Loyalty is an underrated commodity in today’s world. Without loyalty, there is a lack of trust. And without trust, it’s virtually impossible to accomplish anything meaningful, if anything at all.
A lack of trust is cancerous, and it can destroy many great things (e.g., relationships, companies, countries). In the absence of trust, people start to do crazy things. They only think about themselves and act solely in their self-interest. There are plenty of examples of this today, whether it’s employees constantly jumping from job-to-job for marginal increases in compensation, or companies treating employees like they are merely “line-items”. This lack of trust between employers and employees is a negative for society and leads to excessive and unnecessary harm (both financially and otherwise). The irony is, everyone would be better off if we gave loyalty and trust the value they truly deserve.
I’ve always tried to treat loyalty and trust as sacrosanct. I’m not perfect, but I give it an honest effort, and I truly feel that my life is better as a result. And even if that’s not the case, at the very least, it feels good.
As some of you may know, two of my closest friends and I have been working feverishly on building a business in our free time (hence the lack of posting). It’s been a long process and a huge commitment, but I’m confident all the sacrifice will be worth it in the end and I look forward to sharing more with you in the near future. But enough about that, this post is about something I’ve learned along the way.
If there is one thing I have learned on this crazy journey, it’s that advice is nice, but getting things done is better.
In a world of blogs, twitter, hackernews, techcrunch, etc. it’s easier than ever to find advice on starting a business, being successful, yada yada yada. The problem is, there is no “right” way to do most things. In reality, there are many different paths that lead to the same goal. Which path you take has more to do with personal preference than anything else.
So, instead of getting bogged down trying to figure out how to do something, just start doing it. Whether you release early and iterate often or wait until you’re ready makes no difference. The more important goal is to make something good.
There’s nothing wrong with listening to advice; it can be extremely helpful if viewed through the right lens. Just remember, being an expert on other people’s advice doesn’t get you anywhere, but getting things done does.
Getting started is often the hardest part.
Why do most people live lives of minimal consequence?
Why do most people not question the world around them?
Why do most people take the shortcut?
Because it’s easy.
Because it’s the path of least resistance.
Because that old saying is true, ignorance is bliss.
Why tackle that new project today, when you can always start tomorrow?
Why write that new blog post when you’re so busy with everything else?
Why learn something new when your favorite TV show is on?
Why work today when the weather is so nice?
Because, the sacrifices you make are what make something difficult worthwhile.
If there’s one thing in common with the people that leave a mark on this world, it’s that they get started.
While most are content with being another cog in the machine, the great ones are out there making things happen. Taking charge isn’t easy, but it’s almost always worth it. We all have the power to be great; all you need to do is get started.
Today’s fast-paced world has an obsession, nay an addiction, to the “destination”. It’s one of the main reasons that while we may have “more” (e.g., wealth, possessions, etc.) as a society, we don’t seem to be any happier. What we need to realize is that the journey is just as valuable (perhaps more so) as the destination. Who ever coined the phrase: “Stop and smell the roses.” was on to something. It’s a concept I try to remind myself of everyday.
Whenever I find myself bored, directionless, and consumed by an overall lack of drive it’s often because I have lost sight of my initial goal, the very thing that set me on a path in the first place. It’s a horrible place to be and a depressing state of mind. Once you lose the passion, you may as well quit because even if you do reach your intended destination, there will only be a lack of satisfaction and a feeling of emptiness. That invigorating and pleasurable sense of accomplishment that typically accompanies an outcome will almost certainly be absent.
Remembering to “enjoy the ride” isn’t always easy, and embracing / applying the concept is even harder. But I find comfort in knowing that it’s well worth the effort. So remember to cherish the journey as much as the destination. It’s a necessary ingredient in living a life of fulfillment.
“Maximizing shareholder value” is business-speak for “being the best you can be”, and it is a hot topic in today’s business world. And while the concept is an important one, unfortunately, the debate tends to be framed incorrectly.
The problem lies in our business culture’s focus on “precision”, even if that sense of precision is an illusion. We are a society of numbers. We like formulas and things like Efficient Market theory because they attempt to explain elusive concepts in a way that can be quantified. The problem is these formulas and theories often don’t work. Much like you can’t describe the beauty of a sunset or the feeling of falling in love with formulas, there is no “magic-formula” for value maximization. It is quite simply, an unquantifiable thing. And while that may be the case, you wouldn’t get that impression from many of today’s business leaders. Instead, you will probably hear some textbook answer about how “minimizing the cost of capital” would maximize shareholder value. In other words, valuation-maximization discussions tend to imply that things like cost of capital are the independent variables (i.e., drivers) of the shareholder value equation. I like to think it’s just the opposite.
Think about it. Would Coca Cola be what it is today if it was obsessed with having the lowest cost of capital? What about McDonalds? Or Toyota? Nike? How about Apple? The answer is NO. The best companies in the world (i.e., the ones that have maximized shareholder value) are the ones that obsess over their customers. They obsess over delivering the best product, the best service, the best experience to their customers. What ever it is they do, they focus on doing it best. Are financial concepts like cost and return on capital important? Absolutely; and the best companies realize that it’s a balancing act. But focusing on obtuse distractions like achieving the lowest cost of capital virtually guarantees a business will not succeed at anything, especially achieving the lowest cost of capital.
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Not unlike the hormone-induced singles you might observe at a bar 15 minutes before closing time, we humans have a tendency of falling into the trap of weighing decisions based on “relative” attractiveness. While relative benchmarks are important tools, using them outside of an absolute framework can lead to a poor decision-making track record.
To illustrate the point, let’s focus on a hypothetical scenario of a well-known equity analyst touting his latest stock pick on a financial news network. He sure sounds convincing. After all the company has a solid track record, it trades at an earnings multiple of X while its peers trade at 2X, and it even has a stash of cash so large, Steve Jobs himself would blush. But as the old saying goes, “looks can be deceiving.” While company XYZ may be relatively attractive, the absence of an absolute framework could mean it is still a bad bet.
In our example highlighted above, while company XYZ has myriad attractive traits on a relative basis, it could still be a horrible bet in an absolute sense. Forgetting to use an absolute framework could mean our analyst has overlooked the fact that the overall market is overvalued (e.g., stock bubble in ’00), or that company XYZ’s sector is headed for trouble (e.g., homebuilder in ’05), or even that company XYZ’s business model is broken (e.g., RIMM today). Each of these scenarios could result in an ugly outcome. In other words, successful decision making track records are almost always built on a strong foundation of both relative and absolute benchmarks.
So the next time you’re making an important decision, remember to take a step back from the trees and focus on the forest. Otherwise you may end up like so many a repentant 20-somethings at 8 am on Sunday morning.
Unlike what you might read in the financial press, today’s greatest “investment” opportunity is not a financial instrument. Today’s greatest investment opportunity is one’s self.
Like financial instruments, investing in yourself can reap huge rewards, but unlike financial assets, when you invest in yourself there is no way to lose. Not only is investing in oneself a prerequisite for success in one’s career and life, it is also an opportunity to achieve wisdom and possibly even change the world. Even better, investing in yourself feels good. So while the masses are distracted trying to squeeze pennies out of today’s financial opportunities (particularly relevant in today’s steroid-dependent market), you can be printing intellectual “dollars” by investing in yourself.
So invest in yourself. Start a business, learn a new language, train for a marathon, read books, take a class at your local community college, learn to program, take up painting, join a club, travel, etc. Become a sponge and soak up all the beauty that life has to offer. Whatever you do, just don’t watch TV.
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And so it begins…
Before I dive into some topics I thought it would be best to provide a little background on why I have decided to start blogging and more importantly what I plan on blogging about.
Why blog?
- Like a swelling mountain river in the springtime melt, my mind is constantly overflowing with thoughts & ideas; most of which aren’t yet fully-baked. By forcing myself to put the proverbial “pen to paper” I hope to synthesize these ideas, achieve a better understanding of the world around me, and more importantly improve myself. Being a finance “geek”, I like to equate this “experiment” to a form of personal “R&D” or “cap-ex”.
- For the past two years I have benefitted tremendously from the generous startup community blogosphere. This is a community I want to be a part of. I want to make the move from passive observer to active participant.
What about?
- I expect to blog about myriad topics, but you can expect the focus to be on: tech, finance, and economics.
- About a year ago, two friends and I decided we were going to develop a web app. Despite knowing nothing about programming, we’ve spent the past year “learning the ropes” and are now well along into the app’s development. I look forward to sharing our trials and tribulations and lessons learned with you.
taking the plunge, stay tuned for more…
