Daily insights for city builders, delivered every morning at 6 AM ET. I’m Brandon Donnelly — a Toronto-based real estate developer and founder of Globizen. I’ve been writing here since 2013.
Sam Altman’s recent blog post about how to generate ideas for startups has some invaluable tips that I think apply to much more than just new companies. As a reminder, Sam Altman is an entrepreneur and the former president of Y Combinator. So he’s had a fair bit of experience dealing with both startups and new ideas. YC also runs lots of experiments in an effort to get better at funding both great founders and great ideas. And it turns out that being able to generate a lot of new ideas is a critical skill to have when doing a startup. But again, I think you can ignore, for a moment, that Sam is even talking about startups and still find value in his words.
Here’s the excerpt that stood out for me:
It’s important to be in the right kind of environment, and around the right kind of people. You want to be around people who have a good feel for the future, will entertain improbable plans, are optimistic, are smart in a creative way, and have a very high idea flux. These sorts of people tend to think without the constraints most people have, not have a lot of filters, and not care too much what other people think.
The best ideas are fragile; most people don’t even start talking about them at all because they sound silly. Perhaps most of all, you want to be around people who don’t make you feel stupid for mentioning a bad idea, and who certainly never feel stupid for doing so themselves.
Stay away from people who are world-weary and belittle your ambitions. Unfortunately, this is most of the world. But they hold on to the past, and you want to live in the future.
This recent post by Sam Altman (of Y Combinator) on how to achieve outlier success was just passed around our office. And it’s so fucking good that I decided to regurgitate it here on the blog by listing all 13 of his thoughts along with some of his most salient points. All of the words below are his (not mine), but most of his words are missing. I wanted to make a more condensed version so that you could easily print out this post and affix it to your desk. I am about to do that. Thanks for a great post, Sam.
1. Compound yourself
I think the biggest competitive advantage in business—either for a company or for an individual’s career—is long-term thinking with a broad view of how different systems in the world are going to come together. One of the notable aspects of compound growth is that the furthest out years are the most important. In a world where almost no one takes a truly long-term view, the market richly rewards those who do.
2. Have almost too much self-belief
Self-belief is immensely powerful. The most successful people I know believe in themselves almost to the point of delusion. Cultivate this early. As you get more data points that your judgment is good and you can consistently deliver results, trust yourself more. If you don’t believe in yourself, it’s hard to let yourself have contrarian ideas about the future. But this is where most value gets created.
3. Learn to think independently
Entrepreneurship is very difficult to teach because original thinking is very difficult to teach. School is not set up to teach this—in fact, it generally rewards the opposite. So you have to cultivate it on your own.
4. Get good at “sales”
All great careers, to some degree, become sales jobs. You have to evangelize your plans to customers, prospective employees, the press, investors, etc. This requires an inspiring vision, strong communication skills, some degree of charisma, and evidence of execution ability.
Getting good at communication—particularly written communication—is an investment worth making. My best advice for communicating clearly is to first make sure your thinking is clear and then use plain, concise language.
5. Make it easy to take risks
It’s often easier to take risks early in your career; you don’t have much to lose, and you potentially have a lot to gain. Once you’ve gotten yourself to a point where you have your basic obligations covered you should try to make it easy to take risks. Look for small bets you can make where you lose 1x if you’re wrong but make 100x if it works. Then make a bigger bet in that direction.
6. Focus
Once you have figured out what to do, be unstoppable about getting your small handful of priorities accomplished quickly. I have yet to meet a slow-moving person who is very successful.
7. Work hard
I think people who pretend you can be super successful professionally without working most of the time (for some period of your life) are doing a disservice. In fact, work stamina seems to be one of the biggest predictors of long-term success.
8. Be bold
If you are making progress on an important problem, you will have a constant tailwind of people wanting to help you. Let yourself grow more ambitious, and don’t be afraid to work on what you really want to work on.
9. Be willful
People have an enormous capacity to make things happen. A combination of self-doubt, giving up too early, and not pushing hard enough prevents most people from ever reaching anywhere near their potential.
10. Be hard to compete with
Most people do whatever most people they hang out with do. This mimetic behavior is usually a mistake—if you’re doing the same thing everyone else is doing, you will not be hard to compete with.
11. Build a network
Great work requires teams. Developing a network of talented people to work with—sometimes closely, sometimes loosely—is an essential part of a great career. The size of the network of really talented people you know often becomes the limiter for what you can accomplish.
12. You get rich by owning things
The biggest economic misunderstanding of my childhood was that people got rich from high salaries. Though there are some exceptions—entertainers for example —almost no one in the history of the Forbes list has gotten there with a salary.
You get truly rich by owning things that increase rapidly in value.
13. Be internally driven
The most successful people I know are primarily internally driven; they do what they do to impress themselves and because they feel compelled to make something happen in the world. After you’ve made enough money to buy whatever you want and gotten enough social status that it stops being fun to get more, this is the only force I know of that will continue to drive you to higher levels of performance.
Sam Altman has an interesting post up on his blog talking about what he feels is a changing cultural environment in San Francisco (which is where he is based). His argument is that heresies are good for innovation and for moving the world forward. We need people to question established norms. But for that to happen we need environments and cities that encourage it, or at the very least allow it.
Here’s an excerpt:
Restricting speech leads to restricting ideas and therefore restricted innovation—the most successful societies have generally been the most open ones. Usually mainstream ideas are right and heterodox ideas are wrong, but the true and unpopular ideas are what drive the world forward. Also, smart people tend to have an allergic reaction to the restriction of ideas, and I’m now seeing many of the smartest people I know move elsewhere.
In San Francisco he is starting to feel that it is becoming increasingly difficult to have wacky ideas and to work on wacky startups. And for this reason, people are starting to leave the city in search of more open cultures. Openness used to be a hallmark of San Francisco. It was once the epicenter of counterculture. Has that changed?
Here is a final excerpt:
I don’t know who Satoshi is, but I’m skeptical that he, she, or they would have been able to come up with the idea for bitcoin immersed in the current culture of San Francisco—it would have seemed too crazy and too dangerous, with too many ways to go wrong. If SpaceX started in San Francisco in 2017, I assume they would have been attacked for focusing on problems of the 1%, or for doing something the government had already decided was too hard. I can picture Galileo looking up at the sky and whispering “E pur si muove” here today.
“Great ideas alter the power balance in relationships. That’s why great ideas are initially resisted.” –Hugh Macleod
I have been following the work and writing of designer Tobias van Scheider for quite some time now. If you don’t subscribe to his newsletter and you end up liking this post, you should consider signing up.
Recently I stumbled upon something he published back in October called “Ignore Everybody”, where he argues that when you’re exploring something new – that could potentially fail – one of the best things you can do is ignore everybody.
And that’s because:
“We have to understand that ideas are by nature very fragile. They’re like little naked babies, unable to protect themselves. If we really believe in a new idea, we have to protect her with great effort. This is difficult, because oftentimes the greatest ideas get killed by the people around us. Executing on a great idea is by nature a lonely path. If everyone would agree with you, the idea is probably not that great anyway.”
I am incredibly interested in how new things get started and how new ideas thrive. Fostering innovation has become a critical component of city building in today’s world. But sometimes I feel as if we’re thinking too top-down, as opposed to bottom-up.
As Tobias rightly points out in his article, lots of great ideas started as stupid little projects. Who would have thought that a teen sexting app with disappearing messages (Snapchat) would become a company worth many billions of dollars?
It’s for this same reason that Sam Altman of Y Combinator recently wrote that sometimes its better to call your new company a project, rather than a business. When you call it a business you impose all kinds of biases onto it in terms of viable business models, and so on. But when you keep it a “project”, it becomes more acceptable to be experimental.
As an example of all this, I was fascinated to learn this past weekend about a Toronto-based ad agency called OneMethod. Because as part of their agency they have a division called the MethLab, where the goal is to simply experiment with “absurd ideas.”
One of those absurd ideas was a social media campaign slash pop-up taco restaurant – remember, they are an ad agency not restauranteurs. It was so grassroots that they ended up having to sell original art work that happened to come with a “free” taco in order to get around all the legal requirements for serving food. Brilliant.
The idea was so well received that it has grown into a fully fledged restaurant called La Carnita, which today operates across 3 permanent locations and happens to be one of the most popular taco restaurants in Toronto.
But let me ask you this, if they had instead gone out to investors – as an ad agency wanting to get into the taco business – would they have been able to raise the money for their first physical restaurant? I can imagine this being a lot more difficult.
On a larger scale, this is exactly what Google is doing with Alphabet. The company was reorganized and rebranded so that they could continue to work on absurd ideas outside of the Google cash cow. If the idea/project takes off, then it becomes a fully fledged company. If it doesn’t, then it gets shut down and something else is tried.
This is what people and companies are doing today to stay relevant in the innovation race.
But in some ways it feels like a battle to allow the absurd to survive. That’s why the best approach might be to just ignore everybody. There’s value in the absurd but maybe you’re the only one who sees it right now.
For those of you who aren’t familiar with Y Combinator, they are a super successful funding platform for early stage startups. They are located in Mountain View, California.
What’s unique about their approach is that they invest a relatively small amount of money ($120,000 for 7% of your company) in a relatively large number of companies. Their most recent cohort was around 85 companies and they do that twice a year.
The rationale behind this approach is that it can be incredibly hard to predict which people and ideas will produce the next great company. Oftentimes the best ideas appear really shitty at first. (Here’s a post by one of the cofounders of Airbnb talking about the company’s early rejections.)
So instead of putting all of their eggs in one basket, YC invests smaller amounts in more companies.
But beyond this being beneficial to them, it’s also a model that I think helps to reduce the barriers to people starting a company. It gives more people the chance to prove that their company has the potential to be something great.
And that’s precisely what makes this new YC Fellow program/experiment so interesting to me.
Instead of $120,000, YC fellows will receive $12,000 and they won’t have to move to the Bay Area (although it’ll be encouraged). They’ll still get mentorship and advice like the regular YC program, but it’ll be a kind of light version.
Though this is almost certainly just the beginning. Here’s how Sam ended his announcement post:
“Someday if it works, we’d love to fund 1,000 companies per year like this.”
Now all of a sudden that’s some scale.
What’s exciting about this is that I believe our cities have the potential to be far more innovative than they are today. Every city is trying to be the next Silicon Valley, but every city is not the next Silicon Valley.
I saw a great tweet the other day that went something like this (I wish I could remember who the author was):
“Entrepreneurs aren’t risk takers. They’re just rich kids with big safety nets.”
It’s a bit of a tongue-in-cheek generalization. But to unlock the full potential of our cities, we should be figuring out how to get everyone participating and building their ideas, not just those with a head start.
I think there are a lot of people around the world who could be doing great things, but they just haven’t been able to take that first step for one reason or another.
Hopefully organizations like Y Combinator will be able to help them take it.
