Summary of The Start-Up of You
Generously submitted by reader Shahan Lilja.
CHAPTER 1 — ALL HUMANS ARE ENTREPRENEURS
Why are humans born entrepreneurs?
- Our ancestors had to be resourceful and creative to feed themselves and survive.
- Work in its current form is a new invention and the rare exception in history, not a natural human state.
How has the world of work changed?
- The traditional career paths and assumptions are no longer valid — e.g. that big corporations will take care of loyal workers who automatically move up in a career escalator — due to at least two (interrelated) macro forces: (1) Technology (automates jobs, changes the nature of jobs, and makes it easier to offshore jobs), and (2) Globalization (increases competition for jobs).
- “Professional loyalty now flows ‘horizontally’ to and from your network rather than ‘vertically’ to your boss.”
- “Networking has been replaced by intelligent network building.”
- “Searching for a job only when you’re unemployed or unhappy at work has been replaced by always be generating opportunities.”
Why the Start-Up of You?
- To succeed professionally in today’s world you need to think and act like you’re running a startup — the Start-Up of You — i.e. adopting the strategies of successful entrepreneurs
- You are now also operating in a quickly changing and uncertain environment with constraints on resources, information, and time
- “The forces of competition and change that brought down Detroit are global and local. They threaten every business, every industry, every city. And more important, they also threaten every individual, every career.”
What is the Start-Up of You mindset?
- Your life and professional career is in permanent beta. We are all works in progress.
What’s the Start-Up of You skill set (and also the organization of the book):
1. Develop competitive advantage — combine three puzzle pieces into a coherent whole: your assets, your aspirations, and the market realities
2. ABZ planning — formulate a Plan A based on your competitive advantage, and then iterate and adapt that plan based on feedback and lessons learned
3. Build a professional network — based on real, lasting relationships
4. Pursue breakout opportunities
5. Take intelligent risks
6. Tap network intelligence
What are the principles of Silicon Valley?
1. Take intelligent and bold risks to accomplish something great.
2. Build a network of alliances to help you with intelligence, resources, and collective action.
3. Pivot to a breakout opportunity.
CHAPTER 2 — DEVELOP A COMPETITIVE ADVANTAGE
3 factors that form your competitive advantage:
– Two types of assets: Hard assets (like cash, stocks, and physical possessions) and soft assets (like skills, experiences, connections, and knowledge).
– Include your vision of the future, goals, deepest wishes, and core values (regardless of the market realities or your existing assets).
3. Market realities.
– What people will actually pay you for.
How do you fit the pieces together to create a competitive advantage?
- Pursue worthy aspirations, using your assets, while navigating the market realities.
- The three factors (assets, aspirations, market realities), when paired with a good plan, determine the course you should head in.
How to think about assets:
- Develop a soft asset mix that gives you a competitive advantage.
- Strengthen your asset mix by investing in yourself.
- In the meantime, try to turn weaknesses into strengths.
How to think about aspirations and values:
- You should orient yourself in the direction of your aspirations and values — your pole star — even if you can’t achieve them.
How to think about market realities:
- Making the market realities work for you instead of against you is key to being successful.
- Ride the big waves; put yourself close to industries, companies, places, and people with momentum.
Some advantages of having clear aspirations and values in a startup (examples: Twitter, Square):
1. Clarifies product priorities.
2. Ensures a consistent user experience.
3. Makes it easier to recruit employees who have similar aspirations and values.
How do you improve your competitive advantage?
1. Strengthen and diversify your asset mix, e.g. learn new skills.
2. Pick a hill that has less competition.
CHAPTER 3 — PLAN TO ADAPT
Should you craft a detailed plan and persistently work to make it happen? Or do you stay flexible in order to seize unexpected opportunity?
- Both: plan to adapt.
- Follow plans with discipline, yet have no firm plans.
- Be flexibly persistent: always ready to adapt (for valid reasons), yet persistent in driving towards set goals.
- An adaptive approach to planning that promotes trial and error.
- Plan A: What you’re doing now. Your current implementation of your competitive advantage which you constantly iterate on.
- Plan B: What you pivot to when plan A isn’t working or when you discover a better way toward your goal. Don’t write an elaborate plan B, but consider your parameters for pivoting. If you pivot to plan B and stick with it, that becomes your plan A.
- Plan Z: What you shift to when something goes seriously wrong. The lifeboat you can jump into if your plan fails and you need to reload before getting back in the game. The certainty of plan Z is what allows you to take on risk in your plan A and B.
Tips for making a plan:
1. Make plans based on your competitive advantage.
- A good plan should leverage your assets, set you in the direction of your aspirations, and account for market realities.
2. Make explicit the assumptions and hypotheses in your plan:
- What needs to be true for your plan to work?
- Example (hypotheses about your competitive advantage): I am skilled at X; I want to do Y; the market needs Z.
3. Prioritize learning.
- Prioritizing focused learning (soft asset) over, say, cash salary (hard asset) will lead to a more meaningful life and probably to more money in the long run.
4. Learn by doing.
- Some knowledge (practical knowledge) is best developed by doing.
- Test hypotheses through trial and error.
5. Make reversible, small bets.
- A good plan A can be stopped or reversed or easily morphed into a plan B, minimizes the cost of failure, and is iterated bit by bit.
6. Plan two steps ahead.
- If you’re unsure what your first or second step should be, pick a first step that generates a large number of possible follow-on second steps.
7. Maintain an identity separate from specific employers.
The A-B-Z timeline
- Plan A: Almost ready, aim, fire; aim, fire; aim, fire.
- Plan B: Pivot as you learn.
- Plan Z: Jump on your lifeboat and regroup.
What is pivoting?
- Changing your path to get somewhere based on what you’ve learned (not simply changing you path).
Plan B questions:
When to pivot? (When do you switch to plan B?)
- To pursue upside or avoid downside.
- “In general, a lesson from the technology industry is that It’s better to be in front of a big change than to be behind it.”
Where to pivot? (What should your plan B be?)
- To an adjacent niche, something different but related to what you’re already doing.
- “Keep one foot planted while the other swings to the new territory.”
How to pivot? (How do you make the switch to plan B?)
- Start it on the side (unless you need to take immediate action).
- Tip: set aside one day a week or month or whatever to work on stuff towards a plan B, e.g. pursue a business idea, develop a skill, or build a relationship.
CHAPTER 4 — IT TAKES A NETWORK
Why do relationships matter?
1. Ultimately, every job boils down to interacting with people.
2. People control resources, opportunities, and information.
3. The people you spend time with shape the person you are and the person you aspire to become. “The fastest way to change yourself is to hang out with people who are already the way you want to be.”
Metaphor for what success depends on:
- Success depends on (a) your individual capabilities and (b) your network’s capability to magnify them.
The main reason to separate relationships in a personal context from those in a professional context
- Potential conflict of loyalties (between duties as a friend and duties as a professional)
What determines the right behavior if you are personal friends with a professional colleague?
- The context in which you engage the person
How to build a genuine relationship with another person:
1. Empathize: See the world from the other person’s perspective. (“Seek first to understand, then to be understood.”)
2. Help first: Think about how you can help and collaborate with the other person, rather than what you can get. (“Synergize.”)
Mindset for building genuine relationships:
1. Don’t be transactional
- Don’t keep score; be aware that many good deeds are reciprocated, but don’t be calculated about it; think about relationships all the time, not just when you need something.
2. Prioritize high-quality relationships over a large number of connections.
3. Meet people through people you already know
- Start by understanding how your existing relationships constitute a social network.
What’s the best way to engage new people?
- Via the people you already know (which means that you should start by taking stock of the relationships you already have).
Types of professional relationships: (2)
1. Professional allies (8-10)
2. Weaker ties and acquaintances (100s-1000s)
Characteristics of professional allies:
1. Consult regularly and trust each other’s judgment.
2. Proactively share and collaborate on opportunities together.
3. Keep antennae attuned to each other’s interests.
4. Talk up, promote, and defend each other.
5. Are explicit about their bond: “Hey, we’re allies, right? How can we best help each other?”.
(6. “With an ally, you don’t keep score, you just try to invest in the alliance as much as possible.”)
Definition of of weaker ties and acquaintances
- “People with whom you have spent low amounts of low-intensity time but with whom you’re still friendly.” Examples: people you meet at conferences, old class mates, coworkers in other divisions.
Usefulness of weaker ties and acquaintances:
1. Introduce diversity into your network
2. Useful for finding opportunities and information outside your inner circle
What’s your extended network?
- People that are one, two, and three degrees of separation away from you (i.e. friends, friends of friends, and friends of friends of friends).
- Motivation: This is the largest network where it is guaranteed that in any introduction chain where you (You) ask to be introduced to someone (Target), every member of the chain has a stake in the introduction — at minimum they know you or know the target (as special cases, they may be you, or be the target, or know both you and the target).
You –> P1 –> P2 –> Target
If one more degree is included, there may exist introduction chains where a person crucial for the introduction don’t know either you or the target. That means they don’t care about the introduction.
You –> P1 –> P2 (don’t care) –> P3 –> Target
How do you reach your 2nd-and 3rd-degree connections?
- Via introductions (meet people through people you already know).
- Via (a) strong connections or (b) weak connections that have a compelling transactional reason to make the introduction.
- Put in the effort to (a) figure out how you can help the person and (b) tailor your request for an introduction to something you’ve learned. Example: “I noticed that you X — perhaps we could swap notes about Y”.
What’s the structure of the best professional network?
- Optimal mix of narrow/deep (strong connections) and wide/shallow (bridge ties).
– This creates an optimal mix of cohesion/trust and diversity/creativity.
– Strong connections create trust (because there’s overlap in values, communications styles etcetera) and trust creates cohesion (necessary for a good team). Bridge ties (the right weak connections) leads to diversity (in the information and resources that flow through the network) and this diversity helps generate more creative solutions.
What’s the best ways to strengthen a relationship?
1. Help the person.
2. Let yourself be helped.
- In both cases, jump-start the long-term process of give-and-take.
What’s a good way to help people?
- Be a bridge: introduce them to new people and new experiences.
– To be a bridge, straddle different communities and social circles.
Some tips for staying in touch and top of mind:
1. You’re probably not nagging
– Keep following up by mixing up the message, the gift, and/or the approach — or until you get an explicit no.
2. Try to add value.
– Check in with someone when you can offer something more than a generic greeting or personal update.
3. If you’re worried about seeming too personal, disguise your staying-in-touch as a mass action.
– Example: “I’m trying to reconnect with old X from Y. How are you?” Once contact is established, then try to add value (personalize the message).
4. One lunch is worth dozens of emails.
5. Social media updates.
CHAPTER 5 — PURSUE BREAKOUT OPPORTUNITIES
What’s the mindset that has to be “on” to power all the other opportunity-seeking behavior?
How do you increase your opportunity flow? (3)
1. Tap the human networks where the best opportunities flow.
- Join many small, informal networks and start your own.
2. Court serendipity.
- Stir the pot. “When you do something, you stir the pot and introduce the possibility that seemingly random ideas, people, and places will collide and form new combinations and opportunities.”
- Don’t be too directed but set smart parameters, that is, court good randomness but also be strategic. Example: You can go to a conference and approach random people; or, you can go to a conference, identify someone interesting, and approach the people that person is talking to.
- Be resourceful, resilient, and see opportunity amidst hardship.
What factors makes a network rich in opportunity flow (and worth your while)?
1. High-quality individuals.
- A network is only as good as its nodes.
2. Common bond (shared experiences, interests, values etc).
- Shared experiences lead to trust, and trust leads to sharing of information and opportunities.
3. Strong ethos of sharing and cooperation.
- “For a network to be valuable, everyone has got to want to invest in that network.”
4. Geographic density
- Collaboration happens best when information and ideas can bounce around quickly.
Why is it hard to pursue a breakout opportunity?
- It will often be inconvenient (because it doesn’t fit your schedule) and associated with uncertainty.
Why should you avoid “keeping your options open”?
- It’s often riskier than committing to a plan of action.
- “Making a decision reduces opportunities in the short run, but increases opportunities in the long run.”
- “To move forward in your career, you have to commit to specific opportunities as part of an iterative plan, despite doubt and despite inconvenience.”
- Accidental good fortune (that is taken advantage of)
CHAPTER 6 — TAKE INTELLIGENT RISK
1. The effect of uncertainty on objectives.
– Example: Making an investment has higher risk if its return is more uncertain. If there’s no uncertainty in the size of the return, there’s no risk. If uncertainty in some variable increases but this does not impact the objective (making a high return), there’s no increase in risk.
– The impact on objectives may be negative or positive, according to this definition.
Why is it important to take on intelligent risk?
- There’s competition for good opportunities and people don’t like taking on risk. Therefore, if you take on intelligent risk, where the potential upside more than justifies the potential downside, you’ll be able to take advantage of opportunities that others miss.
Rules of thumb for thinking about the risk associated with opportunities:
1. Overall, it’s probably not as risky as you think.
– Because humans are biased to overestimate risk (overestimate threats, underestimate opportunities, and underestimate resources); we have a negativity bias (“sticks get our attention a lot faster than carrots do”).
2. Assess the worst-case scenario.
– Get a handle on a single yes-or-no question: If the worst case scenario happens, can I tolerate it (would I still be in the game)?
3. Assess how easy it is to change or reverse the decision (and jump to plan B).
4. Uncertain does not mean risky.
– Something risky is uncertain, but something uncertain is not necessarily risky. For example, not planning a vacation introduces uncertainty (about what will happen) but not necessarily any risk (because the objective of the vacation, e.g. to have fun and relax, is not necessarily affected by not having planned everything out).
– When there’s uncertainty about something many people overestimate the risk. Therefore, the biggest and best opportunities are often the ones that are most uncertain because they’re the ones unexploited. If you embrace uncertainty and are not scared of it, you’ll be able to take advantage of those opportunities.
– You will never be fully certain of a big opportunity.
Examples of opportunities/situations where others may overestimate the risk (relative to the reward):
1. Jobs that pay less in cash but offers tremendous learning.
2. Part-time or contract gigs.
3. Hiring someone without much experience but who’s a fast learner and much cheaper.
4. An opportunity where the risks are highly publicized.
What’s the volatility paradox?
- High short-term risk leads to low long-term risk, that is, volatility leads to stability.
– Intuition: Small fires prevent the big burn.
CHAPTER 7 — WHO YOU KNOW IS WHAT YOU KNOW
- “What will get you somewhere is being able to access the information you need, when you need it.”
- “Knowing how to conceptualize, access, and benefit from the information flowing through your social network.”
Why is your social network an indispensable source of intelligence?
1. Insider information. People offer information that would never appear in a public place (for example, private observations, personal impressions, and insider knowledge).
2. Personalized advice. People offer personalized and contextualized advice (because they know your interests and particular situation).
3. Filtered information. People can filter information you get from other sources (and thereby help focus your attention on what’s actionable and relevant, which is increasingly valuable in an age of information overload).
4. Better ideas. You may think better thoughts when in dialogue with others.
In a nutshell, how do you acquire good network intelligence?
- Identify the right people to talk to, ask these people good questions, and synthesize points into something meaningful.
Two ways to tap information from your network:
1. Ask private and specialized questions to specific individuals.
2. Ask broad and generic questions to your entire network (e.g. via a mass email or a poll)
When you want information from you network, when facing a decision, who do you ask and in what order?
1. Domain experts. Gives you a sense of your overall options.
2. People who know you well. Helps prioritize options and figure out the best personal fit.
3. People who are just really smart. May give completely different perspectives.
- On a high level, sort the people in your network into these three (overlapping) categories
- Broad network gives you access to many domain experts (and people who are overall smart); deep network gives you access to people who know you really well (and who may be domain experts and overall smart).
How do you ask good questions?
1. Converse, don’t interrogate.
- Have an even, true exchange of intelligence.
2. Adjust the lens.
- When making a decision, ask wide questions to figure out the criteria you should be using (and the factors you should be considering); ask narrow questions to figure out which weight you should give to each criteria (and for specific information about each factor).
- Example: Begin by asking domain experts “What should I be thinking about when when assessing the pros and cons of this opportunity?”. Then, once you’ve narrowed down your criteria for making a decision, ask a more select group (including people who know you well) for specific information about the relevant factors.
3. Frame and prime.
- To get higher-quality intelligence, frame/prime the same question in multiple ways (because the way a question is framed/primed influences how it will be answered).
- Example 1: Use both a positive and negative frame: What are the top two things you got right when doing what I’m about to do? What are the top two things you did not get right?
- Example 2: Give sample answers to prime for the type of answer you’re looking for: What do you see as the pros and cons of X? For example, maybe a pro is Y?
4. Follow up and probe.
- Follow up and probe on qualifying words.
- Example: It’s really risky to X? What does ‘risky’ mean? Well, there’s not a lot of security? What does ‘not a lot’ mean?
(5.) For vague concerns — e.g. “something doesn’t feel right with X” — when you’re unable to formulate a clear question, engage people in person and try to figure out the issues over a long conversation.
How do you get serendipitous network intelligence?
1. Engage people.
- If you’re in touch and top of mind, people are more likely to spontaneously send you useful information.
2. Keep a few general questions in your back pocket.
- Example: “What’s the most interesting thing you’ve learned over the past few months?”
3. Push interesting information out to your network.
What are the steps in tapping in to your network for intelligence? (3)
1. Gather information from multiple people in your network.
2. Analyze the validity and relevance of this information (while remembering that everyone has biases).
3. Synthesize information into actionable intelligence.