We humans are complex creatures. The older I get, the more I’m fascinated by the human experience and the frequent apparent dissonance between what we think and what is. There is no shortage of societal driven “beliefs” we have adopted that are flat out wrong.
A Harvard Business Review piece this morning reminded me of my fascination with this topic. I think that most people associate optimism with a laze fair approach to life and tough-mindedness with pessimism. The piece, titled, Why the Future Belongs to Tough-Minded Optimists, reminds me that optimism and tough-mindedness aren’t opposing forces, but rather a powerful combination. From the Author, and co-founder of Fast Company, Bill Taylor:
I’ve just finished writing a book about companies in pretty ordinary settings (banks, hospitals, even a parking garage) that have won big by doing truly extraordinary things. As I think about the outlook on the future that cuts across these organizations, the mindset that guides their leaders and energizes their members, I’m struck by the fierce sense of optimism that pervades them. Not wide-eyed optimism, an unthinking faith in the inevitability of success, but what the leadership scholar and civic reformer John Gardner famously called “tough-minded optimism,” a blend of original ideas, deep convictions, and resilience in the face of change.
My book list (which is sorely in need of an update) is filled with books that expose some of these contrasts. A few of my favorites:
- From W. Edwards Demming book The New Economics, the notion that grades are demotivating for both good and poor performers. Kids who get good grades are demotivated because they learn that they don’t have to work hard and kids that get bad grades are demotivated because bad grades are a form of punishment and punishment never motivates.
- From Daring Greatly by Brene Brown, the idea that people are generally afraid to express vulnerability, believing that vulnerability is a sign of weakness. But that what we often most admire in others is their ability to be vulnerable. and that the ability to be vulnerable is a key ingredient in personal success and well-being.
- The idea from Carlol Dweck’s work in Mindset that behaving in unexpected and counterintuitive ways is sometimes the best way to drive behavior change in colleagues.
- From Charles Jacobs author of Management Rewired, the notion that pay for performance schemes don’t work. Yet, carrot and stick performance schemes remain pervasive and we investors/directors put countless hours into crafting, tweaking, optimizing them.
A personal favorite from an entrepreneur I’ve had the great pleasure of working with… During a period where a senior leader on his team was struggling, he ultimately made the decision to part with the employee. In reflecting on the decision he referred to his own mindset in making the decision as tough-minded and big-hearted. Quite a contrast but a powerful combination.
I’m as susceptible to falling into the trap of societal norms as anyone. Catch me when I do. In the meantime, I’ll keep working on being a tough-minded optimist…
I never liked the term Unicorn. It never made sense to me to aspire to something mythical and therefore of theoretical value.
I’ve written before about the risks associated with trying to make unicorns and the fact that entrepreneurs are the ones who bare the burden of the risks associated with a go big or stay home company building philosophy. Unfortunately, over the past several years, tech-entrepreneurship seemed to become synonymous with making unicorns. If you weren’t working toward a billion dollar valuation in short order, you were wasting your time and the time of all of the investors to whom you were pitching your business plan.
For entrepreneurs who – for the past five years – have been enamored to achieve unicorn status, it may be time to leave the…
My post on Adapting to the Great Reset was something that has been brewing in my head for a while.
I was pleased then when Luke Norris, CEO of Faction asked me to go deeper. Luke had seen a short presentation I put together for an CEO Forum earlier this week and he gave me a good reason to clean it up. Luke is a wonderful entrepreneur to work with because he’s intellectually curious, open-minded and doesn’t accept hollow answers to tough questions.
Btw, Luke, get a new Twitter picture…
The PPT is embedded below. Enjoy and please ask questions or comment, even if you disagree…
You would have to be hiding under a rock to have missed the shift in private tech investor sentiment that has become apparent over the past several weeks. Truth is, this shift has been underway for some time. The final stage – when the change in psychology fully reveals itself in the popular tech media – always arrives more violently than the trends at its core justifies.
Root Cause of the Great Reset
It all starts with the IPO market. Tech IPOs haven’t fared particularly well. The chart below shows the performance of venture backed tech IPOs since Facebook’s IPO through November 2015.
The average tech IPO performance is positive, but the distribution is skewed toward losers with one “gainer”…
This week was jam packed with Board meetings. During one of them, I experienced a presentation tactic I had not seen before. Before sharing the tactic, a brief word on board meetings and presentations.
Board meetings are necessary, frequently productive, but all too often miss the mark in terms of their focus. Many Board meetings I attend turn into an utter abuse of PowerPoint. Reviewing content packed slide after slide of historical information is a waste of time. I can read the slides; if I have done my job, I’ve reviewed them in advance of the Board meeting.
Yes, we need to review the historical results and understand their implications. But what I’m seeking in a Board meeting is introspection and insight…
Wow! After weeks without a winner, there were three winners in last night’s Powerball lottery. Congrats to the winners!
Powerball is a bad bet and an even worse investment. We can all run the math. The WSJ did a nice visual comparing the odds of winning Powerball to other odds. A one in 292 million chance of winning is inconsequential. [As an aside, a 1 in 112 chance of dying in a motor vehicle accident is scary and something we’ve got to improve.]
What was unusual about this Powerball drawing is that the NPV of an investment in a ticket was not far from break-even. There are a lot of practical and technical reasons that made it less than break-even, including the prospect of multiple winners, taxes…
I enjoy reading blog posts of entrepreneurs that chronicle the journey of starting and building a business. The ones I enjoy most are at times heart-breaking and at other times triumphant. The most memorable are always always authentic and introspective.
To my knowledge, no-one has ever done a blog series on the process of building a venture capital or growth equity firm. If that is right, I’d like to be the first. Building a world-class investment firm feels to me to be every bit as entrepreneurial, with all highs and lows, exuberance and trepidation, joy and fear, as any entrepreneurial endeavor. It feels like its worth writing about.
Six months into the process of building Tahosa Capital, I’m feeling…
I’m sure that many more thoughtful than me have written about the moral hazard of venture capital. In economics, moral hazard occurs when one person takes an unreasonable risk because someone else will bear the burden of the negative consequences. In the age of unicorns, the moral hazard in venture capital has never been greater. Moral hazard and exuberance to make unicorns leads to unicorpses. I was reminded of this today during a conversation with an emerging growth business run by capable, yet young entrepreneurs.
The 20 something entrepreneurs with whom I was talking have built a solid, already profitable business generating $4.3 million ARR. The company has taken a total of $200k of outside financing. With a modest amount of incremental…
It has been about two weeks since Tahosa Capital announced its launch. I’ve found the launch to be invigorating. I find myself wanting to share the sense of purpose behind Tahosa Capital with anyone willing to listen. But, I can’t possibly reach everyone I know one-on-one; hence this post.
I started Tahosa Capital with a point of view on what it will take for Tahosa to be successful.
Start modestly And with a BHAG
Starting modestly (and alone) is humbling and really good. For now, Tahosa Capital is just me and a big hairy audacious goal (BHAG). As we wrote in Tahosa’s introductory blog post, Tahosa sets out with a clear sense
In a board meeting yesterday, we had a brief discussion around “negative churn”. Negative churn is a catchy phrase and apparently a hot-topic in some SaaS circles. I like some of the concepts and disciplines that an understanding of negative churn implies, but I also think it is an unnecessary concept that actually makes it more difficult to understand the inner workings of an MRR based SaaS business. Some background…
What is Negative Churn?
Negative Churn is an increase in revenue which occurs when the change in revenue within an installed base of customers is net positive from one period to the next. Negative Churn implies that the revenue gained from existing customers who purchase more over time exceeds revenue lost from existing…