I’ve got a little end of day advice for everyone out there that is getting whipsawed around by all the craziness in the financial markets. While this is aimed at entrepreneurs, it applies to everyone.
Focus on things under your control.
When I was a teenager, my dad said something to me that has stuck with me and informs many of the decisions I make and things I decide to spend my time on. He said something like "Brad – if you want to change the world, start with the 2% you know best."
Now, this doesn’t mean "don’t be curious." It doesn’t mean "don’t learn new things." And it doesn’t mean "don’t try new things." However, it does mean "don’t get distracted by all the things you don’t know, or can’t influence."
This is especially important when confusing and chaotic things are happening all around us. Since I’ve returned from vacation in England, I’ve been asked numerous times what I think of the current financial crisis, how it impacts entrepreneurship and venture capital, and what the government should do about it. In general, my answer has been "I have no clue." Now – I have some very specific ideas about how it might impact some of the companies we are investors in – especially if the macroeconomy continues to deteriorate. But I know enough to know that I can’t actually predict what’s going to happen nor can I influence the macro stuff at all.
As a result, rather than get all spun up about what’s happening minute by minute in Washington or in the financial markets, I concentrate on making sure that the companies I’m an investor in are thinking through the issues that will directly impact them – either because of exposure to certain customers (e.g. the financial services market) or a broad macroeconomic downtown. These are things I understand (in my 2%) and can influence.
Fear and anxiety comes from lots of places, including fatigue, misinformation, and the endless blathering on of talking heads on the television. If you start feeling your anxiety level increase because of things you have no ability to influence, step back and reconsider how you are spending your time. Go for walk around the block and enjoy a nice October afternoon. Take your best friend out to lunch at a restaurant you’ve never been too. Get a good night’s sleep. Take a deep breath and – as my dad once told me, focus on things under your control.
Certainly good advice for those who are debilitated from the distraction. However, despite the fact that one can't affect the macro-economic factors themselves, it's still important to be aware of them, because sometimes they affect things you *can* control. A simple example in the current situation: where are portfolio companies keeping their cash? It's not just about "curiosity" or "trying new things" but awareness of the environment in which you make decisions about that 2% you can affect. Predicting, understanding, or affecting Microsoft's behavior is equally difficult, yet ongoing awareness of their activities is important to most technology companies. I think the same holds true of the broader economy.
Comment by Dave — January 7, 2009 @ 1:55 am
great stuff Brad
Comment by Chris Selland — January 7, 2009 @ 1:55 am
Readers of Epictetus? This is almost the same as his first rule, which is to understand what you can control and what you cannot.
A simple concept, but it can lead to some profound changes in your outlook.
Comment by Matt_Cullen — January 7, 2009 @ 1:55 am
That's a nice post Brad. Thanks.
Comment by nbauman — January 7, 2009 @ 1:55 am
can you post this every couple weeks? thanks brad.
Comment by nabeel_hya39461 — January 7, 2009 @ 1:55 am
Stephen Covey talks about the difference between the "Sphere of Influence" and the
"Sphere of Concern" in The Seven Habits of Highly Effective People. There's a lot of (probably ancient) wisdom in that book.
Comment by steve_bergs2127 — January 7, 2009 @ 1:55 am
Hey Brad, that is exactly what we're doing. We're going to look at houses with a realtor Friday afternoon… moving ahead with plans to buy . Now is a GREAT time to buy.
Comment by msitarzewski — January 7, 2009 @ 1:55 am
Great and timely post Brad. Thank you.
Comment by Rahul Pathak — January 7, 2009 @ 1:55 am
I've been really puzzled about what to think about all this bailout talk. I don't lose sleep at night about it, but I do wonder if it's going to affect our business. On the day the first bailout collapsed, I closed on a refinance of our house without any hiccups, and September was a record revenue month for us. Dunno if those are trailing or leading indicators, but we haven't made any fundamental changes to our operations beyond reminding ourselves not to let expenses get out of whack with revenue,
Comment by derek_scrug1878 — January 7, 2009 @ 1:55 am
I feel the same way about collecting data or creating new metrics for web apps. Don't spend a bunch of time generating data unless you expect to make business decisions based on the data.
You can't measure everything, so focus on gathering data that will help uncover what's going well (that you may want to invest more in), what's not going well (that you may want to invest more in or shift focus away from), or what's shifting (e.g. referral sources, conversion rates, product line mix shift).
Comment by Ian McAllister — January 7, 2009 @ 1:55 am
Great balance Brad. I found your blog through your hilarious "world class" post. Thanks for the insightful read this morning.
Comment by Jessica Moore — January 7, 2009 @ 1:55 am
As one who can sometimes caught up in the macro media spins, I take this advice to heart.
Comment by Chip Schooler — January 7, 2009 @ 1:55 am
Just wanted to let you know this and the post last week "you're dying if you are not growing" http://bit.ly/1HMgQ0 are golden.
Comment by dylanc — January 7, 2009 @ 1:55 am
@Matt_Cullen here's a great talk with Warren Buffett and Charlie Rose about the current economic situation. As always, Buffett makes solid points. http://www.charlierose.com/shows/2008/10/1/1/an-e...
Comment by Tim Rosenblatt — January 7, 2009 @ 1:55 am
If I remember correctly, it was Covey that distinguished between one's circle of concern and circle of influence. All the leverage to make things happen reside in the circle of influence. Thanks for the timely reminder Brad.
Comment by Bill_Sanders — January 7, 2009 @ 1:55 am