A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here.

Yesterday was my birthday and the last way I wanted to celebrate was to write a post.

But since it was for Friday, I thought I would share China’s version of bro culture.

China is a gender nightmare, in spite of having the world’s largest number of self-made female billionaires, as well as women holding down senior roles in many startups.

Employment ads specify the desired candidate gender and appearance along with soft skills.

Ms. Shen is a “programmer motivator,” as they are known in China. Part psychologist, part cheerleader, the women are hired to chat up and calm stressed-out coders. The jobs are proliferating in a society that largely adheres to gender stereotypes and believes that male programmers are “zhai,” or nerds who have no social lives.

Must be attractive, know how to charm socially awkward programmers and give relaxing massages.

Note that Shen holds a degree in civil engineering.

While the bias is far more overt, one has to wonder if the harassment and bullying is as common.

Image credit: HikingArtist

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here.

I often field questions about compensation, stock allocation and bonuses that revolve around the idea of fairness.

There have been more calls since a rise in media attention to gender pay inequities, especially focused on tech. They look at what other countries are doing, such as a recent UK law, and wonder if similar things could happen here or if someday down the line they will have to do as Marc Benioff did.

Whether the subject starts with diversity or compensation, my callers fall in two distinct camps.

• Those looking for ways to bake fairness into their company’s DNA; and
• The ones who want to cloak current unfair actions in a veneer of acceptability.

(I have to admit that listening to the second group stumble around trying camouflage what they want to do is amusing, but definitely not funny.)

Of course, it’s easiest for founders just starting, since they have no historical staff or (hopefully) bad habits, but any size organization can do it if management is determined and has the grit to follow-through.

Here are some basics actions:

• Develop core values around fairness, diversity, transparency, etc., make both values and culture public on their site, and follow-through when recruiting.
• Salary and stock offers should be based on the value and effect of the position on the company’s success, as opposed to the person you are hiring.
• Before approving compensation compare it with similar people inside and out for fairness, especially if the candidate is a woman or minority.
• Talk to others, such as Gusto cofounder and CTO Edward Kim or the folks behind the Founders for Change coalition.

The most critical factor is a willingness to pass on hiring people when it’s obvious they are assuming it’s just talk or that you should make an exception for them because they are special.

As I’ve said in the past, “If you pay your people equally when you hire and promote there won’t be a pay gap for you to erase.”

Image credit: HikingArtist

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here.

Unlike most folk, when tech types want to improve their sex life they assume there’s an app for that.

If there isn’t they create one.

[Jakub] Konik’s foundational story is a simple one: he was having sex with his girlfriend, and he started wondering how many calories they burned during one particularly memorable session. Stunned to discover there were no existing apps that could answer that rather specific question, he came to the conclusion that he should create one.

Wow! It doesn’t take much thought to see how connected sex toys can make a difference.

And before you laugh, know that at least a couple of the companies received funding.

So, give a cheer for this sexy version of ‘change the world.’

Image credit: HikingArtist

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here.

Regular readers know I have a thing for CB Insight’s co-founder Anand Sanwal and the newsletter he writes. The great data is a given, but the real draw for me are his common sense and wicked sense of humor, both of which infuse his prose creating an irresistible combination.

Monday’s newsletter shared a contrarian view of failure taken from his presentation at last year’s at SaaStr.

Acknowledging and being ok with failure is one of the best things about the startup community. We now celebrate the act of writing a startup failure post-mortem as courageous. (…)  Most are vapid puff-piece post-mortems that talk about being too early to market or suggest investors weren’t committed or offer up trite discussion of why they’ve joined a “larger platform” whose vision aligns with theirs.

Once again Anand is my hero by saying stuff out loud that needs to be said.

I’ve always believed that failure is a learning opportunity, but I never thought it should be enshrined and lauded.

Any more than Mark Zukerberg’s “move fast and break it” should have become a startup mantra.

Anand ends with this comment.

Now, even when you fail, you are a success.

Yup — in Startupland, everyone is a winner.

It reminds me of today’s “everybody gets a trophy” attitude.

Jean M. Twenge, author of The Narcissism Epidemic: Living in the Age of Entitlement. “But the ‘everybody gets a trophy’ mentality basically says that you’re going to get rewarded just for showing up. That won’t build true self-esteem; instead, it builds this empty sense of ‘I’m just fantastic, not because I did anything but just because I’m here.’”

That attitude permeates everything else, so why should Startupland be any different?

Image credit: HikingArtist

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here.

If I have to listen/read one more time about value/importance/etc of hiring “stars” or the “best” whatever I think I may scream. Or, better yet, shove the words/premise down the appropriate throat.

While I, and a small minority, have tried to debunk this mindset we haven’t made much progress.

So here’s an article from Scott E Page, the Leonid Hurwicz collegiate professor of complex systems, political science and economics at the University of Michigan, Ann Arbor.

Perhaps you’ll pay attention to him.

Why hiring the ‘best’ people produces the least creative results

While in graduate school in mathematics at the University of Wisconsin-Madison, I took a logic course from David Griffeath. The class was fun. Griffeath brought a playfulness and openness to problems. Much to my delight, about a decade later, I ran into him at a conference on traffic models. During a presentation on computational models of traffic jams, his hand went up. I wondered what Griffeath – a mathematical logician – would have to say about traffic jams. He did not disappoint. Without even a hint of excitement in his voice, he said: ‘If you are modelling a traffic jam, you should just keep track of the non-cars.’

The collective response followed the familiar pattern when someone drops an unexpected, but once stated, obvious idea: a puzzled silence, giving way to a roomful of nodding heads and smiles. Nothing else needed to be said.

Griffeath had made a brilliant observation. During a traffic jam, most of the spaces on the road are filled with cars. Modelling each car takes up an enormous amount of memory. Keeping track of the empty spaces instead would use less memory – in fact almost none. Furthermore, the dynamics of the non-cars might be more amenable to analysis.

Versions of this story occur routinely at academic conferences, in research laboratories or policy meetings, within design groups, and in strategic brainstorming sessions. They share three characteristics. First, the problems are complex: they concern high-dimensional contexts that are difficult to explain, engineer, evolve or predict. Second, the breakthrough ideas do not arise by magic, nor are they constructed anew from whole cloth. They take an existing idea, insight, trick or rule, and apply it in a novel way, or they combine ideas – like Apple’s breakthrough repurposing of the touchscreen technology. In Griffeath’s case, he applied a concept from information theory: minimum description length. Fewer words are required to say ‘No-L’ than to list ‘ABCDEFGHIJKMNOPQRSTUVWXYZ’. I should add that these new ideas typically produce modest gains. But, collectively, they can have large effects. Progress occurs as much through sequences of small steps as through giant leaps.

Third, these ideas are birthed in group settings. One person presents her perspective on a problem, describes an approach to finding a solution or identifies a sticking point, and a second person makes a suggestion or knows a workaround. The late computer scientist John Holland commonly asked: ‘Have you thought about this as a Markov process, with a set of states and transition between those states?’ That query would force the presenter to define states. That simple act would often lead to an insight.

The burgeoning of teams – most academic research is now done in teams, as is most investing and even most songwriting (at least for the good songs) – tracks the growing complexity of our world. We used to build roads from A to B. Now we construct transportation infrastructure with environmental, social, economic and political impacts.

The complexity of modern problems often precludes any one person from fully understanding them. Factors contributing to rising obesity levels, for example, include transportation systems and infrastructure, media, convenience foods, changing social norms, human biology and psychological factors. Designing an aircraft carrier, to take another example, requires knowledge of nuclear engineering, naval architecture, metallurgy, hydrodynamics, information systems, military protocols, the exercise of modern warfare and, given the long building time, the ability to predict trends in weapon systems.

The multidimensional or layered character of complex problems also undermines the principle of meritocracy: the idea that the ‘best person’ should be hired. There is no best person. When putting together an oncological research team, a biotech company such as Gilead or Genentech would not construct a multiple-choice test and hire the top scorers, or hire people whose resumes score highest according to some performance criteria. Instead, they would seek diversity. They would build a team of people who bring diverse knowledge bases, tools and analytic skills. That team would more likely than not include mathematicians (though not logicians such as Griffeath). And the mathematicians would likely study dynamical systems and differential equations.

Believers in a meritocracy might grant that teams ought to be diverse but then argue that meritocratic principles should apply within each category. Thus the team should consist of the ‘best’ mathematicians, the ‘best’ oncologists, and the ‘best’ biostatisticians from within the pool.

That position suffers from a similar flaw. Even with a knowledge domain, no test or criteria applied to individuals will produce the best team. Each of these domains possesses such depth and breadth, that no test can exist. Consider the field of neuroscience. Upwards of 50,000 papers were published last year covering various techniques, domains of enquiry and levels of analysis, ranging from molecules and synapses up through networks of neurons. Given that complexity, any attempt to rank a collection of neuroscientists from best to worst, as if they were competitors in the 50-metre butterfly, must fail. What could be true is that given a specific task and the composition of a particular team, one scientist would be more likely to contribute than another. Optimal hiring depends on context. Optimal teams will be diverse.

Evidence for this claim can be seen in the way that papers and patents that combine diverse ideas tend to rank as high-impact. It can also be found in the structure of the so-called random decision forest, a state-of-the-art machine-learning algorithm. Random forests consist of ensembles of decision trees. If classifying pictures, each tree makes a vote: is that a picture of a fox or a dog? A weighted majority rules. Random forests can serve many ends. They can identify bank fraud and diseases, recommend ceiling fans and predict online dating behaviour.

When building a forest, you do not select the best trees as they tend to make similar classifications. You want diversity. Programmers achieve that diversity by training each tree on different data, a technique known as bagging. They also boost the forest ‘cognitively’ by training trees on the hardest cases – those that the current forest gets wrong. This ensures even more diversity and accurate forests.

Yet the fallacy of meritocracy persists. Corporations, non-profits, governments, universities and even preschools test, score and hire the ‘best’. This all but guarantees not creating the best team. Ranking people by common criteria produces homogeneity. And when biases creep in, it results in people who look like those making the decisions. That’s not likely to lead to breakthroughs. As Astro Teller, CEO of X, the ‘moonshoot factory’ at Alphabet, Google’s parent company, has said: ‘Having people who have different mental perspectives is what’s important. If you want to explore things you haven’t explored, having people who look just like you and think just like you is not the best way.’ We must see the forest.

Scott E Page

This article was originally published at Aeon and has been republished under Creative Commons.

Image credit: HikingArtist

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here.

If you heard only the following comment who would you think it’s about?

He was determined to succeed by any means necessary, subordinating questions of right or wrong to the good of his career and driving himself crazy with his hunger for power and control, his hypersensitivity to perceived threats to his independence and stature, and his overarching need to measure up.

Travis Kalanick? Howie Hubler? Parker Conrad?

Nope, none of the above.

What about this quote?

“It is a great profession. There is the fascination of watching a figment of the imagination emerge through the aid of science to a plan on paper. Then it moves to realization in stone or metal or energy. Then it brings jobs and homes to men. Then it elevates the standard of living and adds to the comforts of life. That is the engineer’s high privilege.”

Marc Benioff? Pierre Omidyar? Henry Ford?

Nope, none of the above.

Both the description and the quote are about the same man.

Someone lightly touched on at school, but not explored in any depth, as were those who held the same position at other times.

Certainly most of the information in the article KG shared was new to me and I’ll bet it would be new to most of you.

The person is Herbert Hoover, the 31^st President of the United States.

The book, published last year is “Hoover: An Extraordinary Life in Extraordinary Times” by Kenneth Whyte.

Read the article (if not the book); you’ll find it very enlightening.

Then choose which parts of Hoover are worth emulating.

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A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here.

Over the years I’ve written about the value of reading books, most recently in a Golden Oldie just before Christmas. A few days later I was talking with a group of founders, all under 40, a couple of which follow this blog.

They took me to task for expecting them to have spare time to read. They said it was difficult enough finding the time to keep up with what was happening in their field and tech in general and that if they needed additional information on a subject they could google it.

When I commented that that kind of information didn’t lend itself to enlarging knowledge or encouraging thinking things got a bit heated. It was simpler to let them think I had backed down and change the subject than to subject the others to an argument.

And at that time I didn’t have the right ammunition to make my point, but now I do. Better yet, it’s courtesy of four of the most well-known thought leaders / influencers alive today.

“In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time — none. Zero.” — Charlie Munger, Self-made billionaire & Warren Buffett’s longtime business partner

Why did the busiest person in the world, former president Barack Obama, read an hour a day while in office?

Why has the best investor in history, Warren Buffett, invested 80% of his time in reading and thinking throughout his career?

Why has the world’s richest person, Bill Gates, read a book a week during his career? And why has he taken a yearly two-week reading vacation throughout his entire career?

Why do the world’s smartest and busiest people find one hour a day for deliberate learning (the 5-hour rule), while others make excuses about how busy they are?

Not only do they read, they read widely.

Successful people focus on both the tactical (daily) part of their business/lives, as well as the strategic (long(er)-term) part.

Blogs, media, conferences, etc., are tactical.

Books are strategic.

Image credit: HikingArtist

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here.

I had a $15 K lesson in founder ego when I lived in San Francisco. That’s how much I lost when I invested in a startup run by a guy with a bad case of it.

The only thing to do when that happens is to move forward and forget it. Money is replaceable — your sanity isn’t.

I haven’t thought about it in years, but reading the abstract from Do Alpha Males Deliver Alpha? Testosterone and Hedge Funds reminded me of “Craig,” in spite of its focus on hedge funds. (The full paper is available at the link.)

Using facial width-to-height ratio (fWHR) as a proxy for pubertal testosterone, we show that high-testosterone hedge fund managers significantly underperform low-testosterone hedge fund managers after adjusting for risk. Moreover, high-testosterone managers are more likely to terminate their funds, disclose violations on their Form ADVs, and display greater operational risk. We trace the underperformance to high-testosterone managers’ greater preference for lottery-like stocks and reluctance to sell loser stocks. Our results are robust to adjustments for sample selection, marital status, sensation seeking, and manager age, and suggest that investors should eschew masculine hedge fund managers.

This makes one wonder if the lack of testosterone is an underlying factor in the outstanding success of women-led companies outperforming those led by men.

Hedge fund managers have a number of traits in common.

They are white, attended ‘good’ schools, graduated from elite colleges and are connected through a web of similarly privileged friends.

Sound familiar?

That description fits much of Silicon Valley, both founders and investors.

As does the abstract.

As do the egos.

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A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here.

Sometimes predictions are hilarious, especially those about where technology is taking us.

It’s not that they get the tech wrong, but they often don’t factor in the minor details — such as customers.

Media is aglow with stories of how autonomous vehicles (AVs) will literally change the world beyond anything you can imagine.

In a recent survey by AAA, for example, 78% of respondents said they were afraid to ride in an AV. In a poll by insurance giant AIG, 41% didn’t want to share the road with driverless cars. And, ironically, even as companies roll out more capable semi-AVs, the public is becoming less—not more—trusting of AVs, according to surveys over the past 2 years by the Massachusetts Institute of Technology (MIT) in Cambridge and marketing firm J.D. Power and Associates.

And then there’s security.

Every time a software hack is reported, especially from a vulnerability the company knew about two years before it happened, as with Chrysler’s Jeep, or a bank, a retailer, a whatever, people grow more and more aware of just how vulnerable a software-based world that runs on online updates actually is.

Speaking at the National Governors Association meeting last year, Tesla’s Elon Musk, said,  “I think one of the biggest concerns for autonomous vehicles is somebody achieving a fleet-wide hack.”

The solution?

Mr Musk insists that a kill switch “that no amount of software can override” would “ensure that you gain control of the vehicle and cut the link to the servers”,

But what does control mean to an inert lump of metal that has no gas pedal, brakes, or steering wheel?

The car would just shut down wherever it was — maybe the middle of the freeway at rush hour or a lonely mountain road during a storm.

So customer trust and security are the main obstacles to the AV/tech-enabled world companies large and small are drooling over.

Given most companies historically cavalier attitude towards security and the general distrust of auto companies in particular, the result of multiple recalls over the years, changing people’s minds won’t be easy.

And for every step forward a major hack will mean at least three steps back.

Image credit: HikingArtist

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here.

My mother was born a century ago in San Francisco; growing up I spent at least part of every summer vacation there; as an adult I lived there for 25 years starting in 1977.

One constant in all that time was the truth of the saying, “San Francisco is 49 sq miles surrounded by reality” (not original to 60 Minutes).

That was true when my mother was growing up and probably before that.

It is still true, only now it applies to the South Bay, as well as parts of the East Bay.

The Bay Area has always marched to its own, different drummer, but that drummer has lost its mind.

Or maybe it’s not the different drummer, but that the inmates really are running the asylum (pardon the mixed metaphors).

These days, tech is the drummer and the inmates are the billionaires enamored with their own visions of a world created for the 1%.

Elon Musk is a prime example as is Peter Thiel.

Talk about guys with a god complex.

Perhaps we should revive an old roman custom — no, not feeding the 99% to the lions; that’s already happening.

Rather the one that reminded the 1% that they were not gods.

Image credit: HikingArtist