The Breaking Smart AMA, Part 1

Well, I got 70-odd questions in response to my AMA prompt last week. Only a couple of TMS -- tell me something --  responses though. So that part of the experiment didn't quite work.

Almost all the questions were kinda interesting and fun to think about, so I'm going to post my responses to almost of them. It's too much for one newsletter, so I'm going to break it down into two issues. Here's the first set of responses, to the first 33 questions, taken in order. I'll do the rest next week. In some cases, I've anonymized the question even though the questioner didn't ask for it, since the details seemed personal.

The questions span the gamut from industry trends and personal career questions to Big History questions and questions about consciousness. What I learned about myself is that I am sort of the Walmart of quick premium-mediocre baseline takes on almost any subject. I don't have to think for more than a few seconds to come up with an off-the-top-of-my-head not-too-terrible answer to most questions. Only one person managed to entirely stump me in this set.

Well hear we go. Good Afternoon, Internet, I'm Talking.

Continuing the Frasiering

1. Seems like politics is the last bastion of society to be disrupted (with the possible exception of the military - although Iraq and Afghanistan certainly tried).  Anyway, with the social media prowess of AOC on the heels of trump, is the political establishment in for a disruptive awakening? -- Ben Kohlmann

I don’t think I’d call it an awakening. More a sleepening. A dark age is essentially when public life retreats and is replaced by a mix of expanded domestic life and feudal life.

2. What's your single favorite essay you've ever written, as of right now? - Drew Austin

Probably On the Design of Escaped Realities. It is neither a very good piece of writing, nor was it a big performer. However, it is the main public trailhead for almost all the thinking I’ve been doing in private since then.

_3. At 39 years of age, having mastered nothing (yet), what is the most valuable thing I can learn? -- Francisco G. _

You’ve survived and made it to 39. There is deeper mastery than you might realize merely in doing that (unless of course, you’ve been living off a trust-fund from rich parents or something). I’m told James Joyce’s Ulysees is in fact an appreciation of the enormous accomplishment that is ordinary humans simply getting through everyday life. I think in fact it takes more courage to be ordinary than extraordinary. It’s worth reflecting on your life on occasion and trying to unpack how exactly you’ve managed to survive as long as you have.

_4. Does tweeting give or take energy from you? (extro/intro-vert?) -- Edward G. _

I don’t think extrovert/introvert is the right spectrum. It energizes me when I’m depressed and in “retreat” mode, and annoys me when I’m feeling hypomanic and in attack mode. I think I defend/protect my psyche on twitter, but attack by blogging. So the correct spectrum may be creative production versus refractory/relaxation cycling.

5. If you were to base an essay on another tv series like you did with The Gervais Principle and The Office, what would it be and why? -- Isaac Morehouse

Probably Rick and Morty. The “To be fair you have to have a fairly high IQ to understand Rick and Morty” copypasta actually is right about the real depth in the show, though it does not lie where the copypasta author thinks it does, in the nerdy, esoteric obscurity of cultural/philosophical references. In fact, I’d probably try to do a series covering the entire history of adult animated series, focusing on the evolution from The Simpsons to South Park, and then Rick and Morty.

6. Favorite Crispy Junk Food? -- Aryeh Nielsen


7. Apparently the Marie Kondo Spark Joy based show has made a lot of waves. It personally affected me quite a bit actually as a new parent trying to function in the real world after 2 decades online. Your boring resolution has resonated in a similar way, do you see a connection? -- Ian Johnson

I think people are genuinely hurting from the toxicity of the public sphere, and this is part of the broader retreat to self-care behaviors. I think it’s a generation-defining phase and a particularly historic downcycle in public life. It may intersect more or less with life stages. It aligns with your new challenges as a parent (and mine as a slowing middle-aged type). But I don’t think it aligns that well with everybody’s life in all life stages/situations. I would guess, for example, that it is terrible for young singles who are in the dating market. This is not exactly a great time to be out looking for a partner.

8. What's the most mindquake-inducing book you've read in recent memory?  Why? -- Shane Hoverston

Mooncop by Tom Gauld. Not so much a mindquake as an anti-mindquake. We have too many mindquakes going on right now, so that’s not something I value too much. But anti-mindquakes are rare and valuable. It is a very elemental and simple graphic novel about a lunar base being abandoned. I reread it a dozen times in the few weeks I had it checked out from the library. It’s like a memento mori for society rather than individuals.

9. If you had to select a spouse but could only know answers to three questions, what would the questions be? -- Anonymous

Q1: Saver or spender?

Q2: Neat or messy?

Q3: High-energy or low-energy personality?

These are not necessarily “choice” questions (as in, there are no right answers) but the “eigenvectors” of relationship adaptation. I think there’s a theory of 2^3 = 8 marriage types there. All 8 types can succeed or fail, but if you want to know what you’d be getting into, those are the 3 most significant bits.

10. What advice would you give to an independent consultant looking to do more "weird" or non-traditional work - for example the philosopher-in-residence work you did for A16Z and the original Breaking Smart? Thanks! -- Tom Critchlow

I think you just have to do whatever most energizes you and produces a lot of output, and let the work/opportunities find you. I have never gotten an enjoyable weird gig out of going fishing myself. You choose boring, normal work, but interesting, weird work chooses you.

Quantity has a quality all its own as Lenin said. The sheer volume of your work is what works as a signal of weirdness, because anyone can be do a one-off weird thing, but only volume can signal a consistently weird production sensibility that will inspire people betting on you. The energy evident in a body of work is the most honest signal about it that makes people trust you to do things for them.

11. What “common sense” norms do you feel the crypto space would *gain* from using? Similarly, what “weird crypto norm” do you think should be more prevalent in the rest of the internet/world? -- Tim Beiko

The crypto space should try to adopt “paving the cowpaths” as a norm.

Rest of the Internet world would benefit from “trusted third parties are a security hole” thinking.

12. Good coworkers (decent human beings), decent money, good potential upside (stick around another couple years), but unmotivating work. What should one do? -- Anonymous

This is a hard problem. I see motivation as synonymous with high-volume output. Whatever your mode of “work,” you are motivated if and only if you’re producing high-volume output driven by a tight positive feedback loop keeping you in flow state, which is by nature unstable. Two ways it breaks is if the feedback loop doesn’t fuel your imagination (insufficient novelty in the OODA loop) or it doesn’t fuel your risk appetite (insufficient stakes in the OODA loop).

If it is risk, you can financially engineer a risk differential between you and your coworkers (example, take on personal debt for a bigger equity position and use that to go after riskier business where you’ll suffer the downside and upside more). If it is imagination, it is much harder: you have to siphon off a portion of working cash flow to fund more interesting activities, but you will need to find collaborators with the an impedance matched imagination.

Alternately, perhaps you can just think of separating “sex” and “cash” sides of life like Hugh MacLeod recommends. I’ve found that hard to do, but it seems to work for some people.

13. What's your opinion about the value of creating 1-, 2-, 5-, 10-year plans? If you see value, what are your key recommendations for development?" -- Barak Epstein

I’ve gone back and forth on these. Sometimes they are practically necessary because of the context. You don’t get to Mars without a long-term plan of sorts. If there are no practical constraints dictating long-range planning, there is still value to the process of planning even if it doesn’t get used (this is Eisenhower’s famous “plans are nothing, planning is everything”). But then again, some things don’t need even that and are actively hurt by it. I don’t think bloggers should plan more than a few posts out at most. It’s a recipe for failure. If you want to go longer range, write a book (ie pick a project structure that has the time constants you are attracted to).

Beyond these? I think it comes down to temperament really. Everybody has a natural time constant, and constraints tying them to domains with domain time contexts. If the two are not aligned, the outcome is misery. If they are, there’s a chance you’ll be productive and do interesting things.

14. Do you have any recommendations for a very perceptive 14yo who is low-key freaking about the what looks like collapse of nearly everything? --  Anonymous

I was 14 in 1988, when a similar collapse was looming, and I too was low-key freaking out, and hey whaddya know, that was the right response. Things did in fact end up collapsing in important ways, and those of us who came of age around then did in fact have to reorient in a new world. So I think it’s important to let this healthy instinct to “low key freak out” exercise itself. It means the kid has high situation awareness and is responding with a lively imagination. I’m not a parent, but I’d say your job as a parent is to provide the support of a firm family ground under their feet. Governing their imagination is their job, and though you may be able to short-term help them by interfering at that level, in the long term it is best if they figure out their own approach to managing their imaginations.

15. How much longer until deindustrialized America realizes it’s competitiveness is never coming back and what’s your exit plan? Why does the talk center around retreating to off grid mansions, why not bring new lands under cultivation and start new walled cities. (e.g. ‘starforts’) -- Arjunan Gnanendran

Two years ago, I’d have said I don’t agree with your premises. Now, I’m not so sure. The fundamentals are still there, and with sufficient immigration, the aging population part of the problem (the only significant problem) can be addressed and post-industrial economic vitality can be put on a firm foundation. There are of course parts of the problem that cannot be escaped (like climate change impact).

But none of this matters if people stop believing in the story altogether.

As for me personally, I don’t have any “exit plans” because that’s not a viable sort of thing for a crucially important country of 325 million. If the proverbial shit hits the fan, nowhere on this planet will be a good place to be.

I think all the off-the-grid and walled-city apocalyptic fever dreams serve an important function in imagining the elements of the future, but they are only useful so long as you take them “seriously but not literally.” The moment you start taking them literally, your society is screwed. Because the world is more complex and interesting than the limited imagination of a 14-year old sci-fi nerd.

16. Top 5 things you learned in 2018? -- Nick

This is really not a mental model I use or even could use if I wanted to. Learning is integral to life rather than a logbook of discrete rankable entries for me. All I can say is that my life and thinking got more or less interesting compared to previous years. If there’s an increase, it probably means I learned something. But it’s not something I can quantify, let alone unbundle and rank.

17. Advice for 21 y.o. to break smart? I'm a generalist/dilettante; good at holistic thinking/mental models, verbal skills, and writing; decent at data science/coding (but have no interest in pursuing it). Considering PhD in social science. How to succeed without being technical/programmer? -- Adam

Solve for volume/high output. What can you do day in and day out, producing visible output, while staying interested and engaged? Avoid high-level abstract self-descriptors like “generalist” or “dilettante.” That’s a sign of sloppy introspection. Would you say you are “generalist” about brushing your teeth? Use object-level, non-proxy ways of being aware of your output, whether it is words published, or pages of private notebooks filled, or conversations with people that “worked” on some level.

There is always a volume unit. Find it. Then pump it up. Get it to a flow state. Elan vital ftw!

18. How would you as a hypothetical unskilled person create an internet business with $10,000 of start up capital that could 1) scale, 2)persist, 3) generate >$300k in annual revenue within four years? No breaking laws and nothing trendy allowed. -- Jeff Weiner

10k starting capital to 300k revenue in 4 years? Let’s estimate the ROIC on that. Margins are related to the technology factor in the business model, which is what expectations are based on. Higher margins = more technology in the economic “flywheel”, which means you can assume a higher valuation multiple from the earnings. So for example, with 10% margins, I’d guess it is a pure service business. At 1% I’d guess some high-volume commodity. A 60-70% GM is probably a nice hardware business with a nice IP moat.

Let’s work through the implications of a 33% gross margin on 300k revenue as an example. This probably means you’re doing some tech-enabled but human-powered service. Maybe you can assume a P/E of about 20, which means the business is worth ~2 million. So that really means you’re aiming for a 200x ROIC in 4 years! Obviously, very few realistic businesses have that kind of return profile without a major innovation powering them, which means you either have a REALLY bright idea, or you’re not counting some sort of hidden investment. Maybe the value of your labor? Maybe you take a loss for the first 3 years?

The point of an exercise like this is to get a sense of the financial shape of the business model you’re imagining in more specific detail, and recalibrate expectations more realistically, and come up with a plan to address investment gaps. Then you compare it to the shapes of similar and dissimilar businesses at a balance sheet level. Does it look like a grocery store? Does it look like a SaaS product? Does it look like an Etsy craft store? Does it look like a consulting business that runs on labor rather than product?

Once you’ve done that -- and there’s no substitute for spreadsheet wrangling here -- you’ll get a sense of the kinds of business opportunity you could target with the capital and time you have available (and the hidden number you didn’t share: the assumptions about cost structure for those 4 years -- living in your parents basement or in Bali imply different cost structures from renting an apartment in San Francisco).

19. Do you talk the way you write? or attempt to?  in conversations, are you more cognizant & intentional or flowing & reactive? -- Danny Le

I don’t write in just one way so that’s hard to answer. My conversational style is close to some of my more rambling, discursive, free-association essays, but is in general way more flowing and reactive. Having another person in a sparring loop makes a very big difference to how you talk. In general, I prefer talking to people who are well-matched with me, neither too much smarter, nor too much dumber. This tends to lead to the greatest harmonic resonance and a pleasantly exciting flow.

20. While in museums, I've noticed a near-linear transition from orderly/perspicuous/sublime to disjointed/obfuscated/bleak works as a function of era - say, from antiquity through the present. Should content creators strive to counteract this trend? -- Reginald Raye

Time is a very powerful organizing variable, and in general, unless you have an equally powerful overriding organizing logic, it’s hard to beat. One way to beat a temporal logic is with an alternative temporal logic. For example organize according to life stage (childhood to death) in presenting cultural material rather than historic (childhood through the ages).

But in general, I am wary of “shoulds” for creators. Creators “should” do whatever proves to be a fertile thing to do, that creates a generative, high-output organizing logic for the work. If messing with conventional curatorial sensibilities unleashes energy, then by all means do so. If it results in self-important wankery for its own sake, then avoid it.

21. Looking at society through the lens of thermodynamics, is it plausible that old/complicated/large societies are more subject to entropic ruin, and hence political destabilization? If yes, can a society 'stop the clock' on entropic ruin by harnessing an energy source like fusion that dramatically changes energy availability? -- Reginald Raye

Yes. I recommend Joseph Tainter’s The Collapse of Complex Societies on this question. There is a fairly rich literature on this. Jeremy Rifkin has a few books that explore this theme too. Vaclav Smil is another good source.

22. That Vinod Khosla interview that’s going around got me thinking, especially the line “your biz becomes your team, not your plan”. I realized the employees I want are already entrepreneurs. Do you know of any examples where multiple young startups merged together? Your opinion on this approach? -- Zack Kowalik

Interesting question. Setting aside talent acquisition cases, I can’t think of any genuinely powerful examples, only clumsy mergers that didn’t work or regular big company acquisitions. I think this is more likely to work at a slightly later stage, as part of consolidation/aggregation during a business cycle downturn when the weaker (but still valuable) businesses are at risk of dying.

I’d approach this as a “date/party before marrying” problem, and simply network with aligned businesses and get into supply/contracting type relationships with them. Then if the logic withstands the test of an operating partnership, you can consider mergers at the right time.

23. I am interested in your thoughts on Lambda School, or rather alternative higher education as a whole. I was tempted to join their program in lieu of college which I currently attend. Do you think programs like these are worthwhile? -- Demetri Macioce

It’s a fascinating model and I hope it succeeds. It’s too early to tell. College is now an expensive luxury which you should probably only do today if you actually enjoy it, and if the debt burden, if any, is low compared to the realistic earning potential (after adjusting for parental support). I would pick based on what you actually enjoy studying and working hard at. Lambda school is a great deal if you find you enjoy programming, but obviously not if you find you hate programming. But if money is not an object and you get into Stanford, I’d still recommend Stanford. There is no one-size-fits-all answer here. There are good and bad reasons to make any of the available choices.

24. I’m a 22 year Army veteran…5 deployments. Are we staying in Afghanistan primarily because of the sunk cost fallacy? -- Anonymous

I don’t think so. It’s more the exit cost reality than the sunk cost fallacy. At this point I don’t think there is any good reason to be there besides it being hard to disentangle from a messy situation in a strategically important place without causing all sorts of second and third order ugly effects. It’s called the graveyard of empires for a good reason. The Persian, British, and Soviet empires all suffered from getting mired in the region. The US empire too is paying for an ill-conceived presence in the region, and I’m sorry people like you have been roped into that ugly equation. I wish I had something smarter to say, but I’m 44, and Afghanistan has been an unsolved problem for all my life. I don’t expect a clever solution to emerge anytime soon. I suppose the US will eventually decide the exit cost is worth paying, withdraw, and we’ll all deal with the consequences (especially the neighboring countries: Pakistan, Iran, India, the Central Asian countries, and China).

25. What to do when you have a financially valuable skill but you’re tired of using it? -- Jen Adams

Save enough money, learn another skill, and get out. If you can’t, well, we all gotta do what we gotta do to keep going. The simplest questions are always the most impossible to answer cleverly.

26. Money, more and more, seems to me a tool of oppression, and I've been struggling with the implications of this. How can I / do you / should one justify its making and spending when each dollar comes to be perceived as a unit of violence? -- Carson Pepin.

I think this is poetic nonsense. It’s just another technology that works as a double-edged sword. People oppress people, and employ whatever tools are available to do so. Some technologies are certainly more violent than others, like guns and bombs, but money isn’t one of them. It’s too general-purpose. Anything (or any set of things) that replaces money as the technology of economic organization will have exactly as much potential for oppressive violence.

If anything, historically speaking, money has been a great tool of lowering oppression and violence. It allows trade to replace wars, and fosters economic community in place of tribal antagonism. Sure it has its violent externalities, especially on the environment, but I’m definitely a partisan for Team Money. I think playing the game of making money and using it wisely for yourself and others is a good game for our species to be playing. Certainly better than going at each other with guns and swords.

27. I'm a VC associate planning to start a company, but still looking for the big idea. What's the best way to come up with both consumer or enterprise startup ideas? -- Anonymous

The upside of coming from the investment side of the game rather than the ideas and rent-and-ramen side is that you are probably way more dispassionate and grounded than stereotypical entrepreneurs are. The downside is that you might suffer an imagination or passion deficit in whatever you do. The fact that you haven’t even picked consumer versus enterprise (very different psychological profiles) suggests you’re naturally more of a customer-driven wonk rather than a product-driven maven. If you make mistakes -- and of course you will -- it will likely be of the “ugly thing trying to please everybody” variety rather than the Juicero variety.

Exploit the strength: the “best way” for you to come up with an idea is to grind away at a spreadsheet full of data and analytical insights until you spot a hole or whitespace with the right profile. The Jeff Bezos way rather than the Steve Jobs way of “study fonts and design and go on a spiritual journey” way. It’s not the best way for everybody, but it’s probably the best way for you. Then you can go look for the right kinds of partners who can make up for any imagination/passion deficit.

28. Do you believe that language drives consciousness? If yes, do you think that as language evolves we’ll enter an advanced stage of consciousness? -- Patrick South

No and no. The first no is because we have existence proof of species that appear to have subjective consciousness but lack language. The second no because I think to the extent it was a consciousness driver, it was a one-shot deal (with chapters for oral and written). Future evolutionary leaps in consciousness will come from other sources.

29. My romanticist heart lies with voice over exit, but the defining (best?) decisions of my career were exits. At my current job, I'm learning voice can't change some critical things, even with credibility/goodwill. I have an opportunity to exit, and maybe even be someone in the process. Do I? -- Anonymous

Yes. Life is too short to persist with voice for too long once you run out of a reasonable expectation of positive change. If you can leave for better things, do so. Try to leave on good terms, but if you must burn bridges, do so.

30. Emerging markets have lots of good people and lots of smartphones but few trusted institutions, resulting in low trust and limited commerce. What are the biggest barriers to using working and learning data generated by people in the workplace to getting companies access to global capital markets? -- Jay Larson

Setting aside formal governmental barriers, I think capital at a distance is by definition dumb capital. Most VC investments still happen within a just a few dozen miles of the VC firm for example. So for emerging markets, the capital -- and the capitalists who participate in it -- must go to the market to make their money smart enough to play locally. The market, beyond a point, cannot come to the capital. Capital has a kind of mobility people, markets, technology, and even data do not. Data out of context gets dumb really fast. I’m not fetishizing some sort of “small local banks” philosophy of investment. Just pointing out an impedance mismatch between money smarts and market smarts created by investment distance.

I think there is far less capital mobility than there should be because, frankly, investors are by definition rich people who don’t like to go to places that are not that comfortable and fun in order to invest well. So the smart ones stick to investments they can do smartly from the comfort of their first world lives. The dumb ones try to invest too far away and fail.

Think about things like microcredit honestly to understand the anthropology of the capital-distance equation properly.

_31. What should I learn and which money game should I play if I want to:
- continually explore new experiences/skills/ideas (vs "be productive" or "seek epaulettes")
- spend time with people I genuinely like 
- have $100k/yr (or more) to spend on life

-- Andrew Swearengen_

Well, you don't want much, do you? That isn't really a question so much as a rather lazy bounding box for life itself. You're going to have to ask more imaginative questions (not just of me, but of life itself) if you want good answers. Based on your bounding box, all you can do is do some not-very-useful eliminations like "don't join the military" or "don't go live in the developing world." And worse, because the bounding box is so "commodity", you're likely to make serious errors with the obvious eliminations.

So my meta-answer is: learn to ask better questions :)

32. How do you get out of Big Data Analyst/Consultant hell and into a position of actual Ownership/Authority w/in some company? Feel like my Analyst and Business Chops are better than most people w/in a Big Company + Executive Level thinking snd yet stuck at Analyst grunt work positions. -- Anonymous

When you are identified with the agency embodied by a tool, it is hard to break out. So long as you think of yourself in terms of your tool-based process skills, you'll never break out of middle management at best, unless somebody makes a mistake in promoting you. Your mistake is thinking of your superior skill with your tools as an asset rather than a liability. Those executives are above you because they're worse than you at specific skills, not despite being worse.

Good individual contributors have identities tied to hands-on skills. Good middle managers have identities tied to important process skills. Good executives have identities tied to risk-taking skills. Good owners have identities tied to capital deployment skills (which largely consists of knowing when to say yes and no to opportunities).

One suggestion I can make is: position yourself around people who are even better than you are at your Big Data/Analyst skills. That will create a forcing function in your life. You'll either make yourself useful at a higher level of the game, or you'll crash and burn. If that sounds too risky/difficult, then you might not be as suited for executive work as you think.

33. Most underrated city in/of the next 20 years -- Otis Funkmeyer

Congrats, you've stumped me. I honestly have no idea. Most of the big cities are overrated, but I don't know how to systematically look for underrated in a general sense. I'd like to move to one. Seattle is somewhat underrated, but I wouldn't call it the most underrated.

Tell Me Something (TMS) Section

Well Johnny here decided to seize the TMS prompt to go networking :D

CONTACT ME: — 11/10 Full Stack++ Hacker upstream many years R&D and quality open source code, preparing to Sail High-Quality, Useful & Fun Ships; then change their vectors non-linearly (nD Pivot) with Machine Learning, which knowledge I wrested from a giant serpent; have a posse; seeking new allies.

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