Best success correlation ever

After nine of them, I know a good bit about starting companies. After investing in at least twenty, I spot founders with a high success likelihood pretty quickly. An author I admire, Taylor Stevens, recently penned a newsletter nailing one of those elusive success factors brilliantly.  For her, it is all about success in writing and publishing, a field in which she excels. The similarities resonated with me immediately and I couldn’t wait to share them.

Liars' Legacy (book cover) by Taylor Stevens

First, Stevens is a successful author. She freely shares her advice with aspiring writers. You can read all about her on her website. On March 4 (2022) her newsletter arrived with the subject line “If you run with wolves…”  In it Stevens discusses how many aspiring authors read and post in publishing and writing-oriented blogs and forums, getting responses from individuals “without experience in publishing, and so often wrong. The comments come from people who spend a lot of time on those forums, arguing with each other and or talking up their own works in progress.  Stevens, after a short discussion, cuts to the chase:

“If you want to reach a level higher than where you are, you don’t do it by getting information and learning from people who are at your level, or God forbid, beneath you. You don’t plot your climb up Mount Everest by talking to the people down at base camp who’ve only watched other people climb the mountain—you hire a guide who’s been there and gotten safely back. If you want to be successful, seek out people who know, listen to people who’ve already walked the path that you’re on.”

This reminds me so much of budding entrepreneurs who have an idea for a business and want to make it a reality.  Often it appears these people are endlessly involved in talking about the idea, how it would work and why it will win.  These discussions with friends, and on forums and blogs appear to be almost a substitute for moving forward.  Sometimes they’re looking for clues on how to move forward, unaware this is not the place to find them.  Winners focus on doing the work versus talking about the dream and the best advice is from people who’ve succeeded in the area in which you wish to compete. Best to keep your idea secret and use as motivation the vision of how you’ll feel when you succeed and bask in the adulation of all those who didn’t think you had it in you.

Most ideas have little value in themselves; it is the things surrounding an idea that create value. Having an idea that your “X device” will revolutionize a particular industry means very little unless you accompany it with in-depth and diligent research showing how poorly current offerings perform the task that “X device” performs so well. Fifty or a hundred in-depth interviews with players in the space leading to a conclusion supporting the need for “X device” has value that the idea alone does not.  Detailed technical drawings of how “X device” would be manufactured, where, with what materials, and for what cost, have value. Plans and business analyses showing how the product could be introduced and marketed to those that would buy it adds value.  Many entrepreneurs and inventors are in love with an idea and wish to start companies, yet they remain in the talking and conceptualizing stage year in and year out.  They are either too lazy or undisciplined to do the hard work, the work they may not like or enjoy doing, to make their dream a reality.  Instead, they’ll while hours away in forums and on blogs, responding and posting, defending their brilliance, expounding to friends and family on the cleverness of their idea, while others go out and make things happen by actually doing the work.

The other part of Stevens’ newsletter which resonated with me is the number of individuals so much like she described, that surround the startup infrastructures in which I was and am involved.  For every actual company founder here in Phoenix (and in Palo Alto, California before that), I found at least ten people attending events, pointing to the shortcomings of presenting companies, expounding on the merits of various business plans and approaches, demonstrating their vast intelligence and insight and how far a company would go if only they’d have the foresight and wisdom to hook up with them and take their valuable advice – all for a cut of the equity, of course.

Don’t get me wrong, there are highly ethical and professional individuals offering services to early-stage companies. They do it at a fair price and offer superb value and I’m proud to know many of them.  But budding company founders need to avoid those who chatter and criticize from the sidelines, or worse, sell advice and expertise in the absence of a success track record. Building a company with one or two people, no money, and a 20-page pitch deck into something generating tens of millions a year, results in a great many lessons learned.  Doing it twice, three times, or more, even if you fail, provides even more knowledge about what does and does not work.  Curiously, success in other aspects of business — say spending a career with a large multi-national company — rarely leads to success in starting a company. Budding entrepreneurs need to find mentors to work with who have done it, not someone who’s merely watched a lot of Shark Tank episodes and read books on successful startups.

Television shows and movies about startups, “Silicon Valley, Dirty Money, Shark Tank, Celebrity Apprentice, The Inventor: Out for Blood in Silicon Valley” and others, paint incredibly unrealistic pictures of the actual life in a start-up and the incredible number of elements necessary for one to succeed.  Like nearly everything else in life, there are few shortcuts. You have to be lucky.  To be lucky, it also helps to know the actual definition of luck, and so, from someone who’s been lucky, here it is:

“LUCK = When hard work and preparation meet opportunity.”

An excerpt of Taylor Stevens’ March 4 Newsletter below:

Hi Steve,

Like many people, I read blogs and forums on topics that interest me, and over the past several years this has also included forums for aspiring authors, as well as blogs that deal primarily with self-publishing and social media. (I will write more about traditional vs. self-publishing in a future email, this email is about the value of others’ input.)

Sometimes, if I’ve read a particularly good piece on the subject, or even one that I think is off the wall but it raises interesting questions, I will spend a bit of time reading the comments and the conversations that follow. And mostly I come away from those conversations vacillating between amused and horrified because (again, mostly—there are definitely exceptions) the comments and opinions, so full of “rightness” and “righteousness,” are written by individuals without actual experience in publishing, and are so often wrong. And many of these comments are from “repeats”—people who clearly spend a lot of time on those forums, arguing with each other and or talking up their own as-of-yet-not-complete widget or work in progress. […]

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Scary Psychics

Mark Edward cold reading workshop - CSICon
Mark Edward cold reading workshop – CSICon

Recent explorations into ethical questions have led me down a variety of rabbit holes, eventually to the whole psychic phenomenon and people claiming to be mediums and able to predict the future. One fascinating character is Mark Edward.  I watched a 90-minute presentation where he explained how he and others in the “business” of psychic predictions, fortune-telling, and cold-readings do their “amazing feats.” Edwards is a former magician, having had long runs at the Magic Castle in Los Angeles. Like Penn & Teller, David Copperfield, and James Randi, he dutifully explains that what he does is a trick. There are no supernatural forces at work.  He, and others offering psychic experiences, are superb listeners and skilled observers.(1) They’ve learned to tap into the pattern-seeking aspects of the human mind. As he demonstrates in the video, it turns out to be relatively easy to manipulate someone into believing the medium has contact with the spirit world or can hear and speak with dead relatives – even in an audience of confirmed skeptics. But, in fact, they’re all scams and have been proven so time and time again.  Nevertheless, people continue to be taken in.

If you know someone who has paid money for a psychic reading and they feel they got their money’s worth, good for them.  However, it’s best to understand what actually happened: the professed psychic used his/her repertoire to present ideas that would match the individual’s profile – the willing believer – and connected the dots.  The dot picture – and all the connections – were already in the persons head.  It’s the way our minds work.

Along these same lines I found a report, published in December of 2021, about a twelve-year study of psychic predictions. It is exceptionally well done, brilliantly documented and you can read the whole study here.

During the twelve years, researchers found and documented 3,800 predictions made by those claiming the ability to foretell events by paranormal, supernatural, divine, or spiritual means.  Finding them required digging through television programs, radio broadcasts, magazines, newspapers, websites, YouTube, and other social media.  They tracked the predictions and recorded the results.  Here is what they found:

  • 11 percent of predictions were correct
  • 15 percent were “expected”
  • 19% were too vague
  • 2% were unknown
  • 53% were wrong.

Most of what was predicted did not happen. Anti-gravity did not become a reality, Prince Harry did not become king, COVID-19 did not “disappear” in December of 2020 and the president of France was not assassinated.  And the corollary most people miss, most of what happened was not predicted. Psychics did not predict COVID-19, Osama Bin Laden’s death or even that of Robin Williams.

As Tim Medham, the executive officer on the study said,

If my car mechanic was right only 11 percent of the time, I’d get a different car mechanic.  But if, overall, all mechanics were right only 11 percent of the time, I’d begin to think there was something seriously wrong with the entire industry.  The results indicate nothing better than educated guessing – or even uneducated guessing – and certainly no better than any non-psychic could do, and probably a lot worse.”

As I watched clip after clip of supposed psychics, knowing it was a trick and how it was being done, I became more and more convinced those choosing to do this work have to be sociopaths, perhaps even psychopaths.  They are conmen and conwomen – people with little, if any, ethical compass and only pretending to care for the feelings or well-being of others.  As Mark Edward revealed in his presentation (and in more detail in his book: Psychic Blues: Confessions of a Conflicted Medium), it is nearly impossible for him to feel good about what he does.  His rationalizations for why he continues to do it – “it’s my living, it’s the only thing I know how to do” – rings hollow.  How “psychic mediums” Tyler Henry, Miss Cleo, Caputo, and John Edward can allow and encourage people to believe stage tricks are not tricks but real precognition is despicable.

Better understanding of how our minds work is a hobby for me. Since high school and competing on the debate team, why people believe what they believe and think the way they do has intrigued me.  A couple of years ago, my friend Steve Pittendrigh gave me The Drunkard’s Walk: How Randomness Rules Our Lives by Leonard Mlodinow. The book exposes how randomness in everyday events is frequently misinterpreted. That book quickly led me to Michael Lewis’s book about Amos Tversky and Daniel Kahneman titled The Undoing Project: A Friendship That Changed Our Minds.  The New Yorker has a terrific article about the book here.  This pair of researchers were able to demonstrate beyond doubt that humans are not nearly as logical as we believe ourselves to be and are highly influenced by external forces.  Their work won Kahneman the Nobel Prize in Economics.

Our minds are wonderful things. There is more going on inside our heads that most of us know.  The better you understand those who would seek to mislead you for their own selfish purposes, and the tricks they use to do that, the better off you will be. I’ve left this link to last.  It shows precisely how cold-reading works and how easily some one can mislead us. 

End

  • There is a wonderful scene in an early episode of the “Sherlock” series starring Benedict Cumberbatch in which Sherlock Holmes uses his exceptional powers of observation and each detail he sees is briefly highlighted. He saw dirty fingernails, a suntanned finger with a pale stripe where a ring used to be, a book missing on a bookshelf, tiny scratch on a desk corner, etc. If you can train yourself to see such minutiae extremely quickly, parse it, store it and recall it, then you, too, can have a career as a psychic!

Ethics Class Part 2: How it went

University of San Diego campus

My nerves were on edge as I took the wheel of Rich Marin’s Tesla Model X. We were driving from his Escondido hilltop home to old town San Diego for an early dinner. The car wasn’t what was worrying me. My issue was about after dinner when we would drive to the University of San Diego campus and I would guest lecture in Rich’s graduate class on Law, Policy, and Ethics. Agreeing to speak in his class a month before meant choosing a case to study (I chose Theranos), doing the research, and structuring the two-hour class to allow the key ethical considerations to emerge. I also wanted to impart a few invaluable nuggets from my years in business.

My nervousness was mostly due to typical public speaking jitters and so many unknowns – what does the classroom look like, how will the audio/video work, will we arrive early enough or be rushed, how will the audience behave? Knowing myself, nervousness rarely helps bring out my best.  As we rode, I told myself: “You’ve got this; these situations typically go well for you, you’ve done your homework, now just relax and have fun. Things will all work out.”  Slowly I relaxed and by the time we found the classroom, my frame of mind was where it needed to be.

My preparations had involved reading about half a dozen books  and watching the movie. It is the one I mentioned in The Ethics Class Part 1 newsletter and, Rich assigned to the class as preliminary work. The movie, The Inventor: Out for Blood in Silicon Valley” was done in 2019, about two years after Theranos ran into all its trouble, but before Holmes and Balwani were indicted for fraud.  It is terrific and I recommend this documentary.  I also found a link to a video deposition Holmes did in 2017. This was revealing as I was able to hear Homes directly contradict, under oath, nearly all of the claims she’d made about Theranos and its technology.

In addition, one of the subscribers to this newsletter and a good friend, recommended “The Business Ethics Field Guide,” by Brad Agle, Aaron Miller, and Bill O’Rourke. It bypasses all the often boring “why’s” regarding ethics and focused instead on the how’s, creating 13 categories of ethical dilemmas, real-life stories for each situation and a basis for analysis and signposts for finding your way through each of them.

While practicing my presentation with Maggie, she gave me another example, closer to home than I had realized.  Some years ago, while editing a manual for the documentation company where she worked, she found a part number had been entered incorrectly.  She corrected it and sent the document back to the writer on the project. The next day she noticed he’d rejected her correction, forwarding it to the client uncorrected, with the wrong part number.  Confronting him on why he’d not taken her correction, he said it was a matter of “malicious obedience,” justifying his action by saying he’d been instructed, in no uncertain terms, to never make changes to an engineer’s mark-up.  He’d been told technical writers were not to second guess engineers – ever.  Maggie was furious and reported the incident up the chain of command and assumed the manual would be corrected prior to publication.  She was incensed when she later discovered it was not.  Should she contact the client directly and smear her company’s reputation or not? Choosing to be (or not to be) a whistle-blower is a very tough choice.

On the day before the class, Rich told me more about how this single class on business ethics fit into the storyline for the full course, Law, Policy & Ethics.  If you’ve not guessed, legal choices can be unethical and vice versa and policy can go either way as well.  The course will touch on not only ethics but impacts that need to be considered for stakeholders, which include shareholders and creditors, employees and consumers as well as suppliers and competitors. Arbitrage, markets & ethics get a deep dive as do a look at ESG (Environmental, Social and Governance, including anti-discrimination and socioeconomic investing).  He’ll end the class with a look at some of the fundamental concepts in business ethics, individual liberty vs. the common good, and how that affects capitalism, public policy, and civil society.  I hope Rich will be able to get me Zoom access so I can audit the entire course.

You can read Rich’s summary and impressions near the end of his recent newsletter here.  My favorite comment from Rich was this: “In twelve years of teaching I have never seen so much student engagement as we had during this debate.” My assessment is completely the same as Rich’s, although with a twist. My best college teaching experiences were always with highly engaged students.  For Wednesday’s class, I tried two approaches I’d used in the past to help move things in that direction.  The first was before the class began.  As students filed in I spoke to as many as I could. I asked where they worked, why they’d decided to enroll in this program, and what it was like taking classes at night while trying to hold down a job. Rich watched me as if he thought I was running for mayor.  The second step was to begin my presentation with an anecdote to subtly communicate it was okay to speak up, and their thoughts and ideas would be welcome. The above, combined with a contemporary and compelling case and the intelligence, preparation, and interest of these students, resulted in the unusually high level of involvement Rich’s comment points to.  The two hours flew by, all the key points were made and it was great fun.  As in nearly every interaction with graduate students in this age group, I came away having learned things I did not know and impressed with the generation who’ll take over for us when ours is gone.

Oh, one last thing.  Theranos and Elizabeth Holmes are about to get hot. Remember, you read about it here first.  An eight-episode series from Hulu called “The Dropout,” will go live March 3. There will also be a “Bad Blood” film based on John Carreyrou’s book directed by Adam McKay and starring Jennifer Lawrence scheduled to show up on AppleTV.   And last, if you have access to Apple Podcasts, you can follow “Bad Blood: The Final Chapter”, where John Carreyrou and Emily Saul discuss the testimony of witnesses in the trial and everything said by the lawyers and judge.

Two Terrific Books

I’ve been on a reading tear the past few months. Of the dozen or so I’ve read, two stand out in my mind as books my readers would enjoy and the third gets an “honorable mention.”

  1. The Life We Bury by Allen Eskens.  This novel takes place in Minnesota (Austin, Minneapolis, some northern suburbs), is wonderfully told and beautifully written.  It came out in 2020 and was well-reviewed, which is how I found it.  About a third of the way in, I decided to hurry through it and get to my next book. But then the protagonist came to life in my head.  When I’d finished, I realized it had been a very satisfying experience.  I mentioned it to my cousin and frequent reading partner and he wrote me back saying: “I just finished reading “The Life We Bury” and loved it. Well, that’s probably obvious from the fact that you recommended it a week ago and I’ve already finished it. It was well written, the characters were great and I was extremely familiar with the locales (well, Austin not so much but the Twin Cities and Mason City very much so). Great book.”
  2. Bad Blood: Secrets and Lies in a Silicon Valley Startup, by John Carreyrou. This book was mentioned in my Business Ethics newsletter. But irrespective of that, it is history that reads like a crime novel.  You don’t have to have even visited the Bay Area to like this book.  And with the verdict on Holmes coming out earlier this month, it’s very timely.  I think you would love it.
  3. Matrix by Lauren Groff. This is one of those books I bought due to its rave critical reviews (NPR called it one of the best books of 2021) and my interest in books about history.  This is historical fiction, featuring the life of poet Marie de France.  The writing is incredible, but the tale was not so much to my liking.  But seriously, the prose is so exceptional; I would read just about anything this author writes.  It tells the story of de France who, at 17, is booted out of the court of Eleanor of Aquitaine due to being perceived as too rough and coarse for marriage — too tall, too unattractive, and too butch. Plus, she is the result of her mother being raped, and the medieval shame of all that. She’s sent to England and becomes the prioress of a rundown abbey where the nuns are starving.  She makes the best of her circumstances with an amazingly powerful focus, switching out her desire for family into building the order into something powerful and frightening, finding love and fulfillment in the process.  It’s a mixture of the sacred and profane, violence, sex and sensuality, and religious ecstasy.

P.S. I love audio books! I’m a person who does well with what Maggie calls background noise. Sometimes, it helps me focus on whatever else I’m doing – sharpening knives, hiking, doing dishes, driving or tinkering in my workshop. I download books from the Phoenix Public Library app “OverDrive.”  It’s free, easy, and sometimes frustrating, but it works for me.  Ginger has gifted me with a few of her Audible books, and I love that.

Do let me know about books you’ve enjoyed recently.  Let’s keep in touch.