Looking Back, We're Never Going Back, Mark Carney and Reid Hoffman

December 10 2020

“We are what we repeatedly do. Excellence, then, is not an act but a habit”.

- Aristotle

“The whole problem with the world is that fools and fanatics are always so certain of themselves, and wiser people so full of doubts.”

- Bertrand Russell

“If you woke up tomorrow morning and found out you had ten years to live, what would you stop doing?”

- Jim Collins

1. Looking Back And Looking Ahead

How was your 2020 ?

What were your personal highlights ?

I use December less for reading new books and more for thinking about the year that has gone by and planning the next.

I’ve found reflecting and planning to be a useful exercise, not because things go according to plan, but because thinking about what you really want and how you are going to get there is a useful exercise....

or as President & General Eisenhower said: 

1) Plans are useless, but planning is indispensable.
2) Plans are worthless, but planning is essential.

Three are probably two career planning texts that are powerful and worth reading multiple times (I have) and they help guide me.

Firstly, Byron Wien’s: Lessons Learned in His First 80 Years.

The three lessons that really resonated with me:

Network intensely. Luck plays a big role in life, and there is no better way to increase your luck than by knowing as many people as possible. Nurture your network by sending articles, books and emails to people to show you’re thinking about them. Write op-eds and thought pieces for major publications. Organize discussion groups to bring your thoughtful friends together.

When you meet someone new, treat that person as a friend. Assume he or she is a winner and will become a positive force in your life. Most people wait for others to prove their value. Give them the benefit of the doubt from the start. Occasionally you will be disappointed, but your network will broaden rapidly if you follow this path.

Read all the time. Don’t just do it because you’re curious about something, read actively. Have a point of view before you start a book or article and see if what you think is confirmed or refuted by the author. If you do that, you will read faster and comprehend more.

Secondly, Sam Altman’s: How To Be Successful

Here are three parts that resonated with me:

Compound Yourself....You don't want to be in a career where people who
have been doing it for two years can be as effective as people who have
been doing it for twenty—your rate of learning should always be high. As
your career progresses, each unit of work you do should generate more and
more results. There are many ways to get this leverage, such as capital,
technology, brand, network effects, and managing people....Trust the
exponential, be patient, and be pleasantly surprised.

Focus......Almost everyone I’ve ever met would be well-served by spending
more time thinking about what to focus on. It is much more important to
work on the right thing than it is to work many hours. Most people waste
most of their time on stuff that doesn’t matter.

Be hard to compete with....The best way to become difficult to compete
with is to build up leverage. For example, you can do it with personal
relationships, by building a strong personal brand, or by getting good at
the intersection of multiple different fields. There are many other
strategies, but you have to figure out some way to do it.

What are your personal goals for 2021?

One way to make that question more effective is from friend Leila:

Where in your life can you start with a blank sheet, where can you challenge the norms? What have you been doing the same way for years that could be done differently or not done at all?

B. We’re Never Going Back

I’ve been asking everyone I meet when they think things will be back to the new normal and what it will look like when it’s come to work.

The best thing I’ve found on this is this article by Packy McCormick and here’s the audio version if you’d rather listen.

We all think that companies have the following options:

There are significantly more options and outcomes.

When something as big and global as what happened this year occurs life will never go back to normal, and there are huge investment opportunities in figuring out what the 1st, 2nd and 3rd order consequences will be of the changes ahead.

Missing from the debate about what companies will do going forward is the fact that it’s not really up to the companies to choose.

Employees will ultimately make the decision.

The best employees have more options now than ever before, and they’re not going to work for companies that make them shave, get dressed, hop into a car or a crowded subway, and sit at a desk in an office five days a week with their headphones on trying to avoid distractions and get work done. 

We’re never going back to the way things were.

Like any major dislocation, that presents massive opportunities for those who are prepared and is going to completely run over those who aren’t. It always feels safer to bet on the status quo. We’ve worked in offices for more than a century, and we’ll work in offices again. 

But now is the time to think about how life could really be different.

The manifold benefits of Remote or Hybrid are beginning to crystallize, a few of which are.

Quoting Packy:

  • No Commute. People spend nearly one stressful hour commuting every day. That’s time they could be sleeping, working out, hanging with their kids, or even doing more work. Now that we’ve lived without commutes, it’s hard to imagine going back. 

  • Live Anywhere. Not going to the office every day expands the choices for where to live. In Hybrid companies, employees might be able to live in the country two hours outside of the city and go in once or twice a week. Remote employees can live anywhere they desire, with anyone. Location will no longer be tied to employment. 

  • Increase Opportunity and Access. Only .01% of the people in the world live in San Francisco, but a disproportionate amount of great jobs were based there. Now, the best people anywhere in the world can find their dream job without leaving their friends and families.

  • Find Better Talent. The flip side of the above is that companies who look globally can access the best talent in the world, regardless of where they happened to be born. 

  • More Time With Family and Friends. Out of necessity and that magic that binds people going through a challenge together, people accepted that their co-workers were also going to be the people they spent the most time with: eight-plus hours in the office together, five days per week, plus happy hours. Remote will unbundle work and social.

Importantly, all but the most conservative companies understand that they will at least need to be Hybrid, if not fully Remote, not because they want to, but because the best people want to.

The possibility of Remote work will create a liquid global talent marketplace, unshackling employment and geography and giving the best employees more optionality than they’ve ever had.

Forward-thinking companies, too, will have more qualified candidates to choose from than ever before. 

If you believe that a company’s most valuable asset is its employees, then the decisions that companies make around Remote work in the coming months will be the most important they’ve ever made.

There will be a massive first-mover advantage available to the companies who move quickly and intelligently. The shakeout will lead to a gaping bifurcation in talent quality. Similar to what happened with companies that figured out other technologies first.

Here are a few examples of what Packy thinks a Remote and Hybrid future could mean:

First-Order Consequences

If Remote and Hybrid win out, a few things seem likely to happen as a direct result: 

  • Urban Office Prices Will Fall. Office prices in cities like San Francisco and New York will continue to fall in the short-term while companies figure out how to build spaces that attract employees. Flexible operators and spaces, like ConveneIndustriousBreatherFlex by SquarefootSwitchyards and Kettlespace will have the opportunity to position themselves as experts in building spaces that attract employees, on flexible terms.

  • Remote and Hybrid Companies Will Attract Talent. Employees will flock to companies with both flexible Remote and Hybrid options, and increasingly, demonstrated skill at managing remote and in-person teams. Remote Work experts will become a part of many companies’ People teams. 

  • Remote and International Hiring Will Explode. Companies will take remote and international hiring seriously, and will need to wrestle with how to compensate people who do the same job from different parts of the world. Over time, companies will learn how to work better remotely and push through cost of living adjustments, saving money on salary in addition to rent.

  • Spend Shifts to Perks and Software. Companies will reallocate the money that they would have spent on higher salaries, a desk for every employee, and office perks to better at-home setups, fitness, food, and travel allowances, and more software. 

  • Work From Home Trade is On. The WFH software companies will continue to thrive until and unless new, better, remote-first products begin to steal market share. Cloud’s dominance will accelerate as companies realize the shift is permanent. Zoom will be at-risk over the medium-term, but numbers will continue to surprise to the upside for a while as people take time to digest the idea that a vaccine doesn’t mean the end of Remote.

  • Short Return Companies. Companies that try to force a Return on their employees will lose their best employees, and by optimizing for “willingness to come to the office every day,” will hire B and C players. Their decision will also expose a short-sightedness akin to not wanting to leverage software a decade or so ago. “Return” will be a leading indicator of underperformance. Obviously, some companies -- medical, manufacturing, hospitality, and the like -- should Return, but you should short companies that have another option and don’t take it. 

Second-Order Consequences

Digging a level deeper, things start to get a little less obvious and a little more interesting. 

  • More Consumer Travel, Less Business Travel. If more employees can work from anywhere and save money by not commuting and eating at home every day, they’ll be able to travel more frequently. A higher proportion of travel will be for pleasure instead of business, meaning that consumer-focused companies like Airbnb look more attractive than hotels, which generate a lot of revenue from business travel and corporate events.

  • People Will Move More Often. They’ll experiment with new cities. That could be another win for Airbnb, whose long-term stays let people live in a new place for weeks or months at a time. It’s also part of Chamath’s thesis for acquiring Opendoor. As more people move more often, iBuyers that make the process of buying and selling a home easier will gain more market share in a growing market. 

  • Social Will Go Local. As people look for new ways to meet, either because they’re living in a new place, or because they don’t rely on work for friendships in the same way, social will go local again. Gyms and group fitness classes with post-workout social programming could offer a way to meet new people, like Crossfit already does so well. Speakeasies and other hidden social clubs in empty office space might provide excitement for members and some cashflow for office landlords. The “Soho House for X” trend that was underway pre-COVID will come back with a vengeance as people who have been cooped up for months seek to replace the social role the office used to fill. 

  • The Metaverse. People will turn to other online spaces, too. Gaming will continue its meteoric rise, and the Metaverse will be pulled forward. I would bet on Tencent (Epic, Discord, and dozens of gaming investments), Unity, Snap, and the impending Roblox IPO.

Third-Order Consequences

This is where things start getting really wild. Unshackled by the office’s location, people will move where they want to move, often out of expensive cities and into more affordable towns with better weather. Those are first-and second-order effects. Some third-order effect might be that because they’re saving more money, they have more money to invest, and the trends towards more retail investment in stocks, art, real estate, and more will accelerate. 

Other ideas:

  • Rise of Alternative Education. As mobility increases, more people will need to give online or alternative education a real shot, because they’ll be loathe to gain freedom from the office but remain tied down by their childrens’ schools. Homeschooling options like SchoolHouse, which matches groups of families with teachers to form microschools, Primer, an online homeschooling community and infrastructure startup, or Outschool, which lets kids take online classes or camps from anywhere, will appeal to parents who want to move while keeping their kids well-educated.

  • More Fluid Employment. Productive employees may work multiple full-time roles. In GitLab’s fourth phase, Intentionality, employees are measured on output. If employees can keep up the output, employers will be comfortable letting them work multiple jobs. The absolute star performers, who Dror calls “The 10x Class,” will put their talents up for a global auction, and will reach income levels similar to top athletes and celebrities.

  • New Employee Stock Options. As companies and employees enjoy a more transitory relationship, and as Remote leads to more precise performance tracking, equity will have to evolve to be rewarded for performance and contribution instead of tenure and rank. As Sari and I wrote, we think that Fairmint is in a great position to make this possible technically. Remote will make it acceptable culturally.

I’d love to hear your views on what comes next, what the consequences are where the opportunities sit?

C. A Few Things Worth Checking Out

1. The Reith Lectures have been a UK institution since 1948. This week, Mark Carney, the former Governor of the Bank of Canada and the Bank of England, charted how we have come to esteem financial value over human value and how we have gone from market economies to market societies. He argues that this has contributed to a trio of global crises: of credit, Covid and climate. And he outlines how we can turn this around. Deep, but important. Thank you David G for sharing.

2. Ted Seides chatted with Chamath on the Social Capital flywheel and on how he’s planning on creating Berkshire 2.0. This one is much more on the goals and purpose of Social Capital and his plans to achieve them. One to listen to twice.

3. My friend Harry Stebbings had Reid Hoffman on his podcast discussing: Investing in Airbnb and Passing on Stripe, How To Think Through Ownership and Price in Venture & How To Ensure Venture Partnerships Always Have Trust and a Learning Mindset. Super thoughtful discussion, that I need to listen to again.

4. How to Save Democracy From Technology (Foreign Affairs, January-February 2021). Three ‘giants’ in their respective fields make suggestions on how to address one of today’s most intractable issues: ending Big Tech’s information monopoly and the threat it poses to democracy. They reckon that the economic case for reining in Big Tech is complicated but think that there is a much more convincing political case: Internet platforms cause political harms that are far more alarming than any economic damage they create.

5. Three ideas for how to live a fuller life - argues that by reimagining our relationship with time – and coming to terms with death – we can improve our existence. The three ideas that are worth exploring: (1) “The dinner party of the afterlife’, (2) Drawing on the wisdom of indigenous cultures whose worldviews dissolve the barriers between life and death, offering a sense of transcendence, (3) Taking the perspective of ‘deep time,’ recognising that humankind, and our own lives, are just an eye-blink in the cosmic story.

6. How to boost happiness hormones like serotonin and dopamine in everyday life. There are four main hormones that trigger feelings of happiness - dopamine, serotonin, endorphin, and oxytocin -, each connected to specific events or rewards. Understanding these chemicals and how they work can help us figure out some small but effective ways to feel better in such stressful times. This article shares some simple ‘tips’ on how to boost these feel-good hormones.

“That's how history unfolds. People weave a web of meaning, believe in it with all their heart, but sooner or later the web unravels, and when we look back we cannot understand how anybody could have taken it seriously.”

- Yuval Noah Harari (“Homo Deus”)