All human beings are entrepreneurs. When we were in the caves, we were all self-employed… finding our food, feeding ourselves. That’s where human history began. As civilization came, we suppressed it. We became “labor.”
Companies don’t want to invest in you, in part because you’re not likely to commit years and years of your life to working here — you will have many different jobs in your lifetime. There used to be a long-term pact between employee and employer that guaranteed lifetime employment in exchange for lifelong loyalty; this pact has been replaced by a performance-based, short-term contract that’s perpetually up for renewal by both sides. Professional loyalty now flows “horizontally” to and from your network rather than “vertically” to your boss.
When you start a company, you make decisions in an information-poor, time-compressed, resource-constrained environment. There are no guarantees or safety nets, so you take on a certain amount of risk. The competition is changing; the market is changing. The life cycle of the company is fairly short. The conditions in which entrepreneurs start and grow companies are the conditions we all now live in when fashioning a career.
The business strategies employed by highly successful startups and the career strategies employed by highly successful individuals are strikingly similar.
How far in the future should he plan? What kinds of career risks are advisable? How does someone experiment broadly and build specialized expertise?
There’s no better way to demonstrate the perils of failing to adapt the startup of you mindset than by looking back at an industry that once embodied the best of entrepreneurship: Detroit.
In the middle of the 20th century, Detroit flourished into a dynamic capital of the world thanks to 3 local startups: Ford, GM, and Chrysler. At the time, these automakers were as innovative as they come. Ford figured out a way to mass-produce cars and trucks on an assembly line, a technique that changed manufacturing forever. GM and its legendary chairman Alfred Sloan developed a system of management and organization that was imitated by hundreds of other corporations. They were also visionary. Sloan promised “a car for every purse and purpose.” Ford said he would build a car “so low in price that no man making a good salary will be unable to own one.”
In 1955 GM became the first corporation in history to earn $1B of revenue. By the end of that decade, GM was a juggernaut so powerful that the DoJ considered breaking them up.
It was the land of dreams, riches, and next-generation technology. “This was SV, man.” Entrepreneurs were taking home colossal fortunes, and 1M new people flooded into Detroit wanting a piece of it - an influx that made Detroit the 4th-most-populous city in the country. Wages were high; the city’s median income was the highest in America.
In the 1940s, ‘50s, and ’60s, Detroit was a crown jewel of America. The word Detroit is a synonym throughout the word for the industrial greatness of America. It was a key part of the “arsenal of democracy,” so symbolic of American exceptionalism that visitors from around the world flocked there to get a glimpse of entrepreneurship and innovation at its very best.
“Year after year, decade after decade, we have seen problems papered over and tough choices kicked down the road, even as foreign competitors outpaced us. Well, we have reached the end of that road,” said Obama in 2009, at a press conference announcing that the federal government was loaning $77B to GM and Chrysler (and granting access to a line of credit to Ford) to prop up the companies as they filed for Chapter 11 bankruptcy.
What happened? Many things. But the overriding problem was this: The auto industry got too comfortable. “Only the paranoid survive.” Success is fragile, and perfection, fleeting. The moment you begin to take success for granted is the moment a competitor lunges for your jugular.
Instead of taking seriously new competition from Japan, they staunchly insisted (both to themselves and to their customers) that Made in the USA automatically meant “best in the world.”
Detroit did not burst overnight. It saw a gradual deflation. In fact, that was part of the problem. Because companies were still generating billions of dollars of revenue for years during their decline, it was easy for management to get complacent, to ignore the problems that were piling up.
Detroit was once the symbol of progress, of what is good and possible. The auto industry was once the symbol of entrepreneurship. Now Detroit is the symbol of despair.
Why are so many winners ending up like Detroit? Each case is different, but underlying causes tend to include the hubris that comes from success, the failure to recognize and match competition, an unwillingness to exploit opportunities that contain risk, and an inability to adapt to relentless change.
When it comes to your career, right now, you may be heading down the same path as Detroit.
It was a compelling idea, but Reed knew from his years in the tech industry that it would inevitably evolve. He avoided calling his business DVDs-by-Mail and instead came up with a more expansive company name: Netflix.
Reed and his team kept at it. They perfected their distribution center network so that more than 80% of customers received overnight delivery of movies. They developed an innovative recommendation engine that prompted users with movies they might like based on past purchases.
It’s something they’d wanted to do for years, and wide-scale broadband adoption now allows it. Netflix accounts for more than 30% of all Internet traffic during the week.
Though we are optimistic, we must remain vigilant and maintain a sense of urgency.
For many, 20 years of experience is really 1 year of experience repeated 20 times.
Adaptability creates stability.
When a desirable opportunity arises, many people with similar job titles and educational backgrounds will be considered. When sifting through applications for almost any job, employers and hiring managers are quickly overcome by the sameness. It’s a blur.
Your competitive advantage is formed by the interplay of 3 different, ever-changing forces: your assets, your aspirations / values, and the market realities.
You have 2 types of career assets to keep track of: soft and hard. Soft assets are things you can’t trade directly for money. They’re the intangible contributors to career success: the knowledge and information in your brain; professional connections and the trust you’ve built up with them; skills you’ve mastered; your reputation and personal brand; your strengths.
Hard assets are what you’d typically list on a balance sheet: the cash in your wallet; the stocks you own; physical possessions like your desk and laptop. These matter because when you have an economic cushion, you can more aggressively make moves that entail downside financial risk.
Soft assets are more difficult to tally than cash in a bank account, but assuming your basic economic needs are taken care of, soft assets are ultimately more important. Dominating a professional project at work has little to do with how much dough you’ve socked away in a savings account; what matters are skills, connections, experiences.
One of the best ways to remember how rich you are in intangible wealth — that is, the value of your soft assets — is to go to a networking event and ask people about their professional problems or needs. You’ll be surprised how many times you have a helpful idea, know somebody relevant, or think to yourself, “I could solve that pretty easily.”
Your asset mix is not fixed. You can strengthen it by investing in yourself — that’s what this book is about.
Your aspirations are themselves shaped by your actions and experiences. You remake yourself as you grow and the world changes. Your identity doesn’t get found. It emerges.
Keep in mind that the “market” is not an abstract thing. It consists of the people who make decisions that affect you and whose needs you must serve: your boss, your coworkers, your clients, your direct reports, and others.
It’s often said that entrepreneurs are dreamers. True. But good entrepreneurs are also firmly grounded in what’s available and possible right now. Specifically, entrepreneurs spend vast amounts of energy trying to figure out what customers will pay for.
For a long time, business was not among my assets, inspirations, or the reality that I perceived around me.
Graduate school, while stimulating, turned out to be grounded in a culture and incentive scheme that promoted hyper-specialization; I discovered that academics end up writing for a scholarly elite of typically about 50 people.
All advantages are local: Pick a hill that has less competition.
This philosophy presumes that fixed, accurate self-knowledge can be easily attained. In fact, lofty questions about identity and moral purpose, along with deceptive simple ones like “What am I passionate about?” take time to work out, and the answer frequently change. It’s unwise, no matter your stage of life, to try to pinpoint a single dream around which your existence revolves.
She recalls Schmidt’s reaction as she made a detailed presentation of the pros and cons of her various options: “No, no! Get out of the weeds. Go where there’s fast growth, because fast growth creates all opportunities.”
Pixar started as a company that sold a special computer for doing digital animation; it took a while till they got into the moviemaking business. Similarly, Starbucks originally sold only coffee beans and coffee equipment; they hadn’t planned to sell coffee by the cup.
Entrepreneurs penetrate the fog of the unknown by testing their hypotheses through trial and error. Any entrepreneur will tell you that practical knowledge is best developed by doing, not just thinking or planning.
If you study the root causes of business disasters, over and over you’ll find a predisposition toward endeavors that offer immediate gratification.
Apple hired me into their UX group, but shortly after starting on the job I learned that product / market fit — the focus of product management — mattered more than UX or design.
It’s impossible to know exactly when an inflection point will disrupt your career. The only thing you can safely know about the future is that it will be sooner and stranger than you think. So instead of trying to do the impossible and predict when an inflection point will threaten, prepare for the unknown.
But think about his ego. He had decades of experience. A long list of accomplishments. Yet he found himself, in a sense, powerless and young again. It was Day 1 for Gaines. He was in permanent beta.
Fear of failure never goes away. The way to feel comfortable with these entrepreneurial strategies is to have 1 plan in your life that’s highly certain. That’s Plan Z: a reliable plan you shift to when you no longer have confidence in Plan A and B, or when your plans get severely disrupted. The certainty of the Plan Z backstop is what enables you to be aggressive — not tentative — about Plans A and B. With a Plan Z, you’ll at least know you can tolerate failure. Without it, you could be frozen in fear contemplating the worst-case scenarios.
The strength of the cofounders and early employees reflects the individual strength of the CEO; that’s why investors don’t evaluate the CEO in isolation from his or her team. The team you build is the company you build. Mark Zuckerberg says he spends half his time recruiting.
Relationships matter because the people you spend time with shape who you are and who you become. Behavior and beliefs are contagious: you easily “catch” the emotional state of your friends, imitate their actions, and absorb their values as your own. If your friends are the types of people who get stuff done, chances are you’ll be that way, too. The fastest way to change yourself is to hang out with people who are already the way you want to be.
The more important reason why personal and professional are separate relates to conflict of loyalties. For example, suppose a coworker you consider a personal friend is screwing up on a big work project. If you don’t speak up, you will be letting down other team members and your company as a whole, therefore hurting the project and your professional reputation at the same time. If you do speak up, your friend may resent you. Or suppose a personal friend asks you to be a reference on a prestigious job application, but you don’t think he’s truly qualified. It can strain the friendship. For these reasons, it can be tricky to ask close personal friends for career help because you’re asking them to negotiate dueling loyalties: their duties as a professional and their duties as a friend.
Discovering what people want, in the words of Paul Graham, “deals with the most difficult problem in human experience: how to see things from other people’s point of view, instead of thinking only of yourself.”
The second requirement is thinking about how you can help and collaborate with the other person rather than thinking about what you can get from him or her. When you come into contact with a successful person it’s natural to immediately think, “What can this person do for me?” If you were to have a chance meeting with Tony Blair, we can’t blame you for thinking about how you could get your photo taken with him.
A key difference between skilled negotiators and average negotiators was the time spent searching for shared interests, asking questions of the other person, and forging common ground.
Inauthentic people are obsessed with authenticity. Unless the process of bonding and allying with others comes off as effortlessly as tying your shoes, which is to say, unless allying and helping really is what you want to be doing, the collaborative mindset will fail, and so, ultimately, will the relationship.
In other words, as the score keeping becomes less land less formal and as the expectation for reciprocal exchange stretches over a longer and longer period of time, a relationship goes from being an exchange partnership to being a true alliance.
About 16% of the recipients said they found their job through a contact they saw often. The rest found their job through a contact they saw occasionally (55%) or rarely (27%). In other words, the contacts who referred jobs were “weak ties.” He summed up his conclusion in a paper appropriately called “The strength of weak ties”: The friends you don’t know very well are the ones who refer winning jobs.
From an emotional standpoint, this is great. It’s fun to do things in groups with people with whom you have a lot in common. But from an informational standpoint, this interconnectedness is limiting because the same information recycles through your local network of like-minded friends. If a close friend knows about a job opportunity, you probably already know about it. Strong ties usually introduce redundancy in knowledge and activities and friend sets.
Online social networks are converting the abstract idea of worldwide interconnectedness into something tangible and searchable.
Academically, the theory is correct, but when it comes to meeting people who can help you professionally, 3 degrees of separation is what matters. 3 degrees is the magic number because when you’re introduced to a 2nd- or 3rd-degree connection, at least 1 person in an introduction chain personally knows the origin or target person.
The best (and sometimes only) way: via an introduction from someone you know who in turn knows the person you want to reach. when you reach out to someone via an introduction from a mutual friend, it’s like having a passport at the border — you can walk right through. The interaction is immediately endowed with trust.
You can conceptualize and map your network all you want, but if you can’t effectively request and broker introductions, it adds up to a lot of nothing. Take it seriously. If you are not receiving or making at least 1 introduction a month, you are probably not fully engaging your extended professional network.
These are people who would never qualify for conventional bank loans as individuals. Yunus’s pioneering insight was that loaning to groups rather than individuals creates peer pressure within the group to pay back the loans, reducing the risk of default.
Your stronger connections are more likely to happily introduce you to new people — to your 2nd- and 3rd-degree connections. Weak connections, while valuable sources of new information, will not usually introduce you to other people unless they have a compelling transactional reason (i.e., unless it benefits them in some way).
Relationships are living, breathing things. Feed, nurture, and care about them: they grow. Neglect them: they die. This goes for any type of relationship on any level of intimacy. The best way to strengthen a relationship is to jump-start the long-term process of give and take. Do something for another person.
When he asked Jack if there was room for another person to join the initial round of funding, Jack told him it was full — they didn’t need more investors. That was that. But Kevin still wanted to be helpful. He noticed that Square didn’t have a video demo on their website showing how the device worked. So he put together a hi-def video showing off the device and then showed the video to Jack just as an fyi. Impressed, Jacked turned around and invited Kevin to invest in the “full” Series A round of financing.
Helping someone out means acknowledging that you are capable of helping. Reject the misconception that if you’re less powerful, less wealthy, or less experienced, you have nothing to offer someone else. Everyone is capable of offering helpful support or constructive feedback.
Finally, once you understand his needs, challenges, and desires, think about how you can offer him a small gift. We don’t mean an Amazon gift card or a box of cigars. We mean something — even something intangible — that costs you almost nothing yet still is valuable to the other person. Classic small gifts include relevant information and articles, introduction, and advice. A really expensive big gift is actually counterproductive — it can feel like a bribe. Inexpensive yet thoughtful is the best.
If the best way to strengthen a relationship is to help the other person, the 2nd best way is to let yourself be helped. “If you want to make a friend, let someone do you a favor.”
One lunch is worth dozens of emails.
You won’t read about status in most business and career books. It is a topic often dodged in favor of bromides like “Treat people with respect” or “Be considerate of the other person’s time.” Good advice, but not the whole story. The business world is rife with power jostling, gamesmanship, and status signaling, like it or not. It’s especially important to understand these dynamics when you work with people more powerful than you.
He had assumed that what mattered was doing a great job and showing everyone how talented he was. While doing a great job was certainly necessary, he concluded it was not enough. What he failed to recognize was how his personal talents might make his boss look diminished in the eyes of others. He failed to navigate the status dynamics around him; failed to account for the insecurities, status anxieties, and egos of everyone else. He failed to build relationships with the people above him and below him on the totem pole. And ultimately, he paid the price with his job.
A meeting should usually be made more convenient for the higher-status person. That means at the time and location best for him or her. When corresponding with higher-status people, propose to meet “in or near your office.”
The conclusion is not to suck up to people of higher status. Slavishly affirming everything an important person says is unimpressive, to say nothing of dishonest. Nor is the answer to disrespect people of lower status or to flaunt superiority. Presenting yourself as a big deal repels people below you, who won’t feel inspired or loyal. It also repels people above you, who will interpret your braggadocio as insecurity. Rather, the point is that some people require a bit more finesse. If you want to build a relationship with someone of higher status, know that you are supposed to be accommodating.
It’s not just the people you know. It’s the people they know — your 2nd- and 3rd-degree connections. Plan an event where your friends bring a few of their friends; invite your extended network.
Success begins with opportunities. Opportunities are like the snap to the quarterback in football. You still have to move the ball down the field; you still have to execute. But without a snap to the quarterback, there’s no touchdown.
Careers, like startups, are also punctuated with breakouts. On a typical resume there’s a reverse chronological listing of jobs held, all presented in the same type size and font. But on its face this is misleading. Our professional lives are not a sequence of equally important jobs. There are always breakout projects, connections, specific experiences, and yes, strokes of luck — that lead to unusual rapid career growth.
Entrepreneurs brim with curiosity: they see opportunity where others see problems, because while others simply complain, entrepreneurs ask Why? Why the heck doesn’t this annoying product / service work as well as it should? Is there a better way? And can I make money off it?
Andrew Mason did not wake up one day and conceive Groupon; the opportunity grew out of his ongoing activities and ideas.
It’s easy in hindsight to attribute breakthrough career opportunities to a master plan. The key is to raise the likelihood that you stumble upon something valuable — namely, by courting randomness and seeing the opportunities that reveal themselves.
The best way to ensure that lucky things happen is to make sure a lot of things happen.
Opportunities do not float like clouds. They are firmly attached to individuals. If you’re looking for an opportunity, you’re really looking for people. If you’re evaluating an opportunity, you’re really evaluating people. If you’re trying to marshal resources to go after an opportunity, you’re really trying to enlist the support and involvement of other people. A company doesn’t offer you a job, people do.
It wasn’t Franklin’s first time rounding up friends for regular discussion. 40 years earlier, he had convinced 12 of his “most ingenious” friends in Philadelphia to form a club dedicated to mutual improvement. Meeting once a week, these young men recommended books, ideas, and contacts to one another.
Franklin is often remembered as driven, self-educated, and endlessly inventive — a quintessential entrepreneur. But what we find most entrepreneurial about Franklin has less to do with his personal talents and traits and more to do with how he facilitated the talents of others. Franklin believed that if he brought together a bunch of smart people in a relaxed atmosphere and let the conversation flow, good opportunity would emerge.
First, each individual is high-quality. This is fundamental: A group is only as good as its members. The network is only as good as its nodes.
To recap some of the qualities of the PayPal mafia: high-quality people, a common bond, an ethos of sharing and cooperation, concentrated in a region and industry.
When you have no resources, you create them. When you have no choice but to fight, you fight hard. When you have no choice but to create, you create. The less money you have, the fewer people and resources you have, the more creative you have to become. Get resourceful or die.
The lessons is that great opportunities almost never fit your schedule. Usually the timing is imperfect and difficult. Most often, you’ll be in the middle of a different plan — like about to set off on an around-the-world trip.
Making decision reduces opportunities in the short run, but increases opportunities in the long run.
If you are not genuinely pained by the risk involved in your strategic choices, it’s not much of a strategy.
What’s more, risk is dynamic. You are changing, the competition is changing, the world is changing. What may be risky to you right now may not be in a month or year or 5 years from now.
Most people overrate risk. At out core we humans are wired to avoid risk. To keep our ancestors alive, Mother Nature evolved a brain that routinely tricked them into making 3 mistakes: overestimating threats, underestimating opportunities, and underestimating resources (for dealing with threats and fulfilling opportunities).
He asked 700 executives to describe how they think about risk in different scenarios. What he found likely came as a disappointment to architects of fancy decision trees. The executives didn’t calculate the mathematical expected value of various scenarios. They didn’t draft long lists of pros and cons. Instead, most simply tried to get a handle on a single yes-or-no questions: Could they tolerate the outcome if the worst-case scenario happened?
An opportunity where the risk are highly publicized.
Does that mean you should try to avoid those shocks by going into low-volatility careers like health care or teaching? Not necessarily. The way to intelligently manage risk is to make yourself resilient to these shocks by pursuing those opportunities with some volatility baked in. Taleb argues that the less volatile the environment, the more destructive a black swan will be when it comes. Nonvolatile environments give only an illusion of stability.
The real estate agent doesn’t know when his next paycheck is coming in. He has ups and downs. He has to hustle to build a network of clients and keep up with changes in the market. The government worker, by contrast, gets a steady paycheck and an automatic promotion every couple years.
What most students would have done is gone off to the library, skimmed some books on Russian history, and said they weren’t sure it was possible. What Sheryl did was call Richard Pipes, a Harvard historian who specialized in the Russian Revolution. She engaged him for 1 hour and took detailed notes. Which she impressed Summers with the following day.
Your network is an indispensable source of intelligence because people offer private observations and impressions that would never appear in a public place like WSJ or even your company newsletter. Only a coworker can clue you in to your boss’s idiosyncratic preferences. Only a friend working in another organization can tell you about an as-yet-unannounced job position being created there.
Second, people offer personalized, contextualized advice.
Serendipity comes about when you’re in motion, when you’re doing stuff. Serendipitous network intelligence turns up in similar ways — when you’re engaging people. If you’re in touch and top of mind, someone may forward an email with information that’s relevant just because they’re thinking of you.
Think carefully about where you choose to live and work. Then commit to improving whatever community you do live in.
One final point. Books and speeches and articles on entrepreneurship proclaim to impart the top rules of the trade. The irony is that the extraordinary entrepreneurs tend to challenge the rules and partially ignore the “experts.” After all, the way you achieve differentiation in the market is by not doing what everyone else is doing.