VC Confidential

Helpless or Master

"Genius is one percent inspiration and ninety-nine percent perspiration"
                                                                                     -- Thomas Edison

I have often written about how the lessons and factors affecting us as children seem to strangely enough, also impact us in similar ways as adults. I find that I will see something at work and then go home, only to see a modified version of it at home. One of the most recent experiences in this realm I've had relates to a Scientific American article,  The Secret to Raising Smart Kids. In it, the author writes that there are two types of mindsets they see in children: fixed & growth (or helpless vs mastery). In the former, children view their success as being reliant on their inherent abilities which are fixed. In the latter, they view their success as being driven by effort and that any setback can be remedied over time by additional effort.

This distinction is also critical regarding successful entrepreneurs and those pulled under in the Darwinian tech eco-system. This has implications on how one views & motivates employees as well as how one views themselves. I won't do the article justice summarizing it here, but highly recommend it as a read both as a parent and an entrepreneur.

"A brilliant student, Jonathan sailed through grade school. He completed his assignments easily and routinely earned As. Jonathan puzzled over why some of his classmates struggled, and his parents told him he had a special gift. In the seventh grade, however, Jonathan suddenly lost interest in school, refusing to do homework or study for tests. As a consequence, his grades plummeted. His parents tried to boost their son’s confidence by assuring him that he was very smart. But their attempts failed to motivate Jonathan (who is a composite drawn from several children). Schoolwork, their son maintained, was boring and pointless."
                    -- Carol Dweck, The Secret to Raising Smart Kids

Black Swan or Ugly Duckling?

Last Thursday, I gave a speech at Ignite Chicago on the relevance of "black swan" events on entrepreneurship. I had originally been asked to talk on fundraising.  However, after a compelling talk by Steve Jurvetson on our monthly network partners call, I made an audible at the line.  So, thanks to Steve for inspiration and content here.

A lot has been written on "black swan" events since Nassim Taleb's book, The Black Swan: The Impact of the Highly Improbable. In my mind, there  is some overlap with this and chaos theory & non-linear systems. I have attached my presentation if anyone is interested Download 2007_12ignite_blackswan.ppt

Quick points:
-- a Black Swan is 1) a rare event, 2) with high impact, 3) that is hard to predict (pattern attributed post event)
    * examples include 9/11, stock market crashes, discoveries like Penicillin, start-ups (eBay, etc)
-- most of mankind's development has been driven by black swans (unstructured randomness)
-- black swans key in driving big entrepreneurial successes (payoff inverse to predictability)

When this is coupled with the Law of Accelerating Returns (Ray Kurzweil's book, The Singularity Is Near: When Humans Transcend Biology), you realize that the opportunity for entrepreneurs continues to grow exponentially. As technology improves non-linearly, this means we will experience as much change in the next 20 years as we have over the past 100. Buckle up...

Ignite Chicago Fundraising Presentation

I am talking tonight (Thurs, Dec 6th) at the Ignite Chicago event (click for the site) at the Debonair Social Club (1575 N Milwaukee Ave). I was originally going to do a talk on Venture vs Angel fundraising. However, I have decided to change topics last minute and do it on Nassim Taleb's book, The Black Swan: The Impact of the Highly Improbable. I have written in the past on this topic, The Turtles of Omaha, but was inspired to do another post (coming) and change the presentation after Steve Jurvetson gave a compelling talk on our monthly partners call this morning on the book & topic. For those interested, you can download the original presentation on fundraising, Off to See the Wizard, by clicking. Download 2007_12ignite_talk.ppt.

Wikipedia gives a brief overview in its Black Swan Theory entry.

Blodgett Helps Explain the SubPrime Isse...

And we wonder why Buffett says that the credit markets are redefining the term "junk" debt...

How Citi, HSBC, Morgan, Et Al Vaporized Billions

Henry Blodget | November 28, 2007 9:07 AM

Mystified about how Wall Street's best and brightest could suddenly up and lose tens of billions of dollars on insanely risky mortgage bets? Eager to one day get a piece of those billions in bonuses the same best and brightest took home in the years when those insanely risky bets happened to turn out well? Then watch these two British comedians explain how our country's most lucrative and admired industry works...

Wait--worried that, by the time you get there, Wall Street will have learned its lesson and won't be making those insanely risky bets anymore? No worries! Wall Street learned its lesson all right--long before you or any of the current Wall Street generation were born. Here it is (Shhhh....): 

It's Not Their Money!

Ironic Post on the Bubble

My friend, Mike Iannelli, sent me the following link Here Comes Another Bubble. Clearly, we are seeing some funny money deals popping up as the economy takes a dive. Perhaps there is a blog on why Billy Joel seems to be the song writer of choice for these music montages...