For almost 30 years, I’ve shared a huge number of life experiences with Warren Katz.
Yesterday, I did a breakfast AMA at Cooley’s office near La Jolla with the Techstars MDs and PMs from the western half of the US. At the end of the hour, we were presented with the above video from Warren as the final word on a question that is on everyone at Techstars’ mind.
I suppose if I used Facebook, I’d post this there. But I don’t, so it lives here for all of posterity.
I just showed it to Amy and she laughed out loud four times during the four minutes, which is a record for her since she doesn’t really understand humor very well. But, like me, she adores Warren. And his shirts.
I love randomness. It’s an essential part of how I live and work.
Today’s example of randomness is the book event for Do More Faster that David Cohen and I are doing at the Barnes & Nobel in Boulder at 4 pm today. It’s open to anyone and we have no idea who is coming or what the actual agenda will be, but we know that even if it’s just the two of us sitting at a B&N together, we’ll have fun and learn something.
My goal with randomness is to always be learning. Sometimes I have structured randomness, like the Random Days that I used to do all the time and now occasionally do. Other times it’s just a random event (like the one this afternoon), a random visit to a company/organization (like something I’ve decided to do on Saturday afternoon), or a random new thing to play around with.
One of my favorite Neal Stephenson anti-heroes is Raven from Snow Crash. Raven has the phrase “Poor Impulse Control” tattooed on his forehead as a punishment for some crime in his past. I’ve always loved this phrase, but use it in a positive way around randomness.
There are endless examples in the 53 years of my life in the power of randomness. When I’m asked about how we ended up in Boulder, I answer “it was random – we wanted to try it out and see if we liked it so we just moved here from Boston.” We knew that if we didn’t like Boulder, we could try someplace else. Another example is my Goodreads My Books Read list, which is a little less random than the infinite pile of books that I’ve actually bought and are sitting on my Kindle to read. My email is another example – the number of interesting things that have come out of a reply to a person I don’t know who cold emailed me is remarkable to me when I reflect on it.
There is an endless structure that is imposed on my life, either by me or others. All you have to do to see it is look at my calendar. So, in addition to the Joy Of Missing Out, I encourage you to embrace some randomness in your life.
And yes, I am very aware of Nassim Nicholas Taleb’s thoughts, anecdotes, and warnings about randomness. Rather than being confused that luck is skill, I prefer to allow luck to just show up while I’m learning and exploring lots of different things.
While it’s easy to tell people things, it’s much more powerful to learn things. And, as I get older, I see the same lessons being learned by subsequent generations. While this isn’t a post that says “everything is the same as it was before”, there are foundational lessons in life that play out over and over again.
I spent the weekend with a friend from the last 1990s who was the lead banker on the Interliant IPO (I was a co-founder and co-chairman.) Last night, at the Aspen Entrepreneurs event, I was asked to describe several failures and I rolled out my story about Interliant, which, for a period of time (1999 – 2000) appeared to be hugely successful before going bankrupt in 2002. If you like to read IPO prospectuses, here’s the final S-1 filing after INIT went effective and started trading on July 8, 1999.
A few days ago, Fred Wilson wrote a post titled Capitulation? In the middle, he’s got a sentence about the theme of the post.
“Now, the crypto markets are in the eighth month of a long and painful bear market and we are starting to see some signs of capitulation, particularly in the assets that went up the most last year.”
On January 16, 2018 (almost seven months ago) I wrote a post titled It Can All Go To Zero. While I included a lesson from the Interliant experience, I highlighted the top 10 crypto prices, which had already fallen 30% – 50% from their high points a few weeks earlier.
Compare those to the prices right now.
Bitcoin is down another 50% (from 12,001 to 6,157). Ethereum is down over 75% (from 1,118 to 264). XRP, holding strong as the third most valuable cryptocurrency, is down 81% (from 1.37 to 0.26). Stellar, which rallied from #9 to #5, is only down 55% (0.49 to 0.22).
My guess is there are a lot of people who wish they sold their XRP at 1.37. Or, maybe around its all time high of 3.83 on January 4, 2018.
Capitulation in markets is one of those endless lessons that gets learned over and over and over again. My first moment with this was Black Monday in 1987. But that’s not when I learned the lesson. My foundational moment, where I really learned the lesson, happened during the collapse of the Internet bubble in 2000 and 2001.
It’ll be interesting to see if this is the crypto generation’s capitulation lesson moment.
Perspective can be a useful thing. Cryptocurrencies have had a bad 24 hours.
Last night Amy and I watched The Big Short for the second time. If you’ve never seen it, it’s a must watch movie. If you haven’t seen it in at least a year, watch it again. While the events are from 2005 – 2008, they feel like they happened yesterday. And, the cast, including Brad Pitt (my favorite character), Steve Carell (my second favorite), Christian Bale, and Ryan Gosling play their parts spectacularly well.
There are hundreds of lessons in the movie. But, like most things human, we quickly forget them. Or we pretend like they couldn’t happen again. Or we justify what’s going on today as “but it’s different this time.”
In 2000 I was co-chairman of a public company called Interliant. The company had gone public in 1999 and the market cap rose to just under $3 billion ($55 / share, up from $10 / share at the IPO). By the end of 2000, the stock price was at $13. I was on a walk at my house in Eldorado Springs with one of the VPs who asked me how low the stock could go. I can’t remember the exact phrasing, but I remember it being something like “There’s no way the stock will go below $10 / share, right?”
My response was simple. “It could go to $0. I hope it doesn’t, but it could.”
In 2002 Interliant went bankrupt and the stock went to $0.
Now, I don’t have schadenfreude about cryptocurrencies going down. Like many, I’m fascinated by them and the potential implications of both cryptocurrencies and blockchain technology. I hold plenty of cryptocurrencies – either directly or indirectly in funds I’m an investor in. So I benefit financially from them going up.
But I’m not a trader. I never have been. I never will be. It’s not my temperament. I don’t enjoy it. I don’t want to spend mental energy thinking about the gyrations of the market – any market. I don’t want to make money on short-term financial trades, but rather by helping create new things over the long-term.
We all eventually die, at least for now. Some people learn from history. Some people suppress or deny it. Many people ignore it. I prefer to reflect on it and make sure the big lessons are inputs into my thinking. If you want a quick, 128-page frame of reference on this, read The Lessons of History by Will and Ariel Durant. The cliche “the more things change, the more they stay the same” is a cliche because it applies to a lot of things.
My scan of my morning news feeds included Researchers find that one person likely drove Bitcoin from $150 to $1,000, BlackRock’s Message: Contribute to Society, or Risk Losing Our Support, GE Shares Dive on $6.2 Billion Charge for Problems in Its Finance Unit, and a very interesting post titled Impatience: The Pitfall Of Every Ambitious Person.
I’ll leave you with this.
In June, Amy and I had three friends die. One was a mentor of Amy’s from Wellesley, one was the father of a close friend, and one was the wife of a good friend of over 25 years.
Yesterday, while sitting at my desk between calls, I noticed an email from another friend titled Thank You For The Throne. The email said:
After spending many days visiting my mom in the hospital, I felt the need to thank you for your support of Boulder Community Hospital. I found it hilarious and appropriate that you were the sponsor of the bathroom. So, thanks for the throne and the humor during dark days. She is on the rebound after a brutal fight and back at home doing rehab. Hope you’re well.
I sat there trying to process that. I didn’t know the mom was in the hospital. The mom is a fixture in our community, a long-time friend, and an amazing woman. I responded with:
2. OH MY GOSH. WHAT HAPPENED TO XX? IS THERE ANYTHING WE CAN DO TO HELP?
I’m 51, and I have an extensive network. I know this is going to start happening more frequently. In The End, Entropy Always Wins was an effort last week for me to process this a little.
But the email yesterday was a shock. I’m still processing it. I’m thankful our friend is stable and out of the hospital. But it’s just another reminder that our experience on this planet is short and not under our control.
I woke up to an email from a close friend of 25 years that his wife had passed away unexpectedly last night. She’d been fighting cancer for several years, had made progress, then had setbacks, and then made progress again. While I knew them both, I’d spent many hours over the years with my friend, so I immediately felt his sense of loss because I know how central his wife was to his life. I just hugged Amy and sent her out into the world for her day with tears in my eyes the phrase “In the end, entropy always wins.”
Last week, when another close friend died of cancer, Amy said to me “We fight the good fight our whole lives, and then we lose.” It wasn’t meant in a negative way but was an acknowledgment that in the end, we die.
Two other lines that always come to my mind in moments like this are “Life is a process of continuous oxidation” and “Life is a fatal disease.” The second is lodged particularly deep in my brain, as a friend told it to me after his child died at age 21.
While this applies to humans, it applies to everything else. I’ve yet to meet an immortal animal or plant. Many of the Built to Last companies have struggled or failed since Jim Collins wrote his iconic book. Granted, while Rome, which wasn’t built in a day, is still around, the Roman Empire had a finite life.
Companies don’t last forever. Institutions don’t last forever. Physical objects don’t last forever. Our planet won’t last forever. Human civilization won’t last forever.
In the end, entropy always wins. Consider that when you make decisions trying to control the outcome of something.
The Shrike né Predator and I wish you a Happy New Year.
Jonathon Triest and Brett deMarrais of Ludlow Ventures are doing a fun video podcast series called Carpool.VC. As Jonathan and Brett drive to work, they do a podcast interview. It’s hilarious, fun, and informative.
I did it early (6am California Time) on Tuesday. In it, you’ll learn my spirit animal, doppelganger, how Jonathon and I met (I’m now an investor in Ludlow Ventures), and a bunch of other random things. I also agreed to sponsor the episode for $1.70.
I’ve been heads down this week on a handful of transactions. As a result, I haven’t been paying much attention to the world around me, but it’s inevitable that some stuff leaks through in random conversations, emails that I get and skim to respond to later, or stuff I notice, even though I’m not looking.
While I was just in the shower, I had a handful of random things roll through my head that I realized were creating intellectual dissonance for me. They are the kind of thing that I like to dissect and chew on, and expect I’ll blog deeper about some of them. Whenever I feel intellectual dissonance, it’s usually a leading indicator of something. It’s not necessarily “something bad”, but it’s almost always “something different.”
But for now, I thought I’d share the list just to get it out of my head and on virtual paper somewhere.
1. I saw two situations where angels are being pitched on secondary purchases of late stage companies. While the secondary activity has been going on for a while, I separate for “people trying to buy late stage stock” from “angels investors.”
2. Several people, who I view as generally stable and rational, had unexpected negative emotional responses that I felt were overwrought and inappropriate to the situation. In each case it felt like something else was going on, but when confronted the individual actually dug in on their emotional, non-rational position.
3. I pay little attention to the macro, especially global stock market indicies, but somehow I noticed that the Shanghai Composite was down over 30% in the last month and then up 5% yesterday.
4. I encountered a huge retrade on a deal from someone who doesn’t have a reputation of retrading deals. It’s not something I’m involved in but I noticed it.
5. I saw two situations of what I would consider very bad / disingenuous early stage investor behavior in the context of companies that had previously raised modest amounts of angel money. Each were things that regularly happened in the early 2000s, but I have seen very little of in this cycle. Suddenly, I noticed two different situations in the same week.
6. I thought Stan Wawrinka had a shot at Wimbledon, or at least was going to be in the finals (I love Stan). He was on the receiving end of an 11-9 loss in the fifth set.
7. The NYSE and United both had massive, independent computer outages at the same time. But, it appears not to be cyberterrorism.
I generally define intellectual dissonance as stuff going on in my head about factual / experiential things that seem interesting or different to me in the moment, or things I rarely think about or notice showing up in the thought stream. While it could just be my brain doing it’s normal garbage collection, it felt worth pondering.
I’ve decided to try something new on this blog. Rather than using up full posts for short announcements, I’ve added a new block for announcements at the top of the home page. It’s in orange, will generally be only a few lines, and include a link.
Since these are just blog posts being formatted differently, they will show up in the RSS feed and the daily email. In addition, there is a page in the Archives for the announcements.
If you have any feedback on this (good or bad), I’d love to hear it.