Monthly Archives: September 2017

Making friends before shaking the tree

I recently asked a very successful executive whose thoughts I respect how one should approach new work environments. Although my question was in the context of new work environments, I believe that his answer is valid for all new environments.

Here’s the succinct answer:

“Make friends and get to know the organization before shaking the tree”

In other words, try to have an impact. But before you do so, recognize that having an impact comes through mobilizing people. And people don’t mobilize for someone they don’t know and respect. So getting to know people and building meaningful relationships is the first step to having an impact.

Definite optimism and production

Being a technology investor or entrepreneur requires definite optimism. In other words, you need to fully believe in the future of the company that you’re building or investing in order to build it or invest in it. That requires both an understanding of the currently available technology and the ability to imagine how it could evolve and what could be produced as a result of this evolution.

Although I don’t agree with all of the recommendations of this article, it makes a strong case for definite optimism and the production that ensues from adopting such a mindset.

You can read the full article here.

Eating while working

Sometimes you have a lot of work to do. So rather than set aside 30 minutes or an hour to eat breakfast, lunch, or dinner, you decide to eat while working.

While this makes you feel more efficient, the reality is that you’re actually being less efficient.

The first reason for this is that your train of thought while working is repeatedly interrupted by the bites of food that you eat. Although you don’t notice it, the back and forth between thinking about your work and placing food in your mouth causes a decline in the depth of your thoughts and hence your work output.

The second reason is that we’re not programmed to be fully efficient throughout the day. Instead, we have times of peak focus, followed by times of lower focus, and cycle through these states. By accepting your times of lower focus and eating at these times, you’re able to set the stage for a time of peak focus while also enjoying your food, without sacrificing efficiency.

Finally, many of our best ideas come when our minds feel free to be inefficient and just roam. In other words, what feels like inefficiency often ends up being more efficient than what feels like efficiency. Just like spending time in the shower, taking the time to just eat can be one of those times with low perceived and high actual efficiency.

How to have better conversations

I recently listened to an excellent TED talk by Celeste Headlee on how to have better conversations.

Conversational ability has always been an important skill, and it is becoming even more important as technology further increases the frequency and pace with which we communicate both verbally and in writing.

Here are the 3 strategies which most resonated with me:

1. Listen to understand, not reply

2. Don’t equate your experiences with their’s

3. Stay out of the weeds

You can listen to the 12 minute talk below.

Companies that make more profit as customers use them less

Most companies make more profit as their users or customers use the company’s product more frequently.

However, some companies make more profit as their users or customers use their product less. Companies with negative gross margins are the first example of this, but they’re not the topic of this post.

The other classic example is a subscription business that takes revenue up-front and then incurs the cost of providing the service in the future. The less the customer uses the service in the future, the more profit the company makes.

The problem with this is that the less the customer uses the service, the less likely they are to be a repeat customer. This also makes them less likely to recommend the company to others. So while the company experiences a boost in short-term gross margins, this comes at the expense of long-term retention, referrals, and new customer acquisition.

One way to address this problem is to avoid companies that make more profit as users or customers use their product less. I can’t think of any very successful companies that have this characteristic. So avoiding companies with this characteristic doesn’t result in missing out on much.

The other is to invest in companies which make more profit as users or customers use their product less only after carefully reviewing the company’s retention, referral, and new customer acquisition metrics.

The obvious characteristics of a new setting

This post is valid for people entering many different forms of new settings. Examples include starting to work at a new company, embarking on a new relationship, and living in a new country.

When you first enter a new setting, you do so with a fresh pair of eyes. You’re able to clearly see the things that make the setting valuable as well as the things that could be done differently.

As time passes, it becomes increasingly difficult to see these once obvious characteristics. The reason is that, since you’ve decided to stay in the setting, you’ve effectively accepted to live with the characteristics. Staying while continuing to question the characteristics would create cognitive dissonance. So you stop questioning in order to set aside this uncomfortable cognitive dissonance.

However, the characteristics endure. As a result, if you identified them correctly, they eventually manifest themselves in the setting’s outcomes. When this happens, you can tell yourself that you knew it all along. While this may be true, this is of little consequence if you weren’t able to positively influence the outcome.

There are two takeaways from this reasoning.

The first is that the first few days or weeks that you spend in a new setting are a unique opportunity to take note of the strengths and improvement areas of the setting. This needs to be a written note rather than a mental note because your memory is likely to forget the latter in order to eliminate cognitive dissonance.

This leads to the second takeaway. Together with taking these notes, you should appreciate those characteristics that make the setting valuable while doing your best to try to change the other characteristics of the setting in a way that improves the setting’s outcomes. The latter requires patience as you need to gain credibility in the new setting, as well as the friendship and trust of the people who can help you make the necessary changes, before you can change things.

The Middle East startup ecosystem

I read an informative piece on the Middle East startup ecosystem last week.

What I found particularly insightful is that although, at less than 10 million people, the United Arab Emirates has one of the smallest populations in the Middle East and Levant region, it accounts for a whopping 42% of the region’s startups. This is likely due to the country’s progressive governance and Dubai’s success in attracting expats with the goal of serving as a regional hub for non-oil sectors including technology.

You can read the full piece here.

Flying through a solar eclipse

There was a solar eclipse which was primarily visible in North America last week.

While the experience is fascinating no matter how you watch it, it’s particularly special when viewed while flying on a plane.

Here’s what that looks like.

Taking the time to observe a founder’s ability to get things done

In an earlier post, I wrote that integrity, intelligence, personal energy, the ability to draw out collective energy, and salesmanship are the five key traits of great founders. The last three of these traits manifest themselves in a single outcome, which is getting things done.

Getting things done, in turn, takes time. It takes anywhere from a few weeks to a few months to see if a founder is someone who gets things done.

That’s why, as an investor, before investing in a founder, it’s useful to take this time to observe the extent to which the founder is someone who gets things done. It isn’t possible to observe this in a single meeting.

Sometimes competitive bidding processes result in having to decide faster than this. One approach is to sit out of such processes altogether. The other is to adjust your investment amount to reflect the extent to which you’ve been able to observe the founder’s ability to get things done. This leaves you the option to invest more in a future round after you’ve had more time to observe the founder’s ability to get things done.