I’m at Startup Iceland today. I like Iceland – this is the second time I’ve been here. It’s the closest place on earth I’ve been to Alaska, which I love dearly. And it’s fun to see and hang out with my friend Bala Kamallakharan. As a super bonus, Om Malik – who I adore – is also here.
Om and I did a fireside chat with Bala. At the end, Bala asked about the future and what we were uncomfortable with. Neither of us is uncomfortable. Instead, we are both optimistic and intrigued with what is going on. Om talked about his view is that this is the most exciting time to be alive and went on a riff about what is in front of us.
I started with my premise – that the machines have already taken over and are just waiting very patiently for us to catch up. They are happy to let us do a lot of work for them, including feeding them with data, building homes for them, and connecting them together. In the mean time, they are biding their time, doing their thing, along side us.
If you wind the clock forward 50 years, our current state will be incomprehensible to that future human. The pace of technological change at all levels is accelerating at a pace we can’t fathom. Some people are pessimistic and now concerned about the notion of a real advanced intelligence. I’m optimistic and accepting of it, not fighting the inevitability of the path we are on or being in denial about our ability as a society to control things.
This is the rant I ended up on. Human structures change slowly. It’s unevenly distributed based on geography, culture, and political philosophy. Our legal system lags far behind what is actually happening, and as a result we are in the middle of a bunch of debates around technology, including things around privacy, net neutrality, data storage, and surveillance. Our existing approach as a species to dealing with the challenges are painful to watch from the future.
It’s fun to ponder how quickly things are changing along with how badly certain parts of society wants to keep them from changing, hanging on to the “way things are” or even the “way things were.” Don’t ever forget the sound of inevitability.
Amy and I had a very quiet weekend hanging out with each other, Brooks the Wonder Dog, and Super Cooper the Pooper. We like Memorial Day weekend – it always feels like the beginning of summer to us.
I read three books over the weekend. Since I was home, rather than reading on my Kindle, I grabbed some books from the infinite pile of physical books I have in my office. New stuff shows up every week – mostly business and entrepreneurship books, and the occasional “I think you’d like this” book. In addition, whenever I want something that isn’t on the Kindle, I just buy the physical book.
So this weekend was about startup communities with a bonus book on the startup visa tossed in for good measure.
The first was The Making of Silicon Valley: A One Hundred Year Renaissance. This book was written in 1995 and published by the Santa Clara Valley Historical Association so the updated subtitle should be “A One Hundred Year Renaissance – 20 Years Later.” Anyone interested in Silicon Valley, what it means, and how it came together should read this book carefully from cover to cover. There is so much shortened history out there, where the most extensive typically only goes back to Shockley, Fairchild, The Traitorous Eight, and the founding of Intel. The history is so much richer, the one page stories about the companies the shaped each era are just awesome, and the perspective of what 120 years really means for a the startup community that is undeniably the most robust in the world right now is very powerful. It also ends just as the rise of the Internet begins, so it’s the long arc of Silicon Valley is not overshadowed by the last twenty years.
The next book I read was Screw the Valley: A Coast-to-Coast Tour of America’s New Tech Startup Culture. I don’t like the title – it’s too intentionally provocative for my tastes because I’m not anti-Silicon Valley but rather pro-building startup communities everywhere – but the book is excellent. Timothy Sprinkle interviewed me early in his process and then set off on an almost one year trip across the US where he spent real time in Detroit, New York, Las Vegas, Austin, Kansas City, Raleigh-Durham, and Boulder. He writes extremely deep stories about each startup community, along with strengths, weaknesses, and things that are going on that shape them. I show up in a number of times, both personally along with references to my book Startup Communities, and Timothy does a nice job of using some of the concepts from Startup Communities to draw out major themes in each city. This is a great snapshot in time – right now – to show how startup communities develop anywhere.
The last book I read was The Startup Visa: Key to Job Growth & Economic Prosperity in America. Tahmina Watson wrote an extremely clear and easy to process book on the problem of the startup visa, why the US immigration system and visa process doesn’t work for entrepreneurs, why this matters, and makes recommendations about what to do about it. She also gives a nice history of the various bills in Congress, going back to S.3029 in 2010 (Lugar, Kerry) titled “The Startup Visa.” It’s disappointing that it’s five years later and Congress can’t seem to get a bill on the Startup Visa passed – or anything on immigration for that matter – but that’s life in government.
If you want a real punch line to the whole situation, read the short article from the NY Times Magazine – Debunking the Myth of the Job-Stealing Immigrant by Adam Davidson. Amy handed it to me on Monday and I said “I don’t really feel like reading another thing on immigration because I’m so annoyed by our lack of progress.” But then I did, and it was a great read.
It’s always a fun experience to be laying on the couch next to my wife Amy watching something on our 90″ TV when suddenly she grabs the remote, says “that’s awesome”, rewinds, and plays it again. It’s especially humbling when it has to do with grammar.
We’ve both been fans of Stannis Baratheon and regularly refer to him as the one true king when we talk about him. As in “Stannis The One True King.” Two weeks ago, Stannis demonstrated that he’s also the Lord of Grammar.
Last night, every time we saw Stannis, we cried our “Stannis The One True King and Lord of Grammar.” It turns out this isn’t the first time he’s done this (although it’s the first time we noticed.) See the following clip from Season 2.
The dude has my vote.
There will be a downturn. It might be in a day. It might be in a year. It might be in a decade. We have no idea when it will come, but it will come.
I was talking to a VC yesterday who was an entrepreneur in the late 1990s, which we now commonly referred to as the Internet bubble. He was very successful as an entrepreneur and has continued to be very successful as a VC. A VC who has been around for a long time recently told him that you aren’t a real VC until you’ve been through at least one downturn. He commented that while knowing this, it’s hard not to be a cynic when things are going well and he wondered out loud if there was a way to balance optimism and cynicism as a VC. I had a quick reaction about continually being deeply rational about what one encounters, but it didn’t feel very satisfying to me as an answer.
We are in a very positive part of the startup / entrepreneurship cycle. Given that, there is a regularly occurring discussion about whether or not we are in a bubble, or this is a bubble, or is a bubble forming, or some other bubble thing. The conversations devolve quickly into “yes we are” and “no we aren’t.” This is often followed by justifications of positions with a bunch of random data to support the position, where most of the data is either inaccurate, narrowly chosen with huge selection bias, or a function of what the public market guys like to call “talking your own book.”
I have no idea if we are in a bubble or not. And I don’t care since, as an early stage investor, I play a long term investing game, because I have to. I can’t control liquidity or timing, especially when I initially make an investment. The market is going to move wherever it is going to move and is completely exogenous to me so timing it is irrelevant.
I’ve lived through several severe cycles – both positive and negative – as an investor. I’ve had successful companies created and built at all stages of the cycle. I’ve had failure at all stages of the cycle. There are great strategies for success in both the positive part of the cycle and the negative part of the cycle. And you can do completely stupid things that blow up your company in both the positive and negative part of the cycle. While the stage of a cycle has impact on a company, it’s only one factor.
As I pondered the cynic vs. optimist question this morning, I landed on a synthetic view that feels right to me. I was walking around my office looking at my physical book shelves, mostly for words to try to characterize what I was thinking about, and I landed on Andy Grove’s amazing book Only The Paranoid Survive. I bought the physical copy after reading The Intel Trinity (one of the business / history books I’ve read recently) which inspired me to go back and read – slowly and on paper – each of Andy Grove’s books.
Boom – that was it – I’m a paranoid optimist in a business context. As a human, I’m optimistic. I believe in good. I like good. I hope for good. I prefer good. I am hopeful about the future. I love the work I do. I love helping create companies. I love playing with technology. I love seeing amazing new ideas come to life. I love being alive. I hope to live a long time.
But I know that there is plenty of bad out there. I’ve experienced a lot directly in business, whether it’s bad actors, stupid decisions, unintended negative consequences, self-inflicted trauma, passive aggressive behavior, or outright deceit. I’ve made assumptions about what I think will happen only to have my assumptions be completely incorrect, or correct in my parallel universe to the reality that actually ensues. Some of this has been under my control or impacted by my viewpoint while some of it has nothing to do with me in any way, but is like the proverbial elephant that accidentally steps on and crushes the ant.
When I link this to the cynic vs. optimist dichotomy, I’m definitely not a cynic. But I’m not an unbridled optimist that can only expect more positive. And I don’t vacillate between cynic and optimist based on individual situations, companies, or the macro.
Instead, I ignore the macro. I recognize that I have no control over it. I try to use the experience and lessons from the last 30 years of being in business to guide me steadily through whatever part of the cycle we are in. I know the cycle will change and the companies I’m part of will have the opportunity to be successful regardless of the situation. But I also know they have the opportunity to fail. And that’s where the paranoia comes in. It’s a powerful calibrator.
When I reflect on Andy Grove’s leadership of Intel, it was through a series of intense up and down cycles – both within the semiconductor industry as well as the global macro environment. While he leads with the idea of being intensely paranoid, there’s a thread of clear optimism through his big decisions. When faced with brutal challenges, he dealt with them. When there was daylight in front of him, he ran incredibly hard in a positive way to cover as much ground as possible. But he always knew he’d face more challenges.
The next time I get asked the question, “How can you avoid turning into a cynic when things are going well and you know it won’t last forever” I now have an answer. Be a paranoid optimist.
Even though I haven’t been in school for a long time, I still have some tenuous link to the idea of summer vacation. Well, not some much vacation, but a mode shift from going to class every day to doing other stuff, such as playing tennis at least eight hours a day (age 10 – 14) or writing software products (age 17 – 21).
A few summers ago I did a hard shift to maker mode. I did some of my most creative work in a while that summer, including writing Startup Communities and getting started with Amy on the book Startup Life. It was also a powerful summer for some of the companies in my portfolio and I was able to spend deep time with several of them on their product rather than just reacting to all the inbound stuff that was flying at me. I also got in the best physical shape of my life. I worked out – mostly running and biking – almost every day. I slept plenty. I ate well. I spend a lot of time reading and hanging out with my beloved.
At the end of the summer, I blew it as I shifted out of this mode. The fall started with a bike accident in Slovenia and ended with surgery to remove an 8mm kidney stone. But that was only the beginning of a slide into a very deep, six month depression which finally ended in the summer. I didn’t plan for an annual cycle, but that’s what happened on that one.
While I feel mentally healthy right now, I realize that I’m extremely tired. Amy and I slept an enormous amount of the time we were in Paris. While we usually have an epic Parisian meal two or three times during the week, we only had one at the beginning of the week and then cancelled the others because we just didn’t feel like it. We had an amazing visit to the Picasso Museum, but then spent a lot of time laying in bed reading or just wandering around aimlessly, and then heading back to the hotel to take a nap. The heavy fog of fatigue, which settled in on the trip, hasn’t lifted. I’m sure the endless rain in Boulder isn’t helping, but I’m aware that it’s time to shift gears again.
On top of that, I’m pretty tired by the noise in the system. I was tired of it all spring and wrote a few things about it, but the gap between real signal in the entrepreneurial world and the endless noise is at a volume that is very high. I filter much of it out so when it eventually breaks through I know I need to add a new filter, or recalibrate my filter.
At the same time, I’m extremely interested in many of the companies we are investors in. So, I know I’m not reacting to the work, or the types of companies I get to work with, but the systemic noise that isn’t about creating, doing, building, and thinking.
I’m using Memorial Day to Labor Day as my marker for recalibrating for this summer. I’m not going to use the 2012 Maker Mode summer approach but I’m going to design something else. I’m going to let this week roll over me without fighting it as I think about what the recalibration for the summer is, but the new mode will start in a week.