Beginnings that you know are beginnings are daunting. I don’t think I am alone in this experience, where starting any project of even a moderate size (i.e. will take a couple hours, with an uncertain outcome) takes mental bracing, as if I were to jump into a cold pool of water.
Which makes me wonder how any of us get anything done at all. Recently, some friends asked how I learned to program. And the truth is, I don’t know. I know when I learned to program, but I honestly don’t know how.
In the summer after the first year of college I was elected to run the IT department of a student club. Chiefly because I was willing when no one else was, and then chiefly because I didn’t know what I was getting myself into. I had built a couple static websites, which I learned to do during high school. I didn’t know this at the time, but knowing how to do mark up is very different from programming.
"So how does our website work?" I asked my senpai.
"It’s like a PHP thing."
"Ok just FTP into the server. I’ll show you."
I inherited a spaghetti mess of a PHP codebase, before WordPress was even really a thing. I needed to make changes to it, so I borrowed a PHP MySQL book from the library, which I only knew to look for because I googled PHP and Sitepoint’s tutorials came up.
I remember when I discovered for loops, I thought that was genius. SQL queries was magic. I can stop making separate files now, because templates! I had never even heard of the word templates before.
All the while, I didn’t know I was learning to program. I was busy trying to put photos up for events, or automate signups to a ski trip, or make it easy for club members to communicate. I wrote a shoddy basecamp/wordpress clone in 2006 for my student club before I recognized I was programming.
Embedded in this big “beginning” was a hundred little beginnings. Beginning to look at logs instead of printing things out to the server. Beginning to recognize when I’ve created an infinite loop. Beginning to understand the fear of bringing a site down. Never was I conscious of the beginning-ness of it all.
And so maybe that’s the secret. A great way to begin is to not recognize you’re embarking on a life long journey. It might just be to step out to go to the library to borrow a book to scratch this itch you had. I recognize this is not helpful if you’re trying to be deliberate, but I suppose maybe being deliberate is sometimes overrated? It’s good to scratch an itch. Sometimes scratching an itch leads to whole life direction, but if nothing else, an itch got scratched.
Maybe this will remind me to not fetishize “great work”.
Love it. Highlighting the distinction between resisting technological progress and resisting exploitation.
In an environment in which start-up resources are not limited, and no one can predict the next winner, and it is easy to measure customer behavior in great detail, the Internet is no longer a technology.
The Internet is a psychology experiment.
Building a product for the Internet is now the easy part. Getting people to understand the product and use it is the hard part. And the only way to make the hard part work is by testing one psychological hypothesis after another.
Every entrepreneur is now a psychologist by trade. The ONLY thing that matters to success in our anything-is-buildable Internet world is psychology. How does the customer perceive this product? What causes someone to share? What makes virality happen? What makes something sticky?"
The Internet is a psychology experiment. What a quote.
A couple weekends ago I left one bubble to visit another. At the Berkshire Hathaway annual shareholder meeting, Warren Buffet and Charlie Munger discussed markets, investments and economics, and in the process showed me just how deeply ingrained I have been in the tech world’s ideology.
— Marc Andreessen (@pmarca)May 3, 2014
Andreessen is famously attributed the quote, “Software is eating the world.” Implied within is the ideology that technology (and technologists) will disrupt everything (and every incumbent) – it is only a matter of time. And if software is eating the world, you want to be the ones writing the software, not the ones getting eaten. According to this ideology, software will displace existing ways of value creation. What matters in this world is having the engineering chops to write software, and the audacity to take on incumbents.
Software IS Eating the World
It’s clear that technology drives an increasing amount of value creation. Technology is changing how things get done, that is uncontroversial. It is also clear that whoever is behind a new pieces of technology that captures/creates new markets will get an outsized return. Superstar technology companies give its investors 10x or 100x returns, far more than the 15-30% year-over-year returns that Berkshire built its fortune on.
…but it is not Sound Investing
When you’re not the technologist, however, investing in technology is dicey. Venture Capitalists, as a class of investors, do not out perform the market. Technology ventures are full of uncertainty. Software is eating the world implies that some technologists are going to win, but it doesn’t tell you which one. Most start-ups fail, and thus from a straight up asset management point of view, most start-ups are not worth investing in. VC’s only (sort of) work because they invest in start-ups as an asset class, being clear eyed about the risk-reward ratio and adjusting for it.
So does Berkshire actually short the future?
The short answer is no.
The longer answer is this. Mr. Buffet is an asset manager, and he is in the game of efficiently allocating capital, not maximizing potential return. He does not like volatility, and if he has to leave the black swan upsides of VC-style investing, so be it. That discipline is Berkshire’s strength.
Giving up black swan upsides is not shorting the future
When you actually listen to Buffet explain the logic of value investing, it’s hard to disagree with. Save the “bet on great companies in well understood industries” bit, what Buffet talks about are foundational principles that would apply to start-up’s just as much as anyone else e.g.
- Form ideas based on evidence and first principles, not other people’s opinions
- Systematically remove your ignorance
- Be picky about finding great people, then trust and invest in them
- Design incentive structures carefully to bring the best out of people
Berkshire Hathaway is an optimistic company that bets on growth, and bets on teams of managers that will foster that growth. While software may be eating the world, at the end of the day people will still run it.
At the shareholder meeting a question about self-driving cars came up, asking about how the technology will affect Geico, Berkshire Hathaway’s auto insurance business. Buffet and Munger’s responses was essentially:
- Yes, self-driving cars will affect Geico’s business
- No, we do not see it happening soon
- No, we’re not worried, because,
- A. Where there’s risks, there will be demand for insurance
- B. We believe in our managers, they are on top of it, and no doubt will handle it properly
Which isn’t so far from what a VC might say. Ultimately, you’re investing in your people.
Last week at Sift we hosted an internal hackathon. “No rules. Work on whatever you’re excited about” said Fred. And so I worked on two projects – one where we built data visualizations of distributions, and the other where we built a (Harry Potter themed!) demo data generator.
I had a really good time, and delivered two mostly complete projects that members of the business team have asked for again and again. I felt more productive than I had in the three weeks prior.
Mostly because I found flow in working on the projects. Both of the projects involved me stitching together bits of code, where each stitch had an immediate satisfying effect of making a visible bit of progress. It was also, by nature of the hackathon’s constraint, neatly self-contained pieces of work. My mind had been brewing on these ideas for a couple weeks already. Getting to execute and to push something on screen was a nice change of pace.
It was a good reminder amidst all the thinking and planning work that I’ve been doing at Sift that I am at heart a maker. I had gone too long in abstract work, and I needed that hands on work to lift my spirits.
It’s also good prompt to try to figure out a rhythm where I can alternate between being hands-on and being in planning mode. I am far happier this way, and it’ll probably be good for Sift. I guess this is the whole Maker’s Schedule, Manager’s Schedule thing. I have to find a rhythm that balance the two.