-: So, I want to welcome Reid Hoffman.
He is a public, I'm reading my thing.
He's a public intellectual.
He was the adult supervision at PayPal.
He describes it as, he was in charge of everything
that happened outside of the building, right?
He's a founding member
of what's often called the PayPal mafia.
This is that a lot of people who left PayPal
who created a lot of companies.
He's my life coach, and I think that sometimes mutual.
He's one of my best friends.
Early investor in Facebook, Zynga, Flickr,
and a bunch of other companies,
especially now after Greylock, making bigger investments.
He co-invested with me and we worked a lot
on early stage investments together.
He's a founder of LinkedIn, partner at Greylock,
recently an author of a book
called The Start-Up of You, this book.
And I haven't announced the advisory board
of the Media Lab yet,
but he is on the advisory board of the Media Lab.
-: Unannounced of course. -: Unannounced, yes.
Just between us.
And today, we wanted to make this somewhat interactive,
and this is gonna be a conversation,
but I wanted to start off by trying
to connect this trajectory that you've been working
on and sort of crystallizing in this book
and try to connect it to the Media Lab
and the students and faculty of the Media Lab.
Maybe you want to start by doing a little riff
on what you argue in this book.
-: So, the highline, the goal of the book is to say that
actually the model that everyone should think about their
lives is how entrepreneurs actually start companies.
And it's not that everyone should start a company,
although some places, most notably here,
actually have some deep affinity to that.
But it's the fact that it's no longer
kind of a career ladder or a career escalator
as a path, as a model for thinking about how do you
do your work, and how do you have a career.
And kind of the old model is, get good grades,
you know, get to a good university.
With a good university, there are, you know,
career paths that are just kind of there.
Kind of choose one, maybe juggle it around a little bit,
and then have a path and work your way up.
I think that that model has been broken for years.
It's broken by globalization.
It's broken by how technology is disrupting industries
at a faster and faster pace, right?
Matter of fact, this is one of those places
that's trying to create that disruptive technology.
And what that means is the model for how to think
about your life, your career, your work, is different.
And the thesis is that the model is to think
about entrepreneurship and how entrepreneurs think
about product/market fit, how they think about creating
competitive differentiation, how they take intelligent risk.
All of those thing now apply to how you as an individual
essentially lead your life, and each chapter in the book
is a distillation of the advice that I give entrepreneurs
starting companies, refactored for individuals
for thinking about their own lives and thinking about,
if you take the phrase, be the entrepreneur
of your own life seriously, what are the actual pragmatic
concepts that are both mindsets and tools
in terms of how to navigate, and that's the key.
-: And how we'd map that onto the Media Lab is, you know,
while having an MIT degree does sound kind of important,
having a media, arts, and science degree is really tricky,
because you don't have job listings looking for media,
arts, and science, where we're gonna hire 50 media,
arts, and science majors for this, and in fact,
even though you graduate from the Media Lab,
the whole point is all of you are really, really different.
So probably my guess is that as you start thinking
about your career, you go out and you expect
to have to explain what you did.
And from that first step, we're really different
from, say, an engineering school where,
if you have a degree from this engineering school,
people kinda know what to expect,
and people, you already know what your job's gonna be,
and it's already sort of this ladder.
So the, if you're thinking about your life
and you're at the Media Lab already,
you already kind of know that this escalator
or ladder or whatever it is you wanna call it isn't there,
and I think one of the interesting things
about the Media Lab itself as well as the students here
is that we are trying to figure it out as we go along.
So I think that's in the DNA.
But I think the thing that you're adding to this is
to think about your life as an entrepreneur,
and I think what's important, again,
and we were talking about this last night at dinner,
I think is the Media Lab is also undirected research, right?
So, a lot of this sort of, you know, life planning
of the, you know, before an internet age was,
here's a carrot over here, and then you calculate backwards.
Here are the steps for me to get this carrot.
I have to go get an MBA from Harvard;
I have to do this, I have to do that.
And once you check all those boxes,
it's very likely you're gonna get there.
The whole point of directed research is
we don't know where we're going when we start,
and we iterate as we go along.
So that's in the DNA of the Media Lab.
What's interesting I think that you're bringing into this
is the kind of Silicon Valley entrepreneur mentality.
And so, you already know kind of the architecture
of the Media Lab, I mean.
Can you sort of try to say what, I think in the book
you talk about investing in your own network
and traversing networks, 'cause we have
a really interesting group of stakeholders, right?
We have foundations and companies and different institutions
we work with, and the networks that the students have.
How would you, how would you give advice to our students?
-: Well, the key thing, let's see.
So, parsing it.
So the idea is if you take a model of what entrepreneurs do,
and they are looking for product/market fit,
part of getting product/market fit is, and when you're
starting early is, you have to actually figure out
what is the likelihood of, the earliest tells
that you can take of finding an interesting market fit.
And so I know that you have demo days here
and other kinds of things as a way to kind of attempt
to approximate that, but the key thing is,
how do you bring in as much network intelligence
into that process as possible?
So in terms of Silicon Valley companies,
when you're building them, you bring in investors,
advisors, early employees, early potential customers,
and you're trying to actually get the broadest
possible intelligence into, is the path
of which I'm trying to build a product or service
and architect the company around, is is accurate?
One of the things that I could probably give
as an example is that most people tend to begin
by only thinking that a financing process
is literally just kind of going through the hoops
in order to get a certain amount of money in the bank.
Actually, the most interesting thing about a financing
process, and you do, of course, need the money,
so it's not to say that is uninteresting,
but it's actually getting a collective
network intelligence on, is this a good plan?
So, the advantage of talking to a number
of kind of experienced business people,
either angel investors or VCs,
is you look at, what are the things that are kind of most,
the pieces of intelligence that are most common
amongst these smart people about my project?
Now, usually what that means is those, like,
you'll get a set of kind of risks, unknowns,
hypotheses that is in your investment.
So for example, with LinkedIn, at the very early days
of LinkedIn, one of the challenges that I had,
and I knew that I would have this, was because all the,
all of my smart friends who were going around
talking about it said, look, in a network product,
there's zero value, and number one, there's zero value,
and number two, there's zero value, and number three.
That goes on for a while, because number one,
I don't know anyone else in the network.
I invite Joey.
Joey and I know each other already.
The product's not useful, et cetera.
And part of what happens for getting a truly breakout idea
is you have to actually have one of these things,
which it seems like this is broken, but you have a good
thesis about why you're contrarian and right about this.
And my thesis was that a small enough percentage
of people would be interested enough in exploring it
as it's beginning that actually, I could get the network
to a size of 500k to a million people, where the value
propositions of the network begin kicking in.
That kind of process is one of the processes
that we both have here and also need to continue to amplify
in terms of figuring out, okay, what are the key risks
in making this project successful,
identifying that kind of almost as the investment thesis.
It doesn't have to be a pure economic investment thesis,
but an investment thesis and what would lead
to the breakout result that we're looking for,
and then bringing the collective network intelligence
in in order to identify, okay, are these risks,
do we have a good contrarian thesis about it,
and how do we bring the resources to bear
in order to solve that problem?
-: So, I think it was Nicholas who told me this,
but people have described the Media Lab
as a bunch of answers looking for questions,
or a lot of answers looking for problems.
And if you look at some of the success stories that we have
of like, narratives from our past, so we have the sensor
that was built for Yo Yo Ma's bow that got used
by Penn and Teller for a magic show
that eventually was picked up by the NEC engineer
to turn into the airbag safety device for child seats,
and that's a great story, 'cause you didn't know where it
came from, and it turned into this high-impact thing.
But, but it, it's this, a lot of it's like luck
and serendipity, and it's, and people ask me,
well, what's the difference between your serendipity
and just randomness and chaos?
And what's interesting is, 'cause you talked about how
you take an idea and you figure out the distribution model
and you plan it, and, but then there's also the other part
about pivoting and agility and serendipity.
And in the Media Lab, I think a lot of what we do here
is really not, we're not sure whether it's social impact
or commercial impact, but is there, but, 'cause you're
talking about commercial service entrepreneurs methodology.
Do you think there's a version of what you're talking
about that talks about the step before that,
kind of where we are when we're brainstorming projects?
-: Well, kinda, I mean, again, part of the thing is,
you know, I think you were there.
At, you know, Ted a couple months ago, I gave a talk
about how we're moving from an information age
to a network age, and part of I think actually being
in a network age is, how do you increase
the possibility of a positive outcome from serendipity,
e.g., there are things that like, it's still,
there's still luck, but if you increase your probability
of the right connections being made, e.g.,
oh, this answer is the right solution for this problem.
So you say, look, I don't have a problem looking
for an answer; I have an answer looking for a problem.
It's still a connect these two things together.
And when you have a connection problem,
that, generally speaking, goes through human networks,
through networks of people thinking, people knowing things,
people trying to analyze, people trying to solve problems,
you know, these sorts of things.
So, the same thing is true in reverse.
You might say, all right, well, we start with an artifact.
Now how do we find which problems this artifact solves,
is the same hunt from a different angle.
-: So it's the network traversal pattern recognition element
of understanding the network that you'll have, right?
-: Yeah.
And as an example for me personally, you know,
the problem I'm trying to solve as a Greylock investor
is breakout multi-billion-dollar ideas.
I don't then formulate a thesis.
When people ask me on stage, I'll give 'em a thesis,
'cause it's interesting content, but actually,
my thesis is not the only thing I'm looking for.
I'm looking for the idea that I don't know, 'cause the idea
I don't know is much more likely to be contrarian.
So the way that I navigate as an investor is I put myself
into the networks, into the flow where the person
who likely has that idea comes and finds me,
and then I have to be able to recognize it
in order to help it get to the right place.
-: And it's funny, 'cause the last time I was up here,
I cited a study that I didn't know,
and I was very embarrassed.
It's a study about luck.
But Elliott send me the actual paper.
It was a very interesting. -: Crowd sourced.
-: Crowd sourced citations, and the paper I read,
it's actually more interesting than I remembered it,
but it's basically that serendipity and focus are at odds.
So, one of the things, the experiments, is that they put
a dot on the screen, and if you look at the dot,
if they show peripheral things, most people will see it.
But the minute you give the person
a financial return for focusing on the dot,
they no longer see the peripheral stuff.
And then the other example they have is they collected
a whole bunch of people who self-classified themselves
as lucky and unlucky, and they give a newspaper to somebody
and say, okay, count the number of photos in the newspaper.
And in big print in the newspaper,
it says this newspaper has x number of photos.
And the unlucky people don't notice that.
And there's another section in big print that says
tell the examiner that you saw this,
because you've won x number dollars.
And all the lucky people see the writing,
whereas the unlucky people are just sitting there
counting the photos and don't notice that in big print
in the newspaper, it has these answers.
And so, it's really interesting, which is,
the relationship between focus and serendipity.
And you're talking about, like, you have a thesis for your
investment, but you're always looking for the edges,
'cause that's kind of where the breakaway stuff tends to be.
And getting back to sort of the process of entrepreneurship,
I mean, a lot of people talk
about entrepreneurship is all about focus.
You've gotta be focused, you've gotta execute.
They say teams, it's all about execution.
But then they talk about agility.
I mean, what's the, how do you sort of reconcile that?
-: Well, this is a layup question.
(both laughing)
One of the things that I talk about a lot about how
entrepreneurs are given two pieces of contradictory advice,
which is persistence and flexibility,
which is, have a vision, you know, go against adversity,
go against people telling you that you're out of your mind,
'cause by the way, most good breakout companies
have a sometimes years-long phase where people
tell the person they're out of their mind,
and persist in that vision.
And then the other one is, be flexible.
Look at data, look at market understanding.
Change based on the conditions you're getting.
And so the question is,
how do you put those two things together?
And the short answer is, there isn't a simple algorithm.
It's part of actually knowledge and decision making,
because what you do, roughly speaking,
is you have an investment thesis about why it is
you think this project, this company, this product,
whatever it is, is likely to work and have it,
and have some outside result.
And usually that investment piece is expressed
in a set of statements.
For example, early LinkedIn was, hey,
we could actually get to a couple million people
before the value proposition of discovering
other people in the network would really kick in.
And those are the set of hypotheses that if you're right
about, and it kind of adds up almost like a logical proof,
then you get the output that you're looking for.
So when you're making persistence versus flexibility
decisions, it's where are you tracking on being higher,
more confident in your investment thesis or less confident.
And if you're tracking to being substantially
less confident, that's when you actually
change what you're doing substantially.
And it doesn't, it doesn't, sometimes,
it's not even just pure data.
So, for example, one of the ways that when I was
on the board of PayPal, it shifted to being email payments
was they were saying, well, you know, we've got this idea
about, you know, kind of splitting the dinner tab
with Palm Pilots, and I came in and I said,
look, we're completely broken up.
Actually, I don't know how many people
in the room remember Palm Pilots, right?
But the likelihood or the number of people who have
essentially, everyone at the dinner table has a Palm Pilot
is, in restaurants, there in Silicon Valley,
is between zero and one per restaurant.
So even just by thinking it through,
your use case is broken, and that's when Max Levchin said,
oh, I have an idea, we could sync by email and payments.
And I was like, okay, that's a good idea.
And that's the kind of pivoting on your investment thesis
that isn't just data from the real world; it isn't just
ideas from people; it's you thinking it through and thinking
about, what are the conditions that apply to this?
And that is how you make decisions
between persistence and flexibility,
between, you know, iterating and pivoting in terms
of what you're doing in execution of a project.
-: And I think that actually applies
to projects at the Media Lab, and it's,
'cause, and it, but it's not like an exact thing, right?
A lot of it has to do with kind of where
you're gonna be putting your energy, right?
-: Yes.
-: And it seems to, does it relate
to your plan A, B, Z thing?
-: Yes, so. -: I mean, do you wanna.
-: So one of the chapters in the book,
'cause this is a framework that I help companies with,
is how do you actually do kind of a flexible planning?
'Cause most people's implicit view of planning
is actually this outdated sort of military planning,
which is you kind of set up all these plans,
and then you just execute it.
It's like driving a train down the tracks,
and there's a couple gates.
No plans work like that, not even military plans anymore.
What you actually is you have, okay, we're gonna take
these initial steps, and then based on conditions,
we're gonna flexibly respond.
Now, frequently, this is described as a plan B,
and the way that people misunderstand this is they think,
oh, when plan A fails, I shift over to my complete plan B.
That's actually not the way it works.
What plan B is, when you look at these investment pieces
and set of hypotheses, set of risk factors,
you go, okay, what happens if I'm running into this?
What happens if this isn't working?
What happens when my idea about this isn't working?
What are my parameters of flexibility?
So plan B is not one kind of coherent,
and now, for something entirely different,
a little bit like Monty Python.
It's, it's actually, oh, I'm still going at that goal,
but if I shift this way or I shift this way, it might work.
Plan Z, which is part of what allows you to take intelligent
risk, is, all right, what happens when I've been trying
on my plan A, my different variations on plan B
in order to get there, and my confidence
in my investment thesis is going down.
How do, what's the plan that I execute in order
to just reset a plan A to something very, very different?
And when we're thinking about planning in early-stage
companies, we kinda go, okay, what's the plan A?
Okay, on the key risk factors, what are the parameters?
Emotion could be shifting the goal some.
It could be shifting kind of like, different ways
of getting growth.
Early in LinkedIn, like, we had to introduce
the address book importer and who else you knew
on LinkedIn as a function that was kind of part of plan B,
and then plan Z is the, uh-oh, this isn't working,
we really need a hard reset, and how do we identify
that early in a way that we can do the hard reset
in a way that we can continue to play?
-: And, you know, at the Media Lab, we also talk a lot
about reinvention, you know, and celebrating reinvention
and failure and all of these other things.
And so.
-: Celebrating failure actually is a phrase
that I always am a little bit.
-: So how would you phrase it?
-: Celebrating learning. -: Right, right.
Because failure's a kind of discovery, right?
And it's like, when a kid falls, that's a failure
that they're gonna learn from, right?
-: Yes.
But you're not celebrating the falling.
You're celebrating the learning.
(Joey laughs)
-: But, you know, if you think about,
so we use the word reinvention a lot at the Media Lab.
Is that, is that, is that, like,
where does that happen in your plan?
Is that when you get to Z and you're trying to think
about your next thing, or?
-: Well, it depends a little on what it is.
Obviously, your plan A should be
something that's sufficiently disruptive.
So one of the things we think a lot about is, what is
a new way of doing something that sufficiently disrupts
the ecosystem, and from a kind of commercial perspective,
the simplest way to think of a disruption is, you remove $10
of revenue out of the ecosystem and you replace it with one,
right, e.g., it's an order of magnitude different,
more efficient, in terms of what you're doing,
and then you have a useful business because by doing that,
you essentially occupy the entire ecosystem layer
because your thing is so much
more effective and more efficient, cheap.
Dollars doesn't have to be
the only measure as a way of doing it.
Now, part of what happens when you say, look,
when I run into a problem, how do I navigate that problem?
Well, the question is, is it a mild, is it a tweak,
is it a mild fix, is it, is it kind of a modest change,
or is it a major change?
So one of the examples we, in the book,
we pulled examples both from various people's
career paths, but also from companies.
So, you know, Flickr was started as a game,
and what they noticed was the actual engagement
with the photo features in terms of the tagging
and distribution was getting far more use
than all the rest of the game, and they went,
all right, well, given that data, and this is classically,
by the way, kind of, most people think that pivots
and going to plan B is always in a failure case.
Actually, frequently they're success cases as well.
They went, oh, wait, we've discovered
some interesting gold here.
Let's reinvent the entire product around this.
And this is what the company is doing now.
We're putting the game aside,
and we're doing this photo sharing.
And so, that kind of reinvention also happens with, oh,
we've, this is what our essentially plan B is,
but it's kind of a positive upside.
Now, I think any plan A should be invention,
and so plan Z is resetting plan A,
and so then you get to the reinvention side.
-: And so, let me, let's talk about disruption for a second.
So, because I think that when you talk about a breakaway
or disruptive thing, it's something that's so completely
different that you couldn't have really planned it, right?
It's not incremental, and again, Nicholas always
talks about incrementalism being our enemy, right?
And companies pay us money, hopefully,
because they want us to come up with those disruptive things
that they could never figure out in their planning room,
that they come here and they say, we would never
have thought of that, and that's kind of what we try to do.
And, you know, at a recent faculty retreat,
we came up with three words,
which were uniqueness, impact, and magic, right?
So, so the uniqueness is it's gotta be something
no one else is doing or could do.
Impact is important because without impact,
you'd have things that were just obscure,
and for student projects and for fun things,
as jokes, we can do obscure things,
but our big mission should be high-impact.
And the magic is important because that's
kind of a thing that engages people.
It's the, you know, one of our students,
I think it was Andy, told me, oh,
do you remember that Star Trek episode where,
you know, and that's a really good way to like,
those are good Media Lab projects, when they start that way.
And so, so there's sort of an element
of a good Media Lab project.
And to me, if feels like that's what captures
the sort of, the soul of the lab.
The problem is when companies come here,
a lot of companies are looking for the incremental things.
Can you make my pen sharper?
Can you help me with my bottom line?
And it's hard, because companies don't buy,
I think it's like animals don't intuitively want
to be, to find out that they're wrong,
but they also know they need to know if they're wrong.
And so there's this weird fear element, I think,
in always being connected to a disruptive force.
And so, as a venture capitalist, too, I mean,
I see VCs who are also incremental.
They say, oh, the medical space is growing this much,
and they've got these consultants who come in and say,
we've gotta be in this space 'cause it's huge,
and then there's this block that's moving in this direction.
So we're gonna make a bigger block
slightly cheaper, you know?
But, I mean, how do you, how do you instill the DNA
of disruption to make it one, comfortable, and two, how do
you convince people to put their money behind disruption?
-: Well, there's two different problems.
One is existing companies, and one is new companies, right?
So the existing companies, that's kind of challenging,
because in order to get the magic, and your line of magic
reminds me of the Arthur C. Clarke line, you know,
any sufficiently advanced technology looks like magic,
is it has to really be a kind of a mental shift,
a category shift in how you solve the problem, right?
So it has to be something wildly different.
And usually, it has to have something contrarian in it,
'cause it's, people wouldn't
have thought about solving the problem that way.
It has to be approaching it from a different angle,
which of course is one of the reasons why the Media Lab's
very interdisciplinary and you have a bunch of different
labs, you know, kind of in immediate juxtaposition
of each other, all within the same building.
And, for large companies, the challenge is, this is,
you know, the Clay Christiansen innovator's dilemma
as well is the difficulty is they usually,
there's a whole process embedded on one thing,
and so you need a reinvention process.
In order to do that, that usually requires some person
with the right mandate within the company
who has the ability to make that happen,
and relatively few companies organize that way,
but that's, I think, critical; without that,
I don't think it's possible within a big company.
Within the startup side of this, it depends a lot
on the VC that you're doing, but part of, I think
that one of the things that's key in terms of both
as an entrepreneur and as an investor is
if you're looking at an early-stage project,
the only really massive, early-stage projects
are ones where you're contrarian and right,
and one of the measurements that you see for that,
that all of the thoughtful venture firms have done
when they've come back and said, which of these companies
that we have voted on as a partnership have actually
succeeded, the ones with the highest watermark,
the greatest arc of the kind of rocket of success,
are always the ones with mixed votes.
The ones that everyone says, oh, yeah,
that's a great thing are actually less good
than the ones that some people say that's great
and some people say that's not great.
Now, there's also, of course, a number of failures
in that, in that bucket as well,
but the question of, you know, how do you actually,
look, one of the things I, the question I always ask myself
when I'm looking at a project is, why is this not,
like, what are the contrarian theses?
What is the thing that, that is something that's different
than a lot of people are thinking, that as it
turns out to be right, that contrarian thesis
is the thing that makes this really, really big?
And that's part of making sure that you're thinking
like a disruptor when you're doing it.
Now, sometimes a contrarian thesis is,
people are simply unaware of this new technology,
or people simply haven't done the conclusion
that because now, you know, within, you know, X years
there's gonna be a smart phone in everyone's pocket
and it's all gonna work like this, this new thing
is possible, so I'm gonna start building to it,
because from a kind of Silicon Valley startup perspective,
you actually wanna start building the company
sort of one to four years in advance.
You wanna be that kind of level of early.
Five, you can do; after five,
it begins to usually get you into trouble,
so that when the technology convergence
or the change the world convergence comes around
in which your thing really works, you're then
poised for that by having seen that in advance.
That's a version of the kind of contrarian thinking,
because you've gone, okay, people haven't,
like, very few people have seen this, these come together.
If I'm right that these are gonna come together,
haven't come together now, but this is gonna work,
and you have to be right also about what are competitors
gonna do, what are, like, there's a set of things
you have to be right about in terms of this sort of thing.
-: And it's usually wrong, right?
-: Yes.
That's one reason why there's a limited success rate.
-: Yeah.
And I'm not, I don't keep invoking Nicholas just
'cause I see him, but another thing that Nicholas
pointed out that I thought was really interesting is,
I think, Nicholas, tell me if I misquote you, but I think
he said that peer review is also like incrementalism.
It's kind of a death knell for certain types of innovation,
because by definition, peer review means it's something
that everybody agrees on is a good thing,
which, by definition, is sort of incremental.
And we've recently done a, we're doing a faculty search,
and if you look at the description of us in the faculty
search, it says we're anti-disciplinarian, because in a way,
even the word discipline makes it sort of kind of like,
under control and within a box, and I think that that's
the other tricky thing: as an academic institution,
how do we, and I mean, I think the faculty kinda,
there's some faculty here focused
a little bit more on scholarship
and others who really don't care about scholarship.
But it is interesting.
So I just said a reflection that maps to your point
about consensus is probably a bad sign.
-: Yep.
It's almost, if you have consensus, it's very rarely
that that project is the total breakout project.
-: Mmhmm. -: Right?
Usually there has to be something where it's like,
okay, actually smart people would think something different,
but in this case, be wrong, and that sort of thing
that has enough, 'cause the reason why
the contrarianness is right is 'cause,
well, what's happening to all the competitors?
If your thing isn't really contrarian,
lots and lots of people see it, and there's a dogpile.
-: Yep.
-: A dogpile of competition means that it's very difficult
for anything to get through in terms of a breakout,
whether it's scientific research or commercial products.
So, I can officially now say it's on purpose that like,
everything here doesn't look like it's organized.
There's a, there's a funny, I can't remember.
I don't think it ever got finished,
but when I was first here, there were a bunch of Sloan
students who were doing study about the Media Lab,
and the first page, it says, we interviewed
a bunch of people at the Media Lab, and they all thought
it was a completely different thing from each other.
And I think that that's kind of how we get around
this sort of consensus bog down, because we don't actually,
we don't feel like we need to have it.
I don't, actually, I'm not tracking time and questions.
When should we start taking questions?
-: We have 30, 30 more minutes of discussion.
-: Okay.
So, I'm happy to take questions and I also have other things
to ask, but are there any, are we looking
at the Twitter stream at all or, is anybody doing that?
No?
Or if you have a question and there's a mic.
-: Why don't we just keep talking,
and as people walk up to the mic.
-: Okay.
-: Then we can break.
-: All right, we can do that.
And now I have to switch back to remembering.
So, so the other thing that we talked about a little bit
over dinner, which I didn't actually get your
response to, you may just call it wishful thinking,
but I think many people have heard this theory of mine,
but in a nutshell, it's the internet and Moore's Law
caused software to become nearly zero cost of innovation,
cost of distribution, cost of collaboration, and therefore,
you didn't need to raise the money before you built
the thing; therefore, you didn't need the business plan
before you raised the money, so if you look at Yahoo,
Google, Facebook, they were all created while the kids
were still in the dorms or at least in college.
They didn't need initial funding for the product idea
to be tested, and so therefore, that kind of innovation
left the labs and started, went to to startups,
and the startups went to Silicon Valley where you didn't
really care as much about authority and about permission.
So, then my theory, this is, I'm working on this,
is that Silicon Valley kinda had a monopoly for a while
or has a somewhat, I wouldn't call it a monopoly,
but has a regional advantage around having critical mass
for investors and entrepreneurs
and consumer-end software because of that.
My theory is that because that low-hanging,
they've got a monopoly on that low-hanging fruit
and it's so easy because of all the reasons why
it makes it massively scalable, Silicon Valley hasn't been
as focused on things like biotech and hardware.
On the other hand, you have Media Lab and then MIT
and Boston generally who I think, we've been doing more
sort of entrepreneurial kind of tinkering in hardware
and biotech, and if you look at, you know, the synthetic
molecular biology stuff and digital biology stuff
that we're doing, when we look at the fab lab stuff,
and you look at the tremendous drop in the cost
of prototyping and now, with PCH International and others,
you have a dramatic cost and the shortening
of the supply chain and agility in the manufacturing,
you start to see the cost of creation and then
distribution is the next piece, but you see the dynamics
of lowering cost of innovation now hitting hardware,
and you see hardware startups coming out.
And then eventually, I think the same lowering cost
of innovation is gonna happen in biotech.
So, given that, if that's true, then I think you will
start to see the innovation and even drug discovery
and testing is gonna get cheaper.
So then you could see the same dynamics possibly
that startups will start taking over the innovation
in those areas, and I'm wondering whether,
if we can get our act together on the sort
of venture capital and angel investing side,
can we have a regional advantage?
And then there's one last piece, which is.
-: I've already got four threads, but yes, keep going.
-: One last piece is that one other thing is that,
it's all part of one theory, which is there's this
really low-hanging juicy fruit
that the Silicon Valley people have focused on,
and in, like James Blake's book, like, Chaos,
it's like the rest of the world is like,
the world of non-elephant animals.
Most companies don't fit that profile.
But there's a whole bunch of stuff coming into a profile
that's actually pretty interesting investment
that Silicon Valley hasn't traditionally been doing after.
Is that something that we can do here, and you think
we have a shot at sort of moving the center of gravity for,
say, hardware and biotech to Boston?
-: So I think there's a lot of shots,
but lemme start with, I mean, part of the reason
its called, of course called Silicon Valley,
whereas right now it should be called Software Valley
is 'cause historically, there was, especially silicon
as a, kind of hardware as a basis, and there's a bunch
of different biotech that's been done over the decades,
Genentech and other kinds of firms doing that.
Now, that being said, the valley has pivoted very strongly
into doing software, precisely for the reasons that you're
mentioning, which is it's a very low cost of innovation,
of trying a number of different projects in order to get
a potential breakout, essentially what, you know,
AnnaLee Saxenian talks about in Regional Advantage,
is having these open networks by which projects combine
and recombine at a very fast rate in order to find
which are the essentially, you know, the oil wells,
the rockets, you know, kind of like, okay, try this,
okay, try this, okay, try this, under a kind of cheap
innovation clock has been a fairly successful model
that's worked pretty well over the last couple decades.
And it's one of the reasons why there's a huge amount
of attention from, you know, within Silicon Valley,
which I have joked other ventures should be called,
venues should be called Software Valley now.
Now, that being said, I think there's a couple
of different angles of what leads to potential
additional channels for innovation, some of which might be,
you know, really interesting ones for the Media Lab
or Boston or other kind of areas to jump on and own.
One part of it is how essentially Moore's Law continues
but computation begins to touch other areas
than just pure IT, whether it's kind of open hardware
or whether it's, you know, kind of 3D printing,
whether it's biotech and other kinds of things.
These patterns of moving from bytes to atoms and, you know,
back and forth between them are actually, you know,
clearly, you know, and this is not a unique insight
that I'm mentioning here, but, 'cause other folks have had
this, but it's clearly that there's some interesting
new patterns evolving in terms of what kinds of products
can be created, what kinds of services can be created,
and there may be an ability to create a network density
around that kind of thing as a specialty,
because, you know, the only specialty is not just, oh,
are you really good at software and software investments,
but there's other kinds of particular expertise that you
need to have within a network and a network density,
because the way that you can know that you have a strong
entrepreneurial culture is that people will move there
to do that kind of business, because the network
is so good at launching that kind of business.
And, you know, part of the thing
to think about in terms of what's possible
within, essentially within other kinds of deployment
of kind of software bytes and IT, as I think some
of the areas that, exactly that you're mentioning,
and I think that there is, there is, there is venue there
for jumping on that first, for getting that
kind of network density, 'cause the network density
creates the amplification by which you get to the breakouts,
and then those in turn have a feedback loop by creating
angel investors, creating expertise, creating networks
around them that allow other companies to also create.
And that's the kind of thing that I think is a good plan.
The way that you normally look at it is creating
the network density as a function of doing that,
and it may be something you could actually
really anchor on as a, as something to do.
-: And I'll get to your question,
but this actually leads into one other thing
I wanted to ask him, and then I'll get you,
which is, we've been talking about doing
a post-graduate startup program,
and we were actually having lunch discussing it.
And in startup land, we have this term
that we use recently called minimum viable product.
What's the minimum viable product that you can test
in the market to get a sense of whether it's working or not?
You don't try to finish the whole thing.
And if you're, I think Reid is famous for saying
if you release it and you're not
embarrassed by it, you've released too late.
And so. -: The importance of time.
-: Yeah, so by definition,
it's gotta be somewhat embarrassing.
So in that spirit, I think we decided over lunch
about this post-graduate startup program
that we won't try to figure it all out before we start.
And so I think we're, even thought we don't even have a name
for it, we're gonna officially announce that we're doing it.
And what it basically is is some way
to help student startups after they graduate get advice,
get funded, and things like that.
We don't have all the pieces together, but the founding
members are gonna be Google, Greylock, Matrix,
and the Media Lab working together, and we're gonna
sort of figure it out as we go along.
But the initial version is gonna be
a very minimum viable product.
We're not gonna have a space initially.
We're not gonna have, it's gonna be very much
kind of a small group, tightly focused,
trying to figure out what we need to do, and in parallel,
we're gonna try to build out a bigger thing.
But, but so to tie it to that, I mean, what, so, what's your
theory on how, what the minimum viable product should
look like and how that could turn into what you just said,
which is to create the network, and how important is that?
-: Well, the really key thing is to, you have the network
density, which allows you to combine and recombine
very quickly on what the ideas are for a product that could
actually reach, kind of, you know, escape velocity,
can get to something, and because the usual likelihood
on the very first idea is pretty low,
and usually, there are a number of reconceptions.
So, for example, you know, I told the earlier
abbreviated story of PayPal, but PayPal started
as encryption on mobile phone,
then cash on a mobile phone, then cash on a Palm Pilot,
then cash on a Palm Pilot backed up by email,
then into email payments, and then into a Master Merchant.
And that whole process was about 14 months, right, for each
of those pivot, like, in terms of going through that.
And so you need to have that kind of speed
and clock velocity within these kinds
of projects of, what is the thing.
It doesn't have to be exactly that, 'cause it may be
different mediums, but that sort of thing
of combining and recombining in order to get it out.
And part of the reason why minimum viable products are
so key to this is if you're like, oh, actually, in fact,
I'm gonna be judged by everyone going ooh, aah,
work of perfection, and I'm gonna work on it as an artist
until it's done, then likelihood the learnings
that you'd have from the market, the market could
pass you by, competition could pass you by.
It's all a function of get it out there
and then start that iterative process.
So it isn't just data of customers using it,
but it's also in fact the network intelligence
of people reacting to it and everything else.
And one of the things that,
this is probably less true in the Media Lab,
but it's certainly true in entrepreneurs is they say,
oh, my idea is my precious thing.
I don't wanna tell anyone until it's there.
And the actual thing
that's the precious thing is you're in motion.
You're gathering your resources.
You're gathering the network intelligence.
You're trying to get all the necessary speed
in order to build this as an interesting project,
'cause the idea as it is right now is very rarely
the idea that is the plus two years thing to do,
and that's the, that's the linkage of all those things.
-: Sorry to make you wait.
-: Thanks.
Chris Peterson, MIT staff.
So both of you have talked a great deal
about the sort of historical conditions that led
to the predominance of Silicon Valley or Software Valley,
the concentration of information there,
the effects of the internet on making
certain sort of technological ventures possible.
I was wondering if either of you could talk something
about crowdfunding, which has been in the news a lot lately,
what you see as being the dynamics of either this particular
bill that's been proposed and is moving
through the legislature or the model generally
and how it will impact technology geographically
or the sorts of ventures that might happen.
-: I'll let you answer the real substance of it,
but it's a funny story, because my understanding,
as far as I understand, this is hearsay,
is that they misunderstood the Kickstarter model
when they made the bill.
And so they made this bill with a fundamental
misunderstanding of what was going on at Kickstarter.
But it may turn out to be a good thing,
but it was kind of interesting, that they didn't really get.
-: So actually, I don't know that part of it.
I mean, the, the thing that's probably most interesting,
and this relates to what Joey was talking about earlier,
was in projects where the cost of making
a minimum viable product, of making a gander
at something, is so substantially reduced
that a small amount of money can make a try,
then allowing a set of people to essentially,
this is what's good about the crowd funding stuff,
to go and say, I'd like to try to build this product,
I'd like to try to build this product,
and the dollars for doing that are,
can then allow that innovation to kind of spread
out through the networks, so you can have multiple nodes.
It's almost like kind of what's beneficial
about capitalism is distributed decisioning
and allocation and resources and business models.
Well, the same thing here in terms of invention.
And I think that's what's
particularly good about crowd funding.
I don't know if it has
a particular strength in geographic distribution.
I haven't really given it that thought before.
But it does have an advantage in, you know, precisely
the kind of earlier thread that you were talking about,
is one of the things that does create massive amounts
of more innovation is when it isn't gated by a heavy peer
review, lots and lots of people have to decide to agree,
a central process, but when you can
actually build something small and test it
and go with it and actually have an artifact.
So that ability to essentially prototype or build
or even deploy products at low cost
is one of the things that's useful.
Now, in fact, part of the thing that's particularly useful
in the crowd funding basis is then you can say, look,
we now have a much broader set of capital
deploying small amounts of capital, broad amount
of available capital deploying it in small chunks
that allows the first card turnover in these new projects.
It could actually be really useful.
I do think there's several parts of the legislation
that are critical, which is, you know, we kind of have,
you know, you should actually allow more shareholders
before going public, and you've kind of seen those pressures
over the last couple years at a number of companies.
I think that crowd funding is important,
although I haven't dug into enough the details,
whether it's Kickstarter or not,
to know if the legislation is the right legislation or not.
-: Well, I mean, 'cause it's tricky, 'cause the legislation
is about selling stock or some equivalent.
Kickstarter is all about not, right?
So, so, you know that your money is just going away.
You're not representing anything.
So it becomes really, really funky, I think,
when you expect a financial return.
And the other neat thing about Kickstarter, I find,
is that it is those sorts of kitschy, weird
contrarian things that people are willing to put
a little bit of money in, but not willing
to bet the house on, and those are the kinds,
like, I always use Wikipedia as the example.
You know, we're gonna make an encyclopedia.
It's gonna be the best in the world,
and the trick is, anyone can edit it.
You know, I could see that being funded on Kickstarter,
but not at a university,
and not from a venture capitalist, right?
So, so I think that the idea that you can.
-: I might fund it.
-: You might have funded it, yeah.
But there you put, I think Benjamin here
was doing this study on, there were a whole bunch
of Wikipedias that were happening around the same time,
and a bunch of them failed, right?
So it's also, even if you bet on Wikipedia,
you would have to have bet on the right one.
(Joey laughs)
-: Yep, that's the challenge.
-: Hi, thank you for coming,
and so my question is, we were talking about innovation
and you guys were discussing innovation.
And now, it's, you know, as the internet has evolved,
there's companies that have evolved as copycats,
not only that, VCs that are dedicated to just, you know,
copying successful business models, moving them really fast
and waiting for them to be bought out.
One example is Rocket Internet, who's going
against Wrap that Greylock funded recently.
-: And that I personally am on the board of.
Yes, I'm personally familiar with this.
-: So, yeah, I mean, and that's why I ask,
and also, they've, you know, they are actively recruiting
at top business schools.
They're coming to MIT Sloan to recruit some of us.
So one is, you know, the perspective about those
types of companies, and two is if some of us
do decide to go with these types of companies,
how are they viewed in Silicon Valley, and could this
be something of a mark on our resume in the future?
-: Well, one of the interesting things,
I've participated in a number of conversations
the last few months on this topic,
mostly because of Rocket, and the Samwers, who I know,
I've had a brief email exchange with on this.
And a number, it kind of feels wrong from a Silicon Valley
perspective, e.g., competing products is great,
competition is great, but you should try to compete
on I have a different or better idea or strategy
or approach than you do, and we should have the two test,
as opposed to the, oh, you've come up with a really good
idea, and what I'm gonna simply try to do is overwhelm you
by more capital, kind of global infrastructure,
et cetera, as a way of doing this.
And so, I would say that there's something of a meme
kicking around the Valley now about, all right, how do we
reconfigure the playing field to not allow this thing
that we think is a bad thing to be happening.
Now, the degree to which an individual employee
or someone who was working there would be judged negatively
or not depends a lot on kind of what the thought is
of what they were doing and, you know, how that worked.
I mean, you know, people have freedom of market
and all this sort of thing as a way of doing it.
And, but I do think that what's gonna happen is that
a set of folks who care about innovation and care
about people being incented to actually think
and create new ideas and to run with them
and to not worry about someone trying to just
simply copy their idea is something that is a meme
that is kicking around now in the Valley.
Where that plays, I don't know, but I'm fundamentally,
where my concerns and interest lie is always in making sure
that entrepreneurs who have a new idea,
who can bring it to market, and therefore,
we get the best possible human ecosystems,
'cause people are incented to bring those ideas
in and not feel like they're gonna get swamped,
either by kind of this, you know, kind of voracious copier
or by even large companies.
How do you, how do you leave that room for innovation
is I think really important for all of us, and I actually,
you know, this is a conversation in progress,
so I can't say much more about it, but I actually wrote
to Oliver about it, you know, Oliver Samwer, who I know,
to start talking about it, because, you know,
it's better done in conversation than it is in,
you know, other kinds of moves.
-: Check, check.
-: Okay, so this is a question from the Twitter feed,
from Stephanie Hatch, who's asking if Reid can talk a little
bit more about how the Media Lab can work on corporate
ideas without losing non-disciplinary innovation.
Perhaps this is maybe a conversation between the two of you.
-: Is that my question or your question?
-: I think it's maybe for both of you.
(Jes laughs)
-: Well, I think that, I mean,
it depends a lot on what the relationship is.
I tend to, I tend to believe very strongly
that one of the, one of the things we need to figure out
effectively is people frequently look at VCs as doing,
kind of participate in the R side, and I actually think
they're kind of at the product/market fit side.
And so, there needs to be labs that are doing
a lot of research, a lot of early development,
a lot of base technologies and these sorts of things,
and I think it's really critical
and healthy to the whole system.
The question is, how do you get the right economic loops
that tie into corporations as a function of doing this?
This is actually one of the reasons I was willing
to sign up for the advisory board in order to help fix this,
because actually, you know, the Media Lab could be,
and, you know, has been, you know, has been
an important player and could be an even more important
player in the future in terms of playing this role
of helping invent the future, and what the exact
right interface between corporations and the Media Lab
is something I think is a work in progress for sure.
I also think that the, I know we have sponsor members
who kind of come in and do demo days and all the rest
of the stuff, but like, what is, how does
a product evolve is I think an interesting question.
I do think that one of the key things is to figure out,
and this is part of the, you know, Joey's early,
you know, kind of launch with minimal viable product,
is helping the folks who wanna essentially start companies
from here and getting the best possible intelligence
and connection to the network to have
a potential high watermark result is another thing
that's I think important in this whole mix,
and I don't know if.
-: Yeah, I think that's right.
I mean, I think that, going back to uniqueness, impact,
and magic, and if you think impact,
billion people, right, or seven billion people,
if we can knock a few out of the park,
whether it's a social entrepreneur or a startup company
or an innovation that fundamentally changes an industry,
if we knock a few out of the park,
then, we're fine, because the company's,
yeah, that's what I want, you know?
They're not gonna be coming here
asking to make a sharper pen.
But right now, we're at 350 projects,
26 groups, and we're doing cool stuff, but I still get
the question a lot, just to be really blunt,
I mean, when I was speaking at Stanford, the first
curmudgeony question by a professor in the front row
was, what have you done for us lately, you know?
And that's always gonna come up, and I think
that there's this process that we're gonna go through,
which is gonna be an iterative one, about trying to do
all the cool stuff and keep the environment free.
No pressure, everybody,
but we gotta knock a few out of the park.
And I think that that's gonna be an interesting iteration,
because we need the help of the community, too.
We need other institutions, we need companies, but we
also need to kind of step up and swing for the fences,
and I think that takes courage, it takes energy,
and so I think that's gonna be part of it.
Because once you, 'cause in VCs, like good funds
like Greylocks of the world, you get one home run
every five or 10 years, and you're fine.
You know, that's all, that's actually better
than having a lot of little singles, because otherwise,
people are gonna come for you for singles.
And so I think for us, we don't need to hit it
out of the park every single year.
We just gotta do it enough so that people are waiting
for that and willing to stay on and not gonna ask us
for little things along the way.
-: Well, and to amplify that, when you look at kind
of consumer internet venture portfolios, the top
investment is worth all the other investments combined
and more, and then you take the top investment, the next
investment is worth all the other investments and more.
And so you're looking for the high
watermark as a function of that.
-: Right, yeah, it's not the average.
And so I think that's the thing, is that, I mean,
we also, there's a word, positive deviance.
But, so you amplify those
extremely positive deviant behaviors.
You don't try to change the average of the lab, right?
So, so some, you know, we have groups
that are gonna be having ups and downs,
but when we see something tracking, we need to,
and I think we use sometimes, I think this is again
a conversation we were having at the faculty retreat,
but we almost have to provide unconditional support
for those things that are just going crazy, you know?
And we need to be aware of when those things are happening.
-: One thing I would add in to your, or a perspective
I would add in to the uniqueness, impact, and magic thing
which is kind of some breadth of how you think
about those words, because uniqueness doesn't need to be,
oh, it's an artifact I've never seen before.
Sometimes from, for example, a business perspective,
it could be how the business model comes together.
It could be how the product is distributed.
I mean, it does need to have something to occupy
its own category, but uniqueness should be, I think,
my two cents, should be construed broadly.
Impact I think is fairly straightforward, although,
you know, in addition to revenue, it's number of people,
and actually, I tend to think scale
is a three-dimensional vector.
It's number of people, depth of impact, and over time.
And so if sometimes persists
for years and decades, it's doing it.
That's actually another, another vector
of impact that is frequently not.
-: Yeah, we've had videos from the Media Lab
that have gone viral very quickly, but they haven't,
I wouldn't put it in the impact category, yeah.
-: Right, so, and then, but it's kind of over time,
and then magic, you know, also emphasize the contrarianness,
which is it doesn't mean it like, should be,
like everyone should look at you like you're completely,
you know, you know, insane and idiotic,
but something that is, that is in fact, like,
you're taking a risk, you're gambling on a thesis,
and if it turns up a thesis is right,
you can have a discontinuous impact,
is part of how I would look at that.
We have a question over here, by the way.
-: Thank you.
Building up on the introduction to VC's,
we've seen a lot of change in the past few years,
especially as early stage capital is becoming
more and more available, while late stage capital is not.
And a lot of the VC's actually, I just saw a report
on how LP's say they're not gonna put
as much money as VC's as they used to.
So what's your take on the changes we're gonna see
in VC's in the few years to come?
-: Well, this is from an vetted perspective.
I think that what you're gonna see is you're gonna see
a lot of aggregation in the venture firms
that are operating effectively in the new environment,
the ones that have good returns.
I think you'll have a, an aggregation that is natural
both between LPs and in terms of entrepreneurs,
because entrepreneurs will want to work with people
who can help build really great companies
and who have a practice record of doing that.
And so I think you'll see a lot of concentration,
because there's a lot of capital.
The amount of capital I think available
in the venture ecosystem is not gonna be decreasing.
There's all kinds of sources always of capital.
But the ultimate commodity is a dollar.
What's the value of a dollar?
It's a dollar.
And so the question about investment is no longer
just money; it's a question of, how can you build
a multi-billion-dollar company?
What are the right resources to bring to bear?
And I think that will have an aggregation effect.
That's a, that's a two-cent shoot from the hip production,
prediction, but I think that's what's gonna happen.
Should we continue?
-: Yeah, we can continue.
Any other Twitter questions?
No, we're good?
Is he leaving, or does he have a question?
Okay.
-: I'll try and hide behind an anonymous VC.
A couple years ago, I was at an event with Media Lab,
and there was a VC who was getting really irritated
with it, saying that you are really undermining
what innovation is really about.
And so I'm trying to, I'll try and hide behind him
and sort of say, be a devil's advocate.
So, the serendipity and the discipline
are opposed to each other, and you can't really bridge them.
It's just impossible to bridge them.
You talk, you know, good language about bridging it,
but if you think about what happens, you know, you have
maybe, maybe you set out a thousand startups,
but then they, each one of them has to be very disciplined.
The little changes, the plan A, B, Z that they're doing
are incremental changes, right?
So there's a lot of discipline
that's involved in every single step, and the change
is really in just trying out a thousand,
let a thousand flowers bloom or something like that.
And this whole talk about bridging the two
is just a non-starter.
-: Bridging discipline and serendipity.
-: Is it really possible, I think is the question.
-: Is it really possible.
And I think, you know, so, serendipity's hard.
Serendipity isn't random.
It's kind of like meditating.
You don't meditate by falling asleep.
You meditate by providing a certain kind of focus.
And, you know, I was talking to,
I can't remember who this was now.
I wanna give the person credit, but, but,
when you are a good hunter, like, with a bow and arrow,
there's a certain kind of meditative state
that you get in where you stop looking,
and then suddenly, you see all of the peripheral vision.
You see every animal move, because you no longer
are looking at whatever you're looking at.
And there's this really interesting state
that you get into where you can then find
all of the prey and shoot them, right?
But without this hunter's eye,
you can never see all the motion.
And it's a similar thing when you're looking for mushrooms.
There's a sudden moment when suddenly, they pop,
when you can suddenly see all the mushrooms,
and no one else can.
And part of it's pattern recognition,
and part of it is this kind of disciplined way,
to use the word discipline, disciplined way
of having peripheral vision and having serendipity,
which I think are very related.
And I think the key for the Media Lab is to not be random,
and the people have to work really hard.
They have to always have their eyes open,
and it's kind of like, it really is like meditation.
Like my yoga teacher once came up to us
while we were meditating, and he said,
just don't think of elephants, you know?
And then you're just thinking of elephants.
You can't meditate.
And finally, when you get to meditate
is when you finally realize that it actually takes
a lot of work to not think of elephants.
And so I think that that's the problem,
is that most companies that are in the business
of elephants can only think of elephants.
And so, so, so pivoting, what we were talking about,
A, B, Z, is actually not necessarily,
I wouldn't call it, it's not the traditional discipline
that a normal company is told, which is
put your blinders on and do this repetitive task
more efficiently and more hardcore.
It really is, like, so if you look at the development
meetings of like, some of these startups that do normal
agile development, for a week, they're kind of heads down,
nailing all of the different features that they need,
the stories that they need to have in the sprint.
And at the end of the week, they have a product meeting
where they say, okay, we launched this product,
and some of these meetings that I've seen,
they don't even let the engineers in the room,
because the engineers spent a whole week writing it,
and they may suddenly decide to flush
all the code down the toilet and take a pivot.
And it takes a tremendous amount of courage to say,
you know, YouTube was a dating site,
but we're gonna pivot and go over here,
or for Flickr to move or for PayPal to move.
And that courage is a lot harder
than continuing to dig the ditch.
And I think that's the important thing, is that
a lot of times, people mistake sort of focus
and perseverance as kind of hard work, when actually,
the courage that you need to change course is a lot bigger.
And that is a kind of discipline, I think.
-: Well, and actually, the vast majority of companies
that succeed in the Valley have at least one or more
significant pivots, frequently early, but not only.
I mean, so, you know, we abandoned the Palm Pilot
a year into PayPal, so the notion of being able to say
that you're, you're being disciplined in how you're
executing, like, plans are good, planning is good,
but essentially, no plan survives contact with the market,
is I think the understanding that actually, in fact,
that you are looking for the kind of right breakout.
And that's the thing that leads serendipity.
So almost everybody in the Valley knows
that I'm pushing really hard on a specific plan.
I'm trying to build something that is,
that I have a coherent plan of what I'm doing,
but the possibility that I'm gonna do a major pivot
is very real, and that doesn't invalidate my investment,
focus, serious hard work, and matter of fact,
some of my, to use this language of discipline,
my discipline is to look at that peripheral to see
if there is a pivot, because pivots are not just,
oh, shit, I'm running into a problem,
but I see a really much greater opportunity.
And so, I think I would just challenge the question.
-: And one last thing on the discipline.
I mean, the sprint is very disciplined, right?
So when a student says, I'm gonna go down and design
a prototype of this thing, that prototype has to look
exactly like the prototype should look.
That can't, so it's not about being sloppy.
And once a prototype is down, you take a very
disciplined look at your peripheral vision, and you pivot.
And so, I think people kind of mistake the fact
that you're meditating, and they think you're asleep
when actually, you're very focused and deliberate.
-: Hello.
Tom Cadala, down from New York.
The question I have is, you speak about serendipity,
and I'm an entrepreneur from 20 years,
and I'm a strong believer of intuition,
which, I haven't heard that word today.
And, you know, when you use that example of somebody
sort of making a pivot and then they start working
on a project, it's, my analysis of that is like driving
a car and you kinda know where you're gonna go,
you know what you're gonna do.
You're not thinking about the mechanics.
And then suddenly you say, now I've figured out where
I'm gonna go, so now lemme start thinking about the engine
and how the combustion's working and do the calculations
to make sure that this engine's working right.
Those are, those are two different bodies,
two different minds, and, and, you can embody that,
but it's two roles that have to be played separately.
I'm just curious what you're feeling.
I know in my lifetime, intuition has been
probably the strongest force, and I'm just
wondering what your thought is of that.
-: Well, I mean, I think one of the things
that I frequently think about when I'm crafting plans,
like when you're trying to invent a product,
is I distinguish modes between writing and editing
as a function, and so writing is the,
how do I solve this problem?
I have an idea.
It's a strategy; it's a solution.
And then the editing is, is this really gonna work or not?
And rarely are people good at both of them.
Usually, that's one of the reasons why a team is useful,
'cause some people say, here, I think we can do this,
I think we can do this, and other folks going, really?
Well, maybe we do it this way,
or this is how we kind of edit it.
And sometimes, people can do both, although in that
circumstance, I think they have to shift their mode.
Like, for example, when I'm trying to throw possible
solutions against the wall, I can't also simultaneously
be going, oh, this one's gonna really work,
'cause when you're thinking broadly enough
to bring those solutions in order to solve the problem,
you actually have to be thinking about,
well, maybe it'll work.
Maybe it'll work, maybe this idea will work,
as a function to throw them, you know,
kind of a number of different options out,
and that's at least one aspect of which I would say
is kind of this two-minded approach.
Now, in terms of the intuition, I think intuition
is frequently like, where do you look for solutions?
You never have, you rarely have a purely kind of data-driven
approach or completely knowledge-driven approach of saying,
well, it's out of, you know, seven doors, we're gonna choose
door five in terms of options, in terms of what to do.
One of the things that happens in the entrepreneurial
process is you're frequently, you know,
kind of running across a minefield in a fog,
trying to make decisions about how to do that,
and you have limited information and very limited time,
'cause you also have to get across it.
And so, all of that, you know, kinda combines
to where intuition is something where you kinda go,
okay, as a net present set of judgments, I think X,
for some good reasons, and also intuition.
I don't know if there's anything you would add to that.
-: And I would just use slightly simplistic,
right brain, left brain analysis, where you need
part of your brain that creates symbols
and creates structure and thinks linearly,
and then you have the other part of your brain,
which is all about pattern recognition.
And pattern recognition is really important in identifying
non-linear, serendipitous jumps, and I think you need,
you really need to have strength in both.
And you can do it by having division in your team,
but even in your own brain, I think when you're
trying to think in, in non-incremental ways,
the only thing that's really good is pattern recognition.
This is just a side note.
My sister sent me a really heartening book
that said that although your, your, cognitive ability
decreases as you age, your pattern recognition
increases after middle age apparently, so.
(both laughing)
-: I'm gonna ask you a question, actually,
since you look kind of entertaining.
So, one of the things that I think about frequently
in terms of product, startup strategy,
is kind of what the strategy hierarchy looks like.
So, one of the mistakes entrepreneurs most often make
is thinking that it's simply the product.
Like, you invent the product and everything else is easy.
So the only strategy level that matters is
what is the product, at least in consumer internet,
but I think actually this is true, this is true
for vast majority, beyond I think even probably software.
In terms of the fundamental hierarchy, product distribution,
in terms of how does the product actually encounter,
in the case of consumer internet, millions of people,
and then below that is financing,
e.g., how does the capital raised between the various jumps
and the various kind of, you know,
island hopping to get to the next milestone,
which leads the next leg of capital,
whether it's revenue sales or of, of, you know,
investment, is the cycle in which, you know,
this is the whole pattern which we have really,
you know, kind of amplified and supercharged
as part of the whole entrepreneur ecosystem.
What are the parallels in the Media Lab
in terms of this kind of levels of having different
kinds of strategy, having iterative process with cards
and these, you know, turning over the cards in terms
of this island hopping and having a financing strategy,
a distribution strategy, et cetera.
-: So, I would dive into Ed Boyden's work.
So Ed, if you listen to his narrative, so,
he's saying, okay, how do we talk to these neurons?
And then he says, oh, wow, there's this algae that has
this gene expression that creates these little proteins
that are sensitive that turn light into electricity.
And then he isolates that and says,
how do we get these things onto the nerves?
Oh, well, here's a virus that can carry this product,
this gene sequence, onto a nerve.
Wow, cool, now we can flashlight at a nerve and it fires.
But by, that's the product.
By itself, well, what do we use, oh,
we can now read and write to the brain, and we can use
this for drug discovery and for doing all this other stuff.
Wow, this is a whole thing.
Okay, how do we turn that into a, you know, and so there's
a whole bunch of application stuff that comes from that.
And then he says, okay, wait, wait, but wait a second.
Couldn't we use this to solve blindness
by putting it on the neurons on the eye?
Oh, wow, you can do that too.
And what's interesting is there's a bunch,
it's at a very different layer, but it's kind of,
you discover pieces, you have lots of serendipity,
and then you, but you have to think about distribution.
You have to think about literally virality,
like, how do you get this to stick,
and how do you get it to stick to the right people?
And you know your famous X times Y equals V with T,
which is your virality; he's literally doing that
in synthetic molecular biology, right?
-: Cool.
-: And it's kind of cool.
And so there's, there's kind of, so, so it's interesting
that the thought process going through a successful
scientific discovery about having massive impact
on sort of neuroscience.
It's actually, at a very different scale,
similar to what you're doing, and it's funny,
because you use virality as a metaphor,
but you use it literally.
(Joey laughs)
-: Well, it's a very close metaphor,
because one of the things that happens is virality,
in terms of, you know, exposure to a service, ideation,
et cetera, actually does follow a lot of the same
mathematical constraints that actually real virality does.
So it's a very close metaphor.
But it is, that's even closer.
-: Are we, Jes, are we out of time?
Yeah, okay.
So, thanks, Reid.
It was fun. -: Thank you, yep.
-: And you'll be back for our spring meeting, too.
-: Yeah, I'll be back in a couple weeks.
-: All right, thanks, everybody.
(audience applauds)