Rate-of-Learning

Particularly liked this post from Kyle Tibbitts on Rate-of-Learning

Definition: Rate-of-learning is the velocity at which you are aggregating new insights and deploying them in ways that build value.

While that post focuses on ways for individuals to approach startup career choices, this kind of thinking applies equally well to corporations approaching innovation and new business initiatives. Just replace “Normal jobs” with “Existing lines of business” and “Startup jobs” with “New lines of business” in the below.   

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When starting out in new, non-core areas, learning should be the primary objective. Those that learn fastest and can deploy that new found knowledge most effectively into the market stand the best chance of winning.  This is particularly true in markets marked by rapid change and dynamism.  It’s like a gyroscope – the speed of the internal spin rate keeps it orientated when forces try to knock it off-kilter. Companies with higher ROL’s have faster spin rates and can withstand greater disruptions.  

This is one reason why corporate venture arms could and should be a source of great value. They allow established companies to significantly expand and accelerate their learning capabilities at comparatively lower cost. 

 

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Companies Matter Faster

Fred Wilson’s post on “Counting the Hits” led me to William Mougayar’s list of the universe of companies valued at more than $250 million. What I’d really like to see is some data on the *time* it took those companies to achieve those valuations. A chart that plots the time to achieve a $250 million valuation against months from founding parameterized by the year of founding would be quite telling. My guess is that the cohort of companies founded in 2009 and later have been able to achieve that valuation at a faster clip than their peers founded earlier.

I have a thesis that companies matter faster than they ever have in the past. Whatsapp, Instagram, Nest, Snapchat, Oculus, Tumblr and others achieved significant exits after being around for about 5 years or less. Several others have achieved large valuations in their “youth” via funding rounds as well. It doesn’t seem like this phenomenon is limited to lightning in a bottle consumer startups either. Similar trends are occurring on the enterprise side as well.

These companies may be the outliers, but they’re also the ones having an outsized impact on the industry. This has big implications for VCs and corporates alike. When the ability to disrupt an industry happens at a faster rate, you need to engage earlier in the startup lifecycle. This is one reason more corporate VCs and innovation groups are getting involved at the seed stage. Successful startups seem to be growing up faster and faster. And like promising athletes, they seem to be turning “pro” and asserting themselves on the biggest stages at younger and younger ages.

Right to Win

When thinking about new initiatives, lots of big companies talk about needing the “right to win.” I’ve never been a fan of using this entitlement definition of ‘right’ when talking about new market entry.

Yes, companies need to make sure they have the ‘right’ assets and resources to win — meaning the “most favorable or desired” assets and resources to service the opportunity. What they don’t need is the “moral or legal entitlement” to win.

This current age is characterized by a decided disrespect for rights of way. The future yields for no one. Google becomes a car company. Amazon becomes a media company. Nike becomes a technology company. Companies must not wait to till they feel they have the right to win. In this environment, you’re only right if you win.

The future isn’t made by those you feel entitled. It’s made by those you feel empowered to try.

Agree with Semil Shaw’s view of Marc Andreessen here:

Marc Andreessen, the co-creator of Netscape and the VC firm which bears his name (which invested $75m into Oculus VR about four months ago), is also very close to Zuckerberg as one of the original angel investors in Facebook and a current board member. I have never met Andreessen, but based on watching many of his interviews on YouTube, enjoying his endless Twitter stream, and the bold thesis of his firm (which has correctly predicted many things — I’ll write on this aspect soon), he strikes me as a true intellectual polymath — not just conversant or convincing on a range of complex topics, but one of the earliest people to connect the dots of high technology at the highest of levels.

His firm, a16z, has recently made huge bets across a range of industries which could present platform-esque characteristics — the software layer for drones, the software for three-dimensional printing, the software for transferring value across the Bitcoin protocol, and so forth. In Oculus, they likely envisioned yet another emergent computer science platform which could rewrite how people communicated with the Internet.

via For Facebook, An Orthogonal, Astigmatic Move Into Virtual Reality – Haywire.

Startups and Driving in India

Reasons why startups are a lot like driving in India:

    • Both require healthy disregard for established convention and rules.
    • Both require absolute fearlessness.
    • Space fills quickly — White spaces don’t stay white for long. If you identify an opportunity, you have to act fast or it will be filled by someone or something else.
    • Intense and varied competition — Constantly competing against all manner of man, beast and machine. Jumble of old and new. Shiny Audi A6s jockey for space against heavy trucks, old buses, auto-rickshaws, motorcycles, scooters, bicycles, pushcarts, pedestrians and the occasional camel.
    • Horn OK Please — Everyone is always making noise to let you know that they are disrupting and overtaking you.
    • Friends and family — Both often put friends and family at risk. Startups often risk their friends’ and family’s money. Drivers in India often risk their friends and family. Rather disconcerting seeing a family of four, including a toddler and infant clutched in Mom’s arms, atop a Hero motorcycle zipping in and out of traffic.
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vizual-statistix:

When I started this blog, one of my first posts addressed chess square utilization by Bobby Fischer. At the time, several people asked me how his move distribution compared to other GMs. So I finally decided to revisit the topic and do some additional exploration.  Here are the results for square utilization for 12 masters, playing as white and black. In generating these, I calculated some other interesting stats that I thought were worth a few bar charts. Who knew queenside castling was so unpopular?

Data source: http://www.pgnmentor.com/files.html#players

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How To Think

I love this piece about Elizabeth Spiegel, chess coach of IS 318 in Brooklyn, and her approach to teaching kids how to think without coddling or sugarcoating. Having seen Brooklyn Castle and reading more of her story, it’s clear that she was a special and driving force for that team’s success.  

A few of her quotes that stood out:

“Teaching chess is really about teaching the habits that go along with thinking.  Like how to understand your mistakes and how to be more aware of your thought processes.”

Her writing on the 2010 girls’ national tournament:

“…most people won’t tell teenage girls (especially the together, articulate ones) that they are lazy and the quality of their work is unacceptable.  And sometimes kids need to hear that, or they have no reason to step up.”

How To Think