- Steve Jobs
Ever since I heard Steve say these words through a garbled recording of some design awards conference in the early 80’s (on a remarkably great playlist Ashton Kutcher made on SoundCloud to prep for his role in that awful jObs biopic), I see these words everywhere.
The most recent manifestation of them is this Beats Music/Apple news, and the origin of the whole Beats brand. There was the Monster Cable technology that Kevin Lee had chased for years before finally striking a deal with Beats that ultimately screwed his and his dad’s whole company out of any ownership. There was the purchase of MOG to power the me-too streaming service that became Beats Music. The crowning of Dr. Dre as the face of the headphones and thus making them a must-have fashion accessory. The shouting of the word “curation” at every turn with the launch of the streaming service with Ian Rogers doing most of the talking. And the deep music industry connections from the man behind the curtain, Jimmy Iovine (it didn’t hurt that he had convinced Universal and some executives at Warner to invest in the venture, making them a nice windfall profit in the process).
All of those components would seem disparate at the get-go, but came together as one big money-making symphony with Jimmy as the conductor last week with announcement of Apple buying the company for $3.2 billion.
Two people I love who cover the media industry—Jason Hirschorn and Bob Lefsetz—both invoked this wisdom from Steve in their reporting on the news. And examples like these just make that wisdom all the more crystallized. That’s some pretty good connect-the-dots work right there.
I have been writing a lot about wealth and income inequality and I am readingThomas Piketty's Capital in the 21st Century (review forthcoming as soon as I am finished). So it seems appropriate to ask how I feel about the wealth being created by tech startups for entrepreneurs, early employees and investors (which of course includes VCs like myself). I have hinted at this here on Continuations in the past in a post about Twitter but it is worth clarifying. I believe that a large component of this wealth is random — or if you so want: luck.
Maybe the perfect illustration of that random component is Brian Acton, the co-founder of Whatsapp. He famously tweeted about being turned down by both Twitter and then Facebook as an engineer in 2009. If either one of those jobs had come through it seems highly unlikely that Brian would have joined Jan Koum in the fall of 2009 to work on Whatsapp. Which in turn would have made it pretty unlikely that Brian would have made hundreds of millions of dollars when Facebook acquired WhatsApp.
My personal story is similarly full of randomness. I spent all of 2003 trying to buy a traditional software company with the goal of then Internet enabling it. Together with a friend and partner we got super close to buying the leading trucking software company in the US which was headquartered in Cleveland. The deal fell apart at the 12th hour over a sales tax liability (that later turned out to be trivial — I will at some point blog about the details). In any case, had that deal happened I would have been in Cleveland instead of teaming up withJoshua for the wild ride that was delicious and subsequently joining USV.
If you want to argue that this entrepreneurial or investor wealth creation is not random to a large degree, then you would have to believe that people like Brian (or myself) have some skill or ability that is thousands or even millions of times larger than that of others. I personally find that preposterous. Just to be clear, I am not denying an element of risk taking, smarts, etc. — clearly you have to work for a startup or become and investor to begin with if you want to have a shot at this (as in the joke of the person praying for years to win the lottery only to finally hear God speak “buy a lottery ticket”). Beyond that though much depends on being in the right place at the right time.
At the moment randomness is amplified significantly by the winner-take-all characteristic of many markets. The leading service or app in a category with network effects can be an order of magnitude or more larger than the next competitor and can do so on a global scale. Or put differently, the potential size of the lottery tickets has increased substantially. We have had a similar period in history during early industrialization.
PS Some further clarification on the randomness aspect. I am not arguing that the emergence of a company such as WhatsApp is unlikely (in fact the opposite). I am talking about the probability of a particular startup becoming that and of a particular person to be a founder of or investor in that startup.
Had this same discussion over Easter dinner yesterday and we came to the conclusion that generally people who acknowledge that at least a portion of their great success is the result of a “lucky break” somewhere along the way are much more tolerable/humble/fun to hang out with than people who attribute 100% of their success to their hard work/smarts/genius. Those people tend to be assholes.
Not to say the girl or guy with the lucky break didn’t work their ass off to make the best of it, and of course they did, but there are also a heck of a lot of smart, hard-working people who haven’t had the same kind of success, however they define it.
LIFE HACK IF SOMEONE IS REALLY EXCITED ABOUT SOMETHING TRY TO BE EXCITED FOR THEM OR AT LEAST PRETEND TO BE AT LEAST SLIGHTLY INTERESTED BECAUSE NOTHING FEELS WORSE THAN EXPRESSING SOMETHING THAT MAKES YOU HAPPY ONLY TO HAVE PEOPLE TELL YOU TO CALM DOWN OR IGNORE YOU COMPLETELY
Daily Rituals: How Artists Work by Mason Cure
A book detailing the daily routines of people like Kafka, Wolfe, Karl Marx, Agatha Christie, Woody Allen, Dickens, Picasso, Gershwin? Yeah, I’m sold. Just got bumped to the top of the list.
As someone who, no matter how busy, is constantly inspired to fiddle with some side project but finds too many excuses to dive deep enough, this topic is important to me. And if Anthony Trollope could write 3,000 words every morning before leaving for work at the Post Office, where he held a job for 33 years while writing more than 2 dozen books, then what’s my excuse?
Neil Gaiman’s Commencement Speech at the University of the Arts, 2012
Was reminded of this in an email from Tim Ferriss today, referencing his incredibly honest "Productivity" Tricks post from last month. It doesn’t get much more inspiring than that!
Haven’t read any of the documentation yet, but knowing YC’s propensity to innovate their “product” to find a happy medium between investors and entrepreneurs, I’m excited about this!