Summation

Founders Brunch featured in L.A. Times

jessica guynn wrote a good article in the Los Angeles Times:
Brainstorming over bagels: Silicon Valley entrepreneurs seek camaraderie and capital at brunch

special thanks to Tod Sacerdoti, Saar Gur, Peter Thiel, Mark Pincus, and Matt Cohler who, with me, hosted the very first Founders Brunch at my place in 2005.

Hunter Walk on the The Psychology of the Salad Bar

this is definitely worth reading:
The Psychology of the Salad Bar

When Good Isn't Good Enough at BusinessWeek

BusinessWeek was kind enough to publish an article i wrote about why great people are so much more valuable than good people.

please check out:
When Good Isn't Good Enough

Brafmans have a new book: Sway is worth reading

Sway: The Irresistible Pull of Irrational Behavior
By Ori Brafman and Rom Brafman

Ori Brafman's last book, Starfish and the Spider, captured how decentralized organizations work. it was a really interesting book and a good business read.

Sway is even better. I got an advanced copy from Ori and I highly recommend reading it when it is out (June 3, 2008). Sway gives you a sense of how people make decisions and how most decisions are highly irrational. In fact, Sway is a really good book for debunking the myth that we should trust our gut. In Sway, we learn that the gut is right about as often as throwing darts.

Sway is also a quick read and extremely well written (in true Malcolm Gladwell-esque form). I highly recommend this book.

multi-tasking verses micro-tasking

People always say women are better multi-taskers than men. My bet is that the stereotype is largely true. Most men I know can only concentrate on one thing at a time. Where many women I know can do multiple things at the SAME time.

For instance, if you want eliminate my productivity, just put on the television. If the television is on, there is almost nothing else I can do. I am absolutely powerless. I cannot watch television and do anything else that takes brainpower. I might be able to fold laundry or run on the treadmill, but nothing where I am really utilizing my brain.

Many women can compartmentalize their brains better and do many things at once. There has been a lot of studies that claim to prove this but I never believed the studies before because it seemed to me that men and women were equally productive in the workplace. But what I didn’t realize was while women really excel at multi-taking, men compensate for this by micro-tasking.

Micro-tasking is the ability to do lots of different things in series while multi-tasking is doing different things in parallel. While parallel-processing is inherently better, you can make up for it by being very efficient when working in series.

You might think someone is a really good multi-tasker because they get a lot of stuff done in an hour but they might actually be a really good micro-tasker (maybe doing 20 different things in order for an average of three minutes each).

Instant messaging is the bane to people that love to micro-task but cannot deal with true multi-tasking. I can’t deal with IM – it makes any other work I was considering doing fall by the wayside. So like many people who understand that they are not a parallel processor, they organize life hacks to compensate for this.

After actively using ICQ in 1997-1998, I eliminated IM from my life. In fact, I tried to eliminate all unnecessary synchronous communication (which is why I love email – it is by far the best asynchronous communication medium ever invented). And while I use IM to communicate with people occasionally (I don’t have an IM client, I always use Meebo) and recognized the power of IM (I even invested in Meebo), IM should be for people who truly can multi-task and not poor chaps like me (and most men) who have to resort to micro-tasking. And, of course, IM is for people that don’t want to be productive (most people in the world).

Another life hack I made four years ago was to eliminate TV. I canceled my cable subscription because TV, to me, was like chocolate cake – it is so addictive that if it was available in my home it would be consumed.

If you’re a man, chances are you’re not wired for parallel processing. So if you want to gain efficiency and output, you’ll need to set up your life inputs to better gel with your internal systems.

(special thanks to my office-mate, Vivek Sodera, who pointed out these differences to me)

read Einstein biography

just finished: Einstein: His Life and Universe by Walter Isaacson via Audible.

masterful book.

a book about a rebel and nonconformist who changed the world. while the extreme of going-against-the-grain (a la Unabomber) is bad for society, sometimes the extreme conformist (a la Nazi soldier) can be just as bad. einstein did his best to think for himself and not let others think for him. this, in my opinion, is one of the most important and admirable traits someone can have.

Isaacson does a great job of bringing Einstein to life. I haven't yet read Isaacson's book on Ben Franklin but a long time ago i read The Wise Men -- a book he wrote with Evan Thomas (about six people in post WWII America that changed our foreign policy outlook -- two of those six people (Lovett and McCloy) remain heroes of mine today) which is one of my all-time favorites.

Hub and Spoke by Lawrence Coburn

Lawrence Coburn at SexyWidget has a very interesting idea of how to build a distributed web service company:

http://www.sexywidget.com/my_weblog/2008/02/hub-and-spoke-b.html

Quantcast says Insiderpages bigger than Yelp.

According to Quantcast, InsiderPages has a lot more traffic than Yelp (3.3 million uniques to 2.6 million uniques).

I'm dubious of this since InsiderPages has not been updated in a long while and has been actually down today (when i tried to check out the site).

Compete.com tells a different story w/ Yelp about triple the traffic of InsiderPages:

But Compete also shows InsiderPages.com up over 100% in the last year (whereas Quantcast shows it down from last year). Just shows that web statistics, even of high trafficked sites, is very hard to judge. and even their relative position is very hard to measure. Companies like ComScore, Quantcast, Alexa, and Compete are part science, part art. i'm still a big fan of what they are doing (it is quite hard ... but very important), but it is a note of caution when trying to judge a site's popularity.

The Power of Great People (why “good enough” won’t cut it)

The Power of Great People (why “good enough” won’t cut it)
Don't outsource your hiring to a bureaucrat

Great people are five times as valuable as good people. This especially applies to engineers. You cannot just throw bodies at a problem (see the classic Mythical Man Month for more info). Sometimes less people can actually accomplish more.

Great engineers are head and shoulders better than good engineers. Good engineers are everywhere. At Rapleaf, we've received thousands of resumes from good engineers from MIT, Stanford, Berkeley, and IIT, where they received their masters and PhDs. They’ve worked at places like Netscape, Sun, Microsoft, Yahoo!, and Oracle. The only problem: they’re only just good, not great.

In fact, it's pretty much impossible to tell from a resume if someone is great. It's easy to look at a resume and say “this person is at least good” or “they're not bad.” But great people are rare and very hard to spot on paper and it takes a long time to find them.

But great people are worth it. In markets characterized by winner takes-all - increasingly true in a globalized world - you need the very best; “good enough” will no longer cut it when against intense competition. These are the people that build great and lasting companies. Companies that are lucky are built on the backs of good people.

In a start-up, a great software engineer should have the following:
- ability to take a complex concept and write code that can be understood and adapted by other engineers
- ability to product manage oneself
- pleasant personality that is fun to be around and likes working with others
- creative mindset to think out of the box
- not valuing one’s own ideas more just because they were the one that generated the idea
- carpe diem attitude: they seize the opportunity to grow

In a nutshell, this is the person that everyone in an organization asks for advice. In college, this is the person that every other computer science student wanted on THEIR team.

Of course, determining if someone is great is not easy. It’s probably why so many people hire friends and former coworkers – because you know they are great. The best predictor of future employee success is past performance.

But determining a great software developer is not impossible either. To me it is amazing how some start-ups choose who they hire – many seem to hire anyone that went to MIT. That means they are outsourcing their hiring to the $40k/year admissions officer at the college who evaluated the person when they were 17! Do you really want to entrust your hiring to a bureaucrat? This is an extremely bad strategy. Of course, many people who went to MIT are real rock-stars and people who went to MIT might be more likely to be rock-stars than people who went to a lesser-known school, but most are only good … you need to work to find the great people.

By asking pointed questions and giving tough exercises, you can determine with high accuracy if someone is really amazing. In fact, I make it a point not to ask questions like “what do you like to do outside of work?” It’s better to ask them to solve tough problems and get to understand their thought-process. Great people have interests that often converge with what they do at work. At Rapleaf we do at least four rounds of interviews and we take our time. This means we occasionally lose some great people, but we err on not having false positives.

Note: I’ve found that determining a great software engineer is much easier than determining a great salesperson, marketer, etc. At the end of a series of interviews with a software engineer, I can tell you with great confidence if they are a rock-star or not. But with a BD person for instance, I have a much harder time being confident in my assessment.

Two things to note about great people:

1. They only want to work with other great people. Once you recruit a few great people, you’re in a bit of a quandary. You’ll need to, from then on, only recruit other great people or the great people you do have will leave. And if you hire any good people by mistake, the great people will (directly or indirectly) want you to let the perceived mediocrity (i.e. good people) go. And letting go of someone that is good is really hard to do. So you’re stuck and that’s the rub.

2. Great people feed off of each other in person. Like real estate, engineers in start-ups is all about location. You read about all these companies outsourcing offshore and doing development from virtual offices. (as a side note, even the idea that you can outsource a person drives me bonkers – no two people are alike and you cannot just throw bodies at a problem). But a distributed workforce is really hard to manage and real innovation rarely happens in distributed environments. Not to contradict myself, but I’ll acknowledge that sometimes it works, especially with open source projects like Linux and hadoop and Firefox which were developed by teams of people working out of various locations (many of whom never met in the early stages of development). And while there are some distributed workforce examples in the start-up for-profit world, it is very hard to find a highly innovative team based strictly on outsourcing and telecommuting.

Google’s early core engineers all worked in its early Palo Alto office. Facebook’s engineers all work together now in Palo Alto – in fact, Facebook provides a stipend to employees to LIVE in Palo Alto. At Rapleaf, we’re a small company and our 13 employees all work in our San Francisco office. In fact, all of them actually LIVE in San Francisco right now and over half live within walking distance of the office. Big innovation often comes from massive collaboration and rapid iteration, and that can much more easily happen when people work in close quarters and can see each other (no opaque walls or cubicles in the development center is key too).

Great people need other great people to feed off of. Being able to trust and rely on another person's talents affords you the opportunity push your own boundaries (because great people are always looking to be better). You won't have to worry about picking up the other person's slack. You’ll be free to think and experiment with what's new. You’ll be free to innovate.

If you are Google or Microsoft today, you can afford to hire good people. Great people are of course preferred, but 90% of their hires today are just good people. You have lots of processes, product requirement documents (PRDs), and you need people to just code to spec and follow instructions. In fact, you might even want to outsource, because creativity isn’t always required. It isn’t always needed … and with respect to a big company, creativity sometimes gets in the way.

But if you are Google or Microsoft, back when the company was under 50 people, you couldn’t afford to hire anyone but someone that was great. Anyone good would just have to wait a few years until the processes were developed enough to support those types of people. If you’re a start-up who’s goal it is to be the next Google, then you’ll have to attract, hire, and retain great people. And so if you’re looking to go from good to great, throw out your Jim Collin’s book and just focus on hiring great people.

---

(special thanks to the following people who helped me with this:
Ben Casnocha, Joel Hornstein. Lucy Jacobs, Manish Shah, Vivek Sodera, Hunter Walk, Chris Yeh)

And speaking of great people, we’re currently looking for great software engineers and a great BD/sales person (we offer at $10,007 referral award):
http://blog.rapleaf.com/jobs