Lessons Learned in 2020
Two years ago I started an annual reflective exercise of looking back on lessons that resonated with me from books I read that year. A lot has changed since then, both in my life and the world around me. The entrepreneurial journey has lived up to the hype, both in its highs and lows, and it’s safe to say the “uniqueness” of 2020 magnified these swings in a very big way.
With Selva Ventures, the rollercoaster of entrepreneurship starts with the size of our ambition: to build the best consumer investing firm in the world; and our mission: to invest in brands that make their consumers’ lives better. Such a lofty ambition can be daunting, and I’ve noticed that the progress we make and milestones we achieve can bring with them feelings of nervousness and isolation.
It would be easy to say that the loneliness of the journey accelerated when I stopped traveling every week and started experiencing all my professional human contact through Zoom. I think there is more to it than that. Part of it might be that the more progress you have made the more you have to lose, and the less time until you have to prove that you’re onto something. Part of it is that it’s just really hard to build something of value and nobody cares as much about your mission as you do.
The good news is that these feelings were not a surprise. I was warned plenty by the other entrepreneurs in my life and the books I had read. Still, the experience has sparked a newfound curiosity of how people navigate ambitious journeys. This year especially I sought out to read autobiographies of some of the most iconic success stories in business, politics and professional sports. I read not just to understand “how they did it” but also “how it felt”, both in the good times and the tough. The people below have always seemed to me like larger than life figures, but they are still human and there is much to learn from their most reflective moments.
1. Hard work and talent are only part of the puzzle
There are good players and great players, but the technical distance between the best player in the NBA and the worst player in the NBA is really not that big. Everyone can shoot, everyone can dribble, everyone can pass, and everyone is strong. So confidence is really the thing that makes the difference between winning and losing. When I look back at my career, I can see now that each milestone I hit wasn’t so much a milestone of technical ability, though there were those. They were really milestones of personal belief.
— Andre Iguodala, The Sixth Man
When I was 21 I worked for a guy who gave me some blunt advice: “Everybody your age stresses so much about where someone went to school, what their GPA was and what firm they worked at. Pretty soon everyone around you will have those same credentials and all anyone will care about is whether you can predict the future”. It has stuck with me because in competitive fields I notice so much of people’s focus is how to climb the next rung of the ladder rather than what they will do when they get there. At some point you’ll ascend to a level where you’ll meet your match, and you won’t be successful just by product of who you are, what you’ve done and how hard you’ll work. At that point it takes a rare blend of humility and confidence to admire the quality of your competitors but still believe you can outperform them. Imagine what it took for Andre to face Lebron James, acknowledge he’s among the best of all time, and still believe you can stop him. It’s these milestones of personal belief that set the most successful people apart.
2. Solve other people’s most difficult problems
Listening closely and watching the way people talk puts me much closer to answering the question I’m always asking myself, which is: How can I help? If I can help someone and become a friend to their situation, everything else follows. There is nothing more interesting to people than their own problems. If you can find out what they are and come up with solutions, they will want to talk to you no matter their rank or status. The harder the problem and the scarcer the solution, the more valuable your advice is.
— Stephen Schwartzman, What It Takes
There is a common phrase that venture capitalists are notorious for saying: “let me know how I can be helpful”. In fact, there is legitimately a Twitter account dedicated to mocking our constant use of this phrase. The issue is not that we want to help — in fact the most powerful lesson I’ve learned in my career is that investing is a service business. The issue with that phrase is that it’s lazy — we’re asking our counterpart rather than asking ourselves. We’re looking for a quick and easy win instead of listening intently and finding a solution to somebody’s most difficult problems. There are few investments you can make in your career that will have a higher long-term ROI than skipping the low hanging fruit and trying to solve that big problem someone is struggling with. There is no better brand you can have than being known as a solution to the problems people are most anxious about. You can only imagine how many people owe Stephen Schwarzman one.
3. Sharing upside creates more upside to share
The larger truth that I failed to see turned out to be another of those paradoxes — like the discounters’ principle of the less you charge, the more you’ll earn. And here it is: the more you share profits with your associates — whether it’s in salaries or incentives or bonuses or stock discounts — the more profit will accrue to the company.
— Sam Walton, Made In America
In spending time with hundreds of emerging brands every year I’m constantly trying to spot patterns between those who have been successful. There is a constant that is present in every single success story: their teams were passionate from top to bottom. It’s incredibly difficult to build a community of evangelists if your employees don’t feel part of that community. It’s so hard for employees to have an ownership mindset if they aren’t owners themselves. Founders may fear the cost of doing so, especially when cash and equity are scarce, but Sam Walton learned this lesson the hard way so that we wouldn’t have to.
4. Trust is culture and culture is everything
Trust is fundamental to running any large organization. Without trust, communication breaks. Here’s why: In any human interaction, the required amount of communication is inversely proportional to the level of trust.
— Ben Horowitz, What You Do Is Who You Are
When I started my career in investment banking I used to compare my experience to my friends at other firms and thought “good culture” meant things like work-life balance and the location of the holiday party. It took me many years to learn that culture is all about trust, and a bit longer to learn the relationship between trust and communication. The most confusing experiences of my career have come in witnessing good people that cared deeply about the goal unable to trust one another as teammates despite seemingly endless communication. These experiences have forced me to think hard about cultures of radical transparency, like that of Bridgewater Associates, and whether absolute directness can build or impede trust. I know for sure that people can’t reach their potential if they are constantly wondering where they stand and whether their viewpoint is understood. I expect that as the team of Selva Ventures grows, getting trust and communication right will be the challenge I grapple the most with.
5. If you’re right too often you’re not delegating enough
What I was quickly discovering about the presidency was that no problem that landed on my desk, foreign or domestic, had a clean, 100 percent solution. If it had, someone else down the chain of command would have solved it already. Instead, I was constantly dealing with probabilities.
— Barack Obama, A Promised Land
The reward of reaching any elevated position is greater ambiguity and a lower batting average. You can’t let it drive you crazy but that’s easier said than done. I struggle constantly with the stakes of my decisions — many of the risks I’ve chosen to take in the early days of building Selva Ventures have felt existential in the moment. I’ve had to trust the process and optimize the decision rather than focus on the outcome. Risk of failure is inherent in anything worth doing, and paralyzing myself imagining what might happen if the outcome is unfavorable will only cloud my judgment and prevent success. While today I don’t have a big team to delegate to, I hope one day to have the luxury of talented folks to make some of the *slightly* easier decisions on my behalf. In that case I imagine it might be tempting at times to reach down and meddle in their business for an easier win to get my batting average up. I’ll need to remember that’s not my job, and that ambiguity and probabilities are what I signed up for.