The Ultimate Outsider’s Hack: Read All The Biographies

Something Like An Autobiography: Akira Kurosawa: 9780394714394: Amazon.com: Books

A waiter at Sugar Bowl this weekend recognized me from my podcast, and after a couple of meals in the dining room, got up the nerve to tell me he was a huge fan. This is, for the record, one of the most wonderful things a podcaster can hear.

If you see me out, even if I’m with my family, do not hesitate to say “hello,” give me a fist bump, take a selfie (if so inclined), and let me know what your favorite episode is. I like being a micro-celebrity and I love talking to people–don’t be shy!

[ Click to Tweet (can edit before sending): https://ctt.ac/3np2d ]

Anyway, he asked me for three book recommendations for a young person starting out.

When I was younger I wanted to be rich and powerful because I grew up poor and powerless. How anyone got rich and powerful was an enigma to me because I didn’t know anyone rich or powerful–until I started reading biographies.

Biographies are the ultimate outsider’s hack. They enable you to hear all the details of how powerful, important and rich people became those things. Often they will share what they learned, regret and would do differently.

I recently finished Mike Ovitz’s “Who is Mike Ovitz,” and I was blown away. I’m actually listening to it a second time, and he’s committed to coming on the podcast this year.

Ten other biographies I recommend:

  1. On Writing: A Memoir of the Craft by Stephen King
  2. Something Like an Autobiography by Akira Kurosawa (top three director for me).
  3. Born Standing Up by Steve Martin
  4. One of a Kind: The Story of Stuey ‘The Kid’ Ungar, the World’s Greatest Poker Player by Nolan Dalla and Peter Alson
  5. All Over but the Shoutin’ by Rick Bragg
  6. Creativity, Inc.: Overcoming the Unseen Forces That Stand in the Way of True Inspiration by Ed Catmull & Amy Wallace
  7. The Autobiography of Malcolm X by Malcolm X as told to Alex Haley
  8. Shoe Dog: A Memoir by the Creator of Nike by Phil Knight
  9. Hillbilly Elegy: A Memoir of a Family and Culture in Crisis by J. D. Vance
  10. Red Notice: A True Story of High Finance, Murder, and One Man’s Fight for Justice by Bill Browder

Some of these are amazing to listen to on Audible as well — get your free book at audible.com/twist (ohhhh…… auuuudible!).

Note: I realize I don’t have any biographies written by women on this list. Does anyone have a top ten for me to read next? I’ve got #Girlboss in my queue but could use some more. The comments are open!

The Three Vendor Rule

When I first started doing events in New York City in the 90s, the first one called “Ready. Set, Pitch,” I realized that vendors would give us wildly different quotes — often for the same exact thing.

That is when I came up with The Three Vendor Rule.

[ Click to Tweet (can edit before sending): https://ctt.ac/4Rbqa ]

I told my team to obtain three quotes for everything we did, from A/V to space to food to furniture rentals.

As anyone who has done any management will predict, I got pushback … but not from the vendors, from my own people!

Why do we have to do all this redundant work?

Why couldn’t we just use the same vendor as last year?

In my younger days I would simply say “do it” and walk away. Later on I would say “either you can do it or I will do it.”

Of course folks would take weeks to get this done, waiting on the third quote, melee fighting and more. “I love this vendor” and “they were loyal to us” and “this is a waste of my time.”

My team was fighting me on saving money. It was bonkers.

So, I re-stated my rule to be:

“Ask seven vendors for a quote, bring me the first three complete ones.”

The results were stunning across the board. We would have vendors we used last year charge us 2-3x as much for the same thing, a year later! Some vendors would charge us $1,500 to rent a monitor that costs … wait for it … $1,500! One vendor would charge $1,000 to rent a projector while another, $2,500 — for the same projector.

My team started to understand we were being ripped off and they started to join my team to work the vendors, as opposed to working their boss (me).

So, I further amended the rule to be:

“Ask seven vendors for an itemized, apples-to-apples quote, bring me the first three complete ones in a spreadsheet with the % difference in pricing highlighted.”

By doing this we immediately found a range of prices from, say … $15,000 to $50,000, for the same thing.

Then I would ask the team to work the quotes, pointing out things that were bonkers to the vendors. I would give them language to use that was non-accusatory, like:

“I notice that this projector is $2,500 on Amazon and you’re charging us $2,000 to rent it. Perhaps you can look into that for us?”

Or

“Right now your quote is amazing, thanks so much for the effort. As a final step I emailed you four items that are a bit outside of market pricing. If you could review them and make any changes before I submit my recommended vendor to my manager that would be great. Again, thanks so much!”

That’s called the shit sandwich in the business: say something nice, drop the bad news and then finish up with more pleasantries.

Of course, once vendors had completed two hours of work, they were more likely to come down on price because they were invested in working with us.

One time we had a surplus so I told the team “if we use that projector (or other item) 3x we can just buy it and own it. Look into that.”

Now we own our own video switchers and cameras. We can run our own events and we no longer have to ask for quotes on these items.

We could do this because we had the data.

As a final step, when we have two or three vendors in the same zone we simply ask them if they can do it for 10% less. This works every time, because we’ve created a competitive marketplace.

Now, the three vendor rule is a best practice more than a rule, stated as:

  1. Ask seven vendors for an itemized, apples-to-apples quote, bring me the first three complete ones in a spreadsheet with the % difference in pricing highlighted.
  2. Ask the vendors to update non-competitor parts of their quotes.
  3. Ask internally: Should we consider rolling our own (service) or buying this item outright?
  4. Have a second person ask the top 2-3 vendors to give us a 10% discount.
  5. Pick the most reliable vendor with the best product.

Now, when we onboard a new team member, we share the best practice with them and tell them “this is important work,” and they just do it.

This is the big lesson: Management is about explaining how to do things, why to do things and codifying everything. Then, refining it, repeating it and making your team feel 10 feet tall when executing.

When you become great at something and establish true understanding, you can name it well. In this case, my team will say “three vendor rule” at a meeting and we all know what that is and why it’s important.

Now that I’m older, and hopefully wiser, I try to focus some of my time on codification of the most important things we do. Writing is clarity of thinking, so being able to write this very post means I’ve obtained clarity.

This is why writing is such an undervalued skill in the world — and why I’m focusing on it so much.

[Wrote this on my iPhone, slopeside at Sugar Bowl in a blizzard. My daughter just showed up for breakfast, so I gotta bounce. Please say something in the comments, so I know people are reading and I keep the streak alive!]

Should I move my startup to Silicon Valley: the 2009 & 2019 answers compared

Often the best advice is situational, and the situation here in the Bay Area has changed dramatically in the past decade. Today I wanted to detail the two answers a founder would receive to the question, “Should I move my startup to Silicon Valley?” depending on if they asked it in 2009 or 2019.  

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Should you move to Silicon Valley: The 2009 answer

It was easy to give advice 10 years ago when founders asked me if they should move to Silicon Valley. The answer was a wholehearted “yes!” Given without reservation or consternation because:

  1. The sheer number of investors here
  2. The density of talented people here

High-growth startups, defined as the ones trying to hit $100M in revenue in under a decade (what you need to attract the elite investors and to achieve unicorn status), need talented team members and mountains of cash.

There is no place in the world with more of those two things than the Bay Area.

If you want to take over the movie business, you go to Los Angeles because that’s where the talent, money and distribution is. If you want to build a unicorn or decacorn, you come to the Bay.

It’s never really been a major debate.

Great founders can come from anywhere, but they build large businesses here.

Sure, we would see a Groupon (Chicago), Tumblr (New York) and Snapchat (Los Angeles), now and then, but we would see many more Ubers, Airbnbs, Facebooks, Googles and Teslas in the Bay.  

Supply and demand worked exceptionally well for Bay Area investors, who didn’t feel any FOMO by sticking to startups in the Bay Area. Candidly, most VCs still don’t want to get on planes and do board meetings in places that are more than 1-2 hours away from the Valley (read: Seattle to San Diego).

Should you move to Silicon Valley: the 2019 answer

Over the past decade the delta between running a business in the Bay Area and everywhere else expanded dramatically.

Apartments in the San Francisco and the Bay Area are two to five times that of other cities. Heck, I’ve been reading about American developers moving to Tokyo and Kyoto to work remotely while living epic, affordable lives in one of the highest-functioning cities in the world.

Compensation will vary 2-3x as well in many cases. Combine that with the short tenure of people in Silicon Valley, typically calculated in months/quarters, while talent in other cities settle in and stick around for years, and it’s no wonder that VCs themselves are changing their position on the location of your startup.  

Additionally, “remote work” has gone from a strange phenomenon a decade ago, to — at least for startups — commonplace today.

Add all this up, and I’ve seen the same VCs who insisted on founders moving to Silicon Valley in order to get funded, telling founders it’s great to come to Silicon Valley, but it’s also fine to stay where they are.

Often, the best advice is to split a startup’s office functions across geos, with corporate and product being in the Valley and everything else being “wherever makes things grow faster.”

I’ve seen startups raise $3m in the Valley with a plan to burn $250k a month, then move to Canada and have their burn drop by 75% — expending their runway by a couple of years.

If you do choose to be here in the Bay Area as a nascent startup, incurring the costs, you will be taken more seriously by most VCs — even though they will deny this. The thinking by some is that if you can’t figure out how to navigate the Bay Area you won’t navigate your business.

Talk about mixed signals!

Bottom line: Raising money is still much easier when your HQ is based in the Valley, but deploying capital across geos and embracing remote workers will stretch that cash meaningfully. Check back again in a year, if the economy and housing crash in 2020 the 2009 answer might be the correct one again!

How can I do an MVP for a delivery service I want to start?

ShaneRMTanner on Reddit asks: How can I do a MVP for a delivery service I want to start? The basic idea would is this: A delivery service for people who use Offerup and Letgo auction apps. I do and continue to get validation on this idea. It plagues me that I have thought and continue to think about a solution to this problem. Maybe it’s something I’m not seeing, but, I’m driven to find the answer or move on.

Shane: The concept of an MVP (minimum viable product) is to do the LEAST work to answer the HARDEST questions.

Click to Tweet (can edit before sending): https://ctt.ac/nc9bF

Before defining the MVP, you want to define the question(s) you’re trying to answer.

The questions I have about your business, as an investor, are:

  1. How much are people willing to pay for a delivery service, and can this amount build a highly profitable business?
  2. Can you acquire a customer profitably — and how.
  3. Finally, I would want to know what the scale of the business could be. Will one million people use it every month? Week? Day? Hour?

To answer number one and two, you could build landing pages using a service like Unbounce that say some something like

Offerup & LetGo users: Get Toronto delivery in under an [ hour/two hours/same day ] for up to 100lbs for [ $50 / $100 / $150 ]. Enter your email to schedule a shipment in under 10 minutes”

After you test that, you can see how many folks actually give you your email for same day vs. one hour, and for $50 vs. $150.

That data should give some really great insights on customer acquisition, like, what did it cost per click to the landing page and for each email submitted?

Depending on what data you get, you can start building the MVP or run another series of landing pages to answer even more questions.

As an angel investor should I invest in a founder working on two projects (or working half time on one)?

Peter Thiel (in crown), playing multiple Paypal employees at chess — including Sacks (the only winner) and Roelof Botha (to right of Sacks).

Just got asked this question on Quora.

If it’s Elon Musk or Jack Dorsey, sure, go ahead and invest in them.

If it’s anyone else, it’s likely not going to work out well as an investment.

[ Click to Tweet (can edit before sending): https://ctt.ac/c1U8m ]

There are some serial founders who specialize in starting and handing off startups to exceptional managers; Sky Dayton (who founded Boingo Wireless, EarthLink and other startups) comes to mind, but these individuals are rare.

You need to ask yourself as an angel investor the following two questions when looking at a founder with “founder ADD”:

  1. Has this person managed multiple projects before and how did that work out? I’m going to assume they haven’t done this before or you wouldn’t be asking the question.
  2. Does this person really believe in this startup, product, team and market, and if they do, why are they distracting themselves with other projects?! Perhaps they are hedging their bets.

The second question is the important one here. Perhaps the person started the project, needs to spend time with a sick family member, and they have an exceptional President and management team. In that case, I would evaluate the performance of the team and the likelihood that the President can take over as CEO.

Bottom line: startups are absurdly hard. Running two at the same time is like winning two chess matches at once. Anyone can play two games of chess at the same time, but very few will win both. This is an imperfect analogy, of course, because startups are not “win/lose,” they are more like “win small/win medium/win big/win gigantic/lose.” Even if the person wins both games, perhaps they will just win modestly —- which will suck for you as an angel investor.

Chrome OS is the ultimate productivity hack & will exceed Mac OS marketshare — but can it challenge Windows?

The Acer Chromebox CXI3

I recently replaced all but three of the Macs in our office (the ones used for video editing), with ~$800 ACER Chromeboxes and the stunning, ~$900, USB-C powered Dell 38″ monitors (model: U3818DW).

[ Click to Tweet (can edit before sending): https://ctt.ac/877i9 ]

Google’s Chrome OS is an absurdly fast, stable and distraction-free operating system. Over the past seven years of its short existence, it has become world-class.

Here’s why Google has nailed it:

  1. As the world has moved to cloud-based software, running inside of browsers, the need to download client software has disappeared for almost every task. This means software startups don’t have to build clients for every desktop operating system anymore (some do, most don’t).
  2. The Chrome Browser has become the standard for cloud-based apps to be built on — because it has massive market share.
  3. Chrome Extensions are available for everything you need to do, from password management, Grammarly and advanced email with Superhuman (email jason@18.234.176.227 with “superhuman” in the subject line and I will help you jump the line).
  4. ChromeOS doesn’t have all the Mac and Microsoft cruft like iMessage, Apple Photos, iTunes and all the rest. It’s basically just a browser with a desktop.
  5. Chrome OS is an open source project, which is allowing folks to do insane things like making a version of ChromeOS you can install on your old iMac and MacBook Air, and because the OS is so light it makes those computers seem new again.
  6. Chrome OS now supports Google Play, so if you insist on using an App like Spotify, Instagram or Slack, you have the option of doing it in the browser AND in the app. It’s kind of mind-blowing to Instagram on your huge desktop.
  7. Hardware vendors are loving and investing in Chrome OS. The fact that Acer is making a machine that is, literally, the size of a ham sandwich with 16 Gigs of ram, 64 GIG SSD, Bluetooth, six USB ports, an Intel Core i7 processor, USB-C, ethernet, HDMI and an SD reader is bonkers.
  8. For bonus points, you can power the ChromeBox from the USB-C port on your Dell Monitor — which then acts as a USB hub, giving you another four USB ports. This means the whole setup requires one power plug (to the monitor, NOT the computer), which is really strange.
  9. The chrome box powers 3840 x 1600 resolution on the Dell Monitor — which is nuts. You can put three giant chrome browser windows side by side, which will make you and your team 10-20% more efficient.
  10. ChromeBooks are all over schools today.
  11. Google’s login system and browser sync let you log in to ANY ChromeOS device — so sharing a ChromeBook or ChromeBox is as simple as logging on and off.
  12. ChromeOS is so light that it updates and boots blazingly fast — like seconds.
The back of acer chromebox

For $1,700 you can give everyone in your startup a machine that is absurdly fast and a monitor that is just amazing.

The Chromeboxes actually start at around $200, and you can get a decent widescreen for $400… so in truth you can test this setup out at like $600 total and have your mind blown.

Prediction: Chrome OS, which had < 1% market share at the start of 2015 and is currently at 4.35% marketing share of all operating systems (desktops, tablets, and mobile phones) will catch up and surpass Mac OS in the next five years. [ Source: StatCounter, slicker chart by Statista. ]

Comparing just MacOSX and Chrome OS

Big Question: Will Chrome OS eventually dominate the Windows operating system juggernaut, at 60%+? Google did with browsers, which take minutes to switch, but can they do it with computers which commonly get switched every three to five years?

The Chrome browser has taken over the world.

Finally, the Google Pixelbook is a fantastic machine to pair with the Dell 38 monitor. You simply plug in the USB port and, again, the monitor will charge your laptop and sync up in seconds. The Pixelbook, and Chromebox setup above, are half the price of an equivalent mac.

Bottom Line: Google’s brilliant long game: Chrome, Android and ChromeOS (aka the Chromium Project) are all open source and free, driving consumers to give their data to precious data for Google to — essentially — resell to advertisers. This builds a massive moat around Google’s ad business while putting massive pressure on Apple and Microsoft’s franchises.

How do you get an angel investor’s attention?

Don’t say everything

Got asked this question on Quora. The answer for me, and for most angels, is easy: send a short email with a link to the product or a product video.

[ Click to Tweet (can edit before sending): https://ctt.ac/3lcnX  ]

Protip: Do not email your life story or 3,000+ words on why you built your product. This will make you look deranged.

The goal of your email is to get the investor to a) understand what you’re doing and to b) respond.

You want to send just the most important thing, which is one of the following things 99% of the time:

  1. your product
  2. your traction
  3. your market
  4. your technology
  5. you

What you don’t want to do is send an angel EVERYTHING in the first email. Get them on the hook with the best thing (perhaps two things) and try and get them to ask you more questions.

As an example, Henry from Cafe X sent me a video of the prototype of the Cafe X machine, along with two sentences, while based in Hong Kong. Since then, I’ve invested millions in the company, I’m on the board and they have three locations rocking in San Francisco. Mission accomplished.

Note: I don’t respond to all my emails, I get around 300–500 per day… but I do open most of them, and I do click on links often.

PS – I’m going to try and write a blog post every day in 2019 and set them to publish at 7AM… consider this day one of 365.

This is your Captain speaking, I’m turning on the fasten seat belt sign

Friends,

This past weekend, I sent the email below to the 250+ founders I’ve invested in. The goal of this email was to prepare my founders for what happens to startups when a market corrects and then collapses.

I’m not calling a top to the market, or a crash, but rather giving my founders  a blueprint of how to survive and thrive in a down market.

I hope this is helpful to you as well. Feel free to forward it to a founder you know, as they might not be thinking about these issues.

Best, Jason@18.234.176.227

[ Click to Tweet: https://ctt.ac/84ceF ]

—-

Launch Portfolio Founders,

We are in year 10 of the current bull market.

Chaos reigns from Washington to Moscow and all of you are all competing for attention for customers and talent with an unprecedented number of highly-skilled founders running impressive businesses.

Having seen this movie up close three times in my startup career, I wanted to take a moment to explain to you what happens to startups when markets correct — and sometimes collapse.  

In short, I want to explain to you how to avoid having your startup die when the stock market crashes — just in case the market turns.

In my estimation there is a 20-30% chance we could have “an event” in the near term (the next two years), and since there is never a bad time to make long-term plans you should read this email twice, and discuss it with your senior team.

Continue reading “This is your Captain speaking, I’m turning on the fasten seat belt sign”

Defending self-driving cars in the face of tragedy

Last month we reached the tragic, and long-dreaded, moment in the history of self-driving cars: the death of an individual who didn’t opt into using self-driving technology. (In this case, it was a pedestrian, but it could have been passengers in a non-self driving car).

[ Click to Tweet (can edit before sending): https://ctt.ec/A29R8 ]

This follows the May 7, 2016 Florida death of a driver using Tesla’s driving-assist technologies (“autopilot”), which are often confused with self-driving technology.

Since that time, two other deaths have occurred while autopilot was engaged, including a driver in China on January 20, 2016, and the recent crash here in the Bay Area on March 23rd.

Four tragic deaths, in four separate instances, using two different flavors of self-driving tech (driver assist & fully automated), but one common thread which we must, as a society and industry, address candidly: user error and — most confoundingly — the abuse or misuse of this technology.

I’m a strong believer, and investor, in self-driving technologies.

I’m a shareholder in all three of the major players in self-driving: Tesla, Uber and Alphabet (aka Google), which owns Waymo. Two of those names, I own blindly via my Wealthfront “robo-portfolio” (i.e., I don’t actively trade them and don’t know how much I own of each). I invested in Uber, which is still a private company, during their seed round.

I also own two Teslas with self-driving technology, the Model X and the Model 3, and I’ve logged over 20,000 miles on autopilot.

I use autopilot almost every day on the 101 freeway, the same road where the most recent death with autopilot engaged occurred. It’s important to note that I’m not saying “autopilot death” here, but rather a death that occurred with autopilot engaged.

This is an important distinction, because in all three autopilot cases — and I want to be careful to not blame the victims here — the users appear to have potentially misused — or perhaps even abused — the technology.

Continue reading “Defending self-driving cars in the face of tragedy”

“Why do you hate crypto, Jason?” (I don’t, but… )

“If you are right, that 90% of crypto projects are scams or incompetent, what do you gain by taking that position publicly?” asked a close friend.

I took a moment to think it through.

[ Click to Tweet (can edit before sending): https://ctt.ec/3a1P0 ]

Why was I sounding the alarm on Twitter, my podcast, and CNBC, that civilians should be very careful investing in virtual currencies that are unregulated, anonymous, easily manipulated, phenomenally hackable, global, and often run by bad actors or the incompetent?  

“To protect people from losing their money?” I answered.

I’ve got a complicated relationship with crypto, having monitored early projects like Bitcoin with enthusiasm.

Six years ago I wrote a piece called “The Most Dangerous Project We’ve Ever Seen,” that introduced many in the investment community to Bitcoin.
http://www.launch.co/blog/l019-bitcoin-p2p-currency-the-most-dangerous-project-weve-ev.html

Full disclosure, while I don’t trade cryptocurrencies, I have a lot of exposure to it by investments in startups like Robinhood, Abra, and Talla.com (to name a few notable projects).

Here are five important points I would like to state for the record:

  1. This Will End Badly For Most

It would take me ten articles to catalogue all the risks and scams in this emerging space, but to give you the broad strokes here are the critical issues that most savvy people — including those with large positions in crypto — all agree on.

Billions of dollars in crypto have already been stolen, and *most* of the ICOs I see are horrible ideas run by people who have no track record or ability to execute.

Bitconnect is an instructive example that you can read about here:
http://nymag.com/selectall/2018/01/ponzi-scheme-bitcoin-site-bitconnect-shuts-down.html

Most importantly, you should watch this hilarious video:
https://youtu.be/lCcwn6bGUtU

And read about these pump and dump chat rooms, where thousands of people (it seems) are buying crypto coins before marketing them to the next group of suckers.
https://theoutline.com/post/3074/inside-the-group-chats-where-people-pump-and-dump-cryptocurrency?zd=1

Now, it is *possible* that while most projects fail, most of the money in crypto could wind up going to a smaller number of higher quality projects that become long-term successes — but that is obviously not guaranteed.

In fact, it’s possible that Bitcoin could go to zero (which I talk about below).   

Continue reading ““Why do you hate crypto, Jason?” (I don’t, but… )”