Re-Tweetstorm on Thiel interview question

I plan on writing a lot more about why the Thiel interview question (what is an important truth that most people think is crazy) and why it is so brilliant. In the meantime, here is a tweetstorm with my quick thoughts:

Greenland should sell itself to the U.S. … and the U.S. should buy Greenland

Greenland is very strategic territory and becoming more strategic by the day (due to global warming). It is one of most important locations for a military presence. And it would be extremely undesirable (to the U.S.) if a rival country had a significant military presence on Greenland.

But Greenland needs a lot of development. Its 56,000 inhabitants need better resources. While the average Greenlander has an income of $35,000 (more than half of what an average American makes), it takes a lot of resources to live in a place that has such extreme weather.

So here is a modest proposal: Greenland sells itself to the United States.

Yes, the first reaction might be that I’m a jingoistic crazy. But this could be good for every Greenlander.

Imagine selling Greenland to the U.S. for $120 billion (assuming the Danish allow the Greenlanders to make that self-determination). That means that each Greenlander will be worth $2 million — including every adult and child. They could even set up a trust for kids (so the kids, not their parents, have access to the money.

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Almost every company spends over 95% of its time doing what every other company does.

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.

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.

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Over-Rating Intelligence, Insulting Stupidity, Intellectual Bigotry, and Why the Ivory Tower Insults Successful People

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.

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Why written interviews lead to better candidate hires

Over on the SafeGraph blog, we published: Why SafeGraph Does Written Interviews ✍️ (and Why Your Company Should Do Them Too)

The article went viral this week and so did the following tweetstorm:

First Principles About When to Use First Principles

Summary: in this post you will learn when to take the time to use first principles and the three rules for thinking.   

There are tons of people that claim you need to use first principles for all things. People I follow and greatly respect (Naval Ravikant, Shane Parrish, Julia Galef, Eric Weinstein, Scott Alexander, Peter Thiel, Elon Musk, etc.) regular promote first-principle thinking.

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.

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What is the rate you should be scammed?

Let’s say you are investing money in something, what is the rate you want to be scammed?

You could, of course, say that rate should be zero. That you will tolerate no loss due to scams, unethical practices, etc. But that puts an extreme due diligence burden on you before you make an investment. You can’t be 100% on BOTH precision and recall. If you have fewer false positives, you will inevitably have fewer false negatives. 

Being skeptical of everything will allow you to avoid investing with Madoff, but it will also have you miss that angel investment in Facebook and Airbnb. Many ideas seem very crazy (until they aren’t). 

This is also true in life.

You can distrust every taxi driver and every construction contractor … but that might lead do you distrusting most people which could lead to a lot of unhappiness.

Or … or … or … you can accept that you will have some rate that you will be scammed.

You should have a rate you want to be scammed.

A good rate is likely 1-3% of your interactions. This can be on taxi cab drivers, investments, hires, etc. If your scam rate is under 1%, you are likely not taking enough chances. If your scam rate starts approaching 10%, you might lose all your money. 

If you never get into a car, you will never die in an auto accident. But you will also have a lot of trouble living life. So you need to have some guide-rails (wear a seat belt, don’t get in a car with a drunk (or sleepy) driver, etc.). The same is true for investing or doing anything else in life. 

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In marketing, social proof is king, queen, and emperor

Much of marketing is social proof. You use products because you see other people that you admire using products. This is especially true in B2B marketing.

Social proof, when it works well, is a feedback loop. Actions create evidence which create relevance and then create consequences.

This is true in products you buy personally and products you buy for your business. It is true for homes, schools, medical procedures, and even political candidates. Social proof is the number one thing that convinces you to choose any product that is out there.

If you are a marketer, you need to acknowledge the power of social proof and use it to your advantage.

Social proof is a very good short-cut for people who are doing due diligence of a product. They want to understand who else is using a product and what they think of it.

In marketing, social proof is king, queen, and emperor.

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How do I make over $200,000 / year?

If you are not already making $200,000 compensation in your job, there are five steps to getting you there.

Summary:

(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.

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The unintended consequences of rising stock prices – decreased risk taking among employees

Rapid raise in stock prices result in some people in the company being overpaid.  This can be very bad for the overpaid employee and also very bad for the company.

Many tech companies are going public right now and many tech companies have seen significant share price increases in recent years.  We can expect that most of these are facing real internal motivational challenges that could be extremely hard to overcome.  
The weirdness of RSUs in public companies

Let’s say that a company gives you an offer of $100k salary and $500k in RSUs vested over 5 years.  That essentially means that the company values you at $200k per year (as stock and salary are fairly fungible in public companies).  

Let’s say the stock goes up by 20% after six months.  The RSU grant (over 5 years) is $600k and your yearly comp goes from $200k to $220k (a 10% increase).  No big deal for the company as you are probably worth more than 10% more than what they originally offered you because you now have been at the company for 6 months, understand the processes there, have grown your skills, etc.

But now let’s look what happens when they stock goes up by 300% after 3 years (which happens in the tech world).  Now the original grant of $500k is now $2 million (over 5 years).  So the stock alone is $400k per year.  Add in the salary (with assuming some raises is now $150k/year) and you pulling in $550k per year.  

This is when things get a bit hairy.  Because likely the company only values you at $350k so you are making $200k more than you are worth. In fact, if you quit the company and went to work for its top competitor, you might have a hard time getting more $300k.

So now both you and the company are in a bind.

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Everything I know about data companies (in 30 minutes) and one viral tweet-storm

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:

How do you determine the best business to start?

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.