“The Internet Is My Religion”


June 7, 2011 | Comments (9)

Today, I was lucky enough to attend the second day of sessions at Personal Democracy Forum. I didn’t really know what I was getting myself into. As a social web / identity junkie, I was excited to see Vivek Kundra, Jay Rosen, Dan Gillmor, and Doc Searls. I hadn’t heard of many of the other presenters, including one whose talk would be the most inspiring I had ever seen on a live stage.

As Jim Gilliam took the stage, his slightly nervous, ever-so-geeky sensibility betrayed no signs of the passion, earnestness, and magnificence with which he would deliver what can only described as a modern epic: his life story.

Watch it now:

Watch live streaming video from pdf2011 at livestream.com

[Don't read on unless you have watched the video. The rest of this post probably won't make much sense.]

Apologies for the long quote, but I find his closing words incredibly profound [my bolding]:

As I was prepping for the surgery, I wasn’t thinking about Jesus, or whether my heart would start beating again after they stopped it, or whether I would go to heaven if it didn’t. I was thinking about all of the people who had gotten me here. I owed every moment of my life to countless people I would never meet. Tomorrow, that interconnectedness would be represented in my own physical body – three different DNAs: individually they were useless, but together, they would equal one functioning human. What an incredible debt to repay! I didn’t even know where to start.

And that’s when I truly found God. God is just what happens when humanity is connected. Humanity connected is God. There was no way I would ever repay this debt. It was only by the grace of God – your grace, that I would be saved. The truth is we all have this same cross to bear. We all owe every moment of our lives to countless people we will never meet. Whether it’s the soldiers who give us freedom because they fight for our country, or the surgeons who give us the cures that keep us alive. We all owe every moment of our lives to each other. We are all connected. We are all in debt to each other.

The Internet gives us the opportunity to repay just a small part of that debt. As a child, I believed in creationism, that the Universe was created in six days. Today, we are the creators. We each have our own unique skills and talents to contribute to create the Kingdom of God. We serve God best when we do what we love for the greatest cause we can imagine. What the people in this room do is spiritual – it is profound. We are the leaders of this new religion. We have faith that people connected can create a new world. Each one of us is a creator but together we are The Creator.

All I know about the person whose lungs I now have is that he was 22 years old and six feet tall. I know nothing about who he was as a person, but I do know something about his family. I know that in the height of loss, when all anyone should have to do is grieve, as their son or their brother lay motionless on the bed, they were asked to give up to seven strangers a chance to live. And they said yes.

Today, I breathe through someone else’s lungs while another’s blood flows through my veins. I have faith in people, I believe in God, and the Internet is my religion.

The audience rose in a standing ovation, twice. A few of the reactions:

You know it’s an amazing talk when everyone looks up from their computer and stops working to pay attention. #pdf11 – @katieharbath

Standing ovation for @jgilliam at #PDF11, not a dry eye in the house – @doctorow

As I walked back to the office from the Skirball Center this afternoon, I found myself thinking through what his message means to me, and why I was so moved by his words. Working at betaworks, I am confronted with and fascinated daily by the creative opportunities on the Web – for opportunities to change the way that we connect, communicate, share, learn, discover, live, and grow. Technology is only as good as the people who wield it, so perhaps I’m a bit idyllic and naive in my boundless optimism, but I am consistently awestruck at the power of the Web as a creative force.

I’m not a religious person, but I do believe there is something humbling about the act of creation – whether your form of creation is art, software, ideas, words, music – there is something about the act of creation that is worth striving for, worth sacrificing worth, worth living for. Regardless of your view of her politics, Ayn Rand spoke to this notion beautifully:

“Whether it’s a symphony or a coal mine, all work is an act of creating and comes from the same source: from an inviolate capacity to see through one’s own eyes . . . which means: the capacity to see, to connect and to make what had not been seen, connected and made before.” – Ch. II, The Utopia of Greed, Atlas Shrugged

The Web – at its simplest, an open and generally accessible medium for two-way connectivity – bridges creative energy irrespective of geography, socioeconomic status, field of study, and language. It enables and even encourages the collision of ideas, problem statements, inspirations, and solutions. As Stephen Johnson offers in his fantastic book, Where Good Ideas Come From, “good ideas are not conjured out of thin air; they are built out of a collection of existing parts, the composition of which expands (and, occasionally, contracts) over time.” He might as well be describing the Web.

The Internet is a medium capable of unlocking and combining the creative energies of Earth’s seven billion in a way never before imaginable.  Through the near-infinite scale with which it powers human connectivity,  the Internet has shown in just a few short years its ability to enable anything from a collection of the world’s information, to a revolution, to, in the case of Jim Gilliam, life itself.

I’m so excited to be a small part of what can only be called a movement. I’m excited to build, I’m excited to change, and, perhaps most critically, I’m excited to defend.

The Slow Hunch (Part 2): Discovering Serendip


April 24, 2011 | Comments (2)

After reading Stephen Johnson’s Where Good Ideas Come From (which you should buy and read, now), I was inspired to take his advice and “write everything down.” Here’s my first try.

I wrote a few months ago about the evolution of the web, with its “long steady march towards the holy grail of discovery – consumption without intent: content that you don’t even know that you want.” I end the post with a dramatic flourish that probably requires a bit more thought:

…the social web…has replaced intent with context, and so while wading through the stream, we are left with a feeling of serendipitous discovery, as we stumble blindly into content that we don’t even know that we want.

Serendipity is an interesting term. It’s universally perceived as good, but beyond that, I’m not sure that it is so well understood. Since writing this post, I came across a few explanations that I found incredibly useful:

First, the origin of the word. Johnson explains:

First coined in a letter written by the English novelist Horace Walpole in 1754, the word derives from a Persian fairy tale titled “The Three Princes of Serendip,” the protagonists of which were “always making discoveries, by accident and sagacity, of things they were not in quest of.” The contemporary novelist John Barth describes it in nautical terms: “You don’t reach Serendip by plotting a course for it. You have to set out in good faith for elsewhere and lose your bearings serendipitously”

…your discovery may well be interesting and informative, but it will not be truly serendipitous unless it helps you fill in a piece of a puzzle you’ve been poring over.

Yochai Benkler, in his brilliant book “The Wealth of Networks,” never actually writes the word “serendipity,” but speaks to the concept eloquently in his rebuke of the Babel objection (i.e. information overload) – bolding is mine:

We, as individuals, also go through an iterative process of assigning a likely relevance to the judgments of others…. By a combination of random searching and purposeful deployment of social mapping-who is likely to be interested in what is relevant to me now-we can solve the Babel objection while subjecting ourselves neither to the legal and market power of proprietors of communications infrastructure or media products nor to the simple judgments of the undifferentiated herd…We do not degenerate into mindless meandering through a cacophonous din. We find things we want quite well. We stumble across things others suggest to us. When we do go on an unplanned walk, within a very short number of steps we either find something interesting or go back to looking in ways that are more self-conscious and ordered.

Yochai Benkler. The Wealth of Networks: How Social Production Transforms Markets and Freedom (pp. 173-174). Kindle Edition.

Finally, in no more than 8 words, Jeff Jarvis neatly summarizes the concept: “Serendipity is not randomness. It is unexpected relevance.”

Serendipity, in other words, is a form of passive discovery. It describes relevant information that is pushed to the user, in contrast to search results, which are pulled via the act of explicitly surfacing one’s intent. It replaces the exchange “I want this: ok, here you go” with “I thought you might like this: thanks, you’re right.”

Serendipitous discovery has found its most meaningful delivery mechanism today in Twitter. On Twitter we benefit from, in a very literal interpretation of Benkler’s words, “an iterative proces of assigning a likely relevance to the judgement of others.” The asymmetric follow system allows users to iterate through the set of curators that push them content. Further, lists and search allow us to provide a light layer of content categorization or social context on top of our streams. We become meta curators: actively curating a set of curators based on social proximity and perceptions of relevance to our constantly evolving interests. We optimize our streams to deliver content that we will find valuable – in other words, we position ourselves for serendipitous discovery.

All else equal,* serendipitous discovery is a fundamentally more valuable form of discovery than search.

What do I mean by value? Think about it at a basic level – for what service would you pay more? The tool that helps you get your questions answered whenever you need it, or the service of having your answers delivered before you even ask? A service that anticipates intent is more valuable – to the user (and yes, to the advertiser), than the tool that merely responds to intent.

I strongly believe that Twitter, and the ecosystem around it, are on the verge of building an industry that at least rivals what Google has built in search.

See also:

- The Slow Hunch (Part 1)

- Curating the Curators

- You Don’t Know It Yet, But You Want It

*Today, all else is not equal – for example, when I have a question, I want it answered now, not whenever someone happens to deliver it through my stream. I need to think through this some more.

The Slow Hunch (Part 1)


April 21, 2011 | Comment (1)

I just finished Stephen Johnson’s “Where Good Ideas Come From.” Recommended to me by a few people independently, it quickly rose to the top of my reading list. At just a few hundred pages (depending on your preferred ebook font size), it’s fast read, and I recommend it to anyone who works in an environment where consistent creative output is critical. If you’re reading this blog, chances are that you fall into that category – so go read it!

Johnson explores the spaces in and around ideas through the lenses of pyschology, sociology, neurology, and biology. He draws fascinating parallels between the natural and the cultural, between the evolution of matter and the evolution of concepts. The most concise summary of his findings might be that…

“good ideas are not conjured out of thin air; they are built out of a collection of existing parts, the composition of which expands (and, occasionally, contracts) over time.”

A critical element to the evolution of a good idea is what Johnson calls “a slow hunch.” The concept struck such a chord with me, that I’ve included his explanation here in full:

“Most hunches that turn into important innovations unfold over much longer time frames. They start with a vague, hard-to-describe sense that there’s an interesting solution to a problem that hasn’t yet been proposed, and they linger in the shadows of the mind, sometimes for decades, assembling new connections and gaining strength. And then one day they are transformed into something more substantial: sometimes jolted out by some newly discovered trove of information, or by another hunch lingering in another mind, or by an internal association that finally completes the thought.”

We’ve all been there: in the shower, in bed before falling asleep, on the subway, on the phone with a friend – turning over a vague notion that you just can’t shake from your mind, fragments of a concept with no language to support it, mental space with no structure or sense of relationship, a problem that you can’t quite elaborate or a solution with no evident problem, a curiosity on the edge of your mind that, no matter how hard you squint, you can’t quite make out.

The question of how to provide a structure for the cultivation of these mental amoebae is one that I’ve been struggling with these last couple of years. My good friend Alex and I get on the phone every Sunday and try to keep up an ongoing conversation around a number of themes that we find interesting. We’ve found this an incredibly useful way to keep these themes top of mind, and can identify a clear evolution in our thinking over the last 24 months.

Johnson addresses “hunch cultivation” in his chapter on the slow hunch and provides one simple practice to help take a concept from fuzzy to…well, less fuzzy: “write everything down.”

So over the next few weeks I think I’ll try just that, and use this blog as my forum for doing so. If nothing else, I’ll certainly find benefit in writing down my slow hunches, and hopefully a few folks will engage in the comments and help move them forward.

Ode to a Purpose Built Social Network


March 5, 2011 | Comments (13)

Facebook has a big problem. Facebook’s big problem is Facebook.

Social networking applications are not like other businesses. In other businesses, new products built within an existing infrastructure and delivered through existing marketing and distribution channels benefit from economies of scale that help generate higher profits than would be possible on a standalone basis.

Yes, social networking applications benefit from economies of scale in production, marketing, and distribution channels, but they have a unique property that presents a unique challenge: the network itself.

There are two reasons why no single company will ever “own” the social web:

First, social behavior online, as offline, is largely informed by the context of that behavior. Am I conducting this behavior in front of my family, my friends, my co-workers, my best friends? Photos, videos, events, locations – the success of an application on a social network depends as much on the composition of the network as it does on the feature set.

In other words, my connections and the default privacy settings used to mediate my interaction with those connections can contribute as much to the value of an application as the design and functionality.

A location sharing feature is meaningless to me in the context where the default is to share with the 459 friends I’ve accumulated from who knows where on Facebook. Facebook could design the greatest location sharing application ever invented, but I’d rather recreate a social network on Foursquare, specifically for the use of that feature, than attempt to navigate the myriad privacy options on Facebook to more appropriately control my sharing.

Second, it’s easier to do one thing very well, then to do many things very well. To get a sense of what I mean, download and play around with Instagram. This application is 100% purpose built for mobile photo sharing. It integrates with Twitter, Foursquare, Flickr, Tumblr, Posterous, and Facebook. There are no other distractions in the application, no other purposes than to take a photo and share it with a group of people that you believe would find that photo relevant. It’s a great experience – just ask one of the one million users who signed up within the first two months of the product’s existence.

Taken together, these two arguments lead us to the fundamental point: the value of the user experience in the purpose built application, both in terms of functionality and appropriate social context, easily outweighs the cost of switching and rebuilding that context from scratch.

Facebook isn’t going anywhere, but they will never “own” the social web. They will forever be limited by their generality.

Curating the Curators


January 12, 2011 | Comments (3)

A couple of weeks ago I wrote a post about content discovery online, and how the social web effectively turns the people that you’re connected to into your very own personal curators. I wrote that “the social web enables users to iterate through a group of curators who provide relevant content by way of social proximity and temporality.” This type of curation could be called ‘distributed social curation,’ since the consumption experience 1) is different for every participant/producer/consumer and 2) is inherently social – meaning, a necessary condition is your participation in an online social graph.

I came across two articles tonight that highlight that very same trend. Twitter’s Ev Williams describes the potential impact of distributed social curation in a conversation with GigaOm’s Om Malik:

“There’s too much stuff…We just need to let them find the right stuff. We have been going in this direction. It is just not necessarily obvious. For example, the native retweet (RT) is a way to share best stuff more widely than that account’s followers. It sort of adds an editorial layer.”

In “Curation is the New Search is the New Curation,” Paul Kedrosky writes:

“the re-rise of curation is partly about crowd curation — not one people, but lots of people, whether consciously (lists, etc.) or unconsciously (tweets, etc) — and partly about hand curation (JetSetter, etc.).”

While my post focused primarily on the type of social curation that Williams alludes to and that Kedrosky mentions first, Kedrosky adds that we will also see a sort of ‘expert model’ of online curation, where a small group of informed editors make content selections by hand that are relevant to a specific audience type (think Techmeme).

I don’t see these two models as equals – neither in quality nor in potential for adoption at scale. In fact, in the expert model, quality and scale are necessarily inversely correlated. The broader the audience, the more difficult it will be to produce a slice of content that is relevant to all participants. With distributed social curation, however, that same relationship (between size and relevance) is not even contemplated.

In the distributed social web, all audiences have the size of 1, and no single audience experience is ever the same. In other words, unless you follow the exact same people that I do, your content experience will be different from mine. My personal curators might share a particular article with greater or less frequency than yours, and we will both naturally, and as frequently as daily, adjust our social graphs to optimize for the most relevant curated experience.

In the distributed social web, where every participant is a content producer, the audience must curate the curators!

Creating Something Big, Alone


January 2, 2011 | Comments (2)

I spent the past two weeks on vacation, eating delicious food, relaxing in the sun, and enjoying my favorite band. I also managed to make my way through two books that came highly recommended from colleagues at TheLadders: Delivering Happiness and The Intelligent Entrepreneur.

Delivering Happiness chronicles Zappos CEO Tony Hsieh’s career from Harvard dorm pizza joint to CEO of a multi-billion dollar e-commerce joint. From the story of LinkExchange, his first company, through to the sale of Zappos to Amazon for $1.2Bn, Hsieh communicates his life philosophy that is ultimately summarized with a final chapter on the “science of happiness.” In it, he describes three types of happiness: pleasure, passion, and higher purpose, that range from the most ephemeral to the most permanent. Hsieh says the following about a higher purpose:

“The higher purpose type of happiness is about being part of something bigger than yourself that has meaning to you. Research has shown that of the three types of happiness, this is the longest lasting…Based on the findings of the research, the proper strategy would be to figure out and pursue the higher purpose first…”

Hsieh closes the book with a series of questions aimed at challenging the reader to take a long hard look at how he or she is spending their time. Here are a few:

“What is the net effect of your existence on the total amount of happiness in the world each day?
What inspires you?
What is your higher purpose?”

The Intelligent Entrepreneur tells the story of three Harvard Business School graduates from the class of 1998 who found success as entrepreneurs: Marla Malcolm, co-founder and CEO of bluemercury, Chris Michel, founder and former CEO of Military.com and Affinity Labs, and Marc Cenedella, founder and CEO of TheLadders (and my boss). Author Bill Murphy Jr. distills out of their stories common themes that culminate to a list of “ten rules” of successful entrepreneurship (which you’ll have to read in the book). If you’re a wannabe non-technical entrepreneur like me, this book is required reading. The three stories are inspiring and Murphy’s analysis is well thought out and concise. Like Hsieh, Murphy ends the book with a series of questions, challenging the reader to take a critical look at what motivates him or her:

“So now it’s your turn: Why are you here? How do you define success? Why, finally, do you want to become an entrepreneur?”

Since graduation two and a half years ago, I’ve thought often about this last set of questions, but the stories of the three entrepreneurs in The Intelligent Entrepreneur, and the language that Hsieh provides in Delivery Happiness, help frame my thinking in a different light. I’ve structured the remainder of this post into sections that best express my current thinking on these questions.

Alone on the mat

I used to wrestle in high school (pause for laughter). I was not the most talented, nor the strongest, nor the quickest. Wrestling is an individual sport – perhaps the most individual sport. It requires commitment both on and off the mat - I cut 5-10 lbs every season and had to maintain that weight for the length of the season, while burning more calories than ever in the most intense workouts of my life. This meant dinners of salads and peanut butter sandwiches, snacks of hollowed out hard-boiled eggs with cottage cheese inside, and many hungry nights. On the mat there is only you and your opponent. Nothing else. You win and lose by the extent of your commitment at that precise moment and all the moments leading up to it. Bouts are won and lost by the slightest of additional effort, when you can’t possibly put any more effort forward. When you lose, that pain is yours alone to carry, and when you win, that glory belongs to you and you alone.

What I see in entrepreneurship is an opportunity to extend this dynamic into my professional career. Entrepreneurship is an individual sport. Other people are critical to your success, but at the end of the day, the entrepreneur is responsible for selecting those people, and getting the very best out of them. In The Intelligent Entrepreneur, you’ll read about how Marla, Chris, and Marc, faced significant odds alone. Sometimes they won and sometimes they lost. In every case, they won and lost by the quality of their own decisions, and had the opportunity to identify how those decisions could be made better in the future. Confounding factors like “my teammate didn’t pass me the ball” or “my teammate passed the ball at just the right time” don’t exist in wrestling, and they didn’t exist for Marla, Chris, or Marc. Their success is theirs alone, as are their failures.

Something from nothing

In 2010 I tackled Atlas Shrugged and The Fountainhead by Ayn Rand. Rand is a phenomenal story-teller, and though I may not see eye-to-eye with her on an economic or political level, I believe that there is a lot of good in her philosophy of the individual. From Atlas Shrugged:

“Whether it’s a symphony or a coal mine, all work is an act of creating and comes from the same source: from an inviolate capacity to see through one’s own eyes…which means: the capacity to see, to connect and to make what had not been seen, connected and made before.” – Ch. II, The Utopia of Greed, Atlas Shrugged

Starting out in business, I felt that it was important to work somewhere where I could have an impact. What I’ve learned over the past two and a half years is that having an impact is synonymous with creating something that you can look at and say, “I built that. Before there was nothing, and now there is something.That thing is there because of my effort, my ingenuity, and my willpower, and it is having a meaningful impact on other people.” While I believe that any career can afford you the opportunity “to see, to connect and to make what had not been seen, connected and made before,” entrepreneurship is, in my mind, the purest and most meaningful form of “creation” in business.

Bigger than me

Tony Hsieh’s notion of a “higher purpose…about being a part of something bigger than yourself that has meaning to you,” struck me in the context of my transition from investment banking to TheLadders. I’ve been fortunate enough to have had two very different professional experiences in a short amount of time. I spent a year in investment banking (you can find my thoughts on that experience here and here) and then 15 months at TheLadders. In my first role, I acted as an advisor, working with a number of different entrepreneurs to fulfill their visions. I was motivated to the extent that I felt like I had a part to play in those visions. My best days were spent sitting across from passionate entrepreneurs who were building something bigger than themselves.

Chris, Marla, and Marc started their businesses with nothing more than their own passion for building something bigger than themselves. Today, each one of them can look to hundreds of people who now share their original vision and higher purpose. Being a part of someone else’s higher purpose is meaningful to the extent that you can make it yours, shape some part of it, and then instill that purpose in others. But to be the source of that original nugget of higher purpose – to see your purpose shared by those around you, then those around them; to see something that you built from nothing taken by others as their life’s higher purpose – is truly remarkable, and is a testament to the awesome power of entrepreneurship.

I’m sure my thinking will evolve in the next few years, but for now I intend to do whatever I can to best position myself for my first entrepreneurial endeavor. In my mind, there is no better opportunity than the opportunity to create your own opportunity.

You Don’t Know It Yet, But You Want It


November 21, 2010 | Comments (4)

Since inception, the web has seen three major waves in the evolution of relevance: portal, search, and social. These waves manifest typically by the examples of Yahoo, Google, and Facebook/Twitter, and otherwise known as Web 1.0, Web 2.0 and the real-time/social/next/3.0/whatever web.

Jeff Weiner, CEO of LinkedIn, did a great job of framing that history in his talk at TechCrunch Disrupt in September. I’d like to borrow his framework but take a slightly different approach to the question. I’m probably short-changing this topic, so feel free to continue the conversation in the comments.

The goal of any system of content distribution is to present relevance as early as possible in the process of intent, search, discovery, and consumption. The earlier in this process that a system can present relevance, the greater the opportunity to provide value to the user, and, in theory, the greater the opportunity to monetize that value. The history of relevance on the web is therefore the history of a long steady march towards the holy grail of discovery – consumption without intent: content that you don’t even know that you want.

Each system described below uses the same essential building blocks to produce relevance:

  1. Predisposition
  2. Intent
  3. Human intelligence

Web 1.0 – The Portals – In the early web, the mechanism for discovering content was based on static human-built information hierarchies (Puppies is a category in Dogs which is a category in Pets). The opportunity to present content that you don’t even know that you want was confined to the moment after discovery, and so the value was minimal. Think: recommendations and advertising alongside content in the Teen Portal in AOL – you would have already reached your destination by the time you were presented with recommendations. Relevance was determined by assumed predispositions based on the demographic that had in the past consumed that content (in this case, teenagers). Intent as a predictor was not truly captured.

Web 2.0 – Search – The search paradigm introduced a major step forward for relevance, where the mechanism for discovery was based on dynamic and implicitly social intent-optimization. Whereas in the age of portals, the best you could hope for were recommendations alongside the content you were already in process of consuming, by basing relevance on user intent and an informed human curation via PageRank, Google was able to present relevance prior to the process of consumption.

PageRank, Google’s system for ranking relevance depending on inbound links to a particular piece of content from other publishers, is fundamentally human (it takes people to link to other pages/people), and its emergence foreshadowed the coming influence of the social web on discovery.

The Social Web – Facebook/Twitter – In the emergent social web, discovery has taken on passive characteristics, resulting in a model of consumption that occurs without search, and often without intent.

Consider the patterns of content discovery and consumption prevalent on Facebook or Twitter. Discovery is based on the stream paradigm, where relevance is determined implicitly along three dimensions:

  • Time (real-time = conversational)
  • Social group (work or friends or school, etc.)
  • Social proximity (1st, 2nd, 3rd degrees)

Networks will expand along these dimensions, as users tend to follow or focus more of their attention to those streams that present the greatest relevance (think Twitter and Facebook lists). The social web enables users to iterate through a group of curators who provide relevant content by way of social proximity and temporality. It has replaced intent with context, and so while wading through the stream, we are left with a feeling of serendipitous discovery, as we stumble blindly into content that we don’t even know that we want.

Make Your Lessons Painful, Join a Bank


October 17, 2010 | Comments (3)

A few weeks ago I wrote about my experience in Investment Banking and compared it to my experience at TheLadders. I’ve spent one year in each role, which means I’ve only had one year to test the claims that I am about to put forward, so please help yourselves to some grains of salt.

There are no shortage of articles bashing banking, and their authors tend to claim that they tell it ‘how it really is.’

In reality, is can be a lot of different things to a lot of different people. The truth is that in a year of Investment Banking there can be as much value for the young business-person as there is pain, and so as much as I cry freedom for the startup life, I have a hard time recommending that college grads turn down their offers to join banks like Morgan Stanley or Goldman Sachs.

My former Banking colleague Mike Lavalle, who left shortly after I did to start his own business, wrote a great post on the value of Banking to an entrepreneur. I won’t try to speak as expertly to the process of founding a business (because I’ve never founded a business), but I’d like to add a few thoughts on my experience in Banking that I believe have contributed tremendously to a great first year at TheLadders.

Love The Customer

At TheLadders, we live and die by what we call our First Rule: Love The Customer. Our customers are the men and women of the US and UK who earn above $100,000 per year, and we have millions of them. At Morgan Stanley, our customers were the leaders of the most valuable technology companies in the U.S. Over the course of a year in Banking, I had one-one interactions with ~10-15 customers, but the depth of that interaction, and the incredibly high level of expectations for quality of interaction, helped me understand the importance of what I now call the First Rule.

I spent two weeks on the road with the CEO and CFO of a major consumer technology company for their IPO roadshow. We flew all over Europe and US, visiting scores of investors along the way. It was an amazing experience for me, and the level of exposure to two of the most successful tech managers in the world was unparalleled. My role as analyst was fairly rudimentary. I carried the bags, collected the presentations, and coordinated travel logistics. I didn’t care – I would have cleaned the toilet in exchange for the conversations I was lucky enough to have over the course of those two weeks.

Though I added very little tangible value to the transaction, I began to realize that for these customers, for these two weeks, I was the face of Morgan Stanley. The CEO and CFO spent more time with me than with anyone else at the firm over the course of their roadshow (typically an incredibly stressful time for the management team). My behavior and the level of service to which I committed may have had a substantial impact on our payout when all was said and done.

Though the dynamics of the customer relationship are dissimilar, the opportunity to perceive a very real ROI on the work I put into Loving the Customer in Banking helped make the acceptance of the First Rule at TheLadders a natural transition.

Details, details, details

I hate details. Throughout school I followed the mantra “work smart, not hard,” and would rarely check my work after completing it. Come to think of it, even my elementary school teachers hounded me about my attention to detail. A word cloud of my report cards from grades 1-12 would probably spit out ATTENTION TO DETAIL in big, big letters.

In Banking this attitude is tantamount to heresy. I had never before faced the kind of standards to which my work in Banking was held. Yes, it was painful – move this text box one touch to the right so that it is properly aligned with that chart, at 3am on a Friday – but it was incredibly useful. After a year of pain, not only am I now a compulsive checker, but my work tends to be better the first time around.

Managing Up

When you’re working 80 hour weeks, it’s no surprise that time management becomes a useful skill. What I had never heard or thought about was this concept of “managing up.” When you’re at the bottom rung of an organization, you cannot manage time without managing your manager. Your manager may not say it, but they expect to be managed. As an analyst in Investment Banking, this could mean the difference between a weekend in the office or a missed deadline (and therefore a very angry MD). I’ll let you decide which is worse. There is no better way to learn a lesson than to spend a weekend in the office thinking about it.

No matter where you spend your first year after college, much of that year will be spent learning how to send a fax, write an email, and staple large quantities of presentations together in a short amount of time (I discovered what collate meant after a very long afternoon at my first summer job).

One way to make sure you that you learn your lessons quickly is to make sure that those lessons are as painful as possible. Snark aside, should you choose to learn those lessons in Banking, you’ll have a hard time regretting it. I absolutely do not.

Banking on a Startup Life


September 14, 2010 | Comments (19)

Today marks my one year anniversary at TheLadders. I came to TheLadders after one year in investment banking in the Morgan Stanley east coast technology group. Walking in the door on September 14th, 2009, I had very little idea of what I was getting myself into, and my role at TheLadders has morphed about four times in the last 12 months.

Looking back at my experience (or, let’s be honest, the lack thereof) and after fielding the question about 74 times from rising Juniors and Seniors in College, I thought I’d jot down a few thoughts on the similarities and differences between the two experiences. I don’t know if I’ve had anything like a “typical” experience in either case, so I won’t claim that these “lessons” are universally applicable. Still, to the extent that there exists, somewhere out there, someone who is exactly like me, this might prove helpful.

Lesson #1: there’s a difference between business and finance.

Though I knew very little else, one thing I knew for sure coming out of school is that I wanted to be an internet entrepreneur (yea, yea – me and everyone else). I was convinced that going into investment banking, particularly in the technology group, was the best way to get started. Banking promised to open doors, expose me to different types of technology companies at a high level, and teach me the basics of business and finance. Banking met almost all of my expectations.

This is probably obvious to anyone with as little as a few years of experience, but it took me a while to figure it out. Banking taught me how to read a balance sheet, value a company, and build an investor presentation. Banking did not teach me how to inspire and manage a team, how to learn about and build products for customers, and how to identify a market fit for those products. Finance, though an important and necessary part of business, is not business. Though I didn’t know it at the time, equating business with finance is like saying: if you know how to tie your shoes you can run a marathon.

Lesson #2: management and delegation does not equal talent development.

I had a fairly small group at Morgan Stanley – something like 20 people total. The head of our group was a great guy from whom I learned a great deal. The pool of analysts were managed by a “Staffer” who made sure we had roughly equal shares of work. The work was conducted on a project-basis – presentation for client x, analysis for client y. Naturally it made sense for each analyst to own a particular set of clients, and because my group was so small, we each got the chance to work closely with Managing Directors, who owned the relationships with those clients.

Managers at TheLadders spend more time on talent development in a day than I experienced at Morgan Stanley in a year. Analyst programs in investment banking are typically two years stints, at which point most analysts join Private Equity firms or Hedge Funds for better hours and higher pay. The big banks have a really hard time keeping people, and their HR teams have tried all sorts of things to up retention. Unfortunately for them, they are stuck in a vicious cycle.

Since analysts are in and out in two years, and likely only “all there” for 1.5 years (3 months ramping and 3 months of “senioritis”), senior group members have very little incentive to form long-lasting relationships/mentorships (in my last few weeks at the firm, one of the EDs with whom I worked most closely called me James…). Since they don’t typically take the time to develop long-lasting relationships/mentorships, nobody thinks twice about leaving after 2 years – and so the cycle continues.

Lesson #3: love what your boss is doing

When I joined Morgan Stanley, I could see myself as a Managing Director. That lasted about 3 months. There’s nothing wrong with that career path, but I realized quickly that it wasn’t for me. The best thing Banking did for me was put me across the table from CEOs at companies like TheLadders and Rosetta Stone. It soon became clear to me that the jobs of these CEOs was to create value where there was none, and that my job was to help move that value around. This is a worthy calling, but not one that I was particularly fond of.

When I lost interest in my boss’s job, and his boss’s job, and all the way on up to John Mack, I quickly lost interest in my job and started treating it as a means to an end – “I just have to get through my analyst years and then I can do whatever I want.” This attitude it toxic when you’re at the same time asked to give up your nights and weekends.

Lesson #4: “the only financial security you need is the confidence that you are learning more where you are than you could anywhere else.”

This lesson is in quotes because I have no place giving it. It’s certainly not true for all people in all professions, and I don’t even know if it’s true for me. I hope that I’m lucky enough for this to be true.

When I began evaluating opportunities post-banking, I sat down with a number of internet VCs and entrepreneurs and asked them what I should do over the next 5 years to get ready to be an internet entrepreneur. My plan was: go work for a growth capital firm to get exposure to lots of different early stage internet companies, make a ton of money, then in 5 years launch my own company with all the money I had saved.

I met with about 8 people. Every single person, VC and entrepreneur alike, said the exact same thing: “if you want to learn how to run an internet company, go work at an internet company.”

The first 7 times I heard this advice, I shrugged it off. It wasn’t until one VC continued to push me, and followed up with lesson #4, that the idea finally clicked. One year out of college, and I was already beginning to feel the weight of those golden handcuffs closing around my wrists. With lesson #4 I was able to break free of their grip, and haven’t once second-guessed the decision.

For the internet entrepreneur the math goes like this:

20 years working in Finance: $20MM

Probability of being successful: 80%

= $16MM

vs.

20 years working for a startup and changing the world: Priceless

Probability of being successful: 1%

= What’s 1% of priceless?

I wouldn’t exchange my experience in banking for anything. I learned a lot and met a lot of fascinating people. Most importantly, it led me to my current job, which is probably the one thing for which I would exchange banking.

When rising juniors and seniors ask me whether they should join a startup or go work for a bank, I tell them that they should go where they are going to learn more than they would anywhere else. The answer isn’t very helpful, but then again neither is the question, which brings me to lesson #5.

Lesson #5: There is no track to being a successful internet entrepreneur – nothing can possibly “prepare” you for creating something where there was nothing before.

Facebook Will Lose Location: The Location-Flawed Social Graph


August 18, 2010 | Comments (4)

Facebook Places is finally here. Within hours of the announcement, many of the usual suspects have already relegated companies like Foursquare and Gowalla to the ‘niche’ pool.

I think (and yes, hope) that Facebook fails in this latest endeavor. Ok, with an ‘installed base’ of 500MM users they certainly won’t fail fail, but I would argue wholeheartedly against the following statement from Silicon Alley:

Facebook will now become the platform on which other check-in applications like Foursquare will be built. 

What is the first number that comes to your mind when I ask how many people you are interested in sharing your location with? On average? I bet it’s not 120.

120 is the average number of people the average Facebook user is friends with on Facebook.

As in the offline world, for each social group (family, friends, work friends, colleagues, gym friends, classmates, etc.) and for each social object (photos, videos, locations, news, tweets, status), users will rightfully demand unique privacy profiles to limit access to only those most relevant and appropriate connections. For example, I may want to share videos with classmates but not family; I may want to share location with gym friends but not colleagues.

Foursquare has in part been successful because, along with the emergence of a new social object (location), it has given users the opportunity to build (from scratch) a set of connections particularly relevant to that associated privacy profile.

My friends on Foursquare are only those people with whom I am willing to share my location. They tend to be in New York and they tend to be close friends (especially when compared to the 474 people I am “friends” with on Facebook).

So fear not ye social web start ups! The location-specific social graph is not easily replicable and the social graph subsystem of the Internet OS is only just beginning to mature. Purpose-built social applications that are subject to privacy policies outside of Facebook’s core competency will remain safe from the grasp of Goliath (for now)!

For more crusading against Facebook, see some of my prior posts here and here.

For more on social segmentation, see here, here and here.

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