Tag: strategy

Podcast Idea: The Long View

The concept

Business leaders and executives are high powered, rapid decision engines, but we know very little about why, what and how they think. I want to look underneath the jargon-filled soundbites at what myths and beliefs inspire those decisions, how they live, how they understand themselves as actors on the grand stage, where they believe the next act will play out, and paths young people can take to create a decent future.

These are the people that shape our world, and I want to step back with them and take the long view.

Target interviewees

F500 CxOs, initially non-CEOs. Likely a focus on non-tech executives who already get a disproportionate amount of focus

How to execute

Initially do 6 over Skype and if they all work, publish simultaneously and do blogger/media/B school outreach. If successful, pitch to F500 CxOs and offer to come to their HQs and do a live interview with some of their high potentials and allow for Q/A from audience.

Sample questions

  • Did you always want to be a CxO?
  • I know you (insert some brief history), but tell me about your path to where you are now. (Follow up on how influential event affects how they view X)
  • What do you think about YOU caused you to end up at the top of a global organization, rather than XX?
  • How do you structure your day/time?
  • In any way of living there are tradeoffs, executives aren’t exempted. What are the major tradeoffs you feel you make in your life?
  • What do you see as your core purpose as ROLE at ORG?
  • What big theories are inspiring your work at ORG?
  • Who do you think are the brightest lights in the business/strategy/marketing/operations world?
  • What are the last 3 books you’ve read? (find out in advance and read them)
  • What are the 3 books that underpin your view the business and the world? (find out in advance and read them)
  • How do you see American enterprise’s role in the world?
  • What are the 3 greatest forces operating in the world right now? (Dig on positive/negative)
  • What are the 3 greatest challenges facing the world as you see it? (Dig on how they interpreted–welfare, growth, environment, etc)
  • What role do you see college playing in the future?
  • Given your view on X and Y, how should people think about prioritizing their careers?
  • If you were in a top business school, and dead set on climbing to a Fortune 500 C suite, what advice would you give yourself?
  • Will X exist in 10 years? 20?
  • If you could be a young person and move anywhere, where would it be and why?
  • In lots of ways, the status of large enterprises has fallen in American society’s estimation (exempting large tech orgs), do you think this is fair-compared to the status GE had in say the 70s?
  • Large orgs are often disparaged as slow and uninnovative. This is almost treated as a law of nature. What dynamics do you think give rise to this perception? In what ways is this perception false?

Is Effective Altruism Funding Constrained? A Case for Fundraising

Correction: I wasn’t 100% clear on the definition of funding constrained. I stand by my claim that EA orgs should at the margin think about fund raising more.

Is Effective Altruism Funding Constrained?

I posed this question to few folks at EA Global 2018 and got almost exclusively “No’s” in response. Many claimed that charities that work on AI risk are talent constrained— for example they weren’t sure MIRI could hire many more people if their funding 5X’d. I made the counterclaim that surely GiveWell was funding constrained, and was told that they weren’t because of their relationship with Good Ventures and OpenPhil. I’m not sure this is the case.

Good Ventures started with an endowment of $8.3 billion, which is no doubt a lot of money. Annual giving to US charities alone is approximately $400 billion. So even if GV/OpenPhil/GiveWell gave away all of that money tomorrow, EA giving would amount to less than 5% of annual giving by US charities.

Perhaps taking this relative approach isn’t exactly what EAs normally mean when they say funding constrained. But considering that the United Way—the largest charity in the US—gives away $3.5 billion per year, it’s probably time to start considering how to take share from organizations with good intentions but bad execution.

Fundraising likely receives too little attention from EAs because many are more technically oriented and fundraising feels at best fluffy and at worst like sales and marketing. As anyone who has worked in an engineering culture knows, sales is not respectable, at best it’s a necessary evil. Marketing is where buzzwords come from. Given these sorts of aesthetic predispositions, it’s not that surprising EAs have neglected trying to take share from less effective organizations.

But that doesn’t mean it’s the optimal strategy. Especially considering the low hanging fruit of simply copying the most effective fundraising strategies that look a lot like B2B enterprise sales motions. There are strategies that look more like marketing than sales which I may explore separately, but given the cost of sales is predominately time this is a place where EAs with sales aptitude could put in direct work and generate big results.

What Effective Fundraising Would Look Like

Direct Corporate Social Responsibility

Many Fortune 500 companies give away lots of money to causes that are somehow connected to their business and the communities they work in. These large causes have to be approved by very senior executives who are used to making decisions based on businesses cases that show ROI. Winning over CHROs and then the rest of the executive team would by no means be easy. Based on experience I’d guess it would take over a year of conversations.

The initial step would be to have folks with sales aptitude to try to book appointments with junior folks in a few target firms’ Corporate Social Responsibility departments and have big names from EA organizations give presentations.

Indirect CSR

Most F500s have some list of approved charities that they’ll match donations to. The list was created so that there would never be a PR scandal about an organization accidentally matching a donation to a terrorist group or similar. The strategy here would be to first get on those lists, but then to also try to shape criteria going forward for other orgs to get on the list (and perhaps for staying on the list). Those criteria would include effectiveness metrics to benefit EA orgs and steal share.

Government Grants

Getting government grants is a sales process I’m mostly unfamiliar with, but lots of people are and USAID gives away lots of money that EAs aren’t accessing right now.

Why Take Market Share?

EAs may generally be underconfident about their ability to deploy more money effectively, but surely we should be more confident that we can deploy a large share of global charitable giving more effectively than the least effective decile of charitable dollars which are actively harming people and communities. Additionally, creating a fundraising side of EA gives folks with sales and marketing aptitude a role in the community outside of earning to give. On the whole, taking market share from ineffective organizations would at least reduce harm caused, create new opportunities for EA orgs to deliver today, and more optimally utilize the human capital of the EA community.

 

Opportunity Flow

A Theory Of Moments That Can Change Your Trajectory

What is it?

Opportunity flow is to you and me what deal flow is to a VC firm. It is the sum of things like conversations about research breakthroughs a grad student friend had, the inside access to a job opportunity, and an old coworker pitching you to join her startup as a cofounder. (Although I’ll mostly be discussing in the context of paid work, it could be used avocationally or in personal relationships.)

Opportunity flow is the sum of moments that could alter the trajectory of your life. And like any sort of deal flow, depending on your investment hypothesis, you could consistently get opportunities to incrementally alter that trajectory or infrequently get the option to radically change. Most people land somewhere in between, but closer to the former.

Why is it an important concept?

If you can generate 1% more lifetime income or utility, then both you and the world will be richer and happier. While the concept of opportunity flow by itself likely won’t generate that, thinking in more structured ways about your future will.

Opportunity flow is an additional tool rather than a replacement for your other planning tools, as it will be high variance across both the population and at the individual level. However, even a small increase in opportunity identification and execution would increase global wealth and utility—which I believe is the most important moral consideration.

How to get started

Understand your risk profile.

Decide how much risk you are willing to take on. Are you simply looking for a new job or are you looking to invest a high percentage of your liquid net worth in a high risk venture? Most people will be in the middle. Decide if you will make many small bets or one big one.

Set aside your risk capital.

You will invest both time and money in generating opportunity flow. Initially, this will probably be writing down your ideas and previous work, reaching out to people who will mostly ignore you, going on awkward coffee meetings, and flying to events and meetings.  

The amount of time and money is clearly individual, but I would suggest setting aside more than feels comfortable. Once you have identified an opportunity you want to execute on, the time and money needed will be uncomfortable, so it’s best to start feeling that way now.

Be aware of all your skills. Not just your best or most obvious ones.

It’s easy to define your skillset as the graduate degree you have, or the function or industry you work in. However, in any high risk venture you will likely have to do a lot more than that anyway, so it’s best not to box yourself in from the jump. If you are a physicist, you can clearly do the statistics involved in forecasting. If you are a marketing person, but are willing to make sales calls, congratulations—you are now your venture’s salesperson.

Connect with people who have complementary skills—not people who are like you.

Many people looking to generate opportunity flow go to industry or functional events. This is fine as far as it goes if you’re looking to learn from whomever they could convince to speak. But if you’re looking for opportunity, don’t go to a place where there are a thousand people who proclaim to have the same expertise as you.

Go to where your skills are scarce. This could mean a researcher seeking out business types or someone from the developing world offering access to their market to a group of folks from the developed world. You will be rare and interesting, and opportunities will flow to you.

Come at problems from an angle.

If there is a problem that you understand, then seek out people who have no expertise in it, but have expertise in an adjacency. Look for people who deeply understand the first principles of the problem but likely have never considered your higher order problem. If you have an engineering problem, find a physicist. If you have a marketing problem, find a biologist. The flipside also works, if you have a psychology problem, find an art director from an ad agency.

If the people already working on your problem could have solved it, they already would have. And if they are going to solve it, then they likely won’t invite you into the room filled with people like you.

Privilege talent and passion, rather than a specific way of solving a problem (or even a specific problem).

This is a VC firm truism that probably doesn’t work for them. But I think it works for an individual’s opportunity flow. For VC firms, the number of people who have the talent and passion to dramatically alter the world is vanishingly small and their ability to identify them is…questionable. However, the number of people with the talent and passion to dramatically alter their own worlds is…well it isn’t vanishingly small. Fuck—it isn’t even small. Your ability to identify them is also likely much better.

If you find an opportunity with someone who is wildly smart with the passion to will their vision into existence, then I suggest you join them regardless of the problem they’re trying to solve.

A Travel Strategy For Understanding the Future

There are lots of guides to help you understand the past of a place—a fine and noble thing to do that will help you to understand the present. My approach to travel takes for granted that you can access enough a place’s history fairly easily, and can then move on to a more interesting question: how will its present shape the future?

Strategy:

Luckily, we already have a good starting skillset to predict a place’s future at least on a decade or so timeframe. When investigating a city, I find that the best mindset is to ask “would I want to live here?”, rather than aiming to understand the culture more broadly. I chose this starting point because we already try to predict the future of a place when we are deciding to live there or not. Given that most people seem reasonably happy with their choices and not continually surprised about the state of their chosen locale, this seemed a reasonable method. I suggest one minor tweak, rather than immediately asking about preferences, a better frame is “how would I live here”. Simply digging into the logistics of life now.

The questions I want answers to are:

  • How is economic value created?
  • What are the major industries?
  • What are the untapped opportunities?
  • Is there untapped human capital?
  • What are the best neighborhoods?
  • How do people spend their leisure time?
  • How does the exchange rate affect my purchasing power for products I care about the most?
  • How good are the bookstores?
  • How regulated is the average person’s life?
  • How hard is it to start a business?
  • Can you get decent coffee and beer?
  • Is late night street food diverse, cheap and delicious?
  • How optimistic about the future is the average person?

Tactics:

Note: these tactics apply primarily to the developed world.

My normal approach for visiting new cities is to stay in an Airbnb in an up and coming, hip neighborhood or the cheapest centrally located neighborhood—often they are the same. Airbnb is chosen because it provides a kind of domestic tourism—how is the home laid out, what sorts of appliances are being used, etc. I’ll try to eat at home for at least a few meals because then you get to navigate the different lay out of the grocery store and figure out its inventory, rather than simply walking around browsing, and you’ll get to use a new set of utensils and appliances.

Outside the home, I am normally forced to see the main tourist sights, which is perhaps not all bad for checking out the informal and formal tourist economy, but I would probably skip them if alone. As I’m interested in the culture and economy now, the hip neighborhoods of today provide more diversions and insights than museums to the past.

There are various angles you can take to find rapidly developing areas, but the following lenses tend to work:

Food

Reading food blogs tend to get you a really early in. Craft breweries provide insight into how well capital is finding good culinary opportunities. Searching for boutique hotels tends to put you in more developed areas given the different risk profile of building a hotel, but is also not a bad tack. Once in a burgeoning area, see how innovative versus derivative the food and drink scene is.

Startups

To find the tech scene, visit a startup accelerator and talk to people. Ask about the fundraising situation and exit opportunities. A quick walk around the central business district will provide you with a limited understanding of how money is moving through the city’s economy and fueling innovative production and consumption.

Immigration

Find immigrant neighborhoods and explore the markets and restaurants. These folks’ recent arrival means they can’t have affected the past, and they will have above average business creation rates, thus creating a higher than average share of the city’s future.

Human Capital

Go walk around the leading university in the city. Typically the academic buildings are unlocked and you can see the infrastructure and what sorts of things people are studying and doing in their leisure time. Visit a café or cafeteria and try to eavesdrop—English is pretty frequently used. Find the main student drag.

Art

Visual arts tend to be pretty accessible to tourists, so a visit to a high end art gallery will be fruitful. Especially note the commercial side—ask how much a piece is and evaluate that against how much you would pay. Concerts are harder to find and often feel more exclusionary, but music is a more rapidly evolving art and can give you a look at whether globalization has led to homogenization or productive innovation. Concerts also just tend to be more fun than art galleries.

Top Reads of 2017

These are the texts that caused view quakes or inspired/haunted me to the point where I had to recommend them.

Fiction

The End of Eddy by Edouard Louis

Picked up in Paris on a recommendation as a book that took France by storm. Absolutely gut wrenching, brutal and immiserating. Sort of like a French Hillbilly Elegy, if JD Vance were gay and had no extended family to intermittently rely on. Gave me insight strangely into a lot of rural, French (and maybe Western) culture and how inescapable it is for many. And a clearer idea on the “double consciousness” that those who escape have. My favorite novel since the equally, viscerally dark A Little Life.

Forest Dark by Nicole Krauss

It’s brilliant, like all of her work. Deep and generationally intertwined, about impermanence and eternity. Whatever all of her books are about—the power of narrative to tie people together across space and time. If you’re unfamiliar with Krauss, start with The History of Love—my favorite novel and one of the book I buy every time I see it, so I always have copies to give away.

The Chalk Artist by Allegra Goodman

Allegra Goodman is back to form, writing about tech and its discontents. I’ll always be a Cookbook Collector fanboy, but her latest book is more open about its loyalty to literature and education as a…shield, respite or solution to the modern world.

Nonfiction

Reasons and Persons by Derek Parfit

One line interpretation: focus on easy ways to maximize utility regardless of time, space and personal identity up to the point right before it makes you miserable. This interpretation inspired my Ethical Laffer Curve post.

I hesitate to say that this is the most important book I’ve ever read. But I have the impulse to say it. It’s certainly the most important book I read this year. Parfit makes the case for a utilitarianism that isn’t bound by time, space or personal identity. Parfit’s work is hard to summarize, but I’ll foolishly try: he makes the case that we are wrong to think of different people at the same time as fundamentally different as the same people at different times. Essentially that our past and future selves are as different from our present selves as other people. He then makes the case that if this is true, it affects utilitarian ethics substantially. In the same way that it is wrong to harm a different person, it becomes equally wrong to harm your future self (by smoking for example). I’m going to stop trying to summarize it because it’s a 400 page book of logical proofs and thought experiments.

We Were Eight Years in Power by Ta-Nehisi Coates

TC once praised another writer as having “courage to look dead-eyed at ideology and all its limitations without lapsing into nostalgia or cynicism” something he called “ice water vision” and wished that to be the quality he cultivated most. Me too. TC is one of the few writers/intellectuals I’ve had the privilege to watch develop because he was so open throughout his career at the Atlantic. If you haven’t followed him since the beginning, this is an absolute must. His most famous work, Between The World and Me is undeniably important, but WWEYIP is a better place to start.

The Hard Thing About Hard Things by Ben Horowitz

This is the best business book I’ve read in a while—maybe ever. An admittedly low bar. Ben puts on display the cutting intelligence, compassion and ruthlessness that has made Andreesen Horowitz the greatest venture capital firm of all time. His intro below does better than I could.

Inadequate Equilibria by Eliezer Yudkowsky

This book is an interesting look at why certain markets or institutions fail, and how to recognize failures that YOU can see and fix or exploit (often the same thing). Unfortunately, half of the book is really inside baseball stuff about modest epistemology—but that can for the most part be safely skimmed. Suffice it to say: taking the outside view is often appropriate, but sometimes an individual can do better–the book is about recognizing those times.

Eliezer is a strange dude. He founded one of the world’s foremost AI safety research organizations, but then decided that unless humanity became more rational then his work there wouldn’t matter. So he set about to “raise the sanity water line”. What a fucking insane thing. Strangely, he seems to have succeeded somewhat—his ideas have permeated influential thinkers and think tanks, and MIRI continues to hum and help lead AI safety research.

Online Reads

Stubborn Attachments by Tyler Cowen

The polymath economist of Marginal Revolution fame turns his lens on…ethics, or something like it. He makes the case for economic growth as a moral good above almost all else—excepting certain inviolable rights. And argues for a social discount rate of 0. In the 8 months since I read it, I’ve concluded that the optimal discount rate is non-zero, but very close to zero. Based on this disagreement, but with a lot of respect for Cowen’s framework, I propose a Portfolio Theory for Effective Altruism as a way to think about efforts with different levels of certainty and time scales.

I rank this as his best work, followed by MR, and finally his Great Stagnation series–I wonder whether he would agree.

Update: I asked Tyler and he agrees with my ranking.

Definite optimism as human capital by Dan Wang

This piece theorizes about how optimism might be a driving force of innovation. As in, people literally being optimistic that things can change for the better drives productivity growth. He attacks our current productivity slowdown from multiple weird, creative angles.

Neuralink and the Brain’s Magical Future by Tim Urban

Tim Urban is the writer Elon Musk calls when he wants the world to understand him. If you haven’t read his Elon Musk series, start at the beginning and end with this one.

THE 2017 STRATECHERY YEAR IN REVIEW by Ben Thompson

I’m cheating a little bit because I’m letting him curate his top 5, but Ben Thompson is probably the smartest person writing about strategy and tech (fuck, business in any sense) today. Everything he writes is worth reading.

How Much Should You Read?

I shoot to read about an hour a day. Falling short perhaps half of week days and often reading for multiple hours per weekend day. At any given time, I’m probably actively reading 5 books, with maybe an additional 5 cast aside. There are seemingly cultural and aesthetic reasons I endeavor to read this much, but really I read 7-10 hours per week, starting 20 books and finishing 5-10 per month because I currently believe:

  1. Reading books is the most efficient way to seem a lot smarter (both crystallized and fluid intelligence)
  2. There aren’t easy ways to separate seeming smart from being smart
  3. Being smart is beneficial in a knowledge economy
  4. So seeming smarter (than you are) is beneficial economically

If the above is true, then what is the optimal amount of reading a knowledge worker should do?

The largest returns will clearly go to someone who jumps from 0 books per month to 1 book per month. Carefully curated (acclaimed overviews of scientific fields, historical eras, groundbreaking economic texts, etc), 12 books a year would make you seem a whole lot smarter, able to make cross-disciplinary connections, and generally more engaged with the world. Choosing the initial 12 would also be quite easy to select because classic texts are relatively obvious.

Increasing your pace to 2-4 books per month will likely accelerate returns as you can more quickly build up a corpus of knowledge AND make connections between fields of knowledge faster. At 4 books per month (almost 50 books per year!) you will seem considerably smarter than you did before.

After perhaps 4 books per month, curation begins to be more challenging and in reality is difficult to sustain. I think this is the point of diminishing marginal returns and that each book over 4 increases “output” minimally.

I expect the economic returns of reading 2-4 books per month will be highest for people in client-facing or persuasive roles (sales, commercial banking, wealth management, business/corp development, fundraising, etc) and fields that value analytical horsepower (law, consulting, finance (IB, PE, HF) and tech/engineering), but should generally flow to any knowledge worker reading this much.

Ok, so read 2-4 books per month. Easy, right?

I’ll follow up with a post on approximating the economic return on reading, why people don’t read what seems to be the optimal amount, and whether I need to update my belief that the above argument is correct.