M&Ms: What are the odds you can reproduce that?

Tech entrepreneurship for regular people on 111th edition.

Hey Team,

Benjamin Graham was so keen on proving his ideas on investing could work for anyone that he avoided doing anything normal people did not have access to.

In a Berkshire Hathaway shareholder meeting in the 1990s, Warren Buffet, a Benjamin Graham student, said, "Back in his day, Graham could've talked to the people in charge of the firms he invested in. But Graham believed regular people didn’t have access to CEOs and founders of those companies for questioning, so he wouldn't do it either. He would stick with his system of value investing." 

As a result, Benjamin Graham's book The Intelligent Investor is regarded as one of the best investment books ever written. It teaches an investing system that his disciple Warren Buffet took to its natural conclusion. Value investing helped Buffet reach a $113.5 billion net worth.

Graham made sure, even if it cost him a little personally, that ANYONE who would do the work to read a company's financials could use his system. 

But there are a lot of things passed as great systems or great advice today that might never work for normal people or might have abysmal odds. Not everyone practices Graham's rigor when they dole out their advice.

Take the basic business idea: "Just hire amazing people, and you'll succeed." Nick Huber has been poo-pooing all over this idea on Twitter.* And rightly so. Who has access to amazing people when they're starting something new or are small time? Almost no one. It's bad advice that very few people can replicate.

But it's not just the hiring. The vast majority of entrepreneurial advice today is bad advice that is not reproducible.

It's common sense that no one path works in entrepreneurship.

But few benefit from saying that and saying stick to just the basic principles that work. Take the very early-stage VCs, who want their croupier cut from the early-stage startup economy, who might say, "If you work hard enough, make something people want, you will succeed eventually." From your thing, the croupiers only want 7% to 25% ownership. It's a fair deal, hunker down and eat ramen for a few years. And focus on one thing while they have a nice portfolio and a reproducible formula for success with every fund they raise.

I do not want to come off as too mean here. Perhaps in the olden days, in the times of Gatekeepers, when it was nearly impossible to drive traffic to a business without ads, raising capital might've been necessary very early. Before 2008, before FaceBook, YouTube, Twitter, etc., you needed ads on Radio, TV, or direct mail, and to buy ads, you needed capital. And to get capital, you needed connections. Perhaps giving away 7% to 25% of your thing to people not directly involved in the business made sense for access back then. And by the way, I believed this myself early on.

But today, you don't need permission. In fact, you have to find ways to grow anything you build today organically via an audience, SEO, a viral loop, or whatever, whether you pay the croupier or not. The ads just don't seem to work like they used to, and the $150k in cash those incubators invest does not go as far as it used to. And everybody knows the croupier can't help you win in the casino.

And today, with tech moving so fast, being tied to one thing can actually be harmful. But they’ll never tell you that advice either because that wouldn’t help them win. This almost burned my shot at entrepreneurship. With little money coming in from the one investor-funded startup, my savings were disappearing fast in the early days of this game.

So my mindset now is to forget the advice that's got crazy low odds of being reproducible in any way by regular people. Like “eat ramen, focus on one thing, or hire great people.” And instead, focus on things even regular people like me can do to succeed as entrepreneurs.

— —

*Nick Huber on hiring.

---

Three Tweets: Done is better than perfect, computers aren’t accountable, inspiring people.

Marc, the co-founder of Netflix, makes a great point on something I initially struggled with as an entrepreneur.

Most of us overthink it. Heck, I even used to overthink my Tweets.

But shipping a lot of stuff, and putting a lot of things in front of other people, helps a lot with this. It's the only antidote I've found.

---

A truth from IBM in 1979 that’s become even more important in the age of AI.

---

Today you can learn from and be inspired by some great people. Heck, technology has made it so easy you can even interact with many of them and ask questions.

---

Two Memes: Work Life, End the Speculation

Something I used to feel a lot back in a big corporate job.

---

---

Small Personal Update:

I hope you have a happy Fourth of July if you are in America.

---

I love hearing from my readers; even if I don’t always have time to reply, I always read all replies.

-Louie