Brad's Books and Organizations

Books

Books

Organizations

Organizations

Hi, I’m Brad Feld, a managing director at the Foundry Group who lives in Boulder, Colorado. I invest in software and Internet companies around the US, run marathons and read a lot.

« swipe left for tags/categories

swipe right to go back »

I Prefer Extremistan

Comments (5)

This morning, I read two wonderful essays on the web – one by Warren Buffet and one by Paul Graham.

Both of these made me immediately think of Nassim Nicholas Taleb’s brilliant new book – The Black Swan: The Impact of the Highly Improbable- which has been making the rounds the past few months.  If you haven’t yet read it, you should stop what you are doing, buy it immediately, and read it.  If you haven’t read Taleb’s Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets, you should read it first as it sets the stage for The Black Swan.

In The Black Swan, Taleb introduces the wonderful place called Extremistan and the much less interesting but much more often occupied place called Mediocristan.  Buffett and Graham give us more clues as to why Extremistan is a much more satisfying place to hang out.

  • Andrew

    The one Paul Graham essay that resonates most with me right now is the one on bootstrapping your startup with consulting, (http://www.paulgraham.com/fundraising.html). He mentions it about halfway through the essay.

    This economy has put my startup in a situation where sales have almost completely dropped off because we are focused on serving small businesseses. Since we launched earlier this year, we have had a good run but didn't get far enough where cash flow could sustain us though a prolonged 12 month recession.

    My question is should I now resort to consulting or getting a job temporarily which would help continue to fund development and marketing efforts but would take away my total attention on the company for the next 6-12 months while we ride out this storm?

    I would be interested in hearing people's opinion on the “bootstrapping = consulting” problem that Paul speaks of and why it is not an ideal way to fund your startup or why it has worked for others.

  • http://kevinsgreatadventure.blogspot.com Kevin Cimring

    Hi Brad

    Although there is a lot of bad news around, there have been some positive stories too. Take a look at Billshrink – thery just raised a whopping US$8million.

    My sense about it all is that one has to try react constructively to the good and the bad.

    On a positive note, the startup I am involved with, Jemstep, Inc. (based in Palo Alto) is hiring people, renting premises and remaining up-beat. I think that this is an opportunity for great start-ups to get noticed more than ever. If this is what Extemistan is being about, I'm all for it.

    Thanks for the great blog.

    Kind regards
    Kevin Cimring

  • http://wanderingstan.com/ wanderingstan

    I prefer extremistan as well, but it is worth noting that Taleb explicitly recommends people away from exteremistan jobs. Presumably this includes entrepeneurship. On page 28 he says

    “If I myself had to give advice, I would recommend someone pick a profession that is not scalable! A scalable profession is good only if you are successful; they are more competitive, produce monstrous inequalities, and are far more random, with huge disparities betweeen efforts and rewards–a few can take a large share of the pie, leaving others out entirely at no fault of their own.”

    Later on page pg 94 he gives good advice to extremistan entrepreneurs: “Indeed, we have very few historical records of people who have achieved anything extraordinary without such peer validation–but we have the freedom to choose our peers. … If you engage in a Black-Swan-dependent activity, it is better to be part of a group.”

    (…And the Paul Graham essay is fantastic; the best and most encouraging thing I've read in weeks. Thanks for that link.)

  • Kevin Cimring

    Hi Brad

    Although there is a lot of bad news around, there have been some positive stories too. Take a look at Billshrink – thery just raised a whopping US$8million.

    My sense about it all is that one has to try react constructively to the good and the bad.

    On a positive note, the startup I am involved with, Jemstep, Inc. (based in Palo Alto) is hiring people, renting premises and remaining up-beat. I think that this is an opportunity for great start-ups to get noticed more than ever. If this is what Extemistan is being about, I'm all for it.

    Thanks for the great blog.

    Kind regards
    Kevin Cimring

  • http://intensedebate.com/people/wanderingstan82 wanderingstan82

    I prefer extremistan as well, but it is worth noting that Taleb explicitly recommends people away from exteremistan jobs. Presumably this includes entrepeneurship. On page 28 he says

    "If I myself had to give advice, I would recommend someone pick a profession that is not scalable! A scalable profession is good only if you are successful; they are more competitive, produce monstrous inequalities, and are far more random, with huge disparities betweeen efforts and rewards–a few can take a large share of the pie, leaving others out entirely at no fault of their own."

    Later on page pg 94 he gives good advice to extremistan entrepreneurs: "Indeed, we have very few historical records of people who have achieved anything extraordinary without such peer validation–but we have the freedom to choose our peers. … If you engage in a Black-Swan-dependent activity, it is better to be part of a group."

    (…And the Paul Graham essay is fantastic; the best and most encouraging thing I've read in weeks. Thanks for that link.)

  • Andrew

    The one Paul Graham essay that resonates most with me right now is the one on bootstrapping your startup with consulting, (http://www.paulgraham.com/fundraising.html). He mentions it about halfway through the essay.

    This economy has put my startup in a situation where sales have almost completely dropped off because we are focused on serving small businesseses. Since we launched earlier this year, we have had a good run but didn't get far enough where cash flow could sustain us though a prolonged 12 month recession.

    My question is should I now resort to consulting or getting a job temporarily which would help continue to fund development and marketing efforts but would take away my total attention on the company for the next 6-12 months while we ride out this storm?

    I would be interested in hearing people's opinion on the "bootstrapping = consulting" problem that Paul speaks of and why it is not an ideal way to fund your startup or why it has worked for others.

  • http://toostep.com Khanna

    Hi feld,
    Thanks for those links..those are the links or articles that give a confidence and idea in this slowdown…thanks again….

  • Ool

    I don't think you guys get what "Extremistan" really means. It doesn't mean that you can get incredibly rich if only you work hard are smart, and a bit lucky. It means that if you're in the right place you can break the bank regularly. If only you're lucky it makes you not only a lottery winner but the financier equivalent of a totalitarian dictator, who makes more in a day than most other people do in their lifetimes. It means that when you sneeze millions can catch a cold if you're the one on top.

    It means you can upset the entire economy gambling with oil futures or betting on investments actually going bust through naked credit default swaps.

    That's what Extremistan truly means in the financial world. And those are the kinds of narcissistic or narcissistic co-dependent fantasies of omnipotence you harbor when you tell others that you prefer a marketplace like that.

Build something great with me