This Week I Learned #35
Healthy: A podcast binge with Daniel Coyle, the author of Talent Code and Culture Code. Three things needed to build an effective organization is 1) A feeling of safety amongst the employees; so they can take risks and fail if necessary. 2) Establish vulnerability; the leader needs to start by showing a growth mindset and admitting to errors. 3) Knowing that they are collectively aligned on a common goal/path. How do you cultivate belonging? When you make it about them. Not about the company and what it can do for you. It’s about what they enjoy, and what they find to be fun. Companies that make it about themselves by having their top performers talk about how great the company is ended up having lower retention than companies that focused on reaching out to individual employees to understand who they were to create this sense of belonging. Vulnerability can be fostered with warm candor. Forget brutal honesty, it doesn't do any good. Warm candor can lead to employees understanding that they are all focused on achieving the same goal as well.
Wealthy: Read through the Epoch Investment report on the size paradox. The report showed with empirical studies about how the Russell 2000 (a primarily small cap index) was basically a holding zone of companies that sucked (low ROIC) and those that were growing to eventually enter the Russell 1000 (large cap index) with high ROICs. So the Russell 1000 was the place where the best companies eventually broke into because they were the small ones that were profitable. The study showed how just investing in a small cap index alone wouldn't produce better returns because size alone isn't' a determinant of great returns. Rather, size gives the optionality for great returns and the fast growers end up moving into the Russell 1000 as bigger companies. Since you can't rely on the index, this is where stock pickers could potentially add value as they may be able to find an edge identifying the right companies. http://www.eipny.com/insights/the-size-paradox/
Wise: "A man's best treasure is a thrifty tongue." - Hesiod. As someone who loves talking with people it's always a self-reminder to focus on learning and listening 90% of the time for the 10% I do speak.
Wealthy: Naval Ravikant's, founder of angel list, tweet storm on 'how to get rich without being lucky' was referred to me today. Since I don't use twitter I found a nicely compiled article of the tweerts on Medium. This was a great piece and it's one I will have on archive to auto-send to anyone who loves to make "luck" as an excuse for their inability to get out of their ass and do something. What I particularly loved about the piece was on the concept of leverage. The breakup between leverage that requires permission (i.e. capital + labour) vs. no permission (i.e code + media) was wonderful. Thinking back to my own career, a lot of the barriers were hit with leverage that required "permission" but it was all the "no permission" acts I did that opened up doors for me eventually. It's about focusing on using leverage in areas that are within your control. For me, as a non-coder, it's nice and simple. 100% media. https://medium.com/swlh/how-to-get-rich-without-getting-lucky-naval-ravikant-the-tech-buddha-a90f0e7863c0
Wise: Relistened to Farnam Street's podcast interview with Naval Ravikant and it’s just filled with such amazing nuggets of wisdom. Some unrelated learnings: 1) Ask yourself what you were doing 5 years ago, what advice would you give that young self? Build more things. I never needed permission. 2) Most of your problems will be solved if you can sit with yourself for 30 minutes. 3) Happiness is the ability to not desire. It's the ability to be present with your life. 4) We are all playing a single player game. Realize that. https://fs.blog/naval-ravikant/
Wise: Relistened to Farnam Street's podcast interview with Naval Ravikant, again the day after. More learnings: 1) Science is the study of truth. Its the only real discipline because it is falsifiable. Mathematics is the language of science and nature. 2) To get a non-avg. outcome you have to read that which is not popular, which is not this year’s focus of bestsellers. 3) To get abnormal returns in life you must be out of the herd and social approval requires being in the herd. Most successful people start off as losers because they don't have the need or fear of acceptance. They did not receive social approval so they were free to seek paths that led to abnormal returns. 4) In reference to decision making, it’s about not making mistakes. Like Munger says, just try to eliminate all the stupid decisions. If you focus on not doing stupid things than your chance of success is higher. Avoid incorrect judgments. It’s about eliminating mistakes. Create a system that eliminates mistakes so that the individual decisions aren't as important. Create a system low in mistakes. https://fs.blog/naval-ravikant/
Wealthy: Interview with Ian Siegel, founder of Ziprecruiter. Learnings: 1) Ziprecruiter was bootstrapped for 4.5 years. It was a hobby project done on the side and they tested it out with google ads to see product market fit before moving to it full-time. 2) Convenience is favoured by people. It's a universal truth. People will place a premium on ease of use and time savings. Adding an extra step to an existing process only complicates and makes things worse. But taking a step away from an existing process is a way to the people's hearts because you've made their life easier by 1 step. 3) Hiring is all about the references. You have to talk to all the people that have hired that person to understand what they have to say about that person. 4) People who apply to less than 10 jobs end up getting more call backs than those who apply to 40. This is because the people who applied to less jobs took the time to tailor their resume and cover letter to the job description to put in skills to make them be easily matched by the applicant tracking system. 5) Everyone feeling safe is what creates culture. Celebrate the people who have the courage to speak up about the problems in the company and also promote em if they find a way to solve it. 6) Good ideas work right away. Just test it out now. https://www.theinvestorspodcast.com/episodes/tip189-ian-siegel/
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