Category Archives: Uncategorized

Fun hobby of the week: Twitter-tracking dirty words

Step 1: Sign up for Twitter and link it to one of your instant messaging accounts.

Step 2: Read this.

Step 3: Set Twitter to track a dozen of the dirtiest, nastiest words you can think of.

Step 4: Soak in the glorious river of humanity.

Just a few from the last couple minutes:

(cleversimon): It’s “conscience,” not “conscious.” For f***’s sake.

(crummy_cupcake): Ant crawling across my glasses. Now I itch everywhere. F*** me.

(oncogenetic): Let me give a s*** about your tiny problem. Waah, you scratched your hand.

(ennn): Yeah, tell me how I’m not taking on enough work for [company name omitted] when I’m running on an hour of sleep after 2 midterms. F*** this.

(jeangrey): my neighbour started renovating too! freaking hammer sounds alllllll morning. F***!

(glyn): Ah f*** who am I kidding, cheap whiskey you are TOTALLY the boss of me

(vaspers): @[name removed] – You’re trolling me. You put words in my mouth, you ignore my explanations. You keep making wild accusations. F*** you, sir.

(justkatehere): Just told a boy who sorely deserved it to go f*** himself. I feel like a rockstar. JAZZ HANDS!!!!

And one I often agree with:

(AkanahJebez): hey what the f***. how am i awake.

Disclaimer: I am a small angel investor in Twitter. Which by no means reduces the amount of enjoyment I am getting out of my new fun hobby.

OK, you’re right, it IS a bubble

[IMPORTANT WARNING: What follows is satire. I’m NOT being serious. Except for one paragraph at the very end. See if you can spot that one.]

When I first started this blog four months ago, one of the first substantive posts I wrote was called “Bubbles on the brain”.

In it, I attempted to use “logic” to explain the reasons we are most likely not in another dot com bubble.

Since that time, talk of a new dot com bubble or Web 2.0 bubble or Internet bubble has only escalated in volume and intensity.

OK.

You’re right.

It’s a bubble.

A huge, massive, inflating bubble.

We’re all doomed.

Doomed, I say!

DOOMED!

It can’t last.

It won’t last.

It can’t won’t not last.

Here we sit, with over $7 billion in venture funding this year chasing exactly zero good ideas.

Paid keyword ads? All BS. Once users figure out those things on the side of the page aren’t natural search results, that’s it, no more click-throughs. Pop goes the souffle.

Ad targeting? Snort. The creme de la creme for Internet advertising, so to speak, is those acne cream banner ads you see all over Facebook. That’s it. That’s the best Internet advertising will ever be. Get used to the bottom of the barrel, suckers.

Subscription fees? Premium services? Ecommerce? Sponsorships? Mobile advertising? Mobile fee-based services? New hosting models? Video advertising? Music subscription services? In-game advertising? Massively multiplayer games? Digital gifts? Affiliate bounties? HA! Don’t make me laugh. Oh, wait — YOU JUST DID.

So people everywhere are flocking to these newfangled trendoid web sites by the tens of millions and spend hundreds of millions or billions of hours on them every month. So what. It’s all a big fad. Think hula hoops. Pet rocks. The macarena. The clock is ticking, and the 15 minutes is almost up.

Move along, move along, nothing to see here.

These are not the droids you’re looking for.

Venture capitalists? All stupid, and unnecessary to boot. Everyone knows that you shouldn’t need to raise more than $5.37 in loose change to start a new web business. I mean, c’mon.

Entrepreneurs? Smoking dope. What are they thinking? Why aren’t they all working for Apple, helping to build a fatter Nano? What’s wrong with them? Potsmoking, mussed-hair, rooftop party-going, trendy glasses-wearing, sandal-clad, Red Bull-snorting, laid-getting wankers, the lot of ’em. The sooner they realize the world never changes and there are no new opportunities to pursue, the better.

Facebook apps? Good God. So they spread virally to millions of users in a matter of weeks. Not worth anything. Everyone knows that. Can’t possibly build a business. I mean, don’t you realize what else can spread to millions of people in a matter of weeks? Do you want to catch any of those? I don’t think so!

Call off the dogs.

It’s all over.

Stick a fork in it.

It has ceased to be.

The metabolically-differenced lady has sung.

Right now this industry is just like Wile E. Coyote in the old Road Runner cartoons, ran out over the edge of the cliff, hanging in midair, gravity just about to kick in.

Think Acme servers.

Where’s it all going from here?

Now that I’ve raised a monster Series C round for my own company, all other funding of all other startups will immediately cease. No new competitors to my company need be started. There’s certainly no major opportunity in what we’re doing; why go after your fair share of a $0 dollar market?

Further, now that my company is in a rapid viral growth loop, will all the users please stop using anything new that comes along. And while you’re at it, stop using most everything else also, please. Cut it out with the fads already. Posthaste. Chop chop.

Venture capitalists, I don’t think I need to tell you what to do. OK, I do. Hand back the money you’ve raised from LPs. Quickly. Quietly. OK, now step away. Don’t make any sudden moves. Back out of the office park, slowly, slowly. Hey, look at the bright side — carried interest finally getting taxed properly won’t affect you anymore! And now you will have time to play 250 rounds of golf a year instead of just 225, and you can focus on getting your Porsche 911’s retrofitted to run on ethanol.

All you other startups funded in the last three years? Punt. Now. Liquidate the company — get whatever cash you can for the Aeron chairs and the foosball tables and the lava lamps and the RAID arrays and shut down now, hand the cash back to the investors, preferably on fire, and leave town, head down, in shame. All those young programmers and product managers can go get jobs in retail footwear where they belong.

You big companies — you eBays, you Yahoos, you Googles, you Amazons? Yes, and you, Microsoft? Think the new new B2B — back to boring. What’s with all these new products? The world is confusing enough. Shut ’em down and let’s go back to the good old days: Windows ME, Mac OS 9, dialup modems, and 640 megabytes ought to be enough for everyone. You’re just screwing us all over with all this new fancy broadband video-enabled phone-call-making wifi web-based lightweight touch-interface gorgeous long-battery-life flimflam — just look at how you keep dropping the damn prices. I knew I’d be better off not buying any of it, ever. The class action lawsuits are in the mail. And for God’s sake, raise your dividends — what, you think there’s any growth left in this industry? Fools. When the great shareholder revolt comes, you’ll be first up against the wall.

You wanton scribblers of what will now once again be referred to as the “press”, as everyone suddenly goes back to reading the news on smudgy-inked paper — start cranking up the I told you so stories. You know you’ve been wanting to tell ’em — here’s your big chance! Pulitzer is waiting.

The sooner we all get back to 2003, when the few surviving companies had huge giant markets all to themselves, with no competition anywhere in sight, because everyone knew the world had come to an end, the better.

I will accept your applause and gratitude in the form of immediate compliance.

Thank you.

Quote of the week: Filmmaker Ridley Scott on his first three creative projects


[E]very time you do a movie, in fact, the more experience you get, you can almost say, the less you know. Because the more you know, the more can go wrong. So that can also make you more insecure. But I guess I don’t really worry about much. I just try and do the best I can on the set.

[At the time I made Blade Runner], I’m in three movies. I mean [Blade Runner] is my third movie. My first movie is pretty good actually, calledThe Duellists. And that was criticized for being too beautiful, and you know, I took that to heart. So the next one was Alien, and that was less beautiful but more impressive and more grungy. I was criticized for a lack of character development. I said, “What fucking character development do you need when you’ve got that son of a bitch on board?”

So I started getting defensive, then realized actually I was in fairly good shape in terms of being a film director, because for the kind of movies that I will do, I will be always very visual. And I won’t push it in your face, but I know it’s an advantage. I’ve got a good eye, and I don’t know what a good eye means, but I’ve got a good eye, I think. I can align and see way beforehand, imagine way beforehand, what’s going to be. That’s good, that’s very useful. Because some people don’t have that, they [need to have] other talents.

I’ve had to evolve my capabilities in developing material… Alien I was sent, and I read it and thought, “I know what to do with this,” and didn’t want to change anything. Because they kept saying, “Want to change anything?” “Nope.” They said, “No?” I said, “No. That’s it. Let’s go.” So that was great, because that flew.

And then Blade Runner was the play, which then evolved for eight months every day. [The writer] and I and [the producer] every day talked, talked, talked, talked. As [the producer] was trying to get the financing, the film was growing. And that was interesting because that was a real evolution of working alongside a writer that I really respect. And it was hard for him because sometimes he’d say “Oh fuck.” I’d suddenly have this brain wave that comes from a visual notion. We’d get a lot of, “Oh God, I thought we had that worked out.” I said, “Yeah, but wouldn’t this be great?” And he’d say, “Yeah, but that will mean this, this, this, and this.” [And] then there’s a domino effect…

From Wired.

12 questions for the producers of the new Bionic Woman

Not even remotely in order of importance:

     

  • Any organization that developed biomedical technology for instant healing and flawless body part replacement — technology 20 years ahead of its time — would be able to license it and generate hundreds of billions of dollars of income very quickly. Instead, they keep it secret and derive no real value from it. Why?

     

    (On behalf of my childhood, I would also like to extend this same question to the producers of Knight Rider and Airwolf.)

  •  

     

  • What is a “private” company doing running around the continental United States fighting terrorists? What happened to the FBI? Hello? Did all the American intelligence satellites all of a sudden stop working so the feds can’t see your commandos running around that village where everyone died from a bioweapons attack? I mean, I know the Bush administration is incompetent, but did the federal government completely vanish?
  •  

     

  • Exactly how poorly run is such an organization that it has no in-house commandos and needs to “call Halliburton” to rent some mercenaries? Hello?
  •  

     

  • Speaking of mismanagement, how did Jonas, the boss dude, go from menacing creep in the pilot to cuddly good guy by the second episode?
  •  

     

  • Is there some new rule that all the boss dudes of American paramilitary outfits have to be named Jonas now? Haven’t you seen The Unit? Will the bad guys all be named “The Whale” from now on?
  •  

     

  • Speaking of The Unit, what exactly is the point of having an untrained, undisciplined, uneducated amateur prone to crying, complaining, and rejecting missions as your lead superagent, versus, say, a normal Special Forces A-team? The fact that she can see people’s eyeballs real good and punch through drywall? I’m not quite catching the cost/benefit equation here. Have you really thought this through?

     

     

  • So, you’re a young woman so smart and well educated that you were “accepted to Harvard” but you couldn’t go because your shiftless father dumped your whiny teenage sister on your doorstep and you have to take care of her. What logic would you use to conclude that being a bartenderwould be the ideal job for that situation? Hello? Bartenders work at night, you moron! Wouldn’t you want practically any other job that would have you working during the day while your sister is at school? Does Harvard know about this? Have they asked you to send back that acceptance letter?
  •  

     

  • You don’t have time to take night classes (or, taking into account your dumb-ass bartending job, day classes) but you have time to be a travelling bionic superagent?
  •  

     

  • Why would you hire that creepy gay-basher dude from Desperate HousewivesWhy? Was no one else available? A short list of more compelling alternative actors: Scott Baio, Corey Haim, Corey Feldman, Danny Bonaduce, that pudgy Brady Bunch guy Adrienne Curry is married to, Estelle Getty, Verne Troyer. I’m just saying.
  •  

     

  • 1972 Pontiac GTO Judge? 1972? Your production budget couldn’t afford a’71? Hello?
  •  

     

  • How great is it that I am now a paying customer of primetime network shows — by virtue of buying them from Amazon Unbox or iTunes instead of watching them on TV — and that as a paying customer I feel much more entitled to complain openly about the value I am receiving for my entertainment dollar (or $1.99)?

     

    Did I mention I’m a paying customer? I demand satisfaction.

  •  

     

  • Why do I know I’m going to keep watching this show?

The web and mainstream consumer behavior in 2007

Henry Blodget recently recapped the results of a new Avenue A/Razorfish survey of broad-based consumer behavior (“all demographics”) conducted in July.

Henry painted some of the survey results as evidence of poor consumer uptake of certain web businesses and trends. What follows is the content from his post but with all results expressed as % of adoption (as opposed to % of lack of adoption).

Henry has a point that some of these numbers look high, if truly measured against “all demographics”, but on the other hand I’ve seen instance after instance over the last 10 years where actual consumer adoption curves of new technologies — especially new Internet technologies — have been way ahead of where elite opinion assumed them to be.

Web behavior:

     

  • 60% personalize home pages
  •  

     

  • 53% share bookmarks
  •  

     

  • 56% use RSS feeds
  •  

     

  • 35% use tag clouds
  •  

     

  • Almost all read the “most popular” or “most emailed” items on sites
  •  

Video behavior:

     

  • 67% regularly watch videos on YouTube, etc.
  •  

     

  • 95% have watched online videos in the last 3 months
  •  

     

  • 49% have uploaded online videos in the last 3 months
  •  

     

  • 85% have watched online movie previews in last 3 months
  •  

     

  • 71% have watched a TV show online in the last 3 months
  •  

Music, photos, and blogs:

     

  • 42% regularly purchase music online
  •  

     

  • 41% use photo-sharing sites
  •  

     

  • 70% read blogs regularly
  •  

Online research when making product selection decisions:

     

  • 92%+ use the web when making product buying decisions (research, reviews, retailer location, price comparison, etc.)
  •  

     

  • 54% start their product research at a search engine
  •  

     

  • 14% start it at a comparison shopping engine
  •  

     

  • 30% start it at an e-commerce or retailer site
  •  

     

  • 55% rely on user reviews most when choosing products
  •  

     

  • 21% rely on expert reviews most
  •  

     

  • After product selected, most important criteria when choosing where to buy are price (38%) and site reputation (38%)
  •  

Mobile:

     

  • 32% use mobile phone to listen to music
  •  

     

  • 24% use mobile phone to watch video
  •  

     

  • 36% use mobile phone to check headlines

Social networking and the Geocities fallacy

When I take someone through Ning for the first time, 49 out of 50 people look up at some point and say brightly, “Oh! It’s like I can have my own Facebook!” or “my own Myspace!” or “my own Youtube!”. And I say “yes!”, smile, nod, and continue.

But every once in a while, I’ll take someone through Ning and he or she will look up at some point and say brightly, “Oh! It’s just like Geocities!” And I say nothing, fake smile, grit my teeth, and resist the urge to throw myself out of the window.

A Geocities analogy to Ning, or any modern social networking service, is so screamingly wrong that I thought time passing — and more people using social networking services — would fix the small but nagging problem automatically.

I was incorrect.

This week, the meme spread into the Wall Street Journal and into Steve Ballmer’s stump speech — two normally credible public entities, comparing Facebook to Geocities.

First, the Wall Street Journal:

[The] ur-Facebook of 1994 was called GeoCities. And both its rise and fall are a history lesson for [Facebook founder Mark] Zuckerberg as his social-networking site… approaches its own crossroads…

Back then, entries were known as home pages, not profiles. But the basic, expressive elements of today’s Facebook and competitor MySpace, owned by News Corp., were all right there.

“It’s the same as it is today — people want to feel like they’re connected,” says Mr. Bohnett, now a 51-year-old venture capitalist…

“I knew right from the beginning that this was going to be big,” he says.

And then Mr. Ballmer:

Mr. Ballmer also noted that sites such as Geocities, an online community that was bought for $3 billion by Yahoo! in 1999, at the height of the dot-com boom, “had most of what Facebook has.”

Rather than throw myself out of the window, let’s kill this silly analogy here and now.

Geocities was nothing like Facebook — or Ning — or any other modern social networking service.

Point #1: if Geocities was basically Facebook before Facebook existed, then Yahoo today would be, basically, Facebook. Social networking services inherently have network effects due to viral growth; the big tend to get bigger (unless they commit suicide); Geocities the hypothetical ur-social network would therefore today be absolutely enormous; Yahoo owns Geocities. Yahoo, some people have pointedout recently, is not Facebook.

But here’s the real point — point #2 — which I will make by presenting three lists.

The Geocities feature set from the 1990’s (complete):

     

  • Personal home pages
  •  

     

  • Image uploading
  •  

(Yes, that was it.)

The Facebook feature set in 2007 (partial):

     

  • Personal home pages
  •  

     

  • Image uploading
  •  

     

  • Friends and the social graph
  •  

     

  • Profiles with structured, indexed profile information
  •  

     

  • Status updates
  •  

     

  • Messaging
  •  

     

  • Walls
  •  

     

  • Pokes
  •  

     

  • Groups
  •  

     

  • Discussions
  •  

     

  • Search
  •  

     

  • Video uploading
  •  

     

  • Events
  •  

     

  • Marketplace
  •  

     

  • Polls
  •  

     

  • Notifications and feeds system-wide
  •  

     

  • Mobile feeds
  •  

     

  • Invitations and contact importing — creating a viral loop that causes users to propagate Facebook to their friends and colleagues
  •  

     

  • A full level two Internet platform featuring…
  •  

     

  • Plug-in API to inject third-party features/apps into Facebook
  •  

     

  • Data access API for third-party features/apps to draw on Facebook data
  •  

     

  • FQL query language
  •  

     

  • FBML markup language
  •  

     

  • SDKs in multiple programming languages
  •  

     

  • Caching for performance optimization of third-party app content
  •  

     

  • Integration with personal profile pages
  •  

     

  • Integration with notifications and feeds
  •  

     

  • Third-party app directory and popularity board
  •  

     

  • Vibrant third-party app ecosystem
  •  

     

  • A rich and ever-expanding pipeline of new developer and user features
  •  

The Ning feature set in 2007 (partial):

     

  • Personal home pages
  •  

     

  • Image uploading
  •  

     

  • Friends and social graphs
  •  

     

  • Profiles with structured, indexed profile information
  •  

     

  • Messaging
  •  

     

  • Walls
  •  

     

  • Groups
  •  

     

  • Discussions
  •  

     

  • Blogs
  •  

     

  • Search
  •  

     

  • Video uploading
  •  

     

  • Music uploading
  •  

     

  • Email and mobile content uploading of text, photos, and video
  •  

     

  • Invitations and contact importing — creating a viral loop that causes users to propagate Ning to their friends and colleagues
  •  

     

  • “Create your own social network for anything” — with over 100,000 networks created so far, and growing fast — featuring…
  •  

     

  • Privacy controls per network — make your network public, private, or anything in between
  •  

     

  • Latest activity feeds per network
  •  

     

  • “Who’s online right now” per network
  •  

     

  • Full content moderation per network
  •  

     

  • Autogenerated branded photo, video, and music widgets for embedding on third-party sites and blogs
  •  

     

  • Autogenerated branded photo, video, and music Facebook modules for embedding within Facebook
  •  

     

  • Autogenerated RSS and Atom feeds
  •  

     

  • Fully internationalized network experience that any user can translate into any language
  •  

     

  • Premium services to easily buy the right to run your own ads, your own domain name, etc.
  •  

     

  • A full level three Internet platform for network customization featuring…
  •  

     

  • Social network customization via point and click configuration
  •  

     

  • Social network customization via custom CSS, HTML, and embeds
  •  

     

  • Social network customization via source code modification of existing network modules
  •  

     

  • Social network customization via source code creation of new network modules
  •  

     

  • Social network customization via comprehensive PHP and Javascript APIs for arbitrary app development
  •  

     

  • Social network customization via a comprehensive REST web services API for arbitrary internal or external programming
  •  

     

  • Sandboxed, scalable server-side PHP script runtime environment
  •  

     

  • Scalable, semistructured, object-oriented content store with full search and indexing
  •  

     

  • Extensive suite of underlying system services for all user and system functionality exposed through REST, PHP, and Javascript APIs
  •  

     

  • Rapidly growing base of network-customizing users

     

     

  • A rich and ever-expanding pipeline of new network, developer, and user features
  •  

This stuff really matters. The heart of a social networking environment is the ability for people to connect and communicate — users love that, and Geocities didn’t have it. Plus, Facebook and Ning are both platforms that allow end users to programmatically add features without the approval or even awareness of the platform provider — users love that, and Geocities didn’t have it. Plus, Facebook and Ning both have increasingly sophisticated multimedia and mobile capabilities — users love those, and Geocities didn’t have them. In short, other than the ability to create a web page and post an image, Geocities had none of the functionality of a modern, sophisticated social networking service like Facebook or Ning.

Now, I assume that the Wall Street Journal reporter in question is smarter than his story. Or perhaps his story was really that if you call up the founder of Geocities in 2007 and ask him if he invented social networking in 1994, the answer is yes — although I assume Mr. Bohnett was simply quoted out of context. (By the way, I also invented social networking — one year earlier, in 1993! Mosaic let you have a personal home page and display images… QED.)

Mr. Ballmer, on the other hand, may be spinning. Why would I suggest that? First, he is currently negotiating to acquire a major stake in Facebook at a very high valuation, and may be trying to talk the price down — I’m just speculating. Second, hours after Mr. Ballmer’s statement in the UK, Microsoft announced, guess what:

…a MySpace-style social-networking site [for music]…

The defense rests.

The Pmarca Guide to Career Planning, part 3: Where to go and why

When picking an industry to enter, my favorite rule of thumb is this:

Pick an industry where the founders of the industry — the founders of the important companies in the industry — are still alive and actively involved.

This is easy to figure out — just look at the CEO, chairman or chairwoman, and board of directors for the major companies in the industry.

If the founders of the companies are currently serving as CEO, chairman or chairwoman, or board member of their companies, it’s a good industry to enter. It is probably still young and vital, and there are probably still opportunities to exploit all over the place, either at those companies or at new companies in that industry.

If not — if the industry’s founders are dead, or old and out of touch — beware. That industry is now dominated by companies that are being run by second or third or even fourth generation managers who inherited their companies pre-built, and are serving as caretakers.

If you are young and want to have an impact, you want to be in an industry where there is a lot of growth and change and flux and opportunity.

As an industry ages, the vitality drains out until all that’s left is a set of ossified remnants in the form of oligopolostic entities of which you would find being a part to be completely soul-killing.

The exception comes when an industry has gotten so old and ossified that the clear opportunity exists to up-end it and introduce a new order, a new way of doing things, and therefore a new set of companies.

In some industries this happens routinely — e.g. every 10-20 years. This is the case in technology, for example, and financial services.

It doesn’t seem to happen ever in certain other industries which I won’t name for fear of being permanently cut off from my necessary supply of oil, gas, music, and movies.

If you’re going to enter an old industry, make sure to do it on the side of the forces of radical change that threaten to up-end the existing order — and make sure that those forces of change have a reasonable chance at succeeding.

Second rule of thumb:

Once you have picked an industry, get right to the center of it as fast as you possibly can.

Your target is the core of change and opportunity — figure out where the action is and head there, and do not delay your progress for extraneous opportunities, no matter how lucrative they might be.

Never worry about being a small fish in a big pond. Being a big fish in a small pond sucks — you will hit the ceiling on what you can achieve quickly, and nobody will care. Optimize at all times for being in the most dynamic and exciting pond you can find. That is where the great opportunities can be found.

Apply this rule when selecting which company to go to. Go to the company where all the action is happening.

Or, if you are going to join a startup or start your own company, always make sure that your startup is aimed at the largest and most interesting opportunity available — the new markets that are growing fast and changing rapidly.

Also apply this rule when selecting which city to live in. Go to the city where all the action is happening.

For technology, at least in the US, this is Silicon Valley. For entertainment, this is Los Angeles. For politics, Washington DC. For coffee, Seattle. For financial services, New York — unless you are convinced that there are equally compelling opportunities someplace else, like London or Hong Kong or Shanghai.

In my opinion, living anywhere other than the center of your industry is a mistake. A lot of people — those who don’t live in that place — don’t want to hear it. But it’s true. Geographic locality is still — even in the age of the Internet — critically important if you want to maximize your access to the best companies, the best people, and the best opportunities. You can always cite exceptions, but that’s what they are: exceptions.

No one cares who the top filmmaker in Chicago is — hell, people often don’t even care who the top filmmaker in New York is, and quite a lot of films get made out of New York. On the other hand, the top 50 filmmakers in Los Angeles are all very important people in their industry.

Let’s flavor all of the above with a little nuance:

“Current importance” may not be the same as “greatest change”.

Whenever you believe that the currently dominant companies, or cities, are not the places of greatest change and opportunity, you have a decision to make.

Perhaps New York, while clearly the financial services capital of the world, is not the place of greatest opportunity for someone new. Perhaps, for you, that would be Dubai, or Buenos Aires, or Prague, or Macau.

And perhaps Goldman Sachs, Morgan Stanley, Lehman Brothers, Citigroup, and JP Morgan Chase, while clearly the most important financial services companies in the world, are not the companies of greatest opportunity for someone new. Perhaps, for you, that’s a totally different kind of financial services company, like Paypal.

Then you have a decision to make — whether to tilt a little conservative and stick with the currently most important place and companies under the rationale that they are still the major agents of change in the industry, or tilt aggressive and go someplace or to some firm that’s up and coming and might represent disruptive change and therefore even greater opportunity.

Either way, to quote Pink Floyd, “set the controls for the heart of the sun” — be sure you’re heading where the action is, where the biggest opportunities in your field are, as you’ve chosen to think about it. Don’t fart around in second and third tier companies that don’t have a clear mission to dominate their markets.

Third rule:

In a rapidly changing field like technology, the best place to get experience when you’re starting out is in younger, high-growth companies.

(This is not necessarily true in older and more established industries, but those aren’t the industries we’re talking about.)

There are a bunch of great things that you get when you go to a younger, high-growth company:

     

  • You’ll get to do lots of stuff. There will be so much stuff to do in the company that you’ll be able to do as much of it as you can possibly handle. Which means you’ll gain skills and experience very quickly.
  •  

     

  • You’ll probably get promoted quickly. Fast-growing companies are characterized by a chronic lack of people who can step up to all the important new leadership jobs that are being created all the time. If you are aggressive and performing well, promotions will come quickly and easily.
  •  

     

  • You’ll get used to being in a high-energy, rapidly-changing environment with sharp people and high expectations. It’s like training for a marathon while wearing ankle weights — if you ever end up going to a big company, you’ll blow everyone away. And if you ever go to a startup, you’ll be ready for the intensity.
  •  

     

  • Reputational benefit. Having Silicon Graphics from the early 90’s, or Netscape from the mid-90’s, or eBay from the late 90’s, or Paypal from the early 00’s, or Google from the mid-00’s on your resume is as valuable as any advanced degree — it’s a permanent source of credibility.
  •  

In contrast to going to a big company: working for a big company teaches you how to work for big companies. The way things work at a big company is usually unique to big companies. So, working for a big company is often a statement that you plan to spend your career at big companies — and lots of people are very happy doing that, but I doubt that’s your intention or you wouldn’t be reading this post.

In contrast to going to a startup: when you are first starting your career, you should realize that raw startups are highly variable in terms of the experiences you will have. Some can be great, but many are very poorly managed and go nowhere. You will probably be better off going somewhere that’s already succeeding, gain skills and experience, and then go to a startup.

In contrast to going to a mediocre small or mid-sized company that’s not growing: those are great places to go if you don’t want to go anywhere yourself. If you find yourself stuck in one, either figure out how to get the company unstuck and on a fast growth path, or get yourself unstuck.

There is a caveat to all this, which is as follows:

Don’t just be a “summertime soldier” — don’t go someplace because it’s already successful, and then bail when things get tough.

Any hiring manager for the rest of your career will be able to read that on your resume just by looking at the dates.

High-growth companies virtually always hit speed bumps, or even huge potholes.Stuff goes wrong. Going through the experience of gutting through the hard parts and coming out the other end will be a key part of your real-world education and will serve you very well down the road, especially if you ever start your own company.

Then, once you’ve racked up killer skills and experiences at a high-growth company, feel free to go to a startup.

Picking which startup to join probably deserves its own post. However, in a nutshell,look for one where you understand the product, see how it might fit into a very large market, and really like and respect the people who are already there.

Or, start your own company.

If your startup fails, try another one. If that one fails, get back into a high-growth company to reset your resume and get more skills and experiences. Then start another company. Repeat as necessary until you change the world.

Finally, every job you take and every role you fill will always be a tactical opportunity and a strategic opportunity.

The tactical opportunity is obvious: kick ass and take names — gain skills and experiences that will be valuable to you in the future, and do so well that everyone you work with is singing your praises for decades to come.

The strategic opportunity is less obvious and often overlooked.

Every job, every role, every company you go to is an opportunity to learn how a business works and how an industry works.

Learn everything you can about the business and the industry in which you find yourself.

Think strategically: how would I start a firm like this today? Or, if I were starting a company in this industry today, how would it be different than this firm? Why is this firm and other firms in this industry doing what they do? What are the assumptions underneath their behavior? Should those assumptions be changing? How might this industry work differently? Which customers are being underserved? What new technologies might change things completely? How were things working 10 years ago, versus today, versus 10 years from now? And, my favorite: if the creators of this industry were starting out today, what would they be doing now?

In FX’s great new series Damages, a young attorney named Ellen Parsons has gone to work for a famous law firm called Hewes and Associates, run by the legendary, ruthless, and amoral Patty Hewes. Ellen, rattled by the intensity of her experience at Hewes and Associates, asks her mentor Hollis Nye what she should do:

Hollis Nye: My advice to you, Ellen, is to stop trying to figure Patty out. You’ll never change her, but she’ll change you.

Ellen: How?

Nye: By giving you access to how she thinks. You signed up for this; now, keep your head down, and do the work. That’s why you’re there, isn’t it?

Ellen: Yes.

Nye: Then don’t be shortsighted. Start using her. Learn everything you can, then get the hell out of there before it’s too late.

Ellen: How exactly will I know when that is?

Nye: Ah. That’s for another walk.

…and another post.

On Steve Ballmer on social networks

Via the UK Times:

“I think these things [social networks] are going to have some legs, and yet there’s a faddishness, a faddish nature about anything that basically appeals to younger people,” Mr. Ballmer told Times Online yesterday.

Ballmer subsequently added:

“I think these things [talking motion pictures] are going to have some legs, and yet there’s a faddishness, a faddish nature about anything that basically appeals to younger people.”

“I think these things [televisions] are going to have some legs, and yet there’s a faddishness, a faddish nature about anything that basically appeals to younger people.”

“I think these things [rock and roll music] are going to have some legs, and yet there’s a faddishness, a faddish nature about anything that basically appeals to younger people.”

“I think these things [hip hop music] are going to have some legs, and yet there’s a faddishness, a faddish nature about anything that basically appeals to younger people.”

“I think these things [fast food restaurants] are going to have some legs, and yet there’s a faddishness, a faddish nature about anything that basically appeals to younger people.”

“I think these things [bikinis] are going to have some legs, and yet there’s a faddishness, a faddish nature about anything that basically appeals to younger people.”

“I think these things [cars] are going to have some legs, and yet there’s a faddishness, a faddish nature about anything that basically appeals to younger people.”

“I think these things [typewriters] are going to have some legs, and yet there’s a faddishness, a faddish nature about anything that basically appeals to younger people.”

“I think these things [digital music players] are going to have some legs, and yet there’s a faddishness, a faddish nature about anything that basically appeals to younger people.”

“I think these things [mobile phones] are going to have some legs, and yet there’s a faddishness, a faddish nature about anything that basically appeals to younger people.”

“I think these things are going to have some legs, and yet there’s a faddishness, a faddish nature about anything that basically appeals to younger people.”

“I think these things [search engines] are going to have some legs, and yet there’s a faddishness, a faddish nature about anything that basically appeals to younger people.”

“I think this thing [the web] is going to have some legs, and yet there’s a faddishness, a faddish nature about anything that basically appeals to younger people.”

And finally:

“I think these things [personal computers] are going to have some legs, and yet there’s a faddishness, a faddish nature about anything that basically appeals to younger people.”

The Pmarca Guide to Career Planning, part 2: Skills and education

[Please read my opening disclaimers. Note especially that these are only personalviews; I am not trying to malign anyone else’s choice of career or education path. These are simply the things I would want to be told if I were entering college today.]

This post discusses skills acquisition throughout your lifetime, including your formal education. So I will start with college and move on from there.

What should I study in college?

Some people argue that college will be your one chance in life to pursue your passion — to spend four years doing nothing but studying whatever you love the most, whether that’s Renaissance literature or existential philosophy.

I disagree.

If you intend to have an impact on the world, the faster you start developing concrete skills that will be useful in the real world, the better — and your undergrad degree is a great place to start. Once you get into the real world and you’re primed for success, then you can pursue your passion.

A typical liberal arts degree will be almost useless on its own. So you usually won’t have the option of immediately entering the workforce in a high-impact way when you graduate, and you’ll have to go get a useful graduate degree.

And even if you are already planning to get a useful graduate degree, you are much better off combining it with a substantive undergraduate degree — thereby becoming a “double threat”. More on this in a bit.

Which undergraduate degrees are useful in the real world?

Typically, those that have a technical element of some form — that teach you how to do something substantive.

Engineering degrees obviously qualify. The current myth that engineering and computer science degrees are less useful because all the jobs are going to India and China is silliness; ignore it.

Hard science degrees — physics, chemistry — also clearly qualify, as do mathematics and economics.

Why do I take this stance?

     

  • Technical degrees teach you how to do something difficult and useful that matters in the real world. Even if you don’t end up actually doing what the degree teaches you how to do, going through the experience of learning how to do it will help you go through other serious learning experiences in your career. Complexity and difficulty will not faze you.
  •  

     

  • Plus, technical degrees teach you how think like an engineer, a scientist, an economist, or a mathematician — how to use reason, logic, and data. This is incredibly useful in the real world, which generally demands rigorous thinking on the path to doing anything big.
  •  

     

  • Plus, technical degrees indicate seriousness of purpose to future employers and partners. You get coded right up front as someone who is intent on doing real things.
  •  

Graduating with a technical degree is like heading out into the real world armed with an assault rifle instead of a dull knife. Don’t miss that opportunity because of some fuzzy romanticized view of liberal arts broadening your horizons.

What graduate degrees are useful in the real world?

Generally, if you have a useful undergrad degree, I think graduate degrees are overrated. You can usually hit the workforce in a real job with just an undergraduate degree and progress rapidly according to your own ability and energy from there.

Of course, you’re hearing this from someone who could barely stand to stay in school long enough to finish undergrad, so take that for what it’s worth.

If you don’t have a useful undergrad degree, then a useful graduate degree isdefinitely a great idea. Business, math, economics, science — something practical, substantive.

Quite a few people in business have paired a liberal arts undergrad degree with an MBA. They seem to do just fine. But I think that’s a missed opportunity — much better would be an MBA on top of an engineering or math undergraduate degree. People with that combination are invaluable, and there aren’t nearly enough of them running around.

As far as PhD’s are concerned — some of my best friends have PhD’s. However,most of the people who have a huge impact on the world — outside of pure research and education — do not have PhD’s. Draw from that whatever conclusion you think makes sense.

What college or university should I go to?

Try very very hard to go to one of the best colleges or universities in the world for your chosen field.

Don’t worry about being a small fish in a big pond — you want to always be in thebest pond possible, because that’s how you will get exposed to the best people and the best opportunities in your field.

If you can’t start out in one of the top schools for your field, then work your butt off and get great grades and transfer as fast as you possibly can into a top school.

And if you can’t do that — if you end up getting your undergrad at a school that’s not one of the top in your field — then strongly consider pursuing a graduate degree in your field at a great school for your field.

In this way, even if your only option is starting out at a community college, by the time you finish 4-6 years of education, you can vault yourself into the top tier of your field.

What should I do while I’m in school?

I’m a huge fan of gaining practical experience in school by working during the school year, and then doing as many internships and co-op programs as you can.

Particularly at research universities — where you want to be — there are lots of on-campus jobs that will give you highly valuable work experience. Take a job that will teach you something useful and practical — the two obvious examples are working for a professor in your field with an active research program who needs undergrads to do some of the work, and being a staff member at a campus computer lab or research lab.

And then aggressively pursue internship and co-op programs — to get real-world working experience at companies in your field, before you even graduate. Target the best companies in your field, and go after the opportunities early and often.

If you do this right, by the time you graduate even with just an undergrad degree, you can have a year and a half of real working experience at high-quality companies plus another four years of practical experience from an on-campus job under your belt.

Plus, you will be implicitly demonstrating to future employers how determined you are to succeed and how hard you are willing to work.

In contrast, almost any other way you can spend your time while in school aside from getting reasonably good grades is a mistake.

How should I think about skills development once I’m out of school?

You should view graduating from school as just the beginning of your development of a whole portfolio of useful skills.

One of the single best ways you can maximize the impact you will have on the world and the success you will have in your career is by continuously developing and broadening your base of skills.

My favorite way of thinking about this is:

Seek to be a double/triple/quadruple threat.

Scott Adams — the creator of Dilbert — nails it:

If you want an average successful life, it doesn’t take much planning. Just stay out of trouble, go to school, and apply for jobs you might like. But if you want something extraordinary, you have two paths:

     

  1. Become the best at one specific thing.
  2.  

     

  3. Become very good (top 25%) at two or more things.
  4.  

    The first strategy is difficult to the point of near impossibility. Few people will ever play in the NBA or make a platinum album. I don’t recommend anyone even try.

    The second strategy is fairly easy. Everyone has at least a few areas in which they could be in the top 25% with some effort. In my case, I can draw better than most people, but I’m hardly an artist. And I’m not any funnier than the average standup comedian who never makes it big, but I’m funnier than most people. The magic is that few people can draw well and write jokes. It’s the combination of the two that makes what I do so rare. And when you add in my business background, suddenly I had a topic that few cartoonists could hope to understand without living it.

    …Get a degree in business on top of your engineering degree, law degree, medical degree, science degree, or whatever. Suddenly you’re in charge, or maybe you’re starting your own company using your combined knowledge.

    Capitalism rewards things that are both rare and valuable. You make yourself rare by combining two or more “pretty goods” until no one else has your mix…

    It sounds like generic advice, but you’d be hard pressed to find any successful person who didn’t have about three skills in the top 25%.

    The fact is, this is even the secret formula to becoming a CEO. All successful CEO’s are like this. They are almost never the best product visionaries, or the best salespeople, or the best marketing people, or the best finance people, or even the best managers, but they are top 25% in some set of those skills, and then all of a sudden they’re qualified to actually run something important.

    You can apply this principle to the degrees you can choose to get in school.

    I already talked about combining an undergrad engineering degree with an MBA. I’ll hire as many of those people as I possibly can.

    An MBA plus a law degree can be a great combination — and probably far more useful than either of those degrees by themselves.

    Or even combine two undergrad degrees — computer science plus physics, say, or physics plus economics.

    You can also apply this principle to skills that you develop once you leave school.

    Let me cite as examples five skills that you can develop once you leave school that, in combination with your degree or degrees and your other skills, can help maximize your potential:

    First, communication.

    Back to Scott Adams:

    I always advise young people to become good public speakers (top 25%). Anyone can do it with practice. If you add that talent to any other, suddenly you’re the boss of the people who have only one skill…

    At least one of the skills in your mixture should involve communication, either written or verbal.

    The great thing about communication is that most people are terrible at it, because they never take it seriously as a skill to develop.

    This is particularly true of engineers and technical people, who often quaintly believe that the world works logically and that people will automatically recognize the quality of things.

    Ha!

    Of course, communication is critically important because it’s how you convey information and concepts to lots of people in ways that will cause them to change their behavior.

    This is one good argument for certain liberal arts undergrad degrees, such as English. But you don’t need specific college training to be a good communicator — you can learn communication many other ways, including by doing, by practicing, by taking classes (how about a class in standup comedy? I’m serious!), and by reading a lot. And communication in combination with some other useful skill is much more powerful than communication alone.

    An engineer or a finance person or a lawyer who can communicate is hugely more valuable than one who cannot.

    And in the long run, you are going to have a very hard time ever changing the world if you can’t communicate really well.

    Second, management.

    If at all possible, learn how to manage people.

    The best way is to learn from a great manager.

    Early in your career, make sure you are working for a great manager — you’ll know her when you see her in action — and then ask her to teach you how to do it.

    And then give it a shot — ask for and get responsibility for a team of people whom you manage.

    Even if your career path won’t involve managing lots of people, being able to manage will give you a highly valuable tool that you can pull out whenever you need it, instead of forcing you to always be reliant on other people to manage.

    Worst case, you’ll understand a lot more about why companies work the way they do and why people are the way they are. Which is hugely helpful when you set about doing something new.

    Third, sales.

    Learn how to sell.

    I don’t mean, learn how to sell someone a set of steak knives they don’t need — although I hear that can be quite an education by itself.

    I mean, learn how to convince people that something is in their best interest to do, even when they don’t realize it up front.

    Think of this as the art of being able to interact with people such that they will do what you want, predictably and repeatedly, as long as you are making sense and offering them something they should want.

    This is another terribly underrated skill, at least among people who aren’t professional salespeople. But it’s an incredibly general skill that can be helpful not only in your career but throughout your entire life. Knowing how to sell can also help you recruit, raise money, talk to investors, create business partnerships, deal with reporters and analysts, and more — even, God help you, in your marriage and with your kids.

    Spending a year or more in an actual salesforce can be a superb idea even if you have no intention of making your career in sales. John Doerr once told me that the year he spent “carrying a bag” in sales at Intel in the late 70’s was the most valuable year of his life in terms of skills development — skills he now uses every day as one of the world’s most successful venture capitalists. If you’ve ever had John Doerr try to talk you into something, you’ll know what he means.

    Fourth, finance.

    A strong level of financial literacy — financial theory, understanding financial statements, budgeting and planning, corporate structure, how equity and debt markets work — will be a huge boost for almost any career.

    Again, this is a more general skill that it appears to be — having financial skills will also help you in your personal life, as well as in any nonprofit organizations in which you participate.

    And if you ever want to start your own company, being financially literate will be a huge help.

    If you’re, for example, a programmer working at a tech company and you don’t know anything about finance, go find a finance person and offer to teach her all about software in return for her teaching you all about finance.

    Otherwise, finance is something you can easily learn by taking classes, or by reading books.

    Also, make an investment in yourself by reading the Financial Times and the Wall Street Journal every day. Read those two papers cover to cover for five years and you’ll know a lot of what you need to know. (This recommendation will be even more practical once Rupert Murdoch makes the Wall Street Journal web site free. TheFinancial Times just announced its web site is becoming free for casual readers. But even still, if I were you, I’d get paper subscriptions to those two papers, and every day take an hour and sit in a corner and read them cover to cover — except of course for the Journal‘s op-ed pages; those will rot your brain.)

    Fifth, international.

    Time spent on the ground in other countries and in other cultures will pay off in many different ways throughout your career.

    If your company, or university, offers you the opportunity to spend a year in another country, it’s probably a pretty good idea to take it.

    Personally I’d incline towards spending that time in younger, faster growing market economies — like China, India, South Korea, or Argentina — versus older, slower growing market economies like France or Germany. But almost any international exposure is likely to be helpful.

    This is another of those skills where there’s both a pragmatic benefit — you will have experience on the ground with people in a specific country — and a general benefit — you will know how to think more broadly than the average American, or American president, who has never been out of the country.

    There aren’t very many interesting businesses anymore that don’t have a strong international element — in fact, many American companies now generate the majority of their revenue and profit outside the US. Having a global perspective can only help you maximize your future opportunities.

    Any final thoughts on education?

    Yes.

    If you’re in college now, or about to graduate from college, and you come from an upper middle class background — especially if you are going to an Ivy League school — take the time to read a provocative essay David Brooks wrote several years ago called “The Organization Kid”.

    Some excerpts:

    I asked several [Ivy League] students to describe their daily schedules, and their replies sounded like a session of Future Workaholics of America: crew practice at dawn, classes in the morning, resident-adviser duty, lunch, study groups, classes in the afternoon, tutoring disadvantaged kids in Trenton, a cappella practice, dinner, study, science lab, prayer session, hit the StairMaster, study a few hours more…

    [N]owhere did I find any real unhappiness with this state of affairs; nowhere did I find anybody who seriously considered living any other way. These super-accomplished kids aren’t working so hard because they are compelled to… It’s not the stick that drives them on, it’s the carrot. Opportunity lures them… [I]n a rich information-age country like America, promises of enjoyable work abound — at least for people as smart and ambitious as these. “I want to be this busy,” one young woman insisted, after she had described a daily schedule that would count as slave-driving if it were imposed on anyone…

    That doesn’t mean that these leaders-in-training are money-mad (though they are certainly career-conscious). It means they are goal-oriented. An activity — whether it is studying, hitting the treadmill, drama group, community service, or one of the student groups they found and join in great numbers — is rarely an end in itself. It is a means for self-improvement, résumé-building, and enrichment. College is just one step on the continual stairway of advancement, and they are always aware that they must get to the next step (law school, medical school, whatever) so that they can progress up the steps after that…

    They’re not trying to buck the system; they’re trying to climb it, and they are streamlined for ascent…

    Kids of all stripes [today] lead lives that are structured, supervised, and stuffed with enrichment… Today’s elite kids are likely to spend their afternoons and weekends shuttling from one skill-enhancing activity to the next. By the time they reach college, they take this sort of pace for granted…

    In short, at the top of the meritocratic ladder we have in America a generation of students who are extraordinarily bright, morally earnest, and incredibly industrious. They like to study and socialize in groups. They create and join organizations with great enthusiasm. They are responsible, safety-conscious, and mature. They feel no compelling need to rebel — not even a hint of one. They not only defer to authority; they admire it. “Alienation” is a word one almost never hears from them. They regard the universe as beneficent, orderly, and meaningful. At the schools and colleges where the next leadership class is being bred, one finds not angry revolutionaries, despondent slackers, or dark cynics but the Organization Kid.

    Now, if your parents are middle class, or lower middle class, and you’re attending a state school or a local college, and you’re working your way through school in order to pay for tuition, you can stop reading now; you probably don’t have anything to worry about. But if you read Brooks’ essay and recognize yourself, read on.

    The good news is that Brooks’ fundamental thesis is correct: kids graduating from top colleges and universities today are in many ways better prepared for achievement and success than ever before. As a group, you are better educated, better trained, more motivated, and more serious than many of your predecessors. And that is fantastic.

    The risk, however, is this:

    If you have lived an orchestated existence, gone to great schools, participated in lots of extracurricular activities, had parents who really concentrated hard on developing you broadly and exposing you to lots of cultural experiences, and graduated from an elite university in the first 22 or more years of your life, you are in danger of entering the real world, being smacked hard across the face by reality, and never recovering.

    What do I mean? It’s possible you got all the way through those first 22 or more years and are now entering the workforce without ever really challenging yourself. This sounds silly because you’ve been working hard your whole life, but working hard is not what I’m talking about. You’ve been continuously surrounded by a state of the art parental and educational support structure — a safety net — and you have yet to make tough decisions, by yourself, in the absence of good information, and to live with the consequences of screwing up.

    In my opinion, it’s now critically important to get into the real world and really challenge yourself — expose yourself to risk — put yourself in situations where you will succeed or fail by your own decisions and actions, and where that success or failure will be highly visible.

    By failure I don’t mean getting a B or even a C, but rather: having your boss yell at you in front of your peers for screwing up a project, launching a product and seeing it tank, being unable to meet a ship date, missing a critical piece of information in a financial report, or getting fired.

    Why? If you’re going to be a high achiever, you’re going to be in lots of situations where you’re going to be quickly making decisions in the presence of incomplete or incorrect information, under intense time pressure, and often under intense political pressure. You’re going to screw up — frequently — and the screwups will have serious consequences, and you’ll feel incredibly stupid every time. It can’t faze you — you have to be able to just get right back up and keep on going.

    That may be the most valuable skill you can ever learn. Make sure you start learning it early.

    The Pmarca Guide to Career Planning, part 1: Opportunity

    The first rule of career planning: Do not plan your career.

    The world is an incredibly complex place and everything is changing all the time.You can’t plan your career because you have no idea what’s going to happen in the future. You have no idea what industries you’ll enter, what companies you’ll work for, what roles you’ll have, where you’ll live, or what you will ultimately contribute to the world. You’ll change, industries will change, the world will change, and you can’t possibly predict any of it.

    Trying to plan your career is an exercise in futility that will only serve to frustrate you, and to blind you to the really significant opportunities that life will throw your way.

    Career planning = career limiting.

    The sooner you come to grips with that, the better.

    The second rule of career planning: Instead of planning your career, focus on developing skills and pursuing opportunities.

    I’ll talk a lot about skills development in the next post. But for the rest of this post, I’m going to focus in on the nature of opportunities.

    Opportunities are key. I would argue that opportunities fall loosely into two buckets: those that present themselves to you, and those that you go out and create. Both will be hugely important to your career.

    Opportunities that present themselves to you are the consequence — at least partially — of being in the right place at the right time. They tend to present themselves when you’re not expecting it — and often when you are engaged in other activities that would seem to preclude you from pursuing them. And they come and go quickly — if you don’t jump all over an opportunity, someone else generally will and it will vanish.

    I believe a huge part of what people would like to refer to as “career planning” is being continuously alert to opportunities that present themselves to you spontaneously, when you happen to be in the right place at the right time.

       

    • A senior person at your firm is looking for someone young and hungry to do the legwork on an important project, in addition to your day job.
    •  

       

    • Your former manager has jumped ship to a hot growth company and calls you three months later and says, come join me.
    •  

       

    • Or, a small group of your smartest friends are headed to Denny’s at 11PM to discuss an idea for a startup — would you like to come along?
    •  

    I am continually amazed at the number of people who are presented with an opportunity like one of the above, and pass.

    There’s your basic dividing line between the people who shoot up in their careers like a rocket ship, and those who don’t — right there.

    The second bucket of opportunities are those you seek out and create. A lot of what will follow in future posts in this series will discuss how to do that. However, let me say up front that I am also continually amazed at the number of people who coast through life and don’t go and seek out opportunities even when they know in their gut what they’d really like to do. Don’t be one of those people. Life is way too short.

    The world is a very malleable place. If you know what you want, and you go for it with maximum energy and drive and passion, the world will often reconfigure itself around you much more quickly and easily than you would think.

    Now, I’m not proposing that you simply ping pong from opportunity to opportunity randomly. You can have a strategy. And here’s how I think that strategy should work.

    People who manage money professionally don’t think about individual investments in isolation; they think of those investments as part of an overall portfolio. Each investment has its potential return — the benefit you get from owning it — and its potential risks — the things that can go wrong. A portfolio, then, is a set of investments, and the portfolio assumes the return and risk characteristics of all of the investments blended together.

    Viewed in that context, it is often logical to have individual investments within a portfolio that are far more risky than one would normally find comfortable — if the potential return is good enough. Or, investments that are far less risky and have far less return potential than one would normally want — to protect one’s downside. The risk of any individual investment is not important; what is important is how the risks — and the potential returns — of all of the investments combine in the overall portfolio.

    I believe you should look at your career as a portfolio of jobs/roles/opportunities. Each job that you take, each role that you choose to fill, each opportunity you pursue, will have a certain potential return — the benefits you can get from taking it, whether those benefits come in the form of income, skill development, experience, geographic location, or something else. Each job will also have a certain risk profile — the things that could go wrong, from getting fired for not being able to handle the job’s demands, to having to move somewhere you don’t want to, to the company going bankrupt, to the opportunity cost of not pursuing some other attractive opportunity.

    Once you start thinking this way, you can think strategically about your career over its likely 50+ year timespan.

    For example, when you are just out of school and have a low burn rate and geographic flexibility, you can take jobs with a certain return/risk profile. If you get married and have kids, you will take jobs with a different return/risk profile. Later, when your kids grow up and you are once again free to move about and you don’t have to worry about tuition payments and a mortgage on a big house in a great school district, but you now have far more experience than you did when you were first starting out, you can take jobs with a third return/risk profile.

    Most people do not think this way. They might occasionally think this way, but they don’t do it systematically. So when an opportunity pops up, they evaluate it on a standalone basis — “boy, it looks risky, I’m not sure I should do it”. What you should automatically do instead is put it in context with all of the other risks you are likely to take throughout your entire career and decide whether this new opportunity fits strategically into your portfolio.

    Let’s dig into the concept of risk a little more.

    I’m not talking about the form of risk that you think of when you think of stepping out into the crosswalk and getting run over by an Escalade. I’m talking about the form of risk that financial professionals deal with (see the classic book Against the Gods: The Remarkable Story of Risk for more on this), and startup entrepreneurs deal with, and that you deal with any time you make any decision. There are a set of potential downsides to almost any decision — but they can be analyzed, and often quantified, and thereby brought under control.

    Which is important, because in life, there is generally no opportunity without risk.Doing the legwork on that extra project for the senior person at your firm? You risk exhausting yourself and doing your day job poorly. Joining your former manager at that hot growth company? Maybe it tanks six months later and then your current employer won’t rehire you. Join those smart friends at Denny’s and start a new company with them? Maybe it completely fails, and you have to explain why you were so foolish at every job interview you do for the rest of your life. There are always real and legitimate reasons why people often pass on opportunities — they see the risks and they wish to avoid them.

    The issue is that without taking risk, you can’t exploit any opportunities. You can live a quiet and reasonably happy life, but you are unlikely to create something new, and you are unlikely to make your mark on the world.

    To quote Aaron Brown — a legendary Morgan Stanley derivatives trader and poker expert — from his extraordinary book The Poker Face of Wall Street, when talking about hiring traders at an investment bank:

    What I listen for is someone who really wanted something that could be obtained only through taking the risk, whether that risk was big or small.

    It’s not even important that she managed the risk skillfully; it’s only important that she knew it was there, respected it, but took it anyway.

    Most people wander through life, carelessly taking whatever risk crosses their path without compensation, but never consciously accepting extra risk to pick up the money and other good things lying all around them.

    Other people reflexively avoid every risk or grab every loose dollar without caution.

    I don’t mean to belittle these strategies; I’m sure they make sense to the people who pursue them. I just don’t understand them myself.

    I do know that none of these people will be successful traders.

    …or successful at anything important in life.

    So, when you are presented with an opportunity, carefully analyze its risks, but:

       

    • Do so within the context if your likely lifetime portfolio of risks…
    •  

       

    • And do so realizing that taking risk can be a good thing when it leads to pursuing the best opportunities.
    •  

    All that said, here are some of my opinions about the kinds of risks you should take and when:

       

    • When you are just out of school — and assuming that you are relatively free to move and have a low burn rate — is when you should optimize for the rate at which you can develop skills and acquire experiences that will serve you well later. You should specifically take income risk in order to do that. Always take the job that will best develop your skills and give you valuable experiences, regardless of its salary. This is not the time in your career to play it safe.
    •  

       

    • When you have family obligations — a spouse, two and a half kids, a dog, and a picket fence — that’s obviously the time to crank back on the income risk and instead take a little risk that you might not learn as much or advance as quickly or join that hot new startup. However, even this is not black and white! In Silicon Valley, for example, it can still make a lot of sense for a young parent to take a risk on a hot new startup because it will usually be easy to get another job if the startup fails — especially if one has developed more useful skills and experiences along the way.
    •  

       

    • There may be times when you realize that you are dissatisfied with your field — you are working in enterprise software, for example, but you’d really rather be working on green tech or in a consumer Internet company. Jumping from one field into another is always risky because your specific skills and contacts are in your old field, so you’ll have less certainty of success in the new field. This is almost always a risk worth taking — standing pat and being unhappy about it has risks of its own, particularly to your happiness. And it is awfully hard to be highly successful in a job or field in which one is unhappy.
    •  

       

    • Likewise with geography risk. You start out in one city — say, working at a software company in Philadelphia — and you’re doing well. You get the opportunity to jump to a faster growing software company in Silicon Valley. Should you take the risk of moving geographies — to a place where you don’t know anybody, and where the cost of living is higher? Almost certainly — the additional risks of not having an extensive personal network and of tolerating a lower standard of living for some period of time are almost certainly overcome by the upside of being at a better company, relocating yourself to the heart of your industry, and setting yourself up to exploit many more great opportunities over the next decades.
    •  

       

    • Working for a big company is, I believe, much risker than it looks. I’ll talk about this more in the next post, but people who work at big companies are subject to impersonal layoffs at any time, and often forego the opportunity to develop skills and gain experiences as rapidly as they would at someplace smaller and faster growing. And then five or ten years pass, and you realize your skills and experiences are only relevant for jobs at other big companies — and then you have a real problem.
    •  

       

    • Finally, pay attention to opportunity cost at all times. Doing one thing means not doing other things. This is a form of risk that is very easy to ignore, to your detriment.
    •  

    Those are just a few examples. You will run into specific return/risk situations that nobody can predict ahead of time. When you do, just sit down and tease apart the risks — and think hard about whether, in the context of your overall career portfolio, they are really so scary that they justify passing on the return potential of a great opportunity. They often won’t.

    One more quote, this time from Nassim Nicholas Taleb in The Black Swan:

    Seize any opportunity, or anything that looks like opportunity. They are rare, much rarer than you think…

    Many people do not realize they are getting a lucky break in life when they get it. If a big publisher (or a big art dealer or a movie executive or a hotshot banker or a big thinker) suggests an appointment, cancel anything you have planned: you may not see such a window open up again.

    Of course, if you really are high-potential, you’re naturally going to be seeking out risks in your career in order to maximize your level of achievement, so you’re thinking, c’mon, Andreessen, get to the next point. For which, see the next post!