Joining NextPlayU Advisory Board
Hey family and friends, some fun news! Cole and I joined the advisory board for NextPlayU, a company spearheaded by Oren Gabriel and Jason Price with the backing of my friend Ryan Nece.
NextPlayU.org helps collegiate and professional athletes transition from their sports careers into the world of business. Athletes possess a unique set of qualities: grit, unwavering commitment to craft, natural leadership abilities, an unrelenting work ethic, and a genuine love for competition. These attributes are precisely what makes athletes so successful in their sports, and these attributes also translate seamlessly into business. In fact, statistics show that 95% of Fortune 500 CEOs have a sports background.
However, reinventing your identity and transitioning into a whole new life can be an incredibly challenging journey. That's where NextPlayU comes in — with coaching, training, and community support to help athletes navigate these waters. And this is offered 100% free for athletes.
The reality, as highlighted by the NCAA, is that fewer than 2% of collegiate athletes make it to the professional level in their chosen sport. That's why it's essential to have platforms like NextPlayU to help athletes explore alternative career paths and capitalize on their unique skill sets.
If you're a business with open operational roles, we encourage you to consider collaborating with us at NextPlayU. Your doors can be the gateway to empowering these athletes on their journey to success outside of the sports arena. And you get to fill your organization with hungry, hard working, impact-seeking individuals. Or as Coach Prime would likely frame it -- you get to add some “dawgs” to your company.
If you are an athlete or know one on the verge of transitioning into the business world, please send me a message or tag them here. We are ready to coach, and help you find your next play in life.
Joining Harbour’s Board
Hi family and friends. I’m excited to share that I’ve joined the board of Harbour. Harbour is a contract management platform for companies that send a high volume of contracts (e.g., gig economy, media/entertainment, etc.). They provide easy-to-integrate building blocks that scale workflows before, during, and after contracts are signed.
Harbour works with incredible customers including Paramount, Meow Wolf, Wieden and Kennedy, Shiftsmart, and Wave, to help them save hours each day on their most valuable business processes. If you think you might be a potential customer (for example, if Docusign is falling short of your needs, if your company does lots of e-sig activity), feel free to reach out and I can share more about how we differentiate from the competition.
I did a lot of thinking about how I want to approach my first board seat. I met with investors who have sat on dozens of boards. I would be happy to share what I learned with anyone interested. In my earliest conversations with Harbour, I told the team that I’m not looking to be a board member that flies in and out for fancy meetings. I want some bruises, scratches, and dirt under my nails. The type I got from the earliest and scrappiest days of Patreon. I’m grateful to Harbour’s leadership team — Josh Elkes, Eric Doversberger, and Chris Crawford for inviting me to go on this journey and build alongside their gifted team.
Thank you all for the constant and continued support of my wild adventures. This one is going to be fun, and I will keep you posted on our major milestones, and the bruises too.
To Broadway
Hey family and friends,
We are venturing outside of real estate and tech into our third pillar — art and entertainment. We’ve made our first investment in a play — it’s titled The Cottage and it will be on Broadway this summer.
The script is hilarious and the cast is stellar. It stars Eric McCormack of Will and Grace fame, and it’s directed by Jason Alexander, best known for playing George in Seinfeld.
If you are in NYC this summer and would like to see the show, just send me a note as I can make sure you receive the best available tickets.
Many of you know theater was my first love, so it’s nice to return home to it. We have other musicals and plays in the works, so we hope this is not our only stop on Broadway.
Tyler
Hangin’ up the Patreon boots
Family and friends,
After 10 years, I’ve decided to hang up the Patreon boots. I wrote about the decision and started my thank-yous here.
I’ll share with you a little excerpt from the post I sent to the company:
“My belief in Patreon has never been stronger. You all know by now that I love this place as if it were my child. I wouldn’t feel comfortable being apart from it unless I felt it had everything it needed to thrive without me…and that it had made it through its trickiest teenage years. Patreon is all grown up and ready for its next chapter. After a year of setting the proper strategy, hiring incredible talent, and finding ways to operate more efficiently, I’m confident 2023 will be a standout year.”
I’m excited for Patreon’s future. I also feel ready to build my own company. I will keep you posted on what my next chapter looks like, here.
So much love and appreciation towards all of you who supported me during my time at Patreon.
Podcast Episode Recommendation: Lex Fridman and Tim Urban
I want to share a podcast episode that had my brain turning all week long. It’s a conversation between Lex Fridman, an MIT research scientist, and Tim Urban, author of the popular blog Wait But Why.
The two brilliant minds explore questions like:
Do we understand more about how big things can get (observable universe) or how small they can get (subatomic particles)?
How will we organize and govern on Mars?
Why do we listen to music we love over and over again, but we tend to take a different approach with movies (first watch is typically the most enjoyable)?
From two people who know Elon Musk closely, what is it that makes him so special?
If you read for thirty minutes each night how many books will you read in fifty years?
And my favorite — If we lost all of our materials goods (all buildings, clothes, and items disappear instantly), but we kept all of our individual and collective knowledge, how long would it take us as a species to (re)build the most recent version of the iPhone? I’ve been thinking about this question for days now. How would we organize, communicate, find raw materials, eat, build factories, etc? How many years would it take us?
The episode runs 2.5 hours so you may need to break it up across a few drives or walks.
And if you end up falling in love with their work, both are on Patreon.
https://www.patreon.com/lexfridman
https://www.patreon.com/waitbutwhy
Enjoy.
Notes from The Lessons of History
American husband-and-wife historians Ariel and Will Durant spent 40+ years studying 5,000+ years of recorded human history and they assembled that knowledge into The Story of Civilization, which spanned 13,000+ pages and 11 volumes. Their work earned them the Pulitzer Prize and Presidential Medal of Freedom. In the late 1960s, they published a summary of the key lessons and themes from these volumes into a book called The Lessons of History, which I wanted to recommend to you today. This book made my all-time top 5 list, a list I plan to share soon.
At 100 pages in length, The Lessons of History is a quick read. If you were scoring books on an “insights per page” basis, this book might top the list, perhaps rivaled only by books like Meditations (also on my top 5 list). While Lessons of History takes just a few hours to read, it gives you plenty to chew on afterward.
Below I share some of my favorite passages from the book. I’m happy to send the book your way for the holiday season, so just reach out to me if I can send a copy to your door.
In the opening chapter Hesitations, the book begins with an acknowledgment of how bold an ambition it is to summarize 5,000 years of history into a 100-page book (undoubtedly the first thing on one’s mind as they open the book):
Since man is a moment in astronomic time, a transient guest of the body of earth, a spore of his species, a scion of his race, a composite of body, character, and mind, a member of a family and a community, a believer or doubter of a faith, a unit in an economy, perhaps a citizen in a state or a soldier in an army, we may ask under the corresponding heads –astronomy, geology, geography, biology, ethnology, psychology, morality, religion, economics, policics, and war – what history has to say about the nature, conduct and prospects of man. It is a precarious enterprise, and only a fool would try to compress hundreds of centuries in a hundred pages of hazardous conclusions. We proceed.
In History and the Earth:
In the word of Pascal “When the universe has crushed him man will still be nobler than that which kills him, because he knows that he is dying and of its victory the universe knows nothing.”
In Race and History
A knowledge of history may teach us that civilization is a cooperative product, that nearly all people have contributed to it; it is our common heritage and debt and the civilized soul will reveal itself in treating every man or woman, however lowly, as a representative of one of these creative and contributory groups.
In Character and History
So the conservative who resists change is as valuable as the radical who proposes it – perhaps as much more valuable as roots are more vital than grafts. It is good that new ideas should be heard, for the sake of the few that can be used; but it is also good that new ideas should be compelled to go through the mill of objection, opposition, and contumely; this is the trial heat which innovations must survive before being allowed to enter the human race. It is good that the old should resist the young, and that the young should prod the old; out of this tension, as out of the strife of the sexes and the classes, comes a creative tensile strength, a stimulated development, a secret and basic unity and movement of the whole.
In Religion and History
As long as there is poverty there will be gods.
In Economics and History
At the other end of the scale history reports that “the men who can manage men manage the men who can manage only things, and the men who can manage money manage all.”
and
Perhaps it is one secret of their power that, having studied the fluctuations of prices, they know that history is inflationary, and that money is the last thing a wise man will hoard.
and
In progressive societies, the concentration may reach a point where the strength of number of many poor rivals the strength of ability in the few rich; then the unstable equilibrium generates a critical situation, which history has diversely met by legislation redistributing wealth or by revolution redistributing poverty….We conclude that the concentration of wealth is natural and inevitable and is periodically alleviated by violent or peaceable partial redistribution. In this view all economic history is the slow heartbeat of the social organism, a vast systole and diastole of concentrating wealth and compulsive recirculation.
In Socialism and History
The socialism of Diocletian was a war economy, made possible by fear of foreign attack. Other factors equal, internal liberty varies inversely as external danger.
and
The fear of capitalism has compelled socialism to wide freedom, and the fear of socialism has compelled capitalism to increase equality. East is West and West is East, and soon the twain will meet.
In Government and History, the book offers a view into the conditions that might have led to a sticking democracy in America.
We may infer from these classic examples, that ancient democracy, corroded with slavery, venality, and war did not deserve the name and offers no fair test of popular government. In America, democracy had a wide base. It began with the advantage of a British Heritage: Anglo Saxon law, which from Magna Carta onward had defended the citizens against the state; and Protestantism which had opened the way to religious and mental liberty. The American Revolution was not only a revolt of colonials against a distant government; it was also an uprising of a native middle class against an imported aristocracy. The rebellion was eased and quickened by an abundance of free land and a minimum of legislation. Men who owned the soil they tiled, and (within the limits of nature) controlled the conditions under which they lived, had an economic footing for political freedom; their personality and character were rooted in the earth. It was such men who made Jefferson president – Jefferson who was as skeptical as Voltaire and as revolutionary as Rousseau. A government that governed least was admirably suited to liberate those individualistic energies that transformed America from a wilderness to a material utopia, and from the child and ward to the rival and guardian of Western Europe. And while rural isolation provided liberty and security within the protective seas. These and a hundred other conditions gave to America a democracy more basic and universal than history had ever seen.
and
If equality of educational opportunity can be established, democracy will be real and justified. For this is the vital truth beneath its catchwords: that though men cannot be equal, their access to education and opportunity can be made more nearly equal.
In History and War
In the last 3,421 years of recorded history, only 268 have seen no war.
and
“Polemos pater panton,” said Heracleitus; war, or competition, is the father of all things, the potent source of ideas, inventions, institutions, and states. Peace is an unstable equilibrium, which can be preserved only by acknowledged supremacy or equal power.
and
A nation must be ready at any moment to defend itself; and when its essential interests are involved it must be allowed to use any means necessary to its survival. The Ten Commandments must be silent when self preservation is at stake.
In the closing pages of this chapter, the authors offer a view on what an American president might say to China and Russia over the coming decades, followed by the response of a general. The president begins:
“We respect you and our differences…We must not allow mutual fear to lead into war for the murderousness of our weapons will bring us into a situation unfamiliar to human history…
We are not afraid your systems will displace ours nor ours yours…While maintaining adequate defenses we can arrange non-aggression…Let us join in persistent conferences for adjustment of our differences…If you and we can succeed at this, we shall merit a place for centuries to come in the grateful memory of mankind.
But the general smiles. You have forgotten the lessons of history…Some conflicts are too fundamental to be resolved by negotiations …a world order does not come by gentleman's agreement, but through decisive victory by one great power, as Rome did from Augustus to Aurelius. You have told us that man is a competitive animal, that his states must be like himself, and that natural selection now operates on an international plane. States will unite in basic co-operation only when they are in common attacked from without. Perhaps we are now restlessly moving toward that higher plateau of competition; we may make contact with ambitious species on other planets or stars; soon thereafter there will be interplanetary war. Then, and only then, will we of this earth be one.
In Growth and Decay
If we put the problem further back, and ask what determines whether a challenge will or will not be met, the answer is that this depends upon the presence or absence of initiative and of creative individuals with clarity of mind and energy of will (which is almost a definition of genius), capable of effective responses to new situations (which is almost a definition of intelligence). If we ask what makes a creative individual, we are thrown back from history to psychology and biology – to the influence of the environment and the gamble and secret of the chromosomes.
In Is Progress Real?
The heritage rises, and man rises in proportion as he receives it.
and
To those who study history….the past ceases to be a depressing chamber of horrors, it becomes a celestial city, a spacious country of the mind, wherein a thousand saints, statesman, investors, scientists, poets, artists, musicians, lovers and philosophers still live and speak, teach and carve and sing…If a man is fortunate he will before he dies, gather up as much as he can of civilized heritage, and transmit it to his children. And to his final breath he will be grateful for the inexhaustible legacy, knowing that it is our nourishing mother and our lasting life.
While there is no chapter in the book summarizing love in history, I think it’s worth calling out that Ariel and Will may have left us one extra lesson. The two got married in 1913 when Ariel was 15 years old. They spent 68 years together, studying and publishing for the majority of those years. When Ariel passed away in 1981, Will passed away just 2 weeks later (often referred to as the widowhood effect). For all of their shared interests of writing, philosophy, and history, Ariel summarized their love in a conversation with their granddaughter sharing these simple, and timeless words – “it was our differences that made us grow.”
Highly recommend the book. Please let me know if you end up reading it.
Two Stories of Dad
"Just that you do the right thing. The rest doesn’t matter." Marcus Aurelius
My dad’s name is Clarence Edson Palmer V (the fifth). It’s a powerful name and one that would be tough for many to live up to. But boy does my dad fill it out. He is as tough, strong, and as solid as his name. Today, I reflected on 2 stories involving my dad that are responsible for cementing values in me.
Story 1
I played competitive hockey as a youngster in Southern California. My older brother, also a Clarence (VI, the sixth) played hockey, and when you admire your older brother, you copy their every move. If you know me at all, you know I’m not much of a fighter. I take pride in the fact that it’s tough to get me off my rocker, both emotionally and physically. In my 31 years on the planet, I’ve been in one physical altercation. It happened on the rink some 15-20 years ago, and I remember the details like it was yesterday. The back of the other player’s jersey was turquoise and read “Kelly” in white, above the number 13. Well this number 13 was chirping at me all game. After one small scrum in the corner with this kid, I completely lost my composure, dropped my stick, and started throwing punches at the guy. He generously reciprocated the move, and while it felt like minutes of complete exhaustion, I’m sure we exchanged swings and pleasantries for no longer than 30 seconds. We were both kicked out of the game.
After the match ended, my dad walked me to the opposing team’s locker room, made me find the kid, shake his hand, and thank him for his competitive spirit. So uncomfortable at the time, but it was the right thing to do.
Story 2
A second story I’m thinking about was the time I ordered my first big screen TV for my LA apartment. Best Buy shipped my TV early and then accidentally double charged me for shipping. I called to request a refund for the second shipping charge, and Best Buy mistakenly refunded my entire credit card, leaving me with a free TV hanging in my room.
I called my dad to tell him the story and ask him what I should do. He said, “I do have to run to my next appointment, but you know what the right thing to do is in this situation.” And then he hung up. I was sitting there in silence, and I dialed Best Buy.
I no longer have to make the phone call, but his same line has played over and over in my head for hundreds of situations throughout my life. It’s been permanently branded into me in a way that would be impossible to shake.
I’ve never seen my dad cut a corner, hide a piece of the truth, or do wrong by another person. His compass is beyond reach. And the same is true of my brother, Clarence. What a pleasure it is to live under the guidance of not one, but two Clarences. It makes decision-making easy when the only option since birth that you’ve seen, is doing the right thing.
There’s a small joke inside my family that I always wanted to be “The Clarence” (despite the fact that the firstborn male always gets the name, which I am not). But that’s not what I want or have ever wanted. I prefer the position of admiring the name, the people, and the decisions from a close distance and using it as a standard to strive for. Being like a Clarence is an aspirational goal to do right by others in every situation. I don’t deserve to be the Clarence, I can only aim to live like one.
Happy Fathers Day to the Clarence boys, and to all the dads out there, who despite their outdated fashion choices, quirkiness, and at times complications, taught us how to do the right thing. The rest doesn’t matter.
In and of Itself
Derek DelGaudio’s In and of Itself on Hulu is brilliant from start to finish.
I considered writing a thoughtful review, but it’s better if you go into it without any context at all. That’s how it was recommended to me (by several people I trust), so that’s how I’m recommending it to you. If you need a nudge, I think critic Kristy Puchko summarized it best: “It feels like a goddamn miracle.”
Stuck with Taryn Arnold
One of my best friends, Taryn Arnold, recently invited me on her podcast, Stuck with Taryn. The podcast is aimed at helping folks get “unstuck” in various aspects of their lives (career, relationships, money, etc). In our episode, which you can listen to here, we discuss the basics of saving, investing, and being smart with your money.
While I hope our episode is a helpful introduction to personal finance, I know that for many of my readers it might be an introduction to Taryn Arnold. If that’s the case, you’re in for a treat. It’s difficult to find words to describe Taryn given how special she is, but I will try my best below. I speak from experience on this topic of Taryn. I spent most of my 20s living, working, eating, weekending, and vacationing with Taryn. There was exponentially more time together than apart.
Ok, let me take a shot at this:
-When she walks into a room, the energy doesn’t just change, it completely shifts. If you need comfort and support, time slows down. If you need to pick things up, the party starts instantly upon arrival. It’s sacrilege to try to start a party before Taryn gets there.
-She’s ludicrously relatable. I think this comes from how centered and in touch with herself that she is. And it makes sense because Taryn does the work of journaling, walking, considering, and questioning. That brings a deserved confidence, which makes it more effortless for her to be vulnerable and her full self around friends and strangers.
-Taryn has an unusual talent for leading conversations, groups, and events. When on the mic (which is most of the time if you’re Taryn- she once bought a portable microphone headset that she would wear on randomly in the office or while out on the town), not a single thing about her personality changes. She’s just as funny, energetic, composed, and observant. And she doesn’t have to “turn it on” for these moments because it was never off in the first place.
-After your first five minutes with Taryn, you instantly feel like a best friend.
-One of her core principles in life is showing up for people. She makes that a priority and it really does stand out. She won’t miss a birthday or celebration. This pandemic must be hard on her because I know it’s challenging this goal.
-She’s the definition of influential. Everyone wants to be more like her. As a result, Taryn already has a large community of folks who follow what she writes, reads, and shares. And yet, I truly believe Taryn’s impact is about to 100x over the next decade. She’s going to play a key role as a host for much of our lives. I don’t know if it will be on social media, TV, a podcast, or another medium, but it will be somewhere. If I could buy stock in people, Taryn is where I would place my bet.
With all of the time we’ve spent together, you can imagine Taryn has influenced me in many ways. And yet, there is one lesson she taught me that stood out above the rest. I remember the moment with complete clarity. We were in her white, four-door jeep driving on the North side of Golden Gate Park in SF. She said to me, “Every person on earth wants to feel special. We have to remember that we all crave the feeling of being important. And if you dig deep enough, everyone really does have something important and special about them. So in our conversations with people, it’s up to us to find that thing and shine a light on it.” One of my favorite authors Dale Carnegie describes this principle as “To be more interesting, be more interested.”
So while you may discover one or two practical tips about saving money in the episode, what you’ll really see is Taryn’s rare gift on display — Making me feel special and important, shining a light on the topic I love to talk about.
That lesson has stayed with me, and I might just be trying to live it out in this post— trying to be a bit more like Taryn. If you have the time, enjoy the episode here, and follow Taryn earlier than most will. After a few of her posts, you will start to feel like her best friend.
I feel so lucky to be stuck with Taryn Arnold.
Tyler
The Fisherman and The Businessman
It’s the end of the year, and for most people, a time of reflection. A season to evaluate, reassess, measure ourselves against last year’s ambitions, and consider our next ones. It felt timely to share this popular Brazilian short story (translated into English) I discovered via the author Paulo Coelho.
—
There was once a businessman who was sitting by the beach in a small Brazilian village.
As he sat, he saw a Brazilian fisherman rowing a small boat towards the shore having caught quite few big fish.
The businessman was impressed and asked the fisherman, “How long does it take you to catch so many fish?”
The fisherman replied, “Oh, just a short while.”
“Then why don’t you stay longer at sea and catch even more?” The businessman was astonished.
“This is enough to feed my whole family,” the fisherman said.
The businessman then asked, “So, what do you do for the rest of the day?”
The fisherman replied, “Well, I usually wake up early in the morning, go out to sea and catch a few fish, then go back and play with my kids. In the afternoon, I take a nap with my wife, and when evening comes, I join my buddies in the village for a drink — we play guitar, sing and dance throughout the night.”
The businessman offered a suggestion to the fisherman.
“I am a PhD in business management. I could help you to become a more successful person. From now on, you should spend more time at sea and try to catch as many fish as possible. When you have saved enough money, you could buy a bigger boat and catch even more fish. Soon you will be able to afford to buy more boats, set up your own company, your own production plant for canned food and distribution network. By then, you will have moved out of this village and to Sao Paulo, where you can set up HQ to manage your other branches.”
The fisherman continues, “And after that?”
The businessman laughs heartily, “After that, you can live like a king in your own house, and when the time is right, you can go public and float your shares in the Stock Exchange, and you will be rich.”
The fisherman asks, “And after that?”
The businessman says, “After that, you can finally retire, you can move to a house by the fishing village, wake up early in the morning, catch a few fish, then return home to play with kids, have a nice afternoon nap with your wife, and when evening comes, you can join your buddies for a drink, play the guitar, sing and dance throughout the night!”
The fisherman was puzzled, “Isn’t that what I am doing now?”
—
We all have the fisherman and the businessman within us. It’s the great duality of the human experience. We live (or at least attempt to live) with a gratitude for what we have, alongside an ambition to grow, produce, serve more people, make more money, and ultimately shape our world into what we know it can be.
But which character is in the driver's seat? And where are we heading?
One of the best things about my life is that I get to work with the prolific and wise Ed Batista as my coach. We regularly discuss the balancing of (or at times tension between) gratitude and ambition. He reminds me that not only do levels of gratitude and ambition move up and down, but they also move left and right towards different things.
And this had me reflecting on a few key questions:
What happens when you take an unusual level of ambition and point it towards building a loving home and happy family?
Or what if you took the comfort, appreciation, and gratitude you feel in your home and brought that to your work? Could you be perfectly happy and appreciative of the role you’re in?
I’m also wondering how the pandemic will affect our gratitudes and ambitions heading into next year:
Will we realize just how wonderful dinner with the family has been each night and pull back on the late nights at the office? Or will we crave the distraction-free late nights getting lost in our work?
When they come back, will we savor quiet commutes more than we did before? Or will we fall back into dreaded feelings of similar routines?
Will we be eager to travel to meet with customers/partners? Or will we be more concerned with the risks of travel and skeptical of the in-person benefits?
Will we come out of this with pent up energy ready to pour ourselves into our work in 2021? Or have we realized new and fulfilling hobbies that will fill up the hours gained from more flexible/remote work?
The answers will be different for each of us and our gratitude and ambitions will certainly be changed —up, down, left, and right.
Mainly, I wanted to wish you a reflective season with the time and space to ponder what’s most important to you. I hope you get time to think, to walk, and to question. I hope you’re able to land on a set of deliberate and focused desires which you can pursue in the new year. I wish you harmony of ambition and gratitude, prosperity and health -- more big fish, and more drinks in the village with friends.
Tyler
No Rules Rules: Netflix and the Culture of Reinvention
I recently finished No Rules Rules: Netflix and the Culture of Reinvention, written by Netflix cofounder and CEO Reed Hastings and author/INSEAD professor Erin Meyer. The book describes Netflix’s approach to building high performance and innovation into their culture. I wanted to share my notes and highlights from the book.
I feel compelled to start this post with the typical qualifiers on culture books: Is this account truly representative and accurate? How many different cultures actually exist inside a company as large as Netflix? However, when you read the book and look at the results of the company, you just get the sense they must have tapped into something special as it relates to how they organize and run their company. From DVD shipments to streaming, from licensing content to award-winning original productions, they’ve built a company that figures out a way to delight users, despite a typical resistance to change that often accompanies organizations of their size and scale. For 20 years Netflix has proven they can innovate, pivot, and execute. Something inside their walls is working, so it’s worth paying attention to the principles outlined in the book.
The book recommends a 3 phased approach to building culture, with each phase broken into 3 subcomponents:
Talent Density - Think about this as talent per capita. Does each new hire raise the average talent on the team? CEO Reed reminds employees, “We are a team, not a family. We want the best person at each position.”
Candor - A belief that “frequent feedback magnifies the effectiveness of the team.”
Reducing Controls - “Leading with context encourages original thinking,” and “Don’t seek to please your boss, do what is best for the company.” If leaders provide proper context, employees will feel empowered and make the right decisions.
Reed and Erin outline how you can lay a foundation for each, and then turn up the dial over time.
On talent density:
It’s well known that Netflix aims to pay at the top of the market to ensure they’re recruiting and retaining the best people. “We would rather have one stunning superstar than a couple of average people.” Notice the word stunning. They use it over and over to describe what they’re looking for in each and every hire. If a manager wouldn’t describe a teammate as “stunning,” they thank that teammate for their service and send them home with a generous severance package.
Netflix managers encourage teammates to go out and interview at other companies. Leadership wants everyone at the company to understand their market compensation so that Netflix can match or beat it.
A line stood out to me when Reed was describing how he feels attending meetings at Netflix. “You go into these rooms and you feel like the talent and brain power in the room could generate the office electricity.” What a great description.
The thinking on bonuses and “pay for performance” (earning more for hitting certain goals) compensation stood out. They don’t believe in performance bonuses and variable compensation. There are a few reasons for this: 1) Reed believes that incentive compensation plans don’t provide the necessary flexibility for people to adjust and do what’s best for the business. In his view, setting a goal on one metric creates blind spots. What if the best thing for the business over the next 5 years changes, and moving that previously agreed upon metric is no longer the top priority? Who will catch that? Who will prioritize it? The more people with bonus comp tied to a KPI, the less likely it is for someone to catch a different problem and suggest a shift in focus. 2) He doesn’t buy the fact that dangling money in front of high performers will make them try harder. “High performers naturally want to succeed and will devote all resources towards doing so whether or not they have a bonus hanging in front of their nose." He then references a Duke study from 2008 where they test out bonus compensation for various sets of work. It turns out, if the task was mechanical in nature (effort based), performance bonuses improved results. However, if the job to be done had elements of creativity or cognitive load it actually had a negative effect, leading to poorer performance. The results held true across participant groups in India and the US. I find Reed’s arguments persuasive and compelling.
On candor:
Early in the book they introduce a concept called “belongingness cues.” When we get tough feedback, our body and minds react so negatively (pressure, anxiety, nerves, sweats, etc) because we’re biologically programmed to interpret this feedback as a sign that we may no longer be part of the tribe. As we all know, it’s tough not to feel those things when we receive critical feedback. So, when we do give each other constructive feedback, it’s best to remind the receiver that they still belong to the group. It can be as simple as a pat on the back, an encouraging gesture, or a verbal reminder, “you belong on this team, and I am so glad you are in the role you are in.”
They use a very simple tool for soliciting feedback on the ideas they present to one another. When you propose a new idea, you send along a spreadsheet with 3 columns: 1. Name 2. Score for the idea (-10 being “I think this is a terrible idea” up to +10 being “we must pursue this idea at all costs”) and 3. Reason. It’s a very simple way to organize everyone’s view quickly and help the captain make the decision. I’m definitely going to try this out.
Most of us are familiar with performance reviews (formal written reviews completed annually or bi-annually) and 360s (receiving feedback from peers, managers, and reports). Netflix encourages live 360s. In live 360s, you go to a dinner with your team (ideally 5-7 people) and take turns going around giving each other feedback. In front of the team. They recommend aiming for 25% positive feedback and 75% constructive feedback. Doing it in a group setting forces folks to be thoughtful and kind in the feedback they deliver. Wow, what a sign of a healthy team if you can do this. I’ve done this once before and found it extremely helpful, efficient, and believe it or not, trust building with my peers. I got more from that session than any other written review I’ve received.
On releasing controls and providing context:
Netflix appears to be the gold standard on what you might call “radical transparency.” This section was the most inspiring, and had me doing the most reflection. Quite simply, they want to treat people like adults and give all of the information all of the time, with very few exceptions. As an example, they share financial results with close to 700 members of their extended leadership team before they share with wall street. How do they do it? They treat people like adults. The first slide of the internal deck reads, "You will go to jail if you or someone you know trades on this information." They haven’t had a major leak of this information. They did have one employee leave and take confidential information to a competitor. What did they do? Not change a single thing. They advise you deal with these cases as one offs and avoid making the entire org suffer for it.
Even potential layoffs and reorgs are discussed with a broader team. Reed shares the story of a manager telling a direct report that there is a 50% chance they will lose their job as part of a reorg in the coming months. They want everyone to hear the truth every time, so that employees always feel they can trust what comes from the Execs. This also shows up in their communications when folks are terminated. In their departure emails, managers are told to tell the truth. They say “I parted ways with X” instead of the corporate jargon that typically reads, “John is moving on to his next adventure.” They want to give it to people straight. Every major decision is an opportunity to be transparent and discuss what their expectations are for being part of their high performing team. This sounds intense. Right for some people, wrong for others. There are solid arguments on both sides, but this level of transparency seems worth consideration and debate.
One chapter discusses the importance of vulnerability and admitting mistakes. That part is obvious, but I also learned about the Pratfall Effect. The Pratfall Effect states that your appeal increases or decreases when you admit to making a mistake. If you’re perceived as competent, showing vulnerability and admitting mistakes will increase trust in you. However, if you’re not perceived as competent, trust in you will decrease when you admit a mistake.
A key internal mantra at Netflix is “Don’t seek to please your boss. Seek to do what’s best for the company.” Seems straightforward enough. If you’re going to hire stunning people. you should trust them to make great decisions, so long as you’ve done your part and provided the necessary context. I also want to remember their language when it comes to ensuring team members feel free to fail, which is critical for creative roles where big swings are required. “You are not judged based on the results from one single instance or bet. Your performance is judged on the collective outcome of your bets.”
“We don't need to be aligned on each department's plan, we need to be aligned on where we're all going.” I was fascinated reading about how they approach the Quarterly Business Review (QBRs) -- which they view as the time to give leaders the context they need to make future decisions.
On spending decisions, their guideline is “do what’s in Netflix’s best interest.” They had a false start with an initial guideline of “spend as if it was your own” because they learned that team members have different personal spending habits. The new “do what’s in Netflix’s best interest” has proved successful for them. Their tip to employees -- with every expense, just imagine sitting next to the CEO and VP Finance explaining it. If you can picture doing that, you’re good. If you cannot, something is wrong.
Reed talks about how you can pick up clues on how transparent an org is even by looking at the office setup. He talked about meeting a CEO where his office was down a large hallway with 2 assistants out front. He understand in that moment how transparent (or lack thereof in this case) the company was. This influenced Reed to take a different approach with his office behavior. "I always try to go to the work spot of the person I'm seeing instead of making them come see me." I liked that and want to adopt it.
The book finishes with lessons learned about taking a culture global and tweaks one would need to make to ensure the spirit of the culture stays consistent, while accounting for cultural differences.
These were the concepts that stood out to me as the most thought-provoking. I’d be excited to hear your perspective on them, so reply if you have a reaction to any bullet above. I’ll leave you with Reed’s conclusion to the book (spoiler? does sending the concluding summary of a business book count as a spoiler?) because it captures the overall spirit well.
“In today's information age, in many companies and on many teams, the objective is no longer error prevention and replicability. On the contrary, it's creativity, speed, and agility. In the industrial era, the goal was to minimize variation. But in creative companies today, maximizing variation is more essential. In these situations, the biggest risk isn't making a mistake or losing consistency; it's failing to attract top talent, to invent new products, or to change direction quickly when the environment shifts. Consistency and repeatability are more likely to squash fresh thinking than to bring your company profit. A lot of little mistakes, while sometimes painful, help the organization learn quickly, and are a critical part of the innovation cycle. In these situations, rules and process are no longer the best answer. A symphony isn't what you're going for. Leave the conductor and the sheet music behind. Build a jazz band instead.
Jazz emphasizes individual spontaneity. The musicians know the overall structure of the song but have the freedom to improvise, riffing off one another, creating incredible music.
Of course, you can't just remove the rules and processes, tell your team to be a jazz band, and expect it to be so. Without the right conditions, chaos will ensue. But now, after reading this book, you have a map. Once you begin to hear the music, keep focused. Culture isn't something you can build up and then ignore. At Netflix, we are constantly debating our culture, and expecting it will continually evolve. To build a team that is innovative, fast, and flexible, keep things a little bit loose. Welcome constant change. Operate a little closer toward the edge of chaos. Don't provide a musical score and build a symphonic orchestra. Work on creating those jazz conditions and hire the type of employees who long to be part of an improvisational band. When it all comes together, the music is beautiful.“
Investing in Outlaw Soaps
I'm starting to invest in early-stage companies. If you’re interested in getting involved in this sort of thing, I highly recommend the book Angel by Jason Calacanis. Jason is a prominent angel investor known for his early investments in Uber, Robinhood, and Calm. His book is a fast read.
There are a few reasons I wanted to start this type of investing:
To gain access to different types of companies and business models. I’m excited to broaden my horizons and gain more knowledge.
To build a strong network. I bet the next few decades of my life will be more colorful and interesting if I can spend time with the world’s most ambitious and driven people.
To help early stage founders through problems I've been through before. So many people have gone out of their way to mentor me, and I would like to give back where I can.
And of course, it would be great to make money. Over the last 10 years I hope I’ve sharpened my judgement and learned something about picking winning products, businesses, and people. I hope to put that judgement to the test and succeed in this field. And, at the same time, if you told me I would just break even across all of my investments over the next few years and get the three things above, I would still move forward.
One of my first investments is in Reno-based Outlaw Soaps. My high-level analysis below:
Strengths
Unusually great sales growth. Sales grew 320% in 2019 and 2020 is tracking towards 235% growth (on a meaningful base).
Strong product-market fit. 86% of their reviews are 5 stars. Customers love the products, primarily the brand and unique scents.
Danielle A Vincent is a sharp and driven CEO. She deeply understands her business, and the passion is there.
Favorable macro-trends for an outdoorsy brand. I believe the pandemic is driving more people to the outdoors to connect with nature. As an advisor to Hipcamp, I can confirm this is true as that company is flying. More people than before are identifying as outdoorsy, rugged, and adventurous. The shift to remote work should lead to more road-warrior/van-life identities, which should make more people a fit for the Outlaw brand over the next decade.
Risks
I know very little about consumer packaged goods (CPG) and soap markets.
Like with most businesses, long term effects of Covid on this business are unknown.
It's a crowded market, making brand differentiation tough.
Most startup investments do not pan out.
Risks being known, I'm excited about the opportunity given the clear traction and growth. And Danielle is the exact type of founder I’m looking to partner with as I enter this space.
If you feel like giving Outlaw products a try, you can find them at Northern California Whole Foods stores, or you can order them on Amazon or their website. If you decide to give them a shot, let me know what you think.
Tyler
On death and grief
Ten years ago I stumbled upon a comment from one internet stranger to another, and it was one of the most beautiful things I had ever read. The original post was titled, "My best friend died and I don't know what to do," and the moment I finished reading this response below, I saved it, knowing I would need to reference it throughout my life. I've read it once or twice per year since to help me deal with the loss of loved ones (and even the loss of relationships).
As we work through this pandemic, we're experiencing an unusual amount of death and grief, and I thought that sharing this post might be helpful to you or someone you know. I wish I could properly attribute it, but it's written by an anonymous individual.
Alright, here it goes. I'm old. What that means is that I've survived (so far) and a lot of people I've known and loved did not. I've lost friends, best friends, acquaintances, co-workers, grandparents, mom, relatives, teachers, mentors, students, neighbors, and a host of other folks. I have no children, and I can't imagine the pain it must be to lose a child. But here's my two cents.
I wish I could say you get used to people dying. I never did. I don't want to. It tears a hole through me whenever somebody I love dies, no matter the circumstances. But I don't want it to "not matter". I don't want it to be something that just passes. My scars are a testament to the love and the relationship that I had for and with that person. And if the scar is deep, so was the love. So be it. Scars are a testament to life. Scars are a testament that I can love deeply and live deeply and be cut, or even gouged, and that I can heal and continue to live and continue to love. And the scar tissue is stronger than the original flesh ever was. Scars are a testament to life. Scars are only ugly to people who can't see.
As for grief, you'll find it comes in waves. When the ship is first wrecked, you're drowning, with wreckage all around you. Everything floating around you reminds you of the beauty and the magnificence of the ship that was, and is no more. And all you can do is float. You find some piece of the wreckage and you hang on for a while. Maybe it's some physical thing. Maybe it's a happy memory or a photograph. Maybe it's a person who is also floating. For a while, all you can do is float. Stay alive.
In the beginning, the waves are 100 feet tall and crash over you without mercy. They come 10 seconds apart and don't even give you time to catch your breath. All you can do is hang on and float. After a while, maybe weeks, maybe months, you'll find the waves are still 100 feet tall, but they come further apart. When they come, they still crash all over you and wipe you out. But in between, you can breathe, you can function. You never know what's going to trigger the grief. It might be a song, a picture, a street intersection, the smell of a cup of coffee. It can be just about anything...and the wave comes crashing. But in between waves, there is life.
Somewhere down the line, and it's different for everybody, you find that the waves are only 80 feet tall. Or 50 feet tall. And while they still come, they come further apart. You can see them coming. An anniversary, a birthday, or Christmas, or landing at O'Hare. You can see it coming, for the most part, and prepare yourself. And when it washes over you, you know that somehow you will, again, come out the other side. Soaking wet, sputtering, still hanging on to some tiny piece of the wreckage, but you'll come out. Take it from an old guy. The waves never stop coming, and somehow you don't really want them to. But you learn that you'll survive them. And other waves will come. And you'll survive them too. If you're lucky, you'll have lots of scars from lots of loves. And lots of shipwrecks.
7 years in the 7x7
Family, friends, teammates,
Today marks seven years in San Francisco working on Patreon. I took a step back to do some thinking about the biggest lessons I’ve learned here. This started as a note to myself to help me crystallize my learnings. However, as I got to writing, I figured it might be nice to share it with people in my circle. Specifically, I wanted to share it with people I wish to be more in touch with. Maybe it would spark an interesting reaction, conversation, or check-in. So here I am, posting and sharing some lessons learned. The lessons are more simple than I expected, but at the altitude I’m reflecting at, maybe that’s how it should be. Perhaps the simple lessons matter most.
My favorite leaders bring high performance and compassion to the table, and those two things are not mutually exclusive.
The best bring both with ease. When someone cares about you, they expect greatness and they push you to accomplish more than you thought possible. Great leaders want to use their limited time on earth to accomplish meaningful things for the world, and it’s their natural leaning to want the same for you. They lead with head and heart.
Be an energy giver.
This doesn’t mean you must be outgoing to be successful. It means you have to be purposeful about the energy you bring to each interaction, meeting, and problem. Whether it be starting a meeting with a quick game, bringing donuts for a team, or packaging an insight clearly, the best folks are thoughtful about what they bring to the table. They don’t view themselves as participants, but as culture creators. Create moments, and you will be invited back the next time.
Patreon’s Head of Data Science, Maura Church, is outstanding at being thoughtful about the energy she brings to a meeting. When you see Maura’s name on an all hands agenda, you know those 10 minutes are going to be up-beat, energetic, memorable, and succinct. Before Maura runs our Monthly Business Review meeting for ~40 attendees, she’s messaging with me to determine the perfect ice breaker for the group. We’re having conversations together to ensure we bring the right energy and takeaways to this important review of company performance. Maura’s awareness of energy and desire to contribute instead of participate make it so that everyone wants Maura in their meetings.
Investments in written and verbal communication skills are the best bang for your buck.
While we all hope that it’s the best ideas that get worked on, I’ve often found the ideas that get prioritized are the ones that were best communicated. If you’re not sure where to start in your skills development, start with communication. Learn to bottom line your communication by leading with what’s most important. Write down your recommendations so that you’re forced to think more clearly. Share the why behind your decisions whenever possible. Write without bullshit.
Warren Buffett said it best, “You can have all of the brainpower in the world but you have to be able to transmit it. And communication is transmission.” He’s also shared that you become 50% more valuable when you learn to write and communicate in person. I whole-heartedly agree.
Operating with a growth mindset improves your chances of success, and makes you more pleasant to be around.
Folks with a growth mindset have unshakable curiosity and an insatiable appetite for learning. When something goes wrong, they first ask, “How can I grow from this? Where might I be part of the problem?” These teammates understand that if they are part of the problem, they are also part of the solution.
Patreon has done a nice job hiring for this value. I really feel like I’m surrounded by people who are genuinely curious, embrace challenges, and love to learn. I remember in Patreon’s early days, we had buckets of troubles. Payment processors were threatening to turn off our processing, we had content policy issues, and on a particularly tough week, I remember looking over at our Head of Finance, Carlos Cabrera. He smiled and said something to me like, “Wow, T, we’re going to learn so much while we work through this. I wish we were having even more complexity this week because that would push us even harder. The messier the problem, the better.” And the crazy thing is, he believes every word of that. What a gift to work in a building with people who think this way. That much growth mindset in one place becomes powerful (and way more fun), and I attribute much of our success to it.
In growing companies, you have to be ok with your earlier work being ripped apart.
It took me a few years too long to learn this lesson, but eventually I came to realize that if someone is bashing my earlier work, that’s the ideal outcome. People get hired because an area wasn’t getting enough attention. Oftentimes, I was the person deciding to hire the new role and I would still take it personally when they tore out my old systems. The first dozen times, it hurt, but I eventually put a name to this problem and the hurt went away. Our CEO Jack and I came to label this situation as the “you’re the handbook person!” problem. It was inspired by a harsh critique of an early version of our employee handbook, by the person who was there to improve our handbook. This wonderful teammate couldn’t believe what bad shape our employee handbook was in! And they let us know it. Now when this happens I just silently say to myself, “You’re the handbook person, here to improve our handbook.”
Make the other person feel amazing when they’re giving you tough feedback.
I’ve found that the best leaders actually build trust and strengthen relationships in conversations about critical feedback. My highest performing teammates view feedback as a gift, no matter where it’s from and no matter when it comes. Why? Because feedback is just that. It’s a data point on how one person feels, not “the truth.” And depending on where it comes from, you don’t even have to make a commitment to act on it. If that’s the case, shouldn’t you collect as much data as you can to guide your behavior?
I pay special attention to how I act when I’m receiving critical feedback from someone else. I learned to prompt myself with: “How can I make this person feel amazing right now while they deliver this tough news to me?” Because I know if I can do that, they will come back to me with more feedback down the road. And why would I rob myself of extra data points about how my decisions or behaviors are landing on those around me? Don’t rob yourself of future feedback by getting on the defensive. Lift people up and thank them when they come to you with tough feedback.
Bring diversity, equity, and inclusion into your workplace and life. It’s right for the world, and will enhance team performance.
San Francisco is the best place for having your eyes opened a little wider. Over the last decade I’ve realized how many opportunities I’ve been afforded that never show up for others. We all have a responsibility to use our positions and resources to lift up those around us who haven't been given the same chances.
Optimize for positive impact on the world, not stress or struggle minimization.
I’ve known since I was 16 that I wanted to help artists and creators make money and it’s still my north star after all these years. The deeper I go, the more I want to make things right for creators.
I love and respect the creative class with my whole heart. They are trailblazers. They create something out of nothing, so that we can feel more attached to the earth and more connected to each other. Creators take the unknown path so that we can feel more inspired and have an enhanced human experience. I’ve been looking for 30 years, and I’ve yet to find anything as satisfying and refreshing as a good story or work of art. To play a tiny part in creating income and sustainability for these trailblazers has been an unexpected honor.
Ok, the lesson — Raising venture funding is hard and comes with high expectations. Working with the best and brightest is hard and comes with high expectations. Being a leader in 2020 is hard and comes with high expectations. This means you’re going to have tough days. You will need some greater purpose to help you get through it. If you’re not on board with your company's greater purpose, notice that and ask yourself if you’re at the right place.
Most days at Patreon are quite fun. And, some days are not. On those particularly rough days, I feel like I’m trick-or-treating, but instead of candy at each door, I’m given a new jaw-dropping problem every 30 minutes that is a complete punch in the gut. It’s on those days that I feel lucky to lay my head on my pillow at night and say, “I’m willing to struggle to make this dream come true. We’re building something that is inarguably good for the world, and I would prefer that over an easy life.”
Teammates, current and former, thank you for being a part of these lessons. And if you made it this far, thank you for reading. Please reach out and say hello. That would be the best 7 year gift I could receive.
Onward,
Tyler
PS I’m considering writing more. My thoughts on that are available here and I’d love to have you join.
Why I’m writing
I’m going to start writing for a few reasons:
To keep me in touch with the people I care about most.
I wish I could call or text more of the amazing people in my life. With my current setup, this isn’t entirely possible. My goal is to send out occasional posts and have a few folks reply with thoughts of their own. This should create more frequent check-ins, and over the next decade, we should end up knowing each other better than we do now. I’m not aiming to amass a large following of people I don’t know with this newsletter. If you would like to join and we don’t know each other, please say hello and introduce yourself.
To sharpen my thinking.
Writing something down forces clarity of thought. This should help me get to the root of my beliefs and values. And, if a few readers reply with views of their own (especially opposing opinions) I will improve my thinking and accelerate my learning.
To create a more interesting inbox.
“You get out of it what you put in” is a core principle of mine. By publishing more frequently, I believe my inbox will become a more fruitful and fascinating place. This should lead to more weird and wonderful opportunities over the next few decades, and why would I say no to that. I smile thinking about an inbox where anything could pop in on a given day (a book recommendation, a potential investment, a new connection, an invite to join a TikTok House, etc.).
What will I write about? I imagine most of my posts will fall into one of three buckets:
Amplifying creators and art. I’m in a fortunate position in many ways, but one of the best things about my life is I’m surrounded by amazing creators and creations. When I stumble on something special, I will pass it along.
Investments I’m making. This includes real estate, startups, and public markets.
Lessons learned. Primarily via Patreon, though I’ll pass along anything meaningful I learn on a range of topics.
If this sounds fun to you, please join my email list and reply every so often. See you in your inbox soon.
Tyler