31 lessons on startups, writing, books, habits, productivity from Danny Crichton, contributing writer at TechCrunch
In 2008 there was a terrible crisis and if we look at most of the rest of the country outside of Silicon Valley that crisis still continues to this day: unemployment, quality of jobs, the security that comes from having a job that’s there for the long term. When you look at employment figures, a lot of people are working at jobs that don’t use their skills to the full amount which means their skills are retarding over time, they are getting worse and worse because they are not using them. That is a huge problem for our country. That means we educated people, they go into the workforce, don’t use their skills, they lose them and that’s a terrible loss and tragedy in human capital. When I look around Silicon Valley, I don’t see a lot of people caring. I don’t see a lot of people focusing on issues that affect family and individual lives.
One of the best articles I’ve written is “Silicon Valley Is Now Public Enemy No. 1”. We are the only place in the economy that is growing and we are getting really rich doing this. When people are looking at us, it’s no longer as nice, progressive, and ‘benefits all’. It is, ‘Actually they are taking our jobs away, replacing them with computers and these people are making a lot of money doing this’. So you see this ‘Robin Hood Effect’ coming up in my articles a lot.
Online education is not the solution to a lot of these problems. We sort of hyped MOOCs (Massive Open Online Courses), and the hype died down as people realized that just putting content online is not enough to get people to really learn.
The other theme I care about is what I call “Corner of TechCrunch” - identifying companies that have outlived or have more hype than, I don’t want to say they deserve, but are certainly ahead of where they are. So my article on Square and Box is talking about the challenge of commodity companies and is certainly the best performing article I’ve written. Here are two companies with two very charismatic founders that do really well and all of a sudden both IPOs sort of collapse at the same time. If you look at the numbers from behind the scenes (in Box’s case, they are public from the S1 and in Square’s case they are private, but a lot of them have leaked out), their business models aren’t that strong. You had all these people talking about the future, how Box was everywhere and Square was taking over at the cash register. Actually there’s so much more work to be done. We see it with other companies as well. Fab has reduced itself to like 10 employees, according to Valleywag. If you look 3-4 years ago, this was the e-commerce company which was going to destroy Amazon and take over clothing and furniture. It’s been a huge part of what I think we are lacking in the tech press - and that is a little more of that critical lens. I don’t think you can just be critical. It’s always going to be easier to look at 2 people in a garage and say, ‘You can’t do it. You’re screwed’. But you also have to have signal and that’s what I really miss in tech media. We are a little too positive on everything rather than saying, Look, here’s what’s actually great, here’s what’s good, this isn’t working so well’.
The thing you learn as an investor really early on is how many people work in spaces that are never going to make money and it’s a horrible feeling because you figure this out so quickly. I compare it to applying for fellowship like a scholarship from a university. You’ve got a thousand applicants and think you are a unique snowflake. You go and read all these applications on the other side and it’s like there are a hundred other people who said the exact same thing and none of them are interesting because of that. I see it with startups. When you talk to, say, 1,000 startups in a year, you see certain groups of startups start to clump together. Here are 40 startups that are doing the exact same thing. I don’t know if it's because they don't get out and they see the others or if everyone just sees the same opportunity. I am not saying the space doesn’t exist, but if there are 50 competitors you need to do something totally unique.
The companies I always like are Deep Tech - companies the average person can’t do. If you learn Ruby in 12 weeks, you’re not just going to make a networking platform in a week, this is really intense, hard work. That means there’s not that much competition, and if you can get through the technical challenge, your company is almost guaranteed to do well. ‘Guaranteed’ is obviously always a relative term. That took me away from the consumer space I had always been really interested in.
We are in a more mature time in the Internet's lifecycle. When you were building companies in '95, you could just do e-commerce and you were going to make a billion bucks, because you were first and it's commerce, it's the entire market. When you look at companies today, they’re much smaller. These are narrow markets or niches, and that’s OK in most cases because we went from 10 million people on the Internet to billions. So niches can be very valuable, but I think a lot of people need to find what the really big problems are. A lot of people lack that maturity and think, ‘I need to get smaller and more narrow’, and work on little incremental improvements over what’s there, and that’s not a strategy that will be very successful.
Aggregating a lot of talent in one company is so unbelievable hard. I always ask founders, ‘It’s not about getting 5 engineers. How are you going to get 200? How do you convince them not to go to Facebook, Dropbox, Twitter, this huge list of Silicon Valley startups?’ If you don’t have an interesting answer to that, which most do not, that was my investment criteria: could you get 100 engineers to show up? I think that actually worked fairly well.
You have to learn how different types of businesses are. With consulting you’re constantly fighting with getting people to pay you, going back and forth with ‘Is this product good enough?’, you set out requirements and then people change those requirements over time. That can be very frustrating. When you work at a startup, everyone has to do everything and there's a very different feel to that. When you work at a place like Google, you are a small fish in a very large ocean, with a lot of smart people.
I encourage more young people to go to Google than you might expect because you learn an immense amount in a year at companies like that. But it's so frustrating because if you want to get something done you need to convince 20, 30, 40 people eventually and work your way up the command chain to get something launched. I think it’s getting a little better there, but I think every new graduate should work at a company like that because you see it at its best.
What have I learnt at Google? Culture really matters, and when you set up the culture well it can last an extremely long time. Google's culture is still one of the best in Silicon Valley, I really do believe that. The way it focuses on problems, the kind of people it attracts, its focus on engineering. Very few companies have been able to maintain that for a very long period of time. Certainly not 15, 16 years. I think that's really incredible, that's what happens when you get it right. I don't think you can fight off bureaucracy. The reality is at a place like Google where you want identity across all services, you want UIs to look cohesive, you want it to look like one company, there’s no way to really experiment.
One of key things for CEOs is, take Microsoft with a new CEO this year, how do you build whole new products in fields you have not worked in before? And how do you use that to attract great people to the company, but how to also learn new things about fields you’ve never really thought about before? What would you do to a market if you could refactor it like you refactor code? Starting over from scratch, how would you buy homes today if we could just reset, and then how do you build a startup that weaves its way to get to that point? I don’t see that enough in larger companies.
When you grow up that way, you think a certain way, the model of the universe is built a certain way. In Google’s case it’s ads. When you build something like Google+. it’s a completely different model. So when you're debating with the search team, they know how they get search to work in the first place, but then you go to do search on Google+, which is what I worked on, and there's a challenge around how do we work in a social environment, where we want people to work on search for an hour. We want people to keep looking at results, because that's a good sign. It's a complete antithesis of what everyone had done for years. Building that flexibility into the organization is hard.
A lot of African countries are not building land-line phones and jumping straight to mobile, they're leap-frogging. One of the challenges in a lot of companies is skipping a generation, saying how could we have just started with mobile, mobile is the future. We own Android, how can we use our various products in a way that allows us to jump way ahead of where Facebook was? That takes a lot of risk and confidence in the market that you can pull it off right. What Google+ should have really been was Snapchat. If you think about what is the next generation, it's the ephemeral messengers. Google already has GChat and it has a leading messaging app.
This is what's really interesting about the app world today. It's the most open platform I think we've ever had for distribution for the indie developers. And yet the apps that seem to be doing the best are really the big corporate apps. And what's interesting to me, we're going through this unbundling process. Foursquare went through an unbundling, Facebook’s actively unbundling, Google is, sort of, unbundling. Evernote is unbundling, and that's been a long-term strategy for them. I think what will be interesting to see over the next year or two, I see this being the new mobile app in which apps will become single purpose. You will have a different kind of launcher. I really think that the home screen is going to be totally different. We're not going to look at it the same way. If you think back, we’ve had the same kind of home screen interface for 15 years, with a bunch of rows of icons, and it doesn't make sense when everything is about a functionality. Why can't I just check in, and checking in might affect six apps? It's more about actions rather than specific apps. What I’d like to be seeing, which I’m not so much right now, is a little more creativity and innovation around that side of it.
There was a great article in the New York Times books section a few years ago that talked about romantic relationships building up through bookshelves. People just don’t go out for coffee anymore, it’s 'why don't you come home and look at my bookshelf?' Then you can see what we read and see if there are common interests.
I think there are a couple of books that are really important. Edward Glaeser’s ‘Triumph of the City' has a great line in the introduction, which was, at a time when the cause for communication is lower between anyone in the world – we can video chat, do holograms of us in some cases with some more modern products – the cost of real estate is actually moving up in cities, because people want to live closer and closer and closer together. He argues why that is - there is a triumph of the city. I think it's a really interesting observation, which is just how important it is to be near smart, intelligent, creative people. People want to be near other people. The ideas move so much quicker. I see it just on the conference networking circuit, if you will, going from city to city. You can’t go to the middle of nowhere and get the same experience. Any startup that chooses to go out of a large market has an enormous challenge. I’m also really interested in complexity theory these days. So the book I was reading on the plane here, I forget the subheading, but it’s called ‘Complexity’, written by one of the faculty and residents at the Santa Fe Institute, which is the leading complexity research institute. It does a really good job of giving a tour of where complexity theory is today. One of the things I think we’ll see, both because of startups and engineers are becoming a little more influential in society, and also because I think we have the data processing power to really understand complexity better today than we did 10 years ago, we’re really going to start seeing complexity theories play a much larger role in policy making and diplomacy in a lot of fields that it was non-existent before. Law, for example. That's really exciting for areas of the world where startups have not had a lot of access. I think you're actually going to see that as a future. Law firms aren't just going to write laws with no semblance to anything else; people are actually going to engineer laws. That's actually a really different world. One of the more interesting pieces that should be more well read is ‘The Idea Factory’, which is a history of Bell Labs. I think this is a really important work. They produced nine Nobel Prizes. No other company has come close to that level of production. Take Claude Shannon's work on information theory and communications theory. This is a leading mathematician that worked at a company producing theoretical stuff that was obviously valuable to Bell. There's a huge list. The list of innovations and productions I think is unparalleled, and why is it that a lot of large technology companies like Microsoft, Google, a couple others, why have they not had the same impact on real basic research? I don’t know what the answer is, but I think looking at history is important, so I hope that kind of work gets read more widely.
Ernest Hemingway is known for saying, ‘I hate writing, but I love having written’. I thought that quote was funny because I hate all my writing. I always say that all my writing looks great in my head as I begin to write, then by the end I absolutely hate it. I think every piece I've ever written is the worst piece. I don’t know if that’s because I have a high bar or what.
I think for myself, what gets me interested in writing is a lot of that feedback and realizing that a lot of this can be read for a really long time. That the way people see Box and Square in some cases today is actually the model I imprinted, if you will, on their brains, because they read this article, which analyzed it with a certain model in a certain way. I'm actually starting a PhD in the fall, so I'll be headed to Harvard's Kennedy School to do public policy in their PhD program, and I think a little bit of that scholarly career is part of the same idea. You can literally define the way people perceive reality. Nothing too grandiose, but if people read what you write about something, your history versus someone else's history, that's the lens through which they see it. You’ve molded their mind to think of it, and that's both powerful and requires a lot of responsibility.
I do use Evernote and have a long list of ideas, and they're not always pure. For instance, sometimes I have one about accreditation, to talk about it and analyze it a bit more, come up with some ideas about what could be done. I think because I'm in journalism it's not just pure and clear, I mean we do get 90% of the views on most of the articles happening within the first 72 hours, like any new sites, so linking or 'pegging' it to a new story is really important. Sometimes that’s opportunistic, so when Vic Gundotra left Google+, obviously there was a very opportunistic story I wrote right when I got home. I was out and when I got home I wrote for the next five hours about everything I'd already done in my head but never written down, so that sort of pressure helped get it out. In terms of techniques, I outline very heavily, so I use OmniOutliner on OS X 10, and I try to really write the full argument. A typical outline will be about 500 words, for about a 2,500 word piece, so about 20 percent of the words have been written. Think of it as two to three sentences of each paragraph and then after that you're finding evidence, and I find that that's the best way to write. I like writing in one sitting. This is why I've never written a book. I like writing the full draft at once because I like it being cohesive, I like it being one thought. If I come back to it a day later, my thoughts change so often that I'll come out with a totally new perspective; it starts to get disjointed and you can tell. For me, it’s best to do it that way, quickly.
I usually write 7pm. to midnight, so I might outline earlier in the day. Usually about an hour after dinner, I have to recover. I usually have a light dinner when I write the actual essays; I can't have a sugar rush, it would be a little odd. Something like the ‘Square and Box’ piece was actually really long, it took about 10 hours of straight writing. I started around 2pm and it took until midnight. I didn't take a break, so it was a long period of time. I usually try to write quickly and then edit, so I'd rather get words on the page first, find the right pieces, and get them all in there because I'm a harsh editor. I’m fairly aggressive at trying to cut back, and I usually edit a single piece around four or five times.
I'm a little bit of a procrastinator, so there's actually the end-of-week deadline and then I have to write. Sometimes it's earlier; it depends on the news. If there’s something that comes up, I’ll do it at that time, but I usually have one piece that runs over the weekend, because people don't read 3,000 word pieces on Tuesdays. Sometimes I’ll do a Monday piece; I'll write over the weekend and it'll publish on Monday. Living in Seoul, it's a little challenging since our readership is in the U.S. and so I wake up to a lot of tweets when my articles launch, especially when they go viral. I don’t usually schedule tweets with links to my articles because I don’t know when it’s going to go out. It usually gets scheduled when I wake up, so about 2pm. because again, no one reads a 3,000 word article in the morning. They do it in the afternoon when they're bored at work or just need a break. I try to wake up around that time, so I'll tweet it out and have conversations. I try to engage as much as possible on Twitter, so when people ask me questions I'm usually responsive. I’m not as responsive on our TechCrunch comments, but I try to be nice.
I think the best approach to life is long-term planning. I have a learning plan, meaning that there are gaps in my knowledge or things I want to learn more about. I don't tend to consume, outside of journalistic news, much content right when it's published. I rarely read books the same year they're published. I rarely watch TV the same year it’s broadcasted. I tend to always be years behind popular culture. I let everyone filter it and see if it's still important in five years. This is really fundamental, I’ll never write this on TechCrunch, but maybe on my personal blog I will at some point, but I wish people didn't get so into fadish thinking and ideas. I think things come in quickly and they leave quickly. For instance, let's take the Paleo diet. Is the Paleo diet still going to be here in five years? I don't know. If it is, maybe it will be long term. I was joking with a friend that the consumerization of enterprise is going to be the future of all, but now it's done. Now because of the IPO market, enterprise just died. It's changing so rapidly that the ideas don't even last six months before we're already throwing them out, so for me, I don't think the world changes that fast. I actually think the world changes much slower. When we talk about a lot of the startups here in Southeast Asia, we're talking about e-commerce coming into mobile. It'll take about ten years to see the full penetration, and about two to five to see if it's an interesting place to be. That's probably about the right time for a lot of startups to start, but it's not just going to happen in a year. It's never happened anywhere in a year, and so I don't feel the pressure to read books or watch TV or go to the movies. I wait for it to be interesting, if it still lasts and that longevity is there.
Good habits beats goal setting? Absolutely! I think incremental works for most people rather than transformational. Which is ironic coming from the sort of background where transformational is usually better, because people's habits don't change overnight. If you want to get into the science it's just neurons, the way you're wired, it doesn't just change overnight. You can talk about addiction to nicotine or TV or McDonald's food but you're also addicted to the habits you have like the way you like the way you tie your shoe laces. Is it comfortable? Because you don’t think about it, because you’ve done it so many times. You're wired to tie your shoes that way and if you try to tie your shoes a different way, you lose a lot of brain power. It’s not necessarily difficult it just uses a lot of your brain. There are a lot of psychologists that believe in limited supply of decision making, meaning you have a certain amount of decision making power each day that you use up. I really believe in willpower depletion. Getting into the right habits is really important. One habit I really believe in is, again, I read more books than most people in my industry, in terms of writers and investors as well. I don’t believe in reading a million tweets. I try to keep my tweet load to a very focused group of people because you can throw out 140 characters, but the depth of the work is missing. There is a book called ‘The Shallows’, which I read a couple of years ago, which is about how the internet is making us stupider. I disagree with that, but I do think that people are starting to get a little too impatient and people expect results too quickly. It's interesting, I think one of the meta-learnings from everything I've done is some stuff takes a really, really long time. When you look at, it started around 2008 - that’s when they got the people at the Democratic convention, that’s when they really started to get rooms. That was 6 years ago! It's a long road, that's more than half a decade. I really worry about the culture. I worry about people's ability to spend more than a little time to do a project. Most things aren't solved in a day. There needs to be a counter-force that says it is great, but it’s about habits and long-term as you’re not necessarily going to see results the first 2 years.
I always have my inbox zeroed, as much as possible. I never allow myself to get behind on e-mails. I usually process email in batches. I always have everything on silent. I don’t have any notifications. I really hate interruptions, so I think this is really important. I don’t know how many people do this, but I know that Dave Morin said, 'I don’t use a ring of any kind on my phone. This is so that I am always on offense and never defense’. Giving calls, not taking calls. I don’t have that attitude about it, but one of the benefits of asynchronous communication is I can respond when it’s productively convenient for me. Again, it’s about interruptions. If I'm in a long thinking-mode I don't like to be interrupted. I walk a lot, outside in general. I think while walking. I found out research has shown that you're more creative while walking and moving around. My apartment has a rooftop deck, so I walk outside when there's nice weather to get a lot of ideas. I really aggressively curate what I read. I allow other people to decide. I trust experts. I trust people who are widely read. I subscribe to a site called ‘The Browser' which is, I think, out of the UK. Which is a handful of people now, but it used to be one person who just read the web and picks his top 5 or 6 articles each day. It has a nice mix and one of the things I'd like to see more of is that kind of curation, which I pay for and I'm happy to do because I don't want to read a million articles. I want to read the best stuff, I want to read stuff that's valuable. I think it was the ‘4-Hour Workweek’ book that mentioned the information diet. I don't subscribe to everything in that book, but one of the concepts I do agree with is information dieting because you can be overwhelmed with details. But, ultimately, fundamental ideas are what really matter so that's what I try to focus on as much in my life. That’s the core of my habits.
I read book reviews and a lot of the time the reviews are enough. Sometimes you can read the book review realizing that you’ve read the book. There are a lot of books that have been written that are one-page books that are spread over 300 pages. I wish people could write one page and get the equal credit for a book and it's not true in many ways, not in terms of impact. That’s not the way the world works. But in terms of things to develop, I'm terrible at networking which is ironic as a journalist. Being a journalist is a good thing because people generally come to you, but cultivating the right relationships long-term, but I can really ignore people for long periods of time and then I really want to talk to people a lot. The world hasn’t adapted to that level of combination extroversion/introversion or just introverts.
The stereotype is that INTJ is a master strategist, and that’s sort of how I write to. Like a full company looking at its details, understanding its place in the ecosystem. But it’s hard to argue in real life against conventional wisdom that 12 people in a room have. So cultivating how do you influence, how do you ensure people understand, how to persuade people when they have a different mental model. I see this as a policy-focused person, which is sometimes you’re not debating facts, sometimes you’re just debating the ways to see the world. It's far more fundamental issue. Are people fundamentally evil or good? You invent laws to prevent them from doing stuff, you invent laws to encourage them. You have a totally different way to see this and being in Singapore versus Korea, you see a very different model on how you approach different political policies. It’s the same thing in startups and investing: how do you get people to see a different way of looking at the same problem? I haven’t figured that out yet. So one of the habits I want to build in others and myself is how do you get out of your own model of the world? If you grew up in say cost-benefit analysis, you see everything as cost-benefit. Let’s say your an MBA, how do you move from being an MBA to being a complex theorist? Just like, we're in a system, there are feedback loops, we need to develop the right feedback system so that the right things change over time. You see this in government where policy makers are always in cost-benefit analysis mode. But how do you develop the right feedback, so you know where we should be investing resources?
I did work on a Machine Learning project around venture data and I think it has to be combined with humans. I think one of the things that people in the AI space hype too much is that you're going to have these machines that just decide everything, and when you look at the real data, computers often times beat humans, but humans backed by computers crush both. I really see it in healthcare. Your doctor doesn’t necessarily see all the relationships between drugs. He doesn't remember everything. Why do they memorize it? Why not have a computer tell you? You have that backing of the AI, machine learning and the data, but you’re making the real decision. I think you’ll see that in more and more spaces, and that’s key.
The first mistake novices make when they start writing and blogging is they don’t set up the reasons why they want to do something. Why do you want to blog? Some people want to do it for marketing and that's OK, but I think it's a very disappointing experience because there's no audience. I've always had a hard time blogging because no one reads it, and fundamentally you want to write something that's read, and I think blogs that work the best come because it's interesting. The writing process allows me to collect my thoughts in a way that I didn't have as well ordered before. The second is finding the right platform and audience for blogs that people don’t think enough about. I think people don't think enough about their audience. When you really want to blog well, defining your audience is really important. Who are you writing for? Writing an academic paper is for a scholary audience. Writing an essay is for literary criticisms. Writing a news article. These all have different tones, different styles. People don't think enough about it. You got to narrow it down. And if you do that right, you’ll have more success.
My favorites quotes? One is ‘Fortune favors the bold’, which is a translation of the original from Roman times. Sometimes bigger ideas are actually easier to accomplish because bigger ideas attract better people, smarter people. It may actually be the case that it’s easier in the end if you look at it holistically. That's one of the best pieces of advice I always give to founders. Never be afraid to think bigger. History has shown that over thousands of years, sometimes it's people who are being aggressive, who are being bold, are actually successful. The other quote is more about law and politics. It is, ‘Before it’s news, it’s policy'. Nothing happens in a vacuum. We didn't just get to this day without two years of decision making that led to it. You have this process going back years. As a journalist, don't just focus on day to day, but what's the news six months from now. That's what I try to do as a journalist. What’s the news six months from now and writing the pieces in advance.
The number of opportunities in startups is still great. There is a lot of stuff to be done. But make sure not to focus on just San Francisco and people between the ages of 18 and 32. If you don’t understand why laundry services are having such a hard time building huge companies and why that might be considered short-minded, walk outside of the universe of San Francisco. Get a wider perspective if that means taking a gap year. It might be walking through Detroit or Southeast Asia. Getting that wider perspective shows you a lot of different markets that people underexploit and there’s a lot of money to be made working in those markets.
What lesson did you find the most insightful? Who would you like to see as the guest of the next episode?
Guest of the episode: Danny Crichton Creator and host: Arman Suleimenov