Life

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Flying Cars vs Flying Bits

It’s easy to overlook sometimes that Bill Gates is a Tech Original Gangster.  From an interview with Wired:

Wired: Peter Thiel, expressing his dissatisfaction with technology’s progress, recently noted, “We wanted flying cars, instead we got 140 characters.” Do you agree with him?

Bill Gates: I feel sorry for Peter Thiel. Did he really want flying cars? Flying cars are not a very efficient way to move things from one point to another. On the other hand, 20 years ago we had the idea that information could become available at your fingertips. We got that done. Now everyone takes it for granted that you can look up movie reviews, track locations, and order stuff online. I wish there was a way we could take it away from people for a day so they could remember what it was like without it.

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Weekend Work and Play

L.P. Jacks —

A master in the art of living draws no sharp distinction between his work and his play; his labor and his leisure; his mind and his body; his education and his recreation. He hardly knows which is which. He simply pursues his vision of excellence through whatever he is doing, and leaves others to determine whether he is working or playing. To himself, he always appears to be doing both.

 

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The Curious Life of A Turkey

Another of what is becoming periodic posts with wisdom from Taleb’s Antifragile:

This one involves seeing opportunity: being a turkey in reverse:

“A turkey is fed for a thousand days by a butcher; every day confirms to its staff of analysts that butchers love turkeys “with increased statistical confidence.” The butcher will keep feeding the turkey until a few days before Thanksgiving. Then comes that day when it is really not a very good idea to be a turkey. So with the butcher surprising it, the turkey will have a revision of belief — right when its confidence in the statement that the butcher loves turkeys is maximal and “it is very quiet” and soothingly predictable in the life of the turkey. This example builds on an adaptation of a metaphor by Bertrand Russell. The key here is that such a surprise will be a Black Swan event; but just for the turkey, not for the butcher.

“We can also see from the turkey story the mother of all harmful mistakes: mistaking absence of evidence (of harm) for evidence of absence, a mistake that we will see tends to prevail in intellectual circles and one that is grounded in the social sciences.

“So our mission in life becomes simply “how not to be a turkey,” or, if possible, how to be a turkey in reverse — antifragile, that is. “Not being a turkey” starts with figuring out the difference between true and manufactured stability.”

Being a turkey in reverse is about seeing beyond stability in life and markets, stability that is usually manufactured, but that has terror and disorder lurking right under the surface.  That’s where the opportunity might be.

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The Taxi Driver, the Taxi Rider

A fascinating analogy from Antifragility is the parable of the twin brothers; one an office worked, one a taxi driver.  This is how Fast Company describes it (much more powerful in Taleb’s telling):

To get a picture of how randomness plays a role in professional life, Taleb compares two brothers: one an office worker, the other a taxi driver. Volatility is present in the career of each: while the office worker has randomness “smoothed away” by the regularity of salary and employment, he is like a turkey in mid-November, fragile to risk presently out of view. On the other hand, the taxi driver–who Taleb describes as being of the class of artisan, much like a carpenter or plumber–experiences a natural randomness in his daily fluctuations of fares, but is less prone to large shocks. Indeed, Taleb writes, the self-employed artisan can be antifragile: a weeklong earnings decline tells the taxi driver to try a new part of town, while a mistake made in the cubicle farm will be kept on the permanent record. As well, the office worker has one main employer and thus rigidity, while the taxi driver has many–giving him more options, greater flexibility to adapt to his environment.

Stability and safety is an illusion, even more so in a world that is more competitive and has lost some mediating norms.  The more you prize it, the more dependent you become, the harder the fall when it is pulled away.
Fragile things break under stress.  antifragile things don’t.
The difference between the two is part-consciousness — successfully living through and realizing you bend, but not break, and bounce back stronger, gaining from the volatility and stress, instead of stagnating as you play it safe.
True stability comes in the antifragile state; being able to adjust to life as it changes.
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Hunger and Overreaction

Reading Nassim Taleb’s Antifragility.  More people need to write with his “bull in the china” shop speed:

How do you innovate? First, try to get in trouble. I mean serious, but not terminal, trouble. I hold – it is beyond speculation, rather a conviction – that innovation and sophistication spark from initial situations of necessity, in ways that go far beyond the satisfaction of such necessity (from the unintended side effects of, say, an initial invention or attempt at invention).  Naturally, there are classical thoughts on the subject, with a Latin saying that sophistication is born out of hunger (artificia docuit fames).  The idea pervades classical literature: In Ovid, difficulty is what wakes up the genius (ingenium mala saepe movent), which translates in Brooklyn English into “When life gives you a lemon …”

The excess energy released from overreaction to setbacks is what innovates!

This message from the ancients is vastly deeper than it seems. It contradicts modern methods and ideas of innovation and progress on many levels, as we tend to think that innovation comes from bureaucratic funding, through planning, or by putting people through a Harvard Business School class by one Highly Decorated Professor of Innovation and Entrepreneurship (who never innovated anything) or hiring a consultant (who never innovated anything).  This is a fallacy – note the disproportionate contribution of uneducated technicians and entrepreneurs to various technological leaps, from the Industrial Revolution to the emergence of Silicon Valley, and you will see what I mean.

Yet in spite of the visibility of the counterevidence, and the wisdom you can pick up free of charge from the ancients (or grandmothers), moderns try today to create inventions from situations of comfort, safety, and predictability instead of accepting the notion that “necessity really is the mother of invention.”

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The Stoic Entrepreneur School

This view on pursuing and achieving a vision comes from an essay by Oliver Burkeman in the WSJ recently:

He rediscovered a key insight of the Stoic philosophers of ancient Greece and Rome: that sometimes the best way to address an uncertain future is to focus not on the best-case scenario but on the worst.

Seneca the Stoic was a radical on this matter. If you feared losing your wealth, he once advised, “set aside a certain number of days, during which you shall be content with the scantiest and cheapest fare, with coarse and rough dress, saying to yourself the while: ‘Is this the condition that I feared?’ ”

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Research by Saras Sarasvathy, an associate professor of business administration at the University of Virginia, suggests that learning to accommodate feelings of uncertainty is not just the key to a more balanced life but often leads to prosperity as well. For one project, she interviewed 45 successful entrepreneurs, all of whom had taken at least one business public. Almost none embraced the idea of writing comprehensive business plans or conducting extensive market research.

They practiced instead what Prof. Sarasvathy calls “effectuation.” Rather than choosing a goal and then making a plan to achieve it, they took stock of the means and materials at their disposal, then imagined the possible ends. Effectuation also includes what she calls the “affordable loss principle.” Instead of focusing on the possibility of spectacular rewards from a venture, ask how great the loss would be if it failed. If the potential loss seems tolerable, take the next step.

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Life as a Chessboard

This is from Magnus Carlsen, the world’s #1 Chess Player:

“Self-confidence is very important. If you don’t think you can win, you will take cowardly decisions in the crucial moments, out of sheer respect for your opponent. You see the opportunity but also greater limitations than you should. I have always believed in what I do on the chessboard, even when I had no objective reason to. It is better to overestimate your prospects than underestimate them.”

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Bad News Bears

In an otherwise unexceptional article about Third Point’s winning trades in Greek debt is this *money* quote:

The real question, perhaps, is why so many other hedge funds missed it. “People in this industry spend more time trying to sound intelligent rather than making money,” says Greylock’s Mr Humes.

“Being bearish about things is the way they do that.”

Intelligence detached from action has a bias toward the negative. Think of the term critic — both in popular (films, art, theater) and intellectual (academia).

At the start of the year, it’s fruitful to think about this inclination both in listening to others and speaking to others.  It’s worth highlighting this quote from a few posts ago:

I’ve translated it into a rule that I try to get people to follow, and I’m still working on this. When someone gives you an idea, try to wait just 24 seconds before criticizing it. If you can do that, wait 24 minutes. Then if you become a Zen master of optimism, you could wait a day, and spend that time thinking about why something actually might work. In venture capital, you’re at the intersection of human capital and their big ideas, their dreams. My favorite quote is from Eleanor Roosevelt: “The future belongs to those who believe in the beauty of their dreams.”

Happy New Year!

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24 Seconds, 24 Minutes, 24 Hours

In today’s New York Times. this is Tony Tjan, of Cue Ball, and his wonderful framework on mentoring and giving criticism:

One [mentor] was Jay Chiat, one of the founders of the Chiat/Day ad agency. He had this incredible capacity for optimism, particularly optimism during mentorship. He had this amazing ability to think of every reason why an idea might work before criticizing it and thinking why it might not work. When you’re a mentor, you’ve got to realize that people are often sharing their dreams, and I think it’s human nature to be a critic. We’re skeptics. As you get older and more experienced, wisdom is great, but you also have to be careful not to automatically impose your mental framework and your lessons.

I’ve translated it into a rule that I try to get people to follow, and I’m still working on this. When someone gives you an idea, try to wait just 24 seconds before criticizing it. If you can do that, wait 24 minutes. Then if you become a Zen master of optimism, you could wait a day, and spend that time thinking about why something actually might work. In venture capital, you’re at the intersection of human capital and their big ideas, their dreams. My favorite quote is from Eleanor Roosevelt: “The future belongs to those who believe in the beauty of their dreams.”

This ties in nicely with Bill Gurley’s thesis that the one career-making investment might break the rules and pattern-recognition honed through years of long experience.  If so, it is worth spending some time thinking about why an idea might work before dismissing it.