those buildings really still churches?

Pirsig contends, and I agree, that the answer is no. The object of a church is defined by its purpose. If a church is not being used for worship, it is just a building. We may continue refer to the building as a church because of its familiar architecture or because that is how it has been known historically, but it no longer is a church. Not really. There is a deeper meaning to something being called a church. There is a required ‘spirit’ of the physical object. As that spirit leaves, the purpose and very essence of that object leaves with it. It becomes something else entirely. A simple building. A husk.

Pirsig draws a parallel from this line of reasoning to modern universities which he dubs “Churches of Reason.” Similar to religious churches, Pirsig argues that these Churches of Reason are intrinsically defined by their use or purpose. In the case of universities that purpose, that spirit, is to pursue truth through learning. To expand the boundaries of knowledge itself.

Just as with religious churches, these Churches of Reason become simple buildings as soon as the Spirit of the University leaves. As soon as the pursuit of truth and expansion of knowledge stop becoming the purpose for the endeavor, the buildings become nothing more than a mausoleum to their former holy endeavor. Husks.

Pirsig observed this loss of the Spirit of the University in the 60’s and 70’s when he was a professor himself writing Zen and the Art of Motorcycle Maintenance, his part auto-biography part philosophical treatise magnum opus. It saddens me to admit that this trend of the departure of the Spirit of the University not only continued, but has accelerated in the modern day.

But that is a discussion for another time. Next we will turn our attention to a different type of church.

Churches of Entrepreneurship.

The Church of Entrepreneurship

Startups are Churches of Entrepreneurship. They are the altars at which we worship the gods of technology and innovation while hoping that our sacrifices of blood, sweat, and tears change the world.

Just like other type of churches, the object is defined by its purpose. A fundamental part of any startup’s identity is the Spirit of Entrepreneurship that resides within it. The Spirit of Entrepreneurship is the driving passion to change the world through the creation of something new.

Really, the word “startup” is just a name for young companies in which the Spirit of Entrepreneurship resides. They are vehicles for the Spirit of Entrepreneurship to hopefully live and thrive. Just like with churches or universities, if you take the spirit out of the building, it is just a pile of bricks.

Startups are no different. Just because a company is young or small or technology-focused does not mean it is necessarily a startup. Without the driving passion to change the world through the creation of something new, they are just small, risky businesses. Bars within an old church. Husks.

This passion to exert one’s will on the world can come in many different shapes and sizes. There are mission driven founders. There are financially driven founders. There are rage driven founders (this was a new one for me that I heard about this week. Basically someone that is so infuriated by the status quo they say “screw it, I will change it myself”.) But while the prime motivating factor changes, the passionate drive of all strong founders is nearly identical.

This spirit of entrepreneurship can inhabit the halls of older incumbent companies as well, though it does so rarely and often in the places you would least expect. Be wary of large corporations touting their innovation groups and “startup culture.” The spirit of entrepreneurship does not reside somewhere simply because someone wishes it to. It can be born in a moment when a group of mavericks suddenly decides try to change the world against all odds. It can die just as quickly if not properly nourished.

Viewed through this lens, providing a nourishing environment that is ripe for the Spirit of Entrepreneurship to inhabit becomes of the utmost importance.

Doing so successfully is easier said than done. My favorite road map to doing so is laid out in Loonshots by Safhi Bahcall.

But even with help. It’s not easy.

And it shouldn’t be.

Things worth doing rarely are.

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Institutional Contrarianism: On Everest, Mozart, and Instinctual Originality

(Nirmal Purja/AP)

You’ve probably all seen this picture. The 2019 Mount Everest summit season has become famous for a high amount of deaths and reports of long lines of climbers waiting to complete the final summit.

Too often investors act like these climbers. Instead, they should act like Mozart. In this post, I will tell you why.

Institutional Contrarianism: When climbing the world’s highest mountain enters the mainstream

The summit of Mount Everest was first reached in 1953 by Edmund Hillary and Tenzing Norgay. This success came almost 70 years after it was first suggested the feat might even be possible. Unsurprisingly, the summit of Mount Everest captured the world’s collective imagination in a way that few endeavors had before, or since.

And there was no putting the genie back in the bottle.

A line of hundreds of climbers waiting on the summit is what happens when climbing the world’s highest mountain enters the mainstream. What was once the domain of a chosen few lofty dreamers has become the world of Fred from El Paso. And Mo from two neighborhoods over. Now, that is maybe a little bit of an exaggeration, but a Sherpa guide has reached the summit of the mountain 24 times (the most a non-Sherpa has reached the summit is American David Hahn who has reached the summit 15 times).

Venture capital bears a striking resemblance to Everest. Everyone claims to be trying to operate on the edge of what is possible, but when everyone is swimming against the current, is anyone really?

Contrary is the biggest buzz word in venture capital today. No, the irony is not lost on me. The cult of contrarianism was seemingly started by Peter Thiel and his oft-posed question of “what is something you believe that those around you disbelieve?” In his book Zero to One, Thiel encouraged people to come up with fundamental insights about the world by looking at it through a different lens than others. I am a big fan of this way of thinking.

But it has warped into something different altogether. It has become the very evil it sought to destroy.

It has institutionalized.

At some point, everyone trying so hard to go against the crowd just becomes a herd moving in the opposite direction.

Everyone pays lip service to being a contrarian, but how much of them actually do it? From what I have observed, some. But not many. This Institutional Contrarianism becomes the very thing it claims to oppose. There are few leaders in a new space, but many followers. People are interested in latching on to the work others have done and seek exposure to hot spaces without necessarily having a strong perspective on them.

How do you break out of the trap of Institutional Contrarianism? How do you strive for true originality?

We look to great creators of the past for answers.

Create like Mozart: Tapping into the power of Instinctual Originality

A book I have learned a lot from is Impro by Keith Johnstone. This book is ostensibly about improvisation in theater but actually has much more far-ranging lessons. You may recognize it from the annals of FinTwit where it is oft-cited for its teachings on physical presence and interpersonal positioning. These lessons are great, but I have found that it has just as much, if not more, to teach us about learning and thinking.

Recently while reading I came across a section on originality that I think offers some striking insights towards solving our problem of Institutional Contrarianism.

Johnstone on originality in theater:

Anyone can run an avant-garde theatre group; you just get the actors to lie naked in heaps or outstare the audience, or move in extreme slow motion, or whatever the fashion is. But the real avant-garde aren't imitating what other people are doing, or what they did forty years ago; they're solving the problems that need solving, like how to get a popular theatre with some worthwhile content, and they may not look avant-garde at all!

Similar to the avant-garde movement, venture capital investors too often find themselves pursuing what is fashionable instead of what is truly differentiated. By definition, a space cannot at the same time be fashionable and contrarian. One need only look at any tech news site to see the dynamics of fashion trends at works. Entire sectors and technologies fluctuate between golden child one moment and untouchable the next. Blockchain. VR. AI. Greentech. All have had, or are having, their moment in the sun. All likewise have at some point been cast aside.

The crux of the issue is that you cannot generate abnormal returns in any asset class by acting the same way as everyone else. When a “contrarian” trend becomes the fashion and everyone starts flooding into the space, you can guarantee that valuations will skyrocket even as the number of quality opportunities diminishes.

As Johnstone says above, truly original ideas will often hide behind a sheen of the mundane. In hindsight, it is easy to craft a narrative around why companies like Uber and Airbnb were so transformative, but at the time they seemed anything but. Plenty of incredibly smart, successful investors passed on some of the greatest investments of the past decade (for proof just check twitter any time a tech company goes public).

So how can we tap into this true originality of thought? When asked where his ideas come from, Wolfgang Amadeus Mozart replied:

Why my productions take from my hand that particular form and style that makes them mozartish, and different from the works of other composers, is probably owing to the same cause which renders my nose so large or so aquiline, or in short, makes it Mozart's, and different from those of other people. For I really do not study or aim at any originality

Therein lies the secret. One cannot be original by trying to be original. Striving to be contrarian leads you to follow the popular fashions of the day and will inevitably lead to mediocrity. The path to true originality in life and business can only be found by accepting yourself and leaning into the things that make you unique and different. I call this Instinctual Originality.

Ok, Erik, great. Just emulate Mozart. No problem.

It is not as hard as it sounds.

First, accept who you are. All your faults and all your greatness. Be aware of them and honest with yourself about them.

Next, ignore the mainstream. Easier said than done, but possible all the same. Don’t buy the hype. Always ask why and act from principles and fundamental thinking.

Finally, create from a place of Instinctual Originality. Originality is not some external mountaintop that we can scale, it is inherently inside each of us. Let it flow from you. Don’t pursue it. Listen to the voice inside of you. There is a reason that our best ideas often come in the shower or on a run. We already know the answers.

We just need to listen.

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Lessons (and Books) from Camp

Credit: ME! Yes, that is right! This is the first time I have ever actually used one of my own pictures for the blog. This was a picture from the working farm where we had our final dinner on the last night of camp

Last week I had the opportunity to attend the first Capital Camp hosted by Brent Beshore and Patrick O’Shaughnessy in Columbia, Missouri. Over the course of three days, we listened to speakers from all corners of the investment landscape, ate delicious food, experienced some (incredibly) unique activities, and just had a fantastic time. It truly was an amazing experience and I really feel honored to have been included. We had to sign an NDA as a prerequisite to our participation, so I can’t go into too many details about the presentations themselves, but I did want to list a few of my big takeaways from the experience alongside some of the book recommendations that seemed to be a part of almost every conversation.

The Value of Going Niche

A common theme that shone through a lot of the presentations during camp was that there is a lot of value in going niche. Many of the presenters were working in under-explored niches within the investment world and this willingness to go against the grain had compelling results. Going niche allows you to be a standout within a smaller pool. If there is an interesting opportunity in the space you are playing in, competition will inevitably flow in, but by being at the forefront of the trend, you will be among a handful of go-to people in the space. There is A LOT of value in being “The _______ Guy”. If you are among someone’s first couple of calls when they are in a very specific industry or if they are looking for a never-before-created financial product, you are going to be able to capture a lot of value.

The Ugly Premium

Similar to the above, there seems to be a premium placed on work that requires one to get their hands a little dirty. A willingness to go down into the weeds and tolerate extreme complexity or uncertainty can be a true differentiator when competitors are more than happy to stick to harvesting low-hanging fruit. Being a pathfinder in difficult or unexplored terrain is rarely easy, but the results can be truly spectacular if you develop a reputation for handling ugly situations with effectiveness and grace. People are also all too willing to overlook diamonds covered in a few layers of dirt. If you do the digging, you will have them all to yourself.

The Power of Place

I believe that the decision to host Capital Camp in Columbia, Missouri was absolutely key to the event’s overwhelming success. Place is a powerful consideration for any event or gathering and its effects should not be overlooked. By having this event in Columbia, Brent and Patrick immediately differentiated it from the plethora of other investor conferences that occur every year. They were able to build a completely differentiated ethos that was pervasive throughout the entire event and which led to a much more memorable experience than if it had been hosted somewhere like New York. I also think the location served as a strong tool for self-selection. Hosting a AAA investor conference in the middle of Missouri self-selected for people with a wide variety of interests who were open to new things and not too good for small-town America. By design or by accident, I think the location of the event was an incredibly powerful Asshole-Filter.

Interesting People Lead to Interesting Results

As awesome as the presentations, food, and activities were, they paled in comparison to the joy of simply interacting with the other attendees. I am a big believer in the idea that any time that you can get interesting and intellectually curious people together in a single place, something positive will inevitably happen. I know I wasn’t the only one that felt completely out of my depth at times, but the humility and curiosity of the other attendees ensured that I never once felt out of place. I can honestly say this was the first investor event I have ever been to where people were genuinely more interested in learning about you and what you did than they were interested in telling you about themselves. I don’t believe this was an accident, and I am sure both the location and the interesting/expansive variety of Patrick’s podcast both played their part in attracting high-achieving, yet humble, people with intellectual curiosity as varied as it was deep.

The Books of Capital Camp 2019

Interesting people from all over the world attended the first Capital Camp. Every conversation was different from the last. The one constant is that I left almost all of them with a new book on my reading list. Amazon affiliate links included for each book.

Here are all of the books that were recommended to me throughout the course of the week:

• Loonshots: How to Nurture the Crazy Ideas That Win Wars, Cure Diseases, and Transform Industries by Safi Bahcall

  • Ok, I am cheating a little bit on this one. Loonshots was actually the recommendation that I gave everyone who shared a recommendation with me! The book describes how to foster innovative thinking inside of organizations and explores what separates nimble, innovative organizations from slow, political ones. This is by far one of the most entertaining “business” books I have ever read and one that I am sure I will refer back to for some time to come

• Think Twice by Michael Mauboussin

  • Michael Mauboussin was one of the presenters at Capital Camp and I am not exaggerating when I say that his was one of the most interesting and thought-provoking sections of the whole camp. Two of his books were highly recommended and many attendees talked about how influential his writings have been on them

• The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing by Michael Mauboussin

  • Essay highlighting some of the findings from the books

• Titan: The Life of John D. Rockefeller, Sr. by Ron Chernow

  • Tim Ferris has an interesting heuristic about focusing on reading stories that have been around over 100 years. Chances are if they are still being talked about, there is something of value in there. Few names have persisted as long as Rockefeller’s and his biography was recommended by an attendee who makes sure to read it every couple of years

• Steal Like an Artist: 10 Things Nobody Told You About Being Creative by Austin Kleon

• The Fifth Discipline: The Art & Practice of the Learning Organization by Peter M. Senge

• Thinking in Systems: A Primer by Donella H. Meadows

  • Systems thinking was a topic that came up in multiple presentations and conversations at Capital Camp. It is one of the topics I am most looking forward to learning more about!

• Powerful: Building a Culture of Freedom and Responsibility by Patty McCord

• Principles: Life and Work by Ray Dalio

  • This book is probably the one that has been recommended to me most even from before and after camp. I have had it sitting in my kindle for some time now, but it has vaulted to the top of my list based on some of its recent recommendations

• Making Things Work by Yaneer Bar-Yam

• Zen and the Art of Archery by Eugen Herrigel

• The Overstory: A Novel by Richard Powers

  • The only fiction book that was recommended to me at camp. I love reading fiction and always make sure to be simultaneously reading one fiction and one non-fiction book at any given time. Not only is fiction generally more entertaining but I truly believe that imagination is a muscle that needs to be exercised just like any other. Reading fiction books is a great way to do just that.

• Confessions of the Pricing Man: How Price Affects Everything by Hermann Simon

• HBR Guide to Buying a Small Business: Think Big, Buy Small, Own Your Own Company by Richard S. Ruback and Royce Yudkoff

  • Search Funds and Permanent Capital Private Equity were two of the asset classes with the most buzz around camp. This recommendation (and the next two as well) are what I was provided when I asked where a novice should start learning about these asset classes

• The Messy Marketplace: Selling Your Business in a World of Imperfect Buyers by Brent Beshore

  • This was the first book from this list that I picked up after camp and I can happily report that I am thoroughly enjoying it (and I am not just saying that since Brent hosted!) You can tell that it is written to be a reference guide to sellers, but it has been enjoyable and insightful to me as an investor as well!

In addition to the books above, I also received recommendations for a few other mediums:

• Adventur.es Writings

  • Another shout-out to the Adventures team. Brent and Co. are the leaders in the Permanent Capital Private Equity world and they have put out a huge number of thoughtful pieces about the space on their website.

• Anything written by Matt Levine

  • I was told that reading whatever Matt Levine writes is basically the equivalent to an MBA. I subscribed to his newsletter not long after…

• The Business of Innovation: An Interview with Paul Cook

• Dealbreaker

• Econtalk Podcast episode with Jerry Muller on the Tyranny of Metrics

  • I listened to this episode earlier this week and it was a fascinating discussion about the dangers of an over-reliance on metrics without using one’s judgment. I really appreciated Muller’s thoughts on the subject and thought they sync up nicely with my previous post on venture capital due diligence

• My Dad Wrote A Porno Podcast

  • This recommendation was definitely a little bit different than the others. I was told not to listen to it while driving since laughing so hard on the road would be unsafe!

• Sam Hinkie’s Resignation Letter from the 76er’s

  • Just as Sam Hinkie closed out the show at camp, the recommendation to read his resignation letter from the Philadelphia 76er’s closes out my list. Sam’s presentation was one of the more interesting and entertaining presentations I have ever seen and this letter gives a fantastic window into how he views the world.

Thanks again to Patrick and Brent for hosting such a fascinating and fun investor event!

Can’t wait till next year!

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Confessions of an Anxious VC

Photo by Rob Curran on Unsplash

My whole life I have suffered from social anxiety.

It’s something that would surprise a lot of people. I am a social extrovert. I am often the loudest (sometimes obnoxiously so) and most outgoing person in most rooms. I get my energy from interacting with others. And yet those same situations cause me anxiety.

Talk about a catch 22.

I have had social anxiety ever since I was a kid. It used to be bad. Outside of a few best friends, I wasn’t able to spend time in social settings with friends outside of work. The first time I hung out in an unstructured group setting (not a birthday party or a sports practice etc.) was my freshman year of high school.

The weird thing was that it was never the act of being social or the event itself. It was the anticipation of being in a social setting that caused the anxiety ahead of time. Once I got there, I was fine. In fact, I was more than fine. Being social is when I am at my best.

Luckily, I was able to get help. My parents had the resources to pay for me to see a psychologist when I was in middle school. Vocalizing my internal thoughts made a huge difference. Often my own self-talk sounded laughable when said out-loud. By talking about my feelings with an objective third party, I was slowly able to shift the way I talked with myself. I am so grateful I had the opportunity to get help and it breaks my heart that asking for help with mental health still seems to be so stigmatized by our society. I can honestly say that I would not be where I am today without it. Healthy, happy, and (mostly) well-adjusted.

But that doesn’t mean I still don’t get anxious sometimes. Anyone who has dealt with anxiety will understand what I am talking about. The anxiety never really goes away. You just learn to deal with it.

For me, the best strategy was “faking it till I made it”. Every time I threw myself into a social setting I was anxious about, the little voice in my head telling me I wasn’t good enough whispered a little bit more quietly. I acted like I was confident and before long I started to actually feel confident. Over time that little voice went away almost completely.

But it still crops its head up every now and again.

Especially when it comes to networking.

I don’t know what it is, but networking has always given me a spot of trouble. I guess it is just the fact that I generally don’t know anyone at all. True or not, I have this idea in my head that everyone else knows each other and it is easy to get intimidated by that.

Now, you can see why this is a problem.

As a venture capital investor, networking is a big part of my job.

Cultivating a network of relationships with entrepreneurs and other investors is one of the keys to success in this career. It’s not always easy, but I have come up with a few strategies that help me and that may help other people.

Learn someone’s story

The biggest improvement in my ability to network came after re-framing the entire activity. A former colleague of mine was always getting drinks with people after work or meeting up with people in his network for lunch. Most of these connections were people he had met briefly or only a couple of times previously. I had no idea how he did it. When I finally asked him how he was able to network so effectively his response was to tell me that he just liked “hearing people’s story.” As soon as I heard that it was like the clouds parted. I love meeting new people and learning about their story. Ever since I reframed networking as getting to hear people’s stories, instead of focusing on how to present my own, it has gotten exponentially easier and more fun!

An inch wide and a mile deep

Another big key has been focusing on quality over quantity when it came to social connections. I would get overwhelmed by feeling like I would never be able to talk to everyone at an event. So now I don’t even try. I focus on trying to make a smaller amount of deeper connections. I would rather have two 20-minute conversations than eight 5-minute conversations. Aside from just taking the pressure off, I also think this is just a much more effective way to network. If you have a superficial conversation with someone for 5-minutes, you will get lost in the noise. Talk to someone for 20-minutes about the harmonica or the frequency of lightning strikes around the globe and you can be sure that you will stand out.

Go with a friend

When in doubt, guilt-trip a buddy to going with you. Just knowing that you know at least 1 person in a crowd makes a ton of difference. Even if you split up once you get there, it is comforting to know you have a security blanket of someone you already know to talk to in case you need it. And if the event sucks, at least you have someone to laugh about it with.

Nobody cares what you say

This may sound a little depressing at first, but I actually think it is really empowering. The beauty of being in a social setting where you don’t know anyone is just that, nobody knows you. If you say something stupid or put your foot in your mouth, guess what? Chances are that you never have to see those people again if you don’t want to. Maybe you aren’t quite as prolific in putting your foot in your mouth as I am, but the logic even works for boring superficial conversations. Don’t stress about making an impact on every person you talk to. See point number 2 above. If you aren’t jiving someone and you just can’t get them to bite, don’t stress. They won’t remember.

**For the record, I think this tip has a ton of applications outside of networking, especially when it comes to creating content online. People are too afraid of what other people will think about what they say. The truth is, if you say something dumb (like I have many times), no one will care (unless you say something really, really dumb or offensive). On the flip side, make some interesting points and people will take notice. Minimum downside. Maximum upside.

Pick a color, any color

This is a fun one that I picked up from a podcast. If you are anxious about a networking event, pick a color. When you get to the event, talk to everyone there who is wearing that color. It’s that simple. I don’t know why, but for some reason having a mission when you walk into an even (talk to everyone wearing green) really helps. I enjoy this one so much I even went as far as to buy 6-sided dice on Amazon that have different colors on each side. Before any networking event, I roll the die and try to talk to everyone wearing whatever that color is. I don’t know why this one works, but it does. Give it a try.

Go against the grain

I picked this one up from Tim Ferris. When you get to an event, look where everyone is focused. It may be the food table or a celebrity whose attention everyone is trying to get. Ok now see that group focus? Head in the exact opposite direction. It is tough to stand out in a crowd. Give yourself the best possible opportunity you can by going against the grain and doing stuff other people aren’t. This means going to the more esoteric info sessions. It means doing the weirder activities. If you are doing things differently than everyone else, people will take notice. And even better, you will see the other people who are doing the same. Those are the people you want to talk with.

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Hopefully this post is as helpful for you to read as it is for me to write. Mental health is hard. Talking about it makes it less so.

As with most things, overcoming anxiety is a slow and painful process.

Each step feels like you aren’t making any progress.

It’s only when you look back that you see how far you’ve come.

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Why Brushing your Teeth is the Secret to Success in Life and Startups

Brushing your teeth is the secret to being successful in life and entrepreneurship. In this post, I am going to tell you why.

Brushing your teeth is not difficult. It is something we all do. But how many people do it the right way? It’s recommended that you brush your teeth twice a day, every day. There is proper form and improper form. I am sure some kinds of toothpaste are better than others, but admittedly, it can be difficult distinguishing which toothpastes are the best given that each and every one is recommended by 9 out of 10 dentists (I hope I never come across the 10th dentist. Must be a terribly negative person).

The key to dental health is consistency. You need to put in consistent effort day in and day out. Brushing your teeth for an hour at a time will not allow you to skip brushing your teeth for the next month.

Now, as much as I appreciate the importance of dental hygiene, this isn’t really a post about brushing your teeth. This is a post about life and business, two areas where we all too often brush for an hour once a month.

The key to success in life is consistent application of effort. This is true for everything from relationships and startups, to exercise and reading. Very rarely will you find yourself in situations where a single herculean effort is all that stands between success and failure. Much more often, slow and steady really does win the race.

When I was working at Carlyle the head of my team had a favorite phrase, “Do your day job.” It means taking care of the fundamentals of your role and making sure that you excel on the little things. Because if you don’t, it tends to be a slippery slope.

I am a big Broncos fan and our newest coach, Vic Fangio, put it well in his introductory press conference. When asked to explain his famous “death by inches” mantra he said:

“If you're running a meeting, whether it be a team meeting, offense or defense meeting, a position coach meeting and a player walks in, say 30 seconds late, 45 seconds late -- that act in it of itself really has no impact on whether you're going to win or lose that week.

"But if you let it slide, the next day there's two or three guys late or it went from 30 seconds to two minutes. It causes an avalanche of problems. That's 'death by inches.'”

The little things matter. Showing up consistently and putting in the effort is what makes the difference between success and failure.

No place is this truer than with startups.

On the startup battlefield, wars are not won in a decisive moment. Startup successes are a culmination of years of executing on the little things and consistently making progress. In tech, that steady progress tends to grow exponentially. This fact is sometimes hard to see among twitter hype threads and Techcrunch headlines, but the saying “an overnight success, 10 years in the making” really does ring true.

Execution is so, so key. A VC I really respect once told me that he would take a team that can execute in a small market over a team that can’t in a big market every single day of the week. Execution really is what sets apart A+ teams from the rest, and in venture you need those A+ teams to get the outcomes that justify the whole model.

You can bet that this hyper-focus on execution is something that VCs pay attention to.

A great example of this is due diligence. Due diligence is a necessary, but slow, and sometimes painful, process for everyone involved. A secret of venture capital that not many may know is that how an entrepreneur conducts themselves during due diligence, is just as big of a signal about whether the startup will be successful as anything else. An entrepreneur that is organized, prompt, respectful, and who has a masterful understanding of the ins and outs of their business during due diligence will likely exhibit that same attention-to-detail and execution mastery when it comes to running their business. Entrepreneurs who are difficult to deal with and get easily frustrated or are dodgy about direct questions about the business are unknowingly flying a pretty big red flag for all investors involved.

So now that we have agreed that consistent effort is the key to success, what is the best way to go about applying that effort?

In the immortal words of Joel Embidd:

“Trust the process”

The best way that you can ensure that you are properly applying just the right amount of force and using the proper technique when brushing your way through life is to build a process and stick to it. Our culture is far too outcome oriented. We operate on a last-in-first-out basis and optimize based on the outcomes we see, even when those outcomes are often nothing more than luck. If you flip a coin 4 times and get tails every time, you would not conclude that a coin will always land on tails. And yet, far too often our personal and professional actions are the equivalent of flipping a coin once, and assuming that every other time we ever flip a coin we will get the same result.

I have had a big focus on process ever since reading the book Chop Wood, Carry Water by Joshua Medcalf. I can honestly say this book has had a bigger impact on my life than any other. The subtitle says it all, “How to fall in love with the process of becoming great.” I highly recommend this book to any looking to lead a more process-oriented life.

My advice for you:

Focus on doing the little things right.

Fall in love with the process of becoming great. If you are able to truly do this, the outcomes will take care of themselves.

Maintain consistent effort instead of bursts of hyperactivity.

Take care of things like your health, your body, your relationships, your spirituality, and your mindset that only need a little bit of time each day to maintain and yet, are all too often neglected. These are things that are vitally important to your success in life, and yet not one of these things can be maintained by brushing for an hour once a month.

And speaking of.

Brush daily with consistent application of effort.

You’ll be surprised where you end up.

Venture Capital and the Red Queen

This past week I came across a fascinating concept in evolutionary biology called the Red Queen Hypothesis. The Red Queen Hypothesis proposes that organisms must maintain a perpetual state of adaptation and evolution, not only to gain a reproductive advantage against rivals from within their own species, but merely to survive in an ever-changing world filled with other constantly evolving organisms. The Red Queen Hypothesis paints evolution not as an inevitable outcome of generation after generation of survival of the fittest, but as a species-level arms race of life or death.

Evolutionary Biologist Leigh Van Valen developed the Red Queen Hypothesis as a potential explanation for why a species’ extinction rate is relatively flat over time. Under the core tenets of the theory of evolution, one would expect that as species evolve over time, the chance of them going extinct would diminish, but empirical evidence has shown this to not be the case. Van Valen named his hypothesis after the Red Queen from Lewis Carrol’s 1871 novel Through The Looking Glass (sequel to Alice’s Adventures in Wonderland). At one point in the book, the antagonistic Red Queen tells Alice that:

“Now, here, you see, it takes all the running you can do, to keep in the same place.”

Exhibit 1. The wily and cunning fox. Notice the hallmarks of an evolutionary predator. Pointed ears, sharp claws and a stylish three piece suit with occasion appropriate accessories.

Exhibit 2. The swift hare. Large ears have developed to be able to sense the slightest sounds. Evolutionary biologists maintain that the true reason behind the hare’s insistence on wearing gloves and proclivity to ask “whaddup, doc?” were lost a millenia ago.

This idea of running just to stay where you are is an apt metaphor for the necessity of an organism to constantly evolve just to maintain its current place in the evolutionary order. The most obvious example of this in nature also involves running. Imagine the perpetual evolutionary dance between the wily fox and the swift hare. The hare constantly evolves to become faster as the slowest hares are removed from the gene pool by the hungry fox. The inverse happens to the fox, with their slowest numbers dying out from not being able to get enough food to eat. This plays out as a balancing act of co-evolution where both foxes and hares will get faster and faster over time. If either species stops keeping pace in this evolutionary arms race, it will either die out or be forced to adapt in other ways. As long as both the fox and the hare keep at roughly the same pace, their relationship will remain locked in place.

The world of technology startups and venture capital has many of the hallmarks of the Red Queen Hypothesis. Incumbents and disruptors are often locked in a battle of the hare and the fox. As soon as either starts slowing down, their demise is relatively swift. Companies need to constantly be reinventing themselves to stay on top. This is easier said than done. If you look at the tech titans of 20 years ago, only Microsoft has been able to maintain its status as one of the leaders in the space (and even then it is no longer as dominant as it once was). It will be interesting to look back in 20 more years and see whether the Amazons and Apples of the world are able to maintain the current status they enjoy. Some might point to the incredible power that today’s incumbent companies have, but at one point it was similarly hard to imagine that seemingly invincible tech titans like AOL and Xerox would ever fall from grace.

Startups have a biological imperative to constantly be growing and innovating. If they don’t, they will die just as surely as hares would if foxes suddenly evolved to be born with jetpacks. The other day I saw a well-regarded venture capitalist compare startups who take venture funding to sharks. Sharks are only able to “breathe” by constantly swimming so that water passes through their gills and can be absorbed. Constant innovation is similarly the only thing that keeps startups flush with oxygen. You may argue about whether this is the way that things should be, but it is hard to argue with the fact that once a company gets on the venture train, it is exceedingly difficult to get off at the next station. As a founder, you should understand that an ability to evolve and adapt is table stakes. It is not enough to build one great product. You need to constantly and consistently be improving and building better and better products.

How can this be done? Are all companies doomed to fail at the slightest slip up? What can a company do to keep on innovating?

Luckily our world is in a constant state of change which means that there will always be new opportunities for companies that truly build themselves to constantly innovate. The path to constant innovation is surprisingly straightforward, but only an extremely small number of companies ever execute on it over the long term.

The first step is to create a diverse and high quality talent pipeline that will continuously refresh your company with new ideas and perspectives. A focus on diversity must start on Day 1, because if you, as a founder, don’t start focusing on diversity within your first 10 hires, it will be extremely difficult to start doing so after our first 100 hires.

The second step is to keep your eye on the horizon. Reinvest in yourself to stay on the bleeding edge of innovation. Don’t rest on your laurels and expect that what worked yesterday will work tomorrow. Always be on the look out for new opportunities recently enabled by social or technological change. If companies only tried to build upon what made them initially successful, Amazon would be the world’s best place to shop online for books (but nothing else) and Netflix would be the first place we would all go to rent our favorite DVDs through the mail.

The third step is to think for the long-term, without losing the ability to block and tackle over the short term. Apple is the master of this. They never fail to deliver on their quarterly objectives, even as they maintain a long-range focus on the next quarter century. Their obsessive focus on long-term planning has allowed them to build products that people will love to use today, even as they incorporate the building blocks of what their future products will be 10 years down the road. When Apple first built the fingerprint scanners into iPhones, they were preparing us for a day when our face would be the key to our most valuable data. If you pay attention, Apple has slowly but surely been incorporating more and more health and AR focused capabilities into their products. Don’t be surprised when new products with each of those categories at the forefront are released in the coming years.

The fourth step is to think based on first principles about the way things should be done, not the ways that they are done today. The insurance industry has been notoriously slow to embrace new technology and innovation. There are some structural advantages insurance companies have that make it a great sector to be a part of, but these same structural advantages allow them to sometimes forego evolution. In Columbus, we have seen the birth of next-generation insurance companies like Root Insurance and Beam Dental that underwrite risk based on measured activity, instead of age and demographic characteristics. Constantly ask yourself why things are being done a certain way and how should they work based on your understanding of people and available technology.

And that’s all it takes. Not so hard right? The difficulty comes in execution… and the fact that everyone else out there is going to be the fox nipping at your heels. Success is possible, but it won’t ever be easy.

Run fast.

Run hard.

Run hungry.

And you might just stand a chance.

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