Chris Sacca and Matt Mazzeo joined Jason Calacanis on This Week in Startups to talk tech, Twitter, and teenagers (okay, not really teenager, but at least how Sacca is old, man).
There were actually two parts to this interview, but my notes are only from the first.
1/ Fresh eyes on the problem. “You’ve got teams within those companies (potential Twitter buyer) that can take a fresh look and make them simpler. One of the things that Twitter suffers from right now is that everybody who works there is a power user of Twitter. Rarely do they get any fresh eyes on the product.”
If you want to have a good team, you need to have good team members. Peter Thiel wrote, “a lot of these companies aren’t solo efforts of a god-like person that does everything.” That means you have to work with other people, and if you want to be great they should be great people too.
Part of that is having people with multiple points of view. Sacca believes Twitter needs fresh eyes, and the best organizations bake those in. Bill Belichick gets pushback from coaches and Ernie Adams. Anson Dorrance gets pushback from assistant coach Bill Paladino. Ben Horowitz gets pushback from Marc Andreessen. The Wright brothers got pushback from each other.
Good organizations argue well. Andy Grove called it constructive confrontation. It’s arguing, but remaining friends. It’s taking a different point of view and suggesting why it makes sense. That’s what Twitter needs.
2/ The most important thing (MIT). “All they (Facebook) do at the end of the day is they accelerate the things that have the most likes on them.”
This was great to hear. If more people like a thing, then make the thing show up more.
Charlie Munger likes to say that a few mental models carry most of the intellectual freight. To put that in Facebook/Sacca terms, a few mathematical models provide most of the content people want. Get the right ones and you’ll zip along.
When John Boyd taught at fighter pilot school he focused on the MIT, “Have the student assume in trail position on the instructor and learn how to stay in that position throughout any maneuver.” That was the MIT. If you were being chased, how fast could you shake your tail? If you were chasing, how fast could you take down the plane?
Anson Dorrance is bad at paperwork and email because his MIT is coaching and recruiting. Aziz Ansari deleted his email account. Christopher Nolan doesn’t have email or a cell phone. Neal Stephenson explains why he’s a bad email correspondent:
The productivity equation is a non-linear one, in other words. This accounts for why I am a bad correspondent and why I very rarely accept speaking engagements. If I organize my life in such a way that I get lots of long, consecutive, uninterrupted time-chunks, I can write novels. But as those chunks get separated and fragmented, my productivity as a novelist drops spectacularly.
For Ansari, Nolan, and Stephenson, social and communication are not MITs.
For technology companies product is the most important thing and Kara Swisher said Yahoo!? didn’t have it.
MITs don’t have to be complicated, but they do have to be prioritized. KISS your MIT.
3/ Circle of competence (and control). “We invest in things where we feel we can personally move the needle. Instead of just throwing darts in the board like in the public market, I want to know, is this a company that we can help.”
The right choice of capital allocation brings the best returns. That’s capital in every sense, time, money, resources, and so on. Sacca wants to be in areas where not just his money, but his patter recognition skills (see #4) are helpful.
Charlie Munger said, “I think the record shows the advantage of a peculiar mind-set not seeking action for its own sake, but instead combining extreme patience with extreme decisiveness.” Munger wants the same way as Sacca, control. Airlines, for example, don’t have this. Berkshire’s investment in USAir fluctuated with the market. “It worked out fine for Berkshire, but we’re not looking for another experience like it.”
Warren Buffett said at the 2016 Berkshire meeting, “we’re not going to try to out Bezos Bezos.” Buffett and Berkshire have the money to enter e-commerce, but not the skill.
Walt Disney lost much of his early intellectual property becuase his circle of competency was in animation, not legal. Only as Roy Disney’s – Walt’s brother – role grew did Disney become a business.
4/ Pattern recognition. “We (Sacca and Mazzeo) have very complementary skills. Where my value comes in, there are very universal principles in building all these principles. While I may not be a great arbiter of that original idea, I am certainly valuable in determining whether your story is working. I’m certainly good at sussing out ‘are these the guys and gals with the hustle?’”
“That said, I’m not a kid. If I see an app in the app store at $4.99, I’m like, yeah $4.99, whatever. Yet we know that is a huge tipping point where a lot of people, millions and millions of people abandon that option.”
This was the part I enjoyed most. Sacca admits that his skills are different from Mazzeo’s. The former is older, with more experience and kids. The latter is younger, dating rather than married, and believes in e-sports. This kind of pairing tends to succeed.
Sacca’s pattern recognition dovetails with #3, skating within your circle of competency. He also points out the “complimentary skills” which is a combination many successful pairs share, and part of #1, fresh eyes.
Sacca got his pattern recognition through lots of experience, especially with high profile investments in Twitter and Uber. You and I can get some of that experience via books. The biggest help will be time, and how you use it.
Pattern recognition is a superpower, like moving faster than everyone else or moving through time (because you make fewer mistakes). I did a podcast episode about it.
Thanks for reading,
KISS your MIT, keep it (your most important thing) simple, stupid.