The Importance of Getting Small

I was asked to write a guest piece for Spark this week and reposted here. As we all work to manage through the changing cycle, I keep hearing from friends, entrepreneurs, and clients that they are struggling with their identities, their purpose/focus, and feeling like they are enough and doing enough. The answer is learning to get Small to do Big Things.

We are in a world that celebrates BIG…big wins, big personalities, big challenges, big backgrounds & personal stories, big bank accounts. It caters to the needs of ego, which is constantly hungry for recognition and to silence that voice inside that we all have: “You are not enough; you do not have enough.” This is called the Hedonic treadmill…” I will happen when…”. I’ll be happy when I get the promotion, the new car, the new relationship, the new dress, the new body, and so on. However, as we all know, we enjoy the “new” briefly and then back to dissatisfaction. I’m not going to write about the evils of big or wealth or ambition (I’m a fan of all) but rather about the importance and role of SMALL.

“Because he is content with himself,
he doesn’t need others’ approval.
Because he accepts himself,
the whole world accepts him.”
        – Lao-tzu, Tao te Ching

Paradoxically, the more we focus on the BIG, the more likely we will fail to achieve or even start the Big Things. We make them so complex and even so daunting that it becomes difficult to find the motivation or drive to start (overwhelm, imposter, etc). Conversely, sometimes we have success and let it go to our heads. Our ego gets BIG, thereby reducing our future success (arrogance, overconfidence, etc). Or, we find ourselves in a situation where we want to make ourselves appear BIG. This could be in a social setting, with friends, a work environment, or a date. We want others to know that we are enough (success, status, education, wealth, etc), and we peacock about these…sometimes moderately, sometimes excessively so. If only they knew how amazing & accomplished I am, they would approve, accept, love, or befriend me.

At our core, we all seek approval from and connection to others. This goes back to our early days seeking approval to fit into our family of origin. Do Not Get Kicked Out of the Tribe. One of the key drivers of discontent and depression is a feeling that we are not enough or don’t have enough. “Enough” is a subjective concept where we often move the goalposts further and further out…“I’ll be happy when”.  Add the “Imposter syndrome” and FOMO and this losing game of comparative living leads to despondence. We find ourselves stuck, unable to fully enjoy our good fortunes, connect with others, or make forward progress.

At the heart of all of this is EGO. Ego is never satisfied and always vigilant. Ego plays an important role in our drive, perseverance, etc. However, you need to master it. Unchecked, like Icarus flying too close to the sun, we fall. Also, to not fail or look bad, ego triggers fears and warnings that keep us from moving forward. Again, we find ourselves “stuck”, held prisoner by our own nervous system.

My coach, Phil Stutz, says that we need to Get Small to do Big Things.  Using HIPA (see below) combined with making continual Forward Progress through Micro-transactions leads to both happiness and success.

Having read hundreds of books on wisdom, philosophy and self-help, my living life hypothesis is that the magical way to be both successful and content is to architect our lives and personal philosophies to move towards Flow state (the “Zone of Optimal Functioning”). Most of you have likely heard of Csikszentmihályi, who became intrigued by elite artists who would get so lost in their work that they even disregarded their need for food, water, and sleep. You lose sense of time and, more importantly, the hard edges between you, others & your task all begin to dissolve. Your focus is so intense that self-doubt and inhibitions fade away. You’re not worried about failing or what others might think. You’re just completely absorbed in the task. Martin Seligman, who co-founded the Positive Psychology movement with him, calls it Flourishing.

Ego likes certainty and drives anxiety when we don’t have it. However, one of the universal life truths is that the future will always be opaque. As Steve Jobs said:

“You can’t connect the dots looking forward; you can only connect them looking backward. So, you have to trust that the dots will somehow connect in your future. You have to trust in something – your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.” – Steve Jobs

Instead of demanding clarity around the path to the Big Thing, you have to focus on micro-transactions.  One way to get “unstuck” is to take small, continual actions toward your goal. Instead of pondering how all the pieces of a new firm will come together, just get up in the morning and get the URL on GoDaddy. Then hire a web developer and then… Each of these micro-transactions moves you forward and gives you clarity and feedback to guide your next step or move. You move your forward motion a touch to the left or to the right. You feed your intuition while also letting everyone around you know your intentions and direction so they can help. Also, these steps are so modest that they bypass triggering fear and the inevitable Self-sabotaging that follows.  Yes, you need to do intentional work like doing a strategic assessment of the market space (but even this, break into pieces). You have to have an informed opinion and core hypothesis on why this direction and why it will work.

Speed is a Force. If you want or need to do something, take action quickly.  One way to make steady progress is to do one micro-transaction after another. The longer from idea to execution, the greater the chance you will lose momentum or get distracted. Consistent Forward progress. Try small experiments throughout the day. If you realize you need to do something, especially something that you likely will put off, see how quickly you can start it (like minutes). Note in a journal every time you do this. Soon, your identity begins to form in your mind that you are an action-biased (vs analysis paralysis) kind of person.

How do you keep your ego in check while you progress forward (or have setbacks)? Peacocking or talking up your accomplishments, not acknowledging others’ contributions, or any of the other dysfunctional manifestations of ego will achieve the opposite of your desired goal. Instead of connecting with others or gaining approval, you will push people away. Instead of learning from others and helping them feel seen, heard & valued, pontificating or talking at people kills curiosity, connection, and learning. You can never fill the hole of “being enough” this way.

Phil encourages us to focus on HIPA:

  1. Humility: You need to disassociate from all of your successes and identities and refocus on your goals, on connecting to others, and on leaning into your growth edges. Focus on the end game and how you can be of service to others. When you Peacock, you push others away while defocusing on your task at hand. Can you sit with others as equals from a place of humility?
  2. Ignorance: having a “beginner’s mind”, coming from a place of curiosity and humility, is essential for success and future progress and growth. It is hard for anyone to learn if they feel they already know everything. You have two ears and one mouth. You will learn nothing new if you pontificate…ask questions. Can you engage with others through questions from a place of ignorance (“I don’t know, what do you think?”), in which you are curious to learn the wisdom, experiences and perspectives of others?
  3. Poverty: no matter how successful your past days have been, when you get up in the morning, o’clock goes back to zero. Success and growth are driven by constant effort that results in small improvement compounding over time. There is no better way to lose the gains and momentum from previous days than to get up in the morning and not apply yourself because of how impressive your past achievements or days have been. Can you reset your focus, motivation and drive each morning?
  4. Anonymity: If you want connection and acceptance with another person, let them feel heard and seen. It is the most basic of human desires. Can you become so curious about others that you can hold an entire conversation in which they learn nearly nothing about you? Can you create a container with the other person that is focused solely on their feeling seen and heard?

So, these are just a couple of simple tools to use in your daily efforts to realize our dreams while also tightening our relationships with others. Remember, ego is a very useful partner in life. However, poorly managed, it handicaps us, fills us with fear and envy (not enough), and traps us inte. Use our current sta these tools as simple ways to get unstuck and start making specific Forward Progress.

The Simple Path to Purpose Has Not Changed in 2,500 Years

I had a great talk with a friend on a topic that keeps coming up post-COVID: What is my purpose? How do I have more meaning in my day to day? It is like trying to grab a wet bar of soap. The simple answer hasn’t changed in 2,500 years…

The Universe has an interesting way of stepping into our lives. At a basic level, there are those people that come into your life that you know, regardless of outcomes, will be in your heart, your soul, your mind and/or your life forever. These are those rare divine interventions into our lives we need to treasure & be grateful for.

“It was like, in that moment, the whole universe existed just to bring us together.”

Sara in Serendipity

In a larger way, the same goes for those callings, those ideas and those questions that tug at us, pull us and keep coming back. As David Whyte says:

“Questions that have no right to go away are those that have to do with the person we are about to become; they are conversations that will happen with or without our conscious participation.”

David Whyte

Our challenge is that we feel that our purpose or meaning needs to be something clearly before us and often feels grand, heavy and/or impactful. My coach, Phil Stutz, says “the big things come about from doing the small things day in, day out.” Ask 99% of people what their meaning or purpose is and they will likely say something vague around having a positive impact on the world. They feel this age old burden that they should be doing something purposeful or impactful but can’t specifically describe it. They expect to have an epiphanal moment, a lightning strike. Alas, it is much more subtle. Before enlightenment, you need to do the dishes😉

The path to meaning and purpose hasn’t changed in 2,500 years since Socrates, Plato, and Aristotle. Their wisdom has been recast by the Stoics, Maslow (Actualizing/Hierarchy), Flow, Positive Psychology, Brene Brown, Conscious Leadership, etc. Our purpose and sense of contentment & sustainable success are simple: every day, every moment, strive in small ways to close the gap between who we are and the highest version of ourselves (Arete). The latter is that inner voice that whispers to you from time to time. Fortunately, purpose seems to fall out of this all on its own. As you test & trial small things to build skills or discipline/habits or networks, the forward progress begins to show you clearer paths.

I fell into this trap years ago as I started to build out the underpinnings of FORGE. I knew that my calling had something to do with guiding entrepreneurs on their journey more holistically (but from the investment side). I couldn’t describe exactly what or how but I knew that it had to be different & more human-centric that traditional VC.

I was in my head about how daunting building out all of the human-centric frameworks so they would be practical and not philosophical. Every day, I thought, who am I to think I can do this? So many were better than I, and it was such a monumentally enormous feeling task. Also, I was a successful VC…if I jumped into this new model and failed, I would look like an ass in front of many people.

Jerry Colonna, Reboot founder, said at one key juncture: “Matt, stop trying to save the world. Save yourself and let everyone watch (eg figure it out for just me).

Drop by drop, a person becomes better (or worse) as Buddha says. Each moment, we have an opportunity to intentionally move a tiny bit from the current towards the best version of ourselves, to spend more time developing our GENIUS and less time on our obligations or things that we “should or have to do”. Maslow says we are either moving forward into growth & actualizing (+1) or backward into comfort/safety (-1). This could be as a great parent, a boss, a janitor, an athlete or a partner. The key is small steps forward. Eventually, as the pieces come together, you begin to see the bigger picture that has been awaiting you all along.

Phil Stutz calls these micro-transactions. What simple thing can you do this afternoon or tomorrow morning. Rinse and repeat. For me, with FORGE, first I felt ignorant and intimidated by all of the human-centric skills I would need to bring as a holistic “Sherpa” for entrepreneurs beyond my existing investment experience, strategic knowledge, and some tactical business skills. So, the first “micro-transaction” was signing up for a coaching program. Second, I attended the first class. Then the second. Then I began to reframe the methodologies of each class to apply to the specifics of a) Me (save myself!) and b) my entrepreneurs. After a while, I found one or two close entrepreneurs and worked with them using these. Then I saw gaps, did a second program and started to create modules, offsites & exercises. Rinse & repeat. Over 5 years, I amassed a pretty significant skill set and tools…all while working as a VC, at my existing firms, doing VC as before. This year, I began to put out capital from my own vehicles (FORGE) and blended capital with the new capabilities & growing platform.

The journey of a 1000 miles begins with a step (Confucius). So, if your goal is to be a basketball star, start with extra wind sprints this afternoon or another 25 minutes working on 3 pt shooting. Compound a little each day and soon you’ll be surprised by your endurance or that your shooting percentage is 5-10% better. Same goes for any profession. What can you do today or tomorrow morning…smaller the better.

But do so only if this feels like your flow and it energizes you. You feel like you are chipping away the mud that has hidden you for so long. We all feel these tugs. If you keep getting them, you know that the universe is quietly calling you to purpose. Your job is simply to take a small step (a test) in that direction (with no idea where it will lead you) this afternoon or tomorrow. Then another and another. If you hit a block, move a little left or a little right.

Focus on “those questions (and people) that have no right to go away” and surprisingly, you may just happen to stumble upon the elusive purpose and meaning you’ve been waiting for and seeking (and it was there all along). To rephrase Serendipity above, Pablo Coelho wrote “when you want something, all the universe conspires in helping you achieve it (your Personal Legend)

My Journey to Launch FORGE

Today is the public reveal of FORGE Capital on the main stage at Denver Start-up Week. I have been developing a different approach and strategy for venture investing (and life in general) for almost a decade. In addition to investing at Pritzker and Crown, I have been evolving this new venture model with personal capital. Entrepreneurs (and humans in general) are given an oxygen mask and told that the Everest Summit is a day’s hike and are sent on their way. We have our strategic and everyday frameworks, tools, and experiences. We have patterns and behaviors set decades ago within our families and schools. However, within half a day, the first Everest storm hits hard, and we realize that we are missing the most important tools of all…the human ones. We wonder why the journey seems complex, uncertain, and draining.

Being a human centric design enthusiast, I wondered: What if a leadership/coaching platform had a child with a venture fund to help guide or Sherpa entrepreneurs, students and others on their journey? What if Jerry Colonna of Reboot was right when he said: “We believe that in our work lies the possibility of the full realization of human potential. Work doesn’t have to destroy us. Work can be the way we achieve our fullest selves.”

I also wondered what the end goal of life (and work) was. What is true success? I have spent the past eight years reading hundreds of books going back thousands of years on “the good life.” These ranged from Aristotle & Socrates to the Stoics (Aurelius, Seneca) to the Upanishads, Buddha, Confucius, and Tzu to, Emerson, Thoreau, Campbell, and Frankl. I added books on specific foundational areas like Sleep by Matthew Walker, Meditation by Chodron, Davidson, Habits by Duhigg, and Clear and nutrition by Pollan. I seeded a company that is the best I’ve found on “Blinkist-like summaries” of these great texts for everyone (get the Heroic app here). In the end, wisdom has not changed over the centuries, just the metaphors. If you read Meditations by Marcus Aurelius (emperor of Rome and the most powerful man in the world), it reads like the challenges of a modern-day executive, parent, and spouse.

I wanted to create an essential guidepost to measure progress to simplify all of this. I wrapped it in what I call the Saint Peter test (you can replace this with whatever metaphor works for you…Eulogy test seemed too depressing!). If you got hit by a bus today and were in front of the proverbial Pearly Gates and had to describe how you had lived your last month or two, how would that go? Would you feel that you “owned every second that this world could give,” or were you stressed, drained, reacting, waiting for tomorrow to be your time? Did you appreciate and were grateful for all the people and wealth in your life, or were you heads down battling yet another drama?

In the end, I settled on three parts to the test: Energy, Impact, and Presence. ENERGY: life is simply energy…when we are energized, we are happy, and when we are drained, we are depressed. So, does what we do in business, family, and life increase or decrease our energy daily? IMPACT (campground): in his bestselling book, How Will You Measure Your Life, the iconic HBS professor Clayton Christensen posited that the ultimate measure is not money or houses or titles but How Many People’s Lives have you changed for the better while on earth? Today, did I leave the campground cleaner than when I arrived in the morning? PRESENCE: did we show up to our own movie today, or were we down some rabbit hole? My favorite coaching program (one of the top platforms in the Valley), CLG (Conscious Leadership Group), asks how intentional we are in living our daily lives (reactively/impulsively or proactively). Are we coming from a place of trust/abundance that life works for us OR below the line, from a place of fear/scarcity that life happens to us? Was I the architect of my life today? Said more elegantly by OneRepublic (click on the link below for their outstanding, award-winning music video on living life).

I owned every second that this world could give
I saw so many places
The things that I did
Yeah, with every broken bone
I swear I lived

– OneRepublic, I Lived

I believe that entrepreneurship is a proxy for life. The future is opaque and we are faced with daily challenges that test our resilience, our talents and our values. These are just stations at the gym to grow. Ironically, venture capital has approached this highly human endeavor with a somewhat harsh, quantitative, and dehumanizing approach. This mirrors how many of us approach life. We have our responsibilities, our goals and our resources. But when the 8-10 year cycle of life (heck, just daily life) comes swinging through to clear out the brush (if not the forrest) like it is currently doing, we realize that we are missing many of the most important tools.

I was curious if this was just me, so we interviewed over 100 entrepreneurs and asked them one simple question: To help you most, how do you want your VC to show up? Ironically, few had ever been asked this question (I have to love the cobbler’s kids having no shoes). The top response was not to help with hiring or fundraising or strategy (though all are important) but rather, “Who can I turn to, and what can I do on a Sunday Night when the ghosts and demons are running through my thoughts and sleep?” The second response was, “Scaling from $1m to $10m to $50m to $100m is brutal. Can you help me become a Superhero/the highest version of myself? I am dog-paddling in the rapids and need to learn and grow into being a leader (or parent or spouse or…).” Both of these fall into the Human column, not the traditional buckets of Strategic or Tactical.

So the hedonic game plan seems to be breaking down in a big way…that happiness is the next blue ribbon, that vulnerability is a weakness, being right is a necessity, anxiety & fear win out every time. That life is dangerous & happens to us. I have spent years building out alternative tools, modules, and exercises. These are based on wisdom across thousands of years, are tested effective in the application (not just concept), and are self-sustaining (vs. the grinding anxiety models).

To be clear, I don’t have all the answers. My kids joke, “Dad, do you ever listen to your own advice?” However, I do know that the traditional models taught to us as kids and school are broken, and there are age-old, consistent wisdom and tools, as well as modern-day leadership platforms that work much better.

FORGE: personal growth and excellence are forged in the fires of entrepreneurship and life. Here’s to an energetic, impactful, and intentional next chapter!

The Lesson from Beau’s Final Walk

A year ago today, we put our beloved Bernese border collie rescue dog, Beau, down after 18 years with us. He was there to raise all three kids & see them through good and tough days. He was there to see all of use through career moves, market crashes, a divorce and junior high. On his final day and final walk, he had one last lesson to give me that I had forgotten during all of the craziness of the past years. He reminded me, despite whatever is going on in my life, to enjoy the moment…to enjoy the simple things and the loved ones around me. We all are feeling this whirlwind of distraction in our lives between COVID, market corrections, inflation and other reversals. As the Stoics always emphasized, be present and grateful as all you are promised is today: Momento Mori

I think we both knew that the vet was going to visit that afternoon to help him transition. He was holding on but struggling. As we left the building, we turned left and walked towards the main street as we always did. However, unlike normally when he made a quick move to the grass by the street, he stopped, leaned over and smelled the new colorful flower arrangement along the walkway. He had never done this before. But on this final day, he smelled the flowers for about a minute and looked up at me, almost with a smile, as if to say the proverbial “Matt, on your way to the grass (or meeting or deal or…), stop and smell the flowers and be present.” I remember like it was yesterday that moment where everything stopped and I felt him echoing the Seneca quote.

 It is not that we have a short space of time, but that we waste much of it


We continued forward on our walk and he stopped about 100 feet further, closed his eyes and felt the breeze blow against his face. I could see the fur on his neck wave in the wind. After about 20 seconds, he looked up at me as if to say “You try it”. I did. I closed my eyes and I felt the breeze on my face and the sun on my skin. I could not remember the last time that I had stopped long enough between tasks and locations to feel the breeze on my face. I was struck by how the velocity of my life had stripped away the intentionality of it. In moving through A to B to C in the most efficient, impactful or profitable way, I was living reactively vs intentionally determining how I wanted to spend my time in ways that were important or energizing to me. As David Whyte said:

You increase your velocity and speed of work. But are afraid that if you stop  you won’t know who you are. You have no affection for what you’re doing but you have an abstract thought that this is what you must be doing in order to be liked. The key to getting out of the cycle and the rut that we often find ourselves then is to become sick of yourself and what you’re saying and who you’re saying it to and how you’re saying. Throw yourself away and shed the skin. As Nietzsche said, the snake that does not shed its skin must die

David Whyte

All of this is ironic since the key thing I focus entrepreneurs I coach on is Intentionality. Are they intentionally focusing their time and attention on things that matter…that energize them vs that drain them. Do we live out of our email which, in essence, is someone else’s to do list or do we intentionally structure our day to focus on things that are core to us. Deep work time blocks, family time blocks, romantic time blocks, fitness or sleep time blocks, etc. We are like the Steven Covey woodsman who doesn’t take time to sharpen his axe because he is too busy chopping…insuring that the dull blade will double the time to cut.

You could leave life right now. Let that determine what you do and say and think.

Marcus Aurelius

We came home and later that day and the vet administered the injection. Beau was there in form with me and my son, Nicholas, but gradually he faded away. He was there and then he wasn’t…Momento Mori. We sat there in my barely furnished new apartment crying, realizing that he had given us his most powerful lesson and act of love ever during his last walk. Stop living from fear, stop protecting your heart, stop pushing others away. Hug your kids, tell your partner how much you love him/her, stand in discomfort, feel gratitude for the small things, connect with your good friends and remember to stop to feel the breeze of life on your face.

Remembering When Elon Almost Went Under

To all the aspiring entrepreneurs battling through COVID: With the hopeful Crew Dragon launch on Saturday, Elon will show us yet again what the human spirit is capable of and usher in manned space flight’s next chapter. However, I remember & experienced when not one but all three of his companies were on the brink of extinction at once at the end of 2009. Tesla was running out of money ( had a count-down timer), SolarCity lost its California tax incentives (rev dropped 90%) and SpaceX was down to one final, make or break rocket launch. The co-founder of Paypal was deep in the red.

I’ve known Elon since we were on a board together in the early 2000’s. When I was at DFJ Portage, DFJ was an early or initial investor in all three of his companies. We saw our investments flirt with death and witnessed first hand Elon’s tenacity, focus and force of will during this dire time. Below is an interesting short montage:  
There are a lot of things that make Elon who he is. At the risk of way over-simplifying, here are a couple:

  1. Be clear on your purpose & make it worthy as you will be tested hard. Too many entrepreneurs focus on the wrong things like making a fortune or feeding their ego with status/success. These provide no support and become emotional boat anchors during trying times. SpaceX: make space flight affordable to almost anyone (also, ensure the survival of mankind) and give people a sense of excitement in the future.
  2. Focus on only the key technical limiters in the way.  When Elon is focused on an issue, he is maniacally single-threaded in his attention. A common Entrepreneurial error is being distracted or focusing on non-essential matters. Know the core 1-2 things you need to deliver on for success and focus obsessively on it/them. Tesla: one was to build a 300 mile EV battery that wouldn’t burn up.
  3. Take definitive action in the face of fear and be relentless in your commitment. As Edison said:

“Many of life’s failures are people who did not realize how close they were to success when they gave up…I have not failed [regarding the light bulb]. I’ve just found 10,000 ways that won’t work.”  — Thomas Edison

In the end, Mercedes invested in Tesla (for the battery tech above) which triggered a $465m government loan. Fisker was not able to deliver on its tech, failed to get a loan and went under. SpaceX’s final rocket successfully launched, generating billions in launch backlog. Solar City’s subsidies came back.

So, as you strive diligently in these hard times, remember that daylight is around the corner eventually. As the Under Armor Phelps ad says: “What you do in the dark puts you in the light…Rule Yourself”.

The Two Arrows: Productive Pain vs Unnecessary Suffering

A lot of things seem upside down in the world right now. Many plans or dreams are deferred, if not upended and we feel anxiety in the face of uncertainty. However, this is a core part of flourishing. In entrepreneurship and in life, disappointment (AKA pain) is inevitable. However, suffering, which drives most of our unhappiness, is not. Pain is essential to grow. We need to get outside of our comfort zone to shake us out of our ways, to develop new skills, move into new jobs or change our status quo. As entrepreneurs, nothing goes exactly as planned given all of the external factors involved. But, as Darwin wrote, survival does not go to the strongest but to the most adaptable. More importantly, if customers were not seeking a new way to address an existing “pain”, they would not buy our products or services.  In other words, pain is essential to a successful life and is critical to our productivity.

However, we needlessly turn pain into suffering. We can’t help ourselves. We obsess on the current disappointment and fight with the reality we are facing. We think about the situation over and over again without taking action. I’ve always said that we have crossed over to suffering when we stress over the fact on the third or fourth time in our head.  Byron Katie has a great quote: “When I argue with reality, I lose—but only 100 percent of the time.”  Kristin Neff summaries this relationship up beautifully in one formula. The greater the resistance to reality, the greater the suffering. Think about this:

Suffering = Pain x Resistance (“this shouldn’t be happening”)

THE TWO ARROWS: Sages have been writing about this for thousands of years. In Shakespeare, Hamlet says “Things are neither good nor bad but thinking makes it so.” Buddhism talks about the two arrows. The first arrow is the disappointment that hits you. You can feel it and it fires up your fight or flight, your amygdala. However, this is just a flesh wound. The deep damage occurs when the Second Arrow hits…this is your interpretation of the event, the meaning you put around it and the stories that you begin to tell. Instead of reflecting on the first arrow, thinking through what actions can be taken and then taking action, we obsess around what just happened and begin to lean into why this shouldn’t be happening and what  impacts will come from it. The Second Arrow takes an opportunity for growth and turns it into an emotional tempest (a lost customer, an employee issue, a competitor lawsuit, a financing issue, a virus induced global pandemic, etc). What can we do to avoid the Second Arrow?

AMOR FATI: Nietzsche coined a phrase, pulling from the Stoics…Amor Fati: Love Your Fate. Don’t just accept it or put up with it. Don’t just like it. Love it…this makes me stronger.  As Epictetus, said: “Do not seek for things to happen the way you want them to; rather, wish that what happens happen the way it happens: then you will be happy.”  Use it as fuel to energize your (or your company’s) next chapter. Become better for it having happened. Never waster a Good Crisis. You will be kicking yourself later when you realize that everything went up for grabs during the chaos.

ACTION KILLS ANXIETY: When we are hit with change/disappointment, our initial reaction is to freeze, assess and over-process. This is where the Second Arrow comes in as we over-think and foster anxiety.

   Step One: accept what has happened and what is
   Step Two: calm your mind, reduce your fight and flight
           * sit with it, invite the reality in, what it is telling you needs to happen
   Step Three: ask “what do I want?”
   Step Four: layout your plan to reach this
   Step Five: find something small & simple and do it…take action.
                     Then another and another and another

CULTIVATE COURAGE: To do this, you need to lean into your courage. Courage is not being fearless. Courage is feeling fear, pushing through it and doing what needs to be done. Brian Johnson talks about the “Courage Quotient” to “face challenges with grace, connect with and inspire others, and be a force for good.”

   Part One: curb your fears…using mindfulness, CBT or other techniques
   Part Two: boost your ability to take action…start small and build

We will go into this deeper into Cognitive Behavior Therapy on a future post.  This is form of therapy that examines and challenges your belief sets causing suffering vs trying to understand and “fix” events of the past. There are several variations on this from classic CBT to Byron Katie’s “The Work”. 

A key part of CBT is to put your beliefs on paper, process and turn them around. Write several columns on a piece paper rotated lengthwise. On it, label each column with these:

  1. Situation: describe in one sentence your current situation
  2. Thought: list the thoughts that arise when you think of the situation
  3. Feelings & Intensity: list one word feelings & 1-100 intensity rank each
  4. Error Type in Thinking: describe each thought with the classic errors (Fortune Telling, Catastrophizing, Mind reading, Jumping, Overgeneralizing)
  5. Impact: How would you be without this interpretation or these feelings?
  6. Turnaround: list out alternative facts or explanation and Turnaround your assessment, describe the true reality

In summary, we all face disappointments daily in both work and personal situations. We legitimately experience pain from these. However, this can be the fuel for our growth. Instead, we go down a well tread rabbit hole and turn these opportunities into extended causes for suffering. Watch out for the Second Arrow and Amor Fati!

Embracing Life’s 8-10 Year Cycle

Roughly, every eight to ten years, life seems to cycle through like a brush fire to clean up the excesses of the past decade. I’ve experienced this both on a personal and business level four times now (in addition to the 1987 one day 23% market drop).  The Great Financial Crisis cycle has abruptly ended and the next cycle has begun. The core paradigm has also changed from fed protected economic growth powered by dropping interest rates to fiscally driven money printing & deficit spending.

This viral crash scares the crap out of us on many fronts. However, with each new cycle, new opportunities, new trends and new paradigms arise. New rules lead to new ways to profit and challenge the incumbents. Furthermore, we have time to reflect on our lives. We get knocked out of our set ways and have a chance to learn, grow and improve. This can include job loss, financial distress and companies going under. In 2000, a lot of companies went under but people eventually found new opportunities but brought with them the wisdom learned. As cycles age, we get stuck in old patterns and behaviors. We lose sight of why we are even doing things at times. With the brush fire, we have an opportunity to look at everything with fresh eyes…if we let it. As David Whyte wrote:

“You increase your velocity…But are afraid that if you stop  you won’t know who you are. You have no affection for what you’re doing but you have an abstract thought that this is what you must be doing…The key to getting out of the cycle is to…Throw yourself away and shed the skin. As Nietzsche said, the snake that does not shed its skin must die”

During each cycle, a catalyst exposes the excesses from the previous cycle, creating a violent reversal/crash. We respond by trying to survive. Greed & FOMO shifts to fear. We simplify our lives, reduce expenses and go to church/mosque/synagogue/yoga and promise to reform/change. We focus on the fundamentals, endure hardships, change or modify jobs and re-evaluate our lives. We eventually find our footing and begin to rebuild our lives. We are more intentional and thoughtful for this window and profit from the occasional run up in the markets or our firms. Eventually, like child birth, the trauma of the past crash fades to be replaced with FOMO compared to those taking more risks. The excesses start to rebuild, debt grows in pockets and valuations start to reach head scratching levels. We keep playing at the casino, thinking that this has to correct but stretch further and further (higher P/E ratios, higher acquisition multiples, lower cap rates, etc). Like a rubber band, it eventually snaps from being stretched too far and we start over again.  In the middle of all of this, our relationships also go through stages, are stretched, tested and transform (sometimes snap) under the amplified pressures of the economy. We re-examine what is important to us; we are forced to slow down; and we recommit, often, to being higher versions of ourselves.

I’ve seen four of these crashes now (plus growing up in the economically surreal 1970’s). In 1990-2, we had a recession that crippled the commercial real estate market, bankrupting many developers and properties. In 2000-2, the NASDAQ dropped nearly 80% in the dot com bust. Three years in the desert eventually led to the creation of LinkedIn, Facebook, etc. In 2008-10, we all know about the Great Financial crisis. Elon nearly lost all three companies but persevered. Eleven years of bull markets and lower interest rates ensued. In 2020, the most surreal of catalysts has launched a new cycle. The government is racking up deficits/printing money at unprecedented rates. 

When cycles change, it creates massive disruption but also opportunity both in business and personally.  The brush fire is roaring through, the skin is shedding. As the Rahm Emmanuel said: Never waste a good crisis”.  There are a number of things to reflect on. A couple include:

  • Your customers are in pain and facing new challenges. How can you help them? What new offerings or adjustments to your product can you create?
  • What new trends and realities are driving the economy? What new behaviors? How to leverage the past cycle infrastructure of AI, IoT, cloud, genomics, etc to solve?
  • Demographically, we also have a generational shift with the rise of Gen Z (plus Millennials are hitting economic importance).  How are their buying patterns different, especially in light of this crisis?
  • Study after study concludes that the strength of your relationships drives happiness more than any factor. You are the sum of the five people you spend the most time with. Use this time to assess and strengthen your friendships and your connection with spouse/partner & kids. For example,what two things could you do to tighten your familial foundation? 
  • If you are feeling stuck at work, why is this? What excites you each day? What do you dread? Are your values aligned with your firms? Do your strengths align with the needs of the firm?
  • What would bring more joy into your life? What should you do more of? What should you do less of?
  • Get out a piece of paper and journal non-stop for 20-30 minutes. What is the life you want? What does it look and feel like (get specific)? What two things can you do to start moving in that direction?

This too shall pass. It is brutal and scary and I feel for everyone going through hardship. The Phoenix shall rise from the ashes. It always has and always will. The key question is how do you want to show up in this new cycle?

If I Lose My Fear, Do I Lose My Drive?

I hear this a lot from entrepreneurs and students. “If I lose my fear, do I lose my drive?”.  Two things are implicit in this question…1) fear/anxiety is an essential motivator for success and 2) being driven by anxiety & fear (often a default) has an unsustainable & unacceptable cost. This is a false trade-off…success through fear or contentment. They are not mutually exclusive.  My core belief, backed by science, is simple: There Are Much More Powerful, Sustainable & Effective Motivators than Fear and Anxiety. There is a growing base of research around Flow and Flourishing (“Yes And” solutions). I’ve often said that the anxious tennis player is no match for Roger Federer when he is in Flow. He doesn’t even know his opponent exists.

This is not a roses and puppy dog kind of existence either. Only through grit and hard work can we succeed. The question is whether we are motivated by running away from something (not enough, seeking approval, reputation loss, etc) versus moving towards something that matters, has purpose and/or is in service to others. I think Viktor Frankl said it best:

“What man actually needs is not a tensionless state but rather the striving and struggling for some goal worthy of him. What he needs is not the discharge of tension at any cost, but the call of a potential meaning waiting to be fulfilled by him.”  — Viktor Frankl

This calling doesn’t need to be solving world hunger but could be something as simple as building the best culture and company focused on a given SaaS platform or AI or e-commerce. There is what you do but equally important is how you do it (think Tony Hsieh at Zappos) and what values you instill in your firm or life. Anyone can do this…I remember talking with the janitor of 30 years at my son’s school. He said he got up every morning with a smile because he knew his cleaning would help teachers & students take pride in their school. Furthermore, he went out of his way to connect with young kids, especially those who seemed to be having a tough day, to bring some kindness into their world.

Our default setting is to “grind it out” so we’ll finally attain contentment with our next achievement. We are told that only the paranoid survive (Andy Grove, Intel) and the anxiously obsessed will eat our counter-parts for lunch. We have day to day responsibilities like winning accounts, getting product out or managing teams and “grinding it out” works perfectly fine.  We ignore the brain science, organizational research or piles of burnout students/execs that contradict this. We fear that we will become roadkill and our resulting behavior drains us.

Jim Dethmer, co-founder and one of the top CEO coaches at CLG, borrowing on Maslow’s hierarchy of needs, says that we have five layers of motivators.  At the base is ego-centric, fear & scarcity driven motivators and at the top are selfless, trust & “enough” motivators. Don’t be naïve…there is a place in life/company for all five. Great leaders know when to use them.

  • Level 1: Fear, guilt and shame
  • Level 2: Extrinsic Reward (kill it for recognition/freedom, beast has to be fed)
  • Level 3: Intrinsic Reward (purpose, meaning, value, matters)
  • Level 4: Play, Curiosity & Learning (when work becomes play & you are curious…you can’t get enough of it…the drive for Mastery)
  • Level 5: Love (selfless, done purely for love…helping those in need, raising your kids, not asking “what’s in it for me”)

So, what is anxiety (and fear)?  Simply defined, we succumb to anxiety when we cling to the outcome of something that we don’t have control over. I wrote about this in my blog post on Choice Is All You Can Control In Life. Ego is the architect and creates stories around facts…we aren’t enough, that horrible things will happen if we don’t achieve XYZ , that people will we will be judged, etc.

We jump from fire drill to fire drill and fail to enjoy the present moment. Late last year, I had a week where I got up each day anxious, raced from meeting to meeting, focused on my personal agenda, obsessed on couple of perceived insults, slept poorly, ate crappy food and failed to spend time with family or friends. I was drained and miserable. I thought to myself how easy it is to get into this rhythm and soon realize that months, even years, had gone by. This life is a gift. How do we want to spend it? Memento Mori…only today is guaranteed. So, I’ve become very conscious about this, asking myself each night the following question below.

“If I approached all of my remaining days like I approached today, what would my 80-year-old self say to me?” 
(Were we present today, connected with those around us, mastered something new and lived a good life or did we go from dumpster fire to fire on autopilot?)

So, what exactly is going on here? We rarely have true, life threatening situations where adrenaline laced fear is critical for our survival. Scientifically, this is a battle between our three “brains”. There is an ancient coping relic, buried in our reptilian brain which triggers our Limbic system and shuts down our Rational Brain/Cortex. So, our ego creates anxiety (not us) which comes from our Reptilian, autonomic core and reduces our ability to think rationally or have higher-level thoughts.

Does this make us perform better?  No. In the short run, it may focus our attention but it actually shuts down our pre-frontal cortex. In this state, we literally can’t do higher level thinking, creative/orthogonal thinking or be emotionally intelligent/connected. Ask any entrepreneur (or student) and they will tell you that they are stressed “out of their minds” because we keep hitting the Nitrous injector like a Fast & Furious movie.  The father of Positive Psychology, Martin Seligman, wrote about the permanent building blocks for a life of profound fulfillment (Positive Emotion, Engagement, Relationships, Meaning, and Accomplishment—PERMA) in his book Flourish:

“I now think that the topic of positive psychology is well-being [PERMA], that the gold standard for measuring well-being is flourishing…Even scarier, measures of ill-being have not declined as gross domestic product has increased [twelve-fold]; they have gotten much worse. Depression rates have increased tenfold over the last fifty years in the United States. This is true of every wealthy nation, and, importantly, it is not of poor nations.”

I can keep running up the score here but I think you get the point. I don’t need to go into additional gory details about how dysfunctional & ineffective the Fear driven model is (scientific research, interviews with older, successful entrepreneurs, top life coaches, Buddhist philosophers, stoic philosophers, health experts, etc). You will more likely find someone supporting the benefits of smoking than to find a knowledgeable person advocating “the Grind” approach. And yet, our autonomic Fight or Flight system triggers again & again.

By the way, when you go down the rabbit hole, you bring your colleagues down it with you. Not only are you consciously or unconsciously instilling a misguided behavioral norm, but you are also literally impacting their neurology. Fear and Optimism are equally contagious (think market crashes and irrational exuberance).  We have “Mirror Neurons” in our brains that track the emotional flow, movement and even intentions of the person we are with. This is a key part of developing empathy to learning skills from each other to forming relationships. Our neurons (brain cells) synchronize. Like the Coronavirus, you are contagious.

The focus of this post is not to layout a playbook for Flourishing but rather to dispel the value of the alternative approach to life. I’ll continue to write about the various elements of the playbook (mindfulness, curiosity, internal not external measurements, empathy, service, clarity on values, discipline/mastery, motivation strategies, power of relationships, etc). I wish I could provide the answer but each of us carries our own unique answer within ourselves. We won’t ever eliminate fear or anxiety. It is part of our DNA. However, we can approach life courageously. Courage is not having a lack of fear but rather stepping into or through fear in pursuit of a greater cause. Make today a Courageous one!

Hypothesis: Do You Know the Bet You’re Making?

Since the future is unknowable, by definition, we are all making bets in our life, testing hypotheses and probabilities. However, often, we aren’t aware we are making a bet or what that bet is. As a result, we don’t prioritize nor focus on the key things. This applies to careers, relationships, schools or starting companies as well. When we underwrite new deals at Pritzker, we clearly state in a sentence what is our core Hypothesis & bet we are making. 

“I don’t know where I’m going but I’m making great time”

A Core Hypothesis is demarcated by the significance of the outcome. This is the bet of all bets whereby if you are right, you are off to the races and, if wrong, you are road kill. It integrates the key success factor(s) critical to win. From this, you can determine what are the three sub-factors that can kill you and the 2-3 sub-factors that will massively scale your business. Focus all of your time & money on these.

Why is this important? If you don’t know the bet, you won’t set the right priorities nor hire the right people nor properly define your product specs for fit. You risk taking the wrong ground and winning the battle but losing war. People/companies err in three ways:

  • Death 1: assume the wrong hypothesis (e.g. You think it is developing the best consumer app & owning the customer when it is actually owning the channel which gives you scale)
  • Death 2: right hypothesis but poor execution
  • Death 3: right hypothesis but defined the wrong sub-factors (e.g. what can kill or scale you)

When we invested in Coinbase, our core hypothesis was that interest in crypto would continue to grow over time but people would want a simple, reliable and trusted brand as their gateway into this world. Given how complex the regulatory environment is along with challenges around security/hacking and actual trade mechanics, Coinbase was in a key place to consolidate share and become the Facebook of crypto (the main gateway in the US). Investing in providing the simplest user interface, the most reliable backend trading platform and world class regulatory compliance and security infrastructure, Coinbase would expand share. If the core bet turned out to be that people just wanted the cheapest, low-fee solution with little regard for “trusted brand”, then our investment would end poorly.  So far, so good. Coinbase continues to distance itself in the US from other retail & custody players with increasing market share.

So, whether it is your next career move, your start-up or your next relationship, ask yourself if you know the bet you are making and what is at the core to prove out that hypothesis. As John Doerr used to say, know the three things that can make, the three things that can tank you and spend all your money on those.

Enough: Your Savior or Your Demon

My partner, Carter, has hypothesized “…that behind every driven CEO is a 6 year old child seeking its parents’ approval”. In these formative years, we start the dance with being enough (and feeling we aren’t enough). We create coping mechanism to deal with this discomfort whether it be over-achieving, addictions, Instagram posts, compulsive behavior, etc. All of this is focused on filling an unfillable void (which actually is non-existent & manufactured by our mind).

This is especially true for entrepreneurs since we live in a world that is scrappier and has fewer resources. Our companies walk on tightwires and strive to avoid Darwin’s grasp. Ironically, there is also an abundance of creativity, freedom to operate, ability to connect with each other due to small firm size, flexibility/agility, etc. So, at any point in time, there is both Abundance and Scarcity. The difference is our perception of “ENOUGH”.

The source of most misery, conflict, wars, addictions & other fun things stems from one of three phrases:

  1. I’m not enough
  2. There’s not enough
  3. It’s not enough

The CLG coaching framework has a great representation of this by asking people if they are coming from “above the line” or “below the line”. Above is abundance, trust, being enough and Below is scarcity, fear and not being enough. When we dip below the line, we begin to self-optimize, make decisions from a place of fear, bath in anxiety, think win-lose and are short-term oriented. Armageddon is around the corner. We cling to outcomes and, as our fight or flight over-rides our rational pre-frontal cortex, we begin to make crappier and crappier decisions layered on top of each other. We justify bathing in this survival mode by telling ourselves that “if we lose our fear, we lose our drive & risk extinction”.  This is a red herring. As Ving Rhames says in Pulp Fiction…”…you may feel a slight sting. That’s pride [ego] fucking with you. F@&k pride. Pride only hurts, it never helps.”

When above the line, we are more connected to others, we seek win-win, we make decisions from a place of confidence, we enjoy what we do, we are resilient, we make clearer decisions and we can think long-term. We can actually enjoy the ride and welcome the challenges.

The heart of entrepreneurship (or just being a content human) hangs upon our ability to be self-aware about being above/below the line and on our tactics/behaviors we deploy to self-manage “ENOUGH”. The trick is to catch the downward cascade early in its formation…otherwise, you are going along for the ride. You are going to get tumbled mercilessly in the undertow of the wave. There is an array of successful practices to do this. Here are just a couple:

  • Somatic awareness (body): we all carry our emotions in our body. Some carry it in their necks, their stomachs, their backs, etc. When you go below the line, where do you carry your tension? Use this “body wisdom” as an alarm clock and check in during the day. If you feel the tension in that spot, you are probably swimming in the deep end below the line. Stop and address.
  • Foundation: monitor/track how much sleep you are getting, how often you are exercising, what you are eating (sugar & carbs or healthy food), how much time spent with family & friends. If you erode your base, below the line is unavoidable. Working massive hours, sleeping 4-5 hours a night, not moving your body will result in the Covey “Dull Saw” (the lumberjack doesn’t take time to sharpen his saw because he doesn’t have time…so it takes twice as long to cut down the tree.)
  • Mindfulness: when you feel yourself tensing up, unplug and go for a short walk (or do walking meetings), jog stairs, sit/breath deeply & meditate (feel the energy in your body & focus on stilling it), call a friend.
  • Attitude Check: describe your current story to yourself (or to a friend/partner). Are you a victim? Are you bemoaning how you don’t have enough xyz? Are you bathing in the fact that you “aren’t enough” or up to the task? Is your environment out to get you…you are alone? Rewrite each line from the perspective that you have everything you need? If it was a hero story, what amazing thing would your hero do? Position the “challenge” as something meant to make you better (like lifting a weight).
  • Say Thank You: Brian Johnson has a great practice of saying “thank you” to what comes into his life…especially the shitty stuff. Say what? First of all, your ego/brain get confused and start to search for reasons why something is being “thanked”. It begins to rewrite the story. Second, it shifts your perspective to one of events being gifts. As he says, who would Hercules be if he didn’t have monsters and armies to battle? He wouldn’t be a hero…he would simply be a really strong, big guy who wasn’t growing nor whose mettle was strengthening.
  • Integrity Check: be clear on both your values (what energizes you) and your mission/purpose. Why did you start the company? What change in the world are you seeking to see? What would the “highest version” of yourself do? How do you want to show up on a daily basis? Then ask yourself: “right now, am I behaving in alignment with this? Is this fulfilling the mission & am I the leader I could tell my kids proudly that I am?” (the “kid” test).

“Anything that does not bring you alive is too small for you.”    — David Whyte

Our genetics are set for species survival so our Sympathetic “fight or flight” alarm clock has a hair-trigger sensitivity. We are programmed to feel “not enough”.  If we don’t consciously monitor this, we will swim deep below the line. We are each enough & have enough.