For lemons to stand

"The best things in life are free But you can give them to the birds and bees I want money That's what I want" - The Flying Lizards Malthus was wrong.  Scarcity is not the problem.  Ingenuity and efficiency may be near term challenges, but this problem is not irreconcilable.  Someone just needs to foot the bill, now or later . So if energy is free, yet is the ability to do work multiplied by time, we have a conundrum.  Something that defines value is actually worthless.  Energy is like the marketing-fueled De Beers diamond monopoly, except that  sham  is ending now too.  Whiskey.  Tango.  Foxtrot. Well, energy is not actually free.  It take some work to convert it to useful form.  Power you want at one time is often more cheaply available at another time.  Integrate that function over a day, week, month and year and energy pricing materializes. Maybe another paradox can solve this one.  Consider...

Religiously, we only follow @elonmusk and @realDonaldTrump . It's a bit like having a foot in Death Valley (134F) and the other at Vostok Station in Antartica (-129F).  We're often uncomfortable.  But that 263F temperature gradient fuels a difference engine.  Our minds don't anticipate what's next, from either extreme. Unfortunately we also often feel like Steve Bannon when Musk departed  Trump's advisory committee because climate change is real... wait, we're the crazy one in this trio?  How? Maybe, but not for that reason.  Elon continues to bridle at the SEC, and might lose his job over it.  Mueller, or the lynch mob behind him, will eventually get 45 and his cronies.  We may have nuance and facts creep back into our social media consumption.  Or we can just wait until some idiot reprioritizes Asimov's laws. Until then, let's enjoy one version of 1984 and not create a worse dystopia in unravelling this mess.

New ≠ good. Values are funny that way.  North doesn't change direction.  Neither does right v. wrong, nor normative concepts such as "good" and "bad." We've known the right answer here for a while, and we have data to show it can work.  However, the brinksmanship and hyperbole on display at the moment do not appear to be heading in that direction.  We don't have time.  We need market solutions.  Standoff will stymie progress, as more market distortion on top of market failure will cost us time, money and credibility. The intention is good, but inexpedient and therefore net negative.

Opposites attract. They're also insanely frustrating to live and work with years on end, ad infinitum. Orthogonality is existential .  Divergent perspectives prevent echo chambers of unoriginal thought.  One knife sharpens another, avoiding design by committee.  Cutting through consensus driven mediocrity requires the dissent of a single unpopular voice. However, "would you rather be right, or happy?" matters.  Sayer's law identified the inverse proportionality between stakes and argument intensity.  The oft-cited academic example pales in comparison to actual marriage and the figurative one of co-founders. Consider Steve Jobs (and Steve Wozniak (and Ronald Wayne)), Larry Page (and Sergey Brin), Bill Gates (and Paul Allen), Jerry Yang (and David Filo), and Mark Zuckerberg (and Eduardo Saverin (and three other co-founders know one ever talks about)).  Marriages are all easy at the beginning.  Few survive decades without turmoil, or ...

We didn't know. She showed up and changed everything.  We were told, and we thought we knew.  We didn't know. Each of us has had the same experience.  It put everything in perspective.  The rest became noise.  Our kid mattered most.  She/he made family even more important.   We're doing this because we're afraid of the consequences of another two decades of inaction. The why is important.  John Doerr himself thought of the problem this way nearly a dozen years ago.  Unfortunately, we didn't get cleantech 1.0 right.  Worse yet, we're repeating the same mistake or not trying at all. We considering not having children.  We were that on the fence about the world she'd come into.  Our actions today will determine if the next generation has that choice at all.  We'd like to be grandparents, but only if their life will be as good or better than ours. What's next?  More importantly, why? ...

What's the goal? A numerical goal lends direction to a design problem; a ratio works to make the subjective less so. One of the best, worst and therefore most controversial metrics is Body Mass Index ( BMI ).  Its utility stems from being simple to calculate: weight divided by square of height in metric units.  BMI's inelegance drives detractors nuts . The most relevant criticism is that it's nonsensical.  BMI uses metric units, yet the ratio remains popular only in the USA (last to  metricate , along with Liberia and Myanmar) to track the obesity epidemic.  Calculated as mass over crude approximation of surface area, BMI corrupts the square-cube law it's meant to mimic. What BMI does well is abstract away from normative (good / bad) toward health (healthy / unhealthy).  We could all pick our favorite image above, but that's got nothing to do with health.  Measuring body fat percentage or conducting active fitness tests would surely ...

Take the L. Sometimes we lose.  That's worth accepting.  Quickly. The corollary is that when we win, it's worth pausing to enjoy it.  Every.  Single.  Time.  Celebrate success, savor the win. Hanging on too long in an attempt to snatch victory from the jaws of defeat usually fails.  Moving from one victory to the next problem without reflection will burn out a team. The prognosis is the opposite of what we naturally do.  When we're winning, we get addicted to it without enjoying it.  When we're losing, we literally cannot learn fast enough. Wisdom comes from knowing the difference.

Luck is always useful - for us, it will be necessary. If we need luck to win, how can we create it?  Is there a special alchemy to disproportionally load the dice in our favor?  What rabbit's foot do we have to rub, or lady need we kiss to be bestowed with such good fortune? Serendipity is the phenomenon to harness.  It can be studied and reproduced.  Look at simple invention, new singular devices.  Consider complex recombinations of pre-existing devices, materials, approaches and strategies.  The most impactful arise out of elegance, not complexity.  More is not always better, in fact less often wins the beauty contest. Occasionally, what we thought we wanted becomes entirely usurped by much greater breakthroughs . That's what we need now - original thought, not generated through reductive regurgitation. We have to act our way into the world we think we want and let the rest follow.

100 day plans are overdone . Especially when folks use 100 days to mean 100 work days of the 200 available, assuming 50 working work weeks.  So 100 days - already a cheat on a quarter - becomes 6 months.  And that's just to get a plan in order? Reject that noise.  You've got 73 days to kill or fill.  That's 5 plans in a year.  Allow yourself to continue for 3-5 months total if it's amazing.  Otherwise move on. Set real milestones externally, earlier for your team and earliest for yourself. Factor friction  into the plan.

"If it doesn't suck, we don't do it." - David Goggins When your mind is telling you you're done, you're really only 40% done.  That's why marathoners hit a wall at mile 16 and still finish.  It's why this aptly named  ship and fateful voyage ended in survival, not disaster.  Every story of human triumph over reality involves the same saga. Grit.  Courage.  Endurance.  Heart.  Sisu . Entrepreneurs (i.e., founders, executives and early employees at immature companies) require these characteristics for survival.  It's why investors and employers look for experience on athletic teams as indicators of future success.  Individual endurance sports are also relevant.  The best proxy would likely be relay endurance events, athletic (e.g., any relay -athalon) or engineering (e.g., formula student,  battle bots, lemon cars, hackathons, solar cars, etc.) in nature.  Folks that maintain participation while gravitating t...

Rule number #76. No excuses,  play like a champion. Sometimes the universe delivers a pile of pain to trudge through.  It may be a test.  It could be a signal to seek an easier path.  Losing tends to be life's way of telling us we're off course.  Not sleeping should be viewed as a canary.  Listen to it. But that doesn't mean we should give up or not try - exactly the opposite.  Doing our best - maximum effort  - is how we sleep well at night.  We have to let the rest go. Jordan led us here.   Mulally professionalized it.  Goggins  owns it at the individual level. Fast failure is useful if and only viewed as a learning opportunity towards some potentially orthogonal or adjacent succeed. Play as if you'll win.  Accept failure as a signal of learning.  Turn that crank as quickly as you can, sustainably .

Irony is in the eye of the beholder, inspiring humor and/or contempt. Defining the human condition, happiness is an arithmetic function.  It's hard to get an "A" here - we're always searching, hunting, hoping... optimizing .  Few mortals have changed the rules and achieved 100% (aka enlightenment). When a technology, product, service, enterprise, or nation delivers irony en masse, it's a shock akin to ice waterboarding.  It can come in many forms, but always fails 2-3  trilemma criteria at the system level while purporting to win at a lower level.  Irony is the consequence of shooting the engineer and shipping the product; it's unfortunate, but understandable. What's unacceptable is continuous disappointment rather than  improvement .  Substituting corn based ethanol has higher environmental impact, not lower.  Putting  incandescent  lightbulbs on EVs for a decade is uninspired, made worse on a product that is inferior to t...

We've heard the phrase "pattern recognition" thrice in 2019. It came from three investors.  Worse, they appeared to offer diversified perspective as a banker, a VC and a PE-guy.  50-80% of the feedback overlapped.  The justification, on the other hand, was identical. We're livid, but we don't know why.  It feels wrong.  Perhaps because we deny the premise: we heard something three times, so it must be true .  We don't believe it - in fact, we categorically reject the feedback.  So either we're wrong, they're idiots or the game is rigged. Nope.  They're simply giving (1) while we're seeking (2).  Silly humans. Our brains are wired to pick up patterns.  Investors use these instincts and call it a process - pattern recognition is  de ja vu as a thesis.  That's a branded form of intellectual lethargy.  Worse, it's reinforced by echo chambers of homophily and elite projection.  The best version is ...

We're all in sales. The skill is to sell oneself without joining the oldest profession in the world. There are all kinds of sales, catalyzed by completely different styles.  The hard sell, "selling a ketchup popsicle to a woman in white gloves."  The immoral salesperson, "selling your mother."  And then the soul-crushing, trudging mediocrity  that is shoveling crap for cash. So much has been said, written and debated on the topic, yet we cannot agree on the primary objective.  Are we striving for " yes " or should we view " no " as progress?  In classic engineering form, it depends.  If you need to sell what you have, then "yes" is the only path in the end.  If instead, you know what you need, but are flexible in how to get there, the customer can sell themselves on it.  '"No" marks the trail boundary along the way to a win-win deal. With more than twice the power per word of the the nine most te...

The process of maintaining change in a balanced environment.   It's the  challenge of our time. To put the definition and diagram into practice, imagine increasing levels of integration.  Start with technology choices, the products into which they're integrated, then the business geared to run as a viable economic engine, inside of a larger company that maintains equitable relations with all stakeholders.  Individuals then vote via consumption, both wallet and time; those values-driven decisions aggregate up into local communities.  Communities comprise states and nations.  Ultimately, we've integrated all individuals, value preferences and actions up to our global society. Unfortunately, the state of the planet is unsustainable . The existential planetary problem has been a disaster since ~40 years before Copenhagen, with a brief moment of hope in Paris, then dashed by agent orange.  New Zealand  is the only country to co...

Infinity is enough. Never having enough in the beginning, we chase more.  We're consumed by our own excesses in the end.  All because our insatiable appetite was set on everything, early. It's zero's fault.  Time value of money defines zero as perfection.  Divide anything by zero and the result is infinity.  Even mediocre success in zero time and/or funded by zero capital would be magical.  Compound something like that and it would delight forever.  More infinity!  Realizing zero isn't possible, we still draw the up and to the right hockey sticks compounding ad infinitum. Why?  Because that's what you get when at the beginning of an S-curve adoption cycle.  The alternative plan in which you're too early doesn't get funded.  Being the wrong horse is... less pretty. But if everyone is chasing that exponential growth, what happens when we catch the bus? It helps to borrow an analogy from one of the greats .  Go ba...

One is the loneliest number that you'll ever do. That song was written about heartbreak, but companies are the same.  They're irrational and emotional.  Death Valley quality despair balanced by Everest level euphoria.  It can be lonely being a sole founder, but adding a co-founder could be worse.  Being told "no" is the job, so better learn to enjoy the chase. This elegant, irreducible integer - divisible only by itself ad infinitum without decay.  Unity forms the basis for any index that matters.  Neither good, nor bad - the lowest cardinal number simply is.  It's Bill Clinton level poetry .  Hard not to marvel at the beauty. Of course, folks have perverted one and exploited her offspring.  Study AC power or control theory to learn the importance of i .  The sqrt(-1) is a brilliant hack.  With better branding than Apple or Nike, imaginary numbers rule the multiverse.  The complex number is as incomprehensibly important...

In order for us to underwrite immature company risk, the young enterprise should target an order of magnitude improvement. That math can be done infinite ways.  A sure thing that's a 10x improvement is clear, but nothing is without risk.  100x better, but only 10% likely could work.  A 40% probability that combines three separate 3x value wedges does too.  It's not about being merely 10x better, but maintaining an order of magnitude advantage on a risk adjusted basis.  That math may require 1,000x in certain high risk bets - still, it works for some . Our portfolio has to work that way too.  We either find low risk  deals in the wild, reduce risk through our own contributions , or merely convene rather than venture much capital at all.  In all cases, we are price sensitive.  Time value of money within an urgent problem gives us no choice. The goal is 100x within two years, implying escape velocity (10x) within one.  We may be wil...

Adding another curb to an over-constrained problem rarely helps - it's like adding a third group of people to the  trolley problem  where an unstoppable force meets an immovable object. For us, the relevant  impossible trinity  is commonly phrased as cheaper, faster, or better.  Most critiques simplify the problem to a  dilemma , asking us to  pick two .  The detailed definitions driving these microeconomics may help suss out how: (a) lower first cost (b) first to market, or (c) higher value A more nuanced view starts with two of the elements.  Then, build a plan to achieve the third over time.  Just don't run out of time (e.g., competition) and/or money (i.e., financing) before creating a dent in the universe. The macroeconomic constraints are similarly known: (i) Goal -  1.5 to stay alive (ii) Time - 2030 deadline, and (iii) Capital - trillions  required Science determines both target and deadline - dilemma ...

Timing is everything - the punchline of a joke or falling in love.  Courage and weakness, success or failure.  Grace . We shouldn't confuse timing with luck.  From Seneca to Oprah, folks agree  good fortune occurs when the conditions are perfect.  Preparedness (in one's own control) meets the shape of the universe (outside one's control) and we're struck lucky.  This God shot is not some mythical unicorn, but more karmic  fusion .  It happens when the conditions are perfect. The physics of luck are known, to the first order anyway.  Attitude drives learning, requiring purpose .  The practiced achieve moments of superfluidity .  Most of us are merely lucky, sometimes. Beyond the individual wiring, attitude and approach of the principal founder(s), ideas have context.  The old joke that fusion is 30 years away and always will be may meet it's end shortly.  The Jetsonian  vision of flying to work may...

Technology is not a zero to one problem, if only because that first proof of life ≠ job done. Innovation is neither black nor white, but rather endless grey.  There is ambiguity, uncertainty and innumerable factors outside of one's own control.  Filled with nuance - like  art  - it requires judgment. That said, there is a hierarchy of value and an implicit Goldilocks problem.  Services scale.  Products deliver customer value.  Meanwhile novel, pure invention protected through IP (absent commercialization) doesn't buy more than the right to be sued . "Just right" defines investable.  Venture has historically funded software, fabless semiconductor and other high margin & low CapEx approaches.  Sure, a few folks do hard tech these days; billionaires fund moonshots .  Any  four letter word can buy Chinese scooters, build an app, and either sellout to an auto OEM for $100s of millions or achieve $1-2 billion private va...

Few is fun, functional, fast - agile . We cannot do everything alone.  A gross is massive, but not necessarily good.  Bigger is rarely better; in particular, employee growth ≠ good.  Groups of people have their own physics (e.g., inertia/momentum, action/reaction, etc).  Square-cube laws dictate size, weight and agility. So what's just right ? Much of the ceiling has been described by Dunbar  - above 150, it becomes challenging for an individual to maintain deep relationships with more people.  The beer test  posits the same idea.  Extreme misanthropes and introverts  skew an order of magnitude fewer, while extroverts target 10x more.  However, if teams are going to achieve extraordinary performance, between one-third and two-thirds of individuals' relationships need be outside of the company (e.g.,  friends, family, external professional network, service providers, suppliers, customers, etc.). The corollary: healthy pro...

None of us has gravitated toward a conventional "job." Sure, there are creature comforts such as consistency (e.g., 72-degrees and florescent), predicability (e.g., 9 am - 5 pm) and balance (e.g, home in time for dinner with our 2.2 kids).  But it feels sterile and uninspiring - a routine we loathe, devoid of purpose. If we want to start something new, but do it quickly, a lot has to come from outside.  We're repulsed by  coddling hatcheries or hermetic petri dishes  meant to shoehorn the most creative stage of a company into a box within a box.  The same network for hire model sans office may yield insufficient velocity.  Instead, we champion the explosive consumption best demonstrated by starfish stomach  eversion .  Talk about letting oneself be vulnerable and leaving it all out on the field, that little guy is committed!  Step into our paradox: the world is our office, and we have none at all - so we often borrow yours, or the ...

What if we could bring it back , but make everyone better off by fixing v1.0? Aluminum is 95% recycled due to energy content.  Lead acid batteries schlep cores around because the alternative fails price, performance and sustainability requirements.  If we don't start doing something similar with lithium and cobalt, or commercialize solid state batteries, we may paint ourselves into a corner during the electrification of everything . Rockets are reusable now, because scaling space logistics is prohibitively expensive without it.  Most of  micromobility will falter due to the disposable fleets of the market leaders, and the subscale progress of their fast followers and laggards.  Global unbalances remain stark, primarily due to waste . Why doesn't that thinking apply to young companies, especially the small and/or unlucky?  Private equity and distressed credit investors do this kind of work with middle market companies, and sometimes large public b...

F = m*a Holding force (i.e., effort, capital and time) constant, we remove mass (i.e., inertia) to accelerate the velocity of learning, cash flow and demonstrable impact. Entrepreneurs commonly cite roadblocks and investors highlight risks - the top few include: (0) Execution - will it work ? (1) Market - will people want it? (2) Financing - will it snowball before dying? Our value(venture) job before investing a single dollar is to answer (0), making an implicit bet on the team, timing and technology.  We work with founders and industry to eliminate (1), qualifying demand at specific requirements, unit volume and pricing.  Our execution along these goals reduces the need for true risk capital in (2), although growth equity, working capital lines and project finance are just as useful to scaling our businesses as others. What's your escape velocity and how can we help you achieve it in ~1 year?

Timing created the shape of the universe; we ignore that fact at our peril. Failure should not curse a neighborhood forever, if facts have indeed changed.   Value  comprises quantity and quality, neither of which is possible without alchemy (i.e., the parlaying of time, capital, momentum, talent and luck for one another).  Unit economics matter and clever structuring can't fix fugly . So we engineer companies to generate more cash than they consume.  We build credible 18-month operating plans.  We recognize scale cannot resolve negative contribution dollars, and rejigger the plan accordingly.  We aim to break even within ~1 year, but recognize  no plan is right  so  change tactics  as necessary. We are all responsible for  shooting puppies  destined to consume significant cash beyond two years. Try your hand at Lemonade Stand , in life or online.

Lemons + sugar water = lemonade Some sugar water is better than others.  We have just 12 years  to harness capital flows for sustainable global change.  The origins of venture capital and the definition of entrepreneur prove instructive. It's hard to be hopeful that your ship will return with a bounty of blubber after more than a couple years, so capitalists rely on a diversified portfolio .  That said, the captain defies mispriced odds as the bearer of risk (e.g., see Shackleton's formational role in Type III fun).  At the intersection of risk and capital, roles and responsibilities were clear then.  So what changed? Aiming for "impact" where needed most, we added capital  to excess.  In the face of misadventure, we failed to build real businesses  while ironically citing "sustainability."  We've spent decades talking about it.  The best intentions have splashed the pot with concessional capital, destroying markets....

Let's face it, we've made some lemons over the past couple hundred years. And we're not even the first to view it through that analogy. But have we done enough ?