Hi, this is Matt with a free issue of the Four Insights Newsletter. In every issue, I cover unique challenges and provide relevant insights through the lens of a venture-backed startup CEO and operator targeted to other founders, big tech and startup employees, and investors. If you’d like to get emails like this in your inbox, you can subscribe here.
Welcome back to Four Thursdays, a weekly newsletter where I share insights on actionable insights and practical advice on personal finance, health, productivity, parenting, and more.
If you are new here my topics are personal and my goal is to highlight four valuable insights on founder/entrepreneur performance, strategy, sales, and fundraising tactics. My focus is to provide you with practical advice and inspiration from various fields, beyond the realm of pure venture capital startup lingo. Let’s dive in.
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The Four Insights This Week
Building Trust
Navigating Risk
Self-Care
Overcoming Challenges
Building Trust
I have been plowing through The Snowball: Warren Buffett and the Business of Life by Alice Schroeder over the holidays as an ode to the passing of Charlie Munger last month. I had heard and seen the quote below a lot during the coverage of Munger’s passing:
The viral quote:
All I want to know is where I’m going to die, so I’ll never go there." - Charlie Munger
The book added some context in Chapter 3:
‘Invert, always invert.’ ” He illustrated this with the story of a wise peasant who said, “Tell me where I’m going to die so I won’t go there.” But while Munger meant this figuratively, Buffett took it more literally. He lacked Munger’s subtle sense of fatalism, particularly when it came to the subject of his own mortality.
This quote demonstrates Charlie Munger's approach to decision-making and risk management. He emphasizes the importance of an inverted perspective, focusing on avoiding failure and recognizing pitfalls. Trust played a significant role in the success of Munger and Warren Buffett, with trust enduring despite their different lives and locations. This understanding shapes how to approach business decisions and strategy in 2024, allowing for more informed and strategic decision-making. In the context of Silicon Valley, Munger's mindset values identifying and mitigating risks, building trust, and seizing opportunities in the business world. This mindset also influences how we think about the future. As I consider opportunities, fundraising, and hiring in 2024, I am thoroughly contemplating this approach, having gained foresight through my experience at my current startup.
Another gem I picked up from Charlie Munger is this:
"To get what you want, deserve what you want. Trust, success, and admiration are earned.” — Charlie Munger
Trust is a crucial aspect that cannot be gained overnight. It requires consistent actions, reliability, integrity, honesty, transparency, and a genuine concern for others. Building trust is the foundation of successful relationships and ventures, as it opens doors, creates opportunities, and fosters admiration. To earn trust, it is essential to embody these qualities and demonstrate them in personal and professional interactions.
I am looking forward to diving more into some of the Munger philosophies as the Stripe Press team put together a more modern version of Poor Charlie’s Almanac which was also eerily released right around the time he passed away.
Navigating Risk
In the investing community, it seems like private credit is the new thing. I picked up some insights from Stephen Schwarzman in a recent piece from Bloomberg on Private Credit and he added some perspective on how this world of investors think about risk:
“If you can earn 12%, maybe 13% on a really good day,” he said, “what else do you want to do in life?” — Stephen Schwarzman
There is a prevailing theme among peers and friends in the Silicon Valley echo chamber: Run a profitable business. Just yesterday, a company with allegedly 60 employees and under $1M in ARR had a firesale and shut down, despite being just 18 months away from raising $32 million. It's becoming clear that founders are experiencing burnout. The constant pressure to raise venture capital, achieve 20% month-over-month growth, and hire "10x engineers" is taking its toll. Many are starting to realize what Stephen Schwarzman has known and executed since 1985 with Blackstone. His quote suggests that if an investment can consistently generate a return of 12% to 13%, it may be a more worthwhile endeavor aligning with one's goals and aspirations than the Silicon Valley mindset.
This quote ultimately urges business owners and Silicon Valley operators to carefully assess and balance the risks and rewards associated with their ventures, considering both financial considerations and personal fulfillment. While there are undoubtedly billion-dollar opportunities to be pursued, as seen with the rise of generative AI companies, the next wave of Silicon Valley billionaires may be minted by focusing more on sustainable growth and profitable businesses in the coming years.
Self-Care
You do not have to earn the right to rest, connect, or recreate. Unlearn the idea that care tasks must be totally complete before you can sit down. Care tasks are a never-ending list, and if you wait until everything is done to rest, you will never rest.
As I navigate the joys and challenges of welcoming my second son into the world while leading a venture-backed startup, I've come to realize that rest, connection, and recreation are not rewards to be earned, but essential components of self-care.
I picked up KC Davis’s book How to Keep House While Drowning: A Gentle Approach to Cleaning and Organizing in December and it was a refreshing read for me. One of the core things I learned was that it is important to unlearn the notion that all tasks must be completed before allowing ourselves to rest. My wife and I have had the privilege of a nanny share for our first child and her job has afforded her maternity leave but with two kids under two, there is still a never-ending list of care tasks, and if you try and complete everything we'll never truly find the time to rest.
Embracing this mindset has taught me the importance of balancing my responsibilities as a parent and founder, and prioritizing self-care as a means of sustaining both personal and professional success.
Overcoming Challenges
In addition to the importance of rest, I have also been contemplating the contrasting perspective of staying resilient, pushing through challenges, and embracing toughness at all times. While I appreciate the mindset advocated by David Goggins, which emphasizes the value of being hard on oneself and others to drive productivity, I am curious about the empirical evidence supporting this approach. As I look ahead to 2024, I plan to incorporate the four pillars I learned from Steve Magness, the author of Do Hard Things, to strike a balance between these contrasting viewpoints.
Steve Magness’s Four Pillars of Toughness
PILLAR 1: Ditch the Facade, Embrace Reality: Being more honest about the challenges seems to be something there should be more of and it starts with you. I think the embracing of reality is quite difficult in silicon valley. I mean in 2023, which was seen as a difficult year by many accounts Mark Zuckerberg increased his net worth by $84 billion. The startup economy works well for some and I think it distracts many of us from our reality, I know I have been a victim.
PILLAR 2: Listen to Your Body: I think this is a relevant to the KC Davis reference above. Often times, our bodies tell us what we should be doing. I am looking forward to a two-month hiatus starting in March to spend time with my young sons, I am embracing the fact that the years pass by quickly. This will be difficult, as my startup is not exactly in cruise control but one thing I have learned is the markets, startups, and opportunites are always emerging.
PILLAR 3: Respond Instead of React: This will be the most difficult one for me. I think there is something in my childhood that makes me play defense quickly when I feel critiqued. It is something I am working on. This al gets back to being mindful and having a long term approaching to how you think about things. The startup ecosystem is not great at promoting this as other industries, but I definitely want to improve this area with relationships that mean a lot too me.
PILLAR 4: Transcend Discomfort: There has been a lot of adversity in my life and business over the last 18 months. One thing is clear, “only the paranoid survive” and it takes a special person to persivere to build a successful company that yields a successful outcome. There is subjectivity in what defines success but as cliche as it may sound, being comfortable being uncomfortable is a superpower to have and cultivate.
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Remember, trust, success, and admiration are earned. Take the time to build trust in your relationships and ventures, seize opportunities during times of change, and carefully navigate the risks associated with your ventures. Embrace self-care as an essential component of your well-being, and find the balance between rest and resilience. By incorporating these insights into your life, you'll be better equipped to overcome challenges and achieve personal and professional growth.
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