Thinking About Thinking

On The Blind Men And An Elephant

Posted in Philosophy by larrycheng on January 23, 2010

Perhaps my favorite online video series is the Authors @ Google series where they bring the best and the brightest to Google to talk about their area of expertise.  Tonight I was watching the video of Tim Keller (below), founding pastor of Redeemer Presbyterian Church in Manhattan.  He was speaking at Google about his book – The Reason for God.

There’s an interesting part of his talk where he brings up the famous story of the blind men and an elephant – and the response of Scottish missionary, Lesslie Newbigin.

As Wikipedia summarizes: In various versions of the tale, a group of blind men touch an elephant to learn what it is like. Each one touches a different part, but only one part, such as the side or the tusk. They then compare notes on what they felt, and learn they are in complete disagreement.

In John Godfrey Saxe’s version (1816–1887), one man falls against the side of the elephant and proclaims the elephant is a wall.  Another leans on the tusk and proclaims an elephant is a spear.  Another touches the trunk and proclaims the elephant is a snake.  Another touches the knee and proclaims the elephant is a tree.  Another touches the ear and proclaims the elephant is a fan.  And the last one grabs the tail and proclaims the elephant is a rope.

The point of the story is that while each blind man is proclaiming what they believe to be is an absolute truth, in fact all of their truths are just relative based on their experience of the elephant.  No one has the Truth, in its entirety.  This story is often used to critique those who proclaim some knowledge of absolute truth – most commonly those with a monotheistic religious world view.  It is intended to teach us how knowledge and truth is in fact relative.

Here is Lesslie Newbigin’s response:

In the famous story of the blind men and the elephant… the real point of the story is constantly overlooked.  The story is told from the point of view of the king and his courtiers, who are not blind but can see that the blind men are unable to grasp the full reality of the elephant and are only able to get hold of part of it.  The story is constantly told in order to neutralize the affirmations of the great religions, to suggest that they learn humility and recognize that none of them can have more than one aspect of the truth.  But, of course, the real point of the story is exactly the opposite.  If the king were also blind, there would be no story.  What this means then is that there is an appearance of humility and a protestation that the truth is much greater than anyone of us can grasp.  But if this is used to invalidate all claims to discern the truth, it is in fact an arrogant claim with the kind of knowledge which is superior that you have just said, no religion has.

As Tim Keller further clarifies in his talk:

To say, I don’t know which religion is true is an act of humility.  To say, none of the religions have truth, no one can be sure there’s a god is actually to assume you have the kind of knowledge, you just said no other person, no other religion has.  How dare you?  See, it’s a kind of arrogant thing to say nobody can know the truth because it’s a universal truth claim.  To say, ‘Nobody can make universal truth claims.’  That is a universal truth claim.  ‘Nobody can see the whole truth.’  You couldn’t know that unless you think you see the whole truth.  And, therefore, you’re doing the very thing you say religious people shouldn’t do.

I think Newbigin and Keller make a valid and compelling point.  Here’s the rest of the @ Google talk if you’re interested:

The Unofficial Cool Parent Test

Posted in Philosophy, Technology by larrycheng on October 5, 2009

Are you a cool parent?  It all depends on whether or not and under what circumstances your teen has “friended” you on Facebook.  The following ranking is principally based on real experiences of parents I know.  Here we go from the most cool (1) to the clearly not cool (10): 

  1. Your teen sought you out and invited you to be their friend on Facebook.  Kudos to you, you’re cool.  You’re in the top 10%. 
  2. You signed up with Facebook and invited your teen to friend you.  After 6–12 months, your invitation was accepted without any intervention from you.  Congratulations!  It took awhile, but look at it this way – after extensive diligence, you have passed the cool threshold.  Congrats. 
  3. You invited your teen to friend you on Facebook.  You have been accepted – but the content on the page looks thin.  You have been accepted with limited information access – real friends have full access.  Look at the bright side, at least your child doesn’t mind his/her friends knowing that you exist.  You’re not explicitly cool, but you’re not a total embarrassment either. 
  4. You have not been friended by your teen, but they have friended a close friend of yours.  They know that your friend will probably let you check in online every once in awhile through their account.  Your kid thinks you’re cool enough for some access, but he/she’s not ready to go public with that sentiment.  Ask your friend why he/she is cooler than you. 
  5. After the 6–12 month wait, you coerce your child through a mix of threats and gifts (like a car) to accept your invitation.  Your invitation gets accepted with your child under extreme domestic pressure.  Not cool – stop taking parenting tips from 24
  6. Your invitation to your teen to friend you on Facebook has been flat out declined.  It’s got to sting, but look at the bright side – at least he/she was honest with you. 
  7. You invited your teen to friend you.  You have heard no response.  You keep waiting.  No response.  6–12 months have passed – you’re afraid to bring it up. Your invitation may have been “ignored” by your teen – which is the polite way of saying “No Way!”.  Look at it this way, at least your kid cares about your feelings enough to not neg you outright. 
  8. You have no idea what Facebook is.  Not cool, but there could be worse. 
  9. Your teen friended you on Facebook, and the very same day you clicked to every friend they have, looked at every friend’s links, pictures, videos, etc.  Not cool – that is parental stalking.  You give parents a bad name.  Beware of the next one:
  10. You were friended by your teen, but you have been subsequently defriended.  Ouch, you screwed up somewhere along the way. 

1+1 = ?

Posted in Philosophy, Pop Culture by larrycheng on September 29, 2009

True to the name of this blog, I had the random thought of how many unique and legitimate answers there are to the simple question: 1+1= ?  Here are a few that I came up with:

  • arithmetic:  1+1 = 2
  • visual: 1+1 = 11
  • logical: 1+1 = 1+1

Answers from the blogosphere:

  • artistic/comical: 1+1 = window (video)
  • binary: 1+1 = 10
  • vegas: 1+1 = craps
  • boolean: 1 (True) + 1 (True) = 1 (True)
  • basic algebraic: 1+1 = +1 (were ‘+1’ is the name of the variable)
  • algebraic field theory: 1+1 = 0
  • anagrammatical: one plus one = unseen loop
  • blackjack: 1+1 = 2 or 12
  • basketball: 1+1 = 0, 1, 2
  • synergy: 1+1 = 3

If you can think of other answers that are both unique and legitimate, post them in the comments and I will add it to the post.  By the way, I would not consider 1+1 = 5–4 as unique.  It is legitimate, but not unique since I’d still put in in the arithmetic category.

Who Is The Venture Capitalist’s Customer?

Posted in Economy, Philosophy, Venture Capital by larrycheng on September 27, 2009

Venture capitalists always talk to their portfolio companies about how important it is to define your customer, understand their needs, and create a compelling value proposition for them.  Though, if you talk with enough VCs, we have a hard time defining the customer for our own business.  I was having a recent discussion on this topic with some colleagues in the industry and no unified consensus emerged.  It is always a debate between our limited partners (“LPs” – those who invest in VC funds) and entrepreneurs.  We all know that we ultimately get “paid” by LPs.  But, we also know we don’t survive if entrepreneurs don’t want to work with us.  So, who is the venture capitalist’s customer? 

To try and get some feedback, I decided to ask my twitter friends: Who is the VC’s customer?  I specifically asked VCs to respond.  Somewhat surprisingly, no VCs responded, but I got a slew of responses from entrepreneurs.  They were quite aligned:

  • apsinkus: “institutional investors are real customers of VCs (in my opinion).  Entrepreneurs are merely suppliers.  No LPs, no money.”
  • brandonhaskins: “Although not one myself, a VC is ultimately in investment management, so customers are investors – entrepreneurs are products!”
  • muhammadkassim: “VCs’ customers are investors into the fund. Entrepreneurs are VCs’ business partners.”
  • gmsheehan: “their investors”
  • AppStruck: “The VCs customers are the institutional investors you raise money from.”
  • meetthestreet: “LPs…pension funds and endowments are clearly VC customers. In money management the people who give you money are your customers.”
  • CameronHerold: “unfortunately for entrepreneurs the Investors are the VCs customers. The entrepreneur is the VCs product.”
  • EdLoessi: “the VC’s customer are the people who gave them the money the tool is the company invested in and sometimes you break your tools!”

I’d say 85%+ of the respondents said the VC’s sole customer is the LP.  Not a single responder said that the entrepreneur is the VC’s principal customer.  So, in an unexpectedly round about way, I got my answer from entrepreneurs, not from VCs.  If entrepreneurs are the VC’s customer, surely entrepreneurs would know that.  Since they don’t know that – either VCs are doing a terrible job taking care of their customer (which is possible) or in fact the entrepreneur is not the end customer of the VC. 

My personal belief is that the VC’s primary customer is the LP.  There is a clear and constant relationship between VCs and our investors which is consistent with the traditional definition of a vendor/customer relationship – they pay us for providing a product/service to them.  We have to provide a great product/service to our LPs and service them well as our customer or they can take their business elsewhere. 

Then what are entrepreneurs to VCs?  First of all, entrepreneurs should be no less important to VCs than LPs.  Without LPs, VCs are out of business.  Without entrepreneurs, VCs are out of business too.  Entrepreneurs can take their capabilities elsewhere, same as LPs.  So, while entrepreneurs and LPs are equal in importance, it is a different relationship.  I do not have a vendor/customer relationship with the entrepreneurs I work with.  In my mind, the entrepreneur is not the VC’s customer any more than the VC is the entrepreneur’s customer.  Nor do I think describing entrepreneurs as the VC’s product or supplier is accurate.  Neither of these lines of thinking fit for me as the right way to describe the relationship. 

I think the best term to describe the relationship between VCs and entrepreneurs is partners.  The official definition of partner is: “a person who shares or is associated with another in some common action or endeavor”.  I view the entrepreneurs I work with as my partners.  I think they view me as their partner as well.  I am sure that any of my CEO’s will tell you the effort that I put in towards being a value-added partner to them.  We partner together for the common end goal of building great companies and creating value for shareholders.  So entrepreneurs are not customers, suppliers or products for VCs, they are partners.  We work side-by-side as partners at the end of the day.  I wouldn’t have it any other way. 

College Optional

Posted in Philosophy, Venture Capital by larrycheng on August 26, 2009

I have always believed that a great education is invaluable.  The ability to learn new things, grasp new concepts and retain information are all important ingredients of success.  But, how valuable is a college education – which is only one form of education?  In the business world, I think a college education is extraordinarily nice to have, but not a must have.  I’d certainly recommend that everyone get a college education, but if for some reason you can’t or you didn’t – perhaps your best bet is to go find a career in business.

Reinforcing that point of view is the sheer fact that there are many successful CEO’s that do not have college degrees.  Some of these include but are not limited to:

  • Richard Branson, CEO, Virgin Group
  • Michael Dell, Founder and CEO, Dell
  • Barry Diller, CEO, Interactive Corp
  • Bill Gates, Founder and Chairman, Microsoft
  • Paul Allen, Founder and Chairman, Vulcan Group
  • Dean Kamen, Founder and Chairman, Segway
  • Mark Zuckerberg, Founder and CEO, Facebook

You could say that they are outliers, and you would be completely right.  They are outliers in their lack of formal education – but also outliers in the magnitude of their success.  Even if you look at my portfolio of six emerging technology companies, two of the CEO’s do not have college degrees.  And both of those companies are going gangbusters.

At the end of the day, I’m not sure that the traditional college educational process of reading a textbook, listening to a lecture, and then taking a test is a process that is often replicated in the real world of business.  Sitting in a classroom listening to a teacher every day for four years in so many ways is exactly the opposite of what someone with an entrepreneurial DNA should want to do.

After seeing many talented executives come in without a college education, there seems to be a blueprint to succeed if you don’t have a college degree:

  1. Learn how to sell.
  2. Find a problem you’re passionate about solving.
  3. Be courageous and more willing to take risk.
  4. Make a lot of friends.
  5. Develop instincts by failing quickly.

And perhaps the most fundamental thing you need to learn to succeed in business whether you have a college education or not is to learn how to take $1.00 and turn it into $1.10 (without lying, cheating, stealing, swindling, etc.).  I don’t mean that in a theoretical way.  I mean literally, take a dollar bill out of your pocket right now, and figure out how to get someone to pay you $1.10 for it a week from now.  Usually that means you take the $1.00, go buy some stuff, package it up in a value enhancing way, and see if you can sell the end result for $1.10 to someone other than your mom.  If you can do that with $1.00, you’re off and running.  The same principles that enable you to turn $1.00 into $1.10 are the ones that will apply for turning $100 million into $110 million.  That ability is what some call business instincts – and instincts aren’t always learned in college.

Leave Something On The Table

Posted in Philosophy, Venture Capital by larrycheng on August 19, 2009

One of the best lessons I learned early in my career about negotiation is simple: always leave something on the table for the other party. 

To many, being a skilled negotiator means expertly and ruthlessly optimizing your self-interest.  Negotiating is about winning, or even better, beating the other party.  Satisfaction is knowing that you have left nothing on the table – you got everything the other party was willing to give and one more pound of flesh thereafter.  You have squeezed out every last dime.  I do not agree with this approach.

I think we all have to decide whether our primary objective is to win the negotiation or to win the relationship.  You can choose to go through life leaving a trail of dust comprised of those you interact with – seeing people as transactional resources to be drained at every opportunity.  Alternatively, you can go through life being fair and reasonable, not losing sight of the other party’s needs and appreciating that a good deal is one where both parties probably have given a little more than they wanted going in.  Both parties have left something on the table because they value the relationship as much as anything else. 

I really respect and prefer to work with those who adopt the latter approach.  I would say that all of my portfolio company CEO’s are of this mold.  They are people for whom a handshake still means something.  There is some old fashioned sensibility about them which is a high compliment in my mind.  They have the character to start off a negotiation with, “What’s important to you?”  There is no front-end posturing because that’s not necessary among friends and colleagues.  And they ultimately hope that as many people as possible become friends and colleagues over time. 

I’d like to think that operating in this manner, while perhaps not necessarily optimizing every short-term economic matter, does enhance long-term fiduciary value.  I guess it’s hard to know until you’ve seen a full body of work – but at least the ride will be an enjoyable one. 

It’s Hard To Get The News From The News

Posted in Philosophy, Pop Culture by larrycheng on August 12, 2009

This post may be a statement of the obvious, but it’s an observation I had this morning.  As is typical, I skimmed the Kindle versions of The Boston Globe, The New York Times, and The Wall Street Journal on my subway ride to work.  I thought it was very interesting how the three papers described the audience at President Obama’s town hall meeting in New Hampshire last night. 

First up, The Boston Globe:

Obama’s audience at Portsmouth High School gymnasium was tame.  The bleachers teemed with Obama supporters…  The president wound up preaching to the choir, which applauded wildly at his calls for action on healthcare – at one point breaking into a chant of “Yes we can!”

Next up, The New York Times:

Unlike many of Mr. Obama’s town-hall-style meetings, usually filled to the rafters with supporters, Tuesday’s meeting included skeptics from whom he sought out questions.  At one point he asked that only people who disagreed with his approach raise their hands to be called on.  There were plenty who responded.

Finally, The Wall Street Journal:

Inside Portsmouth High School, Mr. Obama faced a friendly crowd, so much so that he sought out some tough questioners.

And just to round it out, I checked out Fox News once I got to work:

Obama faced no disruptions at his meeting, instead taking questions from supporters who soft-balled him opportunities to knock down criticism. 

….and The Huffington Post:

The encounter was so friendly, in fact, that by the end Obama was even asking for skeptical questioners to come forward – to no avail.

After reading all five characterizations, I am inclined to think that The Huffington Post had the most accurate portrayal with the Wall Street Journal a distant second.  The other sources seemed to emphasize parts of the interaction as perhaps unfairly representative of the whole. 

This reminds me of a thought about what it means to be accurate in what you say.  To portray a situation accurately, it’s not just about making factual statements – which I think all of these sources did to an extent.  Accuracy involves more than isolated facts, but complete representation with – importantly – fair and proper emphasis.  This is as true for representing the news in journalism as it is in representing the Bible from the pulpit or representing a company in a Board meeting. 


Memorizing v. Understanding

Posted in Philosophy by larrycheng on August 6, 2009

I went to a Red Cross CPR training class last night and it brought up some more thoughts on educational philosophies.  The methodology of teaching for the class was very much based on memorization.  The entire class was taught in the following pattern: If X happens, then do Y.  After you do Y, then do Z.  After Z, check for A – if A exists, then do B.  By the end of the class, after sufficient repetition, you pretty much had it drilled into your memory.  But, interestingly, the teacher made a passing comment at the end that everyone would forget most of the training after a few months.  Having taken the class before, I can attest to that fact.

It did occur to me on the way home that while we were taught the steps of administering CPR, we were never taught why we were doing the steps.  It was never thoroughly explained to us why you give 2 rescue breaths when you don’t see signs of breathing.  It was never really explained why you administer chest pumps in the first place let alone why you do it 30 times at a relatively fast rate.  We were taught to memorize the steps, but we were not taught to understand why the steps are needed or effective.  I really believe that had the latter happened, more people would remember the steps months later.  To oversimplify, in my experience, memorization tends to more consistently deposit information in short-term memory, but understanding transfers that information into long-term memory. 

In addition to recall, I think the utility of understanding something is generally superior to the utility of just memorizing something.  For example, any undergraduate finance student has learned a basic equation like: revenues – cost of goods = gross margin.  But, few seem to understand what gross margin tells you about a business.  What does a high gross margin mean?  What does a low gross margin mean?  What does it say about a business when the gross margin is growing over time or declining over time?  And to pay homage to the Internet bubble – what does a negative gross margin mean (many equity research analysts of that era seemed to forget this one too)?  Understanding what gross margin means is a different plane of knowledge than just memorizing the equation to calculate it.

This is not a pure critique of memorization as an educational philosophy.  I just don’t think memorization should be applied in such a way as to exclude or trump the teaching of understanding.  Both working together are key components to building knowledge.  With that said, I still highly recommend that people take a CPR training class because remembering anything from the class is better than not having any idea what to do.  I doubt the victim you’re helping will really care if you understand what you’re doing as long as you memorized the right steps!

Don’t Teach Kids To Play Music, Teach Them To Love Music

Posted in Philosophy, Pop Culture by larrycheng on July 29, 2009

My favorite part of the TEDx Boston event yesterday was the themelet on music.  There were three musical performances all involving the younger generation topped off by the Youth Orchestra of the Americas (YOA) led by Benjamin Zander.  I don’t think it’s humanly possible to love classical music more than Benjamin Zander – he’s infectious.

Benjamin Zander’s presentation of music made me think about my own personal musical journey.  As a child, music came quite easily for me – both the piano and the violin.  Once my parents saw that I had some proficiency in music, they sacrificed a lot of time and money to get me great teaching and equipment.  I practiced a fair amount and learned to play a number of the great works by Beethoven, Bach, Mozart, Chopin, etc.  And, at a young age, I even started competing.  Despite my improving capabilities, there was one major flaw in the whole program.  I never really fell in love with music – and that would ultimately be the limiting factor. 

There was a brief moment in my short music career where I could have really fallen for music.  For a few weeks, I got to take a break from classical music and had the chance to try my hand at jazz piano.  What’s unique about jazz is in its truest form, it’s about improvisation.  You don’t play jazz off of sheet music – it comes from within yourself.  I learned that for me, playing the notes on a page of sheet music was not playing music at all.  Ironically, it wasn’t until I threw away the notes, that I really started to feel like I was playing music.  Playing other people’s music was all well and good, but I had the best time making my own.  I always wondered if my brief flirtation with jazz had lasted longer, if I would have ultimately come to love music. 

I have always carried a broader lesson with me from this experience: it’s one thing to be good at something – it’s entirely another thing to be good at something and to also love it.  Anyone know a good jazz teacher? 

Missionary CEOs v. Mercenary CEOs

Posted in Philosophy, Venture Capital by larrycheng on July 27, 2009

I have always had an affinity for a particular “type” of CEO.  I never really bothered to try and define this “type” – I just knew it when I saw it.  Until last year, in an board meeting, Jeff Bezos articulated the framework that captured my sentiments better than I could myself.  He called it: “missionary CEOs v. mercenary CEOs”.  If I had to oversimplify this framework I’d say that missionary CEOs are principally about the mission and mercenary CEOs are principally about the money.  If you met the CEOs of my portfolio companies, you’d find one missionary after another.  Watching Jeff Bezos’ recent video to Zappos reminded me of this nugget of wisdom and reminded me that Jeff is perhaps the perfect example of a missionary CEO.

Jeff’s wisdom notwithstanding, I do not believe that he coined this framework.  After some research, I think he probably heard it from one of his venture investors – John Doerr of Kleiner Perkins who adapted it from The Monk and the Riddle, by Randy Comisar.  Here is John Doerr speaking at Stanford in 2005 articulating how Kleiner views the difference between missionary CEOs and mercenary CEOs.

Over this past year, I have come to appreciate why you invest in missionary CEOs.  Despite one of the most challenging economic times in a century, all of my CEOs exhibited incredible leadership, drive, and passion through thick and thin.  In the darkest moments of this past year, they all demonstrated unwavering commitment and enthusiasm that carried their companies through.  While I don’t know what the future holds for these companies or for the economy, I do know that I am very proud to be associated with each and every one of my CEOs.  They are all great leaders and even better people – worthy of being called missionary CEOs.

[Another piece of wisdom from Jeff Bezos:  How Can We Double Down?]