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

• Bubbles – This week was a reminder that I enjoy being around people with experiences and perspectives different from mine. Living in a bubble isn’t for me.
• Growth mindset – There’s a common theme among investors and entrepreneurs who achieve extraordinary success: they focus on effort, not outcomes, and apply consistent effort toward learning. They all have a growth mindset.

Week one hundred seventy-three was a relaxed week. Looking forward to next week!

I always like to support hometown Atlanta founders. I recently listened to an interview of Ben Chestnut, founder of Mailchimp. In 2021, Mailchimp was acquired for $12 billion. I was curious to hear what Ben had to say post acquisition.

Ben shared lots of great information about his childhood and various other topics. He explained what made him go from “we’re never selling” to being acquired. He also said something about the origin of Mailchimp that caught my attention.

Ben was running a web design agency that was struggling to grow. One day, his wife was watching the Opera Winfrey Show; Rich Dad Poor Dad author Robert Kiyosaki was the guest. Kiyosaki talked about passive income and recurring revenue. Ben heard some of this and was inspired. He began searching for a recurring-revenue business, only to realize that he already had one—Mailchimp. Keep in mind that this was three or four years after the Mailchimp product had launched, but it was more of a side project that had received little attention from Ben or his cofounder, Dan.

They looked deep into the revenue of the Mailchimp product versus the revenue of the web design agency and realized that Mailchimp was growing despite being ignored. They decided to focus on Mailchimp. The rest is history.

I had the chance to listen to Andrew Huberman recently. His video on applying a growth mindset caught my attention. It’s lengthy, but I found it to be a great listen on a long drive.

Huberman defines mindset as “mental frame or lens that selectively organizes and encodes information.”

He defines a growth mindset as “attaching your identity and your effort and sense of motivation to effort itself and the process of enjoying learning and getting better at learning anything.”

He goes into much more detail in his video about this topic. But I especially like how he framed a growth mindset as embracing challenge in a way that allows you to optimize performance by focusing on effort and learning. This is great because it focuses on what you can control (effort and learning), not what you can’t control (outcome).

I’ve been hearing rumblings about commercial office vacancy rates increasing in Atlanta and a few other metropolitan cities, and I’ve been curious about the impact of the vacancies. This morning the title of a Bloomberg article—“Starwood Defaults on $212.5 Million Atlanta Office Mortgage”—caught my attention, and I read it.

Starwood Capital Group is in default of its $212.5 million mortgage backed by a 29-story office building in the Buckhead neighborhood. I’m very familiar with the property: I have friends who work in this building, and I’ve been to the WeWork offices there.

Here are more details from the article:

• The mortgage originated in 2018 and matured earlier this month.
• Starwood didn’t refinance or pay off the debt.
• The property was 87% occupied in 2018. Occupancy was 62% at the end of 2022.
• Starwood and its lenders are negotiating an agreement.

Sounds like this situation is far from over. I’m curious to see how it’s resolved and if any other office buildings in Atlanta will be involved in a default.

Given the current interest rate environment, there’s been a lot of focus on fast-growing companies trying to reach breakeven or profitability. Many fueled their growth with losses when capital was cheap. Those days are likely over, and these companies are now concentrating on generating cash instead of consuming it. All of them won’t survive, but the ones that are solving painful problems and that have strong leadership teams have a higher probability of becoming profitable.

There’s another segment of companies that I haven’t heard discussed as much that I’m curious about: companies with recurring-revenue business models that grew rapidly because of COVID tailwinds and that generate material free cash flow, but that saw their growth rates slow or flatline. These companies can be cash registers. If they retain their current customers, they will generate cash on a recurring basis.

The recurring cash generation of these companies is key. They have cash from customers they can use to experiment with growth activities and ideas. The recurring-revenue nature of their business model means that cash will be replenished. They can keep experimenting. Learnings from failed experiments can be applied to new experiments. Hopefully, compounding learnings from experimentation will lead to the growth engine being restarted.

To be fair, restarting growth is hard—especially for a large company. It often involves retooling entire functions, such as sales and marketing. These efforts can be painful and take time to bear fruit. This isn’t something all management teams are able to achieve. But if they are successful, the rewards could be enormous when these companies are revalued.

I’m curious to see which cash-flow-positive, recurring-revenue companies can restart their growth and what impact it will have on their valuation multiples.

One of my personal characteristics that I’m mindful of is my capacity for empathy. Seeing something from the perspective of someone else or understanding how a situation makes them feel doesn’t come naturally to me. Over time, I learned that understanding the perspectives and feelings of others is a superpower. It makes navigating the world much easier, especially for founders (it’s hard to solve a problem unless you understand the feelings and perspectives of those living the problem).

Over the years, I’ve improved significantly in this area. I’ve tried various things, but what’s had the most impact is simple: spending time with people different from me and trying to understand their perspectives and how they developed them. Doing this (in a genuine and authentic way) has enlarged the lens that I view the world through. That’s made it easier to see things from multiple vantage points. I still may not agree with their perspective, but I can see things through their lens and understand how they feel.

I’m still not an overly empathetic person. But intentionally spending time with others with different perspectives has enhanced my capacity for empathy. It’s something I want to continue doing as long as I can.

I’ve been posting daily since 2020. After three years, it’s still something I enjoy and get a lot out of. When I first started, lots of low-hanging fruit was available—I had many experiences as a founder that I could reflect on and identify insights from. I wasn’t used to sharing my thoughts publicly, though, so it took energy to crystallize my thoughts and craft a post that people could understand.

Now that I’ve been doing this for a few years, I can write a post with minimal effort. I’ve built muscle memory around writing and gaining clarity of thought.

I focus my effort now on identifying interesting things and insights to share. I’ve become more intentional about acquiring knowledge related to concepts I want to understand and attempting to develop unique insights about them.

The result of all this is that writing daily posts is still challenging, but in a different way. I began by being more intentional about developing the habit of sharing my crystallized thoughts. I’m now more intentional about understanding a concept and identifying insights related to it. Focusing on concepts is more difficult. I’ve had to adjust my habits to support the change, but I’m happy with the adjustments. I’m excited to be learning about interesting and difficult concepts. I’m even more excited by the challenge of coming up with unique insights.

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

• Decision feedback – I’m curious to try out the new technique for improving decision-making that I wrote about recently. I’m going to start asking a few people I think highly of if they’ll provide feedback.
• Jump start – Sometimes it’s good to have a change of scenery for thinking. For some reason it jump-starts my creativity and my ability to recognize insights.
• Frustration – Earlier this week, I was frustrated about a few things that were out of my control. Exercising and talking through my frustrations with others was helpful.

Week one hundred seventy-two was a frustrating week. Looking forward to next week!

Today I heard about an interesting technique. The objective is to improve your decision-making by getting feedback on the thought process you used to make a decision, not the outcome. The outcome of a decision isn’t a reflection of decision quality. Bad decisions end up turning out well, and vice versa, because of chance and randomness.

The technique involves sharing your thought process, including the variables you considered, with credible people who make good decisions. How did you think about the decision? What information did you factor in? The twist is that you don’t share outcomes with them (ask for feedback on decisions that have had good and bad outcomes). These people then explain the shortcomings and strengths they see in your thought process. They might even tell you how they would approach the decision if they were in your shoes. From all this feedback, you’ll learn how other people approach making decisions and improve your own decision-making.

This technique caught my attention because most people ask for feedback on decisions by leading with the outcome. This is completely different but makes a lot of sense to me (in theory). I’m curious to try it out and see how it works in practice.

I chatted with a founder about a seed fundraise he’s considering. He wants to raise $2 million. We talked through his thinking, and I realized two things: he didn’t have a great grasp on current market valuations, and he didn’t realize how raising that much capital at today’s lower valuations would dilute his ownership, especially if he continued to raise capital.

I did some back-of-the-envelope math regarding his future round and a few hypothetical rounds after that. It was eye opening to him. He realized that dilution by early and subsequent rounds would have a material impact on his ownership as founder and materially reduce his proceeds if his company were to be sold.

Raising capital is hard right now for early founders. Even if you can raise the amount you desire, it’s worth thinking through how much you need, the current market valuation of your company, and how dilution will affect you. Tools that can help founders understand the dilution impact of fundraising rounds are out there (645 ventures built one). Spending time with one of these tools can help founders quantify the impact of dilution.