A friend shared a quote from Charlie Munger with me:

I think people that multitask pay a huge price. They think they’re being extra productive, and I think they’re [out of their mind].

I think when you multi-task so much, you don’t have time to think about anything deeply. You’re giving the world an advantage you shouldn’t do. Practically everybody is drifting into that mistake.

Concentrating hard on something that is important is . . . I can’t succeed at all without doing it. I did not succeed in life by intelligence. I succeeded because I have a long attention span.

It’s telling that Charlie attributes his success to concentration, not intelligence.

I was chatting with a very successful person, and he shared with me that he blocks out time to think. He said he’s disciplined about when he checks text messages, email, etc. so he isn’t in a reactionary state. And he’s intentional about making time to focus on important topics.

These days, more distractions than ever are making it harder for people to know how to focus. This person and Charlie are both super successful, and both make a point of setting aside time to concentrate. That isn’t a coincidence.

I’m intentional about making time to think regularly, but not on the level of these two. In 2023, I want to look for ways to multitask less and lengthen my attention span.

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I hold all entrepreneurs in high regard, but a subset separates themselves from the rest. I call these people multipliers. They’re driven and accomplished like other entrepreneurs, but they go beyond, seeking to multiply their success and impact. The easiest example is financial, but it could also be in other ways, such as impact on society.

Love him or hate him, Elon Musk is an example of a multiplier. He sold Zip2 in 1999 for over $300 million, personally pocketing over $20 million. He immediately rolled that into another start-up, X.com (which later became PayPal). eBay acquired PayPal for about $1.5 billion in 2002, netting Musk hundreds of millions. He rolled that windfall into starting Tesla, SpaceX, and SolarCity. Last year, Elon acquired Twitter for $44 billion.

Most people would be content with $20 million, but Elon wants to multiply his impact (and, I assume, his wealth). He continues to multiply his impact with bigger moves.

Multipliers are intriguing to me. Even among a rare class of people, they stand out because they’re wired differently. When many would focus on preserving what they’ve achieved, these individuals continue to take on risk to keep multiplying.

I wonder why. Are these people driven by something materially different than other entrepreneurs are?

Layoffs are mushrooming in the tech industry. For example, Amazon, Salesforce, and Facebook—big, public tech companies—have all announced sizable layoffs. These are high-paying, skilled jobs that used to be thought of as safe. These jobs were abundant while these companies grew for many years and competed for talent, creating a market where talent always knew they could find a job. Things have changed. These companies are all reducing or freezing headcount at the same time. This is playing out with smaller private tech companies too.

Absent a reversal, I suspect this will lead to a big uptick in entrepreneurship. Until now, employees with safe, high-paying jobs have had a strong incentive to not pursue entrepreneurship. Low-risk, high-reward positions were abundant. But with the market changing, the risk is greater. If you’re laid off, your reward is low (zero pay). For those who have entrepreneurial desire, starting a company now makes more sense. They’ll still be in a high-risk situation, but they’ll also have a shot at high rewards and have more control over their own destiny. Said differently, in an environment where you can’t find a job, what do you have to lose by trying to start a company?

I think we’ll start seeing more people (in tech and other industries) look at the changing risk/reward dynamics and decide to bet on themselves.

I caught up with a venture investor and talked about a deal that’s frustrating him. He loves the founder, team, and solution. He’s been working to structure an investment that works for his fund and the company. The company raised over $10 million in venture capital eighteen months ago. That fundraising round was large by historical norms, as was the valuation, considering the early stage of the company. But that was the market at the time, and the founders took the deal. They’ve executed but haven’t made enough traction to warrant an increase in their valuation. Given the current market, this investor believes they’re likely worth the same as, or even less than, they were eighteen months ago.

This investor is walking away from the deal. Why? Given the company’s traction and the fund’s target portfolio construction, the investment would need to happen at a valuation that’s materially below the valuation at the last fundraising round. The founder isn’t open to doing a down round.

High valuations feel great to founders when the deal is done, but founders should be aware that they can come back to bite you. If you received investment at a high valuation, executing flawlessly and realizing material traction is likely your best bet to avoid a down round.

Velocity and speed are different. Velocity is how fast you’re going in a particular direction. Speed is how fast you’re moving (in any direction). The direction aspect of velocity is important. People can move fast but in the wrong direction. If they measure speed, they think they’re doing well because they’re moving quickly. If they measure velocity, they think they’re doing well only if they’re moving in the right direction. I believe people who achieve outsize success focus on velocity, not speed.

People who achieve outsize success are usually adamant about learning. Whatever their method, they have a habit of learning. (Warren Buffett reads 500 pages a day to acquire and compound knowledge.) They also have a destination or at least a direction in mind. They know where they want to be and are working hard to get there.

I started thinking about ways to evaluate the likelihood of someone achieving outsize success. Various factors should be considered, but understanding where someone wants to be and how fast they’re bettering themselves (i.e., learning) to get there is key. I think of this as measuring their personal velocity. To my mind, if someone has a high or rapidly accelerating personal velocity, the probability of their achieving outsize success skyrockets. Warren Buffett, Koby Bryant, Tiger Woods, Jeff Bezos, and many other successful people have, or in their day had, high personal velocity. They were clear on what they wanted to accomplish and worked diligently to improve themselves so they could reach their destination as rapidly as possible.

I’m going to start thinking in terms of measuring individual personal velocity.

This weekend, I chatted with two founders who’ve each built a multibillion-dollar company. Both companies are still growing, and both founders want to take their companies “all the way”: they’re planning on IPOs followed by public trading on the stock market. These founders realized that to achieve that goal, they, and their supporting casts, need to level up. They’re both preparing to become public company CEOs, which means they need to learn new skills and improve existing ones. They’ve started hiring company leaders with public company experience and building relationships with public company CEOs from whom they can learn. If all goes well, they should be ready to take their companies public in the next few years.

By any standard, these founders are successful. They’ve built amazing companies from zero to hundreds of millions of dollars in annual revenue, creating wealth for themselves, their team members, and their investors. But even with all this success, neither has ever taken their foot off the gas or become complacent. They continue to level up so they can tackle their next challenge head-on.

Most founders—these two included—have no idea what they’re doing when they start out. A key difference between those who achieve greatness and everyone else is the former group’s desire to continuously level up. They’re OK about not knowing some things, but they put in the work to learn and fill those gaps as quickly as possible . . . over and over again.

My chat with these founders was a reminder that greatness arises not from complacency but from continuously leveling up.

One thing that’s more common than most people realize is early-stage founders not having the data they need to understand how their business is performing. For example, I talked with a real estate founder with multiple properties. I asked how he knows how each property is performing. He doesn’t, he said. He does back-of-the-napkin math on rent and expenses. I’ve talked with other early-stage software founders who don’t have a great handle on their customer conversion rate, customer acquisition cost, or, sometimes, how much runway they have left.

Early-stage founders have limited resources, so it’s not realistic to expect them to precisely measure and understand every data point in the business. But it does make sense to pick two or three that really matter. The highest-priority one should be financial. Businesses fail because they run out of cash. You always want to understand your cash position and its trajectory. For nonprofitable or pre-revenue businesses, understanding your revenue is critical. Knowing how many months you can plan before the bank balance hits zero is key. For profitable businesses, review your profit and loss statement and balance sheet monthly to understand what’s contributing to (or detracting from) your profitability and how much net cash you have on hand. If you’re not a numbers person, there are plenty of firms who can help pull these numbers together and explain them to you.

As we head into 2023, early-stage founders should be mindful of what numbers tell them about how their business is performing. Hint, hint . . . every founder should keep their finger on the pulse of their cash.

With the new year approaching, many people are thinking about what they want to accomplish. A friend told me his weight loss goal for 2023 and asked for feedback. I think he was hoping I’d share my experiences with food or exercises. Instead, I had one piece of advice: start simple by weighing yourself daily. It takes five seconds and doesn’t require changing your life as you’ve known it.

Losing weight is hard for many people—especially when they make abrupt changes. Starting with a feedback loop, instead of big changes, can be a great first step. By measuring something every day that you want to improve, you’re more likely to change your behavior. And if you change your daily behavior, you’re more likely to form habits that contribute to achieving a goal. For example, if you weigh yourself every day, you’re more likely to rethink eating a piece of cake after dinner if you don’t like what you saw on the scale that morning. If you establish a habit of not eating desserts, that reduces your calorie count, which can get you closer to your weight loss goal. Of course, you need to do other things, including upping your physical activity—but you get the idea.

Feedback loops can be a simple but powerful way of taking the first step toward forming powerful habits that align with a goal. Next time you think about something you want to accomplish, ask yourself what feedback loop will send you down the right path.

I listened to someone explain poll-based decision-making. When faced with a difficult decision, you reach out to people in your network and ask which choice they think is correct. Then you do whatever the majority “vote” for. For example, you ask one hundred people if it’s a good idea to put all your money into a single stock someone told you about. If ninety-nine people say yes and one person named Warren Buffett says no, this person would make the investment.

This thought process has several flaws. I’ll discuss two:

• Credibility – It’s good to ask for others’ perspectives. But it’s important to ask credible people, meaning people who have experience or a track record of success in the area. People who have no experience or success in the area aren’t credible, and their perspectives should be discounted or, in extreme cases, ignored.
• Independent thinking – It’s important to take the time to figure things out yourself and reach your own decisions. Letting other people do the thinking for you—following the crowd—can be dangerous. You can factor in the perspectives of others to make sure you’re not missing something, but you don’t know how they made their decisions. If you rely on them, you could be exposed to serious errors. Frauds like Ponzi schemes grow because new investors take comfort from and rely on the fact that other people decided to invest. People who evaluate opportunities independently are more likely to see things that are too good to be true for what they are.

I’m all for getting perspectives from others before making decisions, but I’m not a fan of poll decision-making.

I had a chat with my family over the holiday about truthful feedback. I asked them to share with me any observations they have about me (positive, negative, or neutral). I let them know I wanted the truth and wanted to understand different perspectives to improve my decision-making. I value the feedback of those who’ve known me longest. I may not agree with it, but I still want to hear it. Ideally, I want to hear their raw thoughts, not a watered-down version that I have to interpret later.

The request was embraced, and I got some valuable info. One family member thanked me for giving them permission to provide feedback. They said they’ve had feedback for me in the past but didn’t feel it was their place to share without my asking for it. I always assumed those close to me know how I value candid feedback. I also assumed that knowing this meant they would readily share any feedback. Today that assumption was proven wrong.

As I’ve matured, I’ve become more intentional about seeking out people who will readily share candid feedback. What I missed is that people in my circle might have something to tell me but not be comfortable doing so absent an explicit request.

In 2023, I want to have the truthful-feedback conversation with more credible people in my circle. I suspect this will be a positive exercise that takes some relationships to the next level in the long term and unlocks some valuable observations in the short term and long term.