Embracing Failure as Freedom to Execute
One of the more formative things I did in high school was join the school play. I did a few of them, but one in particular hit me like a ton of bricks. I was the Fire Chief in Ionesco’s The Bald Soprano, a one-act absurdist play.
The Fire Chief has a nonsensical monologue called “The Headcold” (P. 32) that runs on for a couple minutes solo. There are a few cues for interruption along the way, so flubbing lines can create big gaps in the script. It’s a real challenge to nail correctly, especially with an absurdist plot with no logical progression and a British accent, and I have never had a particularly good memory.
In every rehearsal I blew the monologue every time. My co-actors and director were disappointed but understanding. I grinded on this monologue like crazy to drive it into my head, but a fear of screwing up made my nerves jump forward in my mind, and then I’d botch the monologue each successive night. Rehearsal was a safe place to fail because there was no audience, but nonetheless, it lead to my own internal mounting disappointment and increasing fear of failure in front of a live audience.
The day before opening night, we did an “advertisement” for the play by performing in front of the entire school at assembly in the morning. I’m sure the director deliberately picked the scene containing my monologue, so it was my first live run.
I failed. I got about half way through the monologue, forgot the next memory block, paused for 5+ seconds of awkward silence frozen on stage, and then inserted a line that I knew was towards the end of my monologue that would cue the next interjections from my co-actors and keep the play moving forward.
While I was a little embarrassed in talking to my friends after the assembly, failing publicly was freeing. Most students didn’t notice the failure (because they didn’t know the script, and its an absurdist plot anyway), and those that did suspect anything was wrong were more impressed by what worked right than what went wrong.
I had built up public failure in my mind into such a big deal, that once I actually failed in public, I was liberated by the experience. I realized it was bearable… not good, but also not the monster I thought it would be.
I think you can predict the end of this story. On all 4 nights the play ran, I nailed the monologue perfectly, now freed from the distraction of failure’s specter.
It was a formative event because the experience is transferable to all angles of my life. It helps me take risks I would never otherwise take. I’ve never used this story with any of the companies I work with (it’s too personal and random for a board mtg or business conversation), but I am often reminded of it when I see Founders learn similar lessons from small failures, and how they later shape larger successes with the experience of failure.
Bitcoin Cap and Endless Divisibility
There will only ever be 21 Million Bitcoins created, the currency is systematically capped.
But, a Bitcoin is infinitely subdividable. Meaning the decimal places to describe the fraction of a Bitcoin are limitless. (Technically, the decimal places are limited by the size of the memory block chosen to store Bitcoins, but if we need more decimal places in the future to subdivide further, we can always choose a bigger memory block size.)
Bitcoin being both limited and limitless makes my mind spin.
Merchants and consumers intimidated by the cost of a single Bitcoin could collectively agree tomorrow that all Bitcoins are best measured in mBTC denomination. 1 mBTC = .001 BTC (it’s a millibitcoin). So now there would be 21 Billion mBTC in circulation. What’s the difference? Bitcoin is not asset backed and has no intrinsic value, so why not just shift the decimal place?
If people knew there will only ever be 21 Billion mBTC in circulation instead of 21 million, would the exuberance for stockpiling Bitcoin diminish? 21 Billion widgets sounds less scare than 21 Million widgets.
Not compelled by my argument? Well, what if we move a couple thousand decimal places…? A million? When there is 21 Googol xBTC, is that enough to convey limitlessness?
And if there are infinity Bitcoins available, how much would you pay for one? This is the question a non-early adopter would need to ask self-reflectively when first buying into Bitcoin.
I know, I know. I can already hear the naysayers reading this post. They’ll say: “Andrew, you’re making a 4th grade math mistake. If we just change the decimal place, then I now own my same portion of Bitcoins that I did before. My 2 Bitcoins becomes 2,000 or 2 million, etc… So infinite subdividability is meaningless and the number of Bitcoins are still fixed at 21 Million.”
In the context of early adopters, this feedback is correct and I agree. But if Bitcoin is only ever relevant to early adopters, it will fail. It’s disruptive power is perfectly correlated with Metcalfe’s Law. What good is a currency that is only accepted by a small fraction of the world.
In the context of mainstream participants in the global ecosystem (non-early adopters who do not benefit from the near term Bitcoin inflation because they do not own any coins), I think my argument that, practically (not theoretically), there are limitless Bitcoins is more persuasive. And the value of a single Bitcoin will only be measured in its purchasing power with merchants that accept Bitcoin, or the work you’re willing to do to be paid in Bitcoin. Without that counter-party context, Bitcoin is limitless and inherently worthless to the non-early adopter.
Oh, the Bitcoin mind games…
The Innovation/Different Balance
There is a natural balance in user interface design that must be struck between being “innovative” and being “different”.
By “innovative” I mean: Novel, unique. A substancial improvement over the status quo way of doing things. Something that feels genuinely better.
By “different” I mean: not the way people are used to doing thing, and thus, inherently inferior to the status quo. Playing on people’s muscle memory is powerful, and if you’re constantly changing the locations of buttons or redesigning workflow in your app, the “different” experience can frustrate existing users endlessly. An interface should feel natural… like you’re seeing straight-through the interface into your work uninhibited. The interface should just fade away from consciousness. Being “different” gets in the way of seeing straight-through and resurfaces the interface into consciousness.
As an investor in technology, I’m often willing to overlook the difficulties of something being “different” in order to embrace “innovative” products. But, mainstream audiences don’t have that same willingness.
This balance between “innovative” and “different” is one I have known in interface design since it was taught to me in school, so it something I have been aware of for 10+ years. But, I’ve only recently started to see how cleanly this metaphor extends to building a business.
Look at where Tesla is succeeding where so many other electric car prototypes have failed. Electric cars wildly innovative, but the innovation is so advanced that “different” creeps in too. Electric cars need to be charged for a relatively lengthy period of time instead of just pumped up with a new tank of gas in 45 seconds. They don’t *rev* or feel muscular. People’s crappy experience with the diminishing performance of rechargable batteries everywhere else in their life has taught them to be inherently distrustful of electric cars.
Telsa put so much thought and care and “innovation” into the design of their business that they’re finally managing to push the “innovation/different” balance into positive territory. It’s an uphill battle (I battle I believe Tesla can win) because they innovated so much that they’re by-definition “different.”
Talking to My Create Post Box
There are three hours left before midnight, and I have not published a blog post for today. I was going to let this one slide, but I really want to hit the big green button on my Lift app, so I’m just going to talk to my “create post” box for a bit here. No big lessons or thesis, just free form. Proceed with caution.
I have no shortage of things to talk about. On the work side: Twitter IPO, Sincerely acquisition, and a bunch of other action in the portfolio. I could talk about the panel I participated in last night, kindly hosted by Slate and MassChallenge. But this day has been a blur, and so I’ve been unable to form well-considered opinions on any front.
I’m blurry because in the time I have spent in venture, I’ve never seen an IPO. Considering the IPO used to be the primary source of out-sized liquidity for venture-backed companies in the 80s and 90s, working over 7 years across two firms with zero IPOs (until today) is pretty unusual.
Thanks to Ev, Jack, Biz and Dick for their tireless work, unflappable vision, and tight product execution. It has been amazing to watch (and I can safely promise all readers out there, I did nothing more than watch).
Long Term Thinking
One of the hardest skills for me to build as a recovering developer / product manager is long-term thinking. It’s so easy to get sucked down to the 2-inch level and obsess over every feature launch, news story, or competitor funding. But venture works on a very different time scale, and the ability to think and hypothesize long term is essential.
One tool I pull out occasionally to help improve in long term thinking is looking at Techmeme archives from prior years. For example, here is Techmeme from 5 years ago. For context at the time, the bottom was falling out of the economy, banks were collapsing, and Barack Obama had just been elected president for the first time. The key headlines on Techmeme in this context were:
- Yahoo under Jerry Yang leadership wishes it had sold to Microsoft a year prior.
Fast forward 5 years (and two management changes) later, Yahoo is making some interesting moves and is currently trading at exactly the Microsoft offer price of $33/sh. Jerry Yang is quoted 5 years ago as saying that the entire digital advertising industry is $40BN and is still in the early innings. By contrast, today Yahoo’s market cap is $35BN.
- Once thought safe, WPA wifi encryption is cracked.
This is a particularly appealing headline given the modern day context of the NSA subverting major open security standards for the benefit of spying. I bet 5 years ago, the false security we felt in trusting encryption was much worse than we knew.
- Youtube launched a bunch of new features of their embedded player, such as search and closed captioning.
There is a perennial pendulum in consumer-facing web services between owning your own destination where you drive users towards VS distributing your service outwards to places users already are. First, Myspace was a honeypot where they owned their own property. Then, Youtube built a massive media property in part on the back of an embedded player that didn’t require user to always come to Youtube.com to consume content. Next, Facebook created their own destination, but opened it up in unprecedented ways for other companies to build on their property. Subsequently, Facebook then constrained their previously unprecedented openness, and materially harmed a bunch of the companies that built on their ecosystem, and then it became trendy to own your own property again, so you could built a company unmitigated by gatekeepers. Then came mobile, and the App Store as the next distribution goldmine and new gatekeeper. The pendulum continues to swing back and forth on this topic, and will swing in perpetuity into the future.
This is all a simple exercise. Look at old headlines are reflect. Being able to analyze outcomes using 20/20 hindsight is no where as difficult as having foresight in contemporary times. But it helps train pattern recognition, and as such is a worthy and interesting exercise.
Fantasy Sports as an Ideal Model for Second Screen
Fantasy sports feels like the best implementation of a “second screen” media experience to pair with TV. Because:
A) It helps fans care about games that would otherwise be uninteresting. When the game is a blow out, or when the teams are small non-market teams, fantasy owners still care how individual players perform.
B) What happens on the “second screen” doesn’t happen only during the game. There is a week of preparation, news, trades, etc that pull consumers into the experience outside of just Sunday’s games.
C) The biggest issue with watching live sports is the deluge of ads and other crap time. A three hour football games has roughly one hour of football action. That’s two hours of down time or ads. Fantasy helps make those 2 hours of cruft more watchable.
I’m surprised that other forms of TV have not learned from the success of fantasy sports on the second screen. Inspired by the Crowley brothers, I played a version of fantasy Bachelor, and it substantially enhances the show. I’m surprised ABC has not adopted this game directly and built a product around it.
What’s so interesting about how well fantasy sports fits as a second screen experience is that it’s not a game built natively for second screens. Instead, it’s an adaptation. Fantasy is an offline game that has been around since the 70s. It has only entered the Zeitgeist in the past decade, in combination with the rise in mobile technology.
Fantasy also dovetails really nicely with Twitter; every Sunday I do Twitter searches for all my players in order to stalk injury news or particularly juicy matchups. i think the popularity of Twitter amongst professional athletes has really given fantasy sports adoption a boost.
I suspect we’ll see more games as second screen experiences going forward. Fantasy is too successful as a model to ignore.