To be one of the best in the world at something, you have to work hard.
While this seems obvious, there are many people who don’t believe it’s true. Many people believe you can become great just working 9 to 5. It’s not clear where this controversy comes from.
It could be a result of the fact that we can’t all agree on how many hours of work really constitute “hard.” Malcolm Gladwell theorizes that it takes 10,000 hours of deliberate practice to become a master at something. But it is not just the hours … it is the obsession that matters.
You cannot be great at something unless you are obsessed with it. You need to be thinking about it all the time. That obsession may consume you and it might not be healthy for you … but that is the difference between the great and the merely good.
Hard work is a prerequisite to changing the world.
People who changed the world were workaholics. Look at Martin Luther King Jr., or Mahatma Gandhi, or Alexander Hamilton. They all put in many hours more than a standard 40-hour week.
The difference though is that their work is an extension of who and what they are.
They worked hard because it did not feel like work. At least not always.
Actually getting 40 hours of work done in a week is rare.
There are very few people who can do world-changing work in a 40-hour week. I’ve never seen one.
There is a caricature of certain successful people as being stupid. I never understood this but it is something that has prevailed in our culture.
It is an odd insult often thrown by the less successful at the more successful. If these successful people were really so stupid, why did they accomplish so much?
We have a tradition of calling our President ‘stupid.’
It goes back a long way. Many of Franklin Delano Roosevelt’s enemies (including many in his own party) called him stupid and a lightweight. Of course, we do not think of FDR today as a lightweight … but that was a criticism of him for many years.
In my lifetime, almost every Republican President has been caricatured as being stupid. Gerald Ford was the clumsy bumbler portrayed. Anyone of that era remembers Chevy Chase’s hilarious skits on Saturday Night Live.
But Ford wasn’t a clumsy bumbler. He was actually the opposite — Ford was a world-class athlete. He was voted the most valuable player on the University of Michigan Football team.
Then came Reagan. How could an actor be smart? The zeitgeist was that Reagan was stupid and he was being taken advantage of by other members of his party. It was so assumed that he was a dummy that there is a classic SNL Phil Hartman skit that is a parody of the parody. The skit was so hilarious because no one could actually believe Reagan could take control of anything.
The problem is that you cannot use first principles to determine everything. You don’t have the time to do that. You need to rely on proxies who you believed have figured things out and believe in them (until you eventually figure out that the proxies are wrong, frauds, etc.).
For instance, I have never actually done the full proof that the world is round. I don’t actually know, with 100% certainty, the shape of the earth. I use proxies to help me determine that. It might not be round. There might be a conspiracy. Or we might be living inside a simulation. I’m not 100% sure. But I rely on proxies and make an assumption that the world is round (at least for my purposes).
I don’t know (with certainty) that the moon landing in 1969 was real. Some people believe it was faked. But I use proxies who I respect and therefore adopt the belief that the moon landing was real. I believe this even though I have not taken the 100+ hours to prove it myself.
Therefore, I believe the world is round and also believe the moon landing was real. Am I 100% certain? No. But I live life believing it and know that I will likely never take the time to prove either to myself.
If you are not already making $200,000 compensation in your job, there are five steps to getting you there.
(1) Do everything you say you are going to do.
(2) Manage your boss and colleagues — don’t make them spend time managing you.
(3) Proactively help the organization.
(4) Be positive (don’t complain). Be a “yes, and” person.
(5) Report to someone making over $200k.
Even if your goal is not money, following these steps (save the fifth one) will help you achieve success in any organization you are in (including teaching in a school, being a soldier in the military, being a firefighter, working at a non-profit, and more).
100% of 10Xers do the first four things. Or maybe it is 98%. And these are things ANYONE can do — you do not need to have some sort of superhuman skill to achieve the first four things. If you do these things well, you will likely be a 10Xer to your organization.
(1) Do everything you say you are going to do.
One of the rarest things to do in the work world (and this is also true in the social world) is simply to do what you say will do. Be dependable. When you say you will do something, you do it. You meet expectations. Almost nobody does this. Just doing this one step puts you in the top 10% of employees.
For the last 2000 years, one of the most important skills someone could have was the ability to plan ahead. Those that could plan ahead would reap massive awards, those that didn’t would starve in the winter.
But there has always been a tension between the forgetful creative genius (the absent-minded professor type) and the Planner. Of course, the most successful people were the combination of the Planner AND the Creative Genius (like Bill Gates and like Warren Buffett) … but that is a real rarity. For the last 2000 years, you were MUCH better off being the planner than the creative-type unless you were the BEST creative in your field. The 1,000,000th best planner still did very well.
The Planner is typically someone who is really good at seeing the likely future and making plans to address it. For instance, 2000 years ago, it was really important to plan for winter. Things did not grow in the winter so one needed to store food. In fact, thinking about food was extremely important because harvests were not certain so you would need to save grain from a good harvest to cover an eventual shortfall year.
The forgetful creative genius (the absent-minded professor) was at a big disadvantage in society because of their lack of planning skills. At the same time, the Planner (less creative but very good at logistics for the future) was needed for most tasks.
While both skills (planning and creativity) are important, the future will need more creatives types and less planners.
A history of the Planner advantage
Being a Planner 25,000 years ago (as a hunter gatherer), while important, did not pay huge dividends. You mostly wanted to avoid being eaten by lions or bitten by poisonous snakes. And you had a limit to how much you could succeed because humans where generally confined to small tribes of people.
But as the farming revolution spread and we domesticated, planning became more and more important. By the time the Renaissance and (later) Enlightenment hit, Planners could rule vast lands or get very wealthy.
Then came the industrial revolution and Planners became even more in demand. Alfred Sloan, the famous CEO of General Motors, was an incredible planner.
But planning was not just important in becoming a successful business person. Planning was ESSENTIAL in every-day life.
In 1990, the people with great social lives were the planners. If you did not not plan to meet your friends, you might not be able to meet them. In the pre-mobile phone era, you needed to be constantly planing ahead. The rewards, both economic and social, went to the planners.
And yes, there were still some extremely successful forgetful creative geniuses like Einstein. But Einstein had a brain like Einstein. He was an exception.
Even the most famous 20th Century artists were Planners
People think that “creative geniuses” are not planners. But in the 20th Century (the century were planning mattered most), most of the great artists were planners.
Warhol was a planner. Picasso was a super Planner. And other “artists” are planning machines. The successful comics like Seinfeld and Chris Rock were always planning. Most of the best actors, musicians, etc. have been Planners. Planning was how you got ahead.
In fact, we’ve reached Peak Planner.
Today, it is easier than ever to do something in the last minute.
Want to watch a TV show? Not that long ago you’d have to plan to watch it. Seinfeld was available to watch only on Thursday at 9p. Later, when DVRs came, you’d still have to plan by setting up your DVR. Non-planners often had to resort to watching infomercials. Today, you just go watch the great show whenever you want.
Want to go on a good vacation? It is actually possible to plan the whole thing that day.
Need a ride to the airport? You can call a Lyft or Uber a minute before.
Want food? The biggest problem is picking from one of the 400 apps that help you do that.
Want to meet a special someone? Swipe right on Tinder.
Even businesses need less planning. When I stated LiveRamp in 2006 I had to plan ahead to buy servers. I remember the day when we moved our colo to a new host and we had a checklist of over 250 items. I fondly remember the celebration when we completed the move. But need more compute power for your application today? Simple to spin up more instances on Amazon Web Services.
You don’t even need to plan for office space — WeWork gives you office space on demand.
And you can even get workers on demand through UpWork and Mechanical Turk.
On-demand services are built by Planners to give non-Planners an advantage
The best planners are working themselves out of a societal advantage because they are spending their time planning logistical companies that give small benefits to other planners … but very large benefits to the absent-minded professors.
Coordination is getting easier and easier
Coordination … especially between 2–10 people … is getting easier and easier. Not that long ago, if you wanted to meet someone you’d have to spend a lot of time coordinating it. You’d break out a map and plan your route. You’d call them a few days ahead of time and meticulously plan where to meet.
Today your mobile phone takes care of all of this in real-time. No need to coordinate. It is Planning for Dummies.
The Marshmallow Test will not be as important 50 years from now
The famous Marshmallow Test predicted that people who were good at delaying gratification would be more successful. These are people who better appreciated the value of compound interest. But in a future world where planning is not as needed as today’s world, delaying gratification may not be as important.
I’m a planner and I benefitted from it.
And yes, you can still get big economic benefits if you plan. I pay half price when I buy my GoGoAir Pass on the ground instead of in-the-air. I can save a lot of money by packing a chocolate bar rather than buying one at the airport. But the benefits to planning, while significant, ain’t what they used to be.
Yeah, I plan meticulously to queue up my reading so that I always have something good to read. I save book and movie recommendations from people. But while this lack of spontaneity has generally served this Generation Xer well, it is likely not a core skill that someone born in the last decade should be focusing on.
Summation: While people that do well on the Marshmallow Test will still have an advantage … that advantage will be much smaller 50 years from now as it was 50 years ago.
The experts are wrong a lot. If there is not a clear truth, the experts are usually wrong more than 50% of the time.
Experts (those who predict the future for a living) are, more often than not, dart-throwers. They usually perform no better than chance. And recently they have performed even worse than chance.
“Economists have predicted nine of the last five recessions.”
Most experts are biased by their experiences. In fact, the most dangerous person is one who says they are unbiased. “I am just using facts, not opinions, for this prediction” is almost always wrong.
We are ALL biased. We see the world through a very hazy prism of our experiences.
There is no unbiased news outlet. Even “real news” has lots of untruth to it. Almost every news story I had intimate knowledge of made a significant reporting mistake or factual error in the story.
We’re human and we make mistakes. We’re human and we see the world with our strong bias. We overweight certain sources and underweight others. We discount data that is very good and we rely on data that is wrong. We see patterns when there are none and see coincidences when there are conspiracies.
The “expert” can be dangerous.
We live in a world where people spend a lot of time building their bona fides so they can make their living off their “expertise.” Most of the top 1% of earners make their living predicting the future. But because people come with huge biases, their predictions can often be very, very wrong.
In even the most noble professions (like medicine), people have huge biases. Study after study finds top surgeons recommending treatments that they specialize in … even when the problem may be better served from another procedure. That’s because for most of us, every hammer is a nail.
Sacred cows tend to not be that sacred.
Experts tend to talk to other experts and can get sucked into a dangerous groupthink. Once all experts agree on something, even when it is highly speculative, it can become calcified.
Experts often say “that cannot be done” like it is a rule of the universe. But instead of a low of gravity, it is more akin to a custom (like setting fork on a left side of the plate).
We see groupthink happen most often is the softer sciences like political science, sociology, foreign policy, and economics. The more specialized the field, the more people find themselves talking to each other … and the more they will be prone to repeat one another.
While it is harder to happen in hard science, we see it happen there too. Wrong ideas are clung on to too long because it is hard to change one’s mind about the world. Max Planck famously said “Science advances one funeral at a time.”
None of this means experts are trying to be sinister. Yes, sometimes people are on the payroll of an interest (for instance, many people who campaign against oil pipelines are indirectly funded by the railroad companies or the Russian government), but that is not usually the case. Biases control people’s thoughts much more than money.
Protect yourself from experts through contrarian thinking
“Conventional Wisdom” is often very conventional thinking.
Before accepting opinions as truth, think through the issues yourself. Don’t just look for agendas but look for biases. If a surgeon recommends a specific procedure that only her hospital does, seek out other opinions.
Seek out outcasts. Seek out non-expert experts who often challenge the status quo. Some that I would recommend are: Peter Thiel, Naval Ravikant, Nassim Taleb, Paul Graham, Judith Rich Harris, John Hempton, Charlie Songhurst, Tyler Cowen, Sam Altman, Jonathan Haidt, and Slate Star Codex. I’d even throw in some more mainstream thinkers like Malcolm Gladwell, Susan Athey, Daniel Kahneman, Richard Feynman, Tim Ferriss, Daniel Yergin, Robert Cialdini, Oliver Sacks, Elie Wiesel, Robert Caro, and Charlie Munger because people like them will always make you think.
Of course, experts can be right. They often are.
You don’t have time to question everything in this world — you might turn into the Unabomber if you did.
For instance, even if you cannot prove the earth is round, it is not a good idea to think the world is flat. It is likely that the government did not fake the moon landing. And when you were born, you probably were not delivered by stork.
The 40-year life lesson: experts are (very often) wrong
Just because someone knows much more about you about a particular subject, do not assume there are correct. Do not bestow authority on them just because they are wearing a lab coat or possess a PhD.
Summation: just because someone has spent more time learning about something, it does not mean that they are a closer to the truth than you.
ABC: Always Be Charging Whenever you have a chance to charge your devices (phone, laptop, etc), always do it. You never know when you will lack access to reliable power.
Always Be Reading Long-form Read at least 7 hours a week of long-form. Read books. But also read well-written articles longer than 3 pages. Save time to go down reading rabbit holes. Feel free to cut out short-form reading (like clickbait articles) to make time for long-form. The airplane is a fantastic place to read.
Always Go to the Bathroom Whenever you have a chance to go to the bathroom, take it. Never “hold it in.” Just makes you very uncomfortable and unproductive.
Always Be Listening Long-Form We are in a podcast revolution — take advantage of it. You also can get many books (but unfortunately only 20% of good books) on audio.
Always Love Email Email is the best form of communication ever invented. All new communications methods in the last 20 years are inferior to email. Email is the greatest asynchronous communication tool. For synchronous communication: meet in-person, by live video, or talk on the phone. Slack and Facebook Messenger can be productivity killers.
Always be Writing Try to write something over 500 words a few times per week … even if the only person who reads it is yourself. This will help you collect your thoughts.
Sometimes Change your Mind At least once a year, challenge yourself to change your mind about a deeply held belief (business, family, political, societal, etc.).
If you are a big biography reader, you’ll find that most of the super successful entrepreneurs spent a massive amount of time alone when they were kids and young adults. And most of these people still spend a much larger percentage of their time alone today than most outsiders would think.
Especially when people are growing up, spending time alone gives one the space to explore, to be weird, to learn, to imagine, and to dream.
Reading is really (REALLY) important. Read a wide variety of books and articles that stretch your imagination. Don’t just read easy books (like Harry Potter). Read difficult texts that really stretch your mind.
Read fiction and non-fiction. Read wonderful novels written by authors from far-away lands. Read things that challenge your political thought. Read the Bible (New and Old Testament) and ancient mythology. And don’t just read conventional things assigned to you in school (like Hemingway, Shakespeare, Twain, and more) but try to seek out authors on your own.
Most people that are successful today (that grew up pre-Internet) spent a huge portion of their time just reading the encyclopedia. Ask almost any super successful person over 40 and they will tell you they spent gobs of time in the Library pouring through the encyclopedia. Many of them would eventually read every encyclopedia volume letter. These people had an insatiable need to learn new things. Today one can can do the same thing going down a Wikipedia wormhole.
When today’s successful people walked to class (in high school), they were probably reading a book or a magazine (in those days, it was a paper book). Some of these people even got injured walking into things because they were reading.
Most of these people had parents that asked them to READ LESS.
Today the encyclopedia is free and on the internet. But today the encyclopedia is so big that it would be impossible to read in a lifetime — so today choices about what you read could be a bit harder. But reading is still really important.
Play acting At an early age, most of the super successful people spent more time play-acting than others. If you go through the top 100 tech entrepreneurs, very few of these people spent their time playing organized sports … they instead were in their bedroom, backyard, or nearby park playing by themselves (or with their siblings in the case of the Collisons). They were letting their imagination run wild.
They were imagining themselves as secret agents, slaying dragons, marshaling their toy soldiers to do battle, starting businesses, dealing with family situations, and more.
Experimenting It is amazing how many successful people lit things on fire, blew things up, captured and studied bugs, built bird nests, and more. My guess is that every single one of the most successful people subjected themselves to multiple electric shocks (some on accident, some on purpose).
They were building, creating, viewing, and observing. And they were the ones in charge of the experiment — they were the prodders.
Lots of creative activities While most of the super successful entrepreneurs are known for their right-brained prowess, most spent a very large percentage of their childhood and adolescence doing very creative things. They were writing short stories and plays, painting, sculpting, writing poems and lyrics, writing computer programs, and more.
Creating versus Consuming Reading, watching wonderful movies, listening to music, etc. are all great ways to spend time. But they are passive — these are consuming functions.
Most of the super successful people spent a large percentage of their time creating vs. consuming. They were building things, starting things, etc. This is really important.
Today it is harder to spend time creating because there are so many more options to consume. In the pre-Internet days, one would get bored pretty quickly of the consuming options (usually the best option was to read a book or watch bad television) where today there are just so many more options. In fact, the tablet is essentially designed to maximize consumption (unlike the PC which is a better tool for creation).
Get away from the social pressures of school School, especially middle school and high school, is socially incredibly high pressure for everyone. People are jockeying for position and cliques are forming and unwinding constantly. There is a “Game of Thrones” aspect to the social standing within high school that is ultra competitive and hard to escape.
By spending time alone, people get needed breaks from the high school Game of Thrones. Alone-time allows you to spend time actually exploring yourself (rather than spending time conforming to some sort of norm).
Today, alone-time is frowned upon Something happened in the last 30 years to encourage parents to spend more time with their kids. Another huge trend has been for parents to give their kids opportunities by enrolling them in lots of sports, weekend classes, summer learning retreats, and more.
While there are so many good things about the trend of more involved parenting, one of the very important unintended consequences is that kids have significantly less alone-time than they once did. And even when they are alone, they have the means to be a part of of the larger group through social networks, SMS, and more. So it is harder for them to escape the social pressures of school.
So we should expect the best strategy for kids today to not be the same as the best strategy for past generations.
Summation: most everyone (young and old) — especially those that have good social lives and have been reasonably successful — could use more time alone and more time to themselves.
Many companies have strong alumni networks. The most famous of which is the PayPal Mafia which includes Peter Thiel, Reid Hoffman, Elon Musk, David Sacks, Jeremy Stoppelman, Luke Nosek, Keith Rabois, Reid Hoffman, Max Levchin, Roelof Botha, and many others. It is a truly astonishing alumni network.
The best predictor of having a strong alumni network is a company that: (1) had a successful outcome but not crazy successful (like a Facebook or a Google); (2) the company went through a bunch of trying times (and almost went out of business); and (3) the employees built a company that was super enduring and even prospered post-exit.
PayPal fits all three of these criteria. It had a strong exit (but not Google-like escape velocity), it almost went out of business multiple times (highly recommend reading PayPal Wars by Eric Jackson), and it continues today as an independent company (NASDAQ:PYPL) that was spun out of eBay (its original acquirer in 2002).
I often get asked why the LiveRamp alumni have been so successful. While the exit was only 20% of PayPal, it had many of the exact same characteristics. (1) The exit was good; (2) the company almost went out of business multiple times (and like PayPal, we had to pivot hard from “Rapleaf” to “LiveRamp”); and (3) we built a company so enduring that it ended up being the crown jewel of the acquirer and now is an independent public company (trades at NYSE:RAMP).
At the time of announcing our exit (in May 2014), LiveRamp was around 50 people. It is amazing how many of those original LiveRampers are now doing super interesting things.
So without further ado, I list the notable LiveRamp alumni and what they are doing at time of writing (Jan 2019) … please let me know if I missed anyone.
Caitlin MacDonald Bartley – CEO at Cred
Ryan Buckley – CEO at MightySignal
Eric Chernoff – CEO and cofounder at Retain.ai
Phil Davis – Chief Business Officer at TowerData
Ken Dreifach – Member, ZwillGen
Bryan Duxbury – Chief Technologist at StreamSets.
Dayo Esho – CEO and cofounder of TravelJoy. Dayo was a cofounder of LiveRamp.
Greg Fodor – fmr CTO and cofounder at AltspaceVR
Auren Hoffman (that’s me) – CEO of SafeGraph. Previously CEO and cofounder of LiveRamp.
Thomas Kielbus – cofounder at RideOS
Chris Kline – cofounder at CTO at TravelJoy
Ron Johnson – Vice President Sales Analytics at Workday
Anders Jones – CEO at Facet Wealth
Jeremy Lizt – on the beach taking a much needed break. Jeremy was cofounder of LiveRamp and ran engineering from founding (2006) until Jan 2018.
Nathan Marz – founder of Apache Storm
Travis May – CEO and cofounder of Datavant. (Travis succeeded me in running LiveRamp in 2015)
Luke McGuinness – President & COO at TVision Insights
Patrick McKenna – Founder, HighRidge Venture Partners
Bryan Morris – CFO at Kinetica
Brent Perez – President and cofounder at SafeGraph
Mike Safai – Founding Partner at Dexterity Capital
Armaan Sarkar – CTO at Wove
Dan Scudder – CEO at Highland Math. Dan is the person responsible for coming up with the “LiveRamp” name.
Pete Schlaefer – VP Business Operations at AppLovin
Justin Schuster – Head of Marketing at Blend
Manish Shah – CEO of Peerwell. Manish was cofounder of LiveRamp.
Mohammad Shahangian – Head of Data Science at Pinterest
Vlad Shulman – cofounder and CTO of Retain.ai
Eddie Siegel – CEO and cofounder at Wove
Dan Stevens – cofounder at VP Data at Windfall Data.
Vivek Sodera – Co-Founder at Superhuman. Vivek was cofounder at LiveRamp.
Nikhil Sud – CTO at CoWrks
Chris Taylor – CRO at Wove
Michel Tricot – cofounder at RideOS
Alex Wasserman – cofounder at Wove
Takashi Yonebayashi – CTO at SafeGraph
In addition, many of the best people at LiveRamp are STILL at LiveRamp. That includes:
James Arra – President and Chief Commercial Officer at LiveRamp
Sean Carr – VP of Engineering at LiveRamp
Anneka Gupta- President and Head of Products and Platforms at LiveRamp
Joel Jewitt – VP of Strategic Operations at LiveRamp
Allison Metcalfe – General Manager of LiveRamp TV at LiveRamp
Rebecca Stone – Head of Marketing at LiveRamp
and many many others at the company
Summation: while LiveRamp was a company chock-full of talent. Its alumni success was due to being a company that: (1) had a successful outcome but not crazy successful (like a Facebook or a Google); (2) the company went through a bunch of trying times (and almost went out of business); and (3) the employees built a company that was super enduring and even prospered post-exit.
The old adage that “it’s not what-you-know but who-you-know” is so entrenched that we don’t question the premise. Undoubtedly, who-you-know has been important throughout history, whether in the trade networks of ancient Greece, or in the dense web of high tech companies in Silicon Valley. A good network is especially important when capital is scarce, information hoarded, and when finding the appropriate contacts is difficult. For much of history, knowing the right people was crucial if you wanted cash and cache.
By definition: a “What-You-Know” knows a lot about a certain thing. They possess a lot of knowledge, insight, and research. They usually spend a lot of time reading broadly and interacting with a few dozen select people (strong ties).
A “Who-You-Know” generally has a very large network of weak ties. The ultimate who-you-knows make money by being in a profession that introduce two what-you-knows together and taking a vig. In the 1980s, the professions with the highest prestige were the what-you-know professions (like investment banker, corporate lawyer, real estate agent, wealth manager, etc.).
Because the who-you-knows were constantly talking to smart what-you-knows, the who-you-knows ACTUALLY BECOME what-you-knows because they had access to a ton of proprietary knowledge.
Think back to the 1980s … there were no blogs and there were a very small number of news sources. Information was really hoarded and having a deep network was one of the best ways to get access to interesting and unique knowledge.
But something happened in the last 10 years … it is easier to find people, connect with them, learn new things, and get access to capital. So the what-you-know has been ascendant.
Finding people is easier. So is connecting with them.
Tools such as LinkedIn and Google, democratize the ability to network. If before it was difficult to ferret out the perfect contact, today finding a right marine biologist in New Zealand or the genetic researcher in Norway is as easy as a Google search. And social media has made it even easier to connect with that person.
Access to capital is much easier.
Today, capital is relatively plentiful and accessible. In fact, it is the easiest time in history to get capital. That does not mean getting capital is “easy” — it certainly is still really hard. But it is significantly easier than in the 1980s (and the 1980s were easier than the 1880s). It is also much easier than ever to get access to people who have money (accessing capital can be as easy as sending an email).
Access to information is easier.
Information, too, has been democratized. It used to be that if you wanted to get access to cutting-edge ideas in technology, you needed an invitation to an exclusive conference like TED … or to attend a university like MIT. Today, TED lectures and MIT courses are offered free online. The only barrier to most of the world’s best information is knowing English (and even that is changing). Some of the best information is available on blogs.
As an aside, I count myself extremely lucky to be friends with Tyler Cowen (who is truly a wondrous person). But if I knew someone like that in the 1980s, I might have 95% advantage (in getting interesting information) than people that did not know him. Today, anyone can read Tyler’s blog (which I highly recommend you do). It is chock-full of information. My information advantage in knowing Tyler may only be 15% more than those that do not. That is a huge change in a short time.
Given our hyper-connected world, could it be that “who you know,” while still important, matters a little less than in the past? Could it be that “what you know” carries more weight? The answer to both questions is undeniably “yes.”
My intuition is that “what you know” has now crossed the line to be more important … and possibly even MUCH MORE important … than “who you know.” Like Kurt Vonnegut said in Breakfast for Champions; “new knowledge is the most valuable commodity on earth. The more truth we have to work with, the richer we become.”
In today’s world, if you know something really compelling, you will be sought out … and sought out directly. In the past, the people with connections were gatekeepers who controlled access to the elite circle and got paid handsomely for that. Today, people that invent interesting things (the true What-You-Know people) will reap many more rewards than the brokers who make introductions.
Even the traditional who-you-know professions such as banking and law are becoming more specialized. The lawyer that understands the intricate tax implications of U.S.-Brazil joint ventures is now much more valuable than the generalist lawyer that introduces you to that person.
Today the professions most prized are the what-you-knows. The inventors, hedge fund managers, etc. One hundred years ago, most inventors would capture only a small portion of their intellectual property. Most of it would be taken by the who-you-knows.
All this does not mean that your network isn’t important. Of course it is. Who-you-know is still incredibly useful. But it will just be less important than it has been in the past. Even the Wizard of Oz was looking to network: just before he leaves the Emerald City he tells Dorothy that he is off “to confer, converse and otherwise hobnob with my brother wizards.”
Summation: In the new world of abundant capital, easy access to information and people with knowledge, the what-you-know skills are more important than those of the who-you-know.
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 of skill) will slow over time).
To grow quickly, you need a job with the following criteria:
You’re surrounded by people who are super smart
You have many opportunities to fail
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 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. Because you know that everyone else the company hired went through the same process. So never take a job at a company that doesn’t put you through the ringer and make it really hard to get an offer. If the offer comes easy, best to decline the offer.
Opportunities 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. I will not improve my tennis game playing against my six-year-old. (Of course, I will also not improve playing against Roger Federer). Too often, undergrads are put into jobs that they will definitely succeed at (this is too often true at some of the “best” places to work like McKinsey, Goldman Sachs, and Google). And while definite success initially feels good, it doesn’t help you grow very fast. 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 who 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. If your abilities warrant it, you can also be given the chance. Also ask people during the interview process where you could be in three years if you turn out to be a superstar. If the company says “executive” — then that’s a good sign. (too often though it is “associate level 3”).
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 have been choosing start-ups over traditional choices like Google, Goldman Sachs, 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. So you should expect to make almost 2x more at a company that will offer you lower growth company than at a company that will give you the option to get high growth. You have to decide for yourself if that trade-off is worth it.
Summation: 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.