Ever wondered what the most successful United States Presidents have in common?
- Ever felt the way things are done for years isn’t the way things should be done in the future?
At Business of Software Conference USA 2014 Shane challenged common ideas about ‘success’, revealing how conventions like “paying dues” prevent progress, why kids shouldn’t learn times tables and how, paradoxically, it’s easier to build a huge business than a small one. Shane discusses three hacker mentalities that help challenge the normal way of doing things with the result of accelerating success.
Slides, Video & Transcript below
See the slides from Shane’s talk here.
Learn how great SaaS & software companies are run
We produce exceptional conferences & content that will help you build better products & companies.
Join our friendly list for event updates, ideas & inspiration.
Shane Snow Thank you. So my name’s Shane. I’m co-founder of a company called Contently in New York City and I just published a book called Smart Cuts that just came out last week and it’s kind of terrifying, but it’s been awesome so far and so I want to tell you a little bit about both of those things and how they might apply to what you’re working on, but first, I want to ask a personal question. And starting out with this scenario – So, pretend with me that you are driving down a rainy road, kind of in the middle of nowhere. It’s late at night, or it’s getting dark, the rain’s starting to come down harder and harder and you’re a long way from town. So, you’re driving kind of slow so that you can see the road and as you slow down you see on the side of the road three people standing in the rain with no umbrellas. Now, as you start to sort of rubberneck, you see that one of these people you recognize; it’s your very best friend and this person one time actually saved your life.
And – oh my gosh – there they are. But then you see next to them there’s a little old lady who definitely is not making it back to town on her own and she’s being soaked in the rain. And then next to her, by happenstance, is the man or woman of your dreams and this is the once-in-a-lifetime chance to meet them. And you look and you only have one seat in your car. So the question is – so there’s a very good reason, right? To pick all these people. Your friend, you owe them, they saved your life. Like, what a terrible friend are you if you don’t. The little old lady, what a terrible person, if you make her walk back, she’s not going to make it. And certainly a future with the man or woman of your dreams is not at a selfish thing; this is your one shot. So the question is: who do you choose? Now, there’s a right answer. Think about it…
There’s a right answer to this question and it is:
You pick the old lady, of course.
Then, you give your car keys to your friend and then you stay out with the romantic interest and wait for the bus.
I love this question because so many of us question ourselves – “Wouldn’t you pull up the old lady, no, I pick the romantic interest!”
I love this question because it’s an example of lateral thinking. The solution to this – the most elegant solution to this puzzle occurs when you attack the problem sideways, when you actually reframe the question.
The definition of lateral thinking: It’s a term that psychologists came up with a few decades ago for this idea of, rather than approaching problems logically and linearly, reframing them, asking – questioning the question itself.
And I’ve been obsessed with this idea of lateral thinking. So have a lot of people before me. In pop culture you see, of course, McGyver. There’s, of course, websites dedicated to life hacking. I don’t know if you’ve ever had to try to open a blister pack on, like, a new pair of headphones. It turns out a can opener is a really great way to do that. Not the thing that you’d think of. Then you see in business also many examples of lateral thinking, people attacking problems sideways, such as the Captcha, which, you know, everyone thinks is annoying, but did you know – probably in the software conference you do, that this Recaptcha is actually helping translate – digitize old books. Some of these words in here actually come from old texts and then humans type them in and then we turn libraries into digital. The New York Times Archive went from print to digital because of the Recaptcha.
So these are all examples of people solving problems through indirect means and it’s actually the way that computer hackers solve problems.
Rather than attacking the castle gate with your sword, like, straight on, you go around the wall or you dig a tunnel underneath. So, I’ve been obsessed with this idea of lateral thinking and for the last few years, I – So, I’m a technology journalist. I write for Wired Magazine and Fast Company and I’ll talk a little bit more about that in a minute. But I’ve been obsessed with this idea because there seems to be a pattern between anyone who makes breakthroughs in any industry, whether it’s the arts or the sciences or business – any time a breakthrough happens, by definition, someone has broken a rule, that really isn’t a rule, or broken the assumptions or the conventional way of doing things that so many people are backed up on this path that’s sort of the way it’s supposed to be that – making incremental change and very slowly – that the ones who go around that path or who figure out a new way to reframe the industry are the ones that make breakthroughs. Example that comes to mind in sports is the high jump. Many, many years ago, people were diving over the high jump bar forward making inch by inch improvement until Dick Fosbury jumped over it backwards and won the gold medal. And then suddenly everyone was jumping over the high jump bar backwards. That kind of breakthrough happened and he was really young and fairly inexperienced and he beat the so-called 10,000 Hour Rule to become world class and world champion by thinking laterally.
Three Patterns to Approaching Problem Solving
So, I want to talk about three patterns — three of the patterns that I talk about in the book Smart Cuts which is about finding these different ways of approaching problems and here they are, so if you want to guess what they are.
The First Pattern. Thinking Sideways.
I find is best explained by a game that gets played out in the Rocky Mountains where I’m from – I’m grew up in Idaho – called “Bigger or Better”.
So, in Idaho, Utah, Colorado, Arizona, kind of this area, there are a lot of bored teenagers and bored college students. And there’s not much to do except hiking and kind of nothing and so we would play this game called “Bigger or Better” – or college students would – and the way it works is you – it’s kind of like a scavenger hunt for adults. So, you form groups and each of you starts out with a small object, like a toothpick, and the goal is to go out into the town and come back at the end of the night with the biggest or best thing you’ve traded that toothpick for. So, you go in groups and basically you go around and you start knocking on strangers’ doors. And you knock on the door and the stranger answers and you say something like, “Hi, we’re playing a game called ‘Bigger or Better’. We’re wondering if you would trade us something slightly bigger or better than this toothpick’” And, you know, sometimes people are weirded-out, but usually, you know, they see it’s young people playing a game and so someone eventually will trade you a piece of gum. So they give you this piece of gum and it’s slightly bigger and better than this toothpick, so then you immediately go to the next house and you knock on the door and say “Hi, we’re playing this game called Bigger or Better. Would you trade us something slightly bigger or better than this piece of gum?” And then so someone gives you a ballpoint pent.
Now, sometimes people don’t answer the door or sometimes they’re not interested in playing or, you know, they kind of peek through the blinds and don’t answer, but eventually you start getting these objects. So, you go to the next door and you trade the pen for a half-used pack of Post-It Notes. Someone might actually want these Post-It Notes at this point and, actually, the next door – the girls there – someone has an unwanted admirer that left some flowers, and so they would gladly trade the Post-It Notes for that. And so, then you take the flowers to the next door and they love it and so they put it in a vase and they give you their last month’s issue of Nylon magazine. Then you go to the next house and they give you someone slightly prettier on the cover of the magazine and then the game is on because someone might actually want this and actually, you trade that magazine for an old novelty t-shirt. And then, next door, the kid who answers the door legitimately loves Tron and Transformers and whatever this thing is and actually wants this t-shirt, so he trades you his lava lamp. And now you have an object that someone might actually pay money for. So, you go to the next house and the roommates there, they have an old mirror that they don’t want, but they like the lava lamp because their college or whatever and – So then you have this vintage mirror and you go down the road and the old couple that collects antiques has an old bike in their garage that their grandson who went to college that he no longer needs and they were going to get rid of it anyway and they like the antique mirror. So now you have this bike that – Suddenly, kids start coming home from this game carrying canoes and television sets and after three hours of playing — And there’s even this mythology that someone once brought home a used car and it’s not a nice car, but you bought that for a toothpick. [Laughter]
So, I love this game “Bigger or Better” because it illustrates what pirates call a “parlay” or actually, gamblers call a “parlay”, which is a series of accumulating bets where the winnings of your last bet, you place towards the next bet. Now in this case, you’re not actually betting anything because if someone says no, you still have the value that you have in your hand. You still have the object, but there’s no stopping between turns. When someone doesn’t answer the door, you don’t wait for them to come to the door or when someone says no, you don’t try to convince them to – No, you just move on.
It illustrates what psychologists call small wins.
There’s this strategy in problem-solving of basically breaking down huge tasks into micro-tasks, that each task, there’s very low risk of failure because it’s so small, but also, by accomplishing this small task you can gain momentum in acceleration and – much faster than – and get to the end goal faster than if you went after, sort of – ate the whole cow at once, as they say.
But there’s something more interesting about this game “Bigger or Better” and it’s illustrated in the animal kingdom by the cheetah. So the cheetah is the fastest land animal. It can go in speeds in excess of 75 mph, but the reason the cheetah is such a good predator and so feared by its prey is not because of its speed, but because of its turning radius. The cheetah is very good at jumping sideways and so when the antelope dodge, the cheetah gets it. And also, if you look up cheetahs on the internet, you get sidetracked like I do. [Laughter] Because one of the suggestions in Google Images is “baby cheetah” and then you look and they think that they’re ferocious, but they’re not. But they’re really good at turning.
So, this is why – So, the goal – The reason that Bigger or Better works so well is not because your trading toothpicks for pieces of wood of increasing size and coming home with logs, you’re trading toothpicks for pens and pens for magazines and eventually television sets for canoes. You’re trading sideways and it’s this side parlay that makes the game so interesting. This is why the average journey to becoming a Fortune 500 CEO is thirty years, but the youngest Fortune 500 CEO who is in her 30s got there by trading sideways from what she did. She joined a fast-growing company, Google, she climbed the ladder until there was a ceiling, she could no longer go any further and then she moved sideways, she switched ladders, and Yahoo was willing to give someone from one rung lower a chance on the job and they did – In the same way someone might be willing to give the kids with a bike a chance – the bike is slightly different than the TV, but it’s kind of – you know. That’s a principle that people are willing to give you a chance if you’re one rung lower if you seem to have momentum, which she did.
This is also why the world’s best-selling author right now, James Patterson, has sold a quarter of a billion books. He climbed the ladder in the advertising industry and then he moved over when he was at the top of advertising to becoming a novelist and he used his advertising know-how to market his own book, to make his own television commercials when his publisher wouldn’t market his book for him. He became this best-selling author and has created this empire of books. He built credibility in one industry and built skills in one industry that then mapped to another industry that needed innovation. His sideways jump helped him to get there, but also helped him to succeed there and to succeed faster than anyone else. This is why you see actors and actresses that appear out of nowhere like Zoe Saldana who, rather than – And I wrote about this recently. I tried being an extra for a while. The advice that they give you if you’re an extra to how to get to the top is really terrible. It’s basically, be an extra forever and hope someone notices you and then slowly climb your way up linearly. What she did is she became a ballerina and then she auditioned for a film role where they needed a ballerina, someone who actually knew ballet. Then she did a good job and suddenly, she was in the industry winning Academy Awards.
Great US Presidents
This is why, also, I did some research on the career journeys of the Presidents of the United States.
What you find is that not only do Presidents become – enter office at a younger age than senators when they enter office, but the best Presidents of the United States actually have the least experience in politics. And the worst Presidents spent the most time in Congress, which is kind of disconcerting. But they – these best Presidents tend to get leadership experience in other areas – in the military, in business, in philanthropy – before they switch over, many rungs up the political ladder. So they’ve gained credibility, they’ve gained experience, but they also have this incredible flexibility to think sideways and move sideways, which is actually what makes for a great President is the ability to change your mind and to look at other perspectives because no one is a nuclear expert and an economic expert and a domestic farming expert and as a President, you have to make decisions on all of that. This is also why – Apple gets used as an example every time innovation gets brought up – but this is why a computer company was able to launch a smartphone – a phone – when only telecommunications companies were the only ones building phones. It was not a huge leap for us to say, “Well, okay, Apple’s reaching over one ladder over to build this product for us,” but it was unprecedented and it was because of the credibility they had built up with the iPod and with their computers that they were able to move sideways to create and dominate this huge market.
So this is also why – this is disconcerting for a lot of businesses. The average internal raise an employee gets is 1-3% annually in America. The average raise for getting a new job, even at the same level, is about 10-20% and often, you get a new job, you get a promotion, so see kids out of college job-hopping every two years and suddenly making 50% more than their peers who stay in one job. In this case, loyalty doesn’t pay off, which is troubling for companies that want to retain talent. This is also why research shows startups that pivot 1-2 times are more likely to succeed than startups that don’t. That they stay the course that they – kind of – almost by pride or whatever reason the original thing they thought they were doing.
Being unwilling to step just a little bit sideways makes you much less likely to succeed. On the other side of that, startups that pivot 3-plus times are less likely to succeed also because they’re too busy moving sideways that they don’t move forward.
So I used this Bigger or Better idea to become a journalist myself. The very first thing I did – my goal – the dream was writing for Wired Magazine, so when I got to journalism school, I immediately pitched them a feature story and the editor wrote me back and said, you know, this sounds like a nice story, but we just don’t print people that don’t have experience, so come back in a few years when you’ve paid some dues.
And I realized that really what he was looking for wasn’t experience per say, like a checklist of number of years, he was looking for a quick way to screen me and the thousands of other people that are pitching him to say can I do the job to the standard that he needed. So basically, I asked myself, well, what would the minimum required credibility for this be? Probably it’s writing for a magazine that’s slightly smaller or maybe one that’s just as big, but one step over. Maybe like a GQ or like a Fast Company, slightly smaller. Well, what would be the minimum credibility to do that? So I broke the task down into a bunch of small wins and then I played Bigger or Better. I started writing for very tiny blogs, wrote a few stories, and then I pitched the next blog up and wrote a few stories and pitched the next blog up and wrote a few stories and pitch the next blog up – Until I could come back to the Wired editor 6 months later and say, I’ve written for Fast Company and Mashable and Gizmodo and a bunch of others and now I have this great story idea and they – they ran my story and now Wired every month sends me an email saying, hey, what story ideas do you have? So in the six months that it took me to get there by doing this parlay, I would’ve still been an intern at Wired had I gone the traditional path. So this is – and this is the way I ended up building the company Contently that I run now which is before all of that, I started a series of ill-fated startups that were all slightly Bigger or Better than each other, but all pretty small and not very successful. And I parlayed my experience writing for Wired Magazine and others to build a tech company that is in the journalism space. We help published – we build software for publishes and we connect them with freelance journalists – journalism talent. And investors were willing to give us a shot, even though we hadn’t built any public companies or had any exits because of that parlay of that momentum of credibility that we built in the space that we were going into. So this is how some of the fastest moving people and companies in the world shorten the time it takes to get to the top. In the book I talk about a lot of other examples of this, but the idea is rather than thinking linearly and following the path that everyone else is on, taking the switchback route actually can be faster.
So that’s the first one – thinking sideways, finding side doors.
Second Pattern: Leverage
The second one – it comes from a lesson my father taught me out in Idaho when he was forcing his sons to do slave labor building houses. So my dad’s an engineer and he would always make his boys –like, he was always trying to teach us life lessons and he would always make us, you know, tear down roofs and things. And I remember this one day, he brought us into the garage – my brother and I – and he had a board with a nail in it. It was this really nasty nail and he said, Okay, sons, pull the nail out! And so he gave us the hammer and we both worked on it and – it was an impossible nail. We worked on it and worked on it and he kind of taunted us. He said, well, why don’t you pull harder? Why don’t you—have you thought about using your muscles? And so we did it and, you know, it didn’t work and so we’re like, okay, Dad, what’s the lesson? And so he took from – from the garage a piece of pipe and he put it over the handle of the hammer and then pushed on the end and the nail came out and this is a lesson from mathematics from Archimedes, the law of the lever.
The longer the lever you have, the less force you have to push down to move something.
Archimedes said something to the effect of, if I had a long enough lever, I could move the world. That’s not – what my dad said is, sons, you can work hard and you can use your muscles and you’ll get far in life, but if you want to get ahead, you have to work smart, too. And so, why use all your strength to tear out this nail when you know you can use a tool to make it easier. You can use a lever to amplify your effort.
So that’s the lesson I learned from very young and forgot about for ages, but – There’s a guy I write about in my book named David that is, I think, the superlative example of this. He’s pretty well known in programming circles. His name is David Heinemeier Hansson, known as DHH, and when he was in college, he did this thing that he’d call “selective slacking,” which is basically – There were classes that he was interested in, but he really wanted to focus on other classes, that he didn’t care about, that he didn’t want to focus on, so he would do the minimum amount of work that would get the minimum grade to pass, so that he could put all the rest of his effort into what he liked, which happened to be computer programming. So he did this and he celebrated the C-minuses that he got for 5% effort and he started working on computers. And he started working with this company called 37 Signals out of Chicago and they were having him build stuff and he was using a programming language called Ruby that was built, kind of with programmers in mind. It was nicer than other things that at least he had used, but he was very amateur, a very green programmer, and he was frustrated by – so like this “selective slacking” thing – by how often you had to do the same things over and over and over again in programming. He didn’t care what he had to name the databases and he didn’t want to build the same sign-up form logic over and over again. And so, he ended up building a platform called Ruby on Rails that I’m sure most of you are familiar with.
[By the way, David Heinemeier Hansson is speaking at Business of Software Conference USA 2015].
Before I get to that, a bit of a primer – This is probably the worst crowd for me to give this primer to because you all know this more than me, but I took Computer Science 101 and they – So the way computers were, essentially, at a dumbed down level, were built is essentially, there were rooms full of transistors – switches – that scientists flipped on and off.
You put enough of these switches together and you can do things like math and you can make calculations, computations – and it was a very manual process at first, until computer scientists abstracted themselves away from flipping on and of the switches, where basically they built a system so that they could type in 1’s and 0’s – or punch them into cards and make the 1’s and 0’s flip off the transistors on and off. Well, that’s a lot of work, so, eventually, they built a layer of abstraction on top of that where they could type in letters and numbers in combination that would then generate a lot of 1’s and 0’s which would then flip on and off a lot of switches. And then, you know, that is actually pretty arduous, too, so they created higher level programming languages where they could say things in real, human English like “Print F, Hello World, semi-colon” and that would translate into a bunch of garble-y numbers and letters, which would translate into 1’s and 0’s, which would turn off and on a bunch of switches, then display on your screen. So that’s how programming has worked. It’s this increasing layers of abstraction and, eventually, these higher level languages and you build programs in them to the point where when DHH was programming in Ruby, he was programming in a programming language that is built on the web which you use a web browser for, which is built on top of an operating system, which is built on top of a programming language like C, which then, eventually, turns on and off a bunch of transistors. But even that was really hard. With that many layers, it was still a lot of work and it was too hard for him. And he said – he told me that, he decided that, he had only one life he was going to live and if he was going to do something with that life, it had to be awesome and if programming is it, then programming better be awesome and it’s not.
So he built this kind of programming for dummies almost called Ruby on Rails that automated or took away a lot of the extra work you would need to do normally in computer programming. And some programming purists were very upset at this, had very strong feelings and, you know, they said things like, “It doesn’t scale” and all of that, but they also said it’s not hard – if it’s not hard, it shouldn’t work, basically. There’s this sort of protestant work ethic that like, you don’t deserve to be able to program easy, that’s not the point. And of course now, I mean, tons of use Ruby on Rails to – I mean, that’s what our company is built on.
But David released his code and released it open-source and people started using it and something really interesting happened. Suddenly you saw companies using programming to solve problems that hadn’t been solved before in programming – using programming. There’s a toilet company in Minnesota that created an accounting system using Ruby on Rails with their sort of own amateur team. There was a couple in New Jersey that built a social network for yarn enthusiasts and so on, and so on. All of these products and solutions started coming out, created by people who were less good at programming or who were really good at programming, but were just building side projects. This is how we got Twitter is a bunch of guys in a company working on one thing built a side project in a few days using Ruby on Rails as an experiment. Because that was so easy, they saw that take off and then they eventually turned that into this thing that’s transformed the world. So the idea behind Ruby on Rails that’s really interesting to me is that it got a lot of people who are not programmers, who are not scientists to learn programming and, actually, many people who start with Ruby on Rails as sort of their gateway drug, then learn the fundamentals of programming and actually get into deeper, more hardcore stuff that, then they can build more transformative things, too.
So, this brings me to an age-old debate about children and calculators.
The idea behind Ruby on Rails creating people who want to do programming is that, if you give someone a higher platform, that’s more abstracted away from the fundamentals and you learn that platform and you learn that tool, the theory is, that it’s easier and faster for you to learn the fundamentals.
And so, the debate with kids and calculators is a really interesting illustration of this. For a long time, parents and teachers have argued, well, when should we give kids calculators because we want them to learn math. Do we teach them the times tables first, do we put the calculator in their hands? If we give them the calculators too early, then maybe they won’t learn the math on their own, they’ll just get good at using the toy.
Well, it turns out some studies have been done that show that when you give kids a calculator earlier, they actually get better at underlying math and become more interested in math and sciences as a career then if you give them calculators later.
They not only do better on the tests because, yeah, they have the right answers with the calculator, but they start to learn the fundamentals much more quickly than their peers. And there’s also this, I guess, this question of, what’s the minimum amount of math you need to know in the world to know whether if Starbucks is ripping you off or how to do your taxes. If you learn calculators, if you learn Excel, you can actually kind of accomplish anything you want, but the magic of this is by learning the calculator, you learn the underlying skills.
So this is a – brings us back to David’s other career, which is racecar driving. So he made a lot of money with 37Signals and kind of became famous because of Ruby on Rails. He decided to start driving racecars a couple of years after he first started driving real cars, which was around age 30. So he showed up to the amateur racing leagues as this very inexperienced driver and older than a lot of the drivers that were driving in the racing leagues and started racing. And he combined the two things that I’ve talked about so far – these platforms for learning and the Bigger or Better game – where instead of doing what most people do in amateur racing, which is race for a year, complete the whole, sort of, circuit and try to win a first or second place before you move on to the next league. He raced the bare minimum amount of races that it takes to become the worst driver in the next league. He didn’t even have to win. He raced a half dozen races, got – he did okay. He watched a lot of video tutorials of people who drive well and he did okay. He did just good enough to become the most terrible driver in the second league and so he leveled up. So he went to the second league, and then he drove a bunch of races, and became barely qualified to become the most terrible driver in the next league after about six races.
Then he did that again and he did it again and he kept switching ladders, bigger or better, until in a very short amount of time, he ended up in the professional racing league driving at the 24 Hours of Le Mans which is sort of like Tour de France of endurance racecar driving and he ended up placing at the 24 Hours of Le Mans and winning a bunch of championships after just a couple of years of racecar driving. And when he showed up to these professional racing leagues, people had no idea who he was and they have no idea that he’s indirectly responsible for Twitter and Hulu and AirBnB.
He used this “selective slacking” thing to move up to different – bigger leagues, but you can’t win championships as a slacker.
So what ended up happening that is really interesting is when he pushed into these leagues where the competitors were so much better than him, he was forced to either crash into the wall – crash and burn – or get extremely good at racecar driving. He, in the same amount of time, in the two, three years that he did this climb into professional racing, he came back to his old racetracks where his buddies who had been driving just as many races in the lower leagues – he came back and destroyed them. It’s because these upper racing leagues became this platform for him that taught him the fundamentals of racing a lot faster than competing in the lower levels. So, this is why going to, say, like, a Harvard University ends up being a leg-up for a lawyer versus going to College of Southern Idaho where the university not only has a good reputation, but it becomes this platform for networking and for getting “ins” into other places. You can go places faster. This is why big cities have more patents per capita than small cities. It’s because the urban friction and the environment that you have in big cities breeds innovation – becomes a platform that allows people to succeed much more quickly than their peers in other places.
So these first two – thinking sideways and using levers – are two ways of the ways that – that incredible people accelerate success in their business and in their lives. The third one I want to talk about comes from a guy with the coolest name in the world.
Third Pattern: Think BIG – 10x not 10%
His name is Astro Teller and he looks like this. He also has the coolest hair in the world. Astro Teller is the head of Google X. He’s in charge of Google’s “moon shots”. Basically, anything that is outrageous and crazy that Google wants to build, this guy is in charge of building it. And you talk to the guy and he uses this amazing vocabulary you’ve never heard of and clearly is a very smart guy. And so, he’s really smart, but somehow, he gets – he told me something that kind of defies math, which is that he thinks it’s easier build something ten times better than just ten percent better. So, yeah, he obviously was given a calculator too young because this doesn’t make sense except that when you look at history, it actually does.
This has to do with some of the things we just barely heard. The story that I want to tell that illustrates this comes from this happy guy right here. He’s happy because he has a billion dollars and his name is Elon Musk. And actually, a couple of years ago, he almost didn’t have a billion dollars because he made the mistake – There’s the cliché that you hear that if you want to make a million dollars, start out a billionaire and start an airplane company. There’s another one that I think is good that if you want to go broke, start out as a billionaire and start a space company. So he is the latest in a long line of rich people that have decided that they want to go to space and most of them have the same story. They want to go to space because the government is inefficient and NASA isn’t getting the funding it needs and we think the private sector can reduce the cost of getting to space by 20% or we want to do space tourism. We want people to see the beauty of going around the Earth. When you hear Elon Musk talk about why he wants to go to space – Oh, and, by the way, all these other companies have had their rockets exploded or have not even made it – when he talks about his mission with Space X, his company, he doesn’t say, I want to reduce the cost of going to space which is a necessary thing for the future. He says, “I want to die on Mars.” And when you say something like that, people think you’re crazy, but they also perk up. And so “I want to die on Mars” is ten times bigger than anything else anyone is trying in aerospace.
Now, before I get to the rest of this story, I want to talk about some research. There’s the common, sort of, debate that I think that I have had a million times with people, especially inside the company.
When you’re setting goals, do you set realistic goals for the quarter? Do you set outrageous, huge, unrealistic goals? Do you want goals that you can accomplish and feel good about, that are motivating for the next goal or do you set goals – do you shoot for the moon and if you miss, you hit the stars, or whatever it is that people say.
When you look at – and so, some scientists did some research of decades worth of studies on goal-setting – over 40,000 different experimenters – and what they found is that people who set, or are given – you’re given a goal or you set a goal – that’s extremely high end up out-performing themselves given a goal that’s realistic and out-performing their peers. Even if they don’t hit the goal, just the existence of the higher goal makes them out-perform and there’s for a few reasons. The higher the goal is, the more lofty – it forces you to start to use lateral thinking to solve problems. The more you have to break down the assumptions you have about the problem itself or the industry you are competing in, that goal becomes the catalyst for the kind of thinking that leads to breakthroughs. This also happens on a smaller scale with students taking tests. Really interesting. They’ll put – you can put ten students in a room to take, like, a academic test together and they know that their just the only ten in the room, or you can put a thousand students in a room, or 10,000 students in a room. And the students in the room with ten will do better on the test than the same students in the room with a thousand, or the same students in the room with 10,000. And it’s not on purpose. It’s psychological that, when you feel like you have a chance of being the best, you get more competitive and when it seems like the goal, I guess, is not being fought over by a million people, you actually end up subconsciously trying harder.
This is why in business we always talk about low-hanging fruit. Like, “let’s go after the low-hanging fruit first.” That’s why that’s actually a bad strategy because everyone goes after the low-hanging fruit. There’s other research that shows the more competitors competing in markets actually do subpar versus fewer competitors competing in harder markets. And finally this 10x idea – it being easier to do something ten times bigger or harder than ten percent harder – is evident on the statistics in venture capital investment. That VCs – and we learned this the hard way in our first two rounds of funding at Contently – VCs are much more likely to get excited about someone that’s trying to do something that’s ten times bigger than ten percent bigger. They’re much more likely to give you money if you paint this picture of how the world is going to change and, you know, cats and dogs raining from the sky and all of that than if you say, “We’re going to decrease the cost of getting to space by ten percent.” So, the first two rounds of my company, we were very spreadsheet-based and like, here is how we’re going to make these, you know, incremental margins and all of that and the third round we raised, we had really coalesced around the big vision that we had, but we told the story of how, what we were doing was going to change the world and how many markets this was going to bleed into and how long-term this was going to be and investors started using the B-word, the billion word, that round where they never had before. So, and you see this as a pattern in investors in general. The higher reward that you think there’s going to be, the higher risk people will take.
And so that gets me back to Elon Musk and his rockets.
So, when he started the company Space X, he said he had enough money for three rockets and he regretted saying that because everyone in the company knew and he recruited sort of this Oceans Eleven team of scientists and rocket engineers and really smart people to build these rocket and they did a lot of really interesting things to make these rockets cheaper, to streamline the manufacturing. They did a lot of stuff innovation-wise other rocket companies hadn’t, so give them credit for that. But they still had the problem most other rocket scientists, private space companies started by billionaires had, which was that the rockets blew up or they run out of money. A billion dollars is not enough to get you to space.
So, he had enough money for three rockets. The first two rockets blew up. The third rocket was going to work and it had to work and everyone knew it and so, there’s this moment. There’s this great Quora thread that kind of went viral on the internet telling this experience and I interviewed the woman who wrote it. The head of HR recounted the scene of the third rocket launch. All of the Space X employees – there’s about 200 of them – are in the California headquarters watching a screen of the rocket on the landing pad — on the launch pad – in the middle of the Pacific Ocean. And the countdown’s going down, 10, 9, 8 – and the rocket lifts off and it gets past the point where the other two rockets failed and it looks like it’s a success. It’s nearly out of the atmosphere and the two stages separate – so the one falls away and the other is going to make it into orbit – and then the screen shuts off. And there’s this pin drop moment inside of the Space X headquarters where these two hundred scientists that have just devoted the last several years of their lives, hundreds of hours a week realize that something is wrong. And it turns out what was wrong is there was a little bit of juice left in the bottom stage and it rear-ended the top stage and sent it crazy and it ended up in the ocean. And there’s this realization as they process this that, oh no, the rocket’s probably lost. Oh yeah, he said there’s not enough money for another rocket. What are we doing with our lives? The dream is over. And a few minutes go by – these really tense minutes – and then Elon Musk walks out of the command center trailer and he walks past the press that are all there waiting for a statement and he squares up in front of his crew and this is a guy that normally “um”s and “ah”s in his impromptu speaking, he gives the most amazing speech, that clearly he had been prepared for this. He said that, we knew that this was going to be hard when we started this. It is rocket science, literally. And, but we’re not just trying to get a rocket into space, we’re trying make sure that the human race can survive if we screw up the planet. We’re trying to get to Mars. We’re doing something that is going to matter more than anything else that we could be working on and because of that, in the last few weeks, I have secured an investment from a few of my billionaire buddies, basically – secured an investment from other people who believe in this making life multi-planetary mission as well. And so we have enough for a couple more rockets, but I’ll tell you that I, for one, will never give up. And he said this and it was like the electricity entered the room and suddenly, these depressed scientists were super-pumped and in less than two months, they were able to get another – they figured out what was wrong – they got another rocket on the launch pad and they became the first private space company to put a rocket into orbit.
And then since then, they’ve done the Bigger or Better thing, they’ve built slightly bigger and better rockets until they became the first private space company to get to the Space Station. They now have more rocket carrying capacity – that they can truck more stuff into space – than any other object, any other company, any other vehicle in the Solar System. And now they’re getting ready to put actual people in these rockets and so this 10x thinking of Elon Musk and of Space X – The thing that’s kind of magical about that kind of thinking is, what they needed at the crucial point when most startups like theirs failed was not more brains, was not more engineering talent. It was support from – It was capital. It was public support and it was investment and by telling that huge story, he was able to get that investment. He was also, in the first place, able to get the right people in the room to make that business a lot easier business than, you know, the tiny startups that I was running when I was in college. The support itself and all of the people around him made his 10x dream much easier than the ten percent dream of a lot of these other entrepreneurs. And now they’re going 10x further. This – they are saying, well, what if we can make the cost of getting to space ten times cheaper? Well, they – we wouldn’t have colonized America if we had to burn the boats when we got here. Why not make rockets that can land and can be used again? And so they’ve built self-landing rockets called the Grasshopper and – that they have flown up and landed on their feet and it’s really incredible to watch. And so this company, by asking these 10x questions, has come to the innovative solutions that its needed, but also managed to get the support that it needs to do the 10x things.
So this is why I like to say that it’s easier to start a revolution than it is to start a successful lemonade stand. And that’s because people really care about the outcome of a revolution. One way or another, people will be violently into this game that you’re playing, whereas the lemonade stand, your mom has to slip someone some money as they walk by. People don’t care about the small things and sometimes we care about really small things. We’re working on things that are very small, and we care, but we can’t get customers, the public, employees, top employees maybe or investors or supporters to care nearly as much as we do and I think that’s because we’re thinking too small.
So, I guess, I want to leave with a couple of things.
Talking about the ways that innovators and icons throughout history have beaten the curve, have found alternate paths to success – Three of those ways are to think sideways, to find alternate side doors to where they’re going, to use levers to amplify what you’re doing, to find platforms that get you better at the fundamentals and allow you to scale faster, and then use 10x thinking to compete at a world class level.
But I really don’t like the word “shortcuts”. The reason that’s not what the – what I talk about in my book because no one ever changed the world by cutting corners, it’s not about getting somewhere shorter. I’m talking about getting somewhere smarter. No one changed the world without cutting corners, but also, no one changed the world, or made a breakthrough without breaking rules, without changing the assumptions they’ve been given and breaking the conventions that they’ve been given. So I guess if I leave all of you with one thing, it’s that I think that we should break some big ones and that we should do it together. Thank you. [Applause]
Learn how great SaaS & software companies are run
We produce exceptional conferences & content that will help you build better products & companies.
Join our friendly list for event updates, ideas & inspiration.
Mark Littlewood Got a few minutes for questions, so any – where are we? Thank you.
Audience These big ideas are often incubated in silence and they’re not obvious. How do you identify these companies that have these big ideas when they may not be totally public?
Shane Snow Wow, yeah, that is a great question and I think also, the other side of that question is that a lot of times, really big ideas – There’s that thin line between genius and crazy, right? And so, a lot of the biggest ideas seem stupid or seem crazy – I mean, even like the nests that they were talking about earlier – I thought that that was a terrible idea, right? And then clearly they made billions more dollars than I have with it. How to identify is a really great question and I don’t know that I’m necessarily qualified to say, other than pattern recognition. What I would say is that in our own company we apply this 10x thinking pretty regularly to smaller challenges and I think, might be kind of relevant to everyone here that’s already working on something – we will sit down every quarter and have what we call a 10x meeting, where we’ll take one aspect of our business and we’ll say, what if we had to make this ten times better, what would we do? What would we have to break? Who would we have to fire? Who would we have to hire? How much money would it cost? What would we have to do and it sort of forces us to have to question the assumptions that we had. I would say that would be a good exercise to do, no matter what you’re working on because we can be thinking bigger and it can make it easier on ourselves. In terms of identifying others that are doing it – so that, I guess, to invest or to support, I do think it’s about paying attention when someone says goes – cuts against what the common wisdom is. If there’s the thing that everyone believes and someone is saying something different, then that’s someone to pay attention to. Either they’re incredibly dangerous or they’re onto something. There’s a book that’s coming out tomorrow, actually, by Peter Teal, the Facebook investor, that is kind of on this topic of how to as well. That actually might be a good resource – Zero to One – I’ll plug that. He writes about how do you identify when someone – when everyone is believing one thing and you ought to try and go against that. So I hope that’s a little helpful.
Bryan Massey with Conversion Sciences. Trying to get our kids to follow the rules – So how do we on the other side, teach them how to break these rules so that they can do these sort of smart cuts. Any thoughts on that?
Shane Snow Ah, that’s good – I don’t have kids, so I haven’t addressed this in my own life yet. There – do you remember a few months ago, there was this school district in LA that gave iPads to all of their kids and they had some really rudimentary lock-down software and the kids immediately hacked them? So, when that came out and people were talking about like, oh, kids are going to watch porn on their iPads and kids are hackers now, what do we do, do we throw them in jail? I was talking with a friend of mine at Wired about how they ought to create a hacker curriculum and take those kids and give them a scholarship to “hacker school” to direct that sort of mischievousness and lateral thinking into solving problems so that they could become the next innovators. I don’t know, I think we need curriculum to teach people, to teach kids how to do lateral thinking. It’s sort of tough when there’s sort of the moral life lessons, right? “Don’t steal” At a young age, that’s a lesson that you need to hear. If you’re saying “But break rules, that’s how you’re going to get ahead” – I think there’s probably an age where it needs to happen. But I definitely think there needs to be more hacker curriculum in secondary schools for sure.
Joanna Weibe Hi, I’m Jo from copyhackers.com. I think a lot of us connecting with like, this lateral moving thing that you were talking about and so I want to kind of follow up on the last question and ask, can we do the same thing, not with kids, but with employees? Can we get employees to do the same thing we’re doing, moving quickly between things?
Shane Snow Yeah, good question. This is one of the things that is really interesting to me is the entrepreneurship question because I think it’s dangerous to see that, oh, you get ahead by being flaky and switching jobs a lot and you want to retain great talent. I do think that, I mean, most companies at certain points stop growing, right? Most people at a certain point stop growing within a company. So I think, as company builders, we need to create environments where there are challenges to be met. I think the idea of small wins is really the part of this that applies for managers. Giving employees opportunities to have small wins and to have momentum – even if their very small – The psychologist Karl Weick came up with the idea of small wins and wrote this great paper about how small wins can not only motivate people, but win support from other people to a cause that their doing and that, no matter how small the win is, it’s just as much dopamine, I guess, to get people encouraged and motivated. So I think for us as managers, it’s about creating environments where our people can make progress no matter how small, but a lot of times – I know I do this in my company — like, John has got his department, he’s good to go, I’m going to forget about that until there’s a problem. And I think that the job of the leader is to give people resources and make sure they have what they need to succeed. I think part of our job needs to be setting up environments where they can make linear moves, where they can have small wins that build up to innovative things. I think there’s also – every company should have a sandbox for crazy ideas. Everyone should have a Google X or a twenty percent time or something, so that their employees can feel like they can work on those kinds of things as well and do that inside your ecosystem and not lose the talent.
Austin Dimmer, Effective Computing. There appears to me that there’s a risk of idolizing people and not questioning because we’re afraid of their power. And like, Alan Greenspan is the typical example, yeah. No one would question his power in the Fed because he was so powerful and everyone was afraid to question him and eventually led to financial crisis, his policy. And so the idea that Mars is going to save humanity seems to me preposterous and maybe people are afraid to question the sanity of that so, that’s the risk. That’s the point I want to make.
Shane Snow Yeah, well, absolutely and the fact that you think it’s preposterous and not just “eh” – you’re going to tell people about that and he wins anyway, right? You’re going to say this crazy guy wants to go to Mars and I think that that’s insane. It’s actually a very effective word of mouth strategy for him. The other thing, too, about this guy is – about Musk – is that he’s very good, he’s smart. Everything he says is calculated for a reaction and maybe he doesn’t – isn’t convinced at all that we’re going to screw up the Earth, but he is convinced that by putting this 10x vision out there, he’s going to be able to accomplish the things that he wants and actually, he has billion dollar contracts with NASA that he’s won as a result of this crazy mission that pretty much were the goal of a lot of the other private space companies. He’s done that kind of in the sweep of this big mission and so it very well could be what you’re saying is right. The thing you’re getting at though is something that I’ve been thinking about a lot lately, which is that people who change the world or who change the game are skeptical optimists. That if you draw, like, a diagram of pessimism, no faith in the future, optimism, faith in the future and then you draw another axis of skepticism and credulity, the people who are credulous and believe in the future are like most of us who are entrepreneurs. WE think that we can do it and we believe in, like, the thing that we hear and for the most part, people like Steve Jobs are incredibly skeptical and incredibly optimistic. He thinks – he really does think that the world can be better, but he also doesn’t believe anything you tell him and he’s not satisfied with anything you give him and so I think the ability to ask questions and to question people’s motivations and to question the things that they’re doing actually breeds innovation and that’s something we ought to cultivate in ourselves while not losing the optimism that the world can get better and that we can do it together.
Jonathan. So my question is more around, like, I guess, innovation and in terms of, so just a quick thing, so like I’m working on database now, but like, before, I was working on this photo technology startup and the thing is, the problem we were trying to solve was like a very difficult problem and I think that one of the main questions I have is like, trying to – at the very beginning, trying to get people on board with it, the people would just say – how in the – why are you going to make a difference where Google’s in the space with Google+ and Facebook is in that space or whatever, but they’re not really doing what we’re trying to do and so, that’s the first question that you get from a lot of people and then when you finally get that person on board that believes in you then it’s kind of hard to get like, others on board and like – I guess it’s – so basically my main question here like – a lot of investors, for example, they will say okay, we back crazy ideas or whatever – but when they actually see a lot of those ideas that, they may just like, plummet the next day or they might succeed, like it’s hard for them to – at least in my experience thus far, like – it’s hard to actually get them to – on board and that’s actually why, like, I ended up taking a pivot onto like, one little technology that we were building for that, which is our database, just focusing on that and because like, this was a much harder problem that needed more resources, so I don’t know if you get my question…
Mark Littlewood Is that question about how do you gather all resources to attack a very big problem when your –
Jonathan Yeah so when you have something, you can just like, release an MVP in like three days, right? And you need a certain amount of resources to actually get it out there, but to get those resources, those people have to take like, huge risks, right? And so like, it’s not a small risk, it’s like a very huge risk because you don’t really have an actual product yet.
Shane Snow Well, I think the same idea can kind of apply. First of all, it’s not easy. Building any business big or small is not easy. I guess what I’m saying is it’s easier if you’re painting the big picture and if you’re going after something really big because there’s a lot in your favor. Doesn’t mean that it’s guaranteed to succeed, but I think the combination of these two – gigantic mission, gigantic vision trying to do something ten times better, not just ten percent – with the idea of small wins and breaking it down into very achievable bites – that’s the story you can sell to investors, right, and it sounds like that’s exactly what you’re doing. We’re taking this small slice and we’re going to be the best in the world at it, but by the way, this is going to lead us to this thing that’s going to change the world. And again, the question of – why doesn’t Google do it, competition, and all of that – can be incredibly motivating to you or to investors, but it also could mean that they’re going to win and you won’t and that just happens in business. But I think you’re setting yourself up for a better chance of success and a better chance of rapid success by doing that combination of the huge thinking and sort of the micro-leveling up strategy.
Thank you everyone. [Applause]
Learn how great SaaS & software companies are run
We produce exceptional conferences & content that will help you build better products & companies.
Join our friendly list for event updates, ideas & inspiration.