Book Summary: Lost and Founder

Radical Candor/Transparency

It is hard but it works – needs to be tampered with empathy

On being product focused

  • Consulting is limited by time and people – not scalable
  • Effective Product-focused business
    • reach
    • scalability
  • Start with a product informed by your consulting – real life problems others face

Impediment to shifting focus

  • Too comfortable
  • not enough time
  • difficulty finding the right customers for the product

On being a founder

  • Great founders enable a vision
  • forget about being hands on most of the time
  • job scope changes every six months – for any road block encountered focus on sufficing the requirements instead of perfecting it
  • you rarely get to do what you love to do
  • be cognizant on when to lead and when not to – have the specialist do the job
  • Cultivate self awareness in strength and weakness – structure company to work around them
  • Attribute of founder is instilled with near-permanence in the organization while those of supporting team fluctuates
  • the hardest parts of the business is less a reflection about the business than about the person experiencing them
  • Build expertise before building network, build network before building company
  • Focus on and reward the behavior, let the outcome take care of itself

On Values

  • Authentic values force hard decisions – held to be more important than money
  • have real costs: Impede certain behavior and strategy
  • Values are discovered instead of set
  • Used as a yard stick for recruiting new members to the cause. Helps get pass the competence versus cultural fit dilemma

On recruiting

  • CTO should be those that should be oriented towards education instead of shielding you from the nitty gritty details (black box)
  • Use your value system as a yard stick
  • Hiring for diversity will make the mental model of the organization more holistic
  • Great managers / coaches might not be great individual contributors

On markets and pivots

  • Pivots Are expensive don’t make it a habit – only resort to this tactic when the original hypothesis is not longer valid
  • focus on the market and then find a field ignored by others because it appears unsexy. From there craft a solution
  • Err on the side of execution

On investors

  • Need to take money for the right reason
  • Investors interest will tend to get out of alignment overtime (return multiples and investment horizons)
  • 80 percent of returns are by 20 percent of investments
  • They need at least a 10X to break even in a position for all the other losing positions they took
  • They don’t bring much value to the table
  • follow up with CEOs they invested in to understand how they react in a shit storm
  • Can help provide information on salary ranges

Choosing a market

  • If you can keep your ego in check you can chase after smaller markets and don’t need VC money
  • Great ideas are born of mediocre ideas that become better by
    • time spent iterating
    • humility learning
    • surviving
  • look for searches that indicate problems
    • Google Adwords
    • Moz’s keyword Explorer

Knowing your customers

Defining your user base

  • Call 3 different types of users
  • Find out why they subscribed and stayed
  • Craft messaging toward this group of people

Discounts are a doubled edged sword – while they might attract signups, these folks tend to have a higher churn rate

Schedule regular interactions with your user so that you can understand their habits. It helps you get to an empathetic position with them.

On Products

  • Feature set needs to be coherent enough to be able to deliver value
  • Early adopters
    • have very different expectation as compared to early majority –
    • hence more forgiving
    • ok accepting MVP
  • Retention triumphs acquisition any day

Marketing

  • Optimize for acquisition loops that reinforces the UVP instead of linear acquisition channels

Focused Execution

  • Practice the discipline of focus.
  • Important to Focus and not waver around unnecessarily. Its a waste of resources
  • A very focused and simplified product offering will help users to more easily understand and adopt it
  • Helps keep teams lean as a by-product
    • ROA improves dramatically
    • helps avoid future layoffs
  • Focus on what will not change in the next 10 years

Related references

  • Lean Startup, Eric Ries
  • Sprint, Jake Knapp
  • Venture Deals, Brad Feld

Reflections on communicating with your users via email

While sending a personal email to each individual user who directly uses our API just now, it occurred to me the main difference between talking with someone you have relationship with (like your mum/girlfriend/wife…?) versus simply doing a mass email blast to a group of “strangers”, is the potential lack of warmth and empathy in the latter on the sender’s side.
 
No one really likes being treated like a number on a Excel sheet. It sucks.
The key challenge becomes how do you scale your communication as the amount of people you need to communicate with increases without alienating them. Or does it even matter?

Related Reference

  • Permission Marketing, Seth Godin

Book Summary: Contagious

Contagious

On Word of mouth

  • versus advertising
    • it is more persuasive since the messenger has no monetary incentive and is a trusted person.
    • It is directed at the immediate context of the recipient
  • Only 7% of word of mouth happens online. Most still happens offline
  • Types of word of mouth
    • immediate word of mouth
    • ongoing word of mouth
  • Big forest fires aren’t caused by big sparks. Lots of individual trees have to catch fire and carry the flame

Word of mouth principles

  • Social currency
    • people want to feel special about themselves. When they get to share something extraordinary, they get the chance to Wow others.
    • Categories of currency
      • scarcity
      • exclusivity
  • Triggers
    • Ideas strongly associated with items frequently found the environment gets triggered more often. Pick common objects in a user’s environment that is not already laced with other meanings.
    • The more specific a trigger the higher the likelihood of triggered action.
    • Choose trigger right close to the proximity of the intended action
  • Emotions
    • Emotions that excites will be more likely to drive the recipient towards an action than those that.
      • Useful emotions: Awe, excitement, anger, fear
      • Not useful emotions: sadness, hopelessness
    • Associate the idea with emotions
  • Public
    • Monkey see, monkey do. Figure out how to make users activities more visible to those around them so that they could copy his action. A private action is unlikely to get copied
    • Choose stimulus that others can’t help but notice.
  • Practical Value
    • Useful things tends to get shared more frequently. While there might be less initial word of mouth, there will always be on going word of mouth.
  • Stories
    • help transfer huge amounts of contextual information to recipient
    • helps suspending judgement – using proof by analogy
    • story must be designed such that storyline falls apart when intended idea is removed from it
    • For dramatic purposes, interesting and novel points often get exaggerated as story pasts from one person. As such the story gets more and more remarkable as it is past along.

Related theories

  • Prospect theory: the WoW factor of an idea is often taken in association with the denominator its associated with
  • Rule of 100
    • for items below $100 present discount in percentage
    • for items above $100 present discount in absolute dollar figures

Key take aways from Trust me I am lying

Trust me I am lying

The publication eco-system

  • Every content creator within the publication ecosystem is under immense pressure to produce content under the tightest deadline.
    • renumeration is based on number of articles per period time
    • eye balls are converted to advertising revenue
    • lots of copying happens
  • Media was once about protecting a new, on the web it is about building one
    • well defined scope matters
    • content that dives deep into its vertical matters
  • Headlines are the most important
  • Tools of the trade
    • lavish pictures
    • impostors, frauds and fake interviews
    • support for the underdog causes
    • anonymous sources
    • prominent coverage of high society and events
    • different age but same old tricks
  • On monetization
    • Advertising is the main driver of revenue
    • Subscription model focus on trusted source as opposed to advertising source
    • RSS got killed because it went against the interest of Advertisers
  • On the online medium
    • The demands of the medium forces the bloggers to act they way they are
    • Tim Berners Lee stacked new content on the top and the rest of the internet thus follows
    • Thus the need to constantly create new content

On Virality

  • The most powerful predictor of virality is how much anger an article evokes.
  • The most powerful predictor of what spreads online is anger
    • sensationalism
    • extremism
    • sex
    • scandal
    • hatred
  • Things must be negative but not too negative so as to incite action
  • Media needs to get you feeling negative so that you are more likely to share
  • Empty vessels are incline to snark so as to feel unjustifiably good about themselves

On reality

  • Chris Hedges
    • is complicated and boring
    • the masses are incapable and unwilling to handle its confusion
    • In an age of images, entertainment and instant emotional gratification, no one seeks honesty and gratification
  • Cognitive biases
    • we are bad at being sketical
      • availability biases
      • narrative fallacy
    • we are worst at correcting our wrong beliefs
      • social proofing
      • consistency biases
  • First decide what you are intending to do with the information you collected

Related readings

Reflections on maximizing output with limited resources

  • Embrace constrains. The main constrain anyone will experience is time
  • When constrain is acknowledged, one learns the importance of prioritization
  • When the importance of prioritization is acknowledged, one learns the need to horn one’s judgement and foresight through constant learning
  • When self aware of where one’s lack of judgement and foresight in specific domains, one learns the need to exercise prudence
  • When one learns the importance of prudence, one practices by utilizing minimal amount of resources to de-risk the maximum possible areas of uncertainty.
  • When one learns the importance of de-risking, one gives emphasis on strategizing and avoids blind execution.

Related references

  • The Goal, Eliyahu Goldratt
  • Mastery, Robert Greene

Understanding cognitive biases is important for startups

Overview

All decisions are inherently emotional. Our lymphatic system is a more ancient and robust system than our logical faculties. Its been shown in studies, conducted by Antonio Damasio in 2000, that patients with damage to the part of the brain that processes emotions have trouble making even the smallest decisions.

Humans are by nature social creatures. Studies show that our brains contain mirror neurons which endows us the ability to empathize with another fellow human being. This also implies our emotions are easily subjected to the influence of others. This is why it is important to get familiar with the various cognitive biases in the human brain and what triggers them (see lecture by Charlie Munger).

On the flip side, it is possible to exploit cognitive biases to boost sales conversions. This is an art that touts in the streets of Cairo have mastered through years of practice. The effectiveness of any street tout is dependent on the number of cognitive biases he can exploit during the short period of encounter with his subject.

A case study on how cognitive biases are combined and used

A tout might start the conversation with a small ask, e.g. as simple as “what is your name?”. This seemingly innocent question when responded will trigger off the consistency bias. The subject will inevitably feel a sense of cognitive dissonance if he were to stop further conversation after having started the conversation by telling the tout his name.

The tout next proceeds to offer a seemingly harmless “gift” which might be small and of little value. This gift, when accepted, will exploit the reciprocity bias. The subject having received something of value will inevitably feel uneasy if he does not reciprocate in kind.

Since the subject at this point, without any prior data points, is yet sure on the “value” to place on the “gift”, a skillful tout might take the opportunity to exploit the anchoring bias by providing an high arbitrarily number about something seemingly unrelated such as one of the following:

  • the age of his 90 year old mum
  • the age of the pyramids
  • the inhumanly high temperature

This arbitrarily high number will help facilitate a higher perceived valuation of the “gift”.

And while he is telling about his mum or kids, he might exploit the authority bias by saying his mum is sick and needs money to see the doctor. One might say there is no person of authority in the immediate proximity. However in this scenario, the person is actually some authority figure the subject had in his life, while he was growing up, who preached to him the importance of being a good human being and helping others in need. Having delivered his story till this point, the tout should have successfully wiggled himself to a moral high ground in relationship to the subject.

It can be assumed that sometime has already past since the subject was given physical possession of the gift. The endowment effect should have kicked in by then. The subject if he was even mildly inclined towards the gift at the onset, he will feel a potentially higher level of psychological discomfort at returning the “gift” to the tout.

At this point from a psychological perspective, for the subject to be able to refuse the request of the tout for a donation, he would necessarily need to have priorly developed much mastery over his own emotions. It can be safely assumed the percentage of subjects parting with a “token” amount of donation to the tout will be significantly higher than an alternative scenario where a beggar simply approached begged for money.

How it is relevant to your funnel

Now one would ask how does this relate to driving up conversion rates in my startup application? The point of the story is not to teach you how to be “evil“, by getting your user to doing something against his will, but to illustrate the importance of catering to his psychological needs within your onboarding experience. The reason why your user landed at the top of your funnel was because he has a genuine need that he hopes your application could get done for him.

A smooth flowing onboarding experience coupled with a compelling story will help keep your user motivated as you drive him down the funnel towards the magic moment within your application. There is a reason why folks call the magic moment an Aha! moment. From a biological perspective, your user’s brain releases a small dose of dopamine (a feel good reward) during that very instance.

The key to user retention is to figure how to encourage repeated actions by your user so that he could experience the Aha! moment again and again until the action becomes a habit and your user does it reflexively without needing to think about it. Of course, to ensure your service can continue to benefit the world,  it is important to remember asking for contribution to pay for server cost at some point…

At GetData.IO, our mission is to turn the Web into the fully functional Giant Graph Database of Human Knowledge. We aim to do so by nurturing a community of like-minded contributors, hence the importance of successfully on-boarding our users. This is because every successfully created data source will not only benefit its creator but also other community members that might have need of it in the future.

Related References

  • Hooked: How to Build Habit-Forming Products, Nir Eyal
  • Altered Traits: Science Reveals How Meditation Changes Your Mind, Brain, and Body, Daniel Goldman
  • AARRR framework, Dave McClure
  • Influence: The Psychology of Persuasion, Revised Edition, Robert B Cialdini
  • The Power of Habit: Why We Do What We Do in Life and Business, Charles Duhigg
  • The psychology of human misjudgment, Charlie Mung
  • Jobs to Be Done: A Roadmap for Customer-Centered Innovation, Stephen Wunker

Key take aways from the guide to a good life

A guide to the good life

Overview

The core of Stoicism as a philosophy is to live a good life (where peace of mind is deemed the highest good) by learning how to manage negative thoughts like:

  • anger
  • anxiety
  • fear
  • grief
  • envy

Techniques

This is done through the employment of these two techniques

Negative visualization techniques

  • Managing against hedonic adaptation by learning to desire what we already have. To do so, we must constantly remind ourselves the transient nature of things.

Focus of attention on what is within our loci of control

  • Totally within our control – focus our attention of these things
  • Partially within our control – internalize goals around parts where we have control
  • Totally out of our control – learn to be at peace with whatever outcome

Deliberate self denial

By deliberately depriving self the luxuries, one builds courage and self-control

Manage needs and desires

  • natural and necessary
    • Food and shelter
    • to fulfill
  • natural and unnecessary
    • Fine wine and luxurious food
    • to fulfill if not too much hassle
  • unnatural and unnecessary
    • fame and social status
    • to shun
  • unnatural and necessary
    • nothing exist in this category

Attitude towards time

  • The past and the immediate present is beyond change – be grateful for all that has came to pass and accept it with equanimity
  • The immediate future is where our loci of control falls – this is where we should channel our attention

Eras of stoiscism

  • Greek Stoics
  • Roman Stoics

The roman empire eventually adopted Christian religion as a the philosophical framework for state craft. This eventually displaced stoicism and other greek schools of philosophy.

Prominent stoic practitioners

  • Socrates
  • Marcus Aurelius
  • Xeno
  • Seneca

Related schools of philosophy

  • The Cynics – see Diogenes
  • Enlightened hedonism – see Epicurus

Related references

  • Meditations, Marcus Aurelius

Reflections for the morning

On communications

There are two types of communication observed. One that is very deliberate with the goal of effecting a very tangible outcome in an environment. The second runs on auto-pilot, with no constructive goals intended, driven purely by the hedonistic urge need to “feel” good, examples of which are bragging, angry out bursts and complaining.

For effective utilization of limited resources, cultivate type 1 behavior and stem out type 2 behavior.

On human resourcing

As with finding product market fit, the process of finding the right people for specific slots in the machinery requires persistent experimentation.

On personal psychology

To learn to be at ease with ambiguity   . Sometimes it’s more beneficial to leave specific without well defined rules.

To think of forthcoming phenomena in terms of probability and allocate necessary resources as according.

Related references

  • Machina, Sebastian Marshals
  • Thinking in bets, Duke Annie
  • How to live a good life, William Irving
  • What got you here won’t get you there, Marshall Goldsmith
  • Thinking fast and slow, Daniel Kahneman

Navigating the trough of sorrow

While I was reading through most of the success stories that were published on IndieHackers.com, it occurred to me that my project GetData.IO really took longer than most others to gain significant traction, a full 5 years actually.

The beginning

I first stumbled upon this project back in December 2012 when I was trying to solve two other problems of my own.

In my first problem, I was trying to identify the best stocks to buy on the Singapore Stock Exchange. While browsing through the stocks listed on their website, I soon realize that most stock exchanges as well as other financial websites gear their data presentation towards quick buy and sell behaviors. If you were looking to get data for granular analysis based on historical company performance as opposed to stock price movements, its like pulling teeth. Even then, important financial data I needed for decision making purposes were spread across multiple websites. This first problem lead me to write 2 web-scrappers, one for SGX.com and the other for Yahoo Finance, to extract data-sets which I later combined to help me with my investment decision-making process.

Once I happily parked my cash, I went back to working on my side project then. It was a travel portal which aggregates all the travel packages from tour agencies located in Southeast Asia. It was not long before I encountered my second problem… I had to write a bunch of web-scrapers again to pull data from vendor sites which do not have the APIs! Being forced to write my 3rd, 4th and maybe 5th web-scraper within a single week lead me to put on hold all work and step back to look at the bigger picture.

The insight

Being a web developer, and understanding how other web developers think, it quickly occurred to me the patterns that repeat themselves across webpage listings as well as nested webpages. This is especially true for naming conventions when it came to CSS styling. Developers tend to name their CSS classes the way they would actual physical objects in the world.

I figured if there existed a Semantic Query Language that is program independent, it would provide the benefit of querying webpages as if they were database tables while providing for clean abstraction of schema from the underlying technology. These two insights still prove true today after 6 years into the project.

The trough of sorrow

While the first 5 years depicted in the trend line above seem peaceful due to a lack of activity, it felt anything but peaceful. During this time, I was privately struggling with a bunch of challenges.

Team management mistakes and pre-mature scaling

First and foremost was team management. During the inception of the project my ex-schoolmate from years ago approached me to ask if there was any project that he could get involved in. Since I was working on this project, it was a natural that I would invited him to join the project. We soon got ourselves into an incubator in Singapore called JFDI.

In hindsight, while the experience provided us with general knowledge and friends, it really felt like going through a whirlwind. The most important piece of knowledge I came across during the incubation period was this book recommendation?—?The Founder’s dilemma. I wished I read the book before I made all of the mistakes I did.

There was a lot of hype (see the blip in mid-2013), tension and stress during the period between me and my ex-schoolmate. We went our separate ways due to differences in vision of how the project should proceed shortly after JDFI Demo Day. It was not long before I grew the team to a size of 6 and had it disbanded, realizing it was naive to scale in size before figuring out the monetization model.

Investor management mistakes

During this period of time, I also managed to commit a bunch of grave mistakes which I vow never to repeat again.

Mistake #1 was being too liberal with the stock allocation. When we incorporated the company, I was naive to believe the team would stay intact in its then configuration all the way through to the end. The cliff before vesting were to begin was only 3 months with full vesting occurring in 2 years. When my ex-schoolmate departed, the cap table was in a total mess with a huge chunk owned by a non-operator and none left for future employees without significant dilution of existing folks. This was the first serious red-flag when it came to fund raising.

Mistake #2 was giving away too much of the company for too little, too early in the project before achieving critical milestones. This was the second serious red-flag that really turned off follow up would-be investors.

Mistake #3 was not realizing the mindset difference of investors in Asia versus Silicon Valley, and thereafter picking the wrong geographical location (a.k.a network) to incubate the project. Incubating the project in the wrong network can be really detrimental to its future growth. Asian investors are inclined towards investing in applications that have a clear path to monetization while Silicon Valley investors are open towards investing in deep technology of which the path to monetization is yet apparent. During the subsequent period, I saw two similar projects incubated and successfully launched via Ycombinator.

The way I managed to fix the three problems above was to acquire funds I didn’t yet have by taking up a day job while relocating the project to back to the Valley’s network. I count my blessings for having friends who lend a helping hand when I was in a crunch.

Self-doubt

I remembered having the conversation with the head of the incubator two years into the project during my visit back to Singapore when he tried to convince me the project was going nowhere and I should just throw in the towel. I managed to convince him and more importantly myself to give it go for another 6 months till the end of the year.

I remember the evenings and weekends alone in my room while not working on my day job. In between spurts of coding, I would browse through the web or sit staring at the wall trying to envision how product market fit would look like. As what Steve Jobs mentioned once in his lecture, it felt like pushing against a wall with no signs of progress or movement whatever so. If anything, it was a lot of frustration, self-doubt and dejection. A few times, I felt like throwing in the towel and just giving up. For a period of 6 months in 2014, I actually stopped touching the code in total exasperation and just left the project running on auto-pilot, swearing to never look at it again.

The hiatus was not to last long though. A calling is just like the siren, even if somewhat faint sometimes, it calls out to you in the depths of night or when just strolling along on the serene beaches of California. It was not long before I was back on my MacBook plowing through the project again with renewed vigor.

First signs of life

It was mid-2015, the project was still not showing signs of any form of traction. I had by then stockpiled some cash from my day job and was starting to get interested in acquiring a piece of real estate with the hope of generating some cashflow to bootstrap the project while freeing up my own time. It was during this period of time that I got introduced to my friend’s room mate who also happened to be interested in real estate.

We started meeting on weekends and utilizing GetData.IO to gather real estate data for our real estate investment purposes. We were gonna perform machine learning for real estate. The scope of the project was really demanding. It was during this period of dog fooding that I started understanding how users would use GetData.IO. It was also then when I realized how shitty and unsuited the infrastructure was for the kind and scale of data harvesting required for projects like ours. It catalyzed a full rewrite of the infrastructure over the course of the next two years as well as brought the semantic query language to maturity.

Technical challenges

Similar to what Max Levchin mentioned in the book Founder’s at work, during this period of time there was always this fear in the back of my mind that I would encounter technical challenges which would be unsolvable.

The site would occasionally go down as we started scaling the volume of daily crawls. I would spend hours on the weekends digging through the logs to attempt at reproducing the error so as to understand the root cause. The operations was like a (data) pipeline, scaling one section of the pipeline without addressing further down sections would inevitably cause fissures and breakage. Some form of manual calculus in the head would always need to be performed to figure out the best configuration to balance the volume and the costs.

The number 1 hardest problem I had to tackle during this period of time was the problem of caching and storage. As the volume of data increase, storage cost increase and so did wait time required before data could be downloaded. This problem brought down the central database a few times.

After procrastinating for a while as the problem festered in mid-2016, I decided that it was to be the number 1 priority to be solved. I spend a good 4 months going to big-data and artificial intelligence MeetUps in the Bay Area to check out the types of solutions available for the problem faced. While no suitable solutions were found, the 4 months helped elicit corner cases to the problem which I did not previously thought of. I ended up building my own in-house solution.

Traction and Growth

An unforeseen side effect of solving the storage and caching problem was its effect on SEO. The effects on SEO would not be visible until mid-2017 when I started seeing increased volume of organic traffic to the site. As load times got reduced from more than a minute in some cases to less than 400 milliseconds seconds, the volume of pages indexed by bots would increase, accompanied by increase in volume of visitors and reduction in bounce rates.

Continued education

It was in early-2016 that I came across an article expounding the benefits of reading widely and deeply by Paul Graham which prompted me to pick up my hobby of reading again. A self-hack demonstrated to me by the same friend, who helped relocated me here to the Bay Area, which I pursued vehemently got me reading up to 1.5 books a week. These are books which I summarized on my personal blog for later reference. All the learnings developed my mental model of the world and greatly aided in the way I tackled the project.

Edmodo’s VP of engineering hammered in the importance of not boiling the ocean when attempting to solve a technical problem, of always being judicious with the use of resource during my time working as a tech-lead under his wing.  Another key lesson learned from him is that in some circumstances being liked and being effective do not go hand in hand. As the key decision maker, it is important to steadfastly practice the discipline of being effective.

Head of Design, Tim and Lukas helped me appreciate the significance of UX during my time working with them and how it ties to user psychology.

Edmodo’s CEO introduced us to mindfulness meditation late-2016 to help us weather through the turbulent times that was happening within the company then. It was rough. The practice which I have adopted till to date has helped keep my mind balance while navigating the uncertainties of the path I am treading.

Edmodo’s VP of product sent me for a course late-2017 which helped consolidate all the knowledge I have acquired till then into a coherent whole. The knowledge gained has helped greatly accelerated the progress of GetData.IO. During the same period, I was also introduced by him the Vipasanna mediation practice which coincidentally a large percentage of the management team practices.

One very significant paradigm shift I observed in myself during this period of continued education is the observed relationship between myself and the project. It has changed from an attitude of urgently needing to succeed at all cost to an attitude of open curiosity and fascination as one would an open ended science project.

Moving forward

To date, I have started working full time on the project again. GetData.IO has the support of more than 1,500 community members worldwide. Our mission is to turn the Web into the fully functional Giant Graph Database of Human Knowledge. Financially, with the help of our community members, the project is now self-sustaining. I feel grateful for all the support and lessons gained during this 6 year journey. I look forward to the journey ahead as I continue along my path.