Rediscovering Ourselves: Navigating Identity in Life Transitions

by mbmccall
person with body painting

Letting Go of Identity. Such a tricky and painful process during change. We hold onto the past, onto our old identity & reality and it drags us under the water like holding onto a log floating down the stream. The log has passed and no amount of clinging or wishing will change the reality of potentially drowning.

I’ll never forget how ungrounded and lost I felt 15 years ago. I went through a divorce, a job change, and a move at the same time. Ironically, I had also just come off of 5 years of strong venture exits resulting in becoming a “top 100” VC and I had exited all deals before 2008 hit. I “should” have felt confident and happy. Nonetheless, the apathy, anxiety & self-doubt crept into all facets of my life. This puzzled me given I always viewed myself as a resilient, mindful, and action-biased optimist. As I mentioned in Managing Life’s 8-10 Year Cycle, life has a rhythm to it. This will happen more often than we would want. Coming to terms with our shifting Identity(s) is a key part of thriving during these transitions. Otherwise, we will suffer as we cling to past versions of ourselves instead of embracing the new, improved and more empowered version we have actually become. One of my favorite quotes is from Joseph Campbell who lays out what happens if we don’t heed the call to adventure (our next cycle/chapter):

“We must be willing to get rid of
the life we’ve planned, so as to have
the life that is waiting for us.

The old skin has to be shed
before the new one can come.
If we fix on the old, we get stuck.
When we hang onto any form,
we are in danger of putrefaction.
Hell is life drying up.”

― Joseph Campbell

Identity is such an intriguing core to our personality. Our egos cling to a constant Identity and all the validations, relationships and behaviors linked to it.  Who are we if we aren’t the consistent husband, mother, partner, quarterback, etc of the past 10+ years? How do we motivate ourselves? How do we find love or acceptance? How do we prove to ourselves & others that we are enough without this constant foundation & feedback? How can we buffer the winds of the new reality without our old harbor? What is going on is increasingly known thanks to ancient wisdom meeting modern science & research.

Identity (and sub-identities) are fluid despite our best wishes. There is nothing that is constant over time. Ego abhors this. It hates pain, uncertainty and effort. I spent a three day Buddhist retreat with 20 other people. We focused solely on what was constant in us. Spoiler alert: nothing. A core Buddhist tenant is that “Self” is a construct and doesn’t exist. Nevertheless, we cling to the old “constant” identity and suffer. One by one we went through elements:

  • My Body is constant (nope, nearly all your cells in your body recycle over the course of a year)
  • My Values are constant (nope, beliefs shift with experience. How we behave varies. Even if you are a “compassionate” person, good luck if someone aggressively hits your car during rush hour)
  • My Emotions (nope, these cycle every 90 seconds or less)
  • My Thoughts (nope, talk about a wild mustang on the plains)
  • My Behavior (nope, despite my best New Years resolutions…)

We don’t appreciate that Identity being fluid is one of our greatest tools to thrive in life. We can architect how we show up and adopt the most empowering new identity. We can create a very specific master identity and sub-identities to show up as our highest selves. We become what we do. Aristotle said this 2300 years ago. Huberman, Dweck and thousands of researchers have conducted extensive studies. They have proven that our neuroplasticity is our greatest weapon to grow and thrive. Andrew Huberman emphasizes that identity is not static. It changes over time due to neuroplasticity. Neuroplasticity is the brain’s ability to reorganize itself by forming new neural connections based on social, emotional and environmental factors.

David Whyte poetically wrote the answer. “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.” This skin is the identity that you have wrapped yourself in which is slowly dying. It is turning you into an encased mummy unless you cut the skin off and let the butterfly loose.

Of course this is going to be painful. Of course, this is not easy to transition. Our daily routines are different. We feel the loss of the old so deeply & painfully. We regret decisions we made. Our social structures change. Our relationships transform, come and go. Our reward systems reset. Our power system and hierarchies are different. Old childhood patterns trigger and amplify. The familiar is now unfamiliar. Into this void creeps the impostor, self-judgment and less than helpful storytelling.

We can’t direct the wind, but we can adjust the sails. – Thomas S. Monson

How do we do this when every morning we get up feeling the losses of old? How do we make room for the new when we are still full of the old? How do we shed the old when the new has not formed so it feels like an abyss? How do you embrace the new, independent lawyer, teacher or deal person? You no longer have the trappings of your old, established firm. The impostor is reminding you that you are nothing without this platform. How do you show up as a confident single woman, embracing the new adventures and love when you are heart-broken over the loss of your partner, your family structure, your home? How can you make room for another partner when the old ghosts roam? Guilt & regret plays the “remember when” and “if you only you had…” game. How do you become the confident worker? You have left the comfort and known systems & social structure of school. The ego whispers that you are going to fail at the new job. It tells you that you are not qualified for it.

Research & wisdom come to the rescue again. You simply “act as if” and take action. Until you start doing, you won’t trigger the neuro-plasticity to change your wiring. Aristotle said it, neuro-science has proven it and Tony Robbins has productized it. Behavior/action changes Your State changes Your Emotions…not the other way around. We wrongly think that we somehow need to change how we feel/emotion so we are motivated to take the actions (“I’ll do it when I feel.”). WE BECOME BY DOING. Let me say that again: We become by doing. One more time: We Become by Doing. The old cliche about “acting as if” ironically has been proven true. Our physiology triggers hormonal & other body systems that then move us into the state we are seeking. Slump your shoulders, tell negative stories and you will become sad and dejected. Stand erect, shoulders back, smile broadly and you will feel more confidence and energy. The more you play the part, the more your body & nervous system adopt it. Show up as a capable new employee, be curious, work hard and eventually you become that employee. Show up a loving, committed partner enough when your heart hurts and eventually you become that partner and the pain of the old fades. Show up as a top independent deal guy and eventually you become that independent deal person.

We are what we repeatedly do. Excellence, then, is not an act, but a habit. – Aristotle

Letting Go of Identity. This is both simple and exceptionally difficult. Ego does not like change and our nervous system attaches to old ways & patterns. Want to feel anxiety, try driving in China versus your neighborhood. Want to feel fear & loss, jump into a new relationship post-divorce. Want to feel inadequate, change careers or firms. This is so complex that no one (including this post) has all of the answers.

But, here are some actions and changes to take to accelerate your transition. We all get through these shifts. We all end up in a better place if we allow the Universe to do its thing.

  • Get Quiet: find opportunities to be by yourself or to get into nature or a favorite space, chair or room. Breath in for 4, out for 6 to calm your nervous system and Listen to what comes to you. Write it down…journaling (pen & paper old school) is so powerful. Life is calling you. In particular, feel when you are triggered, note where in your body you feel it, stay with it, ask when did this trigger/pattern first appear in your life, breath into it. Consider CBT or ACT Therapy
  • Visualize: See yourself three years from now having the empowered, fulfilling experience that you want. Find role models, movies, songs, pictures that represent what this future looks like. Literally step into this version of you (into the body) in the movie/scene. What are you feeling in your body? What are you seeing? What new habits and behaviors are you doing? What are you saying? What are you experiencing? What are you believing about life? Who are you experiencing it with? Where?
  • Let Go of Your Old Identity: Visualize your old self shedding or burning up. See yourself in your saddest, least empowered moment. Picture this image turning into color, your shell breaking open, your old self burning up. Stutz has an exercise “The Death Exercise”. You imagine yourself letting go of whatever you’re holding onto (relationship, identity, etc). Visualize yourself free falling into a sun below. You burn up (ego death). Literally throw yourself away. Feel yourself dissolve into the sun, symbolizing the surrender to something greater than yourself. After this dissolution, you look up and see the vastness of the universe. The universe is filled with countless other suns. You are part of something much larger.
  • Change Your Framing: Amor Fati…don’t trust but rather know that the Universe/Life/God conspires to help you from a place of love. It flows through you…it doesn’t happen to you. Get curious about what growth, new adventure and empowered identity it is bringing you. Life saw-tooths upward.
  • Create a New Storyline: We organize our lives through story. (MacAdams): Re-author a new coherent life story that lays out how the old self has continuously flowed into your new role. Describe your journey in chapters like a play or movie. Layout how you went into the dark forest, you faced your dragons and rose like a phoenix. Note how your old identity has transformed into your new identity. Describe the new powers, perspectives and wisdom that you have. Note how this makes you better, more capable, more open-hearted in relationship. You need to iterate on the new identity with increasing positive positioning, supporting facts…look for the red cars (positive) versus the black cars (negative).
  • Take Action Now…BECOME: Step into the new identity or version of you. Pick one simple thing to start and one simple thing to stop to become this person. Layout simple habits, words or actions you can do to embody these in your daily life. Do the habit over & over again (see Phelp’s doorways below) until it is you.
  • Take Small, Constant Actions. Change the words you use. Change the stories and interpretations you tell. Create Pinterest vision boards. We become what we habitually do. Create habits to do these repeatedly. Michael Phelps had to reprogram to address his deep depression post-2012 Olympics. At every doorway, he would say to himself, “I am enough” and “I love myself.” He would reframe poor practices and races as great teachers. They showed him how to improve instead of ripping himself to shreds as not enough. Actively seek out new groups that align with your evolving identity. This can foster a sense of belonging and purpose. Don’t suffer alone nor isolate yourself. We are social animals & tribal.
  • Celebrate: Write down what you are grateful for. Write down & celebrate your wins (little or big). As you do these, reinforce the new identity…that’s like me, the guy/gal who… David Goggins, the Navy SEAL, collects his daily wins and puts them into his “Cookie Jar”. He can “reach into the jar” and pull out a reminder of what he’s capable of.
  • Show epic self-compassion: Appreciate that it is hard, that it hurts but that you are heroic showing up in spite of this. See Phelps above…despite all his success, his harsh inner critic drove him into depression until he put positive, re-inforcing habits & words into his life along with positive stories & interpretations. Pretend you are talking to one of your children when talking to yourself.

So, a very simple summary to all of this (for the 4th time). WE BECOME BY DOING. Even if anxious or sad or uncertain, simply show up through small habits and actions to become the new you. When it works, celebrate and remind yourself this is who you are. Just like you can never step in the same river twice, you can’t step into the same Life twice. It moves on. I’ll close with one of my favorite Nike quotes. “When you were born to do something (or become something), JUST DO IT”

Managing Life’s 8-10 Year Cycle (part 2)

by mbmccall

TLDR: “Roughly, every eight to ten years, life seems to cycle through like a brush fire to clean up the excesses of the past decade.” The current cycle never ended as planned. As the cycle moves to the next cycle, people feel ungrounded and seek even deeper for purpose and meaning. There are proven tools to navigate and grow into these changes, including ways to embrace uncertainty, get quiet to listen to life’s callings, and take small, reversible actions to discover new, more expansive directions

If your time to you is worth savin’
And you better start swimmin’
Or you’ll sink like a stone
For the times they are a-changin’
– Bob Dylan

My most read blog post going back to 2005 is Embracing Life’s 8-10 Year Cycle. As COVID set in, I wrote that “Roughly, every eight to ten years, life seems to cycle through like a brush fire to clean up the excesses of the past decade.” Since then, it has become very clear that the double cycle since 2008 has turned and a lot of my entrepreneurs and friends have asked what is next? While I definitely don’t have the answer, I can use past cycles and metrics as a proxy.

To start, the worm has turned and the times they are a-changin’. Things that used to bring purpose or direction have faded, easy financial wins of the past (venture exits, rapid real estate appreciation, low cost money/mortgages, etc) are elusive. Many of us didn’t have to focus on underlying questions about our lives and relationships due to the years of dopamine dog biscuits from the Fed pouring money & low rates on all of us, giving us lovely asset appreciation. Now, I hear my entrepreneurs, clients and friends over and over again asking more about purpose & meaning, career changes, relationship changes, and feeling callings to do something new (albeit often unclear what). Welcome to the Hero’s Journey.

The Cause: Life’s S-Curves

The key factor driving this “Life Quake” cycle is the life/career S-curve. In my Good Life and Career class, I talk about learning curves. Over the course of 8-10 years, we move from Consciously Incompetent (very uncomfortable about a new career, skill, etc) to Consciously Competent (can do but need to think about it) through to Unconsciously Competent (hitting the tennis ball without thinking about it) to Boredom/Wanderlust (what’s next, feeling stagnant). The curve parallels changes in the markets (2000, 2008, 2016, 2024)

In 2000, my world felt like it was imploding. I had two young kids and had generally succeeded at most things I attempted up to this time. Then the DotCom crash hit and my world, technology investing, fell 80%. It was horrible as my grounding disappeared. I spent 4 years watching companies go under or I was continually cutting headcount on the others. I wrote about this period in The Significance of My Karma Bracelet. In my mind, I was a failure and I felt shame around my kids. My companies were all going under and I was going to end up at McDonald’s.

However, the next cycle began to build and after several brutal years, a number of my companies had strong exits and suddenly I was a top 100 VC. I had sold most companies so was feeling incredibly smart and capable as the 2008 market crashed. However, this was short-lived. By 2009, I was going through an amicable but painful divorce, was living in new house undergoing complete renovation and Pritzker Group had recruited me to switch firms. I felt ungrounded, uncertain about my identity suddenly as a father, romantic partner and venture capitalist (new firm, new identity, new routines). I hit bottom in Feb 2010, living in the basement of my house in -20 windchill as my house was stripped to the studs (just like me).

Yet again, the cycle began to move upwards. In the next 7 years, my exits started moving above $1 billion and several exiting north of $20-50 billion. I settled into a new routine with my kids. My renovations were done and could live in a bright house vs the cold basement. Once again, I felt more grounded, optimistic and capable. After several years, the cycle began to shift again. The kids all left the nest, I began coaching training, I moved downtown and started my migration out from Pritzker. That familiar ungrounded feeling began to creep in. However, this time, after years of coaching training, I was able to view this shift through the lens of growth. 

In short, my life has had a cyclical nature of lows, highs, back to lows, shift back up…each time saw-toothing upward as long as I leaned into growing and jumping to the next curve. However, as each downward cycle hit, I felt at a loss, ungrounded and “not enough”. Things should have gone just a bit (or a lot) better in the previous cycle. My karma bracelet reminds me that tomorrow will be brighter and better than today period.

Our lives are a series of these S-curves which take about 8-10 years to play through. In moments like the current, we have the uncomfortable experience of moving from the old (stagnant, receding or limited progress) to a new curve (and being “Consciously Incompetent”). I see lots of people who, due to fear, discomfort and internal stories, refuse to jump to the next curve and their lives often begin to feel a bit more claustrophobic and stale. They stay in a draining job or hold onto a toxic marriage. It is heroic to step forward when this is happening. Their life path, instead of starting to curve up with the new (step 1 to 2 to 3) goes linearly sideways. They literally say “I feel like my life is going sideways and I know there is something more out there for me.” If you heed the call, your life looks like a series of these curves like this (I used myself as an example).

As we get older, these curve jumps feel increasingly steeper and, because of past successes, more risky (“further to fall”). Don’t rock the boat, don’t risk a good thing, don’t…says our ego from a place of fear. We feel stuck like a bug in amber between the growing “call to adventure (and growth)” and playing it safe by sitting in place. However, the Hero’s call starts as a tickle to the ear with a feather. Eventually, it becomes a sledge hammer to side of the head. Like a baby being born, once you are “in labor”, you will be rotating into a new cycle. If you are not careful, you will try to anesthetize this discomfort and resistance through various addictive escapes (dopamine) ranging from excessive scrolling to drinking to much worse. So, how do we manage this?

Managing the Three Universal Truths

First, let’s review Phil Stutz’s three “truths” that get us into trouble. Ego wants things to go its way, wants the path forward to be clear and for it to be easy/low effort. In reality, 1) few things ever go as planned, 2) the path is usually opaque and 3) progress requires a constant pressure or effort. Embrace these (vs saying “this shouldn’t be happening”) and amazing new options and chapters open up to us. Fight them and it is just a matter of time before the sledge hammer comes out.

“In reality, 1) few things ever go as planned, 2) the path is usually opaque and 3) progress requires a constant pressure or effort. ” – Phil Stutz Three Laws

The key is to get curious about what life is calling us to do, expecting from us. We are often so deep into our thoughts trying to “figure out what to do” that we fail to hear this. We grow frustrated and keep seeking to find our Purpose, our Meaning, the right career, how to have impact, etc. This is as elusive as Gatsby’s green light at the end of Daisy’s pier.

“It did not really matter what we expected from life, but rather what life expected from us. We needed to stop asking about the meaning of life, and instead to think of ourselves as those who were being questioned by life – daily and hourly. Our answer must consist, not in talk and meditation, but in right action and in right conduct.” – Viktor Frankl

Practical Steps Forward

As I wrote in my post The Simple Path to Purpose Has Not Changed in 2,500 Years, the way forward is simple but uncomfortable (literally a “leap of faith”). Some of the core principles I coach my entrepreneurs, clients and students around include:

  • Get quiet: get out into nature, take walks, meditate, pray, play music, go for a run…do anything that gets you out of your head and connects you to flow, to transcendence (Campbell) outside of or greater than you. 
  • Listen, don’t grasp/seek: simply ask, while on these walks or sessions, what are you being called to do. Basic but powerful. You will get glimpses and previews (albeit opaque) but if you get quiet enough, you can sometimes literally feel a pull.
  • Get curious and self-aware: spend time clarifying your strengths (what do you do well), your values (things that energize you), your blindspots, your self-defeating habits, your limiting beliefs (usually from early childhood). I always say life is about energy…do the parts of your life energize or drain you. Architect more of the former, less of the latter. Energy is the compass.
  • Micro-transactions: I mention this in most posts. Just get out and start trying small little bets. Volunteer, moonlight, take people out for coffee, buy a URL, take short classes, go on an interview, etc. Keep these small in scope and reversible (e.g. don’t move to another city, quit your job and join a new firm…this is less “reversible”). Do these frequently with a short begin-to-end cycle.
  • Listen to your gut: as you get quiet and start just doing micro-transactions, you’ll literally “feel” in your body the feedback. This I loved, was good at, was energized by and that I was not. This becomes your compass and path setter.
  • Rinse & repeat: assess each bet/test, move to the left, move to the right and try another one.

Eventually, the opaque becomes clearer like taking steps through the fog towards a mountain. Your nervous system begins to feel less anxious and suddenly, the path becomes clear. But, it only does so by taking a leap of faith, stepping into small forward actions, approaching with a beginner’s mind/curiosity (vs. having to have clarity and the answer on day one), and loving/embracing when things don’t go as planned. Critical is that you don’t cling to the past but embrace what awaits you. Otherwise, like holding onto a log going down the river, you will be pulled under. Watch the “coincidences” start to increase in frequency. As Einstein said:

“Coincidence is God’s way of staying anonymous” – Albert Einstein

I’ve thrown a ton at you on this post. These are my observations and experiences so appreciate if your realities are different. I’m always curious and seeking to learn so let me know: 

Thoughts?What resonates and where you have experienced just the opposite or feel strongly the opposite.

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

by mbmccall

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

by mbmccall

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

by mbmccall

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. 

Seneca

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.

Which Wolf Do You Feed?

by mbmccall

Question: If you lose your fear, do you lose your drive?  It’s a question many entrepreneurs ask themselves.  They seem to have bought into the idea that you can either be content or you can be driven, but those two states cannot coexist. But that idea is flawed.

In reality, we are the stories we tell ourselves, becoming the characters (hero or villain, creator or victim, etc) that we believe and repeat. Once set, these identities and these stories rule our lives. For the same conditions or situation, they determine whether we are thriving or surviving, growing or just getting by, content or disatisfied.  And yet, we often make this selection sub-consciously.

One of the leading experts on peak performance, Mihaly Csikszentmihalyi, coined the term “Flow” in his seminal research on top performers. We sometimes call it being “in the zone,” performing at the top of our game and enjoying a sense of mastery and ease rather than enduring the “fear and angst” that can accompany performance.

Mihaly defines Flow as:

“being completely involved in an activity for its own sake. The ego falls away. Time flies. Every action, movement, and thought follows inevitably from the previous one, like playing jazz. Your whole being is involved, and you’re using your skills to the utmost.“

How do we get into it and why do we fall out of it? It’s all about what’s driving you.  Is your motivation internal/intrinsic or external/extrinsic motivation? This is the heart of my blog and my framework below.

At a high level summary, the key to enjoying sustainable success rests on Arete.  This is the Greek concept around striving to become the “highest version” of ourselves as defined by us (intrinsic) and not as defined by others (extrinsic). This is motivation driven by moving towards something aspirational versus moving away from fear.

IDENTITY is at the heart of all of this. If we define our core Identity in empowering ways, we set ourselves up for Flow. If we define ourselves in ego-centric, inflexible ways, we set ourselves up for terrible suffering. Identity has a host of components ranging from core values, narratives, identity statements, behaviors, life segments, etc. We have a core identity and then layers that we use to define ourselves i.e. Mother, wife, boss, coach, athlete, daughter, friend. 

EXPECTATIONS flow from the Identities we choose. These are often subconscious but dictate our lives. When reality shows up differently from our expectations, we begin to feel anxious and suffer. Being conscious around the Identities we chose and understanding the Expectations that arise from this is half the game.

There is a Cherokee story of a chief talking to his grandson. He describes that he has Two Wolves battling inside of him. One is full of ego, greed, anger and pride. The Other is full of truth, hope, empathy and service. When the boy asks “which wolf wins?”, the chief responds “The one that you feed.”

In selecting our identities and in embracing specific narratives about our lives, we feed one of the wolves. Do you work for personal glory or in service to something greater? How critical is external validation to your happiness? Is your inner voice on fire or can you find windows of inner calm?

For example, belieiving that life is a zero sum game and defining yourself as a successful entrepreneur who doesn’t fail can set you up for misery. Things won’t go your way on a daily basis. Setbacks confirm the harshness of your reality and this identity will light up your ego and your fear. Anxiety sets in. “This shouldn’t or can’t be happening.”  “What will people think?”  You might project negative scenarios causing the voice of your inner critic to get louder.  Why? Because you defined yourself and your Identity in a way that plays to ego, requires external validation and has limited flexibility.

However, if you view experience as driving growth, then challenges/setbacks become a means to grow and improve. If you identify as “a resilient & creative entrepreneur who uses persistence in confronting challenges “, your expectations and your interpretations change. In a perfect world, you would welcome these challenges to sharpen your craft and skills. Your value isn’t reflected in what others think of you but rather how you grow and improve your mastery. This is a simplistic example but it shows you the importance of answering: Which wolf do you feed?

 

Challenge: What is your current Identity and Narrative and how can you define what a “Higher Version” looks like to incorporate more intrinsic motivation and Flow?

My Venture Covenant With Entrepreneurs

by mbmccall

There is a false dogma around the VC/Entrepreneurship relationship…supported by bad behaviors on both sides. You feel a need to manage your investors & board, to not show weakness and present to us. We fail to fully listen, dictate desires or fears and financially optimize our investments. Trust and open communication are our most precious assets which we squander away as a result. In reality, we are on the journey together with a common enemy (Darwin). We must hang to together or “surely, we will all hang separately.” We need to optimize our chances for success, row together, remove unnecessary drama and minimize self-inflicted wounds (the majority cause of pre-mature death). Over the years, I’ve seen both the good and the awful with this relationship. So, here is my rough draft of a Covenant with My Entrepreneurs…

MY PROMISE
MY EXPECTATION
Be committed to your personal & the company’s success Be self-aware and embrace your blind spots
Respect that this is your company but provide guardrails & accelerants Don’t self-optimize. Your employees and I depend on you
Show up rationally, empathetically and, “first, do no harm” Don’t let fear or ego dictate how you manage and lead
Be open and frank in my communication Be open and honest in your communications
Seek homework from you to knock down barriers & accelerate growth Say “no thanks” when I’m not helpful
Respect your boundaries Acknowledge when you need help or don’t know
Honor confidentiality Embrace this as a partnership, not as a necessary Evil
Encourage experimentation, quick iterations and respect failure Don’t feel obligated to carry the world on your shoulders

Multiples vs IRR

by mbmccall

One of my most popular posts from VC Confidential…

“You Can’t Eat IRR.” — anonymous

I was at a business school today helping judge several business plans. As group after group presented, I saw each make the same mistake as the previous. When they tried to justify the investment from the perspective of the VC, they kept telling us that this was a 40% IRR deal or a 25% IRR as if we had magical IRR thresholds.

The reality is that the venture world is all about multiples and the IRR’s are the results. I don’t know what the original legacy behind this was, but from a practical perspective, it is driven mostly by the fact that we live in a boolean world. Some is also based upon the high net worth legacy of our business. Originally, because pension law did not permit the large institutional investors in, our business was funded by family offices, endowments and foundations. Multi-generational families, while they want high IRR’s, are really looking to double or triple their invested capital.

From a portfolio perspective, if we invest in 10 deals, 4 are tube shots, 2 we fight to get our money back on, 2-3 we get 2-5x on and the 10th deal drives the return (hopefully north of 10x). If we doubled our money in 1 year (100% IRR) but lost all our money on the next deal over 6 years, we aren’t happy (net gain is $0). We don’t care that we made 2x in 1 versus 3 years or lost all of our money over 6 years versus 4 years (this impacts IRR), because we earned 1x on the capital.

We often see complex financial models with discounted cash flows, hurdle rates and such. These are useless. I have never seen a set of financials in an early stage company that ever reflect what Darwin will allow to happen in reality. So, you start your modeling with unreliable numbers. Secondly, what is the beta for an early stage biotech deal, a semi-conductor start-up, etc? Can you assess the risk associated with a given management team? How about a new market space?

Perhaps we are too lazy to try and figure this out, but after decades of effort, the only method that seems to work in the venture world is to target 10x on each early stage deal (3-5x on later stage plays). They all look like the next Microsoft, but eventually, the portfolio of these settles down to the profile above. In the early stage world, if you target, say a 40% IRR, through assuming a number of 5x wins in a compressed period of time, you will likely be out of the business. Your 5x wins, while possibly generating high IRR’s, don’t return enough multiple to pay for the 4 tube shots and 2 break-even deals. Your winners need to deliver 10x.

So, next time you are trying to convince a VC about the merits of your firm, show them how they can make 10x capital on a realistic exit scenario (not how to get a 40% IRR).

The 15 Year Tech Cycle: Reloading for Another Tour

by mbmccall

“If you can see it, it isn’t the revolution.” — Steve Jurvetson

I wrote the following post in Nov, 2008. It demonstrated two things. 1) Tech and the stock market have a little dance they do…tech has roughly a 15 year cycle and the stock market has roughly a 7-8 year one and 2) tech is non-linear…just as FB/social was about to take off, many thought cleantech was going to be the next bellweather sector. If you can see it, it isn’t the revolution. It is possible that we are going to skip through this current cycle into a second one that goes to 2021 or 2022 due to the continuing decline in interest rates.

The markets in 2008 were very different. The banks were overexposed with bad real estate debt. Their current balance sheets are relatively clean. It is only when the banks get into trouble that the economy truly contracts as they pull in credit.  I wrote in June 2008 that I thought the venture/market cycle was coming to an end and this one in Nov 2008. Today, lot of people are going to cash and getting nervous about the market this year. Fortune 500’s are cutting ad spending for Q1 (some significantly) and I recently spoke to two elder ladies in a hotel lobby who were “short the market”. Also, more VC money was invested in 2014 than any year since 2000. So, while I believe in the 15 year tech cycle (e.g. things go boom in the night in the coming year), with this many people looking for it, it seldom hits. That said, probably not a good time to aggressively put money out and a good time to get your house in order. I’ll revisit as the year progresses…the IPO market vs. last private round valuations is a key metric to monitor.

From Nov, 2008:

“As the bad news keeps pouring in, a lot of people are wondering what we can expect in the coming years. Additionally, everyone is trying to figure out what hope exists. Well, I’ll give two thoughts on this (briefly).

First, the world of technology is driven by two factors: the laws of exponentials and the Black Swan. Progress does not occur linearly but exponentially. We can expect to see changes the magnitude of the past 100 years in just the next 20 years. This means a lot of people are going to a) be really busy and b) be dramatically better off. These changes will come from places you can’t predict (Black Swans). Market crashes and negative developments are not the only unexpected six sigma events.

Second, markets run in roughly 7 years cycles and technology in 15 year waves. Vacuum tubes to main frames to mini-computers (DEC) to PC’s (Apple/Microsoft) to the Internet. The next wave, then, should start in 2010-11 and hit full force in 2015-16. Many in the business (us, Kleiner, etc) feel this will be in Cleantech. The energy market is 10-20x the IT market. We are not talking about billion dollar markets but trillion dollar ones. There will be a lot of casualties but some enormous wins.

So, there us no doubt that life is really brutal today. But, prepare and get ready for enormous, explosive market opportunities. It’s going to be mindblowing.

So, I stick my neck out again typing on my small iPhone. I declared the old venture cycle dead last June. I am declaring the the next cycle, even bigger than the former, will kick in during 2010 with foundations forming by the end of next year. I also believe we will see 30-40% of remaining venture firms will not survive to see this through (food for another post)…

The Key Israeli Story: StartUp Nation

by mbmccall

Larger Post coming…without appreciating the context (yesterday’s post), it is hard to fully grasp the origin nor significance of the tech renaissance that is taking place in Israel.  One has to see it to fully appreciate it. Much like Boston and Silicon Valley had its origins in military R&D and culture, Israel’s tech ecosystem also comes out of this. It has had innovation after innovation emerge from its advanced defense work. For example, ICQ (not AOL messenger) launched instant messaging onto the world and originally came from te Israeli Defense Force’s internal uses. Same with voicemail and many other innovations. Israel has some of the world’s best minds in Big Data, IT security software, messenging, telecom infrastructure, etc.  A lot of this is described in the book, Start-Up Nation by Dan Senor and Saul Singer. Some of the numbers are eye-popping…one start-up per 2,000 people in the country for example. Necessity is the mother of invention.

Equally important is the Israeli resilience & tolerance for risk.  This is at the heart of the entrepreneurship.  When living in the charged environment discussed yesterday, you can’t help but to grow up with a DNA that accepts risk/change’s role in life and embraces the necessity of innovation.

I have to run to Tel Aviv’s accelerator, SOSA (their equivalent to Chicago’s 1871). More to come.

 

Subscribe to SomethingVentured

Enter your email address and click on "Subscribe" button