I recently listened to an entrepreneur, let's call him Bob, share an interesting management approach. He created a document called What It’s Like to Work with Bob. The document, a few pages long, is essentially his operating manual—it helps people understand how he operates.

Usually, it takes time to figure out how to work effectively with someone. It’s a process of trial and error that could take months or years. In extreme cases, people never figure it out. Minor examples are preferred communication methods and meeting times. Maybe you like texting, but your team is used to Slack. When subordinates Slack you, you’re annoyed. Or they’re annoyed because you never respond (because you don’t check Slack). Maybe you like to focus in the morning and keep your calendar open for meetings between 2:00 and 5:00. It annoys you to be interrupted during your focus time. Or maybe you annoy your subordinates by declining their a.m. invites.

Bob aims to avoid the adjustment period altogether. His objective is to use the document, on day 1, to set clear expectations and tell people who he is and how he operates. His subordinates will understand how to work with him after a few minutes of reading his document (and maybe a clarifying conversation) instead of months or years of trial and error.

I really like Bob’s approach. Setting clear expectations early can save lots of time and prevent unnecessary friction and frustration during the getting-to-know-your-work-style period. I can see this approach leading to healthier, deeper, and more productive work relationships from the start. It no doubt also helps in quickly recognizing working relationships that aren’t likely to work (which is OK too).

I like the operating manual approach and plan to create one!

Today I listened to Marcelo Claure and Shu Nyatta discuss their new growth-stage fund, Bicycle Capital. Both of them had spent several years investing at SoftBank’s $7.6 billion Latin America Fund (source).

Claure shared that $200+ million of the new fund’s $500 million capital target will come from Bicycle partners. He and Nyatta went on to explain that venture capital partners investing a significant amount of their own net worth in a fund has an impact on how the funds are invested. When they’re investing their own money, it becomes more personal. They’re not just allocating other people’s capital; rather, they’re looking for people they can partner with who will be good stewards of the partners’ capital. The investing goes from thinking in terms of bets to thinking in terms of partnership. Also, the returns matter more because they affect the personal wealth of the venture capital partners.

I agree with Claure and Nyatta. I’ve learned best and focused more on partnering with entrepreneurs when I’ve had skin in the game via my own capital.

In April, Apple launched its savings account product. A few weeks later, a Forbes article reported that Apple saw inflows of almost $1 billion in the first four days after the launch. At the time, I wrote that it was a sign of a huge unmet need and perfect timing (right after the Silicon Valley Bank failure).

This week, Apple shared that its savings account product has reached $10 billion in deposits. An astonishing amount in just four months—especially when you consider that the savings product is available only to people who have an Apple Card. I wonder what the deposits would look like if the account were available to iPhone users who don’t have an Apple Card.

This product is off to a strong start, and I can’t wait to see how it does over time and what Apple’s next banking move will be.

iBank coming soon?

This is my one-hundred-seventy-fifth weekly reflection. Here are my takeaways from this week:

• Compounding goes both ways – I shared a post yesterday about the power of compounding. I’ve been thinking about this more. That piece is an example of the positive power of compounding. But compounding doesn’t discriminate—it works both ways, positively and negatively. I’m considering how to illustrate the negative impact with an example.
• Market drivers – Interest rates drive public markets, which impact private markets (e.g., venture capital). I’m learning about perspectives on lesser-known factors that could also drive markets in the long term.
• Too good to be true – I read an article that reminded me that when something seems too good to be true, it likely is. It may take time to understand why this is the case (when more facts are revealed, for instance). But you can usually tell early on that something doesn’t add up.

Week one hundred seventy-five was a week of learning. Looking forward to next week!

Albert Einstein famously called compound interest the eighth wonder of the world. Compounding is indeed a powerful force. Yet I’ve noticed that many people don’t understand just how powerful it is. More importantly, they don’t understand that compounding is applicable to other aspects of life, not just money. Relationships, effort, knowledge—all of these and more can benefit from compounding.

I tried recently to communicate the power of compounding to someone but failed miserably. The concept didn’t resonate with them. It wasn’t their fault. I realized I wasn’t doing a great job of explaining it in a simple way that everyone can grasp. I searched for a simple way to communicate this powerful concept and found a helpful monetary example.

Start with a penny. Double it on day 2. Then keep doubling the amount you have every day for thirty days. How much do you think you’ll end up with? The answer is over $5 million, an astronomical amount, all because of compounding. To be exact, $5,368,709.12. Not sure how you go from a penny to over $5 million in a month? Here’s a breakdown of what happens when you double the amount you have every day:

A few things to note:

• It takes 15 days for the value to surpass $100.
• On day 18, the value surpasses $1,000.
• On day 21, the value surpasses $10,000.
• On day 25, the value surpasses $100,000.
• On day 28, the value surpasses $1,000,000.

This is a great example that most people can understand. It demonstrates that most of the benefit from compounding is backloaded.

• Days 1–15: $100 added
• Days 16–30: $5.3+ million added
• Days 28–30: ~$4.7 million added (or 88% of the final amount) in 3 days!

This example also does a great job of showing how powerful it can be to stick with the process even though the payoff is small in the beginning. The small amount you have in the early days provides the base required for future compounding. Without the $100 gained in the first 15 days and the continued compounding, you never reach the $5.3+ million on day 30.  

While this example is monetary, the concept of compounding is applicable to various aspects of life. If you start something and stay consistent over a long period of time, you’ll likely see outsize benefits toward the back end due to the compounding of your consistent efforts.

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The other day I came across a small clothing brand. I did some digging and learned it was Atlanta based. Since I enjoy supporting local founders, I ordered a few pieces.

A few days later I got an email saying my order had been refunded. No explanation or additional information. I wasn’t sure why I’d been given a refund and decided to email the company for more information. My hope is that I’ll understand what happened with this order so I can place another order or find some other way to support this local brand.

Having built a company that sold physical products online, I know how hard (and expensive) it is to acquire a customer. Lots of great brands are competing for customers’ wallets. If you acquire a customer, you want to think about it as an acquired relationship. Not a transaction. You want to manage the relationship as best you can to increase the probability of their ordering again (thus increasing their lifetime value) and telling others about your brand (word of mouth is the best and cheapest marketing). If you can’t deliver on the product or service the customer has paid for, an explanation goes a long way and often opens the door to the customer accepting a comparable substitute product. But this is possible only if you manage the relationship . . . not the transaction.

One of the things that annoys my family and friends is that I’m vague when it comes to details. If they ask me questions about granular details, I usually don’t have an answer. If they ask a high-level question, I likely can answer. For example, what was the keynote speaker’s main point? I can answer. What personal examples did the keynote speaker use to support the main point? I may not remember (unless I took notes).

Over time I’ve realized that I’m not wired to remember granular details or live in granularity. It takes lots of energy and sometimes frustrates me to try to remember and process granularity. Having lots of conversations about granular things can also feel challenging. I have done these things in the past, can do them now, and will likely do them in the future. But it’s not my preference. To be clear, there’s nothing wrong with granularity. Many people enjoy it. It’s just not a good fit personally.

In the past, I’ve compensated for this shortcoming by taking detailed notes. More recently, I’ve learned to embrace my wiring and focus my energy on really understanding the big picture. My notes are less detailed, and I don’t view my tendencies as a negative anymore. I’ve realized that I naturally seek to understand the big picture, to understand high-level concepts. The big picture and high-level concepts are where wisdom usually resides. As a curious person who enjoys learning, that wisdom is exciting; it’s what I seek. As I’ve shared with my friends, I enjoy seeing the forest, not each individual tree.

Today Bloomberg reported that Tiger Global and Accel sold their remaining stakes in Indian e‑commerce company Flipkart in a $1.4+ billion transaction. The acquirer was Walmart, who had purchased a 77% controlling stake in Flipkart in 2018 for $16 billion. The transaction was completed at a reported $35 billion, down from the $38 billion in Flipkart’s 2021 funding round.

I don’t have any insider information on this deal or this company’s metrics, but it appears that Tiger Global first invested in Flipkart’s 2009 Series B round by investing $8.6 million at a $42 million valuation. In subsequent years, it invested an additional $1.2 billion. It began exiting its position in 2017 when it sold part of its investment to Softbank, and it then sold more to Walmart in 2018. Tiger is reported to have made $3.5 billion in profits on its investments in Flipkart.

This is a large secondary transaction and likely will allow Tiger to provide LPs in its prior funds with much-desired liquidity.

I’m curious to see whether this transaction is a one-off or we’ll start to see more VCs get liquidity by selling stakes in growth-stage companies to large corporations.

All last week, I thought about how to solve a problem. I felt like I was missing something, but I couldn’t figure out what I was missing or how to solve the problem.

I called a good friend from college to vent and get his opinion. He’s in a totally different field than I am and sees things from a different perspective, which I value. Over the next hour he gave me feedback on my thinking, and we talked through various ideas. Eventually, we landed on an insight that felt significant. We searched for data to support or contradict it. The data supported our thinking, and we realized that we’d uncovered what could be an important insight. Now I’m excited to dig into this key insight this upcoming week.

Knowing credible people with diverse perspectives whom I can call is helpful. These sounding boards can accelerate good thinking, highlight flawed thinking, or help me formulate unique insights.

Some founders take the approach of shielding their teams from the realities their start-up faces. They want the team focused on building a great solution and serving customers. I caught up with an early-stage founder who recently updated his small team on strategic direction and the state of the company during a team meeting. He decided to leave their current runway out of his update because he didn’t want them to worry.

They didn’t let that slide, though. One of the first questions was how much runway they had to execute what they’d just heard. Having been asked, the founder answered candidly: four or five months to make it happen.

The founder wasn’t sure how the team would respond to such a short runway. He assumed some would worry. Their responses surprised him:

• “Thank you for being transparent.”
• “I was giving 100%, but now I’m going to give 120%.”
• “I did the calculation on my equity, and if this works like we think it will, I’ll make a lot of money, so I’m going to do all I can to make it work.”

This founder learned that he doesn’t have to shield his team from the unpleasant realities of working at a start-up. People don’t expect everything to be roses. They know start-ups will have ups and downs. They want to be kept in the loop, good or bad. Sometimes, sharing the bad can energize the team to push harder to make the impossible happen.