Tiger Woods: Mental Toughness

“The will to win means nothing without the will to prepare.” - Juma Ikangas, winner 1989 NYC Marathon

Two of my favorite authors are Malcolm Gladwell and ESPN’s Bill Simmons; Gladwell for his ability to make ordinary things fascinating and Simmons for his hilarious take on the psyche of a sports fan. Coincidentally they had an email exchange that was posted here.

Cue Gladwell:

“This is actually a question I’m obsessed with: Why don’t people work hard when it’s in their best interest to do so?

“The (short) answer is that it’s really risky to work hard, because then if you fail you can no longer say that you failed because you didn’t work hard. It’s a form of self-protection… If you get drunk the night before an exam instead of studying and you fail, then the problem is that you got drunk. If you do study and you fail, the problem is that you’re stupid — and stupid, for a student, is a death sentence. The point is that it is far more psychologically dangerous and difficult to prepare for a task than not to prepare. People think that Tiger is tougher than Mickelson because he works harder. Wrong: Tiger is tougher than Mickelson and because of that he works harder.” (Emphasis added)

Like many other American information workers, I was mesmerized by today’s US Open. Tiger showed us what is so great about sports, and Rocco Mediate is due his respect for pushing Tiger to show his brilliance in order to win. If you didn’t catch it, Nike aired an ad that featured Earl Woods (Tiger’s late father) talking about Tiger’s incredible focus:

We can’t all be Tiger, but we can work like Tiger.

It’s about execution

and a bit of luck.

I’m tired of the accusations against Mark Zuckerberg. He didn’t “steal” anything. Like most great ideas, its time had come. It was in the air.

This isn’t just a Facebook thing, most great inventions emerge with a little bit of controversy. They can’t even say for sure if Alexander Graham Bell really invented the telephone. He may have been beaten by a few hours.

So get over it. From the Rolling Stone article, here’s the salient line:

Wherever the idea for Facebook came from, it was Zuckerberg’s version that went viral throughout college campuses that spring.

That’s it. Atta boy Mark.

Warren Buffett bets hedge funds can’t beat the market

Fascinating news from money.cnn.com: Warren Buffett reaffirms his distaste for sophisticated investment vehicles, this time putting up some serious cash to back it up. Well, serious for me. Probably not for him.

The Sage has bet Protege Partners, a fund of hedge funds, $1 million (sort of - more on that in a minute) that, net of all fees, the Vanguard S&P 500 index fund will beat the average of 5 funds of hedge funds chosen by Protege over the next 10 years. Although it’s not disclosed, you can assume that Protege itself is one of those 5. The bet took effect on Jan. 1 of this year. Each party put up $320,000 to purchase a Treasury bond that will be worth $1 million at the end of the bet, at which time the money goes to the winner’s charity. This is apparently a standing offer that Buffett made in May 2006.

Seems to me that Buffett is just toying with these guys. “Sure, I’ll take your bet. Knock yourself out, kid.” As for Protege, they already got their money’s worth. Not everyone gets to make a bet with Warren Buffett, let alone a big one. However, if Buffett wins (60% likely according to Buffett, 15% likely according to Protege) I’m sure it won’t be reported. It’s no longer news when Buffett makes the right bet. Now if Protege wins, then they’ll make a big deal out of it. But this bet is all about the PR value right now, not financial performance 10 years from now. In that respect, Protege’s money was well spent.

As intriguing as hedge funds are, I’m an index fund guy - I subscribe to Mark Cuban’s theory that the best investment is made with an information advantage, which you and I don’t have in public companies. However, it’s simply not practical to invest your meager savings in startups where you can have an information advantage. That leaves index funds as the most reasonable investment. Fees, transaction costs, and management expenses drain most mutual funds and hedge funds of the really good returns. I’m with Warren on this one.

My worst nightmare

I love cycling. That’s why I probably take notice more often than your Average Joe of car-related cycling deaths, which happen all to frequently.

So when I saw this image on CNN, I literally gasped:

Be careful out there people. And please - PLEASE - watch out for cyclists.

New York Venture Fund: NYC Seed

The NY Times is reporting that Mayor Bloomberg has launched a new seed stage fund for pre-revenue and pre-product technology startups in NYC. Called NYC Seed, the fund has a few interesting details:

• First-time founders are encouraged
• NYC Seed will make investments of up to $200,000
• NYC Seed will provide guidance from VCs, entrepreneurs, and technologists - presumably from the NYC area
• Companies must be located in NYC

So, will this work? If by ‘work’ you mean recreate Silicon Valley, then probably not. Silicon Valley has a mindset that is extremely accepting, both financially and socially, of the failure inherent in developing new technology companies. However, if the measure of NYC Seed’s success is adding fuel to the burgeoning startup community forming in New York as in other cities, then yes I think this is a good start. They are incorporating several key ingredients of an evolving technology venture model: young founders, small investment amounts, and an involved mentor community.

Best of luck to these new companies and their founders.

How much is culture worth? $1000 per FTE for Zappos.

Zappos gets lots of love. Their customer service is legendary, which is incredible given that they expect revenues to approach $1 billion in 2008. That’s a lot of feet to make happy.

As startups obsess about their culture, there is an inevitable ‘corporatization’ that takes place when it’s no longer possible to know every one of your coworkers. How has Zappos maintained a culture of customer service among all 1600 employees? The answer lies in “The Offer“:

“It’s a hard job, answering phones and talking to customers for hours at a time. So when Zappos hires new employees, it provides a four-week training period that immerses them in the company’s strategy, culture, and obsession with customers. People get paid their full salary during this period. After a week or so in this immersive experience, though, it’s time for what Zappos calls “The Offer.” The fast-growing company, which works hard to recruit people to join, says to its newest employees: “If you quit today, we will pay you for the amount of time you’ve worked, plus we will offer you a $1,000 bonus.” - Bill Taylor

Isn’t that incredible? It is worth a grand to Zappos to find out now, rather than later, if their new employees buy in to the culture or not. Think of the ROI on that investment - Zappos has defied the odds and built an invaluable brand by creating a culture of fanatical service, and ingrained that culture with tangible policies and practices. Hats off to them.

What’s scary is that this is your competition and mine. Doesn’t matter if you sell shoes or houses or laser beams. This is the bar we are all measured against.

Peer Venture Partners: citizen venture capital

Peer Venture Partners is an important evolution in the life cycle of new companies. Because of changing conditions in the markets of innovation - capital requirements, sources of innovation, talent, etc. - Peer is turning traditional venture capital on its head, similar to how blogging turned journalism upside down.

Jared Hutchings and Mark Campbell previously were the managing directors of the University Venture Fund, a successful fund that coinvests with VC firms and is run entirely by students. Jared and Mark have expanded the UVF model, with a few improvements, to some of the most entrepreneurially prolific campuses in the US: Stanford, Berkeley, MIT, Harvard, and Wharton. By employing student associates on these campuses, Peer does several important things:

• Builds a network of talented prospective entrepreneurs
• Crowdsources investment decisions across a diverse group of talented people (who are largely unencumbered by the status quo)
• Seeds fertile innovation breeding grounds with informants who can be the first eyes on emerging technology

I think this will work. There are other ways of attacking the funding gap faced by many new companies - Y Combinator is a notable example - but I believe in the Peer model for a few reasons:

• It’s critical to identify breakthrough technologies early. Peer will have a huge advantage by physically being in the labs, coffee shops, and study rooms where innovation is happening. Favorable deal terms, trend spotting, network development, etc.
• In a similar vein, it’s advantageous to identify breakthrough entrepreneurial talent early. There was a recent meme tipped off by Fred Wilson about the role of youth in revolutionary ventures.
• Why couldn’t part-time VC associates, in addition to their day job as students, be successful deal spotters? Professional VC’s get it wrong all the time. If a former lawyer can use an “amateur” medium to create one of the most popular technology publications, why couldn’t a VC fund leverage a distributed network of passionate amateurs to identify investments? It’s not a new idea, just new to venture capital. (See Wikipedia, Linux, Apache, etc.)

Why you must fail to succeed

There is well-supported rule of thumb that says more data beats a better algorithm. Google is a good example, taken from the linked article:

Another fine illustration of this principle comes from Google. Most people think Google’s success is due to their brilliant algorithms, especially PageRank. In reality, the two big innovations that Larry and Sergey introduced, that really took search to the next level in 1998, were:
1. The recognition that hyperlinks were an important measure of popularity - a link to a webpage counts as a vote for it.
2. The use of anchortext (the text of hyperlinks) in the web index, giving it a weight close to the page title.
First generation search engines had used only the text of the web pages themselves. The addition of these two additional data sets - hyperlinks and anchortext - took Google’s search to the next level.

Failure is a data point. For example, Edison famously said about the light bulb, “I have not failed 1,000 times. I have successfully discovered 1,000 ways to not make a light bulb.” A business failure is a special kind of data point, because complex data mining teaches that independent, 3rd party data that is not affiliated with the original data source almost always adds more value. In Google’s case, hyperlinks and anchortext were independent data, revealing what other people think about any given web page. Independent data always accompanies a business failure: customers wouldn’t buy, investors wouldn’t invest, industry gurus gave an unfavorable review.

Entrepreneurs have a choice: accumulate data (find out what doesn’t work), or write better algorithms (business plans, strategy, etc.). As in complex data mining, the experts in innovation believe that more data beats a better algorithm. Why does Sand Hill Road continue to fund entrepreneurs who have failed before? Because seasoned entrepreneurs hold more data.

As IBM founder Thomas Watson put it, “If you want to increase your success rate, double your failure rate”.

Work vs Play

I’m convinced that the reason many people are not succeeding at their current ambition is that they are playing instead of working. (1) There could be several paths to playing work rather than working on work, but the result is the same: well-intentioned people, most of whom are reasonably talented, who languish in vocations they ought to be succeeding in.

How can you tell if you’re working on work or just playing work? You probably already know. If it makes you just a little uncomfortable to read this, but a train wreck-esque fascination keeps your eyes moving across the screen, it’s a good sign you’re among the guilty. However, the fact that you’re reading – rather than avoiding – these words probably means you can get back to working without too much trouble. So, how?

Start by recognizing the symptoms. People who play work know what they would rather be doing, it’s just painful to get started. An obvious symptom of playing work is expecting it to be fun all the time. After all, it’s called work. That said, real work is fun – sometimes. Oft repeated quotes about “loving what you do” lead us to believe that there’s something wrong if we don’t laugh ourselves hoarse at the office (2). But that’s not the kind of fun intended. Fun happens, like when a milestone is reached or your hard work is recognized. Along the way, however, there are some necessary evils. Avoiding the distasteful parts makes it difficult, if not impossible, to experience the great parts.

Another neat trick to avoid real work is to wait for the silver bullet. This one’s especially tempting because you convince yourself that you’re actually making the right decision given the conditions. Not only does the part of your brain that seeks comfort get served, but your ego does as well. Better to listen to General Patton and get to work on a “good plan violently executed today.”

There are other sure signs of play. If you’re never criticized, corrected, opposed, held responsible, or possibly even ridiculed, you’re probably not doing real work, at least not the variety that has far reaching impact.

If you’re always doing what you want at the time, it’s probably not work.

If you’re not following some preconceived strategy, it’s probably not work.

If you aren’t seeking feedback, it’s probably not work.

Back to Work

Your particular brand of play may vary, but there’s a sure way to get back to work: don’t wait for a perfect plan. (3) Since the last time you worked, you’ve risked no failure on the sidelines. You’ve stayed safe. The siren song of the perfect plan falsely ensures success, while the ‘best you have’ route is, by definition, prone to failure. The fallacy, of course, is that the perfect plan is a myth, and its followers will wake up one day having sealed their failure. (4) On the other hand, “…the dreamers of the day are dangerous men, for they may act their dream with open eyes, to make it possible.” (5) Be dangerous.

That’s it really. No 12 steps, no Harvard-born frameworks, just an invitation to begin.

Begin now.

Begin to be dangerous.

***

(1) Just to be clear, this doesn’t describe all unsuccessful people, only some, but there are a lot of them.
(2) For example, “Find your own play, your own self-renewing compulsion, and you will become the person you are meant to be.” - George Sheehan
(3) “In any moment of decision the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.” - Teddy Roosevelt
(4) “Action always generates inspiration. Inspiration seldom generates action.” - Frank Tibolt
(5) From T.E. Lawrence. The full quote is, “All men dream; but not equally. Those who dream by night in the dusty recesses of their minds awake to find that it was vanity; But the dreamers of day are dangerous men, for they may act their dream with open eyes to make it possible.”

Become What You Love

You’ve heard it before: “do what you love”. Steve Jobs told Stanford graduates that “the only way to do great work is to love what you do.” I’ve always been passionate about finding what I loved, having first heard the mantra from my grandpa. On that journey I’ve quit jobs, ended relationships, and sold enough of my belongings that what remained fit in the back of my car.

Important as it may be, I’ve found that finding what you love is more problematic than it sounds. As with dating, there are lots of signals that can be interpreted as love and not all of them are real. For example, I love triathlons; am I supposed to love work like I love triathlons? Expecting to feel runners’ high 40 hours a week seems excessive. There has to be some reasonable timeframe implied when asking, “What do I love to do?” And then there are the temptations of prestige, exhilarating risk, and wealth. Many careers are a path to all three, but are these things the root of passion for your work? Hardly. Even benefiting society can be an imperfect indicator of fulfillment. Sewage engineers, for example, help millions of people, but I don’t see them giving commencement addresses at Stanford.

As is often the case, it’s insightful to turn this problem on its head. Rather than ask, “What do I love to do?” ask, “What is it like when I don’t love what I do?” For most people this is easy. For me, I feel under-engaged, uncreative, and unfulfilled. Basically, I don’t like who I am when I’m not doing something I love, and there’s the key: “who I am”. It turns out that it’s not that finding what you love is hard, it’s that “What do I love to do?” is the wrong question. “Who do I want to become?” and it’s corresponding axiom, “Become what you love” are much more useful.

Seeking to become rather than to do leads to an entirely different set of goals, habits, and values. In our cocktail party culture, the question “So, what do you do?” is really a proxy for “Who are you?” since we so closely associate personal attributes with professional pursuits. Truly happy people have narrowed the gap between who they are and what they do, and they view these two questions interchangeably. They must, in order to set free their full creative capacity.

The question “Who do I want to become?” is remarkably simple to answer for most people: a creator, a healer, a leader. Many titles would fit under any given answer to the Become question, but the values that you surround yourself with in pursuit of becoming, say, a healer are identical for most people: compassion, understanding, service. Setting free the qualities that you feel lurking within yourself is what brings fulfillment – not titles or job descriptions. Once brought to the surface, your most desired attributes work in overdrive since they are so closely aligned with the person you want to become. It’s a creative and productive force that can be felt behind some of the world’s most accomplished, magnetic, and happy people. You can bet that these people have repeatedly made bold decisions to follow their own voice rather than accepted definitions of success.

And that’s the trick. Become what you love.