How to successfully have a great online video discussion.

I have hosted hundreds of one-conversation dinner parties over the years.   

Moderating a great discussion by video has a lot of similarities to moderating a great dinner party but there are a few key differences.  

Quiet is golden

When hosting a great dinner party, you want to make sure you are in a quiet room so everyone can hear each other.

When hosting a virtual discussion, sound quality is also very important.  You want to have a discussion with the microphone on for all participants. The conversation will be much more organic if no one needs to be on mute.  That means all the participants need to be in a quiet place or have a very good headset.  

Best discussions are 5-12 people where they can all see each other

The best discussions have 5-12 people.  The more the people, the better the skills needed for the moderator.  

Everyone should see everyone in the discussion so it is important that you view people in “grid view” (rather than speaker view).  Another nice feature of video chat is that they usually can put the people’s names on the screen (analogous to having nameplates for good dinner discussions).

How to do online Introductions

Usually when getting people together that do not all know one another, you go around the table and everyone quickly introduces themselves.  This is a good idea for virtual meetings too but it requires more moderation as it is not clear who is next. The moderator needs to jump in (“thank you Bill.  Susan: you’re up”).

Norms for discussions are important

Just like a great dinner party, you need everyone to show up on time and be engaged and present.  For virtual discussions, everyone needs to be present and not checking Twitter or another screen while the discussion is going on.  

A good moderator needs to enforce these norms and call people out that might be straying or looking less engaged.

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Almost every company spends over 95% of its time doing what every other company does. And it spends less than 5% of its time on things that are unique to the company.

Almost every company spends over 95% of its time doing what every other company does.
And it spends less than 5% of its time on things that are unique to the company.

That makes no sense.

— Auren 𝐇𝐨𝐟𝐟𝐦𝐚𝐧 (@auren) October 27, 2019

That makes no sense.

Ideally it should be flipped. Your company should spend the vast majority of its time focusing on things that are unique to your company.

Crazy thought experiment: Imagine a new type of company that decided to only do what it was really good at and essentially outsourced everything else.

Recruiting as a service?

Pretty much every company spends lots of time recruiting. Recruiting is a massive time suck. Yes, some companies do it better than others … but there are a set of best practices that all the good companies eventually master.

What if your company could completely outsource its recruiting (including interviewing) to another service? I know this seems completely crazy … but imagine if that could happen. Imagine the time savings.

Continue reading →

Over the last year I have been steadily putting together everything I know about running (and investing in) data companies. These companies are trendily known as DaaS (Data-as-a-Service).

I posted it to the SafeGraph blog: https://blog.safegraph.com/data-as-a-service-bible-everything-you-wanted-to-know-about-running-daas-companies-d4cf4c15c038

It is long (will take a good 30 minutes to read) but there is also a summary tweet-storm.

The tweet-storm about the DaaS Bible went viral so including it here:

1/ Data businesses are generally misunderstood. DaaS has different metrics than SaaS.

While there has been a lot written about SaaS businesses (how they operate, what metrics to watch, etc.), there has been surprisingly little written about data businesses.

— Auren Hoffman (@auren) June 18, 2019

3/ Data is ultimately a winner-takes-most market.

As a data company starts to dominate its niche, it can lower its price and gain more market share and use those resources to invest more in the data … thereby gaining more market share (and the cycle continues).

— Auren Hoffman (@auren) June 18, 2019

5/ DaaS is just about assembling verifiable facts. It is all about Veracity and TRUTH.

Good framework is truth vs. religion. pic.twitter.com/T1pMomSZhn

— Auren Hoffman (@auren) June 18, 2019

7/ DaaS margins look horrible at $10M ARR and look amazing at $100M ARR because the cost of data goes in COGS.

“incremental margins eventually become extremely attractive at successful data businesses” – Michael Meltz, EVP of @Experian

— Auren Hoffman (@auren) June 18, 2019

9/ DaaS is growing. Just 5 yrs ago, only ~20 of the 11,000 hedge funds were using alternative data. Today it is still only about 100 funds. In five years it will be over 500 funds.

And every other industry is buying data at the same rate as hedge funds.

— Auren Hoffman (@auren) June 18, 2019

11/ Read more about Everything you want to know about running DaaS companies (Data-As-A-Service Bible) at the @SafeGraph blog:https://t.co/tgrn8CVskL

— Auren Hoffman (@auren) June 18, 2019

So you want to start a business eh?
“Yes,” you say. “It has always been my dream to start a business. I just can’t figure out what to start.”

The answer is right in front of you. Literally. It is in this post. (just keep reading)…

The best business to start is to figure out the join of:
1. Something that will be very valuable in the future.
2. Something most smart people do not think will be very valuable in the future.
3. Something you have a real advantage doing.

If you find a business that fits all three criteria, you have a very good chance of building a massive business.

Of course, it is really hard to know what will be valuable in the future (criteria #1). As the future is very hard to predict.

But the good news is, it is much easier to figure out criteria #2 (something people do not think will be valuable) and criteria #3 (something you have a unique advantage in) … if you are honest with yourself. If you can get those two things right, you have a real shot on changing the world.

How do you determine the best business to start?
1. will be very valuable
2. most ppl don't will be valuable
3. Something you have a real advantage doinghttps://t.co/Z8cMnkuIjI

— Auren Hoffman (@auren) June 4, 2019

Every year I re-edit my list of favorite books of all time.  This year's edition has a few subtractions from years past and a two additions I read in 2014 (one by Peter Thiel and one by Ben Horowitz).  Enjoy:

Ultimate Auren Hoffman Reading List:

Against the Gods
The Remarkable Story of Risk
by Peter L. Bernstein

The Cash Nexus: Money and Power in the Modern World, 1700-2000
by Niall Ferguson

Coming Apart
by Charles Murray

Churchill: A life
by Martin Gilbert

Difficult Conversations
by Douglas Stone, Bruce Patton, and Sheila Heen

Economics Facts and Fallacies
by Thomas Sowell

The Effective Executive
by Peter F. Drucker

Exodus
by Leon Uris
(fiction)

Fooled by Randomness
by Nassim Taleb

Freakonomics: A Rogue Economist Explores the Hidden Side of Everything
by Steven D. Levitt, Stephen J. Dubner

Generations: The History of America's Future, 1584 to 2069
by William Strauss & Neil Howe

Genghis Khan and the Making of the Modern World
Jack Weatherford

The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers
by Ben Horowitz

How the Mind Works
by Steven Pinker

Influence: The Psychology of Persuasion
by Robert B. Cialdini

John J. McCloy: Chairman of the Establishment
by Kai Bird

Just and Unjust Wars
by Michael Walzer

Justice
by Mike Sandel

The Man Who Mistook His Wife For A Hat : And Other Clinical Tales
by Oliver Sacks

The Moral Animal : Why We Are, the Way We Are: The New Science of Evolutionary Psychology
by Robert Wright

The Next 100 Years: A Forecast for the 21st Century
by George Friedman

Night
by Elie Wiesel

The Nurture Assumption
by Judith Rich Harris

Outliers
by Malcolm Gladwell

Path to Power: Early Life of Lyndon Johnson
by Robert A. Caro

A Piece of the Action
How the Middle Class Became the Money
by Joseph Nocera

The Prize
The Epic Quest for Oil, Money, and Power
by Daniel Yergin

Revolution 1989
Victor Sebestyen

The Signal and the Noise
by Nate Silver

Social Animal
by David Brooks

Stumbling on Happiness
by Daniel Gilbert

Surely You're Joking Mr. Feynman!: Adventures of a Curious Character
by Richard P. Feynman

Thinking Fast and Slow
by Daniel Kahneman

Too Big to Fail
Andrew Ross Sorkin

We Wish to Inform You That Tomorrow We Will be Killed With Our Families: Stories from Rwanda
by Philip Gourevitch

We the Living
Ayn Rand
(fiction)

Why We Buy: The Science Of Shopping
by Paco Underhill

A World Lit Only by Fire : The Medieval Mind and the Renaissance – Portrait of an Age
by William Manchester

Zero to One: How to Build the Future
Peter Thiel

How to optimize for growth

In this economy, most people are lucky to find one job.  But a select few have multiple offers of  interesting opportunities.  If you are one of those people, picking the right opportunity can be difficult and stressful.  Here are some easy heuristics to help you make the best decision.

First, let’s think about what you want to get out of a job.  Very few people are trying to maximize their short-term compensation.  If you are trying to do that, no need to read further.  Just take that job at a top hedge fund (or, better yet, get drafted by the NBA).  But read on if you are trying to maximize growth, learning, and long-term success.

Long-term success requires massive growth.  Most smart people out of college grow an average of 10% per year.  Which means they are roughly twice as effective 7 years after graduating college.  That makes sense as most 29 year olds make double what they did their first job out of college.  But growing at 10% per year is way too slow if you want to accomplish great things.  You should be aiming to grow at a rate of at least 25% per year for your first few years out of school (like all things, your rate of growth (the second derivative) will slow over time). 

To grow quickly, you need a job with the following criteria:

1. You’re surrounded by people who are smarter than you
2. You have an opportunity to fail
3. The company has a history of giving massive responsibility to people that look like you

Find a company where at least 30% of the people are smarter than you

You will grow the most through the people who surround you, so make sure those people are really impressive.  Because people tend to hire those they know, many of these people will likely be your colleagues for the next 30 years.  So pick your colleagues wisely.  One simple heuristic to determine how smart the people are at the company are is how selective they are in hiring.  You want to pick a company that has a really hard (and often long) recruiting process where you need to meet a lot of people, complete a project, and have some grueling interviews.  While not perfect, at least you know that everyone else the company hired went through the same process. 

Opportunity to fail

You grow the most when you have a 33-66% chance of failure.  To improve, you want to be in a position where success is not guaranteed. When success is difficult to attain, people push themselves much harder.  Too often, people (especially recent grads) are put into jobs that they will definitely succeed at.  I will not improve my tennis game playing against by 22-month old daughter.  If you are playing chess, you’ll learn the most playing people within 100 points of your score (in the chess Elo ranking, a 100 point difference means a 2-to-1 advantage).  And while definite success initially feels good, it doesn’t help you grow. You should find an organization that will give you projects where there is a high chance of failure. 

Opportunities for massive responsibility

Assuming you are an ambitious person that wants to have continued growth, you want the opportunity to be promoted and to be given continuously greater responsibility.  The companies that are most likely to promote you quickly have a history of doing so and are experiencing high growth. Find people that joined the company with a similar profile that you have and see if some of these people were given outsized responsibility in the company.  If your abilities warrant it, you can also be given the chance.  But if you have a hard time finding people, there will be little chance the company will look to promote you quickly.

These three criteria are heavily weighted towards the selection of start-ups (fast growth companies with under 200 people).  And it is not an accident that the very best grads over the last few years are choosing start-ups over traditional choices like Goldman Sachs, Microsoft, and McKinsey.  In fact, so many great people are joining start-ups that traditional employers have been forced to massively increase salaries to attract students with the promise of short-term compensation. 

But not all start-ups are created equal.  Look for the ones that have a really hard interview process, where they give you an opportunity to fail, and have examples of people just a few years older than you that have been given outsized responsibility.  

 

Great conversion about changing law schools to two years (from three):

This was originally posted in MediaPost.

CMOs are getting smarter and taking control

Limited by the indefinite and imprecise results of traditional marketing, CMOs of the past could not realize meaningful metrics to measure success.  But today’s technology has ripened, enabling sophisticated and precise decision-making.  CMOs have adapted and thrived accordingly, so much so that they will soon lead not just marketing, but companies in their entirety.

The CMO as Billy Beane 

Michael Lewis’ Moneyball chronicles how baseball teams evolved to embrace new and more sophisticated metrics to achieve success.  Traditionally, teams looked to antiquated statistics (e.g., batting average, stolen bases) to determine a player’s worth.  Around the year 2000, the Oakland A’s realized that advanced stats like slugging and on-base percentages were far better indicators of value.  Building a roster with these new metrics, the A’s became one of the best teams in baseball despite one of the smallest payrolls in the sport.

Marketing is experiencing a similar revolution now.  In the past, no substantial feedback loop existed to tie customer choices to marketing activity.  Marketers had to do things by touch and feel, often betting their careers on the black-boxed “genius” of creative agencies or the fuzzy results of focus groups.  Ultimately, CMOs simply had to hope that correlation was causation; that an uptick in sales was actually attributable to them and not some confounding factor.

That’s all changed.  With the plethora of analytics tools, big data platforms, and precise tracking methods available today, marketers can see inside the black box.  Like in baseball, sophisticated metrics have emerged to enable better decision-making.

Enter the Moneyballer CMO. 

Today’s Moneyballer CMO plans her marketing initiatives the way Billy Beane built the Oakland A’s.

She uses streams of analytical data and relies less on subjective focus groups or simplistic measures.  Her analytics are acute and precise; the impact of every marketing and branding initiative is quantified.  She leverages granular data on customer actions to expand beyond the traditional CMO role, influencing product strategy, customer service, and optimized sales pitches.   

The Moneyballer CMO still uses smart agencies and consultants, but insources the core marketing strategy using the increased visibility her technology allows.  She also insources her company’s data, employing it across multiple platforms and applications.  Silos are the enemy of the Moneyballer CMO, because connected data means more holistic and measurable results.     

Moneyballer CMOs and Technology

The rise of the Moneyballer CMO is both a symptom and a cause of marketing technology growth.  As data becomes more integrated and accessible, smart marketers demand better analytics, so companies respond by spawning countless marketing applications. 

Analogous to Moore’s law, the number of marketing applications doubles every two years.  Just think of all the platforms that have emerged in the past 12 years: search marketing, social media, cloud applications, site analytics, mobile devices.  With so many new technologies to manage, CMOs have had to become smarter, shrewder, and data savvy to stay competitive. It’s little wonder that they have become some of the smartest people in the room.      

Residing on the cutting edge of technology, the Moneyballer CMO is often the most forward-looking executive at an organization.  She’s always scanning the horizon for the next platform that will complement her technology stack, improve leads, or lift conversions up another fraction of a percent.  That foresight is key to keeping an organization modern and relevant across all departments.

The CMO’s Touch

Business is just starting to experience the positive influence of the Moneyballer CMO.  Marketing technology companies are in their infancy and we should anticipate an explosion of new tools that will yield massive returns for marketers and customers alike.

The CMO is moneyballing everything that touches the end customer.  That’s why the CEOs of the future are the CMOs of today.

 

We will soon own a lot less stuff

The next few decades will witness a massive decline in ownership.  Renting, not owning, will become the primary way people in the first-world consume. 

The last century saw an enormous increase in ownership.  This change was spurred by a few factors:

• Wealth: society grew much richer over the past 100 years. 
• Convenience: having your own property available to you all the time, e.g., your car, has been much more convenient than the alternative.
• Technology: the advent of big-box stores and the Internet made it easier and cheaper to own than before.

And thus, we have way too much stuff.  In fact, everyone, even the some of the poorest Americans, have tons of things we don’t need and no longer want. 

But this will change.  We will soon become a nation of renters. We might still own the very essential things (like our smart phone) or things that are used very often (like underwear), but there will be little need to own things we use only occasionally (a fancy pair of shoes, most jewelry, or that really nice pizza-making set). 

The things we might want to rent fall into three categories: 

1. Things we need occasionally, like specific cookware.  We'd like to use that lovely baking set 3-4 times per year, but we don't want it cluttering up your cabinet everyday.

2. Things we need for a finite period of time, like baby’s clothes.  We might want to hang on to one or two cherished items, but most of our baby’s clothes go to waste after the child grows.

3.  Things we need only once, like a hotel room.  When I go to Kansas City for two nights, I am not going to buy a house.

Paradoxically, some of the same forces that have made it so easy to buy will soon make it much easier to rent. 

Technology: Much of the newest technology in the last decade has focused on renting rather than owning.  It is no longer smart to buy music – you can rent every song in the world from Spotify.  Instead of buying movies, you can watch them on demand on Amazon Prime or Netflix.  ZipCar gives you the flexibility to drive whatever car you fancy at the moment – sometimes you’ll want a sports car and other times you’ll want an SUV.  Attending a ritzy party? You can rent that designer ball gown from RentTheRunway.com instead of spending a fortune to own it. 

Unpredictability: Our world is now perceived as more unpredictable than it was a generation ago (especially for Americans).  A hard-earned asset like a house was once a sign of stability, but in the past ten years owning a home became a ruinous liability for many.  Without certainty about the future, ownership is high risk.

Convenience:  While owning is often more convenient than renting, technology and business model changes have made renting really easy (and, in some cases, even easier than owning). For example, with car sharing services you don’t have to worry about obtaining insurance or finding a parking spot.

Population Density:  More people are choosing to live in dense urban areas.  This means we all have less room for stuff.  Shrinking living spaces makes it increasingly impractical to own things like winter sports gear, larges tools like table saws, and other occasionally used items.  Additionally, renting is much easier when there is a high concentration of people because warehouses and depots can reach high utilization. 

Environmental Awareness: Creating stuff we own but no longer need is a big contributor to environmental harm.  As some of the population grows more concerned about the health of the environment, many will consider renting a less wasteful way to consume.  While recycling helps mitigate the damage caused by the things you own, renting leaves an even smaller footprint. 

Over the next 20 years, we’ll see a huge movement toward a renter’s world.  The second order effects of this shift will be both positive and negative.  Positively, people will be able to have more choice, convenience, and opportunity to experiment.  Negatively, the decline in ownership will undoubtedly hurt economic growth, with potentially catastrophic implications for countries like China that make much of the world’s stuff.

 Like with many economic problems, change is dictated by our ability to solve market inefficiencies.  The things we own that we don’t use regularly are wastefully underutilized, and it is only a matter of time until those inefficiencies were cured.  That time, the time of renting, is nearly upon us.

 

Special thanks to: Kurt Tsuo and Michael Safai

You can’t learn to be a big winner without losing first.  We would all love to achieve success on the first go, but the reality is failure often lays the requisite groundwork for success.  As I discussed in my earlier post “Fail to Succeed,” failing hardens our resolve, gives us experience, and lights the way to achieving our goal.

In his almost manic Oscar acceptance speech for winning Best Picture for “Argo,” Ben Affleck illustrated this mainstay mantra in Silicon Valley. After a string of bad films, the reinvented and rebooted Affleck said, voice trembling with emotion: “It doesn't matter how you get knocked down in life; that's going to happen. All that matters is you've got to get up."

This maxim is best exemplified in politics.  There’s no clearer referendum on success and failure than an election by popular vote.  Throughout history, political losers have rose to become successful leaders.  In fact, every elected U.S. President since Kennedy has lost a major election on their way to the top:

• Lyndon Johnson – Lost his first battle for the U.S. Senate in 1941 
• Richard Nixon – Lost his first race for the Presidency against Kennedy in 1960
• Jimmy Carter – Ran for governor of Georgia in 1966 and lost
• Ronald Reagan – Failed to win the Republican Presidential nomination in 1976 when he took on a sitting President Ford 
• George H. W. Bush – Lost his race for Congress in 1964 and then lost his Senate seat in 1970
• George W. Bush – Failed in his bid for congress in 1978 
• Barak Obama – Took on a popular sitting congressman, Bobby Rush, in 2000        and got trounced in the Democratic primary

Bill Clinton lost his first reelection bid for Arkansas governor.  That loss was devastating for him.  But he quickly learned from his failure and adopted a new message, which put him back in the governor’s mansion two years later. He famously said that he “learned from defeat that you can't lead without listening.” Recognizing
the value of failure allowed him to take a big risk in 1992 and run against a very
popular president. His main Democrat rivals (Mario Cuomo and Dick Gephardt)
didn’t jump into the race because they were too afraid of losing. Without
Clinton’s pivotal failure earlier in his career, the 1990s could have been a
very different decade.                    

Beyond gaining experience, running a failed campaign can build up essential
infrastructure



and recognition for future elections.  John McCain lost his bid for the Republican Presidential nomination in 2000, but he gained the national recognition to win the nomination in 2008.  Mitt Romney followed the same blueprint, losing to McCain that year but winning the nomination in 2012.  Romney invested a lot of time in building a strong ground game during his first run, cultivating support in key states and setting up offices around the country.  When he ran the second time, he was able to re-enlist those same resources.  Building upon an already strong foundation, he handily won the nomination. 

While I can’t predict who our next president will be, I can predict that he or she will have lost a significant election in the past.  Losing is at the heart of winning big.

 

 

 

(Originally published as a guest on Nir Eyal's blog:  http://www.nirandfar.com/2013/08/to-become-a-superstar-improve-your-strengths-not-your-faults.html)

To really differentiate yourself in this winner-take-all
world, you should be focusing on improving your strengths, not your weaknesses.

Most people who set out to improve themselves focus on their
faults.  For example, here’s Bridget
Jones’ list:

“Resolution number
one: Obviously will lose twenty pounds.  

Number two: Always put
last night's panties in the laundry basket.  

Equally important,
will find sensible boyfriend to go out with and not continue to form romantic
attachments to any of the following: alcoholics, workaholics, commitment phobics,
peeping toms, megalomaniacs, emotional wits or perverts.” 

While I don’t deny that it’s good habit
to place your undergarments in the laundry bin, it is not the best way to
achieve greatness. People who focus on their faults can eventually improve them
to a point where they are no longer obstacles, but doing so will not propel
them to success.  A better strategy is to
focus on one or two of the things at
which you excel and hone those skills or talents to the point of excellence.
Working on your faults might help you make a living, but honing your talents
may help you change the world.   

We are all judged on a variety of traits. We might have four
bad traits, another four mediocre ones, and one or two for which we are
admired.  We all recognize the four at bad
ones; we make New Year’s resolutions to improve them.

The impulse to focus on your weaknesses is a vestigial
remain of an outmoded era in our evolution. 
Indulging that impulse won’t lead to success because we are in a modern winner-take-all
world.  In this world, outsized
returns go to greatness, so it’s better to focus on one or two things at which you
truly excel and strive to become great at them. 

Going from good to
great is really hard.  But so is going from poor to mediocre.  And if you have a
predisposition or talent for a trait it’s likely to be something you love to do
and you’ll  enjoy the process of refining it. 

If one of your really good traits is that you’re good-looking,
you should focus on being great-looking, because in your category the spoils
will go to a few people. So spend the money and time on those expensive haircuts,
the rigorous fitness routine, and the flattering clothes. 

Suppose you are really good at developing computer
algorithms and really bad at showing up on time.  It might take an X amount of effort to become
really great at computer algorithms and let’s say it takes X/4 effort to become
average at showing up on time.  Both are
improvements that increase your value, but being great at computer algorithms will
pay exponential dividends. 

Or let’s say you’re ugly but hilarious enough that strangers
pay you to make them laugh.  Working on
your comedic skills will go a lot further than losing some weight.  Being the funniest person in town is going to
make you stand out.

Have you ever noticed that all the most successful people
have massive, glaring weaknesses?  Think
of Bill Clinton’s well-known faults.  But
he has one or two traits in which he is world class.  That’s all you need to be a superstar.  Same thing goes for Martin Luther King Jr.,
Gandhi, Steve Jobs, and any other person that has changed the world.  What does Tiger Woods do great?  He hits golf balls long and accurately . . .
and that’s what he will be remembered for.  People — all people — have very obvious flaws.  Instead of spending massive amounts of energy
on those flaws, spend it on making yourself great.

Of course, it’s not as
easy as I make it sound, or else everyone would achieve greatness.  To be outstanding requires passion,
dedication, and extraordinary commitment. The great pianist Arthur Rubinstein
practiced as much as 16 hours a day at some point in his career.  He said that if he missed practice for one
day, then he knew it. But if he missed practice for three days, his public knew
it.  

For most of us it might be too late to be a concert pianist,
a champion golf player, or a prima ballerina. However, we do have talents and
natural abilities that, if honed, can propel us much further than remedying                                                                                            our
faults.