Crypto Building Blocks

"Show me the incentive and I'll show you the outcomes." At the end of the day, observes a16z crypto general partner Chris Dixon, Satoshi's whitepaper [the original bitcoin paper outlining a peer-to-peer decentralized network and blockchain sans centralized third parties] is nine pages of incentives.

Strategic + planning

Strategic planning is many things but I like to think it's about moving teams on two axis that represent the strategy + planning parts.

1. Pessimist --> Optimist

This is the strategy part.

You'll have to convince people that the new destination is a better place.

Describe where the team needs to go by inspiring, influencing, nudging, etc. By using any means (data, qualitative and quantitative research, metaphors, legends, stories, testimonials, insights, case studies), you must clarify the sandbox. You don't want the sandbox to feel small – it can feel bigger than it was perceived before. You open up possibilities and you define what success looks like. You'll need to work a lot so everyone « can see it ».

2. Unpractical --> Practical

This is the planning part.

You'll have to convince people that you have enough gas to get there.

Describe how the team can get there by researching, mapping, detailing tactics, etc. You want the thing to feel as practical as possible. So if you decided that the team should develop a new product, open a store in a new market, cut half of its team, invest in augmented reality or change the packaging that's been there for 100 years, it must feel tangible. It might include a roadmap, key steps to get there, key people to include, case studies, etc. Ideally, it would include a simulation of the scenario or a minimum viable product. Break the thing into all the parts necessary and add details to each part. You'll need to work a lot so everyone « can own it ».

Active Investing

When you are making early-stage investments, which require a lot of your personal involvement over a seven to ten year period, you can only take on so many projects. If you assume the average hold period for an early stage investment is seven years and if you make one to two investments per year, you will have between seven and fourteen portfolio companies to manage at any one time.
— Fred Wilson

I founded my own company, highlow, on the premise that I would encounter, once or twice a year, through consulting, projects or early stage businesses I would like to be part of in the long run.

This is why I set the company in a way that profits would be partially re-invested in early stage business opportunities. I don't call them startups because some are simply not startups or geared for growth. 

Don't give me a portfolio of 100 stocks of people and companies I don't know. I would not know what to do with it. Give me a few projects I understand and I can add value to.

This investment pace fits my style and my personality. I like to work on a 10 years horizon. I like to work in-depth. I like to get to know people well. I like to have a few fires lit. But it's important to manage that portfolio in a way you have enough time and energy for each project to add value.

This is active early-stage investing.

For Fred Wilson and the USV crew, it means returning a billion dollars or more/year. For François and highlowit means creating long-term partners, learning tons of execution-related stuff, diversifying revenues of a consulting business and creating a stimulating work environment. 

This is not spray and pray, this is not following the herd, this is not momentum investing. This is thesis-driven, active early stage investing, which has always produced the best returns over time and I believe always will.
— Fred Wilson

Communication insights

A communication insight is not a statistic from Gartner (no offense, love the graphs).

The process (and the output) of a good communication insight looks more like the following.

Here's a short and sweet tweet storm by Mark Pollard.

Check out Mark Pollard's full tweet storm and dig in comments from fellow strategists here.

Testing your theories

Fellow consultants, how many times have you tested/experimented (with your own time, money, ressources) what you preach? Prof Feynman will remind you that...

It doesn’t matter how beautiful your theory is, it doesn’t matter how smart you are. If it doesn’t agree with experiment, it’s wrong. In that simple statement is the key to science.
— Richard Feynman
Source:  Prof Feynman

Source: Prof Feynman


Last year, I set out to write daily on this blog.

My batting average is ~66% / 200 posts in 300 days – I don't even watch baseball but it's the best analogy I can think of because everyday I feel a perfect ball is coming at me and I can bat it or not.

The good thing is that I'm pretty sure I'll easily bat 100% next year.

It's now harder for me NOT TO write than to write.

Velocity is a powerful thing.

Thinking & Doing

Are you thinking too much or doing too little? Are you thinking too little and doing too much? Find time and space to do both. And mix them fiercely,

Leonardo [da Vinci] was the artist but he also mixed all his own paints. He also was a fairly good chemist. He knew about pigments, knew about human anatomy. And combining all of those skills together, the art and the science, the thinking and the doing, was what resulted in the exceptional result.
— Steve Jobs

Lucky People

Wiseman found that lucky people score significantly higher on extroversion. They smile twice as often and engage in more eye contact. Their sociability, Wiseman explains, helps them increase their likelihood of a lucky opportunity because they meet more people, connect better, and maintain relationships.

Universal Basic Income

Universal Basic Income is a theme I associate with Union Square Ventures and Albert Wenger. His book on the topic is titled World After Capital and it looks quite good. When I heard about this concept first, I thought it was a dystopian idea from a truly smart but let's be honest, optimistic and idealistic venture capital guy. Universal Basic Inc-what?

A basic income, also called basic income guarantee, universal basic income (UBI), basic living stipend (BLS) or universal demogrant, is a type of program in which citizens (or permanent residents) of a country may receive a regular sum of money from the government.
— Wikipedia

I then learned the concept was not that new – quite the opposite – it's over 50 years old. Then, this week, Ray Dalio (from Bridgewater Associates) shared a well-written primer his team prepared for him. You can read the whole post here.

Here's how they define the concept:

What is Universal Basic Income (UBI)? In general, UBI is a type of cash transfer that is: 

  • Universal: every citizen receives the transfer regardless of employment status or income.
  • Unconditional: recipients have no restrictions on how they can spend the cash.
  • Basic: the amount will cover “basic needs” and will constitute a “living wage.” 
  • Long-Term: the cash transfers will last for the long term, e.g. entirety of the receipt’s life.

Hungry for more? If you're interested in reading about the pros, the cons and all the research was done on the topic, I suggest you read Primer On Universal Basic Income.

Free Cash Flow

This tweet sent my back in the Amazon shareholders letters archive:

Disclaimer: my finance and accounting classes are far behind me. This is not financial advice. Just a marketing guy figuring things out. The businesses I'm involved with do not have complexe financial statements and do not operate at Amazon's size. But it's always a pleasure to expand our horizons by learning a few things directly from the boss, Jeff Bezos. In his 2004 annual report, Bezos makes a point about Free Cash Flow. 

In overly simple terms, Bezos prefers Free Cash Flow over net income as a metric. Instead of looking at the top line growth (earnings), he'll look at how much cash he has on hand at any given time. And at the growth rate of that pile of cash. His argument is that growing earnings will not necessarily mean that you're growing the pile of cash you need to re-invest in the business.  Let's think about this for a while. Growing earnings (monies) doesn't mean I'll have the additional investment opportunities in the future.

Though some may find it counterintuitive, a company can actually impair shareholder value in certain circumstances by growing earnings. This happens when the capital investments required for growth exceed the present value of the cash flow derived from those investments.

There's a good example in his letter that illustrates this point. Then, he explains why’s financial focus is on long-term growth in free cash flow (per share) over everything else and how they achieve this goal.’s free cash flow is driven primarily by increasing operating profit dollars and efficiently managing both working capital and capital expenditures. We work to increase operating profit by focusing on improving all aspects of the customer experience to grow sales and by maintaining a lean cost structure. We have a cash generative operating cycle1 because we turn our inventory quickly, collecting payments from our customers before payments are due to suppliers

Why is he so obsessed with cash? We know the guy takes in a nominal salary and that the business barely turns a profit each year. Well it seems like having cash on hand gives him optionality in the long run – additional optional investment opportunities.

And because the world is complex, we never know where we'll need to focus on 3-5 years from now. Having cash on hand – that cash being free – puts you in a very good position to seize opportunities.

Unless they're extremely well funded, startups do not have good free cash flows. You're stretched, things barely hold together. You're rarely in a good position to reflect on what your options are and where you want to invest your time, ressources and energy.

You can think about Bezos and his obsession about Free Cash Flow. What would he do to make sure that cash is never a problem? And that growth, over time, makes cash even less a problem.

Of course, this applies if you're in it for the long run. If you're not, and you don't mind suffocating your business, take your dividends each year and run. Or pay yourself an exorbitant salary. But if you care about being in a good position in the future, think about freeing your cash flow.

Culture & Customer Development

Culture doesn't come later. That's what NOBL argues in this essay.

Yes, you’re building a product, but you’re actually foremost building a group of people that can work together to produce a product. You can’t afford to ignore the most fundamental thing to your business: your people and their relationships.

Culture doesn't come later because at the end of the day, any organization is simply a bunch of people working together. There are desks, machines, tools, computers, processes, paperwork, titles, etc. but it's just a bunch of people figuring things out together. So if you haven't discussed or explicitly worked on your internal culture -- it's not that there's non, it's that there's already one and you don't know it. And from my readings, it seems that cultures are hard to revert.

The text hits home when it talks about customers. I spent most of days working with entrepreneurs and marketing managers. As an entrepreneur and a marketer myself, I try to spend as much time in the real world - wherever that is - where rubber hits the road. But it's hard. And we get trapped thinking inside our little bubble. We forget to talk with and take feedback of people who actually pay us to do work. Hint: you VP is not your customer, even if she/he might responsible for your next promotion.

It amazes me that people who are creating new services, building new products, brainstorming about new things to market, etc. spend so little time hanging out with their customers and talking to them. Honestly talking with them. Or just listening if you're really shy.

In bigger organizations (or organizations where you're not interacting with your client all day), it goes back to the culture that is in place. So here's the hard question and a few answers from NOBL's essay:

How can you grow toward your customer, not your ego or a bureaucracy?
  1. You can give them a literal seat at the table.
  2. You can recreate their experience for your employees.
  3. You can obsess over the customer experience like Pixar obsesses over their stories.
  4. You can hold your employees to actually interacting with your customers.

Source: Culture Doesn't Come Later

How vinyl records work

YouTube is a special place (see this). Here's a very cool slow-motion video of a vinyl LP and all the explanations on how it was achieved.

I describe how I made a stop motion animation of a phonograph needle in an LP groove using an electron microscope. I also show electron micrographs of other recording media. Support Applied Science:


What makes marketplace business models so attractive, especially as compared to classic ecommerce and retail? (Hint: network effects.) From the classic unbundling of Craigslist to entirely new marketplaces enabled by smartphones and mobile, a16z general partner Jeff Jordan - a veteran of numerous marketplace businesses and currently on the boards of many such a16z companies - shares examples, drivers of profitability/margins/moats, and what makes marketplaces superior for consumers as well: identity, reputation, payments, trust and safety, frictionlessness, and transparency.

Annual retreat

This weekend was our annual retreat with @GosuNYC / @jackallenh.

  • Steaks from Boucherie Lawrence
  • A bottle of Coureur des Bois (thanks @lebucktr)
  • A crash course on product mgmt
  • A review of the games avail. on Steam
  • A review of #rekt crypto portfolios
  • Some rap music I had not heard since 2006

When Dylan Went Electric

I love The Band. I Love Bob Dylan. And I love reading Bud Caddell's blog. This is a re-post from his blog. It's about creating something new. It's about being violently rejected at first.

When Dylan went electric, the world turned against him. I love hearing what that was like from the inside. If you’ve ever felt like you’d been pursuing a new creative path and the world was ignoring you or against you, this is a must watch.

Dealing with Hard Problems

Thanks to Josh Wolfe (more of him here) for tweeting this great essay about problem-solving. The article offers a few strategies for dealing with hard problems and the frustration that comes with them. I don't pretend to work on hard problems. But I get stuck at work all the time. Here are two quotes I liked.

Do something. Yeah, the problem is hard. Yeah, you have no idea what to do to solve it. At some point you have to stop staring and start trying stuff. Most of it won’t work. Our lead curriculum developer wrote 100-200 pages of content, dreaming up lots of different styles and approaches we might use. Not a one of those pages will be in the final work, but they spurred a great many ideas for content we will use.
Don’t wait until the last minute — hard problems are hard enough without having to deal with time pressure. Moreover, complex ideas take a long time to understand fully. The people you know who seem wicked smart, and who seem to come up with ideas much faster than you possibly could, are often people who have simply thought about the issues for much longer than you have.