Monthly Archives: August 2017

A miracle

Our son is over 4 months old now. Before his birth, I was looking forward to the many things that I would have the opportunity to teach him. After all, he is quite a bit less experienced.

And the time for that teaching will likely come when he grows older and begins to perform activities like going to school, playing with friends, and doing work.

However, at his current age, I’m learning more from him than he is from me. My learnings are taking place in many areas, but one that really stands out is what he teaches me as a result of his innate curiosity for and resulting fascination with everything in life.

The fascination with which he examines someone he meets for the first time.

The fascination with which he tastes something new (even though they’re only liquids so far).

The fascination with which he watches new places from the window of the car.

The fascination with which he listens to a new sound.

And so much more.

There’s a quote, attributed to Einstein, which goes as follows: “There are only two ways to live your life. One is as though nothing is a miracle. The other is as though everything is a miracle.”

As adults, since we’ve experienced many things before, we often default to the former.¬†However, while a specific experience may be similar, the actual moment we’re experiencing is always new.

When I observe our son, I’m reminded that each new moment is a miracle.

Contextual charisma

Most successful founders are charismatic. However, this doesn’t mean that they have what we commonly think of as a charismatic personality. They’re not all life of the party smooth communicators. Some of our best founders are reserved, thoughtful, and deliberate in character. Most people wouldn’t describe them as being charismatic in every day conversation.

In other words, their charisma isn’t an overarching character trait, but one that comes alive in the specific context of their startup. It’s when they’re talking about their company and what they’re going to accomplish in the future that their charisma surfaces. They’re obsessed with what they’re doing and this obsession earns the respect of others (employees, business partners, the media, investors). They find what they’re doing of utmost meaning and, since we each look for meaning in our own lives, we want to be part of helping them realize the meaning that they’ve found.

Fortunately for investors, this contextual charisma isn’t easy for entrepreneurs to fake. You just have to take in all the signals, trust your interpretation of them, and not confuse your own belief in the meaning of the startup with that carried by the entrepreneur.

The commoditization of AI algorithms

Butterfleye, where we’re investors, is the producer of the Nero 1, a wireless security camera which comes equipped with facial recognition technology.

Once you start using the Nero 1, it captures and prompts you to tag the faces it identifies. This lets the Nero 1 remain passive in the event that it sees a known face while alerting you to new faces who could represent potential intruders.

What’s interesting about the facial recognition feature is that Butterfleye developed it using the Amazon Rekognition API. In other words, Amazon built the general image recognition algorithm, and Butterfleye is now using it for the specific case of facial recognition by applying the algorithm to the facial data that it collects.

This is a great example of the commoditization of AI algorithms. As more people have access to these algorithms, the source of value increasingly shifts from the algorithm itself to the data to which the algorithm is applied.

Progressing through internal peace and external disruption

Progress is a repeated cycle between two actions, one internal and one external.

The internal action consists of developing a thought about the way the world works. For example, this can consist of engaging with a person who you believe will make you happier, developing a habit which you believe will make you more successful, or building a product feature which you believe will increase user engagement.

What follows is the external response to your internal action. You see whether the person does indeed make you happy, whether you can stick to the attempted habit and whether it increases your success, and whether the new product feature increases user engagememt.

While the internal action is peaceful because everything makes sense in your mind, the external response is often disruptive as you discover that things aren’t exactly as your mind imagined they would be.

You then internally revise the way you believe the world works before putting it to a new external test.

Progress comes from realizing that a disruptive external response is just part of the cycle. When you see things this way, you’re able to repeat the cycle without giving up, at a fast pace, simultaneously across multiple domains. The end result is that your thoughts about the way the world works become more realistic each day.

My social media profile picture

A friend recently asked why I use a picture from my childhood days as my social media profile picture. I use the same picture, taken from my third grade yearbook, on both my Twitter and Facebook profiles.

The reason is that, whenever I feel as though I’ve experienced all that there is to experience, or learned all that there is to learn, something happens which makes me realize how much more I have yet to experience and learn.

In other words, although I might no longer be a child in terms of my age, in terms of the experiences and learnings that I have yet to face, I will always remain a child.

My social media profile picture is a reminder of this beautiful fact.

Integrity, intelligence, personal energy, collective energy, and salesmanship

Depending on who you ask, a startup’s founding team is either the most important determinant of the company’s success, or the second most important following the attractiveness of the startup’s target market.

But what makes for a great founding team? The most common answer is a combination of integrity, intelligence, and energy.

Integrity is a requirement because without it a startup’s success will eventually falter or, even if it doesn’t, only the founders will walk away with anything following whatever level of success the startup achieves.

Intelligence and energy refer to, respectively, knowing the right thing to do and doing it.

However, the “doing it” component needs to be further broken down. Specifically, you can either do things yourself or attract and motivate the right other people to do things. And the latter is required to scale what you’re doing.

In other words, being a doer isn’t enough. You need to be a doer through others. I think of this as being able to draw out collective energy. This is one of the two biggest predictors of the eventual scale of a startup’s success.

The other is the founding team’s ability to sell what will be done using what has been done. The founders who are able to do this, without crossing over the thin line of repeatedly overpromising and underdelivering, attract greater resources (like investment, talent, and partners) which enable them to do more faster than their competition. As a result, the companies of two founders faced with the same starting conditions can reach widely different heights in a few years’ time if one founder is a better seller than the other.

So integrity, intelligence, and personal energy are necessary but not sufficient. Great founders also need to be able to draw out collective energy and sell.

Happy birthday Webrazzi

Webrazzi, the leading tech news website in Turkey where we’re investors, recently had its 11th birthday. Founded in 2006, I’m pretty sure that this makes it the oldest company in our portfolio.

Journalism is a very challenging job in today’s world. The emergence of social media which amplifies and quickly draws both supportive and critical feedback in response to each piece of content makes you choose your words carefully and think twice before you publish something.

Add to this the fact that Webrazzi covers tech, a sector where new developments take place at a very fast pace, and you get a glimpse of how challenging the job of a Webrazzi writer is.

In light of these challenges, Webrazzi’s writers are doing a great job. Happy birthday Webrazzi.

The science behind a gripping soundtrack

I recently watched the movie Dunkirk directed by Christopher Nolan. The movie tells the story of Allied soldiers (of the UK, France, and Belgium), attempting to escape from the German soldiers that surround them in Dunkirk, France during the second World War. The movie was excellent, and I strongly recommend it.

After the movie, I researched the other movies that Nolan has directed. They include Interstellar, The Dark Knight Rises, Inception, and Prestige. I think that each of these movies is excellent. And I’m not the only one who thinks this. The minimum IMDB rating across these movies is a very impressive 8.4.

This leads to the question of how Nolan is able to consistently produce such successful movies. I think that there are 4 ingredients to a successful movie. These are the storyline, the acting, the videography, and the soundtrack. There’s a science to delivering exceptional results in each area, and Nolan seems to have nailed each one.

Here’s an article explaining the science behind Dunkirk’s soundtrack which uses a combination of what’s known as a Shepard tone and the sound of ticking to deliver a gripping auditory experience. Unsurprisingly, the same science was also applied to the soundtracks of Interstellar, The Dark Knight Rises, and The Prestige.

Nuclear is the safest mainstream energy source

Renewable energy sources like solar, wind, and hydroelectric power will hopefully eliminate, or make negligible, the negative health outcomes of energy production. However, renewables still account for only 4% of global energy production. Until that changes, the majority of our energy is being produced by coal, oil, biomass, gas, and nuclear energy. It’s therefore important that, in the meantime, we produce energy from the least harmful of the currently mainstream energy sources.

And that’s where the problem arises. Nuclear energy is in fact the currently mainstream energy source responsible for the smallest number of short term (generational) and long term (intergenerational) deaths. This article does a great job of outlining the reasons and data supporting why this is the case.

However, deaths from the production of nuclear energy, which take place mainly as a result of nuclear accidents, are very visual. They also occur in the form of a very low probability event with a single large toll, in contrast to deaths from today’s other mainstream energy sources which occur with more predictable higher probabilities, each of a smaller magnitude.

As a result, people fear nuclear energy more than other currently mainstream energy sources, even though nuclear energy is actually safer. Hopefully articles like this will help raise awareness of the large cost of our fears and lack of knowledge.

Investor support for startups’ external and internal activities

There’s a wide spectrum of support that an investor can provide a startup. At one extreme, we can provide capital without any interference. At the other extreme, we can effectively serve as core team members, helping with everything from building the team to designing the product to identifying and building out distribution channels to raising future funding to structuring an exit.

However, based on my experiences, there are 4 specific types of support that great startups can benefit from:

  1. Identifying and helping recruit/transition team members
  2. Thinking of and helping structure partnerships with other companies
  3. Preparing for and raising future funding
  4. Structuring an exit

There are also certain types of support that, if an investor finds themself giving a company, are usually an indication that things aren’t going well:

  1. Designing and providing feedback on product
  2. Identifying, building out, and measuring the return of different distribution channels

What’s common across the 4 types of support that great startups can benefit from is that they’re external activities. Specifically, they’re about connecting the startup with external talent, companies, and financing opportunities.

What’s common across the types of support that great startups don’t need is that they’re internal activities. Specifically, they’re activities that require detailed immersion to do well. As such, great startups do it themselves. So if an investor finds themself being requested to or feeling the need to contribute in these areas, that’s often a negative signal.

The corollary to this analysis is that you should invest in startups who either don’t need you, or benefit from your support in external activities. You shouldn’t invest in startups who need you to perform their internal activities.