So, sorry about that last post. Boring as hell, I know. It was even boring for me to re-read, but I guess writing practice is writing practice, even if the subject matter is dry. On to more interesting topics...
Christy and I got The Social Network out of RedBox about a week ago. For those of you who don’t know, it’s the story of the founding of Facebook. If you don’t know what Facebook is, well, Google it. We’re both pretty nerdy and into anything technology related, and I’m also a sucker for learning how people get rich. It turned out to be pretty good. Even N’Sync guy didn’t do a bad job. It also gave me a handful of insights that I thought might be of interest to the world. Those insights are found below. Note that this may not all make sense if you haven’t seen the movie, but I did try to explain things in places where I directly reference the film.
1. Parasites are everywhere. And it can pay to be a parasite.
Before I watched the movie, I had no idea that Sean Parker (one of the original Napster guys and involved in a lot of other Internet stuff) was involved in Facebook at all. Apparently he was. He was even president of the company for a while until he got caught with some drugs or something. And why was he involved? Why did he get 6% of the company? Why did he get an executive job? I guess you could argue that he set them up with the venture capitalists. I'm not sure whether or not that should be claimed as a benefit (see #2 below). Did he do anything else substantive? From what I saw, it looked like he bought a few lunches, took Zuckerberg out on the town a few times, and that was about the extent of it. What he did do, though, was act important and confident, give Zuckerberg some friendly advice, and just hung around Facebook central all the time. He made himself a part of the company simply by flirting with Mark Zuckerberg. And for this, $2 billion. Lesson: you don't have to add value in order to get someone to think that you add value.
Of course, there's also the other side of that coin - when you come up with something big, there will ALWAYS be someone there wanting to help you, for a nominal fee. If they really have help to give, great. But don't let a parasite fool you into thinking that they are doing something valuable when all they are really doing is running game on you.
2. Never trust a banker.
There are 2 (non-mutually exclusive) classes of banker. There is the stupid retail banker - these are the people who got killed in 2008 because they thought real estate would never go down. Then there is the tear-out-your-jugular-vein-with-their-own-teeth-banker - these are the people who convinced the stupid retail bankers that they had safe investments, then put a gun to the heads of 535 congressmen in 2008 and demanded that taxpayers fix the problems that their retarded cousins created. They want to take your money at gunpoint, urinate on you, then put a knife to your throat and demand that you thank them for doing it. Not all bankers work for banks. Some are hedge fund managers. Some are “investment bankers” - basically hedge fund managers inside of actual banks. Some are venture capitalists. But at their core they all have the same philosophy, the same core - keep as much of the money for yourself as possible. Lying, cheating, and stealing be damned.
Eduardo (Zuckerberg’s early partner, made the initial financial investment in exchange for 30%) got screwed by a banker because he didn’t read what he was signing. Now, to be clear, I’m not blaming the banker. The banker philosophy has a certain beauty. If everyone behaved like a banker, nobody would ever get screwed because nobody would trust anyone. It would likely create a pretty optimal economic system. But everyone does not behave like a banker. Eduardo trusted a banker. Eduardo got what he deserved for that little misstep. But in his misstep, you get to learn a valuable lesson. If a banker ever gives you something to sign, make sure at least one lawyer reads it. If you’re securing venture capital funding, you should probably have multiple independent law firms both read it. Twice. Because they are trying to screw you. In their minds, one of you is going to get screwed, and they want to make sure it’s not themselves. Your job is to make sure that when you get screwed (because you will), it’s at least a fair and just amount of screwing.
3. Social networking is mostly about sex.
I ran across a great quote a few months ago from some guy (I presume it’s a guy) named Jamie Zawinski - “The most important question for anyone writing social software should be, how will this software get my users laid?” It is, I think, a good point. There’s a scene right before Facebook goes live for the first time where Zuckerberg runs across campus back to his dorm room to add the “relationship status” feature before they turned it on. Even then, sex was central to what they were doing. The whole thesis behind the site that the Winklevoss brothers were working on (and that Zuckerberg “stole” the Facebook idea from) was that sex partners from Harvard were more desirable than those from other schools. I know, I know, YOU don’t use facebook to try to get laid. At this point, people use facebook because other people use facebook. But when nobody was using facebook, why did the first adopters use it? I’d be willing to bet that most of the time, it was a means to get laid.
4. Go after 1 marlin, not a bunch of trout.
In the early stages of Facebook, Sean Parker apparently ran across the site and fell in love. He proceeded to track down Zuckerberg and Eduardo and had dinner with them. Eduardo, at the time, is trying to convince Zuckerberg to start monetizing the site. They wind up asking Parker what he thinks. As part of his explanation of why they should wait to monetize until it's grown bigger (I think they had like 100,000 users at the time). Parker asks, "When you go fishing you can catch a lot of fish, or you can catch a big fish. You ever walk into a guy's den and see a picture of him standing next to fourteen trout?". If you have a really big idea - one that has the potential to have hundreds of millions of customers - don't be satisfied to catch a few trout and go home. The whole freaking point is to catch the big ass marlin.
I think, though, that there's an even more important point here - don't waste your time on projects that are trout. If you are going to invest the time and effort that will be required to turn an idea into reality (see #10 below), make sure the idea is worth that time and effort. If you're satisfied with trout, you may as well just work for someone else. It's a lot more secure and there's a lot less heartburn.
5. Harvard isn’t about learning.
Places like Harvard aren’t about the education, they are about the good-ole-boys’ club that you join. I’ve sorta known this for a while; I suspect I’m not alone there. The new nugget that I got from the movie was that it’s far more important to make a splash at those places than it is to have good grades. All press is good press. In 5 years, nobody will remember what your GPA was. But they will remember if you are on the front page of the school newspaper for hacking the school network and making it crash. If that newspaper is at LSU, that memory might be worth a couple of bucks - your classmates aren’t going to wind up running Goldman Sachs. But if that newspaper is at Harvard, you will have impressed a lot of people who are going to grow up to have a lot of money and a lot of power. At the end of the day, that’s what is important.
6. Nerds are often perceived as assholes simply because they have no social graces.
“...you're going to go through life thinking that girls don't like you because you're a nerd. And I want you to know, from the bottom of my heart, that that won't be true. It'll be because you're an asshole.” - Zuckerberg’s girlfriend at the beginning of the movie
Poor misunderstood Mark. What spawned this? He had just told her that by joining some club or other at Harvard would enable her to meet people that she would never otherwise be able to meet. Most likely a very true statement. But in modern America, you’re not an asshole for knowing the truth, you’re an asshole for speaking the truth. Part of being a nerd is a complete inability to know what not to say. Nerds have zero social graces. They live their lives surrounded by ideas that are either true or false. If something is true, why not say it? Unfortunately, that’s not ok in most interpersonal interactions. So next time a nerd offends you, realize that it’s probably because he’s right.
7. Spam everyone you know - even people you like or people that you are afraid won’t like you if you do.
There was one point in The Social Network when my heart stopped. Facebook had just gone live for the first time. Mark turns to his partner Eduardo and asks for the email list for the exclusive fraternity that he had just joined. I couldn’t believe it. Mark Zuckerberg was going to launch Facebook with a wave of spam.
I don’t really believe in karma, but I do believe in the golden rule. Email spam (and junk snail-mail for that matter) is against my religion. The idea that I would ever have to do that in order to launch a website gives me chills. I guess I need to get over it. Facebook would never have even gotten off the ground if not for spam. And this wasn’t just a blast to everyone on campus. It was Eduardo spamming the one group of people from whom he wanted admiration and respect. I guess I could bring myself to spam the general populace. But spamming my friends? On purpose? Yikes. I guess you don’t get to keep self pride if you want to get rich.
8. If you’re going to lie, cheat, or steal, make sure you’re insanely rich before anyone is able to call you on it.
This is really a lesson learned in the 2008 banking crisis, but this movie reinforced it. If the Winklevosses had moved earlier with their lawsuit, they probably could have stopped Facebook in its tracks. Who knows, you might even be posting your status updates today on ConnectU.com instead of facebook. Heh, ok, probably not. This really isn’t even a commentary on whether or not they were right. The point is that they had no shot simply because they waited too long and Facebook was too big by the time they tried to extract their pound of flesh. When they finally got around to suing Zuckerberg, he was too big to fail. Being too big to fail grants the owner of that title all sorts of superpowers, among them the right to get away with anything. If you plan on doing something that you will need to get away with, make sure you get too big to fail with a quickness.
9. Always sue. It’s the American way.
I actually learned this one a few years ago. A drunk driver hit me from behind. I wasn’t injured and their insurance repaired my car, so I took the high road. Stupid. In hindsight, I should have sued her into oblivion, if for no other reason than to get her 10 AM drinking ass’ insurance cancelled. But I digress.
I left mid-5 figures (possibly even 6 figures) on the table with that mistake. 5 figures isn’t chump change, to be sure, but I can live with losing it. But what if it wasn’t 5 figures? What if it was 8 or 9 figures? Losing out on $100 million might make you want to jump off of a bridge. So, if you have even the most dubious remote claim against $1B, you almost have to sue. The payoff to risk ratio is too high to do otherwise. At the end of the day, it doesn’t matter whether you’re right or not, especially if the person you’re suing has a reputation for being an asshole. It’s a funny thing about the American legal system: truth is basically unimportant. The question is not, “who is right?” the question is, “who can make the jurors more emotional?” People are stupid. When you go to court, the outcome is entirely dependent on what 12 morons think. Nobody wants to expose their billion dollar fortune to the whims of 12 morons. So they will write you a check instead. It’s an amazing system.
10. I will never be worth a billion dollars.
In order to become a Bill Gates, a Larry Page, a Sergey Brin, or a Mark Zuckerberg, you have to be completely obsessed with your work. To the point of having no friends, no life, no family, and no sleep. You have to turn on your friends. You have to go multiple days of writing code without stopping (there’s that sleep thing again). You have to leave people who you were supposed to pick up at the airport at crazy hours of the morning because you were to engrossed in what you were doing. You will probably have to move. You will have to invest every dime that you have, and then borrow some. Self pride - out the window. Did I mention that you have to lose sleep? Yea, lots of it.
Becoming super-rich is largely about luck. So even if you do all of those things, you probably won’t ever be worth a billion. But to even have a shot, you have to give up all of that stuff, and more. I’m not sure I’d give it all up even for the billion. But for a lottery chance at a billion? No thanks.
Christy and I got The Social Network out of RedBox about a week ago. For those of you who don’t know, it’s the story of the founding of Facebook. If you don’t know what Facebook is, well, Google it. We’re both pretty nerdy and into anything technology related, and I’m also a sucker for learning how people get rich. It turned out to be pretty good. Even N’Sync guy didn’t do a bad job. It also gave me a handful of insights that I thought might be of interest to the world. Those insights are found below. Note that this may not all make sense if you haven’t seen the movie, but I did try to explain things in places where I directly reference the film.
1. Parasites are everywhere. And it can pay to be a parasite.
Before I watched the movie, I had no idea that Sean Parker (one of the original Napster guys and involved in a lot of other Internet stuff) was involved in Facebook at all. Apparently he was. He was even president of the company for a while until he got caught with some drugs or something. And why was he involved? Why did he get 6% of the company? Why did he get an executive job? I guess you could argue that he set them up with the venture capitalists. I'm not sure whether or not that should be claimed as a benefit (see #2 below). Did he do anything else substantive? From what I saw, it looked like he bought a few lunches, took Zuckerberg out on the town a few times, and that was about the extent of it. What he did do, though, was act important and confident, give Zuckerberg some friendly advice, and just hung around Facebook central all the time. He made himself a part of the company simply by flirting with Mark Zuckerberg. And for this, $2 billion. Lesson: you don't have to add value in order to get someone to think that you add value.
Of course, there's also the other side of that coin - when you come up with something big, there will ALWAYS be someone there wanting to help you, for a nominal fee. If they really have help to give, great. But don't let a parasite fool you into thinking that they are doing something valuable when all they are really doing is running game on you.
2. Never trust a banker.
There are 2 (non-mutually exclusive) classes of banker. There is the stupid retail banker - these are the people who got killed in 2008 because they thought real estate would never go down. Then there is the tear-out-your-jugular-vein-with-their-own-teeth-banker - these are the people who convinced the stupid retail bankers that they had safe investments, then put a gun to the heads of 535 congressmen in 2008 and demanded that taxpayers fix the problems that their retarded cousins created. They want to take your money at gunpoint, urinate on you, then put a knife to your throat and demand that you thank them for doing it. Not all bankers work for banks. Some are hedge fund managers. Some are “investment bankers” - basically hedge fund managers inside of actual banks. Some are venture capitalists. But at their core they all have the same philosophy, the same core - keep as much of the money for yourself as possible. Lying, cheating, and stealing be damned.
Eduardo (Zuckerberg’s early partner, made the initial financial investment in exchange for 30%) got screwed by a banker because he didn’t read what he was signing. Now, to be clear, I’m not blaming the banker. The banker philosophy has a certain beauty. If everyone behaved like a banker, nobody would ever get screwed because nobody would trust anyone. It would likely create a pretty optimal economic system. But everyone does not behave like a banker. Eduardo trusted a banker. Eduardo got what he deserved for that little misstep. But in his misstep, you get to learn a valuable lesson. If a banker ever gives you something to sign, make sure at least one lawyer reads it. If you’re securing venture capital funding, you should probably have multiple independent law firms both read it. Twice. Because they are trying to screw you. In their minds, one of you is going to get screwed, and they want to make sure it’s not themselves. Your job is to make sure that when you get screwed (because you will), it’s at least a fair and just amount of screwing.
3. Social networking is mostly about sex.
I ran across a great quote a few months ago from some guy (I presume it’s a guy) named Jamie Zawinski - “The most important question for anyone writing social software should be, how will this software get my users laid?” It is, I think, a good point. There’s a scene right before Facebook goes live for the first time where Zuckerberg runs across campus back to his dorm room to add the “relationship status” feature before they turned it on. Even then, sex was central to what they were doing. The whole thesis behind the site that the Winklevoss brothers were working on (and that Zuckerberg “stole” the Facebook idea from) was that sex partners from Harvard were more desirable than those from other schools. I know, I know, YOU don’t use facebook to try to get laid. At this point, people use facebook because other people use facebook. But when nobody was using facebook, why did the first adopters use it? I’d be willing to bet that most of the time, it was a means to get laid.
4. Go after 1 marlin, not a bunch of trout.
In the early stages of Facebook, Sean Parker apparently ran across the site and fell in love. He proceeded to track down Zuckerberg and Eduardo and had dinner with them. Eduardo, at the time, is trying to convince Zuckerberg to start monetizing the site. They wind up asking Parker what he thinks. As part of his explanation of why they should wait to monetize until it's grown bigger (I think they had like 100,000 users at the time). Parker asks, "When you go fishing you can catch a lot of fish, or you can catch a big fish. You ever walk into a guy's den and see a picture of him standing next to fourteen trout?". If you have a really big idea - one that has the potential to have hundreds of millions of customers - don't be satisfied to catch a few trout and go home. The whole freaking point is to catch the big ass marlin.
I think, though, that there's an even more important point here - don't waste your time on projects that are trout. If you are going to invest the time and effort that will be required to turn an idea into reality (see #10 below), make sure the idea is worth that time and effort. If you're satisfied with trout, you may as well just work for someone else. It's a lot more secure and there's a lot less heartburn.
5. Harvard isn’t about learning.
Places like Harvard aren’t about the education, they are about the good-ole-boys’ club that you join. I’ve sorta known this for a while; I suspect I’m not alone there. The new nugget that I got from the movie was that it’s far more important to make a splash at those places than it is to have good grades. All press is good press. In 5 years, nobody will remember what your GPA was. But they will remember if you are on the front page of the school newspaper for hacking the school network and making it crash. If that newspaper is at LSU, that memory might be worth a couple of bucks - your classmates aren’t going to wind up running Goldman Sachs. But if that newspaper is at Harvard, you will have impressed a lot of people who are going to grow up to have a lot of money and a lot of power. At the end of the day, that’s what is important.
6. Nerds are often perceived as assholes simply because they have no social graces.
“...you're going to go through life thinking that girls don't like you because you're a nerd. And I want you to know, from the bottom of my heart, that that won't be true. It'll be because you're an asshole.” - Zuckerberg’s girlfriend at the beginning of the movie
Poor misunderstood Mark. What spawned this? He had just told her that by joining some club or other at Harvard would enable her to meet people that she would never otherwise be able to meet. Most likely a very true statement. But in modern America, you’re not an asshole for knowing the truth, you’re an asshole for speaking the truth. Part of being a nerd is a complete inability to know what not to say. Nerds have zero social graces. They live their lives surrounded by ideas that are either true or false. If something is true, why not say it? Unfortunately, that’s not ok in most interpersonal interactions. So next time a nerd offends you, realize that it’s probably because he’s right.
7. Spam everyone you know - even people you like or people that you are afraid won’t like you if you do.
There was one point in The Social Network when my heart stopped. Facebook had just gone live for the first time. Mark turns to his partner Eduardo and asks for the email list for the exclusive fraternity that he had just joined. I couldn’t believe it. Mark Zuckerberg was going to launch Facebook with a wave of spam.
I don’t really believe in karma, but I do believe in the golden rule. Email spam (and junk snail-mail for that matter) is against my religion. The idea that I would ever have to do that in order to launch a website gives me chills. I guess I need to get over it. Facebook would never have even gotten off the ground if not for spam. And this wasn’t just a blast to everyone on campus. It was Eduardo spamming the one group of people from whom he wanted admiration and respect. I guess I could bring myself to spam the general populace. But spamming my friends? On purpose? Yikes. I guess you don’t get to keep self pride if you want to get rich.
8. If you’re going to lie, cheat, or steal, make sure you’re insanely rich before anyone is able to call you on it.
This is really a lesson learned in the 2008 banking crisis, but this movie reinforced it. If the Winklevosses had moved earlier with their lawsuit, they probably could have stopped Facebook in its tracks. Who knows, you might even be posting your status updates today on ConnectU.com instead of facebook. Heh, ok, probably not. This really isn’t even a commentary on whether or not they were right. The point is that they had no shot simply because they waited too long and Facebook was too big by the time they tried to extract their pound of flesh. When they finally got around to suing Zuckerberg, he was too big to fail. Being too big to fail grants the owner of that title all sorts of superpowers, among them the right to get away with anything. If you plan on doing something that you will need to get away with, make sure you get too big to fail with a quickness.
9. Always sue. It’s the American way.
I actually learned this one a few years ago. A drunk driver hit me from behind. I wasn’t injured and their insurance repaired my car, so I took the high road. Stupid. In hindsight, I should have sued her into oblivion, if for no other reason than to get her 10 AM drinking ass’ insurance cancelled. But I digress.
I left mid-5 figures (possibly even 6 figures) on the table with that mistake. 5 figures isn’t chump change, to be sure, but I can live with losing it. But what if it wasn’t 5 figures? What if it was 8 or 9 figures? Losing out on $100 million might make you want to jump off of a bridge. So, if you have even the most dubious remote claim against $1B, you almost have to sue. The payoff to risk ratio is too high to do otherwise. At the end of the day, it doesn’t matter whether you’re right or not, especially if the person you’re suing has a reputation for being an asshole. It’s a funny thing about the American legal system: truth is basically unimportant. The question is not, “who is right?” the question is, “who can make the jurors more emotional?” People are stupid. When you go to court, the outcome is entirely dependent on what 12 morons think. Nobody wants to expose their billion dollar fortune to the whims of 12 morons. So they will write you a check instead. It’s an amazing system.
10. I will never be worth a billion dollars.
In order to become a Bill Gates, a Larry Page, a Sergey Brin, or a Mark Zuckerberg, you have to be completely obsessed with your work. To the point of having no friends, no life, no family, and no sleep. You have to turn on your friends. You have to go multiple days of writing code without stopping (there’s that sleep thing again). You have to leave people who you were supposed to pick up at the airport at crazy hours of the morning because you were to engrossed in what you were doing. You will probably have to move. You will have to invest every dime that you have, and then borrow some. Self pride - out the window. Did I mention that you have to lose sleep? Yea, lots of it.
Becoming super-rich is largely about luck. So even if you do all of those things, you probably won’t ever be worth a billion. But to even have a shot, you have to give up all of that stuff, and more. I’m not sure I’d give it all up even for the billion. But for a lottery chance at a billion? No thanks.
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