Tag Archives: Marc Andreessen

Chase, Chance, and Creativity: The Lucky Art of Novelty by James Austin

Summary

  1. “The original intent remains: to provide a brief, personal story of the ways persistence, chance, and creativity interact in biomedical research…This is a story of the ways persistence, chance, and creativity interact in medical research. My thesis is that novelty in research is like that in any endeavor-it springs from the dynamic interplay among several ingredients: personal lifestyle, people, luck, intuition, and system.”

Key Takeaways

  1. Chance
    1. Know something about the structure of luck so that at least you don’t do anything to discourage it. Chance I is anyone’s luck; Chance II is anyone-in-motion’s luck. Chance III is luck that comes from one person’s discernment; Chance IV is luck that flows from one unique person’s actions.
    2. The second simple-minded axiom follows from the first: the more diversity among these individual varieties of chance, the more unique is the creative product when their lines intersect. Luck comes in degrees. So does novelty, the hallmark of the creative process, and the yardstick by which its product is measured. A key agency of this novelty is intuition, a process reaching far beyond ordinary logic.
    3. I find medicine and science are meaningless unless they are interwoven with the rest of nature, the arts, and humanities.
    4. Because many new (and some useful) ideas about experiments or methods flash into my thinking anywhere and anytime, I keep a shirt pocketful of file cards to quickly jot down these ideas before they vanish.
    5. Research proliferates,’- and for a simple reason: as one question is answered, at least two new ones arise.
    6. My own research has been indelibly influenced by my personal beliefs and style of living. Nonscientific interests have repeatedly come back to enrich and invigorate my scientific career.
    7. Rather, what seems to be superimposed on the conscious work are some personalized drives and sensibilities interacting with chance. Later, we will say more about the qualities of mind, temperament and instinct that underlie this kind of experience. For the moment, let me note that the episode with Tom the dog can he used as an example of the “barking up the right tree” phenomenon. It means that if you happen to be the kind of person who hunts afield, it may be, in fact, your dog who leads you up to the correct tree, and to a desirable conclusion.
    8. If you are completely candid with yourself, you will soon discover how much your discoveries hinge on contingencies. Every now and then, when you happen to combine both boldness and skill, you may be able to exploit a few of the lucky situations that arise. But skill alone will not be enough, for much of the novelty in creativity is decided only when you are bold enough to thrust at chance.
    9. To sum up, serendipity is the facility for encountering unexpected good luck, as the result of accident and sagacity, as can occur in the course of more generalized, relatively unfocused exploratory behaviors, even meanderings.
    10. The four kinds of chance each have a different kind of motor exploratory activity and a different kind of sensory receptivity. The varieties of chance also involve distinctive personality traits and differ in the way one particular individual influences them.
  2. Chance I – Blind luck. Chance happens and nothing about it is directly attributable to you, the recipient. No specific personality traits are needed
    1. In Chance I, the good luck that occurs is completely accidental. It is pure blind luck that comes with no effort on our part. No particular personality trait is in operation. If, for example, you are sitting playing bridge at a table of four, it’s “in the cards” for you to receive a hand of thirteen spades, but statisticians tell us it will occur on an average only once in 635 billion deals (635,013,559,600).’ You will ultimately draw this lucky hand, but it may involve a rather longer wait than most have time for.
  3. Chance II – The Kettering Principle. Chance favors those in motion. Events are brought together to form “happy accidents” when you diffusely apply your energies in motions that are typically nonspecific. Those who are curious about many things, persistent, willing to experiment and explore benefit from Chance II
    1. Years ago, when I was rushing around in the laboratory working on sulfatides, someone admonished me by asking, “Why all the busyness? One must distinguish between motion and progress. “Yes, at some point this distinction must be made. But it cannot always be made first. And it is not always made consciously. True, waste motion should be avoided. But, if the researcher did not move until he was certain of progress he would accomplish very little. There’s no “standing pat” in research; the posture of creativity is forward-leaning. A certain basal level of action “stirs up the pot,” brings in random ideas that will collide and stick together in fresh combinations, lets chance operate. Motion yields a network of new experiences which, like a sieve, filters best when in constant up-and-down, side-to-side movement. Consistent centrifugal types of motion are what distinguish Chance II; its premise is that unluck runs out if you keep stirring up things so that random elements can combine, by virtue of your and their inherent affinities.
    2. An element of the chase can be involved in Chance II, but action is still your primary goal, not foreseeable results. The action can be an ill-defined meandering, or a restless driving, but it depends on your basic need to release energy, not on your conscious intellect. 
  4. Chance III – The Pasteur Principle. Chance favors the prepared mind. Some special receptivity born from past experience permits you to discern a new fact or to perceive ideas in a new relationship. A background of knowledge, based on your abilities to observe, remember, and quickly form significant new associations
    1. Chance III involves a special receptivity, discernment, and intuitive grasp of significance unique to one particular recipient. Louis Pasteur characterized it for all time when he said: “Chance favors only the prepared mind. “Pasteur himself had it in full measure. But the classical example of his principle occurred in 1928, when Sir Alexander Fleming’s mind instantly fused at least five elements into a conceptually unified nexus. He was at his work bench in the laboratory, made an observation, and his mental sequences then went something like this: (1) I see that a mold has fallen by accident into my culture dish; (2) the staphylococcal colonies residing near it failed to grow; (3) therefore, the mold must have secreted something that killed the bacteria; (4) this reminds me of a similar experience I had once before; (5) maybe this new “something” from the mold could be used to kill the bacteria
  5. Chance IV – The Disraeli Principle. Chance favors the individualized action. Fortuitous events occur when you behave in ways that are highly distinctive of you as a person. Let us define it as the facility for encountering unexpected good luck as the result of highly individualized action. Distinctive hobbies, personal life styles, and activities peculiar to you as an individual, especially when they operate in domains seemingly far removed from the area of the discovery. 
    1. Chance IV is the kind of luck that develops during a probing action which has a distinctive personal flavor. The English Prime Minister, Benjamin Disraeli, summed up the principle underlying Chance IV when he noted that, as persons, “we make our fortunes and we call them fate.” Disraeli, the practical politician, appreciated that by our actions we each forge our own destiny, at least to some degree. Chance IV comes to you, unsought, because of who you are and how you behave. Disraeli was aware that our so-called “quirks of fate” are often one-man-made. They are a highly individual matter
    2. There is no mystery about Chance IV, nothing supernatural about the way it generates an uncommon discovery. But you do have to look carefully to find Chance IV for three reasons. The first is that when it operates directly, it unfolds in an elliptical, unorthodox manner. The second is that it often works indirectly. The third is that some problems it may help solve are uncommonly difficult to understand because they have gone through a process of selection. We must bear in mind that, by the time Chance IV finally occurs, the easy, more accessible problems will already have been solved earlier by conventional actions, conventional logic, or by the operations of the other forms of chance. What remains late in the game, then, is a tough core of complex, resistant problems. Such problems yield to none but an unusual approach, much as does the odd lock in an old door open only to the rare key. 
    3. The most novel, if not the greatest discoveries occur when several varieties of chance coincide. Let us call this unifying observation the Fleming effect. His own life exemplifies it so well, and it deserves special emphasis.
  6. The early chapters of part III will reveal sagacity to be an important attribute, and we haven’t yet fully described its decisive ingredients. Keen powers of observation are among the first of these components, powers so keen that they can quickly “arrest an exception.” Each scientist began by sensing some novel incongruity in the fact in front of him, discerned at once that this anomaly didn’t fit the pattern of other concepts available during that era. Charles Darwin’s son, we will find, employed this “arresting” phrase to describe his father’s characteristic attribute. Beyond this, we will also find that each scientist was astute, a word meaning that keen intuitive powers were an integral aspect of his sagacity. Each man realized that his new observation was part of a pattern that could satisfy a huge information gap and comprehended how significant this fact was in its new larger relationship. So, he did more than simply “arrest” the exception. He realized that he would need to handcuff it, subject it to rigorous cross-examination, and report details of his investigation in print.
  7. Creativity
    1. A moment of creative inspiration is rare. It has both a long incubation period and, if it is to prove fruitful, a lengthy subsequent development. We find that the creative experience in science begins with an unconventional person, of abilities both diverse and contrasting, who is well grounded and receptive in his professional field. He not only prefers but needs novelty, for he is bored if not disenchanted by a physiological status quo. He has grown up to be a questioning, “adverbial man” whose curiosity is piqued to solve problems for more reasons than he is aware of. His search incorporates some elements of the primitive chase, brings all his senses to a peak, and sweeps him up in a tangle of stimulating ideas. He employs logic as far as it alone can go. Soon, however, his progress is blocked, and he may appear to have abandoned a fruitless struggle. But preconsciously, his mind probes and scans for clues throughout all his sources of information and experience, rapidly discerning those that will fit, neatly discarding the others. He keeps on going. Often, through an accident that has a distinctive personal flavor, he will finally stumble on a fresh clue. At a conscious level, the clue might appear irrelevant, but it immediately opens up wide avenues of useful information. He suddenly finds himself in a state of enhanced awareness. His thoughts steer themselves at lightning speed to a new conscious insight. The new solution is vivid and intensely satisfying both intellectually and emotionally. His visual recollection of the moment is usually indelible. The “moment” may be a major flash of insight, or it may be an attenuated “spark,” or a related series of faint glimmers spread out over months or years.
    2. The creative individual is a person who regularly solves problems, fashions products, or defines new questions in a domain in a way that is initially considered novel but that ultimately becomes accepted in a particular cultural setting. Howard Gardner
    3. Some would restrict creativity solely to the flash of creative inspiration. I can’t agree. I would emphasize that these brief moments are rare, that they have a long prelude, and that they must be followed up if they are to be productive. Still, whenever you have an intense episode of illumination, you know that it is a profound and very special experience.
    4. A sensitive perception of details in the world of nature and the world of man; an awareness of and concern about unsolved problems-the attitude of inquiry; fluency of thought. Ideas come readily; later they are evaluated for quality and logic;” concentration-ability to enter wholeheartedly and personally into an experience; integration-ability to find unity in the diversity of nature, to discover unexpected likenesses, and to relate or connect things not previously related or connected; flexibility and spontaneity guided by a goal or purpose; originality and individuality. The creative person has the courage and inner directedness to resist conformity. Not content with what is now accepted, he looks forward to what may be accepted; ability to analyze and abstractor ability to synthesize; ability to go beyond the facts and discern new implications, to imagine more than evidence obviously shows, to speculate on relations that may not at present be verifiable;* keen satisfaction in creative activities; vivid imagery; Superior abstract and verbal intelligence.
    5. The visual element of creativity is not a single skill, but one separable even in children into at least three components: a preference for complexity, a skill at handling complexity, and an ability to complete what is unfinished. Beyond these gifts the adult researcher needs a special permissive attitude, one that enables him to “see” deeply into a problem, then to find relationships between many seemingly unrelated items, and finally to forge links that connect them. He is not only adept at recognizing a cluster of facts, but he is utterly transfixed when he notes an exception to the rule. Incongruity in a situation snaps him instantly to attention. Charles Darwin’s son described this quality in his father as follows: “There was one quality of mind which seemed to be of special and extreme advantage in leading him to make discoveries. It was the power of never letting exceptions pass unnoticed. Everybody notices a fact as an exception when it is striking or frequent, but he had a special instinct for arresting an exception.””
    6. If I were to limit myself to the five most important traits, I would quickly select: curiosity, imagination, enthusiasm, discrimination, and persistence. But this would be like trying to define the complex operations of a whole human being in terms of his five most vital organs: nervous system, heart, lungs, adrenals, liver. They are essential, but they, too, are only part of the total picture.
    7. An interesting kind of fluid intellectual instability has been noted by Barron, who finds that the effectively original person is one who can regress very “far out” for the moment, yet still be able quickly to return to a high degree of rationality.’ As he does so, he can take back with him the fruits of his earlier regression to fantastic modes of thought. If the person is basically confident of his own ability to discern reality accurately, then he can afford to give free rein to his powers of imagination.
    8. Good role models are absolutely essential. Because we are motivated in many ways to live up to our models, no one is ever a “self-made” man. Examples of how to do something and-fully as important-how not to do something, exert their pervasive influence during one’s formative years.
    9. As we ascend the phylogenetic scale, the amount and complexity of the cerebral cortex increases enormously. In man, a whole new realm, the intellect, has been added. And in man we can observe that the search for stimuli takes on a new dimension-that of a quest. The quest is both psychologically utilitarian and intellectually satisfying. Man’s search to satisfy the physiological needs of his cerebral cortex now takes on a greater meaning, not only to himself but to society as well.
    10. The approach you take when you raise a good bird dog for the field is similar to that involved in trying to raise a creative child or researcher. You start to refine the chase into the quest even before the litter is conceived. First you search for the very best mental and physical pedigree you can find, balancing the sire’s known assets and liabilities against those of the dam. This gives you the optimum opportunity to have the best “hard wiring” already built into your pup’s nervous system at birth. Then you select the boldest, healthiest-looking pup as best you can tell from the way he stands, runs, cocks his ears, and socializes with you. Finally, you give him as much affection as you can without spoiling him. He’ll not only thrive on this, but you later won’t have to discipline him as much, for a word or a gesture will suffice instead of firmer measures. You’ll give him as much wide-open country to explore as freely as possible, graduating to tougher cover only when he’s tall enough for it, always trying to achieve that happy balance between preserving his intense feral qualities and keeping him out from under your feet. You’ll show your enthusiasm with praise when he goes staunchly on point on a pheasant, and your disapproval when he chases a rabbit. If you and hare especially lucky, you’ll have an older, wiser dog he can imitate, from whose experience he can quickly learn the wisdom of the chase that takes years to accumulate. Gradually, he’ll learn that fun and serious work are not incompatible. Ultimately, then, what you will have tried to do is to supplement his basic genetic constitution with the best “soft wiring” you can help him add from his environment-this will include behavior that he’s learned for himself, from you, and from another dog. Your goal is a strong, bold, wide-ranging dog, capable of practical, instinctive action in the field and still house-broken at home, a joy to watch in the field as well as to live with. If you should ever err, your bias should be in the direction of his independence in the field.
    11. As Plato said, “What is honored in a country will be cultivated there.” Even programmed instruction can enhance creativity in children, but it must be properly prepared so that it reinforces many different responses.
    12. These researchers were more effective when there was a “creative tension” between sources of stability and disruption, between security and challenge.
    13. Big problems must first be defined in the mind, however vaguely, before they can be effectively approached in the laboratory.
    14. One cannot rely on the processes of conscious or subconscious memory to pull out the right facts at just the right time. (At least, my brain doesn’t function that way.) Instead, I supplement what is inside my head with a fairly elaborate filing system. The individual topics are listed in large, bold print, color-coded so they can be seen-a file folder full of enzyme reprints here, a folder on a certain disease there, a file of methods farther on. With luck, connections will emerge between one file and the others. Sometimes they do, but rarely.
    15. In my own experience, the most productive free association occurs in the early morning reverie just before arising. In this fluid state, halfway between dreaming and waking, reasoned analysis is suspended. Problems, long unsolved, float up toward consciousness, and then seem easily to attach themselves to solutions, or to ideas for solutions.
    16. Sensing which ideas to ignore is probably more important than generating many of them.
    17. Thus, with regard to Francis Crick’s epic DNA research with James Watson, we find Crick remarking: “The major credit I think Jim and I deserve … is for selecting the right problem and sticking to it. It’s true that by blundering about we stumbled on gold, but the fact remains that we were looking for gold.”‘
    18. Moreover, suppose you start with the two abilities-one, the capacity to focus your concentration, the other the capability to browse internally in a more unfocused manner. It is not to your advantage constantly to deploy one at the expense of the other for hours on end. In fact, what you really need is to be able to shift flexibly, and repeatedly, from one mental mode to the other at exactly the right time.
    19. The master word… is directly responsible for all advances in medicine during the past twenty-five centuries… the master word is Work. Sir William Osler
    20. We recall that the sequences usually quoted are, in order: interest, preparation, incubation, illumination, verification, exploitation.
      1. Interest. Only if you are really interested in a topic will you persist in it, see it through to completion. This holds whether the topic is colors, dogs, mathematics, law, or whatever. Therefore, you should seek out those areas that serve a deep, long-standing personal need. You won’t know, in the abstract, which are your areas of special interest; you will first have to try many of them on for size. Those that fit naturally will “turn you on,” and only then will you really know. The interest that strongly motivates you will be the one that enlists all your energies and brings forth skills you would never be aware of otherwise. Your best work will be a projection of self. Trust yourself to know when you’re on the right track. …Soon, you will find that you’re engaged in something of a quest. At all times, seek out lively vital people-good teachers, in particular-for they will both kindle your interests and be inspiring role models in many critical ways. Get involved with them. Ask them questions. Select guides, not drivers, bright persons you can respect, mentors wise enough to help you find your own way, secure enough to keep your own best interests in mind, mature enough to let go at the right time. If need be, adopt some active hobbies that provide contrast. If you are a verbal, precise, systematic type, get into something loose-something visual or musical that you can actively participate in, whether that means finger painting, pottery, or the guitar. Engage all the nerve cells in your whole right hemisphere in active pursuits, not just in passive listening and looking. 
    1. Preparation. You must study to become well-grounded in your field, mastering its basic techniques until they are second nature. Then, practice your craft by solving problems of increasing complexity. Before long, you will find yourself out at some frontier of the field.
    2. Incubation. Preparation is followed by more work. When you work on a good new problem, you will become committed to it to the point of an obsession, wrestling with it months or years before you solve it completely. Like a jigsaw puzzle, each big problem consists of a whole series of smaller problems that need to be pieced together…Earlier, you needed time to browse; now, you must create solid undistracted blocks of time to work. These blocks of time tend to be more fruitful in the morning or in the evening…Sooner or later you will run out of ideas. If you then persist with the intensity you should, you will become frustrated by your lack of progress. Relax at this point. Let go. Free the problem to “go underground.” Set it aside to be worked over at all levels of consciousness. Here, again, other diverse interests will provide a refreshing change of pace, give you a breather while you incubate the first problem, afford other problems you can still make progress on in the interim…Define passive activities, such as listening to music, that help you relax, unfocus your thinking, and loosen up your free associations. 
    1. Illumination. Solutions do leap forth by themselves, but a clear, relaxed, well-slept mind generates more innovative ideas. Get enough sleep. Stay alert for the intuitions that flicker in from the margins of consciousness, especially during the phase of reverie after awakening. Major insights can be unforgettable, but they are rare. Most other flashes of insight are of lesser intensity, and they can vanish quickly unless you immediately write them down.
    2. Verification. If a solution has arisen, it is still only one possible solution. If a hypothesis springs forth, it remains to be tested. Again, hard mental and physical work enters in. You will save much time at this point by shifting into hypercritical gear, deferring all leads save those most pregnant with new possibilities. Ask the “so what” question.
    3. Exploitation. Keep the emphasis on ideas, theories, and hypotheses that can lead to action. If your creative efforts are ever going to cause change, you can’t stop now. You must follow through on the project, investing more of yourself to make sure that change does, in fact, occur.
  8. Other
    1. the arts and crafts you are interested in involving taking an adult education course, and you haven’t got the time to explore such new ground, take the time.
    2. True creativity is characterized by a succession of acts, each dependent on the one before and suggesting the one after. Edwin Land
    3. Discovery is pluralistic. It springs from a dynamic interplay between one’s own lifestyle and that of other persons, between intuition and reason, between the conventional scientific method and chance in all its forms. The more diversity there is among these elements the more unique is the resulting creative product.

What I got out of it

  1. If there’s anything we can do to bring about more luck into our lives, seems like we should take advantage of that. Blind luck, luck due to motion/velocity, luck due to preparation, luck to individualized actions/hobbies

Marc Andreessen’s Blog Archives

Summary

  1. A compilation of Marc Andreesen’s blog posts – touching on everything from startups to productivity (PDF can be found here)

Key Takeaways

  1. Favorite articles – Why not to do a startup, guide to personal productivity, The Psychology of Entrepreneurial Misjudgment, Age and the Entrepreneur, Luck and the Entrepreneur
  2. When the VC’s say “no”
    1. Third, retool your plan. This is the hard part—changing the facts of your plan and what you are trying to do, to make your company more fundable. To describe the dimensions that you should consider as you contemplate retooling your plan, let me introduce the onion theory of risk. If you’re an investor, you look at the risk around an investment as if it’s an onion. Just like you peel an onion and remove each layer in turn, risk in a startup investment comes in layers that get peeled away — reduced — one by one. Your challenge as an entrepreneur trying to raise venture capital is to keep peeling layers of risk off of your particular onion until the VCs say “yes” — until the risk in your startup is reduced to the point where investing in your startup doesn’t look terrifying and merely looks risky.
  3. But I Don’t Know Any VCs
    1. VCs work mostly through referrals And of course it’s even better if you walk in with existing “traction” of some form — customers, beta customers, some evidence of adoption by Internet users, whatever is appropriate for your particular startup. With a working product that could be the foundation of a fundable startup, you have a much better chance of getting funded once you do get in the door. Back to my rule of thumb from the last post: when in doubt, work on the product. Failing a working product and ideally customers or users, be sure to have as fIeshed out a presentation as you possibly can— including mockups, screenshots, market analyses, customer research such as interviews with real prospects, and the like. 
    1. Don’t bother with a long detailed written business plan. Most VCs will either fund a startup based on a fleshed out Powerpoint presentation of about 20 slides, or they won’t fund it at all. Corollary: any VC who requires a long detailed written business plan is probably not the right VC to be working with.
    2. Alternately, jump all over Y Combinator. This program, created by entrepreneur Paul Graham and his partners, funds early-stage startups in an organized program in Silicon Valley and Boston and then makes sure the good ones get in front of venture capitalists for follow-on funding. It’s a great idea and a huge opportunity for the people who participate in it.
    3. Read VC blogs — read them all, and read them very very carefully. VCs who blog are doing entrepreneurs a huge service both in conveying highly useful information as well as frequently putting themselves out there to be contacted by entrepreneurs in various ways including email, comments, and even uploaded podcasts. Each VC is different in terms of how she wants to engage with people online, but by all means read as many VC blogs as you can and interact with as many of them as you can in appropriate ways.
    4. So, when such a new thing comes out—like, hint hint, Facebook or Twitter— jump all over it, see which VCs are using it, and interact with them that way — sensibly, of course. More generally, it’s a good idea for entrepreneurs who are looking for funding to blog — about their startup, about interesting things going on, about their point of view.
  4. The Only Thing That Matters
    1. Personally, I’ll take the third position — I’ll assert that market is the most important factor in a startup’s success or failure. Why? In a great market — a market with lots of real potential customers — the market pulls product out of the startup. The market needs to be fulfilled and the market will be fulfilled, by the first viable product that comes along. The product doesn’t need to be great; it just has to basically work. And, the market doesn’t care how good the team is, as long as the team can produce that viable product.
    2. In honor of Andy Rachleff, formerly of Benchmark Capital, who crystallized this formulation for me, let me present Rachleff’s Law of Startup Success: The #1 company-killer is lack of market. Andy puts it this way:
      1. When a great team meets a lousy market, market wins.
      2. When a lousy team meets a great market, market wins.
      3. When a great team meets a great market, something special happens.
    3. Let’s introduce Rachleff’s Corollary of Startup Success: The only thing that matters is getting to product/market fit. Product/market fit means being in a good market with a product that can satisfy that market. You can always feel when product/market fit isn’t happening. The customers aren’t quite getting value out of the product, word of mouth isn’t spreading, usage isn’t growing that fast, press reviews are kind of “blah”, the sales cycle takes too long, and lots of deals never close. And you can always feel product/market Ft when it’s happening
    4. Carried a step further, I believe that the life of any startup can be divided into two parts: before product/market fit (call this “BPMF”) and after product/market fit (“APMF”). When you are BPMF, focus obsessively on getting to product/market fit. Do whatever is required to get to product/market fit. Including changing out people, rewriting your product, moving into a different market, telling customers no when you don’t want to, telling customers yes when you don’t want to, raising that fourth round of highly dilutive venture capital — whatever is required.
  5. The Moby Dick Theory of Big Companies
    1. First, don’t do startups that require deals with big companies to make them successful.
    2. Second, never assume that a deal with a big company is closed
    3. Third, be extremely patient
    4. Fourth, beware bad deals
    5. Fifth, never, ever assume a big company will do the obvious thing.
    6. Sixth, be aware that big companies care a lot more about what other big companies are doing than what any startup is doing.
    7. Seventh, if doing deals with big companies is going to be a key part of your strategy, be sure to hire a real pro who has done it before.
    8. Eighth, don’t get obsessed.
  6. How much funding is too little? too much?
    1. The answer to that question, in my view, is based on my theory that a startup’s life can be divided into two parts — Before Product/ Market Fit, and After Product/Market Fit. Before Product/Market Fit, a startup should ideally raise at least enough money to get to Product/Market Fit. After Product/Market Fit, a startup should ideally raise at least enough money to fully exploit the opportunity in front of it, and then to get to profitability while still fully exploiting that opportunity. I will further argue that the definition of “at least enough money” in each case should include a substantial amount of extra money beyond your default plan, so that you can withstand bad surprises. In other words, insurance. This is particularly true for startups that have not yet achieved Product/ Market Fit, since you have no real idea how long that will take. Raising money is never an accomplishment in and of itself — it just raises the stakes for all the hard work you would have had to do anyway: actually building your business.
    2. Some signs of cultural corrosion caused by raising too much money:
      1. Hiring too many people — slows everything down and makes it much harder for you to react and change. You are almost certainly setting yourself up for layoffs in the future, even if you are successful, because you probably won’t accurately allocate the hiring among functions for what you will really need as your business grows.
      2. Lazy management culture — it is easy for a management culture to get set where the manager’s job is simply to hire people, and then every other aspect of management suffers, with potentially disastrous long-term consequences to morale and effectiveness.
      3. Engineering team bloat — another side effect of hiring too many people; it’s very easy for engineering teams to get too large, and it happens very fast. And then the “Mythical Man Month” effect kicks in and everything slows to a crawl, your best people get frustrated and quit, and you’re in huge trouble.
      4. Lack of focus on product and customers — it’s a lot easier to not be completely obsessed with your product and your customers when you have a lot of money in the bank and don’t have to worry about your doors closing imminently.
      5. Too many salespeople too soon — are out selling a product that isn’t quite ready yet, hasn’t yet achieved Product/Market Fit — alienating early adopters and making it much harder to go back when the product does get right.
      6. Product schedule slippage — what’s the urgency? We have all this cash! Creating a golden opportunity for a smaller, scrappier startup to come along and kick your rear. So what should you do if you do raise a lot of money? As my old boss Jim Barksdale used to say, the main thing is to keep the main thing the main thing —be just as focused on product and customers when you raise a lot of money as you would be if you hadn’t raised a lot of money.
      7. Easy to say, hard to do, but worth it.
    3. Continue to run as lean as you can, bank as much of the money as possible, and save it for a rainy day — or a nuclear winter. Tell everyone inside the company, over and over and over, until they can’t stand it anymore, and then tell them some more, that raising money does not count as an accomplishment and that you haven’t actually done anything yet other than raise the stakes and increase the pressure.
    4. Illustrate that point by staying as scrappy as possible on material items — office space, furniture, etc. The two areas to splurge, in my opinion, are big-screen monitors and ergonomic office chairs. Other than that, it should be Ikea all the way.
  7. Why a startup’s initial business plan doesn’t matter that much
    1. A startup’s initial business plan doesn’t matter that much, because it is very hard to determine up front exactly what combination of product and market will result in success. By definition you will be doing something new, in a world that is a very uncertain place. You are simply probably not going to know whether your initial idea will work as a product and a business, or not. And you will probably have to rapidly evolve your plan — possibly every aspect of it — as you go. (The military has a saying that expresses the same concept — “No battle plan ever survives contact with the enemy.” In this case, your enemy is the world at large.) It is therefore much more important for a startup to aggressively seek out a big market, and product/market Ft within that market, once the startup is up and running, than it is to try to plan out what you are going to do in great detail ahead of time. The history of successful startups is quite clear on this topic.
  8. Hiring, managing, promoting, and firing executives
    1. Hire an executive only when it’s clear that you need one: when an organization needs to get built; when hiring needs to accelerate; when you need more processes and structure and rigor to how you do things.
    2. Second, hire the best person for the next nine months, not the next three years. 
    3. Third, whenever possible, promote from within.
  9. Retaining great people
    1. Companies that are winning — even really big, old ones — never have a retention problem. Everyone wants to stay, and when someone does leave, it’s really easy to get someone great to take her place. Companies that have a retention problem usually have a winning problem. Or rather, a “not winning” problem. 
    2. And here’s a neat trick that actually works. Go out and re-recruit the best people who already left. Some of them have since discovered that the grass isn’t actually greener at whatever mediocre startup they joined or whatever other big company they jumped to. Give them fat packages against the new mission and get them back.
  10. Where to go and why
    1. When picking an industry to enter, my favorite rule of thumb is this:
      1. Pick an industry where the founders of the industry — the founders of the important companies in the industry — are still alive and actively involved. This is easy to figure out — just look at the CEO, chairman or chairwoman, and board of directors for the major companies in the industry. If the founders of the companies are currently serving as CEO, chairman or chairwoman, or board member of their companies, it’s a good industry to enter. It is probably still young and vital, and there are probably still opportunities to exploit all over the place, either at those companies or at new companies in that industry. Once you have picked an industry, get right to the center of it as fast as you possibly can. Your target is the core of change and opportunity — figure out where the action is and head there, and do not delay your progress for extraneous opportunities, no matter how lucrative they might be. Never worry about being a small fish in a big pond. Being a big fish in a small pond sucks—you will hit the ceiling on what you can achieve quickly, and nobody will care. Optimize at all times for being in the most dynamic and exciting pond you can find. That is where the great opportunities can be found. Apply this rule when selecting which company to start
      2. In a rapidly changing Held like technology, the best place to get experience when you’re starting out is in younger, highgrowth companies.
  11. The Pmcarca guide to personal productivity
    1. Don’t keep a schedule!
      1. By not keeping a schedule, I mean: refuse to commit to meetings, appointments, or activities at any set time in any future day. As a result, you can always work on whatever is most important or most interesting, at any time.
      2. When someone emails or calls to say, “Let’s meet on Tuesday at 3″, the appropriate response is: “I’m not keeping a schedule for 2007, so I can’t commit to that, but give me a call on Tuesday at 2:45 and if I’m available, I’ll meet with you.” Or, if it’s important, say, “You know what, let’s meet right now.” Clearly this only works if you can get away with it. If you have a structured job, a structured job environment, or you’re a CEO, it will be hard to pull off. 
      3. If you have at any point in your life lived a relatively structured existence—probably due to some kind of job with regular office hours, meetings, and the like—you will know that there is nothing more liberating than looking at your calendar and seeing nothing but free time for weeks ahead to work on the most important things in whatever order you want. This also gives you the best odds of maximizing Yow, which is a whole other topic but highly related.
    2. Keep 3 and only 3 lists: a Todo List, a Watch List, and a Later List
      1. The more into lists you are, the more important this is. Into the Todo List goes all the stuff you “must” do — commitments, obligations, things that have to be done. A single list, possibly subcategorized by timeframe (today, this week, next week, next month).
      2. Into the Watch List goes all the stuff going on in your life that you have to follow up on, wait for someone else to get back to you on, remind yourself of in the future, or otherwise remember. Into the Later List goes everything else—everything you might want to do or will do when you have time or wish you could do. If it doesn’t go on one of those three lists, it goes away.
    3. 3×5 Index Cards
      1. Each night before you go to bed, prepare a 3×5 index card with a short list of 3 to 5 things that you will do the next day Use the back of the 3×5 card as your anti-todo list. Each time you do something, you get to write it down and you get that little rush of endorphins that the mouse gets every time
      2. he presses the button in his cage and gets a food pellet. Then tear it up and throw it away
    4. Structured procrastination
      1. The gist of Structured Procrastination is that you should never fight the tendency to procrastinate — instead, you should use it to your advantage in order to get other things done.
      2. As John says, “The list of tasks one has in mind will be ordered by importance. Tasks that seem most urgent and important are on top. But there are also worthwhile tasks to perform lower down on the list. Doing these tasks becomes a way of not doing the things higher up on the list. With this sort of appropriate task structure, the procrastinator becomes a useful citizen. Indeed, the procrastinator can even acquire, as I have, a reputation for getting a lot done.”
    5. Strategic incompetence
      1. Enough said
    6. Do email exactly twice a day
    7. When you do process email, do it like this
      1. First, always finish each of your two daily email sessions with a completely empty inbox.
      2. Second, when doing email, either answer or file every single message until you get to that empty inbox state of grace.
      3. Third, emails relating to topics that are current working projects or pressing issues go into temporary subfolders of a folder called Action.
      4. Fourth, aside from those temporary Action subfolders, only keep three standing email folders: Pending, Review, and Vault
        1. Emails that you know you’re going to have to deal with again — such as emails in which someone is committing something to you and you want to be reminded to follow up on it if the person doesn’t deliver — go in Pending.
        2. Emails with things you want to read in depth when you have more time, go into Review.
        3. Everything else goes into Vault.
    8. Don’t answer the phone
      1. Let it go to voicemail and do them in batches
    9. Hide in an iPod
      1. People are less likely to bother you even if you’re not listening to anything
    10. Sleeping and eating
      1. start the day with a real, sit-down breakfast. This fuels you up and gives you a chance to calmly, peacefully collect your thoughts and prepare mentally and emotionally for the day ahead
    11. Only agree to new commitments when both your head and your heart say yes
    12. Do something you love
  12. The Psychology of Entrepreneurial Misjudgment
    1. The design of tactical incentives — e.g. bonuses — is a whole topic in and of itself, and is critically important as your company grows. The most significant thing to keep in mind is that how the goals are designed really matters — as Mr. Munger says, people tend to game any system you put in place, and then they tend to rationalize that gaming until they believe they really are doing the right thing. I think it was Andy Grove who said that for every goal you put in front of someone, you should also put in place a counter-goal to restrict gaming of the first goal. 
    2. My favorite way around this problem is the one identified by Clayton Christensen in The Innovator’s Dilemma: don’t go after existing customers in a category and try to get them to buy something new; instead, go find the new customers who weren’t able to afford or adopt the incarnation of the status quo.
  13. Age and the Entrepreneur
    1. Just do yourself a favor and read the whole thing. The article he references can be found here
  14. Luck and the entrepreneur
    1. Chance… something fortuitous that happens unpredictably without discernable human intention. 
    2. OK, so what are they?
      1. In Chance I, the good luck that occurs is completely accidental. It is pure blind luck that comes with no effort on our part. 
      2. In Chance II, something else has been added — motion. Unluck runs out if you keep stirring up things so that random elements can combine, by virtue of you and their inherent affinities.
      3. Now, as we move on to Chance III, we see blind luck, but it tiptoes in softly, dressed in camouflage. Chance presents only a faint clue, the potential opportunity exists, but it will be overlooked except by that one person uniquely equipped to observe it, visualize it conceptually, and fully grasp its significance. Chance III involves a special receptivity, discernment, and intuitive grasp of significance unique to one particular recipient. Louis Pasteur characterized it for all time when he said, “Chance favors the prepared mind.”
      4. [Chance IV] favors the individualized action. This is the fourth element in good luck — an active, but unintentional, subtle individualized prompting of it. Please explain! Chance IV is the kind of luck that develops during a probing action which has a distinctive personal flavor. The English Prime Minister, Benjamin Disraeli, summed up the principle underlying Chance IV when he noted: “We make our fortunes and we call them fate.” Chance IV comes to you, unsought, because of who you are and how you behave. Chance IV is so personal, it is not easily understood by someone else the first time around… here we probe into the subterranean recesses of personal hobbies and behavioral quirks that autobiographers know about, biographers rarely. [In neurological terms], Chance III [is] concerned with personal sensory receptivity; its counterpart, Chance IV, [is] involved with personal motor behavior.
      1. [You] have to look carefully to find Chance IV for three reasons.
        1. The first is that when it operates directly, it unfolds in an elliptical, unorthodox manner.
        2. The second is that it often works indirectly.
        3. The third is that some problems it may help solve are uncommonly difficult to understand because they have gone through a process of selection. We must bear in mind that, by the time Chance IV finally occurs, the easy, more accessible problems will already have been solved earlier by conventional actions, conventional logic, or by the operations of the other forms of chance. What remains late in the game, then, is a tough core of complex, resistant problems. Such problems yield to none but an unusual approach…[Chance IV involves] a kind of discrete behavioral performance focused in a highly specific manner.
      2. Here’s the money quote:
        1. Whereas the lucky connections in Chance II might come to anyone with disposable energy as the happy by-product of any aimless, circular stirring of the pot, the links of Chance IV can be drawn together and fused only by one quixotic rider cantering in on his own homemade hobby horse to intercept the problem at an odd angle.
    3. A recap?
      1. Chance I is completely impersonal; you can’t influence it.
      2. Chance II favors those who have a persistent curiosity about many things coupled with an energetic willingness to experiment and explore.
    1. Chance III favors those who have a sufficient background of sound knowledge plus special abilities in observing, remembering, recalling, and quickly forming significant new associations.
    2. Chance IV favors those with distinctive, if not eccentric hobbies, personal lifestyles, and motor behaviors. This of course leads to a number of challenges for how we live our lives as entrepreneurs and creators in any field:  How energetic are we? How inclined towards motion are we? 
    3. Those of you who read my first page and the entrepreneur post will recognize that this is a variation on the “optimize for the maximum number of swings of the bat” principle. In a highly uncertain world, a bias to action is key to catalyzing success, and luck, and is often to be preferred to thinking things through more thoroughly.
      1. How curious are we? How determined are we to learn about our chosen field, other fields, and the world around us? In my post on hiring great people, I talked about the value I place on curiosity — and specifically, curiosity over intelligence. This is why. Curious people are more likely to already have in their heads the building blocks for creating a solution for any particular problem they come across, versus the more quote-unquote intelligent, but less curious, person who is trying to get by on logic and pure intellectual effort.
      2. How fIexible and aggressive are we at synthesizing– at linking together multiple, disparate, apparently unrelated experiences on the fly? I think this is a hard skill to consciously improve, but I think it is good to start most creative exercises with the idea that the solution may come from any of our past experiences or knowledge, as opposed to out of a textbook or the mouth of an expert. (And, if you are a manager and you have someone who is particularly good at synthesis, promote her as fast as you possibly can.)
      3. How uniquely are we developing a personal point of view — a personal approach– a personal set of “eccentric hobbies, personal lifestyles, and motor behaviors” that will uniquely prepare us to create? This, in a nutshell, is why I believe that most creative people are better off with more life experience and journeys into seemingly unrelated areas, as opposed to more formal domain-specific education — at least if they want to create. In short, I think there is a roadmap to getting luck on our side, and I think this is it.

What I got out of it

  1. Some awesome insights. I changed how I batch mail, learned how to see luck from 4 different perspectives, and thought Simonton’s age and outstanding achievement was incredible