This Week I Learned #16

“Go to bed smarter than when you woke up”
— Charlie Munger


  • Wise: Your reputation is what other's perceive you to be and your character is what you are. It's great if both are good but I think character is much more important. John Wooden. I've read about Coach Wooden in numerous books but this was the first time I heard him speak. A neat talk on the difference of success and winning. Winning is the result but success lies in the process employed to get the result. Hence success lies in the journey taken. Coach Wooden doesn't talk about winning but rather focusing on the practice and allowing the work put in the from the week's practices to showcase on the basketball field. Fate is in our hands and we control it.


  • Healthy: Whilst recording a podcast episode with Conrad McGee-Stocks of Uken Games I learned about how games are designed to limit/reduce burnout. Conrad eluded to how many mobile games will force you to wait for a period of time before they let you play the game again. I personally thought this was a way for games to profit off of you because many have the option of letting you continue to play if you pay but it turns out it's a feature designed to give players a break so that they don't get tired of a game and builds a habit loop where their desire to return to play the game is maintained or increased. Just a fun insight to how game companies think about habit formation in their design. Stay tuned for the release of this episode on a future newsletter! 


  • Wise: A cool interview with Shopify CEO, Tobi Lutke, on Shopify's culture, the journey and his approach as CEO. Toby is a Type 8 on his enneagram like I am. Shopify, like Dropbox, relies most on the enneagram test for their personality test. He also talks about how culture design is not a directive set by the CEO but that its more a result of the collection of people who work at Shopify. That's the culture. He takes the opposite view of Google where he doesn't want people to be "Googlers" for fear of forming some unified collective identity where people forget their own individuality. He wants people to be themselves. The true value of diversity can be cultivated by such an approach. He also speaks about the difference of operating a business in a non-primary location (i.e. Ottawa instead of SF). Most business books of successful companies have been written by people starting companies in primary locations like SF or NY. Starting Shopify in Ottawa was a strategic choice and thus growing it required different growth and operational processes for the company was forced to invest in people for the long term when they first started and that constraint has in effect become an advantage for them. All companies should invest in people for the long-term but many in primary locations don't have the same problem of "limited talent" and their ecosystem is different where people start developing different mindsets like "I'll hop between Google, Facebook, Apple whenever the other offers to pay me more etc..."


  • Healthy: Interview with Srinivas Rao and Chase Jarvis. This interview gave me some new inspiration to update my morning routines and iterate my current habit base. Rao personally imposed a 1000 word writing habit daily. I personally experimented with 500 words in the past and had difficulty with that but I've reinstated the habit as part of a morning routine where I now write for 300 words. It's about making "creative processes" a habit because creativity is a muscle and it needs to become habit for it to compound over time. It doesn't hit you randomly and nor is it talent people have with no effort. It's also given me a different approach I can take with my public equity investing where I look at each stock analysis as a project with its own "sprint" and I force those constraints to streamline the research but also create an environment that is constructed to fit me. I know a weakness I have is information paralysis because I love seeking new information so using such constraints to put a limit on myself may be an effective tactic. Rao also eludes to what he learned from interviewing hundreds of high performers and he noted how many have an irrational optimism that is balanced with reality. That is what allows them to continuously grow. He also notes how to make a lot of money you can't be realistic. You have to think about the possibility and not rely on reality. He also starts his writing process with quotes to prime your creativity. It's the idea of building a box first if you wish to think outside the box.


  • Wealthy: Learnings from Jerry Neumann’s interview on angel investing. VC is about people, product and market but what truly matters is the market. It rhymes with what Andy Rachleff said in my other newsletter. People are essential but market matters most. Product is the last thing because products change. Uber was not the product it started with. Same for Twitter. The product is useless if there is no market to sustain it. Jerry also talks about not taking advice on investing from people at Sequoia or other established VC funds because how you invest as an angel or VC will be very different and the strategy too may be different so you have to think about how you will build out your own competence area. You need a proprietary deal source. In regards to due diligence, you don't ask people in the market if they would use the product. They'll say they won't because people don't like change. This happened when Jerry asked his family members in the construction business if they would use these new construction products he was thinking of investing in. They said no but they ended up using those products later on as it became more commonplace and evident it solved a problem they had. As Ford put it "If I asked people what they want they would've asked for a faster horse". So you have to ask the market what problems they have because the product that addresses the problem will eventually be adopted because people hate problems more than changing their ways.!00fc8


  • Wise: An interview with Evan Williams. I did not know he was the co-founder of Medium, Twitter and Blogger. Per Chris Sacca, early twitter investor, Evan was considered the product visionary the early VCs were investing in and Jack Dorsey (who I thought was the key Twitter exec) was not a material factor. In the interview Evan provides a look into the digital publishing world and how we can think about evolution of information, how we receive it and how Medium is looking to build up a movement to increase paid informational content. He uses a few good analogies to represent the change in consumer behaviour. One is coffee where Starbucks practically started charging way more for "quality" coffee. Now, my opinion as an avid coffee drinker, Starbucks is the lower -end commodity product where I would go for cheaper coffee because all other coffee shops that stand for "quality" charge more than Starbucks. So Starbucks radically upped the cost of a commodity product and that changed the consumers appetite for what they were willing to accept over time. Another is for music. Apple looked to radically commoditize music and we moved from a period of people paying a lot for music (CD, records) to a generation where everyone downloaded music illegally (and free) to a generation now where no one downloads music for free but rather pays a few bucks to Shopify. It's weird to think that we moved away from getting free music to everyone paying for it but I think this shift consumer behaviour will become a possibility for informational content on writing platforms as well.


  • Wealthy: Rare interview with Chamath Palihapitiya of Social Capital. I am personally a fan of Chamath because of his constant focus on challenging the status quo and that definitely sings true to my own heart. The interview is focused on the "turmoil" at his own venture capital fund where he is transitioning into a technology holding company. I don't see anything wrong with this, building such a berkshire model is something I'm hoping to create and it's nice to see this forming by someone I respect. Chamath's grief seems to come mainly from fund of fund investors who are not happy with how he runs his VC firm and his non-traditional approach. What's interesting here is that there seem to be a population of fund of funds that invest in venture capital. This is a model I think will be truly valuable as more money flows into private capital and this is one more data point supporting my thesis. Chamath is going through a divorce with his wife, a Social Capital co-founder, and don't believe people, no matter how high-performing they may be, can be objective in such decision making when their personal life is so impacted. There is definitely something there with that. I actually fully agree with Chamath's new direction with his investment company. I do think the fees are unjustified and the reinvestment of the carry into the company for further growth makes sense. the idea of paying young VCs in the firm a paycheque akin to working for a company to align selves with the entrepreneurs they invest in. i get that. "The letters V and C don’t mean Stanford MBAs in fleece vests running around. Venture capital means money for ventures, he said." Have to love that quote. .

Daniel LeeTWIL