Tuesday, January 06, 2015

Trust In Process, Not People

Even if we've moved on from the "Great Man Theory" of history, the very human desire for simple stories with clear protagonists continues to affect us today.

I was reminded of this fact by a Fast Company story on how Jeff Bezos and Amazon designed and launched the (at this point) unsuccessful Amazon Fire Phone.  Austin Carr (presumably not the former professional basketball player) wrote a fascinating, carefully-reported piece on how Bezos drove the project, and the (apparent) mistakes he made along the way, such as demanding a premium phone with innovative technology like Dynamic Perspective, as opposed to building a "value" product.

(I'm hedging all of my descriptions because, regardless of the thesis of this essay, I'm still terrified that Bezos will somehow make the Fire Phone a monster success and make me look as ridiculous as the analysts who predicted the iPhone would flop.  That's how much I respect his abilities.)

There's a particularly telling passage that describes how the Fire Phone team was skeptical about Bezos' chosen product direction, but felt they had to give him the benefit of the doubt:

"When it came to the Fire Phone, says one former product lead, "Yes, there was heated debate about whether it was heading in the right direction. But at a certain point, you just think, ‘Well, this guy has been right so many times before.’"
Therein lies the mistake that most of us (including me) are guilty of committing.  We focus on the people, rather than the process that they follow.  Focusing on people just feels good and right--there's a reason we make movies about heroes, and not macroeconomic forces.

When someone has made as many good decisions as Jeff Bezos, we assume that he is a good decision-maker, as opposed to thinking that he follows a good decision-making process.  Yet even geniuses can make mistakes, especially when swelling overconfidence causes them to believe in their own omniscience.

Smart people are especially prone to this mistake--just ask any Hacker News reader who believes he knows the answers to the world's problems, or any technology tycoon who believes he knows more about journalism than its practitioners.  Even the late, great Steve Jobs, perhaps the greatest business savant Silicon Valley has ever known, probably cost himself years if not decades of healthy life by opting to treat his cancer with an all-fruit diet rather than surgery.

Evaluate ideas based on evidence, not provenance.  Just as "because science" isn't a valid explanation, neither is "because Bezos," "because Jobs," or any other such invocation of sainted authority.

Monday, December 22, 2014

The Dangerous Conflation of Money and Self-Worth

One of the big dangers that entrepreneurs (and everyone else) face in Silicon Valley is the temptation to conflate money and self-worth.  I was reminded of this by an entrepreneur that I'm coaching, who has been dealing with the whipsaw effect of fluctuating net worth and income.

Making money and/or getting a big payday through a liquidity event feels great.  And I'm not arguing that you shouldn't celebrate such good fortune.  I love to see hard work rewarded.  But you need to remind yourself that the money doesn't change who you are, even if it changes how other people treat you.

Tying your self-worth to your net worth feels great when your net worth is skyrocketing.  But it sets a dangerous precedent because net worth (and any associated adulation) are extrinsic motivators, rather than intrinsic, and people who focus on the extrinsic have been shown to be much less happy than those who concentrate on the intrinsic.  It also moves you towards a fixed mindset ("this result proves my worth") rather than the healthier growth mindset ("I'm glad that my hard work resulted in this financial success").

This is not to say that money is irrelevant; it is a tool, a useful metric, and something that eliminates a certain class of worries.  But it does not change who you are.  Even people who feel that money has “changed them” are simply dodging responsibility; they changed themselves in reaction to the money.

At a time when 50% of conversations in Silicon Valley are about "unicorns" and the other 50% are about the extreme cost of real estate, it's a good idea to keep reminding yourself that your self-worth has nothing to do with your net worth.

UPDATE: Now that I've gotten her permission, I can reveal that the entrepreneur who prompted this quote is Felicia Spahr, who is a wildly successful communications trainer who can help you be more charismatic and develop better social skills.

Wednesday, December 17, 2014

Spreading the ideas of "The Alliance" with Allied Talent

Dear readers,

I'd like to ask for your help.

This year, I realized a lifelong dream when Harvard Business Review Press published The Alliance: Managing Talent in a Networked Age, the book I co-authored with my friends Reid Hoffman and Ben Casnocha.  The book became a New York Times bestseller (on the advice list, but hey, it's still the Times!) and had a warm reception from critics, and most importantly, actual managers.  If you haven't had a chance to read it yet, you can download an excerpt for free (or buy a copy) at the book website:

The gist of The Alliance is that employers and managers need to rebuild the relationship they have with their employees.  Rather than free agents, employees should be treated as allies, in a relationship of mutual trust, mutual investment, and mutual benefit.

To help leaders and managers adopt the ideas in The Alliance, I've co-founded a new consulting firm, Allied Talent ( http://www.alliedtalent.com ).  So far, we have developed two workshops to help build more adaptable, innovative organizations.

One workshop teaches managers how to strengthen their relationships with star employees.  We teach them how to have better career conversations and to organize each employee's work around a personalized mission objective with a specific expected timeframe.  Achieving the objective transforms both the company's business and the employee’s career, and provides a springboard for defining a follow-up mission.

The other workshop teaches managers how to coach their team to develop professional networks and leverage them both for career development and for solving business challenges.

In short, we’re developing managers for the 21st century, which my friend Reid has dubbed the Networked Age.

We're already working with a number of organizations, including several fast-growing startups, as well as non-profit organizations like the Wikimedia Foundation, to help them attract, manage, and retain the top talent they need to achieve their missions.

Now I need your help to change the way managers and employees think about work by spreading the ideas of The Alliance.

Of course we're looking for clients, but we are also looking for venues to build thought leadership: writing, speaking, interviews, webinars, etc.  I, my co-author Ben, and Allied Talent's CEO Chip Joyce are all available for these opportunities.

The ask:
  • Would your organization -- or an organization you work with -- be interested in learning more about The Alliance and our training programs?

I'd love any and all introductions, suggestions, and well-wishes you're willing to provide!  Here are a couple of resources you can share with folks who might be interested:

Wednesday, November 12, 2014

Risk and Race: A Modest Proposal To Encourage Investing In Minority Entrepreneurs

Fast Company put out a fantastic package of stories covering the role of race in Silicon Valley.  The centerpiece is a deservedly glowing profile of Tristan Walker, but my favorite was an interview with a group of African American startup folks titled "An Honest Discussion of Race in Silicon Valley."

One thing that I failed to appreciate before, and that this story made clear, is the interaction of risk and race:
In many African-American households—since we don't descend from centuries of wealth in this country—parents want their kids to be a lawyer or a doctor, or go to Wall Street to make a lot of money so they can come back and take care of the family. Is the African-American community too cautious for tech and its "fail fast" mantra?

Erwin: Black folks like me have to take care of family members at home, so jumping into a startup is very risky when you can make it either on Wall Street or do something more stable in finance. If my company fails, the people who are counting on me also fail.

T. Gauda: You have to have a very high risk tolerance, and we are traditionally risk averse. As it is, just being who we are is extremely risky.
The two key points are that a) simply being African American increases the level of risk in your life.  Logically, the principle of risk compensation would call for African Americans to take on less personal risk.  Layer in the socioeconomic effects of historical discrimination, and the magnitude of the effect would grow further.  B) Coming from a less-advantaged background, a potential African American entrepreneur might feel compelled to "play it safe," so that he or she would be in a better position to help the rest of the community.  The cost of failure is far higher for such an entrepreneur than for a wealthy Caucasian male.

Given these headwinds, it is all the more important that we encourage the minority entrepreneurs who take on these increased risks.

Another key passage tackles the issue of networks:
"I hear about bootstrapped rounds and angel rounds and friends-and-family rounds, and I just think to myself, Man! There are people who just know and are related to folks who can write $50,000 checks all around them! It's in their ecosystem."
As an investor, I take the stance that an entrepreneur ought to be able to be able to bring a product to market before raising money from professional investors, either by bootstrapping, or by raising a friends and family round.

But I'm guilty of unconscious bias in that filter--how can an entrepreneur bootstrap a company or raise money from friends and family if she comes from poverty and doesn't have any friends and family who can write a $50,000 check?

That being said, investing in pre-product startups tends to be a bad bet; I'd be hard-pressed to make money with that investment strategy.

Encouraging Investing In Minority Entrepreneurs: "Greed Is Good."

I believe the answer is to set up some kind of matching fund to encourage investing in underserved minority entrepreneurs; if my check were doubled or tripled by a foundation (and I got the equivalent equity to compensate for the increased risk), the financial incentives would encourage, rather than discourage investing in those entrepreneurs.  Investors would see investing in minority entrepreneurs as *less* risky, and minority entrepreneurs would see starting companies as *less* risky.

When it comes to getting people to change, I always bet on appealing to their sense of self-interest, not their sense of responsibility.  And the idea of using risk manipulation to solve a problem that's created by risk has a certain ironic appeal!

Now we just need someone to reach out to the appropriate funders to create this program....

Monday, November 10, 2014

What Entrepreneurs and Leaders Can Learn From Happy Marriages

As a happily married man, I can confirm what the latest research indicates: The secret to a happy marriage is kindness and generosity.

When I was a kid, I was mystified by altruism; I couldn't understand why my parents would always let me have the best share.  At the time, I just figured that they were suckers, and that I ought to take advantage of the situation (sorry, Mom and Dad!).  As far as I was concerned, they were "support staff," there to cater to my needs.

Needless to say, I was kind of a self-centered kid!

Today, while I'm still a self-centered something or other, I always try to be kind and generous to my wife and kids.  The key is consistency:
Couples who had divorced after a six-year follow up had “turn-toward bids” 33 percent of the time. Only three in ten of their bids for emotional connection were met with intimacy. The couples who were still together after six years had “turn-toward bids” 87 percent of the time. Nine times out of ten, they were meeting their partner’s emotional needs.

By observing these types of interactions, Gottman can predict with up to 94 percent certainty whether couples—straight or gay, rich or poor, childless or not—will be broken up, together and unhappy, or together and happy several years later. Much of it comes down to the spirit couples bring to the relationship. Do they bring kindness and generosity; or contempt, criticism, and hostility?

“There’s a habit of mind that the masters have,” Gottman explained in an interview, “which is this: they are scanning social environment for things they can appreciate and say thank you for. They are building this culture of respect and appreciation very purposefully. Disasters are scanning the social environment for partners’ mistakes.”
Any factor that has 94% predictive power is one hell of a lever.  So why limit it to marriages?

Barbara Fredrickson's work on the positivity ratio shows that the same effect can be found in the workplace.  Unless positive interactions outnumber negative ones by at least 3:1, the culture withers and dies.

Here in Silicon Valley, we focus an awful lot on hiring smart people and adopting fancy management practices like agile development.  I don't hear that much about being nice to each other.  Sometimes, it's almost as if being nice is considered a negative, because it prevents "honesty."

If you want your company to last like a successful marriage, ask yourself if your people bring kindness and generosity or contempt, criticism, and hostility.  If the answer is the latter, it's time to make a change.

Monday, October 20, 2014

Ditch The Swagger

Once upon a time, swagger was considered a negative.  Think of the phrase, "swaggering bully." Now, however, swagger has become a quality that many view as a major positive, and try to adopt for themselves.

Swagger-philia has proliferated across numerous industries and fields.  No longer just the province of entertainers and professional athletes, now even software developers call themselves "rock stars" and swagger about, accompanied by "hustlers" who brag loudly about being "ballers."

Is this a good thing? A bad thing? My gut says bad, but it's worth a closer examination.

First, we have to define swagger.  Is it simply confidence? I think swagger requires confidence, but it's certainly possible to be "quietly confident" without swaggering about.  If you're not sure what I'm talking about, consider two of Denzel Washington's iconic roles.  In "Training Day," Washington's character *is* a swaggering bully (albeit a mesmerizing, charismatic one).  In "The Equalizer," Washington plays a stone-cold badass who humbly works at a home improvement store.

Confidence isn't swagger.

Okay, so perhaps we should take a look at swagger from a different angle.  What  does it feel like to have swagger? I think the key here is that swagger is like an addictive drug.  When you swagger about, you feel cool, badass, superior, invincible, bulletproof...you name it.  It feels great.  But why? I would argue that it's because swagger is both completely self-centered and detached from reality.  Swagger gives you permission to focus on self-aggrandizement, and to ignore reality.  Joe Namath guaranteed a victory in Superbowl III; the reason we  revere his boast is that his team actually delivered.  99% of such guarantees go unredeemed.

So if swagger makes you feel good, focus on yourself, and ignore reality, it's essentially the cocaine of attitude.  A lot of fun until you crash.

And make no mistake, swagger usually leads to a crash.  Even Michael Jordan crashed when he returned to the NBA with the Washington Wizards.  Manic activity and ignoring the evidence might feel good in the short run, but it generally leads to feeling bad in the long run.

The amazing thing is that those with true swagger can crash time after time and never concede one iota to reality.  The NBA's Nick Young had the swagger to nickname himself "Swaggy P," and amazingly, even made it stick.  Despite being, objectively, a below average player (in his best season, he didn't even hit 45% of his shots), his propensity to take and make (a low percentage of) circus shots continues to win him fans.  This despite many of those same shot attempts ending up on YouTube, like his failed attempt at a 360 degree layup which sailed directly into the stands.  Of course, Nick is also a multi-millionaire who is in a romantic relationship with multi-millionaire, sex symbol, and #1 recording artist Iggy Azalea, so perhaps he is the one having the last laugh.

But for every Swaggy P, there are a million playground loudmouths, writing verbal checks their game can't cash.  And that's the problem.

Swagger is so outlandish and mesmerizing (remember Denzel in "Training Day") and feels so good (just ask any former SNL star/cocaine addict) that many people flock to its practitioners and imitate them.  But the lucky few swaggerers who can actually back it up are like the lucky few athletes or entertainers who hit it big.  Yes, the outliers have an amazing outcome, but the median outcome looks an awful lot like failure.

Swagger doesn't age well; even the swaggering playboy eventually runs out of young women witn daddy issues and low self-esteem.  Would you rather be Hugh Hefner or Nelson Mandela? (If you answered Hef, you should be ashamed of youself.)

Building quiet confidence based on the evidence and your experience with reality doesn't feel like doing blow, and doesn't sound good on a reality TV soundbite, but for the vast majority of people, it's a better path to a happy, productive life than the swaggerer's way.

Tuesday, October 14, 2014

Drivetime Consulting: Amr Shady

I just completed my first Drivetime Consulting engagement yesterday.  Amr Shady reached out to me via email yesterday afternoon, and we set up a call for my drive home last night.

The call was exactly what I was hoping for; Amr is a successful entrepreneur and all-around interesting guy, and he wanted my feedback on a new product that he's building, for which I would be a natural customer.  I was able to give him some very concrete feedback, and we also discussed some of his other activities, such as his involvement with Endeavor.

Hopefully, I'll be able to get more involved with Endeavor in the future, and we've made plans to meet up when he comes to San Francisco!

Saturday, October 11, 2014

Why Reading Literature is Valuable

I was listening to the New York Times Book Review podcast (one of the little ways I stay connected to the literary world) when I heard a debate about the value of literature.  As is often the case with literary folk, the debaters were conflicted and ambiguous, pointing out the contradiction between arguing for literature's inherent value, and the frequent argument that reading literature prepares one for the world.

I've never been particularly good at angst--one of the main reasons I always struggled to write literary fiction (and to get dates with my fellow writers at Stanford, most of whom seemed to prefer darker, more brooding suitors).  To me, it's actually fairly easy to come up with a taxonomy of why reading literature is valuable:

1) Entertainment.  People pay money to be entertained; people find literature entertaining.  Ergo, literature provides entertainment value.  Beyond the simple power of page-turning, literature can also make you feel emotions that you wouldn't normally encounter in your everyday life.

2) Cultural fluency.  Reading the canon grants access to a broadly shared set of ideas and experiences.  In other words, reading literature provides cultural fluency.  Eric Cartman of South Park can say, "Captain Ahab has to get his whale," and we understand why.

3) Reading ability.  Literature tends to be a far denser read than, say, TechCrunch posts.  It acts as a training program that enhances both your reading speed and your ability to glean meaning from text.

4) Ideas.  Literature grants you access to other lives and minds.  Not only does it expose you to new ideas, those ideas can serve as models for your own decision-making.  I often use principles I learned from literature and history to make better decisions.

5) Authority.  When you seek to persuade others, citing classical sources seems to have a far greater impact than, say, children's cartoons.  Rightly or wrongly, the judgment of history grants literature authority that you can leverage for your own purposes.  (Though I'll note that I'm always a sucker for any argument that is based on DuckTales)

6) Branding.  Even today, reading literature is considered a key part of being learned.  If you don't know Shakespeare, Twain, and Austen, you won't be taken seriously as an intellectual.

Of course, I would argue that entertainment is the fundamental value.  If you don't find literature entertaining, you'll end up like the millions of American high school students who can't remember much about The Great Gatsby...and were born too early to simply watch the Leonardo DiCaprio movie.

Wednesday, October 08, 2014

The Writing Feedback Loop

Like many things in life, the feedback loop on writing is long and uncertain. When I write a post, I don't know if it will quietly sink beneath the waves, get a reaction or two, or spark a week-long furor. Sometimes, the shortest and least effort-filled posts draw the best.

As a result, only people who love to write stick with it; the extrinsic rewards are too uncertain. You have to rely on intrinsic motivation.

(originally appeared as a comment on Hunter Walk's blog)

Monday, October 06, 2014

Drivetime Consulting

For years, I've been saying that I ought to set up a drivetime consultancy.  I'm in the car for 20-30 minute chunks each day, and I'd rather be talking with people than listening to the radio.

What's held me back is the work involved.  I figured I would need to build a fancy scheduling system, and I just never seemed to have enough time.

To heck with that.  If I can tell entrepreneurs to get gritty and make things happen, I should be willing to do the same.

Therefore, I'm announcing the Chris Yeh Drivetime Consultancy.  Anyone who wants to buy a 20-minute chunk of my time for drivetime consulting (either 8:30 AM or 5:30 PM Pacific, Monday through Friday) can simply send me $100 via PayPal.  I signed up for PayPal so long ago that my PayPal address is actually my old business school email: cyeh@mba2000.hbs.edu

Once you send me the money, follow up with me via email (that same business school email still works, amazingly enough) to schedule your call in the next week or two.

If this MVP works, maybe I'll go ahead and build that fancy scheduling system.  And while $100 for 20-30 minutes may sound steep, it's a pretty hefty discount over my Clarity.fm rate of $10/minute (I'm willing to discount for people who save me from the vagaries of drivetime radio).