Humanlike Beings

I rewatched the video demo of the Figure robot the other day that prompted a thought. The question that arose was less about robots but rather the person interacting with them. Go to the very end of the video and you see an interaction where the conversation isn’t quite finished, but the person interacting with the robot begins to walk away. In any normal interaction, this would be considered a bit rude. Not so to a robot who does not consider things in that way.

The question with any technology is not only “How does this change our world?”, but also “How does interacting with something in this way change us?” What normalizing that type of behavior will do to our other, non-automaton relationships. Whatever we want our more meaningful interactions to look like should inform our lower level interactions.

As AI and robotics gain ground, everyone should do the work to consider what it means to interact with humanlike beings on use.

Good Counsel

“For Lack of guidance a nation falls, but victory is won through many advisers.” -Proverbs 11:14

I wrote something a few weeks ago and at the end asked anyone who read it who they had around them. The thing I’ve found over time is that wise counsel critical in managing towards better outcomes. If you don’t have this you’re no only increasing your risk, you’re decreasing your chance of good outcomes.

Anyone else find this true?

Assets – Private, Public, and Otherwise

Let’s talk about private equity for a minute. Full disclosure, i’m not an accredited investor. Still, through a myriad of circumstances I’ve been able to hold private assets with other parties as a Limited Partner. There are some times that being an LP or telling someone you’re an LP sounds good. Reality wise, it’s not all that nice most times. It’s an investment vehicle and that’s all it should be considered.

Someone was asking me about one of these related to a robotics venture and if they should invest. There is a lot of nuance to that question and for this person I discouraged it. Not because I think it was bad for me, but more because the experience of an LP is distinct in your inability to control outcomes. Even when I was working IN the actual business where I was also listed as an LP I didn’t have access to many of the levers that would deliver better outcomes to me as a shareholder.

General Partners have a much better viewpoint, but also have the privilege of personal liability against the asset. So i’m not saying their situation is any better. It’s simply different.

What do I do then?

Well for the person I was speaking with about the robot stuff, I told them the S&P 500 has a better feel. For them that was equally true because of their runway. For me, I have a longer timeline so i’m ok. But in general many (social media, news, advertising) will try to convince you that being an LP in something is SUPER great with a pot of gold at the end. It CAN be true, but it is NOT necessarily true. Also, private assets are harder to remove your position in where public assets are simple. As a litmus test to this, think about selling a stock on your fidelity account vs selling your house. See what I mean?

So i’m not giving advice on how you invest. We’re all adults here with our own versions of what we need and why we do things. That said, I do believe you should be aware of what you’re getting into and if you have the opportunity to own a private asset it’s worth careful consideration and wisdom from some trusted folks around you. That’s the point, don’t buy the line that there are riches at the end of this rainbow. There’s a safety net in a multitude of perspectives and experience

Who are your people that you trust to give you wisdom in these decisions?

Financial Measures and Levers

There are two primary levers that you have in your life for financial measures.
1) Income
2) Expense

In choosing the assets you own, you need to consider these levers.
Expenses usually come from the assets you own. If you’re most Americans, your house and cars are the largest expense buckets and most of your wealth is tied up in your home. Anything else is probably in stocks somewhere. That’s fine, and those are also not cash generating assets in the truest sense.

Increasing your income can happen through raises and job changes, but the fastest way to do this is by owning more cash generating assets. Have you thought about this?

Two questions to ask yourself:
1) What is your wealth target?
2) What is your wealth generation strategy?

Vehicles for Growth

Everyone has a wall they hit with growth. The question is what to do once you get there? I’ve found these tools help me a ton as I look for ways to grow.

  • Books —> Reading is helpful beyond the information. Training your brain to intake deeper and longer form information is an activity that our society has lost much of, but it’s incredibly necessary.
  • Print —> If there are a lot a charts
  • Audio —> If it’s a story form
  • Podcasts—> Honestly on this, just do it. Too much entertaining content with a low effort bar on the consumption. Even if it’s outside of your normal scope of thought, I’ve never found it harmful to know a little bit about a lot of things. That said, here are the three areas I tend to live in:
    • Business —> Generally, but not always, finance. It’s always helpful to understand how finances impact organizational decisions so the more understanding you can get here the better.
    • Leadership —> Things like EntreLeadership or WorkLife are very helpful in thinking through how to lead teams.
    • Edutainment —> Basically, tons in this area so it’s hard to recommend one in particular. Lately, because of a cyber security interest I’ve been listening to DarkNet Diarires.
  • Videos —> YouTube has so much on there. Beyond that, find 3 good movies about something you’re interested in from history. Don’t watch just for entertainment though. See what the diverse perspectives of others can do with the same story.
  • Relationships —> The most growth I’ve experienced is from sticking in long term friendships where the other person had enough context to call me when I was lying to myself.
    Who is in your orbit that you can trust to challenge you in a safe way?
    Can you challenge each other?
    Do it!

What are some other vehicles of growth that I’m missing?

High Performers and Self-Feeding

I had a conversation about growth with one of my staff the other day about the fact that he is incredibly smart, talented, and hardworking. That sounds like a good thing and in a vacuum it is. Here’s the thing though, he has currently refused to read books, listen to podcasts, or find other ways to grow outside of picking up things from those in his immediate orbit. I had also struggled with how to communicate the reality of what damage not growing through other mechanisms that aren’t direct experience would cause. Finally, I had the thought. The challenge I presented to him is that at some point he hits his ceiling and then he’ll need to find a way to push past the barrier of his immediate vicinity.

When you get to your capacity there are very few choices of how to grow and at some point you become the ceiling for your team. What do you do in those moments to continue growth? How do you find other people and places that will challenge you with where you’re at? I can say after years of self-feeding I’ve learned to do this for myself. My current challenge is helping others learn this for themselves. How about you? Do you actively or passively pursue growth?

Leveling Up is Your Decision

If you don’t know who Chris Lighty is, that’s ok. Chris was the business manager for most of the large names you would have heard of coming out of the HipHop scene from the late 90’s early 00’s. He was known for his incredible work ethic. The thing is, no one would have known about it if it weren’t for this one moment. There was a point he was in a club with some folks and got into a fight because of some random beef he’d had with folks. From there, someone took him aside and explained to him that they liked him, but also made it clear that he can’t do that anymore. So Chris was faced with a choice to stay the same or up his level.

I constantly have this thought. “Is this my Chris Lighty moment?” Existing in a rapid growth environment will cause you to run into enough people who work extremely hard but, for a myriad of reasons, are in a place where the company might have outgrown them. In those moments, I try to be as clear as possible with those staff members about their ability and my concerns. I’m also certain that everyone has a ceiling. That will come from either ability, or choice. If mine is ability then I hope someone will be gracious enough communicate that to me. If it’s choice, then that’s only something I can know. All roles have a cost. They require too much of the personal end of the life balance. Some roles are simply not worth the transaction cost to achieve the position. The only way to know that is to be clear on your own personal boundaries.

It helps to be clear on those so that you know when to say “I need to change to level up.” or “I’m ok and that’s not worth it.” I’ve found the clearer you are about this, the more comfortable everyone else is with where you’re at. What are your limits before you’ve given too much for a role and where are the areas you need to commit to change and growth?

Directionality of AI

I had a discussion with a friend over the weekend about AI. There are some assumptions about the value it adds and I wanted to address one of these in particular. The reality is that it’s not going to remove jobs so much as it will make very boring jobs obsolete. The issue is that some believe this reduction of overhead will lead to greater profit and that’s simply not true. It could be if all other things were static and the world simply does not work that way. Growth and Death are a fact of life and this equally true for organizations. If you’re not growing you’re dying. Markets expect that also.

That explained, I believe there are three potential options for AI results in an organization. Any and all of these are simultaneously possible in the same market and all have their own unique strategy tradeoffs.
AI’s three future business fundamental options:
1) AI makes service costs a deflationary race towards $0.
-Many services are commoditized. If your vertical isn’t yet, then just wait about 10 years. Because of the cost red ocean effect of commoditization, this allows you to keep competitive pricing while also allowing the margins to stay the same.
2) AI will allow for maintaining revenue levels and increasing the user experience.
-With the easy problems solved for you’re able to reallocate costs to staff for and service higher level business functions. This provides the end user with a better, more consultative experience.
3) AI will allow you to increase your capacity and reach without cost increases.
-If you can take on 2x, 4x, 10x more clients without increasing costs then you have a greater chance of survival in a disruptive situation. The capacity gained will potentially allow companies to continue growth and gain market share without reducing services.

Technology Business or Technology Enabled Business?

Over the past few years I’ve had to rethink my understanding of the underlying finances of a business. This is necessary when developing your investment thesis. FinTech is a good example. If you look at the trajectory it shows what people are discovering. A NeoBank that was treated as a SaaS company during ZIRP is being realized as simply a bank because the unit economics support that. This is why so much in a lot of companies needs to be written down.

The prevalence of the thought that “every company will be a tech company” simply isn’t true once you apply the unit economics of the vertical that the business exists within.

Everyone else seeing this same rework to investment thoughts?Technology Business or Technology Enabled Business?

Over the past few years I’ve had to rethink my understanding of the underlying finances of a business. This is necessary when developing your investment thesis. FinTech is a good example. If you look at the trajectory it shows what people are discovering. A NeoBank that was treated as a SaaS company during ZIRP is being realized as simply a bank because the unit economics support that. This is why so much in a lot of companies needs to be written down.

The prevalence of the thought that “every company will be a tech company” simply isn’t true once you apply the unit economics of the vertical that the business exists within.

Everyone else seeing this same rework to investment thoughts?

Extractors and Fillers

Steven Freidkin posted about the tension you find from being in the privileged place of being good at solving problems that also counterintuitively will bring you more problems to solve. Check it out linked below.👇 I’d like to riff off that for a moment.

https://www.linkedin.com/feed/update/urn:li:activity:7206267953606995970/

There’s an old jewish proverb: “if you work with your mind sabbath with your hands and if you work with your hands sabbath with your mind”

Because of the dynamic of never ending problems generated by growth:
-I’ll never not be a dad again
-I’ll never hold a position in a business again where my job will not be to simply look at problems and solve them. (Frankly, I think I’d be miserable if this wasn’t true.)
The work seems never ending and that can be an exhausting thought.

In that i’ve found that if I do something in the opposite realm (flipping from mind to hands) allows me to see something finished. The ability to see a finished work at least one day a week adds rest back in a way that gives me energy for the next round of problems the coming week.

With all the extractors, what is your filler activity that sets you up for the next week, the next round?