This Week in Ideas 21FEB21

Hiring is Difficult.

Ben Horowitz made used an excellent analogy for hiring. I’m going to butcher the quote and the context because it came in the middle of a three-hour podcast, and I didn’t timestamp when it happened. (Funny enough, I can see exactly where I was when I heard this idea, though).

What stuck with me was that one of the most challenging but crucial skills to learn is how to hire talent that isn’t like you. Most people know what they are good at and so look for that in someone else. They look for a copy of themselves because that’s what they know. And that’s what you end up with homogeneous organizations.

The analogy that stuck with me, though, was this. What if you put a receiver in charge of picking the football team, and they only picked other tall, thin, fast people? You wouldn’t have a very good football team. The receiver needs to learn that, though slower, a 300-pound man with a different kind of hand skills is just as important to winning.

Broken Journalism.

Many people worry about business models where a company gets most of its revenue from advertising… “if you’re not the customer, you’re the product” and all that.

Similarly, many people worry about the decline of newspapers because Craigslist and Facebook stole all their revenue from classifieds and local advertising.

However, is there not a problem with the fact that journalism never had a sustainable business model? Though papers would charge for subscriptions, they made most of their money (from my understanding) on advertising and classifieds.

Journalism needs a sustainable revenue source. It’s not a government subsidy because that creates incentives to not bite the hand that feeds. But journalism has rarely had a sustainable revenue source; it’s always funded news with other sources of revenue.

At the most successful outlets at getting revenue from news consumers (The New York Times and The Wall Street Journal), people pay for analysis and opinion, not news.

Hear more at Exponent and Protocol.

Starlink Economics

Byrne Hobart laid out some great bull cases for Starlink, but I think it’s really the combination of one and two that make sense to me. His second argument is that enormous CapEx spend is an excellent moat if you can convince people to invest in you (which Elon can). His first argument is that Starlink is disrupting a high marginal cost business, traditional ISPs who can charge $100k+ to lay new fiber to a house. Starlink, on the other hand, is a (relatively) low marginal cost product. Adding satellites is expensive, but adding a new customer is not. And adding satellites can be subsidized by SpaceX’s primary launch business.

What SpaceX is doing is deploying significant CapEx to built a platform with relatively low marginal cost. It allows them to simultaneously disrupt the incumbents while building a moat to make it difficult for others to follow. But why will Starlink succeed where OneWeb failed (the first time around, second time TBD)? That’s an interesting topic for another post.

On Late Bloomers

Rather than thinking of people as late bloomers, people who were in some way held back or prevented from success, we would be better off seeing them as opsimaths: smart people who carried on learning and achieved things when the timing and circumstances were right. -Henry Oliver

Much more wisdom here. The takeaway is that most people are “late” bloomers. We should probably ditch the term and stop discouraging people who haven’t found “success” by 30 or 40.

My main takeaway? Keep learning and keep working, so you’re in a position to take advantage of an opportunity whenever in life you happen to stumble upon it.

One for the Road

Rules of the blog: 1) this is where I come to flesh out thought, 2) thinking with others is better than thinking alone 3) these thoughts will change