Asking About a Person’s Weaknesses

Austrian entrepreneur Hermann Hauser, in an interview in yesterday's FT, was asked about his three worst features. His answer: "I am impatient, I don't suffer fools gladly, and I am too demanding."

I've seen impatience cited as a weakness in several interviews with big-ego execs. What a cop-out. Though it's not as bad as when someone's self-critical moment comes via a line like, "I work too hard on the weekends."

When attemping to rely on a person's self-knowledge — a treacherous affair — stick to asking about the person's top strengths.

If, however, you're keen on asking a question that prompts a darker reflection, don't ask explicitly about weaknesses. Ask instead, "What keeps you up at 2 AM?"

You won't get an honest answer there, either, but, in my experience, you get a bit closer.

Hiring and Business

This week Steve Newcomb and Ben Horowitz both wrote dynamite posts on hiring and business.

In Steve's post, he sets up the topic this way:

What happens when founders try to sleep at night is this: their mind spins uncontrollably between scenarios that result in a glorious success and scenarios that result in a burning death crash.  Most founders I know ride a fine line between seeming to be in total control and going nut balls.  

All I can say is welcome to the club – you're normal!  

Whenever people ask me how I make it through, I always say the same thing.  Sit down and write down the shit storms that you are worrying about and divide them into two list.  Those that are under your control and those that aren’t.  Then focus on the list that you can control.  If you stare at that list long enough you’ll realize a commonality.  That the solution to every single one of them begins with having a team that is rock solid, one that isn't afraid of challenges and one that believes in you as a founder.  If you do this one thing right, it will steady you and calm your mind enough to face and conquer any challenge.

Focus on things you can control is a lesson one can never hear too many times. Steve says the answer to all of a founder's worries is to have a rock solid team behind you. Very generalizable. In the post he goes on to offer a rich list of tips for how to recruit and retain a killer team. Read the whole thing.

Ben Horowitz's post is intriguingly titled: If You've Never Done the Job, How Do You Hire Somebody Good? CEOs often hire people to do jobs they've never done and never could do. You're hiring domain experts. But if you're not a domain expert yourself, how to evaluate the candidate? That's the set-up for an excellent analysis on hiring.

One of his early points is that you should figure out what strengths you need from a candidate and focus on that:

The more experience you have, the more you realize that there is something seriously wrong with every employee in your company (including you). Literally, nobody is perfect. As a result, it is imperative that you hire for strength rather than lack of weakness. Everybody has weaknesses; they are just easier to find in some people. Hiring for lack of weakness just means that you’ll optimize for pleasantness. Rather, you must figure out the strengths you require and find someone who is world class in those areas despite their weaknesses in other, less important domains.

Then he suggests coming up with a list of questions for different types of candidates that cut at the heart of that specific domain (sales force, operational management, etc).

He notes the usefulness of front door references:

For the final candidates, it’s critically important that the CEO conduct the reference checks herself. The references need to be checked against the same hiring criteria that you tested for during the interview process. Backdoor reference checks (checks from people who know the candidate, but were not referred by the candidate) can be an extremely useful way to get an unbiased view. However, do not discount the front door references. While they clearly have committed to giving a positive reference (or they wouldn’t be on the list), you are not looking for positive or negative with them. You are looking for fit with your criteria. Often, the front door references will know the candidate best and will be quite helpful in this respect.

Against Occupational Licensing

Matthew Yglesias discusses the follies of occupational licensing, citing the case of whether barbers ought to have licenses to set up shop:

If you just assume optimal implementation of regulation, then regulation always looks good. But as I noted in the initial post the way this works in practice is the boards are dominated by incumbent practitioners looking to limit supply. One result is that in Michigan (and perhaps elsewhere) it’s hard for ex-convicts to get barber licenses which harms the public interest not only by raising the cost of haircuts, but by preventing people from making a legitimate living. States generally don’t grant reciprocity to other states’ licensing boards, which limits supply even though no rational person worries about state-to-state variance in barber licensing when they move to a New Place. In New Jersey, you need to take the straight razor shaving test to cut women’s hair because they’re thinking up arbitrary ways to incrementally raise the barrier to entry.

In principle, you could deal with all these problems piecemeal. But realistically this sort of problem is inevitably going to arise when you pit the concentrated interest of incumbent haircutters against the diffuse interest of consumers. It’s hard enough to make sure that really important regulatory functions related to environmental protection, public safety, and financial stability are done properly.

In the comments section of Marginal Revolution, there's a link to Dan Klein's PowerPoint on occupational licensing. I spent five minutes flipping through the slides and learned a lot about the issue and about how economists think about topics such as this. Highly recommended. I learned, for example:

  • Occupational licensing affects 29% of U.S. workers
  • There are three levels of control: registration (an official list of providers), certification (if you want to use the official title you have to be certified), and licensing (you cannot do business unless you have a license).
  • Popular rationale for licensing includes helping consumers find trustworthy providers because consumer cannot judge quality and safety before and (sometimes) after the fact.
  • Official stance on licensing: protects consumers. Skeptical stance: protects incumbents from competition.
  • Voluntary supply of assurance: certifications, word of mouth, brand names, warranties, etc.
  • Studies consistently support the skeptical stance on OL. Reduces supply, increases prices; no quality difference net net, sometimes even a worse quality among licensed practitioners; depresses wages.
  • Licensing boards made up mostly of existing practitioners in the industry and they spend most of their time prosecution unlicensed practitioners, regardless of quality. In-group ethic is strong.
  • Another example of the persistence of a bad status quo thanks to concentrated benefits, diffused costs.

BTW it's interesting to see Yglesias's liberal readership bash him in the comments section, even though his sensible less regulation idea ahelps (via lower prices) poor people who consume the services and helps the (generally speaking) poorer people who want to start businesses like barber shops. One commenter, after the onslaught of negativity toward Yglesias, writes: "The left once again reveals itself as not pro working class, or pro woman, or pro black, or pro muslim, or pro oppressed group of the day, but merely the voice of the state." A later commenter says the right doesn't even pretend to care about the oppressed. Both sentiments contain a truth. I think a better way to split the political left and right is comparing the Tragic and Utopian View of the World.

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Here's my older post on the Case Against Credentialism, which covers similar themes.

The Procrastination Risk in the Maker’s Schedule

Paul Graham wrote a popular essay a year ago contrasting the "Maker's Schedule" with the "Manager's Schedule":

The manager's schedule is for bosses. It's embodied in the traditional appointment book, with each day cut into one hour intervals. You can block off several hours for a single task if you need to, but by default you change what you're doing every hour.

When you use time that way, it's merely a practical problem to meet with someone. Find an open slot in your schedule, book them, and you're done.

Most powerful people are on the manager's schedule. It's the schedule of command. But there's another way of using time that's common among people who make things, like programmers and writers. They generally prefer to use time in units of half a day at least. You can't write or program well in units of an hour. That's barely enough time to get started.

Marc Andreesen wrote a post a couple years before Graham recommending a something similar: as much as possible don't keep a schedule, don't agree in advance to meetings that can interrupt the most important to-do of the current moment.

It's true that for some creative pursuits you need long, uninterrupted stretches of time to get work done. I try to batch my calls / meetings for just this reason. But one twist: if you have literally nothing on your calendar for a day — and for enthusiasts of the Maker's Schedule, this is the goal — procrastination becomes easier, in my experience.

When I have nothing on today's calendar it's easy to dick around during any one of my morning routine stages: wake up, breakfast, email, workout, shower, lunch. If I don't have any anchor external commitment, I can say to myself, "If I start real work at 2 or 3 PM, what does it matter?"

By contrast, if I have a call scheduled at 1:30 PM (my usual time for doing calls), I keep focused on swiftly moving through my morning routine in time to do the call. Otherwise, my whole day is thrown off. Then, when the call's finished, I'm ready to immediately dive into real work for the rest of the afternoon / night. (I'm up until 1:30 AM.)

Bottom Line: The idea of a day totally free of any external commitments or obligations sounds good in theory yet increases the likelihood I procrastinate. On the other hand, a day full of meetings or obligations means I get nothing done. The optimal point is one or two obligations which mark the passing of the day and create a sense of urgency about how I spend the time that's all mine.

Time Allocation Goals vs. Output Goals

When people set goals they usually define clear, measurable outputs. E.g.: “Today I’m going to write 1,000 words” or “This afternoon I’m going to finish QA testing this version release.”

But this approach doesn’t work as well for tasks of considerable complexity where what’s required of you is uncertain. Projects where there’s a clear end-goal but it’s in the distant future. The specific intervening steps, and the time required for each step, are unknown.

I’m involved in such a project right now. When I work on it I set goals around how many hours I want / need to spend. My daily goal might be: “Spend four hours working on [specific thing related to general project].” Then I’ll put my head down and make progress. And if I spend four solid hours, I consider the goal met. I am very disciplined about making sure I only count time that’s real work — if my mind wanders or if I get distracted, I turn off the clock.

As I’ve set time-allocation goals I’ve figured out the maximum amount of time I can realistically apply toward different types of tasks in a given day. I can usually do at most 4-5 hours of “hard focus work” and 4-5 hours of “light focus work” (email, blogging, Skyping) per day. A big variable for people is whether meetings fall into “hard focus” of “light focus.”

Bottom Line: The right kind of goal setting depends on the person and projects involved. For long-term projects where the specific steps and time necessary for each step are uncertain, setting short-term time allocation goals works well for me.

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All inbound email to me is now automatically marked as “read.” No more bold messages that scream to be opened. I would find myself opening the bold messages even before I had finished dealing with an older email. Thanks to Cal for this idea. I reccomend trying it.

The Two Schools of Strategy

…the history of strategy as a struggle between two definitions, strategy as positioning and strategy as organizational learning. The positioning school, led by Harvard’s Porter, sees strategy making as the choice of where you want to compete, in what industry and from what spot within that industry, and how—on price, with distinctive products, or by finding a niche. The organizational-learning school, by contrast, maintains that no company that’s already up and running can choose its strategy as if it had a blank slate. Almost gleeful in its derision of the positionists—at least its leading spokesman, McGill’s Henry Mintzberg is—the learning school also argues that virtually no strategy ever works as originally planned. The point, they say, is for the company to set off in one direction, learn from the response it gets from markets and competitors, and then adjust accordingly.

That’s from The Lords of Strategy by Walter Kiechel. Full review forthcoming. Here is Mintzberg’s book The Rise and Fall of Strategic Planning.

Robert Solow on Markets and Their Limitations

His review of Cassidy’s book How Markets Fail in the New Republic a couple months ago is superb. He clearly describes basic economics, what a free market can do, and where it falls short.

Excerpt:

…in the course of producing and distributing goods and services, market outcomes generate incomes, wealth, status, and power. Any modification of market outcomes modifies the allocation of incomes, wealth, status, and power. So it is no wonder that the discussion has become thickly encrusted with ideology. And one convenient way to turn subtle argument into ideology is to create dichotomies where there are originally fine gradations of more and less. For example: are you for or against “the free market”?

He also touches in passing on the issue I’m sure the more introspective workers in the finance industry must ponder: How much good am I doing in the world?

I have read that a firm such as Goldman Sachs has made very large profits from having devised ways to spot and carry out favorable transactions minutes or even seconds before the next most clever competitor can make a move. Deep pockets in a large market can make a lot of money out of tiny advantages…A lot of high-class intellectual effort naturally goes into trying to invent ways to find those tiny advantages a few seconds before anyone else.

Now ask yourself: can it make any serious difference to the real economy whether one of those profitable anomalies is discovered now or a half-minute from now? It can be enormously profitable to the financial services industry, but that may represent just a transfer of wealth from one person or group to another. It remains hard to believe that it all adds anything much to the efficiency with which the real economy generates and improves our standard of living.

And so: “…our poorly regulated financial system is not only dangerously unstable, but also too big and too complex, absorbing talent and resources that could be better used doing something else.”

Imagine a world with 50% fewer bankers / brokers and 50% more entrepreneurs.

The Difference Between Banality and Profundity

Generally a few billion dollars, Daniel Gross says, in a short Slate piece:

The real alchemy of finance is to endow those skilled at finance to wield authority in adjacent or even unrelated areas. That's the general theory of Davos, bankers sharing their theories about nonbanking subjects. Stick around and you'll hear a lot of conventional wisdom on globalization, climate change, poverty reduction, financial crisis, but it somehow sounds deeper and more weighty because it's delivered by an extraordinarily wealthy CEO, a private equity executive, or hedge fund manager rather than by a journalist.

His case-in-point is George Soros, who we listen to on topics ranging from U.S. politics to philosophy, even though his views in these areas may not be unusually insightful.

The truth is we listen to rich people on a range of issues not for their insights but because a billionaire is in a position to actually implement the conventional wisdom. Is Bill Gates the most original voice on education reform in America? No, but whatever he does believe, banal or not, matters, because if he wants to make a difference he can.

Still, Gross's point is well taken: expertise is context-specific, and billionaires rarely have the most interesting things to say.

The “It” Quality

In the business world investors are looking for TheGuy, according to Randall Stross:

The guy. No special emphasis on either the or guy, but no intervening pause, either. TheGuy. That’s the person needed to head a start-up once it has grown beyond a seed. To wit, a stud, ideally, a big honkin’ stud or a total fuckin’ stud. He (or yes, she) will not lack for balls, at least in one sense, but in another will work his nuts off, or his ass off. A high-hustle guy. A total can-do guy. A winner. Smart. Someone with integrity off the charts. Scrappy. A kick-ass dude, a nail-eatin’, nut-crushin’ decision maker, a competitor with killer instincts. Someone who attracts and hires A’s, unafraid to hire above himself. A player. A hitter.

You can abbreviate it: They’re looking for an entrepreneur who has “it.”

When businesspeople don’t have “it,” you can tell. From the Vanity Fair profile of Arthur Sulzberger:

Here, in a nutshell, in the words of a veteran Times staffer, is what is supposedly wrong with Arthur: “He has no rays”—rays, as in the lines cartoonists draw around a character to suggest radiance, or power. In the comics trade these lines are called “emanata.” The emanata deficit is a standard insider lament about Arthur, although most Times people need a few more words to make the point.

“It” means more than “very smart.” Besides suffering from word inflation, “smart” doesn’t capture energy, zest for life, incredible get-shit-done capabilities, and general radiance that seem to accompany these people. It’s the total package.

In the sports world, elite athletes who always take care of business often earn the “it” label. I once watched a football game and heard the announcers say the quarterback has “it.” They went on to say, He is a baller, He is a player, He is a competitor, He is hyper talented. But none of these things seemed sufficient. At a loss, they said again, “He just has ‘it.'”

Finally, the “it” quality lives large in the world of beauty. Supermodels seem just normally beautiful at first. Why do the cameras never tire of them, then? Supermodel beauty involves, among other things, “uncanny symmetry and harmony to their features so that once you start looking at them it becomes difficult to stop.” It’s regular high ranking beauty plus this other harder-to-describe stuff (“harmony to their features”?) that make it work.

You know it when you see it.

The “Easy Out” Email Technique

Life is a sales call. Every day we're trying to sell something to somebody — from as little as convincing someone to join you for dinner to as big as selling a potential employer on your credentials. That's why it pays to study sales and psychology.

Most sales activity these days happens over email. So it's important to think through how you can craft emails that get the response you're looking for.

My friend David Cohen, executive director of TechStars (apply to Boulder now!), blogged about a good technique to use that he calls "the easy out." If you've been emailing someone who is not responding and you've followed up by phone and still are not getting an answer, try this:

You can send an email that says something like “It’s been some time and after several attempts, I haven’t received a response from you about my proposal. I realize this may not be a fit for you, but I was hoping you could just let me know for sure with a quick reply so that I can cross you off my list.”…

Magically, you’ll find that providing the easy out sometimes triggers action. Psychologically, it feels like a last chance to the recipient. I’ve noticed that the easy out is generally effective at separating the “maybes” into “No” and “I really am interested – I’ve just been busy.” Most people won’t ignore the easy out (if they receive the message), and their reaction can be telling of their true intentions.

I'll be writing about this topic more later in the year. Let me know if there are other situations where you are interested in how to get the attention of a busy person.

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  • Imagine if the SAT lasted two days, covered everything you've ever studied, and decided your future. Welcome to China.
  • When things go wrong or when your expectations are not met, the first words out of your mouth should be: "Hmmm. Interesting."
  • Cool time lapse video of a guy who drove from Los Angeles to New York.
  • What's the difference between liberals and libertarians? Arnold Kling outlines the key points.
  • Long piece on Dave Eggers. "I need eight hours to get 20 minutes of work done…and seven hours of self-loathing."