If we fund an early stage startup company today and it’s hugely successful, it’ll be coming into its own in 2025. Ponder that for a moment.
That’s how our business – and entrepreneurship – really works. With all of the excitement around entrepreneurship in the past few years, there has been a lot of shorter term thinking. I’m seeing and hearing a lot more of it these days. This is dangerous, especially for founders.
I was in Boston at the end of May and had three separate experiences in one day. The first was with a company started in 2011 that is now a real business. The second was Techstars Boston Demo Day, showcasing 14 brand new companies. We started Techstars in 2006 and ran the first Boston program in 2009. The last was dinner with Alex Rigopulos, the co-founder of Harmonix, which he co-founded with Eran Egozy in 1995, sold in 2007, bought back in 2010, and is still running today.
We have three typical units of measure in business today: a month, a quarter, and a year. Many companies measure things on a daily basis, but decision making at this level is particularly difficult, especially as you add people to the mix. Most of the monthly measurements are either backward looking (e.g. financial reporting) although some are cadence generating (product release cycles, which can be continuous, but with significance once or twice a month for many companies.)
You get a little planning in the mix on a quarterly cycle. If you are on a leadership team, the question “how did the quarter go?” is likely a common refrain you hear four times a year. If your company has a good planning rhythm, you are reflecting on the quarter while simultaneously planning and adjusting for the next one. We are in the second week of Q316 – if you’ve rolled out your Q3 plan or your 2H plan to your team then you know what I mean.
The annual cycle is very predictable and omnipresent. I don’t think it merits much comment here.
While these are all important, none of them matter nearly as much as a long-term aperture. If you limit your thinking to one year, you are screwed in the long term. Humans are particularly bad at non-linear thinking which is at the core of any innovation process. If you want to understand this better, go soak in Ray Kurweil’s classic essay about The Law of Accelerating Returns where he discusses the intuitive linear view versus the historical exponential view.
Now that you’ve spent a few paragraphs thinking about days, months, quarters, and years, consider a decade. Can you even imagine your company over the next decade? While it’s easy to feel like we are compressing time with extreme success cases like Facebook and Twitter, consider Nike from 1964 to 1974 or Starbucks from 1971 to 1981 (Howard Schultz didn’t even join until 1982.) For perspective, explore any successful company’s first decade.
While there is a ton of variability in the trajectories of various successful companies, my favorite personal example is Harmonix, which spent a decade trying to go out of business every year before its “overnight success” of the launch of Guitar Hero. From the epic Inc. Magazine reflective history of the company in 2008.
It all easily might never have happened. “We were on the brink of death, I don’t know, 10 times over those 10 years,” Rigopulos says. Harmonix missed the cash gusher of the Internet bubble almost entirely while it pursued ideas that bombed miserably, one after another. In 1999, the year an online pet store fronted by a sock puppet raised $50 million, Harmonix was laying off staff. Its founders sometimes give the impression of still being a bit shaken. Last year, when fawning organizers of a video game conference asked Rigopulos to give a speech about “living the dream,” he wistfully marked up a PowerPoint chart of Harmonix’s annual profits and losses. He labeled the company’s breakout year, 2006, as “The Dream.” The years 1995 through 2005, shown almost entirely in red ink, were “The Part Before That.
I turned 50 in December and have been thinking more about the passage of time recently. I’ll be 60 in 2025. That’s a good marker for many of the early stage companies I’m involved in. “You’ll be the real deal when I’m 60” is a powerful way for me to frame the time commitment it takes to create something substantial out of nothing.
The next time we talk, tell me what your company will look like in 2025.
I read The Three-Body Problem last week and loved it. It was a little hard to get into it at the beginning and that ended up being pat of the beauty of it. I’m not going to summarize it here – I encourage you to read it – but want to talk about the thoughts it simulated.
About two-thirds of the way through the book, I had a thought while laying in bed next to Amy that we don’t have any idea how the universe works. I blurted out something like “We don’t know how the universe, whatever that means, works.” Appropriately, Amy asked “Tell me more” which is how many of our funnest conversations unfold.
I’ve been listening to the Hyperion Cantos on Audible while I run. I’ve ramped up my training again so I’m almost done with the last book (Rise of Endymion). As I absorb all of them, I think Dan Simmons has written what may end up being the most important science fiction books of our era.
When I toss creative constructs like the void which binds, the conflict between humans and cylons, and the Trisolaran’s (including criticism about how stupid they are) into a cauldron and stir it around, the stew that gets made reinforces my view that as humans we have no idea what is actually going on.
The idea the we are the only sentient beings that have ever existed makes no sense to me. Our view of time, which is scaled by a normal human lifespan (now approaching 80 years) sizes the lens through which we view things. Our daily cadence, which is ruled by endless interactions that last under a second and require almost no foreground thought, just reinforces a very short time horizon.
What if our time horizon was 100,000 years. Or 1,000,000 years. Or we could travel forward and backward through time at that scale. Or cross physical distances immediately without time debt. Or cross physical distances while varying the time dimension so we can travel both physically and through time at will. Or maybe travel on a dimension that is different than distance or time that we haven’t even considered yet.
Over the weekend, I ended up reading a few articles on quantum computing and qubits. As I was trying to piece together the arguments the authors were making about the impact on machine learning and AI, I drifted away to a simple question.
What does time mean anyway?
This might be my favorite part of The Three-Body Problem. I’m planning on reading the second book in the trilogy (The Dark Forest) next week after I finish the third book in the Red Rising Trilogy (Morning Star) to see where it takes me.