#50 Marc Andreessen's Blog Archive

What I learned from reading The Pmarca Blog Archive Ebook by Marc Andreessen. ---- [0:01] In this series of posts I will walk through some of my accumulated knowledge and experience in building high-tech startups. [3:15] Great things about doing a startups: Most fundamentally, the opportunity to be in control of your own destiny — you get to succeed or fail on your own, and you don’t have some bozo telling you what to do. For a certain kind of personality, this alone is reason enough to do a startup. The opportunity to create something new — the proverbial blank sheet of paper. You have the ability — actually, the obligation— to imagine a product that does not yet exist and bring it into existence, without any of the constraints normally faced by larger companies. The opportunity to have an impact on the world — to give people a new way to communicate, a new way to share information, a new way to work together, or anything else you can think of that would make the world a better place. The ability to create your ideal culture and work with a dream team of people you get to assemble yourself. Want your culture to be based on people who have fun every day and enjoy working together? Or, are hyper-competitive both in work and play? Or, are super-focused on creating innovative new rocket science. And finally, money —startups done right can of course be highly lucrative. This is not just an issue of personal greed — when things go right, your team and employees will themselves do very well and will be able to support their families, send their kids to college, and realize their dreams, and that’s really cool. And if you’re really lucky, you as the entrepreneur can ultimately make profound philanthropic gifts that change society for the better. [5:15] However, there are many more reasons to not do a startup. [5:28] First, and most importantly, realize that a startup puts you on an emotional rollercoaster unlike anything you have ever experienced. You will flip rapidly from a day in which you are euphorically convinced you are going to own the world, to a day in which doom seems only weeks away and you feel completely ruined, and back again. Over and over and over. [6:04] Some days things will go really well and some things will go really poorly. And the level of stress that you’re under generally will magnify those transient data points into incredible highs and unbelievable lows at whiplash speed and huge magnitude. [6:42] The best thing about startups: you only ever experience two emotions, euphoria and terror, and I find that a lack of sleep enhances them both. [7:09] In a startup, absolutely nothing happens unless you make it happen. [8:19] As a founder of a startup trying to hire your team, you’ll run into this again and again: When Jim Clark decided to start a new company in 1994, I was one of about a dozen people at various Silicon Valley companies he was talking to about joining him in what became Netscape. I was the only one who went all the way to saying “yes” (largely because I was 22 and had no reason not to do it). The rest flinched and didn’t do it. And this was Jim Clark, a legend in the industry who was coming off of the most successful company in Silicon Valley in 1994 —Silicon Graphics Inc. How easy do you think it’s going to be for you? [10:50] The fact is that startups are incredibly intense experiences and take a lot out of people in the best of circumstances. [14:03] And so you start to wonder—what correlates the most to success— team, product, or market? Or, more bluntly, what causes success? And, for those of us who are students of startup failure—what’s most dangerous: a bad team, a weak product, or a poor market? [15:16] If you ask entrepreneurs or VCs which of team, product, or market is most important, many will say team. This is the obvious answer, in part because in the beginning of a startup, you know a lot more about the team than you do the product, which hasn’t been built yet, or the market, which hasn’t been explored. [16:32] Personally, I’ll take the third position — I’ll assert that market is the most important factor in a startup’s success or failure. Why? In a great market — a market with lots of real potential customers— the market pulls product out of the startup. The market needs to be fulfilled and the market will be fulfilled, by the first viable product that comes along. [17:33] Conversely, in a terrible market, you can have the best product in the world and an absolutely killer team, and it doesn’t matter—you’re going to fail. [18:53] You can obviously screw up a great market — and that has been done, and not infrequently—but assuming the team is baseline competent and the product is fundamentally acceptable, a great market will tend to equal success and a poor market will tend to equal failure. Market matters most. [19:32] Markets that don’t exist don’t care how smart you are. [20:15] The only thing that matters is getting to product/market fit. [21:00] Lots of startups fail before product/market fit ever happens. My contention, in fact, is that they fail because they never get to product/market fit. [22:59] The most important thing you need to know going into any discussion or interaction with a big company is that you’re Captain Ahab, and the big company is Moby Dick. When Captain Ahab went in search of the great white whale Moby Dick, he had absolutely no idea whether he would find Moby Dick. What happened was entirely up to Moby Dick. And Captain Ahab would never be able explain to himself —or anyone else— why Moby Dick would do whatever it was he’d do. You’re Captain Ahab, and the big company is Moby Dick. [29:30] A startup’s initial business plan doesn’t matter that much, because it is very hard to determine up front exactly what combination of product and market will result in success. By definition you will be doing something new, in a world that is a very uncertain place. You are simply not going to know whether your initial idea will work as a product and a business, or not. And you will probably have to rapidly evolve your plan —possibly every aspect of it — as you go. [30:03] It is therefore much more important for a startup to aggressively seek out a big market, and product/market fit within that market, once the startup is up and running, than it is to try to plan out what you are going to do in great detail ahead of time. The history of successful startups is quite clear on this topic. [38:38] The point is this: If Thomas Edison didn’t know what he had when he invented the photograph while he thought he was trying to create better industrial equipment for telegraph operators. . .what are the odds that you—or any entrepreneur— is going to have it all figured out up front? [40:00] The first rule of career planning: Do not plan your career. The world is an incredibly complex place and everything is changing all the time. You can’t plan your career because you have no idea what’s going to happen in the future. Career planning = career limiting. [40:46] The second rule of career planning: Instead of planning your career, focus on pursuing opportunities. [41:06] Opportunities that present themselves to you are the consequence— at least partially — of being in the right place at the right time. They tend to present themselves when you’re not expecting it —and often when you are engaged in other activities that would seem to preclude you from pursuing them. And they come and go quickly — if you don’t jump all over an opportunity, someone else generally will and it will vanish. [42:40] I am continually amazed at the number of people who are presented with an opportunity and pass. There’s your basic dividing line between the people who shoot up in their careers like a rocket ship, and those who don’t — right there. [42:58] I am also continually amazed at the number of people who coast through life and don’t go and seek out opportunities even when they know in their gut what they’d really like to do. Don’t be one of those people. Life is way too short. [43:17] The world is a very malleable place. If you know what you want, and you go for it with maximum energy and drive and passion, the world will often reconfigure itself around you much more quickly and easily than you would think. [50:44] There may be times when you realize that you are dissatisfied with your field — you are working in enterprise software, for example, but you’d really rather be working on green tech or in a consumer Internet company. Jumping from one field into another is always risky because your specific skills and contacts are in your old field, so you’ll have less certainty of success in the new field. This is almost always a risk worth taking– standing pat and being unhappy about it has risks of its own, particularly to your happiness. And it is awfully hard to be highly successful in a job or field in which one is unhappy. [52:52] Finally, pay attention to opportunity cost at all times. Doing one thing means not doing other things. This is a form of risk that is very easy to ignore, to your detriment. [53:33] Marc’s final takeaway for thinking about opportunities: If you really are high-potential, you’re naturally going to be seeking out risks in your career in order to maximize your level of achievement. [55:46] Graduating with a technical degree is like heading out into the real world armed with an assault rifle instead of a dull knife. [56:19] Don’t worry about being a small fish in a big pond—you want to always be in the best pond possible, because that is how you will get exposed to the best people and the best opportunities in your field. [58:26] Capitalism rewards things that are both rare and valuable. [56:52] Seek to be a double/triple/quadruple threat. . . The fact is, this is even the secret formula to becoming a CEO. All successful CEO’s are like this. They are almost never the best product visionaries, or the best salespeople, or the best marketing people, or the best finance people, or even the best managers, but they are top 25% in some set of those skills, and then all of a sudden they’re qualified to actually run something important. [1:00:50] Learn how to sell. I don’t mean, learn how to sell someone a set of steak knives they don’t need — although I hear that can be quite an education by itself. I mean, learn how to convince people that something is in their best interest to do, even when they don’t realize it up front. [1:06:06] In my opinion, it’s now critically important to get into the real world and really challenge yourself — expose yourself to risk— put yourself in situations where you will succeed or fail by your own decisions and actions, and where that success or failure will be highly visible. Why? If you’re going to be a high achiever, you’re going to be in lots of situations where you’re going to be quickly making decisions in the presence of incomplete or incorrect information, under intense time pressure, and often under intense political pressure. You’re going to screw up — frequently — and the screwups will have serious consequences, and you’ll feel incredibly stupid every time. It can’t faze you — you have to be able to just get right back up and keep on going. That may be the most valuable skill you can ever learn. Make sure you start learning it early. [1:07:20] When picking an industry to enter, my favorite rule of thumb is this: Pick an industry where the founders of the industry—the founders of the important companies in the industry—are still alive and actively involved. ---- Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work. Get access to Founders Notes here. ---- “I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth Be like Gareth. Buy a book: All the books featured on Founders Podcast

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00David Senra?

  In this series of posts, I will walk through some of my accumulated knowledge and experience in building high-tech startups. My specific experience is from three companies I have co-founded: Netscape, Opsware, and Ning. But more generally, I've been fortunate enough to be involved in and exposed to a broad range of other startups. Maybe 40 or 50 in enough detail to know what I'm talking about. As a board member, as an angel investor, as an advisor, as a friend of various founders, and as a participant in various venture capital funds. Much of my perspective is based on Silicon Valley and the environment that we have here: the culture, the people, the venture capital base, and so on. Some of it will travel well to other regions and countries. Some probably will not.

• 0:45David Senra?

  With all that out of the way, let's start at the beginning. Why not to do a startup? Okay, so that is from the book that I'm going to talk to you about today. So this is going to be a little different. If you're new to founders, the premise of this podcast is really simple. I read a biography of an entrepreneur every week and then pull out ideas that I found interesting, usually from their early life, how they got started, how they think about business, things like that. But today, I wanted to cover Marc Andreessen. The reason I say this is different is because, as far as I know, there's not a biography or an autobiography of Marc. I was introduced to Marc through, I think I found out about him through Twitter, and

• 1:28David Senra?

  I've come to know, to know his ideas and thoughts mainly through podcasts. Personally, I find him very interesting. I like how fast he talks, and he's just, seems to have a wide, he's able to talk about a wide subject matter, a wide array of different subjects, rather. So what I did not know, though, was about 10 years ago, he was quite the prolific blogger. I stumbled upon this link that led me to downloading a free ebook. So I'm going to leave that link in the show notes, of course. And that ebook is a collection, so Marc runs a venture capital firm, and I don't know if he did this, or the firm did this, or somebody else did, but they selected some of his blog posts. Which as far as I know are not online anymore.

• 2:12David Senra?

  And they put them into an ebook that's free to download. So this isn't going to be a biography of Mark, but this is going to be an explicit way he thinks about building companies, which I think is still valuable to you, the listener. And like I said, I think it's definitely worth checking out. I've read the ebook now twice. And it's, I think, close to 200 pages and there's just not a lot of fluff in there. So let me just go ahead and jump into that. It's true that there are a lot of great things about doing a startup. They include, based on my experience, the opportunity to be in control of your own destiny. So he says that's most fundamental and he's going to explain. He goes, "You get to succeed or fail on your own. And you don't have some bozo telling you what to do. For a certain kind of personality, this alone is reason enough to a startup."

• 2:57David Senra?

  The second reason, "The opportunity to create something new," also super important. "The proverbial blank sheet of paper. You have the ability, actually the obligation, to imagine a product that does not exist yet and bring it into existence without any of the constraints normally faced by larger companies." Okay, so the third reason is "The opportunity to have an impact on the world. To give people a new way to communicate, a new way to share information, a new way to work together, or anything else you can think of that would make the world a better place." Straightforward right there. And then another one is "The ability to create your ideal culture and work with a dream team of people you get to assemble yourself." Want your culture to be based on people who have fun every day and enjoy working together? Or do you want a hyper competitive atmosphere, both in work and play?

• 3:42David Senra?

  Or are you super focused on creating innovative new rocket science technologies? Or are you global in perspective from day one? You get to choose and to build your culture and team to suit. And then money. Startups done right, of course, can be highly lucrative. This is not just an issue of personal greed. When things go right, your team and employees will themselves do very well and be able to support their families, send their kids to college and realize their dreams. And that's really cool. If you're lucky, you as an entrepreneur can ultimately make profound philanthropic gifts that change society for the better. And so now he's going to get to his main point. Of this section though, and he says, however, there are many more reasons not to do a startup.

• 4:27David Senra?

  So I'm just going to highlight some of the ones that really stuck out to me. This section's much longer, so I'm not going to read all of it. Okay, so it says, first and most importantly, realize that a startup puts you on an emotional roller coaster unlike anything you have ever experienced. You will flip rapidly from day to day in which you are euphorically convinced you are going to own the world. To a day in which you, in which doom seems only weeks away and you feel completely ruined and back again. Over and over and over. And I'm talking about what happens to stable entrepreneurs. There is so much uncertainty and so much risk around practically everything you are doing. Some days, things will go really well and some things will go really poorly.

• 5:10David Senra?

  And the level of stress that you are, that you're under generally will magnify those transient data points. Into incredible highs and unbelievable lows at whiplash speed and huge magnitude. So when I read that, I thought of, there's a, there's an exchange that happens. I talked about this in, in founders number 41, when I went over Ben Horowitz's book. Uh, Ben Horowitz is, uh, Mark Andreessen's business partner, but he wrote a book called Hard Thing About Hard Things. And one of my favorite exchanges in the book, I'm just going to read it to you. And it's a conversation between Mark and Ben, and Mark's the first one talking. He says, do you know what the best thing about startups? And Ben asks, what? You only ever experience two emotions, euphoria and terror.

• 5:54David Senra?

  And I find that a lack of sleep enhances them both. So that's a good, uh, kind of a good insight into, into Mark's personality there. And a little bit of what he, what he's talking about here. Second, in a startup, absolutely nothing happens unless you make it happen. This one throws both founders and employees new to startups. In an established company, no matter how poorly run or demoralized, things happen. They just happen. People come into work, code gets written, markets get analyzed, pricing gets studied and determined, sales calls get made and so on. A startup has none of the established. ...systems, rhythms, infrastructure that any established company has.

• 6:34David Senra?

  You, as the founder, have to put all of these systems and routines and habits in place and get everyone actually rowing. Forget even about rowing in the right direction. Just rowing at all is hard enough at the start. And until you do, absolutely nothing happens. Unless, of course, you do it yourself. Third reason not to do a startup? You get told "no" a lot. Unless you spend time in sales, you're probably not familiar with being told "no" a lot. It's not so much fun. Fourth, hiring is a huge pain in the ass. A lot of people think they want to be part of a startup, but when the time comes to leave their cushy job at HP or Apple, they flinch and they stay.

• 7:19David Senra?

  As a founder of a startup trying to hire a team, you'll run into this again and again. And this is where he talks a little bit about Jim Clark. "When Jim Clark decided to start a new company in 1994, I was one of about a dozen people at various Silicon Valley companies he was talking to about joining him in what became Netscape. I was the only one who went all the way saying yes, largely because I was 22 years old and had no reason not to do it. The rest flinched and didn't do it. And this was Jim Clark, a legend in the industry who was coming off of one of the most successful company in Silicon Valley in 1994. How easy do you think it's going to be for you?" Fifth reason not to do a startup? God help you, at some point, you're gonna have to hire executives.

• 8:02David Senra?

  You think hiring employees is hard and risky? Wait until you start hiring a VP of Engineering, VP of Marketing, VP of Sales, General Counsel, and CFO. Sixth, the hours. There's been a lot of talk in Silicon Valley lately about the work-life balance. That's hilarious because he's writing these words a decade ago, and I feel like on Twitter there's arguments and fights every day about this. About how you should be able to do a startup and simultaneously live a full and fulfilling outside life. Now personally, I have a lot of sympathy for that point of view, but it's really difficult. The fact is that startups are incredibly intense experiences and take a lot out of people in the best Circumstances. So let me just go back to what I just referenced about it's funny that he wrote this this 10 years ago.

• 8:45David Senra?

  The reason I spend so much time thinking, reading about history and learning about history is because I feel when you see things like this, actions that human beings are engaged in that are separated from time and geography and culture, meaning they just constantly reappear over and over again. To me, that's just a good indicator that some level of our base programming makes us do these kind of engage in these kind of activities. And when you see that, it's probably best just to abstain. Are we really going to make that big of a difference in this debate? My opinion, probably not. I think people are going to do whatever they feel they want to do anyways. And they're probably going to be arguing about this 50 years and 100 years from now as well. Okay, so he says, "The fact that startups are incredibly intense experiences and take a lot out of people in the best circumstances."

• 9:26David Senra?

  And he says, but he's honest about this. He says, "In case you were wondering, the hours do compound the stress." Seven, "It is really easy for the culture of a startup to go sideways. This combines the first and second items above. This is your emotional roller coaster wrecking havoc on not just you, but your whole company. In the best case, you get an amazing dynamic of people really pulling together, supporting one another, and working their collective tails off in pursuit of a dream. In the worst case, you end up with widespread self-reinforcing bitterness, disillusionment, cynicism, bad morale, contempt for management, and depression. Guess which way it usually goes." He's actually, I'm sure I'm going to repeat myself over and over again, but he's really funny.

• 10:11David Senra?

  A lot of his writing, I laughed out loud several times. Eight, "There are a lot of X-factors that can come along and whoop you right upside the head, and there's absolutely nothing you can do about them." And he's going to list some here. "Stock market crashes, terrorist attacks, natural disasters. Any given X-factor might slam shut the fundraising window, cause customers to delay or cancel purchases, or at worst, shut down your whole company." He gives an example. He doesn't tell us what startup this happened, but he said, "Russian mobsters laundering millions of dollars of dirty money through your service, resulting in the credit card companies closing you down. You think I'm joking about that one?" And then he continues, "Okay, now here's the best part." This is hilarious because I'm just reading, kind of nodding along as I'm reading his answers.

• 10:55David Senra?

  And then I didn't even realize that, we haven't even got to the point that you haven't even figured out what product to build. So he talks about that here. He says, "I haven't even talked about figuring out what product to build, building it, taking it to market, and standing out from the crowd. All the risks in the core activities of what your company actually does are yet to come." Okay, so now I want to get into his post. And he titled the post, "The Only Thing That Matters." So now this is Mark writing. "This post is all about the only thing that matters for a new startup. But first, some theory. If you look at a broad cross-section of startups, say 30 or 40 or more, enough to screen out the pure flukes and look for patterns, two obvious facts will jump out at you. First obvious fact: There is an incredibly wide divergence of success.

• 11:38David Senra?

  Some of those startups are insanely successful, some highly successful, many somewhat successful, and quite a few, of course, outright fail. The second obvious fact: There's an incredibly wide divergence of caliber and quality for the three core elements of each startup, and it's team, product, and market." You'll understand in a few minutes why he's laying this out, because he's going to take the counterintuitive point here. "At any given startup, the team will range from outstanding to remarkably flawed. The product will range from a masterpiece of engineering to barely functional. And the market will range from booming to comatose. And so you start to wonder, what correlates the most to success? Team, product, or market?

• 12:22David Senra?

  Or, more bluntly, what causes success? And for those of you who are students of startup failure, what's most dangerous? A bad team, a weak product, or a poor market?" So he's going to go into defining those terms a little bit more. I think you probably already know what they are, and if not, you can just read a little bit more about that by downloading the free ebook. He's going to jump into the difference between product quality and market size are completely different. Because some people say, so, he talks about, he said, how can, he gets a question, "How great can a product be if nobody wants it? In other words, isn't the quality of a product defined by how..."

• 13:00David Senra?

  appealing it is to lots of customers and his answer is no product quality and market size are completely different and here's so he's going to give you an example here's the classic scenario the world's best software application for an operating system nobody runs just ask any software developer targeting the market for next applications what the difference is between great product and a big market and so now he's going to build into his own thoughts on this he said so if you ask entrepreneurs or VCs which of team product or market is most important many will say team this is the obvious answer in part because at the beginning of a startup you know a lot more about the team than you do about the product which hasn't even been built yet or the market which hasn't even been explored yet good points right but plus we've all been raised on slogans like people are our most important asset at least in the US pro people sentiments permeate our culture ranging from high school self-esteem programs to the declaration of independence's inalienable rights to life liberty and the pursuit of happiness so the answer that team is the most important feels right and who wants to take the position that people don't matter on the other hand if you ask engineers many will say product this is a product business startups invent products customers buy and use the products apple and google are the best companies in the industry today because they build the best products you're clearly seeing he's steel manning their argument this is not what he believes this is what he hears from engineers without the product there is no company just try having a great team and no product or a great market and no product what's wrong with you now let me get back to work on the product and so now we're going to hear his own opinion personally I'll take the third position all assert that market is the most important factor in a startup's success or failure and here he lays out his kind of his pretty convincing argument why in a great market a market with lots of real potential customers the market pulls product out of the startup the market needs to be fulfilled and the market will be fulfilled by the first viable product that comes along the product doesn't need to be great it just has to basically work and the market doesn't care how good the team is as long as the team can produce the viable products

• 15:10David Senra?

  In short, customers are knocking down your door to get the product. The main goal is to actually answer the phone and respond to all the emails from people who want to buy. And when you have a great market, the team is remarkably easy to upgrade on the fly. And so here's some examples. This is the story of search keyword advertising and internet auctions and TCP slash IP routers. Conversely, in a terrible market, you can have the best product in the world and an absolutely killer team, and it doesn't matter. You are going to fail. You'll break your pick for years trying to find customers who don't exist for your marvelous product, and your wonderful team will eventually get demoralized and quit,

• 15:54David Senra?

  and your startup will die. This is the story of video conferencing and workflow software and micropayments. So now he's going to get into, remember that the name of this post is the most important thing. So there's this guy, Andy Ratch, Ratchliff, that he's going to quote. He has this, this, the series of ideas called Ratchliff's Law of Startup Success. And so it says, "The number one company killer is lack of market." And this is Mark writing, and he says, "Andy puts it this way." It's actually a good summary of this entire post. "When a great team meets a lousy market, the market wins. When a lousy team meets a great market, the market wins.

• 16:37David Senra?

  When a great team meets a great market, something special happens. You can obviously screw up a great market, and that has been done and not infrequently. But assuming the team is baseline competent and the product is fundamentally acceptable, a great market will tend to equal success and a poor market will tend to equal failure. Market matters most. Neither a stellar team nor a fantastic product will redeem a bad market. I can name you a bunch of examples of great teams that totally screwed up their products. Great products are really, really, really hard to build. Hopefully, a great team also gets you a great market. But I can also name you lots of examples of great teams that executed brilliantly against terrible markets and failed."

• 17:21David Senra?

  And I love this, this summary, and he even italicized it in his writing. "Markets that don't exist don't care how smart you are. Conversely," he continues, "I can name you any number of weak teams whose startups were highly successful due to explosively large markets for what they were doing." And he says, "A great team is a team that will always beat a mediocre team, given the same market and product." A few paragraphs down, the question is, "Well, as a startup founder, what should I do about all this?" And so now Mark's going to get into that. He says, "Let's introduce Ratchliff's corollary of startup success." And this is the core of the reason Mark's writing this post.

• 18:03David Senra?

  "The only thing that matters is getting to product-market fit." Product-market fit means being in a good market with a product that can satisfy that market. You can always feel when product-market fit isn't happening. The customers aren't quite getting value out of the product. Word of mouth isn't spreading. Usage isn't growing that fast. Press reviews are kind of blah. The sales cycle takes too long and lots of deals never close. And you can always feel product-market fit when it's happening. The customers are buying the product just as fast as you can make it. Money from customers is piling up in your company checking account. You're hiring sales and customer support staff as fast as you can. He says, "Lots of startups fail before product-market fit ever happens."

• 18:45David Senra?

  "My contention, in fact, is that they fail because they never get to product-market fit." "Carried a step further, I believe that the life of any startup can be divided into two parts." So he's going to call this BPMF and APMF. You can kind of figure out what that is. So it's before-product-market fit and after-product-market fit. "When you are before-product-market fit, focus obsessively on getting to product-market fit. Do whatever is required to get to product-market fit." "When you get right down to it, you can ignore almost everything else." And he's saying you can ignore everything else because the only important part is actually getting to product-market fit. "Whenever you see a successful startup, you see one that has reached product-market fit. And usually along the way, screwed up all kinds of other things.

• 19:27David Senra?

  From channel model to pipeline development strategy to marketing plan to press relations, to compensation policies, to the CEO sleeping with a venture capitalist. And yet the startup is still successful." So again, he's just rehitting that. Like, you can do all these other things terribly. But if you focus on the most important thing, which is, in his opinion, getting the product-market fit, none of that matters. So now, he's gonna say the reverse of that. Like, there's plenty of really well-run companies that never get it and still fail. So it says, "Conversely, you say a surprising number of really well-run startups that have all aspects of operations completely buttoned down. HR policies in place, great sales model, thoroughly thought-through marketing plan,

• 20:07David Senra?

  great interview processes, outstanding catered food, heading straight off a cliff due to never, to not ever finding product-market fit." Okay, so now I'm gonna jump to his post. And it's advice for startup, for smaller companies, on dealing with larger companies. And he uses the metaphor of the Moby Dick theory of big companies, which is quite humorous. So he says, "There are times in the life of a startup when you have to deal with big companies. The most important thing you need to know going into any discussion or interaction with a big company is that you're Captain Ahab, and the big company is Moby Dick.

• 20:50David Senra?

  When Captain Ahab went in search of the great white whale, Moby Dick, he had absolutely no idea whether he would find Moby Dick. What happened was entirely up to Moby Dick. And Captain Ahab would never be able to explain to himself or anyone else why Moby Dick would do whatever it is he would do. You are Captain Ahab, and the big company is Moby Dick. Here is why." I love this part. "The behavior of any big company is largely inexplicable when viewed from the outside." I always laugh when someone says, "Microsoft is gonna do X, or Google is gonna do Y, or Yahoo is going to do Z."

• 21:31David Senra?

  Odds are, nobody inside Microsoft, Google, or Yahoo knows what Microsoft, Google, or Yahoo is going to do in any given circumstance on any given issue." So you can logically, logically take away from that. Well, if they don't even know what they're doing on the side, how could you from the outside? And he's gonna explain why that that's really hard to do. "The inside of any big company is a very, very complex system, consisting of many thousands of people, of whom at least hundreds and probably thousands are executives who think they have some level of decision-making authority. On any given issue, many people inside the company are going to get some kind of vote on what happens. Maybe eight people, maybe 10, 15, 20, and sometimes many more." So he's gonna tell a story here, which it sounds like it's made up.

• 22:14David Senra?

  I don't think he's lying to us, but this, this is so ridiculous. When I was at IBM in the early 90s, they had a formal decision-making process called concurrence. On any given issue, a written list of the 50 or so executives from all over the company who would be affected by the decision in any way, no matter how minor, would be assembled. And any one of those executives could non-concur and veto the decision. That's an extreme case, but even a non-extreme version of this process, and all big companies have one, they have to, is mind-bendingly complex to try to understand, even from the inside, let alone the outside. And so, he continues, he says, "You can count on there being a whole host of impinging forces

• 22:59David Senra?

  that will affect the dynamic of decision-making on any issue at a big company. You can't possibly even identify all the factors that will come to bear on a big company's decision, much less try to understand them, much less try to influence them very much at all." So, back to Moby Dick. Moby Dick might stalk you for three months, then jump out of the water and raise a huge ruckus, then vanish for six months, then come back and beach your whole boat, or alternatively, give you a clear shot you need to harpoon his giant butt, and you're never going to know why. A big company might study you for three months, then approach you and tell you they want

• 23:40David Senra?

  to invest in you, or partner with you, or even buy you, and then vanish for six months. Then come out with a directly competitive product that kills you, or alternatively, acquire you and make you and your whole team rich. So, think about all the different factors he just explained in one paragraph. And again, the takeaway is the same thing, and you're never going to know why. The upside of dealing with a big company is the right deal with the right big company can have a huge impact on a startup's success. The downside of dealing with a big company is that he can capsize you, maybe by stepping on you in one way or another and killing you, but more likely by wrapping you up in a bad partnership that ends up holding you back, or just making you waste a huge amount of time and meetings and get distracted from your core mission.

• 24:25David Senra?

  So, when I was reading all this, I just- Couldn't, I was like, why would he, why is he giving you advice that it's like, why would you want to deal with just big companies? It seems like there's way too much randomness. Like you, you have a much harder shot of building a, a good business there if it's, if this is just random. So I'm reading through all this and highlighting this, but this doesn't make any sense. It's like, I don't understand where Mark's going with this. And once I got to this part, I'm like, oh, okay. Cause I, I come up with the same conclusion. So what to do? First, don't do startups that require deals with big companies to make them successful. The risk of, and he tells you why, the risk of never getting those deals is way too high. No matter how hard you're willing to work at it. And even if you get the deals, they probably won't work out the way you hoped.

• 25:08David Senra?

  Second, never assume that a deal with a big company is closed until the ink hits the paper or the cash hits the company bank account. Third, be extremely patient. Big companies play hurry up and wait all the time. If you want to deal with a big company, it is probably going to take a lot longer to put together than you think. I like this reason a lot. Never, ever assume a big company will do the obvious thing. What is obvious to you or any other outsider is probably not obvious on the inside. Once you, once all the other factors that are involved are taken into account. And then I think, uh, he continues and it's even a, I think he's picking up like a fundamental aspect of human nature here.

• 25:47David Senra?

  Be aware that big companies care a lot more about what other big companies are doing than what any startup is doing. Hell, big companies often care a lot more about what other big companies are doing than they care about what their customers doing. Big mistake. Moby Dick cared a lot more about what the other giant white whales were doing than those annoying little people in that flimsy boat. So he's going to give us some advice to close out this, this post. And he says, don't get obsessed. Don't turn into Captain Ahab. By all means, talk to big companies about all kinds of things, but always be ready to have the conversation just drop and to return to your core business.

• 26:29David Senra?

  Rare is the startup where a deal with a big company leads to success or lack thereof leads to a huge failure. Okay. So now I'm going to skip ahead to, um, his post on why a startup's initial business plan doesn't matter that much. All right. A startup's initial business plan doesn't matter that much because it is very hard to determine upfront exactly what combination of product and market will result in success. By definition, you will be doing something new in a world that is a very uncertain place. You are simply probably not going to know whether your initial idea will work out as a product and a business. And you will probably have to rapidly evolve your plan, possibly every aspect of it as you go.

• 27:13David Senra?

  It is therefore much more important for a startup to aggressively seek out a big market. And product market fit within that market. Once the startup is up and running, then it is to try to plan out what you're going to do in great detail ahead of time. This just goes back to one of my my central philosophical tenets is that that we live in a world that is far too complex for us to understand. And therefore, you're going to have to learn as you go. The history of successful startups is quite clear on this topic. Normally, I would simply point to Microsoft, which started as a program as programming tools before IBM, all but forced Bill Gates to go into the operating system business.

• 27:52David Senra?

  Or Oracle, which was a consultancy for the CIA before Larry Ellison decided to productize a relational database. Or Intel, which was very much, which was a much smaller company focused on memory chip market. Until the Japanese onslaught of the mid 80s forced Andy Grove to switch focus to CPUs. Side note, if you want to learn more about Intel, I did a podcast on the great book called The Intel Trinity. It's a founders number eight. Okay, so back to what Mark is writing. Okay, however, I've recently been reading Randall Strauss's marvelous book about Thomas Edison, The Wizard of Menlo Park. Okay, let me plug another one of my past podcasts in case you haven't listened to it. I did, I actually read this book and I did a podcast.

• 28:37David Senra?

  It's founders number three. So I did that like a year and a half, maybe two years ago. I think I did this even before I had the name founders for the podcast. But yeah, it is a fascinating book. And actually, a lot of this post, he's going to be quoting the book. So why is that important? Instead of talking about Andy Grove or Intel or Oracle or Microsoft, why is he saying, no, that you can just, I'm just going to bring up Thomas Edison. And he says, and here's the reason, because of one of Edison's, one of the most important inventions of all time. And how it actually started. So his whole point is like, you can't predict is kind of relayed here in this Edison story. So this Edison's first commercially viable breakthrough invention was the phonograph. Okay. So what the hell is a phonograph, right? Well, the phonograph is

• 29:20David Senra?

  the forerunner to what you kids know as the record player, the turntable, the Walkman, the CD player and the iPod. And as a result, podcasts, the very activity that we're engaged in right now. Because what did a phonograph do? It allowed you to play back at a later time, recorded audio. Edison went on, of course, to become one of the greatest inventors and innovators of all time. As our story begins, Edison, an unknown inventor, running his own startup, is focused on developing better hardware for telegraph operators. He is particularly focused on equipment for telegraph operators to be able to send voice messages over telegraph lines. So it says, "The day after Edison," this is Randall Strauss writing now, "the

• 30:03David Senra?

  day after Edison had noted the idea for recording voice messages received by a telegraphy office, he came up with a variation. That evening, on July 18, 1877, when his lab's midnight dinner had been consumed, Edison turned around to face his assistant," and it's Charles Batchelor, he's kind of a famous guy in his own right, "and casually remarked, 'Batch, if we had a point on this, we could make a record of some material which we could afterwards pull under the point, and it would give us the speech back.'" As soon as Edison had pointed it out, it seemed so obvious that they did not pause to appreciate the suggestion. Everyone jumped up to rig a test. Within an hour, they had the gizmo set up on their table.

• 30:47David Senra?

  Edison sat down, leaned into the mouthpiece, and delivered the stock phrase that the lab used to test telephone diaphragms, 'Mary Had a Little Lamb.'" Bachelor reinserted the strip, the beginning of the strip on which the phrase had been recorded, and out came, "Ari had el am." "It was not fine talking," Bachelor recalled, "but the shape of it was there." The men celebrated with a whoop, with a whoop, whoop, sorry, with a whoop, shook hands with one another and worked on. By breakfast the following morning, they had succeeded in getting clear articulation from waxed paper, the first recording medium. And this is a really important point.

• 31:32David Senra?

  "The discovery was treated surprisingly casually in the lab's notebooks. It was a singular moment in the modern history of invention, but in the years that would follow, Edison would never tell the story the way it actually unfolded that summer, always moving the events from July 1877 to December. We may guess the reason why. In July, he and his assistants failed to appreciate what they had discovered." So remember, the start of this paragraph says it's the singular moment in the modern history of invention. A few sentences later, they actually don't even know what they've discovered yet. "At the time, they were working feverishly to develop a set of working telephones to show their best prospects."

• 32:15David Senra?

  So they're, they're trying to sell these working set of telephones to the, to the company, Western Union. "There was no time to pause and reflect on the incidental invention of what the first working model of the phonograph, of what was kind of to be the first working model of the phonograph. The invention continued to be labeled in the notebooks with the broader rubric, 'speaking telegraph,' reflecting the assumption that it would be put to use in the telegraph office recording messages." And this is going to give you an idea of what Edison's state of affairs in his life was at the time. "In October 1877," so this is a few months after that he invented the phonograph, "Edison wrote his father that he was at present very hard up for cash, but if his speaking telegraph

• 32:59David Senra?

  was successful, he would receive an advance on royalties. The commercial potential of his still unnamed recording apparatus remained out of sight."

• 33:09David Senra?

  So let me actually jump to the next paragraph. A description of the phonograph in Scientific American, uh, excuse me, Scientific American in early November, set off a frenzy in America and Europe. The New York Sun was fascinated by the metaphysical implications of an invention that could play, and this is a quote from them, echoes from dead voices. And more to Mark's point, like, why is Mark including all this? Talking about, you know, your initial, he's trying to teach us that our initial business plan is not the most important thing. And here's why. The New York Times predicted that a large business would develop in bottled sermons,

• 33:49David Senra?

  and wealthy connoisseurs would take pride in keeping a well-stocked oratorical cellar. So they thought the use would be that preachers would be able to record their sermons, and people would be so enthralled by this, they'd have basically an at-home audio library of preaching sermons. By late November, Edison and his staff had caught on to the phonograph's commercial potential as a gadget for entertainment. A list of possible uses for the phonograph was noted. And so this is some of the things they thought maybe it could be used for: speaking toys, whistling toy train engines, music boxes, clocks and watches that announce the time, and there was even an inkling of the future importance of personal music collections,

• 34:34David Senra?

  here described as "a machine for the whole family to enjoy, equipped with a thousand music recordings." And so on December 7th, 1977, so it's almost six months after he first did this, Edison walked into the New York office of Scientific American, placed a small machine on the editor's desk, and with about a dozen people gathered around, turned the crank. "How do you do?" asked the machine, introducing itself crisply. "And how do you like the phonograph?" It itself was feeling quite well, it assured its listeners, and then cordially bid everyone a good night. Having long worked within the world of telegraphic equipment, Edison had been perfectly placed to receive the technical inspiration for the phonograph.

• 35:17David Senra?

  But that same world oriented to a handful of giant industrial consumers, our customers, had nothing in common with the consumer marketplace. And now this is Mark finishing up this post with what he took away from that. And he says, "The story goes on and on. You should read the book. It's all like this." "The point is this: If Thomas Edison didn't know what he had when he invented the phonograph, while he thought he was trying to create better industrial equipment for telegraph operators, what are the odds that you, or any entrepreneur, is going to have it all figured out upfront?" Okay, so that is the end of what I wanted to include for the P Market Guide to Startups. Now he has the P Market Guide to Career.

• 36:02David Senra?

  And there's just a few parts that I want to share with you here that I think are extremely valuable. So we're going to be talking about career planning. He says, "In real life, as opposed to blogging, one of my least favorite things to do is give career planning advice. Most people who say they want career planning advice aren't actually looking for advice. They just want validation of the path they already chosen. Because of that, giving someone career planning advice is one of the surest ways to end up feeling like an asshole. However, as with so many other things, career planning is a topic about which I have plenty of opinions." So I love that. He's like, "This is useless. I don't like doing it, but I have a lot of opinions, so I'm going to write them down." The three parts, like I said earlier, that I'm going to focus on is how to think about opportunity, skills and education, and where to go and why. So, let's start with opportunity.

• 36:48David Senra?

  The first rule of career planning: Do not plan your career. The world is an incredibly complex place and everything is changing all the time. You can't plan your career because you have no idea what's going to happen in the future. You have no idea what industries you'll enter, what companies you'll work for, what roles you'll have, where you'll live, or what you'll ultimately contribute to the world. You'll change. Industries will change. The world will change. And you can't possibly predict any of it.

• 37:17David Senra?

  Trying to plan your career is an exercise in futility that will only serve to frustrate you and to blind you to the really significant opportunities that life will throw your way. Career planning equals career limiting. The sooner you come to grips with that, the better. The second rule of career planning, instead of planning your career, focus on pursuing opportunities. Opportunities are key. I would argue that opportunities fall loosely into two buckets. Those that present themselves to you and those that you go out and create. Both will be hugely important to your career. Opportunities that present themselves to you are the consequence, at least partially, of being in the right place at the right time. They tend to present themselves when you are not expecting it, and often when

• 38:02David Senra?

  you are engaged in other activities that would seem to preclude you from pursuing them. And they come and go quickly. That's such an important part. I need to read that read that part over. Okay, so they're going to present themselves when you're actually not expecting it. Okay, usually when you're engaged in some other activity and that usually would prevent you from from pursuing that right. And then let's, I want to repeat this part because it might be the most important part. And they come and go quickly. If you don't jump all over an opportunity, someone else generally will, and it will vanish. I believe a huge part of what people would like to refer to as career planning is being continuously alert to opportunities that present themselves to you spontaneously, when

• 38:45David Senra?

  you happen to be in the right place at the right time. And so he's going to give you some examples of what that might look like in real life. A senior person at your firm is looking for someone young and hungry to do the legwork on an important project in addition to your day job. Your former manager has jumped ship to a hot growth company and calls you three months later and says, come join me. Or a small group of your smartest friends are headed to Denny's at 11pm to discuss an idea for a startup. Would you like to come along? And now Mark is going to give his opinion on this. He says, I am continually amazed at the number of people who are presented with an opportunity like the ones above and pass. There's your basic dividing line between the people who will

• 39:27David Senra?

  shoot up in their careers like a rocket ship and those who don't right there. I am also continually amazed at the number of people who coast through life and don't go and seek out opportunities, even when they know in their gut what they'd really like to do. Don't be one of those people. Life is way too short. Unfortunately, I think that's probably the vast majority of people. The world is a very malleable place. If you know what you want and you go for it with maximum energy and drive and passion, the world will often reconfigure itself around you much more quickly and easily than you would think. Now, I'm not proposing that you simply ping pong from opportunity to opportunity randomly. You can have a strategy, and here's how I think that strategy should work.

• 40:11David Senra?

  People who manage money professionally don't think about individual investments in isolation. They think about those investments as part of an overall portfolio. Each investment has its potential return, the benefit you get from owning it, and its potential risks, the things that can go wrong. A portfolio then is a set of investments and the portfolio assumes the return and risk characteristics of all the investments blended together. Viewed in that context, it is often logical to have individual investments within a portfolio that are far more risky than one would normally find comfortable, and that's only if the potential return is good enough, or investments that are far less risky and have far less return potential than one would normally want to protect one's downside.

• 40:55David Senra?

  The risk of any individual investment is not important. What is important is how the risks and the potential returns of all those investments combine in the overall portfolio. So why is he giving us, you know, like an econ 101 lesson? Then here's the reason why. I believe you should look at your career as a portfolio of jobs, roles, and opportunities. Each job that you take, each role that you choose to fill, each opportunity you pursue will have a certain potential return, the benefits you can get from taking it, whether those benefits come in the form of income, skill development, experience, geographic location, or something else. And this is the other side of that.

• 41:38David Senra?

  Each job will also have a certain risk profile, the thing that could go wrong from getting fired for not being able to handle the job's demands to having to move somewhere you don't want to, the company going bankrupt, etc., etc. Once you start thinking this way, you can think strategically about your career over its likely 50-plus-year time span. For example, when you are just out of school and you have a low burn rate and geographic flexibility, you can take jobs with a certain return risk profile. If you get married and have kids, you will take jobs with a different return risk profile. Later, when your kids grow up and you're once again free to move about and you don't have to worry about tuition payments and a mortgage on a big house in a great school

• 42:21David Senra?

  district, but you now have far more experience than you did when you were first starting out, you can also take jobs with a third risk-return profile. Most people do not think this way. They might occasionally think this way, but they don't do it systematically. So when an opportunity pops up, they evaluate it on a standalone basis. "Boy, it looks risky. I'm not sure I should do it." He's talking about some of the common excuses. What you should automatically do instead is put it in context with all of the other risks you are likely to take throughout your entire career and decide whether this opportunity fits strategically into your portfolio. And so he's going to say, "Here, let's dig into this concept a little more."

• 43:01David Senra?

  I'm talking about the form of risk that financial professionals deal with and startup entrepreneurs deal with and that you deal with anytime you make any decision. There are a set of potential downsides to almost any decision, but they can be analyzed and often quantified and thereby brought under control, which is important because in life, there is generally no opportunity without risk. A lot of the thing I love about his posts, he always intertwines like stuff he's reading or saw elsewhere into like how, he gives you like some background on how he came about and what influenced these ideas. So there's this guy named Aaron Brown. He says, "To quote Aaron Brown, a legendary Morgan Stanley derivatives trader and poker

• 43:44David Senra?

  expert, from his extraordinary book, The Poker Face of Wall Street, when talking about hiring traders at an investment bank..." So this is Aaron Brown talking about hiring traders and then we're going to have Mark tie this into entrepreneurship. "What I listen for is someone who really wanted something that could be attained only through taking a risk." Whether that risk was Big or small. It's not even important that she managed the skills, the, the risk skillfully. It's only important that she knew it was there, respected it, but took it anyway. Most people wander through life carelessly, taking whatever risk crosses their path, path without compensation. But never consciously accepting risk to pick up the money and other good things lying all around them. Other people reflexively avoid every risk or grab every loose dollar without caution.

• 44:30David Senra?

  I don't mean to belittle these strategies. I'm sure they make sense to the people who pursue them. I just don't understand them myself. I do know that none of these people will be successful traders. So now we're back to Mark and he says, so when you were presented with an opportunity, carefully analyze its risks, but do so within the context if your likely lifetime portfolio risks are of your likely lifetime portfolio risks. And do so realizing that taking risk can be a good thing when it leads to pursuing the best opportunities. So he's going to give us some, some concrete examples here and he says, "All that said, here are some of my opinions about the kinds of risks you should take and when."

• 45:11David Senra?

  I actually sent this, uh, I actually took screenshots of this and sent it to my brother-in-law because he's dealing with this now. He's young, no kids, just got married, but living in, you know, a relatively cheap apartment. Uh, has a job that he has, there's a clear path forward to advancement and a stable income, but maybe he doesn't like it and doesn't foresee, doesn't really want to spend his life doing that. And I, I sent him this, this part right here. He says, when you're, uh, this is Mark writing, he says, "When you were just, remember this is, uh, Mark's opinions on the kinds of risks you should take and when. When you were just out of school and assuming that you're relatively free to move and have a low burn rate,

• 45:52David Senra?

  is when you should optimize for the rate at which you can develop skills and acquire experiences that will serve you well later. You should specifically take income risk in order to do that. Always take the job that will best develop your skills and give you valuable, valuable experiences regardless of its salary." And this is, he put, he italicized. This and it's the most important part. This is not the time in your career to play it safe. Amen to that. Moving on to the next set. When you have family obligations, a spouse, two and a half kids, a dog, a picket fence. That's obviously the time to crank back on the income risk and instead take a little risk that you might not learn as much or advance as quickly. Or join that or might basically don't join that. It might not be a good idea to join that hot new startup. He does add the caveat though.

• 46:37David Senra?

  He says, however, this is not black and white in Silicon Valley. For example, it can still make a lot of sense for young parents to take a risk on a hot new startup because it will usually be easier to get another job if the startup fails. Third one, there may be times when you realize that you are dissatisfied with your field. Okay, this I talk about constantly with with people in my personal life. You are working in enterprise software, for example, but you'd rather be working on green tech or in consumer internet company. Jumping from one field into another is always risky because your specific skills and contacts are in your old field. So you'll always have less certainty of success in the new field. This is almost always a risk worth taking. Standing pat and being unhappy about about it has risks of it has risks of its own.

• 47:22David Senra?

  Particularly to your happiness. And it is awfully hard. This is, this is so important. And it is awfully hard to be highly successful in a job or field in which one is unhappy. I think most people would agree with that last statement, yet analyze the people around you. How many people you know that have jobs they hate, but yet they they constantly talk themselves into why they have to constantly that this has to be the case. Oh, you know, it's not that bad. Oh, I enjoy my weekends. Oh, I have kids. Oh, I have all these other things like not saying that you can just jump. Everybody can just jump freely, but if you know that you're unhappy, at least work your work towards a position in which you can make a change.

• 48:03David Senra?

  As opposed to just constantly saying like most people just shut their mind off that change is even possible. Now, okay, so he's gonna continue with likewise with geographic risk. You start in one city, say, working at a software company in Philadelphia, and you're doing well. You get the opportunity to jump to a faster growing software company in Silicon Valley. Should you take the risk of moving geographies to a place where you don't know anybody? And where the cost of living is almost high, when the cost of living is higher? Almost certainly. The additional risks of not having an extensive personal network and of tolerating a lower standard of living for some period of time are almost certainly overcome by the upside of being at a better company, relocating yourself to the heart of your industry, and setting yourself up to exploit many more great opportunities over the next decade.

• 48:48David Senra?

  And he says, finally, pay attention to opportunity costs at all times. Doing one thing means not doing other things. This is a form of risk that is very easy to ignore to your own detriment. And he says, one more quote, this time from Nassim Nicholas Taleb and The Black Swan. Seize any opportunity or anything that looks like opportunity. They are rare, much rarer than you think. Many people do not realize they are getting a lucky break in life when they get it. If a big publisher, or a big art dealer, or a movie executive, or a hotshot banker, or a big thinker suggests an appointment, cancel anything you have planned. You may not see such a window open up again. So that's the end of the quote from Black Swan. This is back to Mark.

• 49:32David Senra?

  And this is the takeaway and his final takeaway from the thinking about opportunities. If you really are high potential, you're naturally going to be seeking out risks in your career in order to maximize your level of achievement. So now he's gonna, we're gonna go to skills and education. And then we're gonna go more on geography. I love this. So it says, please read my opening disclaimers. Note especially that these are only my personal views. I am not trying to malign anyone else's choice of career or educational path. These are simply the things I would want to be told if I were entering college today. So first section we're gonna talk about, what should you study in college? Some people argue that that college will be your one chance in life to pursue your passion,

• 50:17David Senra?

  to spend four years doing nothing but studying whatever you love the most, whether that's Renaissance literature or existential philosophy. I disagree. If you tend to have an impact on the world, the faster you start developing concrete skills that will be useful in the real world, the better. And your undergrad degree is a great place to start. Once you get into the real world and you're primed for success, then you can pursue your passion. Um, so as you can imagine, he's just going to recommend STEM degrees mostly. Um, so I'm going to skip over that part, but I'm going to tell you, I am going to share with you why he's recommending this. So he says, why do I take this stance? Technical degrees teach you how to do something difficult and useful that matters in the real world.

• 50:59David Senra?

  Even if you don't end up actually doing what the degree teaches you how to do. Going through the experience of learning how to do it will help you go through other serious learning experiences in your career. Complexity and difficulty will not faze you. Plus, technical degrees teach you how to think like an engineer, a scientist, an economist, or a mathematician. How to use reason, logic, and data. This is incredibly useful in the real world, which generally demands rigorous thinking on the path to doing anything big. Plus, technical degrees indicate seriousness of purpose to future employers and partners. You get coded right up front as someone who is intent on doing real things. And, uh, I love his writing here and he italicized this to, to really hone in that it's important to him.

• 51:44David Senra?

  Graduating with a technical degree is like heading out into the real world armed with an assault rifle instead of a dull knife. What college or university should I go to? Try very, very hard to go to one of the best colleges or universities in the world for your chosen field. Do not worry about being a small fish in a big pond. You want to always be in the best pond possible because that's how you will get exposed to the best people and the best opportunities in your field. Okay. Now he's talking about, we're going to skip ahead, talking about, so that's education. And, and in relation to education is developing skills because that's what you should, uh, what's the purpose of learning something, right?

• 52:27David Senra?

  So he says, this is his favorite way of thinking about how do you develop skill once you're out of school? So this is my favorite way of thinking about this is seek to be a double, triple, quadruple threat. Scott Adams, the creator of Dilbert nails it. So he's going to quote from a blog post that Scott Adams made about a decade ago. And so this is Scott writing. He said, if you want an average, successful life, it doesn't take much planning. Just stay out of trouble, go to school and apply for jobs you might like. But if you want something extraordinary, you have two paths. Become the best at one specific thing, or become very good, top 25%, at two or more things. The first strategy is difficult to the point of near impossibility. Few people will ever play in the NBA or make a platinum album.

• 53:12David Senra?

  I don't recommend anyone even try. This is Scott still writing, by the way. The second strategy is fairly easy. Everyone has at least a few areas in which they could be in the top 25% with some effort. In my case, I can draw better than most people, but I'm hardly an artist. And I'm not any funnier than the average stand-up comedian who never makes it big, but I am funnier than most people. The magic is that few people can draw well and write jokes. It's the combination of the two that makes what I do so rare. And when you add in my business background, suddenly I had a topic that very few cartoonists could hope to understand without living it. Get a degree in business on top of your engineering degree,

• 53:55David Senra?

  law degree, medical degree, science degree, or whatever. Suddenly, you're in charge, or maybe you're starting your own company using your combined knowledge. This is probably the most important sentence in this entire post. Capitalism rewards things that are both rare and valuable. You make yourself rare by combining two or more pretty goods until no one else has your mix. It sounds like generic advice, but you'd be hard-pressed to find any successful person who didn't have about three skills in the top 25%. I mean, the top 25% of all people. Okay, so now this is Mark telling us his opinion about what Scott just wrote. All successful CEOs are like this. They're almost never the best product visionaries, or the best salespeople, or the best marketing people,

• 54:40David Senra?

  or the best finance people, or the best managers. But they are top 25% in some set of those skills. And then all of a sudden, they're qualified to actually run something important. Mark is going to tell us his opinion of what skills we should focus on cultivating. Let me cite as examples, five skills that you can develop once you leave school that in combination with your degree or degrees and your other skills, can help maximize your potential. First, communication. So he says back to Scott Adams, he's going to go back and quote that, another blog post. I always advise young people to become good public speakers, meaning get into the top 25% of all public speakers. Anyone can do it with practice.

• 55:22David Senra?

  If you add that talent to any other, suddenly you're the boss of people who have only one skill. And at least one of those skills in your mixture should involve communication, either written or verbal. Now, this is Mark again. The great thing about communication is that most people are terrible at it because they never take it seriously as a skill to develop. This is particularly true of engineers and technical people who often quaintly believe that the world, the world works logically and that people will automatically recognize the quality of things. Ha! Of course, communication is critically important because it's how you convey information and concepts to a lot of people in ways that will cause them to change their behavior.

• 56:04David Senra?

  So, we're building companies, we want some kind of impetus of behavior change because we want you to buy the product or service, right? We want our customers to, to do something, we want to convince them to do something. So, you have to communicate. This is one I think is extremely important. Learn how to sell. I don't mean learn how to sell someone instead of steak knives they don't need, although I hear that can be quite an education by itself. I mean, I learn how to convince people that something is in their best interest to do, even when they don't realize it upfront. Think of this as the art of being able to interact with people such that they will do what you want predictably and repeatably, as long as you're making sense and offering them something they should want.

• 56:47David Senra?

  This is another terribly underrated skill, at least among people who aren't professional salespeople. But it's an incredibly general skill that can be helpful not only in your career, but throughout your entire life. Towards the end of this post, he has, he asked a question, or somebody asked a question, like, "Do you have any other final thoughts on education?" He says, "Yes, if you're in college now, or you're about to graduate from college, and you come from an upper-middle-class background, especially if you're going to an Ivy League school, take the time to read a provocative essay David Brooks wrote several years ago called 'The Organizational Kid', and so, I'm going to read some excerpts of this, of this, of this essay. And we're gonna see why Mark feels this is so important. So this is David Brooks writing, he says, "I asked several Ivy League students to describe their daily schedules,

• 57:30David Senra?

  and their replies sounded like a session of future workaholics of America. Crew practice at dawn, classes in the morning, resident advisor duty, lunch, study groups, classes in the afternoon, tutoring disadvantaged kids in Trenton, a cappella practice, dinner, study, science lab, prayer session, study for a few hours more. Nowhere did I find any real unhappiness with this state of affairs. Nowhere did I find anybody who seriously considered living any other way. These super accomplished kids aren't working so hard because they are compelled to. It's not the stick that drives them, it's the carrot. Opportunity lures them. In a rich information age country like America, promises of enjoyable work abound,

• 58:15David Senra?

  at least for people as smart and ambitious as these. "I want to be this busy," one young woman insisted after she described a daily schedule "that would count as slave driving if it was imposed on anyone else." "We have in America a generation of students who are extraordinarily bright, morally earnest, and incredibly industrious. They like to study and socialize in groups. They create and join organizations with great enthusiasm. They are responsible, self-conscious, and mature. They feel no compelling need to rebel, not even a hint of one. They not only defer to authority, they admire it." Side note, it's probably why so few of them actually build great companies.

• 58:57David Senra?

  "They regard the universe as beneficent, orderly, and meaningful. At the schools and colleges where the next leadership class is being bred, one finds not angry revolutionaries, despondent slackers, or dark cynics, but the organization kid." So that's the term that David is putting on this. And now, Mark is gonna tell us why this is so dangerous. Now, if your parents are middle class or lower middle class, and you're attending a state school or a local college, and you're working your way through school in order to pay for tuition, you can stop reading now. You probably don't have anything to worry about. But if you read Brooks' essay and recognize yourself, then read on.

• 59:38David Senra?

  So he talks about what's the risk in raising kids this way or living your life that way? If you have lived an orchestrated existence, gone to great schools, participated in lots of extracurricular activities, had parents who really concentrated hard on developing you, developing you broadly and exposing you to lots of cultural experiences. So again, this is the reason I like, how many people actually go through this? Like it's a tiny percent of people's existence that actually are raised in environments like this. And graduated from an elite university in the first 22 or more years of their life, you are in danger of entering the real world, being smacked hard across the face by reality and never recovering. What do I mean?

• 1:00:20David Senra?

  It's possible you got all the way through those first 22 or more years and are now entering the workforce without ever really challenging yourself. This sounds silly because you've been working hard your whole life. But working hard is not what I'm talking about. You've been continuously surrounded by a state of the art parental and educational support structure, a safety net, and you have yet to make tough decisions by yourself in the absence of good information and to live with the consequences of screwing up. So that last part about it's all italicized. You have yet to make tough decisions by yourself in absence of good information and to live with the consequences of screwing up. That's, I think you already know where Mark's going with this.

• 1:01:04David Senra?

  That's the description of building a company. You have to make tough decisions by yourself in the absence of good information and you have to live with the consequences of screwing up. Goes back to what he's been saying this, through many of these posts about the complexity of, of the world we live in. Like that's a complex environment means there's going to be an absence of reliable information. In my opinion, it's now critically important to get into the real world and really challenge yourself. Expose yourself to risk. Put yourself in situations where you will succeed or fail by your own decisions and actions and where that success or failure will be highly visible.

• 1:01:41David Senra?

  Why? If you're going to be a high achiever, you're going to be in lots of situations where you're going to be quickly making decisions in the presence of incomplete or incorrect information, under time pressure, and often under intense political pressure. You're going to screw up frequently, and the screw-ups will have serious consequences, and you will feel incredibly stupid every time. This cannot faze you. You have to be able to just get right back up and keep on going. And this is the end of the post, the last sentence of the post, and why I decided to include it in the podcast. That may be the most valuable skill you can ever learn. Make sure you start learning it early.

• 1:02:26David Senra?

  So we're almost done. I know this is longer than, I'm going on longer than I normally do, but there's just so much good information in this, uh, this book and this series of posts. I'm really happy that I stumbled upon it. So the last section we're gonna go over is where to go and why. When picking an industry to enter, my favorite rule of thumb is this. Pick an industry where the founders of the industry, the founders of the important companies in the industry, are still alive and actively involved. This is easy to figure out. Just look at the CEO, chairman, or chairwoman, and board of directors for the major companies in this industry. If the founders, and this is another italicized part, if the founders of the companies are

• 1:03:06David Senra?

  currently serving as CEO, chairman, chairwoman, board member of their companies, it's a good industry to enter. It is probably still young and vital, and there are probably still opportunities to exploit all over the place. Either at those companies, or at new companies in that industry. If not, if the industry founders are dead, or old, or out of touch, beware. That industry is now dominated by companies that are being run by second, or third, or even fourth generation managers who inherited their companies pre-built, and are serving as caretakers. That's just great writing. If you are young and want to have an impact, you want to be in an industry where there's

• 1:03:51David Senra?

  a lot of growth, and change, and flux, and opportunity. As an industry ages, the vitality drains out until all that's left is a set of ossified remnants in the form of oligopolistic entities, of which you would find being a part of to be completely soul-killing.

• 1:04:10David Senra?

  All right, so if you want the full story, I'm going to leave it here. I'll leave a link in the show notes and everything, obviously, is always available at founderspodcast.com. You can download the ebook for free. I definitely recommend. If you go to amazon.com/shop/founderspodcast, you can see every single book that I've covered so far. And if you purchase using that link, the podcast gets a small percentage of the sale. So it's actually a good way to support the podcast. Thank you very much for your support. Thank you for listening. Please tell a friend. And I will talk to you again on Monday.