entrepreneurship, mindset

The Eighth Natural Wonder

Seventy million years ago, a group of North American tectonic plates began to shift slowly. This movement produced tremendous pressure that lifted an entire region to almost 7,000 feet above sea level. For millions of years, not much happened until a small stream began to develop along the surface of the rock. Occasionally there would be a flood, and the stream would fill with more water and other objects like rocks.  These stones would serve as little chisels pecking away at the supporting rock below as the current carried them along. But every day, the stream grew bigger and burrowed a little deeper. Eventually, it was no longer a stream but what we now know as the Colorado River. Over millions of years, It carved one of the world’s seven natural wonders: The Grand Canyon.

Once you have experienced the canyon’s awe-inspiring scale, it seems inconceivable that it was once an unremarkable little stream. What makes this landmark unique and rare is how a focused action repeatedly happened for millions of years in a row. It is a quintessential example of compounding.

Compounding is when things grow in an exponential instead of linear pattern. Albert Einstein is undoubtedly one of the greatest thinkers the world has produced over the last few centuries. His theory of relativity has become a cornerstone for our understanding of time and how the universe functions. He plumbed the deepest depths of thinking about time and space, but he was the most amazed by compounding. Einstein’s fascination with the concept led him to observe: 

“Compound interest is the eighth natural wonder of the world and the most powerful thing I have ever encountered.”

Compounding can have a profound impact on our relationships, career, abilities, finances, and health. When harnessed, it has the power to improve our quality of life dramatically. It is as elusive, however, as it is powerful. As Charlie Munger put it:

“Understanding both the power of compound interest and the difficulty of getting it is the heart and soul of understanding a lot of things.”

Capturing the benefits of compounding starts with examining its core ingredients: action, focus, and time.

Action

We first learn about compounding as a principle for saving and growing our money. When I was in grade school, I discovered that when I put my money in the bank, it gains interest over time, and the total begins to grow exponentially. I initially thought of compounding as a passive process, but the opposite is true. The bank can only pay me interest if they are successfully loaning the money I have on deposit. If the bank stops generating new loans, it will not have the funds to pay my interest, and my deposits will not compound. Compounding requires action.

Every day we are faced with choices, and those choices manifest in our thoughts, words, and behaviors. Over time our life comes to be a cumulative result of these choices and actions. A fitting analogy is a garden. Plants begin as a small seed that, over time, can grow into a large plant. Not every seed will successfully grow to maturity, but only a planted seed has the potential to grow. Our actions are the seeds that define where compounding growth is possible in our lives. They are the starting point.

In entrepreneurship, one of the most important concepts is having a “bias to action.” When you start a new company, it has no sales and no customers. If you did nothing, it would be an absolute certainty the business would fail. Successful entrepreneurs make their best guess at what would help get the company off the ground and get moving. It’s much better than the alternative of doing nothing. A bias towards action is helpful in most areas of our lives. If I want to become fluent in another language, it is impossible for that future to exist until I take the action of learning my first word. In The Paradox of Choice, psychologist Barry Schwartz points out something interesting about how we reflect on our actions:

“When asked about what they regret most in the last six months, people tend to identify actions that didn’t meet expectations. But when asked about what they regret most when they look back on their lives as a whole, people tend to identify failures to act.”

In the movie Gladiator the protagonist Maximus says:

“What we do here today will echo in eternity.”

The actions we choose today reverberate for the rest of our lives and chart the course of our future.

In 1492 Christopher Columbus made landfall in China after an epic journey across the Atlantic Ocean. At least he thought he landed in China. During his preparation for the trip, Columbus made three significant mathematical errors while charting the course. The common thread was that they all resulted from overly optimistic assumptions on Columbus’s part. As biographer Samuel Morison noted:

“Of course, Columbus’s calculation is not logical, but Columbus’s mind was not logical. He knew he could make it, and the figures had to fit.”

I have seen the same tendency in my own life. As an optimist, I can assume that the future will be great and be overly generous in assessing my actions today. The inverse can also be true. Pessimism can discourage us from taking the steps needed to make our desired future possible. To harness the power of compounding, we have to take deliberate action today.

Focus

We all have areas of our life that we would like to see change. Every year over 50% of Americans will make a New Years’ resolution to change an aspect of their lives. Unfortunately, only around 8% of these resolutions stick for more than a few months. At the beginning of 2020, I resolved not to drink any caffeine. The first couple of months went great, but by March, I was back to drinking a couple of Coke Zeros per day. Anyone who has been to the gym in January has witnessed something similar. We are generally successful in taking initial steps towards change. Our problem is that we often lack the focus to sustain these actions.

Focus is the ability to concentrate our attention. It has always been an important skill, but I believe it has become even more critical in recent years. As a result of technological innovation, the world has witnessed an explosion of options, and one example is in TV shows.  A few decades ago, a handful of scripted TV show options existed. Then came cable and, more recently, streaming video. By 2009 there were 210 different scripted TV shows. By 2019 there were 532! There are more options to choose from than ever before, but It is becoming harder for a program to grab our attention. Once we choose a show to watch, if it suffers from a stretch of 2 or 3 mediocre episodes, we will quickly switch to one of the dozens of alternatives.

The more options we have, the more difficult it is to focus. Even if the show we are watching is outstanding, it is easy to imagine that one of the shows we aren’t watching would be even more enjoyable. Options seem to be freeing, but the reality is that they are often enslaving as they harm our ability to focus. Steve Job once remarked:

“Focusing is about saying no.”

We will meet thousands of people throughout our lifetime. Still, meaningful friendships with real depth and intimacy require that we focus most of our attention on a handful of people. The more that we focus our attention and efforts, the more profound the results will be. If you stand outside on a day when the sun is shining, you can get warm from the energy that the light contains. A magnifying glass can focus light into a smaller beam that produces enough power to start a fire. But If you focus light enough, it creates a laser that can cut through metal. The difference is the amount of focus. Focus is the discipline to say “no” to most of life’s options so we can concentrate our time, actions, and passion on the few things that we value the most.

Time

Alignment of our actions and focus creates powerful results, and when this goes on for an extended period, something extraordinary happens. Warren Buffet is one of the world’s wealthiest people with an estimated net worth of 87.1 billion dollars. Buffet began investing when he was ten, and it has been one of the central focal points of his life for over 75 years. Remarkably, 99.7% of his wealth accrued after his 65th birthday. It is counter-intuitive because exponential things don’t make intuitive sense to us. We tend to think about things in more of a linear progression. During the COVID pandemic of the last year, this was on full display. Viruses can grow exponentially, so by the time we realized COVID was in the United States; we already had a massive outbreak on the east coast. Because compounding is exponential growth, it becomes more powerful the longer it persists. Not surprisingly, Buffet’s says this about his long term perspective on owning stocks:

“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”

It makes perfect sense. Once you are fortunate enough to be a part of something compounding, the most important thing is not to disrupt the process. It all begs the question: “What can we do to put time on our side?”

Throughout our lives, there will be many things that draw our focus. Some will be fleeting, others will last for a season, and a few will be focal points for most of our lives. The ones that persist will be the result of deliberate commitment. Our emotions and our passions will wax and wane over the many decades of life. For something to be a consistent focus, we must intentionally choose it. Commitment helps us to stands firm when our emotions and passions fluctuate. A great analogy is a marriage. Two people commit to a relationship with one another “until death do us part.” They enter this commitment without knowing what circumstances the future will bring. There is an old Puritan proverb about marriage that says:

“First you choose your love, then you love your choice.”

We choose the things we give our focus and actions towards, and then we commit to love those choices. Only then do we begin to recognize the fantastic compounding that comes with time.

The final piece of ensuring that time works in our favor is sustainability. In 1982, the Southern Methodist University football team finished undefeated and ranked 2nd in the country. It had been a remarkable rise to power for a school of only 6,000 students that lacked the pedigree of its conference rivals Texas, Texas A&M, and Arkansas. A turning point in program history had happened when future NFL Hall of Fame running back Eric Dickerson unexpectedly chose SMU in 1979. Dickerson became the focal point of the “pony express” offense that catapulted SMU to the college football world’s pinnacle. Soon rumors would begin to swell about SMU paying players. One of the most common quips was that Dickerson had taken a pay cut when he went to the NFL. In 1985 the NCAA handed down stiff penalties when a former player testified that as a recruit, he had accepted $5,000 to choose SMU. The NCAA didn’t know that many players at SMU had not only received money as recruits but were continuing to receive secret payments funneled to them via boosters. Instead of stopping the payments, SMU alumni decided to slowly “phase-out” the distributions hoping that the NCAA would never discover their existence. In 1987, these payments came to light, and the NCAA responded by giving SMU the harshest punishment possible: the death penalty. It would be two years before SMU would be allowed to play another football game, and the school would manage only one winning season in the next twenty two years.

Compounding requires sustainable behavior. When we cut corners like SMU, time starts to work against us. It becomes a countdown until implosion. Over the course of my life I have witnessed people experience short term success with unethical behavior, but that success usually evaporated over time. Sustainability comes from pursuing our goals with integrity, empathy, honesty, and humility. We should listen most attentively to those leaders that have achieved sustained long term success.

Take action today to plant the seeds of compounding in your life. Intentionally and deliberately ignore 99.9% of options to focus your time and effort on the .1% that matters. Do it with commitment and integrity so it can last for decades.


Questions for Reflection:

What is a dream that requires you to plant seeds with your actions today? What is preventing you from taking the first step today?

Write out the five things you want to focus on the most in your life and rank them. How does this list compare to how you are allocating your time, thoughts, and finances?

What is one thing about your behavior in the last year that could make growth unsustainable? What can you do to make a change in this area?

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entrepreneurship, mindset

The Power of Practice

Game 6 of the 2013 NBA finals was one of the best games in basketball history. The Miami Heat entered the game behind 3-2 to the San Antonio Spurs in the best of seven series. The entire game was close, with the lead seesawing between the teams until the Spurs took control in the last two minutes. With 28 seconds left, Manu Ginobli sank a free throw to put the Spurs up 5 points. 

Bill Simmons recounts his experience watching this part of the game:

“During that now-fateful timeout with San Antonio up five, Jalen Rose and I watched NBA officials wheel the Larry O’Brien Trophy into the runway to our right. It couldn’t have been farther than 15 feet from us. We watched security guards assume positions around the court, and we watched Heat employees hastily sticking up yellow rope around the courtside seats. Like they were cordoning off a homicide scene. Even after LeBron’s second-gasp 3, I still thought we were going home. Some Heat fans had already trickled out. We watched them leave in disbelief.”

The game seemed over for all intents and purposes. What followed was an improbable and frantic finish culminating with this incredible Ray Allen 3 pointer that would send the game into overtime.

Everything about this shot is remarkable. The coolness under pressure. Allen’s mental awareness that he had to shoot a 3 for the Heat to have a chance. The balance to avoid falling out of bounds while dribbling backward, and the presence of mind to make sure that both feet were completely behind the line before shooting. This iconic play was a shining moment for one of the game’s all-time greatest shooters. We all get to see the amazing shot, but that shot was only possible because of the thousands of hours of training and practice that preceded it. Allen was once asked about how he became such a great shooter and said:

“I’ve argued this with a lot of people in my life. When people say God blessed me with a beautiful jump shot, it really pisses me off. I tell those people, ‘Don’t undermine the work I’ve put in every day.’ Not some days. Every day. Ask anyone who has been on a team with me who shoots the most. Go back to Seattle and Milwaukee and ask them. The answer is me — not because it’s a competition, but because that’s how I prepare.”

I think Allen’s answer is a powerful insight into how we can unlock the highest levels of achievement. His point is not that he has a lack of God-given talent but that his jump shot is largely the result of countless hours of practice. There are likely thousands of people with a comparable amount of natural talent as Ray Allen. Still, only a handful have honed their ability to shoot a basketball to such an elite level.

In his book, Outliers, Malcolm Gladwell examines what enables some people to achieve at remarkable levels. It is always difficult to tease apart talent and practice to find how much each had a role in a person’s success. One of Gladwell’s more compelling examples is students who have successfully gained admittance to a top music school. Without a doubt, there is a relatively high level of required talent to be admitted to a school like Juilliard. Once a student achieved admission, Gladwell wondered, what was the biggest leading indicator of future success? Fortunately, the data paints a clear picture:

“Once a musician has enough ability to get into a top music school, the thing that distinguishes one performer from another is how hard he or she works. That’s it. And what’s more, the people at the very top don’t work just harder or even much harder than everyone else. They work much, much harder.”

Successful musicians are forged from a combination of natural talent and exceptional practice ethic. In some fields, the natural talent required to succeed is a high bar. The NBA only has around 500 active players at any given point in time. Even if you include international professional basketball leagues, there are only a few thousand professional basketball jobs available at any given point in time. As a result, the amount of natural physical gifting needed is relatively high. If you are 5’6″ tall, it’s borderline impossible to have a career playing professional basketball no matter how hard you practice.

In contrast, one of the great things about entrepreneurship is that the world economy needs millions of business owners. Countless people possess the natural aptitude and talent required to be an entrepreneur. Creating a business doesn’t hinge on how you look, where you were born, or what level of education you received. Instead, just like Ray Allen’s jump shot, success in entrepreneurship is largely about mindset and a willingness to put in the practice.

Practice Cultivates Talent

Recently I have been listening to the audio version of the outstanding book, The Body, by Phil Bryson. In the chapter on how our body responds to the food that we eat, Bryson notes:

“By whatever means you measure it, we are pretty good at removing energy from food. Not because we have an especially dynamic metabolism but because of a trick we learned a very long time ago – cooking…It is widely believed now that cooked food gave us the energy to grow big brains and the leisure to put them to use…the few plants we can eat are the ones we know as vegetables…but we can benefit from a lot more foods by cooking them. A cooked potato, for example, is 20 times more digestible than a raw one.”

Cooking exponentially expands the number of things that we can eat. It protects us from harmful diseases and bacteria. It changes the texture and taste of food to make it more appetizing. It even increases the amount of nutrition that we derive from food. Without cooking, our body would require us to spend our entire day eating in our quest to get enough calories. But what does cooking have to do with entrepreneurship and practice?

In the same way that cooking cultivates and enhances food, practice cultivates and enhances our natural talents and abilities. Practice unlocks our full potential and amplifies our effectiveness, but it requires a great deal of time and commitment. For example, one study of 20-year-old violinists divided them into 3 talent groups based on their conservatory teachers’ scores. Those judged “best” had averaged 10,000 hours of deliberate practice since taking up the violin. Those judged “better” averaged 7,500 hours. And those judged “good” averaged 5,000 hours. One thing that is worth noting: Considering their age, all of these violinists had spent an incredible number of hours practicing. If you assume these students began playing violin at age 5, then 10,000 hours of practice had required 11% of their life to be dedicated to training!

Our mindset profoundly influences how we view practice. In her classic work, Mindset, Carol Dweck makes a compelling case that most people can be categorized as having a predominantly “Fixed Mindset” or a “Growth Mindset.” Fixed mindset people believe that the talents and abilities we are born with define what we can do. The idea of practice is somewhat antithetical to this self-view because your abilities are almost exclusively the result of your natural abilities. Fixed mindset people are more easily discouraged by setbacks, take feedback poorly, and view exertion of effort as proof that someone does not have talent in that area. Challenges are, therefore, something to be avoided.

In contrast, the growth mindset is characterized by a fundamental belief that our capabilities can expand and grow over time with dedication and practice. They believe our skills come from hard work and persistently working through challenges. They actively seek out feedback and would assert that effort will be necessary for any significant accomplishment. Dweck illustrates how powerful a growth mindset can be through several examples. One of the most compelling is through art. Drawing is widely considered to require a good deal of natural artistic ability. Still, even a small amount of regular practice by someone with a growth mindset can make a remarkable difference. Below is an example of a before and after picture one artist produced from just a few hours of practice and instruction.

One artist’s initial drawing compared to a drawing after a 12 lesson course.

Entrepreneurship requires a growth mindset. Over the past 12 years, I have been fortunate to be a part of co-founding several businesses. One of the best parts is the immense amount of practice and learning in a new company. Running a business requires being able to execute at a reasonable level in a lot of different areas. Below are some of the many needed skills that come to mind:

Recruiting
Casting Vision
Crafting Strategy
Negotiating
Motivating
Selling
Establishing Culture
Strategically Quitting (Read More About this Here)

Our natural giftings and personality give us a different base level of competence in these areas. But no matter what our starting point, excellence is impossible without a tremendous amount of practice. Here are 5 tangible suggestions of how to apply this in your life:

  1. Openness to feedback. There is a reason that the best golfers in the world still have a swing coach. No matter what level of performance we reach continued growth requires feedback. One of the ways that I grew the most in my teenage years was through being a part of basketball and track teams. Teams provide a context where others can observe your behavior, your attitude, and your habits. Your teammates become the single best place to get honest and vital feedback.

    I have found that it is not easy to get others to share candid feedback, especially with a superior. To have a feedback-rich environment, you must continually ask for feedback from others instead of assuming that they will offer it if there is a way that you can improve. When you do get critical/constructive feedback, listen and seek to understand instead of responding defensively. Responding negatively to feedback communicates that you are not really open to feedback and that sharing it with you should be avoided in the future. Do people feel comfortable sharing feedback with you?
  2. Root out fixed mindset thinking. Although you can generally categorize people as having a growth mindset or fixed mindset, the reality is that all of us have at least some of both. I tend to lean pretty heavily towards having a growth mindset, but there are areas of my life like music and foreign language where I am prone to fixed mindset thinking. In general, the less natural talent I have in an area, the more tempting it is for me to have a fixed mindset. What are the areas in your life that you are living with a fixed mindset?
  3. Focus on process over results. Results orientated people are primarily motivated by outcomes. For example, “I will practice piano every day so that I can win the talent show in the spring.” Practice is a means to an end. In contrast, process-oriented people are primarily motivated by achieving a higher level of intrinsic skill at a particular endeavor. For example, “I will practice piano every day because I get joy from playing beautiful music. I want to know how beautifully I can play this instrument.” At some point, our ability to persist in practice has to be based on something deeper than results. It requires that we intrinsically love the process of finding out what we are capable of. Where are you more results-oriented than process-oriented?
  4. Be picky in what you practice. Recent psychological experiments have shown that our brains are not able to multi-task. Unsurprisingly, we are also unable to practice many things simultaneously. Choosing judiciously where to focus our time creates the opportunity to invest meaningfully in the areas where we most want to grow. Are you trying to grow in too many areas at the same time? What are the most important areas for you to be growing right now?

What area of your life do you want to focus on practicing the most over the coming year? Was there something that stood out to you in this article as helpful? Please share your thoughts in the comments.

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entrepreneurship, mindset

The Art of Quitting

Over the past 12 years, I have been a part of starting several companies. I’ve been fortunate to be a part of some incredible successes, but I’ve also seen my share of flameouts. I am constantly seeking to understand how to be a better leader and entrepreneur. In this blog, I hope to share some of the things that I have learned along the way.

What personality traits are the biggest predictors of success? Historically experts have identified things like intelligence, raw talent, and charisma. Newer research shows that our mindset might be the most important predictor of future achievement. Specifically, a mindset of persistence may be a more powerful leading indicator than raw talent. In Angela Duckworth’s acclaimed book Grit, she says this about the necessity of persistence in pursuing excellence:

“…there are no shortcuts to excellence. Developing real expertise, figuring out really hard problems, it all takes time―longer than most people imagine….Grit is about working on something you care about so much that you’re willing to stay loyal to it…it’s doing what you love, but not just falling in love―staying in love.”

That aligns with my experience. It’s impossible to build a business, a relationship, or any expertise without staying the course. But I’ve learned another paradoxical truth. Successful entrepreneurs are simultaneously skilled at persistence and at the art of quitting.

2nd Time is Not the Charm

In October 2009, I was a part of a team that launched an online auction business. Against all odds, it was an incredible success that surpassed our wildest expectations. We were young and naive; at 30, I was the oldest person in the company. Emboldened by our success, we began planning a 2nd e-commerce startup in 2011. Abundant time, money, and passion were poured into the 2-year buildup to launch. Confidence was high that this new venture would be another huge success. The concept was an online store where customers could shop for any product in mainstream categories. During the checkout process, they would play a short flash game to win a discount on their order. We believed our creation would add excitement and entertainment to the shopping process. We finally launched the website in 2013 with high hopes. We were exhausted but excited.

By the time the first customers saw the website, I had personally invested thousands of hours and a large amount of personal savings into funding the project. I eagerly watched to see how customers would respond. The early results were…terrible. The average customer was not responding at all. Potential customers were bouncing off the landing page like it was a trampoline. It would be hard to overstate our discouragement at the initial results. Internally, company morale sank as the reality began to set in.

In retrospect, we made several missteps in the process of launching:

-We didn’t spend enough time talking to potential customers
-We did not create a minimum viable product (MVP) and tried to launch a polished product
-We were overconfident because of the success of our first company
-We underestimated how quickly Amazon was consolidating market share in e-commerce
-We picked a technology that would soon be extinct (Flash)
-We designed around desktop instead of mobile

It’s quite a list of missteps now that I type it all out. And yet, I don’t have many regrets about the mistakes we made in launching. Hindsight is always 20/20, and anytime you try to do something new, there is a decent chance that people won’t get it. The question before us was “What do we do now?”

“Don’t Give Up”

Back to the research on the mindset of successful entrepreneurs. Conventional startup wisdom affirms the value of the statement “Don’t give up.”  There are epic stories of people who refused to give up and were rewarded for their persistence.  One great example Business Insider recounts here is Pandora: 

Pandora was not able to pay its employees for an astounding two years between 2002 to 2004 while it worked on producing a viable commercial product. Not paying full-time employees is very, very illegal in California, where Pandora is based.

“We had no idea we were breaking the law,” Westergren said.

Over that period, Pandora accumulated $2 million in back wages owed. Westergren himself ran up a $500,000 debt on “maxed-out cards” while he paid bills and as many salaries as he could afford. 

He paid a little at a time in the order they were due, an experience he describes as like “playing Tetris” with his finances, which he “[doesn’t] recommend.” 

Two employees sued for back wages. And Pandora’s original model of licensing out its Internet music recommendation engine to retailers and labels was not working out. 

But Westergren, a musician by training who had little to fall back on if he defaulted on the debts, managed to keep most of the team together. To keep employees motivated, he gave speeches upon speeches, encouraging them that the potential market was huge, and so was Pandora’s potential impact on music and culture. 

Somehow — Westergren says he is not sure how — the company was able to close a $9 million round of funding in 2004, when money was much harder to come by than it is today. 

Westergren called an all-hands meeting for everybody in Pandora that same day. Everybody was expecting another stirring speech, he says. Instead, he pulled a stack of envelopes from his back pocket and paid out the $2 million among the 50 employees right then and there. 

“Everybody thought it was a bad joke, like it would bounce or something,” Westergren says.

What an epic story! The scene of Westergren handing out envelopes full of back pay is incredible.

This story can serve as a reinforcement to my natural disposition to be persistent. I don’t like giving up on things.  I am the kind of person that will keep working on a brainteaser longer than other people just because it drives me nuts if I can’t figure it out.  Hearing the Pandora story only strengthens my resolve. “No matter what – don’t ever give up.  Sometimes success comes from sheer force of will.”

The problem with lionizing stories like the one above is that it lacks two important pieces of context.

1. Why was Westergren so convinced that he should bet everything he had to keep going? Was there clear evidence that they were on the cusp of a breakthrough? Was it obvious they had product/market fit? Was their main challenge a temporary disruption to fundraising due to the tech bubble bursting?

2. How many stories exist where things didn’t turn out so cheerfully? Survivorship bias tells us that using anecdotes and stories of successful entrepreneurs is dangerous. How many times has the founder of a company “played Tetris” with their finances only to see it end in bankruptcy? We never hear that multitude of stories because they don’t get articles in Business Insider.

The point I am driving at is this: What if persistence isn’t always the answer? What if sometimes persistence prevents success?

Toxic Persistence

The last 20 years have seen an explosion of reality TV talent shows. One of the most notable is American Idol, which has led to stars like Kelly Clarkson and Carrie Underwood. Several years ago, American Idol was must-see TV for my wife and me each week. Without a doubt, the most cringe-worthy part of each season was the compilation of failed auditions. The clip below is a fan’s “top” 10 worst auditions of all time.

The hardest part of watching these auditions was not the off-key singing. It is how contestants responded to negative feedback from the judges. Instead of introspection, contestants would often reply with something like, “I’m not giving up on my dream!” or “I’ll prove you wrong!” These contestants are exercising persistence, but it is the darker side of persistence. I call this type of persistence “toxic persistence” because it harms us.

At its core, persistence is continuing on the same course despite difficulty or adversity. Belief is what fuels persistence. A belief that if we keep going, better days are ahead. But when we are heading in the wrong direction, the last thing we want to do is persist! Unfortunately, our psychological software has a bug called “belief perseverance.” When we sincerely hold a belief, we don’t process new evidence properly. Several studies have shown that being presented evidence contrary to a deeply held belief can strengthen the incorrect view. When evidence contradicts our beliefs, we tend to choose our beliefs. Ironically, aspiring entrepreneurs can be the most susceptible to toxic persistence precisely because they are so committed. Author C.S. Lewis once observed:

“Progress means getting nearer to the place you want to be. And if you have taken a wrong turn, then to go forward does not get you any nearer.

If you are on the wrong road, progress means doing an about-turn and walking back to the right road; and in that case, the man who turns back soonest is the most progressive man.”

Quit isn’t a Four Letter Word.

As I told you earlier, the second launch I led as an entrepreneur could not have gone worse. We made countless strategic errors leading up to the launch. However, when I reflect on this period, I don’t think it was the mistakes I made before launch that I regret. I regret the decisions I made after launching far more.

I regret not giving up sooner. It was clear that our business hypothesis was wrong. Not just that we were in the wrong zip code, more like we were on the wrong planet. In the face of plentiful evidence that we were not on the right path, we continued to push ahead. Over the next year and a half, we would waste even more time, resources, and morale trying to redeem a project more supported by belief than market evidence.

Why? I think the primary reason is identity. When you pour a lot of yourself into something, the lines can begin to blur. The project can transition from something you are working on to something that defines you. Once your heart makes that jump, it is excruciatingly difficult to allow it to fail. The project becomes a referendum on your worth as an individual. You become willing to prioritize belief over evidence because a failed project means laying off friends and painful conversations.

Another reason that we resist quitting is the sunk-cost fallacy. When we have invested significant time or money into something, we develop an irrational attachment to it. Imagine you buy a used car. A month later, you discover that it will require repairs that exceed the value of the car. Studies have shown that we are likely to pay for the repairs even though it isn’t rational. 

I kept going because I was too afraid to quit. That’s not helpful. In fact, it will actively prevent you from accomplishing your goals. It is a bottomless pit that can devour all of your devotion, time, passion, and money. The more you indulge it, the more dangerous it becomes.

My point is that persistence must be paired with another skill to be valuable. Knowing when to quit. Our culture celebrates starting things and mourns ending things. Our emotional and societal incentives all discourage quitting. I call it the art of quitting because it requires judgment, maturity, and humility. In Seth Godin’s book “The Dip”, he examines the importance of strategic quitting and makes the observation:

“Winners quit fast, quit often, and quit without guilt.”

W.C. Fields surely agreed with this sentiment when he famously said:

“If at first, you don’t succeed, try, try – and then quit! No use being a fool about it.”

Toxic persistence is pressing on when quitting would be wiser. Quitting saves us from devoting our resources to efforts that are destined to fail. It stimulates growth and learning while bolstering our humility. It is the foundation that future success is built upon. As Mulla Nasrudin observes:

“Wisdom comes from experience, and experience comes from failure.”

Redemptive Persistence

Redemptive persistence is flexible and adaptive. To use an example from above, imagine someone who deeply loves music and wants a career as a singer. For a variety of reasons, including talent and circumstances, this might not be possible. Toxic persistence leads to a mindset that the only path to success is by becoming a professional singer. It would lead someone to continue to pursue a career in singing even when all the evidence from the market is that they don’t have a future as a performance artist. Redemptive persistence would lead someone to incorporate feedback and explore other areas to find a career in music. How many successful producers, songwriters, and agents only unlocked their full potential when they quit trying to be a singer? Redemptive persistence is about pursuing a career that engages your love of music while being open-handed with the specific context.

I recently read the biography of a man who dreamed of becoming an officer in the British military. He gained his first significant military assignment at the age of 20 and commanded troops by 21. He distinguished himself for courage and bravery in several battles, but after a few years, it became apparent that he would never be able to advance to a higher rank because of where he was born. After several years of service in the British military, he quit and pursued a new career in farming and politics in Virginia. Years later, he would unexpectedly realize his dreams of leading in a military context when he was appointed General of the Continental Army. As you have probably guessed, that man was George Washington. Washington’s willingness to resign from the British military instead of pressing forward created the context and opportunities that culminated in serving as the first U.S. president. How would the world be different if he had pressed on instead?

Conversely, it was Washington’s redemptive persistence that made him such an exceptional leader during historic times. He had not attended college and was woefully underprepared to serve as General of the Continental Army. He made repeated mistakes during the Revolutionary War and won very few significant battles until receiving substantial French aid. He was always low on resources and troops. But America won the war, in large part, because of Washington’s persistence. He correctly observed the enormous financial cost of the war for the British. Even though the battles weren’t going particularly well, America could win the war with endurance. He successfully held the ragtag army together until the British bills mounted and the French joined the war as allies of America.

Final Thoughts

How can we identify when our persistence is toxic or redemptive? I’m going to tackle this more in future posts, but I would offer two thoughts.

  1. Redemptive persistence is almost always predicated on evidence that objectively points towards possible future success. It is flexible and adjusts to feedback. Toxic persistence is often a defiant “doubling down” in the face of the evidence. It is characterized by a rigid definition of success that we become unwilling to change.
  2. This highlights the important role of judgment. We don’t know what would have happened if Washington had continued in the British military. Maybe it would have led to his promotion to leadership despite being born in the colonies. Conversely, many contemporaries of Washington believed the Revolutionary War was a lost cause at points. This mental model does not remove the need for judgment; rather, it highlights the necessity to carefully and strategically choose when to quit and when to press on.

In 2012 I started working on what would be the most significant professional failure of my life. It took me almost a year and a half to break free from a mindset of toxic persistence. That failure was one of the best things to ever happen to me. It helped me learn the art of quitting, and I am a better leader and entrepreneur. It would turn out that my most significant professional failure would set the stage for the highlight of my business career so far: Co-founding Simple Modern.

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