danieltenner.com

Startups, company culture, technology, writing and life

So, I’m an investor now

I guess it had to happen sometime! My first investment, made a month or two ago but kept quiet until now, is SolidLabs, makers of the Primo Playset that had a successful Kickstarter last year. It’s an absolutely awesome project to teach programming to pre-literacy kids via an arduino-based device. Watch the video, it’s really excellent. So I invested in them.1

It’s been interesting and very instructive to find myself on the other side of the figurative table. Except I’m not on the other side. I’m an entrepreneur, running a business that, who knows, may itself take funding at some point. I’m investing largely because I’m lucky enough to be able to, and because I’ve always had a desire to move towards that.

However, there are some interesting lessons at the moment, worth making notes on, if only so I can look back at them later, but also so that they might be helpful to others…

Valuation? We’ve heard of it

Perhaps because I’ve been bathed in the startup world for almost a decade now (since 2007 – almost 8 years), I am (perhaps naively, we’ll see) not that bothered about the valuation. It shouldn’t be something unreasonable, but then that is usually determined by the amount of equity being raised. Every round, from seed to series whatever, should be somewhere between 10% and 30% or thereabouts.

Why am I not bothered about the valuation? Because I understand that many if not most of those businesses will go bust and return nothing, and those that do succeed will hopefully return a sufficient multiple that the initial valuation shouldn’t be a huge factor in there. I am also counting on the fact that other investors, who are putting in more money than me, are investing on a sensible valuation, and I’m investing along with them, so benefitting from their efforts at coming up with a sensible valuation.

Ultimately, I don’t care that much if the investments that work out give a 30x multiple or a 20x multiple, so long as it’s in the tens.

I also don’t care what percentage I end up owning. That’s not what matters for an investment. What I care about is that if I put £10k in, I get a multiple of that out. Whether I turn my £10k into £50k by owning 0.001% or 10% makes little difference. What makes much more difference is how much the business grows.

Quick decisions

One thing I have learned from reading countless articles about investor flaws is not to do the classic thing of dragging out a potential investment for weeks or months. I make up my mind quickly. Investing is not all that far from educated gambling, after all. I draw on my years of experience as an entrepreneur in the startup scene to make a snap judgement, and then do some background research to make sure I’m not being scammed.

I have a budget of a few tens of thousands of pounds to invest each year, that I’ve split into £10k packets which I’m investing in different businesses. I know I’ll lose a lot of it, but the “learning” is hopefully spread and there will perhaps be a winner or two in the lot!

I won’t invest in a field that I know nothing at all about, but “tech startups” covers a fairly broad range of topics. This enables me to make these decisions snappy. If I can’t make a decision quickly, I won’t invest.

Insider information is the killer

Obviously that’s not going to be the case for all of my investments, but where available, insider information is great to have. For example, SolidLabs was also one of GrantTree‘s clients. We wrote about their technology and their business extensively. We know them, over a period of time.

Insider trading is illegal when it comes to public corporations, but it’s perfectly legal when it comes to private investments. In fact, if you’re smart, you’ll want as much insider info as possible, and working directly with a company is the best way to get that.2

I won’t say that working with GrantTree will automatically lead to an investment. It obviously won’t. I also won’t say that it is required for an investment. It probably isn’t (the second investment I’m currently looking at is not a current client). But it sure helps!

Tax incentives help a LOT

I’ve wanted to invest in startups for quite a while, but if I look at the most immediate cause for my investments? The UK tax breaks are just too good.

Get this: with SEIS investments, I get 50% of the invested amount deducted from my income tax liabilities for the year. This means I can pay myself more without paying income tax (I don’t like income tax; do you?). Effectively, my investment is half price, upfront.

That’s not all – if, god forbid, the investment goes sour, I will get a further chunk of tax deductions at that point. It can work out as well as £7.5k of tax breaks for a £10k investment. That means my £10k packet only risks £2.5k, effectively.

Can you beat that? Yes you can. After all this, SEIS also makes the gains capital gains tax-free. So if the investment doesn’t turn sour, and in fact returns, say, a 10x multiple on that £10k, I will get £100k back, tax-free.

That’s tax incentives. And then there’s the government support the UK gives to the companies themselves. With tax credits, the money spent on R&D goes 33% further. So this £2.5k I’ve risked can enable up to £13.3k of investment. Even better if the startup gets a grant, which can be 45-60% match funded. In that case, a £10k investment could net £18.2k of spend, or even up to £25k of effective spend.

So, I risk £2.5k, and the UK government can fill in up to 10x that amount, in the optimal case. Blimey, as they say in the UK.

What next?

I guess I’ll carry on and see what happens. Where possible, I’ll mention my investments here.

 


  1. And if you have young kids, I strongly to buy a set!

  2. The ultimate form of insider trading, of course, is starting your own business. You invest your resources (money and time) with complete knowledge of what’s happening within the company.

How to beat the hedonic treadmill

In geek circles, the hedonic treadmill is a powerful idea with strong roots. The essence of it is that as humans, we are physiologically designed to never be satisfied without more of whatever it is we crave.

In practice, it means that if, for example, you want to “be rich”, and you define that as having a million dollars of yearly disposable income, then by the time you reach that objective, your internal goal posts will have shifted and now you will want two million dollars, or more. The goals perpetually recede in the distance like mirages the closer you get to them.

If your goal is to have three kids, then some time after your third child is born you will start to feel dissatisfied and want something else. If your goal is to run a four minute mile, then once you achieve that objective, you won’t be satisfied until you run a 3 minute 50 mile, and so on forever and ever.

The hedonic treadmill explains why we are so miserable as a species despite living in the most plentiful and wealthy period of human history so far. As comedian Louis CK put it, “everything’s amazing but no one is happy”.

Many discussions of the hedonic treadmill paint it as an unavoidable physiological characteristic of mankind, as ineluctable as death and maybe even taxes. We are human, therefore we always crave more, therefore we can never be satisfied with what we have, we must always have more. The natural conclusion of this line of thinking is to realise that humans can never be happy unless constantly expanding their sphere of influence, and therefore resign ourselves to either a dystopia where most people are dehumanised to strip away this fundamental human need, or a view of humanity as some kind of uncontrolled cancerous growth that will eventually falter and die, perhaps taking its host organism (the Earth) down along with it.

Like most pernicious ideas, the problem with the hedonic treadmill is not that it’s untrue, it’s that it’s only part of the truth.

Everything is amazing

The more complete truth is to recognise that yes, a part of us is wired to seek out objectives and beat them, and in fact that’s a pretty helpful mechanism to use to achieve things (goal-setting techniques abound in personal improvement literature, and for good reason!), but it’s not a helpful mechanism when considering our larger goals in life, and it is by far not the only mechanism available to us.

The brain is a complex organ, and it has many more ways to produce happiness and contentment than just goal-seeking.

For example, one such mechanism that is easily available to all of us and very popular with meditation practitioners is “being present in the moment”. You can try it for yourself right now! After you finish reading this paragraph, take your eyes off the screen, and take three very slow deep breaths, letting the complete reality around you (sights, sounds, smells, etc) sink in, letting your eyes unfocus, letting your senses be overwhelmed by the cacophony of sensory input that surrounds you at any moment. Then, while you’re doing this, try to notice something beautiful amongst this cacophony. It’ll only take thirty seconds. Do it now.

Unless you’re in a truly awful place in your life (which is very unlikely to be the case for anyone reading this article) you will have noticed something beautiful or weird or unique around yourself and taken it in. And as a result, you should feel incrementally happier than you were before you did it. Notice this did not require any goals or achievements, only taking the time to pay attention to the world that surrounds you with beauty at any given moments and noticing something nice. You noticed the water you were blissfully swimming in, chose what to think about instead of being a puppet of your mind, and this had an effect on your sense of contentment.

Boom. Happiness treadmill beaten. Achievement unlocked. What’s the next goal now?

There is no goal, just a practice for the rest of our lives. When we practice this simple, 30-second exercise on a regular basis, we soon find that it gives us more lasting contentment and happiness than any goal can, and does so consistently throughout our life for free, without needing to purchase anything or beat any high score or any other defined goal.

As we internalise that realisation, the hedonic treadmill will lose its effect. The key was in Louis CK’s sketch all along: we merely needed to notice that yes, many things are amazing, and be happy.

A final note

In reading this article, it is easy to misinterpret it and believe that I’m advocating throwing out goals altogether. That is not the case. Goal-setting is extremely useful to get stuff done, to achieve things, to have an impact on the world – and a whole lot of other things you may wish to do (and feeling that we’re living up to our potential to make a positive difference is something that can also create contentment and happiness).

However, the goals are insubstantial, and the problem of the hedonic treadmill arise when you mistake the goal for the activity. If you start going down a ski slope, it is natural to have a goal to get to the bottom. However, if you don’t derive happiness from going down the slope, but only from getting to the end, then you’re missing the point of skiing – and of life.

There are no B players

“Only hire A players! Fire the B players!”

“If you hire B players, then they will hire C players!”

“Over time, the A players will get frustrated with the B players and will leave to go to other companies and you’ll be left only with B and C players, unless you regularly cull B players.”

Hands up if you’ve read this advice before. Keep your hands up if you’ve believed it. I see that’s all of you still. Now keep your hand up if you think you’re a B player, that it’s your nature to be one, that you’ll never be an A player. Oh, where’d all the hands go?

“Everybody is a genius. But if you judge a fish by its ability to climb a tree, it will live its whole life believing that it is stupid.”

- Albert Einstein (or not)

I was a B player

Once upon a time, I worked for Accenture. I started out fairly motivated, and did some good work (or so it felt) in my first year, and then I got progressively more demotivated. I have no doubt that most of the people I worked with, or at least most of the people who had to rate my performance, rated me as a B player. Not a bad contributor, but not the kind of balls-to-the-walls excellence that they hoped for from a super-keen, motivated Accenture consultant.

I missed two rounds of promotions before I finally left Accenture. In theory this was due to one-off structural stuff happening while I was there (like Accenture taking a $450m write off on the NHS project), but I knew that if I had been rated as one of the top people, they would have figured out a way to promote me even during a promotion freeze (Accenture works like that, with special deals for special people). So I was clearly not at the top. At Accenture, I was a consistent B player.

Even in my two subsequent startups I was a B player. It turns out that I don’t operate at my full potential when I believe someone else will find and fix my mistakes. I play better without a safety net. I also have a burning need to work on stuff that I feel I own completely. The two combined mean that on Vocalix and Woobius, I was working at maybe 10–20% of my capacity at the time (probably less than 5% of my current capacity). I was not in a state of flow. I was easily distracted. I frequently felt demotivated because of what I perceived as unfair ownership/shares split. I still got stuff done, of course, but most people who are not in an absolutely abysmal environment will get shit done.

Long before these events, I was a B player at school, and then at university. I might have been smart, but I never felt like putting in the seemingly unending amounts of largely pointless effort that academic excellence would have required. Add to this that I was undisciplined, didn’t have many friends, and in fact was constantly bullied in my early years of school. For most of school, I was a B player, if not a C player.1

So, shall we consign me to the B-player trash can and forget about this person called “Daniel Tenner”? Or, as my dad suggested, in a skilful reductio ad absurdum, to the headmaster who declared me “unsalvageable” and wanted to expel me, “so do we take him out back and shoot him now?”

People are not cogs

The A/B player mentality comes out of a worldview where people are replaceable cogs in a machine that you’re building to make money. In this context, they are measured mostly by their ability to produce a positive effect on the bottom line. Sure, there may be some qualities or defects that don’t have an immediately apparent effect on profits, but in this worldview, it all comes down to the numbers in the end, to one number in particular: profit.

Within that worldview, the concept of A and B players makes sense. An A player has an outsized positive effect on your profits. A B player has a more moderate positive effect. A C player may have no effect or worse. It stands to reason that the best thing to do in this context is to have only A players: this way you’ll have more revenue, more opportunities being grabbed, and fewer people to share the pot with. If that’s all that matters to you, then please disregard my article: it’s not addressed to you.

If, however, the thought of measuring your entire human output with a single number makes you shudder or at least makes you a little bit uncomfortable, please read on.

Human beings are deep, complex creatures with many subtleties and nuances. They can contribute to a whole variety of endeavours in a whole lot of ways. The key to unlocking this human potential in yourself is to find the stuff you’re good at, that you enjoy doing, and that you think is worth doing to make a positive difference, to find that elusive state of flow where work becomes more like play, where despite dealing with a variety of tasks, some of which may seem boring, you take the time to love what you do and thereby end up doing what you love. When you find that place, you’re an A player.

Everyone seems perfectly willing to accept the above statement when it comes to their own self. Even better, we all breathlessly repeat this pearl of wisdom to friends, family, and sometimes complete strangers that we feel some sympathy towards. We believe in its deeper Truth, on its positive impact on our lives.

And yet when it comes to hiring and firing, we suddenly conclude that some people are hopeless B players to be culled, lest they pollute our precious company by hiring even worse examples of themselves, or setting a low hiring standard for the whole company.

That is elitist crap, merely there as a consequence of a narrow-minded worldview and as an escape hatch to allow us to blame poor performance on other people rather than ourselves. There are no B players, only people whose potential is not being brought to life, fish which are made to climb trees and then told they suck.

A better view of hiring

Pretty much everyone in the world has the potential to make a great contribution to some human endeavour. Sure, some people are cleverer or stronger or faster or more nimble or more diligent or more patient or more helpful or more of a zillion different qualities humans can be evaluated on. However, this contribution is only possible when the said human being is placed in a context that gets the best out of them.

Most of humanity labours in terrible, dehumanising, boring, uninspiring contexts. Too many still are slaves, or toil for survival or safety or comfort rather than for inspiration, fulfilment or any kind of meaningful purpose. That is a tragedy first of all for ourselves as a species, as we miss out on great contributions from billions of people who could give so much more to the world around them. A few of us are lucky to be able to find or fashion an environment which enables us to give our best day after day after day. Calling the latter “A players” and firing the rest is not only callous, it is immensely short-sighted and bone-headed on both a personal, a business, and a societal level.

When it comes to hiring, not everyone is right for your company. Some people will thrive in the open environment we’ve built at GrantTree. Others will excel in a numbers-and-measurements-oriented, strictly hierarchical company. Others yet will thrive in a socially oriented context where they feel part of a family. Others may give their best when surrounded by chaos and relying on themselves alone. To make matters worse, people will shift between these and other categories throughout their life, depending on many factors including personal growth, external demands on their resources, etc. In addition, people have skills, abilities and aspirations that will determine whether there is useful work for them to do within a given company.

Anyone who thrives in the environment you’ve built for your company, and wants and is able to contribute to something important to your company, will be by definition an A player. Your job when recruiting is to find those people who will do well in the environment you’ve built, and who have skills, abilities and aspirations that coincide with the needs of your company. Depending on how different your company is from the norm, there may be no one who fits so well outright. Perhaps they will need some coaching to embrace your unique culture. Perhaps some training to learn the ropes. Your job then becomes to find people with the right potential to thrive in your company, and to coach them and train them and help them to unfold their potential.

Whatever you do, though, don’t make the mistake to think that those who don’t fit your specific environment are unworthy human beings, categorised forever with the “B” brush stroke, unlikely ever to amount to much, and don’t let yourself fall into the trap of thinking you’re better than them. You’re not better, you’re merely in a better place, and with some humility perhaps you will be able to see that your role is not to sort the deserving from the unworthy, but merely to help those whose way you’re lucky to cross to contribute at their best, whether in your company or somewhere else.


  1. My parents would certainly disagree with this assessment, but then, what are parents for if not to provide this unflagging belief in their children’s abilities, that later forms a solid platform for the self-confidence our world requires of us?

Flat hierarchies, mentorship and personal development

I read this article with concern. Dustin Moskovitz, founder of Asana, took issue with Valve’s flat management structure and its lack of coaching:

Almost immediately after, I grasped what they had actually written and my enthusiasm waned. In exchange for freedom, they gave up *personal growth.* I can fully believe that there are people who can survive in such an organization, but I am deeply skeptical that they can thrive and reach their full potential. They are throwing the baby out with the bathwater. They tied one hand behind their back. The juice is not worth the squeeze. Pick your favorite metaphor; the point is this philosophy lacks balance. More importantly, I totally reject the idea that freedom and mentorship have to be mutually exclusive.

Dustin then argues that some kind of people-management is necessary to ensure personal growth, and proposes a few lighter management-that-doesn’t-look-like-management approaches, such as:

An alternative approach to creating structure and order that we employ at Asana is distributed responsibility, exemplified by our AoR (Area of Responsibility) program. Rather than have all decisions flow through the management hierarchy, we have the explicit intention of distributing them as evenly as possible across all employees. Unless we forgot about the existence of an AoR (which does happen) or otherwise make a mistake, the relevant domain owner has the final decision making authority, not their manager. Additionally, we try to promote an understanding of management as an AoR on par with other AoR’s, making the organization feel flatter.

Management still plays a very important role, however, as a backstop for all decisions. If an AoR does not exist or the most relevant decision maker is ambiguous, then decisions do flow through the management hierarchy. In effect, the CEO has the ultimate meta-AoR. In practice, this happens very rarely, but we save ourselves a ton of pain by having clear decision making authority when it does. Another way of putting it is that the managers fill the whitespace of the organization, making sure we have complete coverage. People tend to value that clarity rather than see it as a form of oppression. No one wants to feel like the ship is not being steered and, in my experience, organizations that lack identifiable decision owners tend to end up with more politics than those with traditional structures, rather than less.

Ultimately, each company needs to evolve its own approach to this and other similar culture issues, but my opinion is that going back to having “people managers” and a hierarchy is a clear step backwards. There are other solutions to the problems described by Dustin, that don’t involve setting up an official hierarchy, and I hope Dustin will consider them before letting the Asana ship sail too far in its current direction…

Dynamic hierarchy isn’t bad

First of all, it’s worth clarifying that I’m not opposed to all hierarchy, not at all. As I’ve written before, hierarchy is essential, it’s a natural way that people organise when facing a problem and if you try to make it disappear, you just make it harder to change. What’s problematic is not the existence of hierarchy, but the existence of a static hierarchy that needs to be maintained artificially in the face of changing circumstances.

In one context, one person might be the best leader. In another, it might be some other person. Someone new might join in and be better than someone who was previously in charge of something. If you have a static hierarchy in place, how do you get the new person to take over a role for which they are a better fit?

Unfortunately, a people-management hierarchy, especially one based on mentoring and ultimate decision-making, sounds exactly like the kind of static hierarchy that is very hard to alter and that easily turns into a career ladder. This may work for Asana, but I dislike that instinctively, because I know what those hierarchies end up looking like eventually. Static hierarchies usher in arbitrary decision-making and unfairness, which need to be justified by secrecy, which reduce trust, etc… We’ve been down this road before.

Mentorship and personal development don’t have to come from above

Mentoring people is not something that needs to be done by a boss. There is no need for a mentor to have management or decision power over the person they’re mentoring. In fact, arguably, a mentor who is also your manager is a far less effective mentor.

A mentor is simply someone who can give you advice and help you reflect on what you do in order to accelerate your personal development. Mentoring relationships often do imply some sort of seniority, but seniority does not have to involve management responsibility. I can be senior to one of my colleagues without being their manager.

As for personal development, I think it is ridiculous to imply that personal growth requires a hierarchy. Personal growth is one of our core values at GrantTree and it is doing perfectly well without a static, non-flat hierarchy. Personal growth is about growing who you are, what you’re able to do, your sense of purpose, your sense of achievement. How bizarre that an entrepreneur, who almost by definition is someone who finds personal growth without any management structure around him or her, comes to the conclusion that other people need a manager in order to grow personally?

If anything, traditional management stifles personal growth by imposing boundaries on it. Without reporting lines, everyone is free to grow in the direction in which they feel they wish to grow, and to push themselves as fast as they want with no speed limit.

Conversely, an open culture with a flat hierarchy liberates everyone to grow in whatever direction they feel inclined to, without needing to ask for permission or wait until they’re promoted up the career ladder. Open cultures encourage people to grow at whatever rate they’re comfortable. Combined with a good mentor, this should outperform the hierarchical approach to personal growth consistently.

Decisions don’t have to float upwards

Finally, Dustin also made the point that someone needs to take responsibility for making the decisions, which he feels is not addressed by a flat management structure.

However, built into that statement is the implicit belief that people in general cannot be trusted to take responsibility for the decisions they make. In an open culture, everyone can and does make decisions and takes responsibility for the outcome of those decisions. The presence of a manager who will take responsibility for your decisions is precisely what leads to the infantilisation of employees that then provides evidence that of course, people can’t be trusted to take responsibility for their actions, etc.

If it begins without trust, it is unlikely to end up with an open culture. I see this assertion that decision-power lines of responsibility are necessary as a big warning sign about Asana’s culture and its future.

A conclusion

I’m not saying that Dustin is necessarily wrong with his assertions. They may be correct in the environment of Asana. However, the dismissal of flat hierarchies as incompatible with mentorship and personal growth are flat-out (!) wrong, and doing so based on a quick extrapolation of an “employee handbook” which clearly gives only a very partial picture of life at Valve seems quite unfair (practically a straw man argument). At least, before making this point, Dustin should have contacted some current or former Valve employees to ask how things work in practice.

My main concern after reading this article, however, is that although Asana seems to have started with an open culture, it is adopting closed solutions to problems instead of doing the hard work of finding open solutions. Eventually, this is likely to erode trust and lead Asana to becoming a culture just like very other top-down, hierarchical closed culture. That seems like a shame, since Dustin appears to want to do the right thing in other areas of the business.

Millenials: not working for money

“Almost two-thirds (64 percent) of millennials said they would rather make $40,000 a year at a job they love than $100,000 a year at a job they think is boring,” the Brookings Institution recently noted in a report by Morley Winograd and Michael Hais titled “How Millennials Could Upend Wall Street and Corporate America.”

Given this, if your culture’s main lever for retention or recruitment is money (which is the traditional approach in closed cultures), you’re in for a rough few decades.

Open cultures typically have more ways of motivating people, and so they’re ideally positioned to appeal to the millennial generation: purpose, freedom, self-fulfilment – and paradoxically, those are much better motivators even for those who also want money.

 

How to strip off in front of your staff

Here’s a great article by my wife and cofounder, Paulina, on the topic of open cultures and her journey through the last few years, as we embraced more and more of the building blocks of open cultures in GrantTree:

I’d like to propose something radical, I’ve tried over and over again in my own office: strip off in front of your team. Do it thoroughly and from the very beginning when you start employing people. Sounds scary and unusual? It tends to be, but only up to the point when it becomes the very DNA of your company, and the benefits become so strong and so obvious, you wouldn’t even dream of running the business in a different way.

 

Sam Altman and the Internet lynching problem

This story begins with Sam Altman’s article about sexism in technology, with its strong follow-up, a reminder to investors, by YC partner and cofounder Jessica Livingston. Both make the same perfectly valid and unimpeachable point: disgusting sexist behaviour by investors is bad. I’d like to start by agreeing with this point, wholeheartedly. In fact, only a few days ago I wrote a blog post on this very topic. It’s here.

Unfortunately, sexism is one of those conversations that has a tendency to degenerate into shouting matches. The fault lies on both sides – and on neither side, actually.

Weak Man

At this point, it’s worth stepping outside of this thread for a second and reading Scott Alexander‘s excellent article about the “weak man” superweapon. It’s really great. Read it, I’ll wait.

For those who didn’t follow my instructions above, the article begins with a simple few questions:

There was an argument on Tumblr which, like so many arguments on Tumblr, was terrible. I will rephrase it just a little to make a point.

Alice said something along the lines of “I hate people who frivolously diagnose themselves with autism without knowing anything about the disorder. They should stop thinking they’re ‘so speshul’ and go see a competent doctor.”

Beth answered something along the lines of “I diagnosed myself with autism, but only after a lot of careful research. I don’t have the opportunity to go see a doctor. I think what you’re saying is overly strict and hurtful to many people with autism.”

Alice then proceeded to tell Beth she disagreed, in that special way only Tumblr users can. I believe the word “cunt” was used.

I notice two things about the exchange.

First, why did Beth take the bait? Alice said she hated people who frivolously self-diagnosed without knowing anything about the disorder. Beth clearly was not such a person. Why didn’t she just say “Yes, please continue hating these hypothetical bad people who are not me”?

Second, why did Alice take the bait? Why didn’t she just say “I think you’ll find I wasn’t talking about you?”

After much intelligent and enjoyable discussion1, it concludes:

In the example we started with, Beth chose to stand up for the people who self-diagnosed autism without careful research. This wasn’t because she considered herself a member of that category. It was because she decided that self-diagnosed autistics were going to stand or fall as a group, and if Alice succeeded in pushing her “We should dislike careless self-diagnosis” angle, then the fact that she wasn’t careless wouldn’t save her.

Alice, for her part, didn’t bother bringing up that she never accused Beth of being careless, or that Beth had no stake in the matter. She saw no point in pretending that boxing in Beth and the other careful self-diagnosers in with the careless ones wasn’t her strategy all along.

In short, if you are part of group X (or if you are just believed to be part of group X) and group X includes subgroup X1, which is not representative (and which you may dislike), then if someone attacks group X1 you find yourself with a choice of either defending group X1 (who you don’t even agree with) (option 1), or distancing X from X1 as thoroughly as you can (option 2), or being on a slippery slope that leads to group X being publicly discredited, and you along with it (option 3).

This fairly convincingly explains why men tend to react to statements like “men are rapists2 by saying “hey, wait a minute, not all men are like that.” Because it’s of course true – the majority of men are not rapists, wouldn’t dream of being rapists, abhor rapists, would cut off social ties with anyone found to be a rapist immediately, etc. But since option 1 is totally not available (rapists are indefensible) and option 3 feels intuitively like a bad choice in the long term, many men will pick option 2, and make the obviously true statement that “hey, you’re exaggerating quite a bit there, not all men are rapists”.

Which gets feminists very excited. They get to point at their feminist bingo card3 and say “oh my god, he used the ‘not all men’ argument, what a douche, I wonder what other stupid sexist patterns this guy uses.”.

Which leads to completely unproductive discussion. The ironic part is, the “not all X” argument then gets lobbed in both directions, with the reverse statement being that not all feminists are narrow-minded bingo card abusers. Both sides are thus locked in an eternal struggle till Judgement Day (which is starting to sound like a good thing in comparison).

Yes, I just summarised Scott’s arguments. I know what you’re going to say: “Not all of us readers skipped that article that you recommended reading!” There must be a blogist blogwiki entry for that meme.

Insanity

In such a climate, and having even a vague awareness of how the internet is a batshit crazy place, it’s not very surprising that an intelligent, self-aware, publicly-facing organisation is going to try to defend itself proactively.

Which brings us back to YC’s announcements. Chris Stucchio wrote a blog post in response that fairly comprehensively analyses the very loose and shoddy logic in Sam Altman’s post. In short, the post conflates various orthogonal statements that don’t really fit together in any sort of coherent argument. This poses the question of why a smart guy like Sam would write an incoherent blog post like that. Chris answers that question in a Hacker News comment that naturally got obliterated by HN users and by a high-profile member of the community since it takes an unpopular view:

YC is attempting to appease the internet bullies and avoid unwanted media attention (witness the Paul Graham sexism non-incident), not convey facts.

In context of this discussion, it shouldn’t be all that original or controversial to come to this conclusion. The internet is a crazy place. The tech scene is a prominent place on the internet. A number of high-profile tech organisations have been attacked very publicly recently (some for very obviously good reasons, some more ambiguous, some actually targeted at YC and HN itself on laughably bad premises). There is a general climate of extreme hostility in the tech scene, spearheaded by aggressive characters, often (but not always) justified in their reaction by actual behaviour. Basically, shit can erupt in any direction at any moment for valid or invalid reasons and hit a multiplicity of fans that will make for a very unpleasant few days for whoever has to clean up, and can frequently produce sufficient effect to cause founders to be kicked out of their own companies.

It’s only sensible for any prominent player in this field to make some kind of meek statements trying to convey “hey, we’re not the bad guys, we’re totally with you” whether or not that is true. In that context, Sam’s post is perfectly understandable and seems like a pretty sensible move to reduce the impact of any shit-and-fan incidents in the future.

If only…

If only it were that simple. There’s one dynamic that’s not at all covered by this. Feminists are not alone in their single-minded and aggressive pursuit of a somewhat intolerant agenda. There’s countless other groups that can be equally narrow-minded and bigoted. And based on my anecdotal observations, they all seem to be on the rise, figuring out how to be more and more effective at using online tools to organise instant lynch mobs and attack whatever target they set their sights on today.

Recently we got a first-rate and somewhat ironic explosion when Richard Dawkins, atheist extraordinaire, met feminism. It was ironic because atheists, like feminists, are themselves a group (X) that contains an X1 which is highly aggressive and narrow-minded4. When X1 met Y1, sparks ensued. Just be glad you weren’t in the middle of it.

So here’s the problem: first of all, trying to placate these groups is a losing strategy, because they are exceptionally narrow in their beliefs. If you’re not exactly on their agenda, repeating their mantras word for word, you’re a bad guy/gal/other. The second problem is that all those groups are growing in prominence5, and their agendas are mutually exclusive. So even if you do manage to placate one completely, you’ll inevitably tread on the others’ toes.

It’s not a battle anyone can win, let alone a public organisation.

So what to do?

I wish I had a grand solution to suggest, that would magisterially solve the problem in one fell swoop.

Unfortunately, this is the real world, and those solutions don’t exist. Damn.

I can, however, suggest a step in the right direction.

These *-ist movements are made of people like you and me. Some of them are very intelligent. How they get into the mindset of believing the narrow agenda of one of these groups baffles me, but it happens.

If you’ve read this far, perhaps this is a topic you’ve thought about. Perhaps sexism in tech is something that bothers you. Perhaps feminism in tech is something that bothers you. Perhaps it’s some other form of social justice that you’re thinking of fighting for (the causes are many and varied and march around the field with their big flags waving for more supporters).

Here’s the very simple thing that you personally can do to help with this: don’t join one of those movements6. If you see one of those deaf arguments going on, don’t take sides. When someone in a hostile, polarised, *-ist environment makes a legitimate comment that seems to go against the grain, think carefully before you join in kicking them.

Internet flash lynch mobs are a reality we’re going to have to deal with for the foreseeable future, but what you can do personally is at least make sure you don’t join them. Support their agenda where it makes sense, but don’t join in the crazy conversation. Don’t condone it. Don’t give it more reach than it already has, however tempting it is to jump on a hobby-horse from time to time7. Lynch mobs thrive on the fact that large groups of people grab pitchforks, join in, and help make things even bigger and louder than they were. Don’t be one of those people. Just. Stay. Out. Of. It.8

If I’ve managed to convince even a single person that was standing on the edge of an *-ist-precipice to step back cautiously and think things through, this article has achieved its goals.


  1. You really should have read through!

  2. On that note, given how rabidly @shanley tends to push the “men are rapists” agenda, I find it highly amusing that a search for “shanley men are rapists” on DuckDuckGo turns out a bunch of articles about a priest called Shanley who is indeed a rapist (and a pedophile to boot), instead of any links to @shanley’s statements.

  3. Another long article very much worth reading

  4. You know, the kind of people who reply to your casual tweet by responding with a “.” in front of your handle and thereby ccing their entire 5000-rabid-fans following into the conversation and drowning out any possible sense instantly.

  5. The “personalisation” of the web, which allows everyone to see only a world they agree with and thereby feel like their Truth is uncontradicted by any evidence, is probably helping this trend.

  6. I have very little hope of convincing anyone already ensnared in one of those movements to leave…

  7. I realise how ironic it is for me to give this advice seeing as I’ve done this very thing myself (and am doing this right now). I am but human.

  8. Unless you figure out the magisterial solution I didn’t, of course…

Company culture: an open and shut model

There are nine and sixty ways of constructing tribal lays,
And every single one of them is right!

Rudyard Kipling, In the Neolithic Age

How many ways can you categorise the ways that different startups organise themselves, the different flavours and colours of organisational culture adopted by companies through their life (and death). Far more than nine and sixty, I assure you. And, yes, each of them is right. Models of the world are usually helpful in making sense of the continuous chaos of reality.

I’d like to propose a very simple and useful model for startup (and, more widely, company) cultures, that I feel is relevant at this point in history: open and closed.

Hierarchical Pyramid

Closed cultures

There are a number of ways to run a closed culture, but the presence of any of the following features is usually a clear sign of an at least partially closed culture:

  • Secrecy by default: Business information is closed by default, on a need-to-know basis. Typically, only the senior management team has access to all the information (e.g. salaries and bonuses, detailed financials of the organisation, etc). These multi-layered secrets often form part and parcel of the power structure: the higher you are, the more information you have access to.
  • Top-down, hierarchical management: This can be implemented with varying degrees of flexibility, but the common element is the idea that you have a boss and you should do what they tell you. All closed cultures enable some elements of push-back from those savvy enough to know how to make their points from below, but the general mode of functioning is from the top to the bottom.
  • The Pyramid/Career Ladder: Closed organisations are without fail mapped out as pyramid-shaped: there is one CEO at the top, with a senior executive team below, and progressively wider layers as you go down. This Pyramid also provides the Career Ladder – the ever-receding MacGuffin1 that motivates people to work hard so they can one day get on top of the Pyramid and finally achieve true Success.
  • Focus on profit: The more advanced closed organisations tend to focus on profit above all2. This is measured as a number and is the primary driver of decision-making. If an action results in more profit, it’s worth doing. If the company makes more profit, it is more successful. Profit is the essential driver of all decisions. “How will it affect the bottom line?” is the main (or perhaps even only) question being asked.
  • Motivational measurements and individual incentives: Closed organisations, as they mature, learn to apply measurements as a method of ensuring performance. They will measure everything that can be measure and make up targets and projections (with varying degrees of involvement from those being measured), then hold people accountable to those estimates. Those who meet their targets are rewarded, and those who fail are punished.
  • Fixed roles and masks: In closed cultures, you are hired for a specific role. You can progress towards more managerial responsibilities through promotion, but typically, doing things outside of your role is discouraged (if only because it will step on the toes of the person who currently owns that role). In closed organisations you are your role. It’s no surprise, then, that most people put on a mask to go to work: while they are at the office, they are no longer a full person with a variety of wants and activities and aspirations, but a “Web Developer” or a “Marketing Manager”. Professional behaviour is all that’s accepted, and it’s all that’s given. 3
  • Distrust and control: A fundamental assumption of closed cultures is that people are lazy and cannot be trusted, so they need to be controlled, otherwise they will not do any work. This gives even more justification to adding more measurements and narrowly defining roles and performance criteria. When they don’t treat them like mindless cogs in a machine, closed cultures tend to treat employees like irresponsible children4.

There are countless examples of closed cultures: most of the companies and organisations in the world are run on the closed model. In fact, in many countries it is illegal to run a public company in an open way 5.  You’ve most likely worked for a closed company at some point in your life. In fact, chances are you’re working in one right now6.

Whilst closed cultures (which form the majority of business cultures today) are clearly capable of delivering great results, they have a number of deadly flaws, which I’ll cover in more detail in a later article. For now, let’s look at open cultures.

Open cultures

If there are many ways to run a closed culture, there are even more ways to run an open one7. Each open company tends to have its own way of expressing its culture. However, these are some typical commonalities by which to recognise an open culture:

  • Transparency by default: In open cultures, business information is publicly available to all employees. This includes salaries, but also bad news, strategic plans, problems, decisions, ideas, etc. People are trusted to be able to handle that information.
  • Flat hierarchy and/or self-management: If everyone knows everything and you’ve hired smart people in the right kinds of jobs, it is very difficult to maintain an arbitrary hierarchy, since everyone can contribute to any decision8. When you trust people, it is also unnecessary to set up managers whose job it is to check after them.
  • Personal development through work: When there is no career ladder, how do people achieve career progression? The obvious solution is that they take on more responsibilities without having to go “up” an arbitrary ladder. As a natural consequence of that, it is possible for people to fully express themselves in their work, by getting involved in their full range of interests, so they can achieve more personal development than they would in a narrow role with a career ladder.
  • Multiple stakeholders, values, and purpose: In open organisations, the idea of valuing profit above all others becomes obviously absurd. It’s not only shareholders, but also employees, suppliers, customers, society, and the environment, which matter. The company does not exist in a vacuum. Values become a way to express what the company cares about, rather just a motivational slogan. Along with the higher purpose of the company, they become the way that decisions get made in open cultures.
  • Team or company incentives: There is a progression from the closed culture approach of individual incentives, via team incentives, towards the eventual ideal, which is a system where base pay is determined by a combination of what the person is contributing, what the person needs, and what the company can afford, along with company-wide bonuses. Individual incentives are shunned.
  • Self-determined pay: One of the surefire signs of an open culture is when people determine their own pay. In most companies, this is unthinkable. In open cultures, it becomes a natural consequence of all the other stuff. After all, if you trust people to make all sorts of important decisions about the company, why not trust them to make this decision too?9
  • Separation of role and person: The idea that a person and their role are intrinsically bound becomes visibly stupid as the culture opens up. Eventually, it is clear that people are not their roles, but are capable of engaging in several roles simultaneously, contributing more fully to the organisation’s needs. This further enables people to accomplish themselves and to be fully themselves at work instead of wearing masks. One of the ways this is accomplished is through Open Allocation.
  • Trust: Perhaps most important is the fact that open cultures treat employees like adults, trusting them to do the right thing even in complex or ambiguous situations. There are of course processes to help people make better decisions, but the key point is that all these processes start from a perspective of trust and responsibility.

The benefits of running companies this way ought to be obvious, but in case they need to be spelled out:

  • People in open cultures are more engaged, happier, more creative, they contribute more, etc. This makes them much more fun to work in, both as a founder and as an employee, but also much more productive – people work much more effectively when they care.
  • Having a better environment makes it easier to hire great people.
  • Open cultures are way more adaptable to change. Change management is an oxymoron in an open culture: change happens constantly and continually, not through expensive, long-winded, and often failure-prone change processes.
  • Because they motivate people so much better, open cultures are, ironically, also better at achieving sustainable, long-term financial results10.

There are some examples of open cultures out there, too, to varying degrees. GrantTreeBuffer, Valve and Github, in the startup space, are known examples of open cultures. Others include Semco, Burtzorg, Happy Startup, MorningStar, and many others in all sorts of different contexts and sizes. All companies could adopt an open culture, but most don’t. Why is that?

Reinventing Organisations, by Frederic Laloux, studies a dozen or so open cultures and comes to the conclusion that two things are absolutely prerequisite for an open culture to exist for any length of time: both the CEO/Leader and the owners must be fully supportive of this (currently) unconventional way of operating. Otherwise, eventually the company hits a hard time, and either the CEO or the owners pressure it into returning to a more traditional (i.e. closed) mode of functioning. So the obvious reason why more companies are not currently open is because most CEOs are not prepared to let go of their control mindset, and when they are, the owners (whether private owners or VCs with board seats and a traditional, closed mindset, or simply public markets) frequently won’t let them.

If you’re a founder of a startup, this poses an interesting challenge: are you up to the challenge of creating an open culture in your business? Even when that involves giving up the trappings of power? Even when that involves passing on an investment round from an investor whom you know will force the company to change its ways when it hits a rough patch?

If so, welcome to the club. Follow this blog11, and I’ll do my best to share what I’ve learned in transforming GrantTree to be an open company. This is still a new field so we can all learn from each other.


  1. In fiction, a MacGuffin is a plot device in the form of some goal, desired object, or other motivator that the protagonist pursues, often with little or no narrative explanation. See Wikipedia

  2. Less advanced closed cultures are satisfied with stability

  3. Another sign of this is the internal interview: to change your role, you must go through a complex and scary process of interviewing again in the new department.

  4. This of course encourages infantile behaviour. The company then becomes paranoid about trying to keep everyone in line through more controls, which leads to more child-like behaviour, etc.

  5. For example, directors of public corporations usually have a fiduciary duty to shareholders – meaning the focus on profits above all other things is encoded in law.

  6. If not, congratulations!

  7. Part of that is probably due to the fact that open cultures are relatively new and rare, so “best practices” are still evolving

  8. Usually one of the main ways that a hierarchy maintains itself is by gaining control of information. There’s no easier way to create a power differential in a meeting than for one person to say to the other “I know something that you’re not allowed to know.”

  9. There is one reason: fear. But it’s not a good reason.

  10. For some empirical evidence, have a read through Reinventing Organizations by Frederic Laloux, which examines a dozen open organisations a number of which are doing exceptionally well in a market of closed competitors

  11. You can also sign up to receive these articles by email, on the right in the footer.

How Psychedelics saved Amber Lyon’s life

Emmy-Award-winning, former CNN investigative reporter Amber Lyon on her new site reset.me:

I invite you to take a step back and clear your mind of decades of false propaganda. Governments worldwide lied to us about the medicinal benefits of marijuana. The public has also been misled about psychedelics.

(…)

Five ceremonies with psilocybin mushrooms cured my anxiety and PTSD symptoms. The butterflies that had a constant home in my stomach have flown away.

(…)

I was blessed with an inquisitive nature and a stubbornness to always question authority. Had I opted for a doctor’s script and resigned myself in the hope that things would just get better, I never would have discovered the outer reaches of my mind and heart. Had I drunk the Kool-Aid and believed that all ‘drugs’ are evil and have no healing value, I may still be in the midst of a battle with PTSD.

Forgetting the personal development benefits of psychedelic drugs, the fact that our society does not explore their benefits to people with mental disorders is a disgrace of modern medicine and politics.

I wish Amber the best of luck in her reset.me venture. I hope it focuses on clean investigative reporting, consistently making the case for more psychedelic drug research, rather than letting itself be drowned in mysticism and superstition.

On discrimination in the tech industry

Whilst I am not one to side with dogmatic ultra-feminists, this kind of behaviour is not only reprehensible, it is disgusting and stupid:

After some small talk, he sat next to me on the couch and commented that I looked stressed. He put down his glass of wine and reached to massage my shoulders. As he slid his hands further, I made a nervous joke, quickly trying to shift my weight away from him. I leaned into the corner of the couch and crossed my legs, attempting to put an obstacle in his way. Undeterred, he continued to reach for me.

Silicon Valley may be a hotbed of technical innovation, but when it comes to social standards it seems to be pretty far backwards:

It’s not merely the men. Sometimes women help perpetuate the same tropes. Once while presenting to a group, the only female on the panel began an onslaught of questions, including “Did your daddy give you money?” “Are you old enough to drive?” and “How are you going to run up the corporate ladder in those shoes?” What was billed as a 20-minute pitch turned into a three-and-half hour inquisition.

Unfortunately, this is not even limited to Silicon Valley. This one is from a New York investor:

When she asked why, he told her. “I don’t like the way women think,” he said. “They haven’t mastered linear thinking.” To prove his point, he explained that his wife could never prioritize her to-do lists properly. And then, as if he was trying to compliment her, he told Tucker she was different. “You’re more male,” he said.

People who behave in this manner have no place in civilised society. They should be shunned just as they would be if they spouted racist jokes, joked about hitting people while drunk driving, or occasionally burst into homophobic rants. Perhaps the sad thing is that some of those people do those things as well, and still get away with it. Such is the power of money and position, still, today.

Beyond what women are already doing, i.e. patiently changing the system by becoming part of the system and then forcing it to change from within, and occasionally publicly shaming an exceptionally bad player, unfortunately there doesn’t seem much else to do. Change takes time. Deep, societal change takes more time.

Those backwards dinosaurs who still think it’s ok to beat up women or discriminate against them (or, indeed, any other minority) will die eventually. All of them. Let’s make sure no new generations are brought up in the belief that any of those behaviours are ok.

Based on the last few hundred years of history, I think we’re moving in the right direction.

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