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

QUESTION YOUR THOUGHTS (CBT):
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?

Bill Gates on The Virus’s Lessons & Reminders for All of Us


I wanted to do a post on the symbolic or ironic lessons of the virus, including its slowing us down, connecting us more to family and forcing us to reflect on what’s important (and on our own vulnerability & impermanence). Alas, Bill Gates nailed it so here’s a repost. Life doesn’t give us what we want but often what we need…

From: Bill Gates

Subject:
What is the Corona/ Covid-19 Virus Really Teaching us?

I’m a strong believer that there is a spiritual purpose behind everything that happens, whether that is what we perceive as being good or being bad.

As I meditate upon this, I want to share with you what I feel the Corona/ Covid-19 virus is really doing to us:

1) It is reminding us that we are all equal, regardless of our culture, religion, occupation, financial situation or how famous we are. This disease treats us all equally, perhaps we should to. If you don’t believe me, just ask Tom Hanks.

2) It is reminding us that we are all connected and something that affects one person has an effect on another. It is reminding us that the false borders that we have put up have little value as this virus does not need a passport. It is reminding us, by oppressing us for a short time, of those in this world whose whole life is spent in oppression.

3) It is reminding us of how precious our health is and how we have moved to neglect it through eating nutrient poor manufactured food and drinking water that is contaminated with chemicals upon chemicals. If we don’t look after our health, we will, of course, get sick.

4) It is reminding us of the shortness of life and of what is most important for us to do, which is to help each other, especially those who are old or sick. Our purpose is not to buy toilet roll.

5) It is reminding us of how materialistic our society has become and how, when in times of difficulty, we remember that it’s the essentials that we need (food, water, medicine)
as opposed to the luxuries that we sometimes unnecessarily give value to.

6) It is reminding us of how important our family and home life is and how much we have neglected this. It is forcing us back into our houses so we can rebuild them into our home and
to strengthen our family unit.

7) It is reminding us that our true work is not our job, that is what we do, not what we were created to do.
Our true work is to look after each other, to protect each other and to be of benefit to one another.

😎 It is reminding us to keep our egos in check. It is reminding us that no matter how great we think we are or how great others think we are, a virus can bring our world to a standstill.

9) It is reminding us that the power of freewill is in our hands. We can choose to cooperate and help each other, to share, to give, to help and to support each other or we can choose to be selfish, to hoard, to look after only our self. Indeed, it is difficulties that bring out our true colors.

10) It is reminding us that we can be patient, or we can panic. We can either understand that this type of situation has happened many times before in history and will pass, or we can panic and see it as the end of the world and, consequently, cause ourselves more harm than good.

11) It is reminding us that this can either be an end or a new beginning. This can be a time of reflection and understanding, where we learn from our mistakes, or it can be the start of a cycle which will continue until we finally learn the lesson we are meant to.

12) It is reminding us that this Earth is sick. It is reminding us that we need to look at the rate of deforestation just as urgently as we look at the speed at which toilet rolls are disappearing off of shelves. We are sick because our home is sick.

13) It is reminding us that after every difficulty, there is always ease. Life is cyclical, and this is just a phase in this great cycle. We do not need to panic; this too shall pass.

14) Whereas many see the Corona/ Covid-19 virus as a great disaster, I prefer to see it as a great corrector

It is sent to remind us of the important lessons that we seem to have forgotten and it is up to us if we will learn them or not.

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. 

The Dawn of a New Era in VC & Tech

Tech and VC are entering the Dawn of a New Era. Our industry goes through thematic cycles roughly every 10 years (in addition to the “15 year tech” cycle).  The 2020’s will be known for the rise of Stakeholder Capitalism. We will significantly change how we build companies and what their greater roles are. There will be an expanded focus of business to “positively impact society” versus simply cranking out record earnings. We will be reminded daily of this as inequality continues to grow, homelessness worsens, cities & countries burn, etc. I’m not hugging trees here…ignore this advice at your own peril.

Something feels off as we are 11 years into an unprecedented bull market and most people are unhappy & anxious. We have “hedonically adapted” to all of the dopamine hits & blue ribbons of the past decade. Whether it is young entrepreneurs or veteran investors, I keep having daily conversations with people commenting on “how there has to be more to existence than “this”. We are hearing an increasing drum beat from mainstream America as well as idealistic millennials around stakeholder capitalism…the notion that corporations service a larger societal role beyond simply greasing the palms of the moneyed shareholder class.

For the first time in 40 years, the Business Roundtable (comprised of the largest 200 CEO’s in the country) recently broadened the purpose of corporations to include serving all stakeholders (not just shareholders). Larry Fink, CEO of Blackrock & its $7 trillion in assets, has famously championed that his firm will start evaluating companies based on their ESG track records. TPG has raised over $3 billion in Impact related funds targeting 10 of the UN Development goals. Marc Benioff, CEO of SalesForce, announced the death of traditional capitalism and the rise of stakeholder capitalism at Davos. Goldman Sachs will not take any company public that does not have a least one female board member. Investors like the Gates Foundation & Emerson Collective will join mainstream venture investors. The list goes on and on. When the largest corporations and the largest investors pivot, you don’t want to be standing in the way…you want this wind at your back.

Everyone seems to be raising “Impact Funds” these days. Many of these will fail since most haven’t thought through the “Yes And”. They need to operationalize how embracing a new approach to investing and building companies leads to competitive advantage vs simply feeling good. Whole Foods upended the grocery world not just by creating a company culture & value set but also innovating around a unique supply chain that Safeway was unable to replicate. While Whole Foods increased its store count, Safeway shut down entire regions.

Why does this matter? Because you can’t put the genie back in the bottle. We have a demographic change of power in the US going on, with Millennials stepping into their key spending years and accounting for core parts of the workforce. The Gen Z’s are right behind them. They don’t want their father’s brand of capitalism. If you can’t clearly define what your firm’s values & mission are, how these translate into positive societal change and how you are focused on all stakeholders, the headwinds are going to grow significantly. Good luck recruiting top engineers. Many of my daughter’s top engineering friends in her class at Stanford won’t consider apply to Facebook & its brethren. They increasingly won’t buy your products. Your company will be less attractive to buyers (IPO or sale), especially when the Larry Fink’s of the world begin to demand to see greater ESG transparency. This will become table stakes.

I’ve simplified how this stakeholder impact shows up into three buckets:

  • your customers & product…what you do, what does your product stand for, what impact does it have when used or consumed
  • your culture…how you do show up to your employees, what behaviors & norms do you foster or repress, what trade-offs are you willing to make, what do you look for in your hiring & firing
  • your supply chain & your community…how do you engage & treat your suppliers, what do you demand of them, how do you give back to your community & cities

I will write in more detail about each of these. However, in the interim, appreciate that we are entering a new era in entrepreneurship which will create significant new opportunities as well as increasingly punishing those clinging to old dogma.

Choice Is All You Can Control in Life

I was talking with a distraught, young entrepreneur whose week had been rough. He had a much needed prospect go with a competitor and an existing investor reneg on a promise to fund the second tranche of his commitment. He was making himself miserable, thinking about a) the potential failure of his business, b) the injustice of the unethical investor and c) the implications of this on his reputation & what he would have to tell his employees. I asked him how much value he was getting from revisiting these topics after the first time or two (very little) and if his choice to focus on them was the optimal path forward (was not)? I asked him what he had control over & what would help solve the situation the company was in?

“Man does not simply exist but always decides what his existence will be, what he will become the next moment. By the same token, every human being has the freedom to change at any instant.” – Viktor Frankl

The entrepreneur was going down the well-tread path of mistakenly focusing on external factors which he had no control over instead of internal factors which he did. We all seek to control our lives, to achieve our goals and to be happy. However, we confuse that which we can control with that which we can’t all the time. Even worse, we then attach our happiness & contentment to the results of these external factors. Lastly, we then bath all of this in stories & narrative…usually with a negative or victim theme to them. The end result is anxiety, disappoint, poor sleep and missed goals. If I had one piece of advice for my entrepreneurs, my kids and myself, it would be that:

Our choices are all we have control over. Focus all our efforts on this sole freedom: the choices we make in the space between stimulus/events and response.

Despite our desires otherwise, we have little control over our health, others opinions, our environment, our children’s behavior, our management teams, our competitors’ actions or anything else outside our mind.  We do have complete control over how we respond, how we interpret, how we act and what stories we tell ourselves…inside our mind.  We have control over a tight set of choices:

  • Values: what values & virtues to set as True North
  • Beliefs: what stories or facts we believe to be true
  • Focus: what to focus our attention on
  • Action: what action to take next
  • People: which people to reach out to or be with
  • Place: where to physically be

Do we choose to continue on our path forward as we planned or do we choose to let events derail us? Are we conscious of what we are choosing to believe or what stories we are creating or why we decide to do A instead of B or why we are spending time with Fred versus Sally? Or, are we letting these all occur on auto-pilot subconsciously like algorithms?

So, when life, whether as an entrepreneur, a parent, a friend or in a relationship, goes in an unexpected direction, you can let go/put down what is no longer serving you or you can let it drag you into the spin cycle. Ego and pride will cast an array of Oscar worthy storylines. Ask the question: “What is my play now?” Focus on five steps:

  1. Acknowledge the setback or loss
  2. Assess what choices you have control over (see above)
  3. Let go of all that doesn’t serve you/don’t control
  4. Determine you next action (what is my play now?)
  5. Take decisive action (“action dispels anxiety”)

As the famous Stoic philosopher, Epictetus, said:

 “In life our first job is this, to divide and distinguish things into two categories: externals I cannot control, and the choices I make with regard to them I do control. Where will I find good and bad? In me, in my choices.

NKC’s: How I Focus My Year to Create Impact

We all come into the New Year with a fresh start from the holidays and the hope to check off a host of resolutions that will make the coming year a success in some small or large way. While these goals are well intentioned, we often set ourselves up for disappointment in the way we frame them. They are a) not focused on key priorities, b) poorly defined or c) lack actionable steps to make them happen. But, this doesn’t need to be the case.

A few years ago, my coach, Brooke Vuckovic, coined and taught me about using NKC’s: No Kidding Commitments. These are not just rough intentions or resolutions that I hope to get to but a set of Iron Clad commitments which I make to myself (and her) that will be completed by the end of the year. I have slightly modified her approach and added a reflection step.

There are four parts to my process: 1) reflection on the year before, 2) a theme to guide the new year, 3) four to five No Kidding Commitments and 4) a set of actions for each commitment to ensure they happen.

Reflection: Before I can move forward with the new year, I want to reflect on the previous year and use this as a guide/baseline for the upcoming one. I use Reboot’s Reboot Your Year course/process which is simple and straight forward. You get an email with a quote and Koan (paradox/poem) to reflect on and a prompt to journal on for five consecutive days. They include reflection on:
    1) key events that shaped your year
    2) the personal growth resulting from these events
    3) things to let go of that no longer serve you
    4) envisioning what would make a successful year
    5) a letter of advice to yourself  
This is one of the simplest & most effective reflection approaches I’ve come across.

Theme: Next, I create a unifying theme for the year to simply and focus my attention. I choose a word and define what that word means in the context of the coming year.  Since 2019 held a significant amount of change for me and the barrage of ominous news seems unending, I chose the word “FLOW” as my core theme. Athletes know this as being “in the Zone”. Mihaly Csíkszentmihályi defines it as being in “an activity, fully immersed in a feeling of energized focus, full involvement, and enjoyment in the process of the activity.” I’ve defined it contextually for this year as being present (mentally), energized (physically) and open-hearted (emotionally) in all endeavours.

Commitments: After I choose my theme, Brooke has me lay out my No Kidding Commitments for the year. These are the uber-important achievements that will create the greatest impact and deliver the greatest amount of contentment in the next 12 months in the major segments of my life (career, family, service/impact, health, spiritual, finances/home, relationships). Each includes a statement starting with “I will…” and has a clear success state, such as, “I will sell my house and move downtown,” or “I will staff up the LA office and refocus my efforts nationally,” or “I will relaunch my blog, develop my voice and post at least 3x/week”.  The issue with traditional resolutions is that they are sloppy agreements without a logical result.  It’s hard to make progress against something like “I will be more healthy this year.” By setting tangible metrics for your NKCs, it’s easier to track progress and commit to results.

Actions: Once I set my NKCs, I will then put actions against them so that I have line of sight towards realizing each one. I create a project in Things (my task management app) for each NKC and list out the actions to take. For example, To relaunch my blog, I had roughly 10 tasks ranging from securing the domain name to hiring a design firm to setting up the Mailchimp service. I review these to-do’s every week, assess how I am making progress, and determine if there are any changes to the action plan needed.

Through this process, I’ve found I am much clearer on my priorities, accomplish what I set out to achieve and am more content throughout the year.

I’d be curious to hear what any of you do as part of your New Year reflection, resolution and planning process.

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The Three Drivers of Contentment & Motivation at Work

What motivates us to perform and drives contentment at work? Most entrepreneurs struggle with this question. You want success, want to have drive and yet rely too heavily on fear-based or external motivators which often leave a negative residue. The research shows that the most effective motivators are intrinsic and positive.

A champion needs a motivation above and beyond winning.
~ Pat Riley, six-time NBA championship coach (Lakers/Heat)

This post comes from the first part of a lunch & learn session I recently did at one of my former portfolio companies, Graphiq.

What truly motivates us? Three words: Mastery, Autonomy & Purpose. Daniel Pink, in his book Drive, reviewed the sea of research around motivation at work. While factors like money, prestige, punishment or fear can drive us, these pale in comparison to MAP. This video does a great job expanding on this work (worth the 10 min watch):

Mastery: the urge to improve, to have a sense of forward progress. In my Flow framework, this is at the heart of “thriving in the entrepreneurial journey”…defining the core elements of your identity (and focus) and then applying the habits and discipline to master the key skills critical to them. For example, in a work context, this could be “becoming the best salesperson possible” and developing the skills around prospecting, objection handling, relationship management and negotiations. On a personal level, it can be self-mastery and developing a greater sense of equanimity & patience in your daily interactions, better self-care practices (sleep, working out) and becoming less reactive to ups and downs of daily life. As you get better at something, the more rewarding it becomes.

Autonomy: the desire to direct our own lives. As we master our core responsibilities, everyone in the organization or those around us feel more confident in giving us more freedom: when we work, how we work, what we work on, who we work with. Said another way, we experience less micro-management and enjoy more degrees of freedom.

Purpose: The service to something larger than ourselves. When we do something for our own gain, it can motivate us but it is short-lived and often requires another hit (like an addict). Service can be defined in a host of different ways ranging from providing superior care to customers to mentoring junior reports to helping those less fortunate to being a role model for others. The key is that it is not focused on your own gain.

So, to reiterate…three words: Mastery, Autonomy & Purpose.

Contentment
That said, none of us want to win the battle and lose the war.  Too often, we drive ourselves hard only to feel empty or drained at the end. Contentment comes from when we progress towards something better/greater versus escaping from our fears and inadequacies. Let me repeat this as IT IS CORE…focus on motivation around progressing Towards something versus the anxietal default approach of motivation through Escaping our Fears & inadequacies (e.g. the inner voice that says “look asshole, if you don’t do this right, you’ll be a failure or you’ll get fired or you’ll be embarrassed or…).

In Which Wolf Do You Feed?, I discussed the importance of Intrinsic versus Extrinsic motivations.  In his book, Pink argues that effective human motivation is largely intrinsic around mastery, autonomy and purpose. He argues against old models of motivation driven by rewards and fear of punishment, dominated by extrinsic factors such as money.

My challenge: see how you can integrate more positive, intrinsic motivators into your daily work. Define your core role at the firm, laying out the key responsibilities and outputs for this and then commit to building the skills and obtaining the knowledge to be your highest version of this (vs just getting by). Focus on the input(s) versus the output. Start with just one area or skill and go from there. Additionally, write down 2-3 ways in which your work is in service to others. Put these out where you can see them. Focus your motivation on this versus simply gaining recognition or earning more money/bonus.