This is where I share 3 things every week with my friends and anyone else interested.
A picture from my life:
I was at a Starbucks in FiDi when it happened to be one of the locations giving away free drinks for an hour. The line was out the door. It’s fun to think about that line as a theoretical max patrons they can attract for that location, and how many people you’d need to sustain one Starbucks. At the end of the hour, the baristas said they served 150 people and got only $30 in tips. Confirms that free customers are the worst customers 😛.
Starbucks is probably my favorite business. The decor and coffee are reliable everywhere I go in the world. Some fun facts:
There is no Starbucks in any of the 49 countries in sub-Saharan Africa, even though the beans come from Ethiopia. Oh the irony.
Starbucks is global but failed in Italy (again, irony) and Australia.
Starbucks coffee has way higher caffeine content that’s why I’m addicted.
Starbucks founder went to learn from Peet’s, and then at one point bought Peet’s before spinning it back out. Starbucks also owns Seattle’s Best Coffee, which I think is hilarious because it feels like they had to own it just for the name.
Luckin Coffee is a Chinese coffee shop that started in January 2018 and IPO’ed a year and a half later, opening over 2,000 locations during that period and it sounds like they are still opening 8 stores a day. (Starbucks only has 3,600 locations in China). Nuts!
You might have noticed a lot more Joe and the Juice locations recently because private equity firms moved in to scale the concept in the US. It’s an European juice bar / coffee shop with a very bro-y culture.
Thing on my mind:
This is the last newsletter of the year. Thanks for reading this year and wishing you a happy new year from San Francisco! 🥳
I will continue my reflection on entrepreneurship from last week when I wrote about my Amtrak trip with Wefunder.
Even though I’m an entrepreneur, when I meet other entrepreneurs, I often walk away thinking that the person is either too naive or too arrogant. It’s common because a sufficient amount of naïveté and arrogance is exactly what’s required for people to take the plunge and start something, and we need more people starting things!
So how do you develop enough naïveté or arrogance to think you can succeed at something most think is unrealistic? That sounds weird because you don’t develop naïveté or arrogance. No one would want to develop those things. They’re just what happens to you when you are blinded by at least one of these five things: ambition, mission, obsession, ego or a chip on the shoulder.
For all talk of world-changing missions in the Silicon Valley, most entrepreneurs I know here are not that mission-driven. What blinds them is typically their ambition and obsession. The entrepreneurs I meet in other parts of the US share in our blinding obsession, but they are much more likely to also be blinded by the mission instead of ambition. That’s a pretty stark difference.
I love obsessive people and it’s one of the reasons why I fell in love with the startup community in the first place. You can be obsessed about brewing beer or writing beautiful software, but if you are too obsessed about it, you may not care to scale your business or even have a business at all. This is an affliction that’s shared by entrepreneurs in the Silicon Valley and everywhere else. Most of the entrepreneurs I met on the trip wouldn’t know how to spend a million dollars on their business beyond solving for the next immediate bottleneck because they don’t zoom out often enough from their obsession.
For entrepreneurs outside of the Silicon Valley, many are highly indexed on mission, making them way more inspiring but also way more inflexible. The mission is so blinding they miss opportunities to pivot to a better way of doing business if it means compromising part of the mission. This doesn’t happen as much in Silicon Valley. SV entrepreneurs’ ambition-orientation allows them to embrace the idea of the pivot much more easily.
So…the best entrepreneurs…well, that sounds bad. “Best” only in the sense that they are trying to create maximum impact as opposed to the most directed kind of impact. The “best” entrepreneurs are actually not overly indexed on the mission. They may care about making a dent in education, but they are flexible about the how. They can move away from helping under-served students and focus on selling enterprise software to school districts if they think that scales their impact better. They’re also not overly indexed on obsession. They may love building highly-opinionated and beautiful products, but only if that product makes a difference in the world.
People find “business people” icky because when push comes to shove, what they care most about is the growth of the business, not the purity of the mission or the spirit of the craft. And it sucks when those who are more pure and inspiring get out-competed. Some entrepreneur might have opened a coffee shop for the mission of giving the community a gathering space or because she loves making and sharing great coffee, and then Starbucks comes around with inferior coffee and wipes her out. Starbucks feels like the villain here, but it’s not that simple.
Piece of content I recommend:
The Calculus of Grit by Venkatesh Rao on Ribbonfarm
If you liked PG’s The Lesson to Unlearn from two weeks ago, you should definitely read this one. It gets at a similar idea but from a different angle. Extrinsic navigation vs intrinsic navigation. Extrinsic are things like majors, disciplines, licenses, etc. They have boundaries and they are predictable. You don’t all of a sudden have to learn to dance a few years working towards becoming a dentist (although that would be hilarious), and that helps you decide if you have what it takes to be a dentist. Dentistry has well-defined boundaries, but some boundaries are weak, and many disciplines don’t have convincing boundaries to begin with (like “marketing”) because the world is changing too quickly. Intrinsic navigation is about listening to yourself and your strengths and creating a rhythm. You move about the world not going after external markers but more following where you think you need to go.
Bonus recommendation from my co-founder David Tran. We frequently try to distill idea together to really understand them, and he’s really done it this time for the SOWH idea we toss around a lot in the Silicon Valley. If you need more motivation, this post went viral on Hacker News and the nerdy corner of startup social media, and it features my favorite basketball player James Harden!