More thoughts on Occam’s Paradox
I’ve been re-reading my Occam’s Paradox post as well as the comments and trackbacks (which are excellent – please click through them if you have a minute). I fell a little short of really saying what I originally intended for the post, which was that I think that we have a tendency not only to make things more complicated than need be, but also to focus on too many things (and therefore the wrong ones). As a result we try to assimilate too much data to make decisions (not recognizing the massive diminishing returns on this effort) and try to pay attention to too many things. I wrote a post a while ago about trying to cram too much information into financial models that argued that more complex models are not necessarily better or more accurate. I’m realizing now that I’m connecting the dots here that this is exactly the type of behavior I’m talking about in Occam’s Paradox. [By the way, there’s an entire post to be written about how VC’s play into this in their decision making (how many customers do we need to talk with, how many models should we run, etc before we make an investment decision?) – but I don’t think I should go there in this post]. …
July 29, 2005· 2 min read
Occam’s Paradox
Remember Occam’s Razor? It’s the principle (that you probably learned in high school physics) that states that the simplest solution to a given problem is probably the best. I’ve been thinking recently about complexity in business and in life and think there’s a corollary to Occam’sRazor that perhaps should be called Occam’s Paradox – the propensity of humans to make things more complicated than they need to be. I don’t pretend to know why this is, but I notice it all the time (both in my own life and with other people). I guess it’s just easy to start down the road of dependency mapping (i.e., making everything you do a part of a larger matrix that has many interdependencies). I watch this tendency in the companies I work with as well. Lots of dependency mapping; lots of “if’s”, “but’s” and “its not that simple”. Now – I get that life and business are complicated. But I’m talking about how we react to that complexity. We have the choice to either drown in complexity or to cut through it, because although the challenges we face in life and business are clearly complex – the solution to those challenges generally are not (generally the difference is in recognizing what you control and what you don’t control and not wasting a whole lot of time on the latter – perhaps a subject for a future post). …
July 26, 2005· 2 min read
Cheese
Today is the 36th anniversary of the first moon landing (July 20, 1969). Moon’s almost full, so you’ll get a great look at it. Google put up a moon site recently – www.moon.google.com. Be sure to zoom all the way in .
July 20, 2005· 1 min read
Who is your vc?
John H turned me on to a post from Investments and More titled VC’s – Top Brass Solid, Others Not (“wow – someone taking the glam out of the VC world,” he writes). I actually found his post pretty amusing. While I think a lot of people at venture firms are fantastic (law of natural selection, I guess) there are, of course, some that are better than others. What Steve’s post did bring to mind was how important it is to recognize that when you take on an investor you’re taking on an individual more than you are taking on a firm. Some firms have more cache than others, but at the end of the day as an entrepreneur you work with a person, not a fund. Sure, individual partners get to call on the expertise (and rolodexes) of the other partners in their fund, but firms don’t attend board meetings or strategy sessions, give feedback or pick up the phone to talk with you – an person does. …
July 19, 2005· 1 min read
Changing styles . . .
Brent wrote in recently to remind me that I wrote in M&A Part I – Lines in the Sand that I’d talk a bit about changes in my negotiating style over time. I actually interested to hear if other people have had similar experiences, because what I’m about to describe both seems like a natural progression and might also be termed ‘growing up’. I had an odd introduction to more formalized negotiation a few months into my first corporate job after leaving Wall Street. The company I worked for decided to embark on a few acquisitions and I was assigned to work on these with my boss who was the head of the business development group. Eventually we settled on our first deal and, after negotiating the purchase price, my boss turned to me and said something to the effect of “go get it done.” Disappointed that I didn’t get to participate in what I thought was the real action I accepted my role as the grunt on the deal and started work on processing the deal. Much to my surprise at the time it turned out that negotiating the price was about 5% of the actual deal and there were lots of other terms to be worked out. I had the great fortune of working with an outstanding lawyer (who I’ve since done several dozen deals with over the years) who took sympathy on this (at the time) 23 year old who knew nothing of either negotiation or m&a deals. My initial negotiation style arose out of these circumstances and was at the same time defensive (I didn’t want to admit when I didn’t understand something – which happened pretty often – and I understood nothing of the nuance of the terms I was negotiating) and brash (I didn’t fully understand the give and take nature of negotiation and thought I needed to ‘win’ on everything). I learned quickly (and in a few cases embarrassingly) that this style wasn’t going to get many deals done, but in thinking back on this period of my life realize that I maintained a somewhat brash style to negotiating deals (both m&a and business development) for quite a while (my original boss was promoted and I ended up working for someone who was more involved in the day-to-day details of the deals we were doing but who was also very harsh in his personality and negotiating style, which I think I picked up to some extent). …
July 19, 2005· 4 min read
Some thoughts on better board meetings
I sit through a lot of board meetings and while they are a great time for a company to harness the expertise of the people sitting around the table, they need to be structured and managed in such a way to actually accomplish that (i.e., effective board meetings don’t just happen – they are the result of planning and careful management). I sometimes joke with my dad that it must be tuff to get a word in at his board meetings given the powerhouses around the table; he just laughs and tells me that they prepare for their board meetings carefully. In actuality, I think he get a huge benefit out of his board – as do many of the companies I’m involved with – by doing exactly that. Here are a couple of quick thoughts on what that kind of planning and preparation might look like. Send out the board package in advance (a week is great; minimum is a couple of days). This allows you to set up an expectation with your board that they will have all read your board package carefully (which they should do, but won’t always be possible if they get the board package at midnight the night before the meeting). The board package should be comprehensive and cover updates from each department. Include a CEO letter or overview at the beginning of the package. This gives you the chance to set the tone for the meeting – setting up topics that you plan to dig into deeper and asking people to think about certain areas of the business for further discussion at the meeting. Since the board package is also probably pretty thick and full of data this gives you the chance to set the lay of the land for the board (very helpful) and point out specific things that you’d like to highlight in the package. Do not review the entire board package at the meeting. If you are sending out your board package in advance of the meeting and the package is comprehensive by department you should not feel the need to review the entire package (since everyone will have read it). Pick the highlights you want to cover; point out specific items that you’d like to bring the board’s attention to (presumably you’ve done this in your CEO letter as well); ask if there are any questions about the material. But please – don’t spend hours at board meetings reading every page of the package; if you work up a separate presentation to guide the board meeting itself, don’t feel like you need to stop on every page. Many of our companies like to focus on one strategic area of the business at each meeting and prepare a separate presentation to guide that discussion. I think this is a great idea. Make the presentation no more than ½ hour and be sure to make it strategic rather than tactical in nature. …
July 18, 2005· 6 min read
Toys
Here’s some stuff I’ve been playing with that I’ve been meaning to post about: First is MyBlogLog, which tracks links people follow from my blog site. It also tells me how many page views were served from my site. Since I serve full feeds this doesn’t capture all of my link traffic (I miss everything that isn’t clicked directly from the site itself), but I get enough direct site hits to extrapolate these data to my subscriber base. If you want you can also put up a chicklet on your site that shows your most popular links. It’s easy to set up (you have to embed a small amount of code on your site) and intuitive to use. Some more flexible reporting and perhaps different UI for reports would be helpful, but I’m sure Eric is working on those. If you blog and you care about user stats (what am I saying – all bloggers care about their user stats!) this is a great tool to have. I’ve written a few posts (here and here and here) that reference better ways to view information. While the UI of TagCloud is pretty lacking its still a HUGE step in the direction I’m talking about. You can point a bunch of blogs to this tool and it will pick out the overlapping words. Yah – this needs a NLP engine to really be useful and pull out full concepts rather than single words. Still it’s a great idea. Now they just need to make it look more like this. (thanks to Walker for pointing me to this site) …
July 8, 2005· 2 min read
How cool is your ride?
Even though I’m getting older I still like to think of myself as at least a little bit cool (although I’m sure there are many people who would set me straight on that one). As a result I was a bit dismayed this weekend to read an amusing article in the Times that clued me in that – at least in my choice of cars – I was not as cool as I thought I was. In fact, the Land Rover that I drive is pretty close to the “Stodgy” end of the cool meeter and in the same category as Chrysler and (gasp!) Oldsmobile. As the kids would say these days: “Not so groovy!”
July 6, 2005· 1 min read
TSA in action
i can’t tell you how much safer i’m feeling now. i’m writing this on a flight from denver to chicago (on my danger sidekick, by the way). i almost inadvertantly took aboard an allen wrench set (in my bag from when i rode my bike to work last week and perhaps the most blunt object in my bag). the fact that i somehow got it with me to chicago in the first place aside, i know i’m much safer now that its been confiscated (apparently under the ‘tools’ clause of the tsa’s list of banned items). if not, right now, someone could have taken the set and be using it to LITERALLY dismantle the plane. . . …
July 5, 2005· 1 min read
Networking 101 Expanded
Josh Kerbel wrote me with a good question to my Networking 101 post and my follow up post to that one Here’s how you do it that I thought I’d post along with my response (with his permission). Josh Writes: A while back you wrote a post about networking and you referenced Ben Casnocha as an example of a great network, the type of guy who writes people letters and goes out and meets them. …
July 5, 2005· 4 min read