The Unrepentant Recalcitrant

Lessons for an accidental entrepreneur

If You are not out in front of the Herd, the View never changes

You will spend your life looking at someone’s ass.

And thats ok, if you are content. Who am I to judge?

I speak for all of us that want to strive for something that does not yet exist in our lives.

This is not just about entrepreneurship. No sir.

All the difference made in this world bar none has been made at the margins of the common, the accepted and the ‘norm”.

You will never make a dent, and never shake things up if you follow the herd.

To use a scientific turn of phrase, you need to embrace a paradigm shift.

A paradigm in science (or elsewhere for that matter) is a framework to think about things.

(See below for a reference to Thomas Kuhn’s famous book on paradigms)

Each paradigm is a temple of sorts for those who wrap themselves in its teachings.

If everybody (or more correctly the majority) believes something to be true, two things necessarily follow:

One: There is little to be discovered within its folds..it has been exploited and understood.

Two: The territory outside the paradigm has not been well explored and is ripe for new, innovative, ground shaking ideas and development. Also, the competition here is slim compared to the paradigm where the sweaty masses are spending their time.

Every body knew the sun revolved around the Earth until they didn’t. People lost their lives trying to change that paradigm.

Everybody knew that man could not fly until that paradigm shifted.

Ok, but you and I are not the Wright Brothers! (at least not I!).

If you are an entrepreneur, everybody knows your idea is crazy. Of course! If they did not, the competition to get your idea to market would destroy your chances!

If you are a value investor, everybody knows your stock picks are all wrong. Heck everybody knows value investing doesn’t even work “anymore”!! (Ha!, now thats a paradigm for you to bust). This is a good thing…trust me. Your stock picks are safe. It will be like taking candy from a baby.

(Note to the moms out there..I am not advocating stealing from infants).

Ok, maybe not that easy. But you get my drift.

A Nobel prize winning scientist I had the good fortune to speak with briefly once told me “When they think you are crazy and shun you, you should know you are on to something.”

This guy discovered/described a new form of life and almost lost his career and reputation doing it.

The takeaway for those of us that are far away from winning Nobel Prizes is really about conviction in your thought process.

It matters a hoot what others think. Listen to them, dissect their arguments but for heavens sake learn to think for yourself. It will serve you well over a lifetime.

And when everyone (sic) thinks a certain way, there is likely money to be made by taking a bet against them.

The House does not always win.

 

 

Bibliography:

Kuhn TS. “The Structure of Scientific Revolutions” 1962. University of Chicago Press. ISBN 9780226458113

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Rudyard Kipling was a Value Investor

Those of you reading my blog for the last several columns have figured out by now that I believe that the traits and character required for an entrepreneur are very similar to those a good value investor should have.

I am going to add to that.

As you think deeply about the kinds of behavior, instincts and thought process that result in success in these areas, you will no doubt find that many of those ideas are transferable to life itself. This is something I have termed “Right Thinking” in prior posts (not my term, but one I think is appropriate).

Understanding this and applying this thinking to your project(s), you may find you are “doing better” in other parts of your life. (Oh the horror! I have become my mother!)

Think of this as a welcome side effect (As a doctor, I think in these terms…what can I tell ya!)

By no means am I a fan of Rudyard Kipling (I can tell you where he should stick his “White Man’s Burden”!).

But credit where credit is due. I believe his poem IF, reproduced below is a graphic and exact description of what you need to succeed as an investor, as an entrepreneur and at life.

I will discuss aspects of what he says in this column over time, but I am unable to summarize the whole as elegantly as he has done.

You can do much worse than read it carefully, ponder and apply to your situation! Rinse and repeat!

 
If

If you can keep your head when all about you
Are losing theirs and blaming it on you;
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired by waiting,
Or, being lied about, don’t deal in lies,
Or, being hated, don’t give way to hating,
And yet don’t look too good, nor talk too wise;

If you can dream – and not make dreams your master;
If you can think – and not make thoughts your aim;
If you can meet with triumph and disaster
And treat those two imposters just the same;
If you can bear to hear the truth you’ve spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to broken,
And stoop and build ’em up with wornout tools;

If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breath a word about your loss;
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: “Hold on”;

If you can talk with crowds and keep your virtue,
Or walk with kings – nor lose the common touch;
If neither foes nor loving friends can hurt you;
If all men count with you, but none too much;
If you can fill the unforgiving minute
With sixty seconds’ worth of distance run –
Yours is the Earth and everything that’s in it,
And – which is more – you’ll be a Man my son!

 
Now tell me thats not the most amazing advice you ever got!

Dear Dumb VC — What I Learned Building… — Medium

Andy Dunn, the author of the post I have linked below, is the founder of Bonobos. He writes endearingly scathing posts about his experience as a founder looking for capital.

Dear Dumb VC (Venture Capitalist)  has created waves all over the venture community and has been hotly debated from both the sides of the investor, and the bruised and battered entrepreneur.

It’s a love letter (NOT!) from a successful entrepreneur to his erstwhile VC. There are lessons here for all of us that start companies or projects and weigh capital raise options.

It’s a departure from the rubbish they teach you in business school (Yes even in the best schools, they teach you rubbish about the real world!)

Let’s be clear on a couple of points first.

I dont’t believe VC’s are unintelligent per se.

They are more often than not highly educated and very well spoken.

I also don’t believe that all VC’s don’t understand business.

We should draw the distinction between VC’s who have built or worked in business before (Operating VC’s) and those that have not (Financial VC’s).

But most VC’s I have met have not been been operating VC’s. So called Financial VC’s, most certainly are less experienced about actual business concerns and in many cases are only looking to turn a quick profit regardless of the overall outcome for the business.

All VC’s prefer the moniker “Operating VC”. Of course they do. Wouldn’t you?

However, having worked in business development role  in another persons company or having a career exclusively in consulting is NOT operating experience. Sister Please!

Flipping a business in a year or two is also not an “operating experience”. I don’t care what you say about it…I believe it takes time to build operating experience in a business. You may be successful as an entrepreneur if you sold your business quickly, but you don’t know operating from a hole in the ground.

A true Operating VC is worth her weight in Gold. If they are real OVC’s, you really shouldn’t care whether they want to invest in your company. Put them on your board, befriend them, do whatever it takes, but don’t ever let them go. They could be the difference between success and failure and more importantly knowledge and ignorance.

Enough of my opinion. Read and decide for yourself. It’s a very well written piece!

 

Dear Dumb VC — What I Learned Building… — Medium.

Charlie Munger on Wrestling with Pigs

Charlie Munger is the long time associate and friend of Warren Buffet and an investing legend in his own right.

I hope to be talking about him a lot on this blog, not just because I believe he is a great investor but also because I believe he is one of the foremost proponents of what I like to call “Right Thinking”.

Right Thinking is not about how to pick stocks or how to startup companies or take your profits. Right Thinking is about how to go about thinking about all of these things and so much more.

It’s the framework of your thoughts and actions that will determine your satisfaction with the end result and your success.

I am going to adapt his quote on Pigs but I keep the meaning in all seriousness.

Charlie says, “Don’t wrestle with Pigs. You will both get very dirty. Trouble is, the Pig will enjoy it”

Be careful whom you associate with. It may be expeditious, it may even seem like you have no choice at the time.

You may believe you can get out of the relationship any time you choose.

But you are going to get very dirty.

It never ends well.

Each of you reading this know who these pigs are, and which of you are considering wrestling with some.

That shit will not come off easy.

The Story of Abhimanyu: Why You Must Have an Exit Strategy

Let me tell you the story of Abhimanyu.

Long long ago in a kingdom far far away, an epic battle was fought.

The battle and its larger story were immortalized in an epic Sanskrit poem called “The Mahabharata”.

The war was between two families of cousins battling for control of their kingdom.

Abhimanyu, a warrior prince learnt the strategies of war while in his mothers womb. His overheard his father Arjuna telling his mother Subhadra how to enter, exit and destroy various battle formations.

The most complex of these  battle formations was the “Chakravyuh”, a formation resembling a rotating spiral that moved forward and expanded at the same time.

Here is where the story gets interesting (and relevant, so pay attention!).

Subhadra, listening to her husband teach, fell asleep before he finished. Abhimanyu, learnt the method of entry into the Chakravyuh, the way to fight once inside, but did not hear how he should exit.

Fast forward to the battle, many years later. The bad guys (sic) are winning. Things look grim. The Chakravyuh is advancing on Abhimnayu and his forces. It seems unstoppable.

Abhimanyu, hero that he is, rushes forward and uses his knowledge to penetrate the spiral. He breaks his way in and fights the enemy from the inside.

Alas, he does not know how to get out of the spiral, once he is in. He lacks an exit strategy.

He is surrounded and killed by the enemy forces, and dies a bloody death on the battlefield.

 

I think I’ve made my point to all of you here (and It isn’t that you shouldn’t fall asleep in class!).

Whatever you do, entrepreneurship or investing or anything else with meaning to you, consider your exit strategy.

Not an exit strategy, not even a couple. You should be devising a decision tree of exits based on your view of multiple different outcomes for your task.

While your life may not depend on it as it did for our hero, you should behave as if it does.

Your outcome(s) will thank you.

 

As a coda for readers interested in the Mahabharata, it is the longest Indian poem (the title means Great Indian Story), is available in English translation and is one of the most gripping tales ever told. The Bhagavad Gita, a discourse by Lord Krishna is a story within this story and probably better known. In the Gita, Krishna speaks to Arjuna (Abhimanyu’s father) and explains right living and the concept of “Karma”. Try it. You will love it.

 

 

Milton Friedman on “GREED”

I’m not a fan of economists in general but a couple like Friedman were some of the greatest minds in our history.

Agree with him or not, Friedman is compelling with his arguments and logic.

Think about what he says and try to come up with a logical (and not emotional) rebuttal. Its actually not easy.

What this does for me, and I’m no unvarnished capitalist, is demonstrate how the real world functions (and not how I would like it to function!)

Great Stuff!

My Infinity Box | Are you memorable?

You should read this. I think Emily Chu is on to something.

I agree with her when she says “super cool is not memorable”

 

My Infinity Box | Are you memorable?.

Be Quiet

Be Quiet

We talk too much.

It’s all about communication we are taught. Stay in touch. You can never communicate too much. Let’s brainstorm this idea or that one. Let’s discuss strategy. Then let’s discuss tactics.

We have a million meetings. And then some more. We drown ourselves (and our sorrows) in our email. Pushing email has become an acceptable proxy for work in many of our biggest and most powerful organizations.

Every available minute of every available day is full of talk talk talk.

Our minds are not at peace and a million thoughts populate it.

Small, inconsequential, stressful thoughts. Its all about urgent and not at all about important.

How are we supposed to think? How do we ruminate on the big stuff?

Two words: Be Quiet.

Look at the people around you who you respect the most. The powerful, successful and the smart people you know. The ones who have achieved the most in their lives and the ones you know will be stars.

They don’t talk much. They listen.

They spend time alone thinking. Not being weighed down by the compulsion to communicate, their communications take on more meaning, their words take on more weight.

They don’t feel the need to demonstrate their smarts.

They are not rushing from meeting to meeting and email to email.

They communicate only when they have something to say.

There’s a pattern there for you and I to emulate.

Think about it. And then, shut your mouth. Be quiet.

We will be better for it.

 

 

All Entrepreneurship is Value Investing

It shouldn’t be a surprise really when you think about it.

Value investing has been described as buying a dollar for fifty cents. Warren Buffet, speaks of investing as delaying the economic gratification of spending money today to have more money in the future. This “more money” is wealth generation resulting from investing in a business that profits.

So, what exactly is a startup?

You have a (great) idea. You start a business. No one believes in your idea. Its crazy they tell you. It would never work. Why, they say, if its such a great idea are the big players in your space not already doing it? As soon as you start valuing your company, you start to see the discrepancy between what you believe the business is worth and what others (“experts”/”investors”) think its worth.

You see where I am going with this?

You “invest” time, effort, energy in this company denying yourself gratification in order to build wealth and if you are successful, the worlds view of the businesses worth now matches your own (or more likely there is froth and the pendulum has swung wildly to overvaluation…You sell into this as fast as you can hombre!)

Value Investing has the concept of a “catalyst”, the event/result that brings together the price of an investment to its real value and converges the two. You, my entrepreneur friend are the catalyst in your business. Believe in yourself and stop listening to the noise.

 

 

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