4 min read
Interviewer: Well, that concludes this part of the interview process. Before we proceed, do you have any questions for us?
Candidate: Sure do.
Here’s a question to help me understand the culture of the company. A manager walks over to her associate, who’s brewing a coffee at 6:45am. She forgot the VP arranged a meeting with a major client, so she needs a revised report on her desk by 10am. The report would just need the most up to date financial data, but she also stipulates that there has to be a page with 3 green triangles, 2 blue rectangles, and 1 red circle.
The associate understands the importance of the request, so he gets started right away. But he misremembers the details of the report, and convinces himself that his boss asked for 3 blue triangles, 2 green rectangles, and 1 red circle.
At 7:30am, the associate walks over to his analyst, who had been at the office until midnight the previous night, and tells her that the report is now her responsibility. He also says it has to be finished by no later than 9:30am. He makes sure to stress the importance of there being a page with 3 blue triangles, 2 green rectangles, and 1 red circle. The analyst gets started right away too, and without taking any breaks, manages to finish the report by 9:55am. The associate briefly scans the report, checks that the page meets the specification, and has 2 copies printed out for his manager’s meeting.
When the manager sits down, she takes a look at the report and doesn’t notice the mistake. But as they’re walking through the specifics of the deal, the client does, and is not impressed. They lose the sale, and their reputation is damaged.
Whose fault is it?
Interviewer: Well. It’s the fault of the manager for forgetting the meeting in the first place. It’s also the fault of the associate for misremembering the details. But the analyst is also to blame for not being able to get the report finished on time so that it could be proofread properly. The VP of Operations may also be to blame for the lack of organisation and structure that allowed for this problematic situation to arise, but that would depend on if this was something that happened regularly.
Candidate: Sure. Now assume that each person doesn’t have full information of the situation, and they are real people with real egos and reputations on the line. The last thing the manager remembers before seeing the final report is that she made it the responsibility of the associate at 6:45am. The last thing that the associate remembers before seeing the final report is giving the analyst instructions at 7:30am. The analyst knows she made the report to the exact specifications that the associate asked for.
Who does the manager blame? Who does the associate blame? Who does the analyst blame? Who does the VP blame?
Interviewer: The manager would mainly blame the associate for the error, though she would also put some of the blame on the analyst. The associate would blame the analyst, and would likely forget that they were the one who asked for the wrong colours in the first place. The analyst would blame the associate for messing up the instructions and for making it the analyst’s problem in the first place. The VP blames the manager.
Candidate: Where does the blame really lie?
Interviewer (bad answer): The associate should be blamed for misremembering the colours, and the analyst should be blamed for getting the report finished late.
Interviewer (good answer): The employees share the blame because they are a unit that works as a team. The important thing is that they identify the systemic problems that allowed for this mistake to occur, so that they can avoid it in the future. In this case, it may mean clearer communication and better organisation from the manager and VP.
1 min read
"A world in which success means Rhodes/Teach for America/Goldman/McKinsey followed by Yale Law School/Harvard Business School followed by Blackstone/Bridgewater/Facebook is one in which too many talented, well-intentioned people follow the same path and end up doing the same few things. (Since I graduated from college a quarter-century ago, the only real additions to the hierarchy have been TFA and the technology behemoths.) In their famous paper, Kevin Murphy, Andrei Shleifer, and Robert Vishny found that countries with more engineering majors tend to grow faster and those with more law students tend to grow slower. A society in which smart, hard-working young people with generic ambitions tend to become hedge fund and private equity fund managers, management consultants, corporate lawyers, and strategists for technology monopolies is probably not one that is allocating talent effectively."
1 min read
I'd need a much better camera to capture how vivid and cool this looks:
1 min read
“Eternity isn't some later time. Eternity isn't even a long time. Eternity has nothing to do with time. Eternity is that dimension of here and now that all thinking in temporal terms cuts off.... the experience of eternity right here and now, in all things, whether thought of as good or as evil, is the function of life.”
2 min read
The simplest way to illustrate this point is just to name successful companies, prestigious schools, famous cities, and other everyday words:
Really prestigious schools (no order)
The simple reason for this is that it's much easier for things to spread by word of mouth if it's easy for people to say the word being spread. It's especially easy if people are able to quickly visualise how the word should be spelt in their head, and even more so if there's a consonant dividing the first and second syllable.
On a personal note, I've found it's infinitely quicker to say I go to school at Hog-warts than Warw-ick (especially if I'm talking to an American). That weird English 'rw' sound is as baffling as wor-ces-ter-shire being pronounced wooster-shire.
5 min read
Only about a fifth of the way through Zero to One by Peter Thiel and Blake Masters, but here's a few excerpts I particularly like.
This first quotation neatly summarises my frustration with higher education, and the problems associated with competition and extrinsic goals:
"Competition is not just an economic concept or a simple inconvenience that individuals and companies must deal with in the marketplace. More than anything else, competition is an ideology--the ideology--that pervades our society and distorts our thinking. We preach competition, internalize its necessity, and enact its commandments; and as a result, we trap ourselves within it--even though the more we compete, the less we gain. This is a simple truth, but we've all been trained to ignore it. Our educational system both drive and reflects our obsession with competition. Grades themselves allow precise measurement of each student's competitiveness; pupils with the highest marks receive status and credentials. We teach every young person the same subjects in mostly the same ways, irrespective of individual talents and preferences. Students who don't learn best by sitting still at a desk are made to feel somehow inferior, while children who excel on conventional measures like tests and assignments end up defining their identities in terms of this weirdly contrived academic parallel reality. And it gets worse as students ascend to higher levels of the tournament. Elite students climb confidently until they reach a level of competition sufficiently intense to beat their dreams out of them. Higher education is the place where people who had big plans in high school get stuck in fierce rivalries with equally smart peers over conventional careers like management consulting and investment banking. For the privilege of being turned into conformists, students (or their families) pay hundreds of thousands of dollars in skyrocketing tuition that continues to outpace inflation. Why are we doing this to ourselves?"
Thiel then expands on his own personal experience, and how he wish he got out of this mindset earlier:
"I wish I had asked myself when I was younger. My path was so tracked that in my 8th-grade yearbook, one of my friends predicted--accurately--that four years later I would enter Stanford as a sophomore. And after a conventionally successful undergraduate career, I enrolled at Stanford Law School, where I competed even harder for the standard badges of success. The highest prize in a law student's world is unambiguous: out of tens of thousands of graduates each year, only a few dozen get a Supreme Court clerkship. After clerking on a federal appeals court for a year, I was invited to interview for clerkships with Justices Kennedy and Scalia. My meetings with the Justices went well. I was so close to winning this last competition. If only I got the clerkship, I thought, I would be set for life. But I didn't. At the time, I was devastated. In 2004, after I had built and sold PayPal, I ran into an old friend from law school who had helped me prepare my failed clerkship applications. We hadn't spoken in nearly a decade. His first question wasn't "How are you doing?" or "Can you believe it's been so long" Instead, he grinned and asked: "So, Peter, aren't you glad you didn't get that clerkship?" With the benefit of hindsight, we both knew that winning that ultimate competition would have changed my life for the worse. Had I actually clerked on the Supreme Court, I probably would have spent my entire career taking depositions or drafting other people's business deals instead of creating anything new. It's hard to say how much would be different, but the opportunity costs were enormous. All Rhodes Scholars had a great future in their past."
Also snaps for anything that skewers economics (in its current state) for being a pseudoscience:
"So why are economists obsessed with competition as an ideal state? It's a relic of history. Economists copied their mathematics from the work of 19th-century physicists: they see individuals and businesses as interchangeable atoms, not as unique creators. Their theories describe an equilibrium state of perfect competition because that's what's easy to model, not because it represents the best of business. But it's worth recalling that the long-run equilibrium predicted by 19th-century physics was a state in which all energy is evenly distributed and everything comes to rest--also known as the heat death of the universe. Whatever your views on thermodynamics, it's a powerful metaphor: in business, equilibrium means stasis, and stasis means death. If your industry is in a competitive equilibrium, the death of your business won't matter to the world; some other undifferentiated competitor will always be ready to take your place. Perfect equilibrium may describe the void that is most of the universe. It may even characterize many businesses. But every new creation takes place far from equilibrium. In the real world outside economic theory, every business is successful exactly to the extent that it does something others cannot. Monopoly is therefore not a pathology or an exception. Monopoly is the condition of every successful business. Tolstoy opens Anna Karenina by observing: "All happy families are alike; each unhappy family is unhappy in its own way." Business is the opposite. All happy companies are different: each one earns a monopoy by solving a unique problem. All failed companies are the same: they failed to escape competition."
6 min read
I finished reading 'The Hard Thing About Hard Things' by Ben Horowitz today. It's a really fun book, full of start-up war stories and a narrative of "you can achieve what's best for the people you care about [in this case, the company's employees] if you can persevere through hard decisions and embrace uncertainty." I particularly liked his emphasis on finding people with the right motivation to work with, and striving to start a company that people are excited to work for beyond their own material gain. Here are my favorite excerpts:
"There are no shortcuts to knowledge, especially knowledge gained from personal experience. Following conventional wisdom and relying on shortcuts can be worse than knowing nothing at all."
"Coach Mendoza began his opening speech, 'Some of you guys will come out here and you just won't be serious. You'll get here and start shooting the shit, talking shit, bullshittin', not doing shit, and just want to look good in your football shit. If you do that, then you know what? Turn your shit in.' He went on to celobrate on what was unacceptable: 'Come late to practice? Turn your shit in. Don't want to hit? Turn your shit in. Walk on the grass? Turn your shit in. Call me Chico? Turn your shit in.'"
"No matter who you are, you need two kinds of friends in your life. The first kind is one you can call when something good happens, and you need someone who will be excited for you. Not a fake excitement veiling envy, but a real excitement. You need someone who will actually be more excited for you than he would be if it had happened to him. The second kind of friend is somebody you can call when things go horribly wrong--when your life is on the line and you only have one phone call. Who is it going to be? Bill Campbell is both of those friends."
"If you are going to eat shit, don't nibble."
"'Gentlemen, I've done many deals in my lifetime and through that process, I've developed a methodology, a way of doing things, a philosophy if you will. Within that philosophy, I have certain beliefs. I believe in artificial deadlines. I believe in plying one against the other. I believe in doing everything and anything short of illegal or immoral to get the damned deal done.' Michael had a way of making things extremely clear."
"An early lesson I learned in my career was that whenever a large organisation attempts to do anything, it always comes down to a single person who can delay the entire project."
"After all that we had been through, how could I ask the team to charge up yet another impossible mountain? How could I muster the strength to do it myself? I felt like I had no more stories, no more speches, and no more "rah-rah" in me. I decided to level with the team and see what happened. I called an all engineering meeting and gave the following speech:
'I have some bad news. We are getting our asses kicked by BladeLogic and it's a product problem. If this continues, I am going to have to sell the company for cheap. There is no way for us to survive if we don't have the winning product. So, I am going to need every one of you to do something. I need you to go home tonight and have a serious conversation with your wife, husband, significant other, or whoever cares most about you and tell them, 'Ben needs me for the next six months.' I need you to come in early and stay late. I will buy you dinner, and I will stay here with you. Make no mistake, we have one bullet left in the gun, and we must hit the target.'
At the time, I felt horrible asking the team to make yet another big sacrifice. Amazingly, I found out while writing this book that I probably should have felt good about it. Here's what Ted Crossman, one of my best engineers, said about that time and the launch of the aptly named Darwin Project many years later:
'Of all the times I think of at Loudcloud and Opsware, the Darwin Project was the most fun and the most hard. I worked seven days a week 8 am-10 pm for six months straight. It was full on. Once a week I had a date night with my wife where I gave her my undivided attention from 6pm until midnight. And the next day, even if it was Saturday, I'd be back in the office at 8am and stay through dinner. I would come home between 10-11pm. Every night. And it wasn't just me. It was everybody in the office. The technical things asked of us were great. We had to brainstorm how to do things and translate those things into an actual product. It was hard, but fun. I don't remember losing anyone during that time. It was like, 'Hey, we gotta get this done, or we will not be here, we'll have to get another job.' It was a tight-knit group of people. A lot of the really junior people really stepped up. It was a great growing experience for them to be thrown into the middle of the ocean and told, 'Okay, swim.' Six months later we suddenly started winning proofs of concepts we hadn't before. Ben did a great job, he'd give us feedback, and pat people on the back when we were done.'
Eight years later, when I read what Ted had written, I cried. I cried because I didn't know. I thought I did, but I really didn't. I thought that I was asking too much of everybody. I thought that after barely surviving Loudcloud, nobody was ready for another do-or-die mission. I wish I knew then what I know now."
"If I'd learned anything it was that conventional wisdom had nothing to do with the truth and the efficient market hypothesis was deceptive. How else could one explain Opsware trading at half of the cash we had in the bank when we had a $20 million a year contract and fifty of the smartest engineers in the world? No, markets weren't 'efficient' at finding the truth; they were just very efficient at converging on a conclusion--often the wrong conclusion."
"'We have a very high churn rate, but as soon as we turn on email marketing to our user base, people will come back.' Yes, of course. The reason that people leave our service and don't come back is that we have not been sending them enough spam. That makes total sense to me, too."
(TBC more quotes tomorrow)