What It’s Like To Start A Business

I received a letter from a fellow healthcare worker the other day.

She wrote to me regarding a patient of mine, demanding that I “do something”.  Her letter was, to be quite honest, rude and uncalled for.  She knew very well that I had already seen the patient, assessed the patient correctly and that the patient had the ability to make decisions regarding her own medical care.

This isn’t an uncommon occurrence.  I spend a significant part of my working day telling patients and other healthcare professionals that nothing needs to be done.  And that often doing nothing is more beneficial than doing something for the sake of doing it.

But why are patients and people in general like this?  Why, for example, does a patient with lower back pain for a grand total of two days turn up at my clinic demanding an urgent MRI scan, which would bring no benefit to the patient whatsoever?  Why do they get angry and upset when I explain that physiotherapy and lifestyle changes are the way forward?

I think there’s a simple answer:

The patient is worried that they are going to die*.

And who can blame them for having this outlook?  Most people from a young age have been conditioned to think that death is lurking right around the corner.

The thinking even in primary school was something along the lines of: “If you don’t do well in school, then you’ll end up without a job, then you’ll end up homeless and then you’ll die a sad and lonely death.”.

Of course for the people who made it through school and are not dead – which happens to be the majority of mankind – the above line of reasoning is clearly false.

Yet the same thinking often persists and manifests itself in absurd ways later on in other parts of  their life.

riskysport

This is not what it’s like to start a business

I think a lot of people avoid going into business for themselves due to this reason.  Even though it would be better for themselves, their family and those they serve to go it alone, they don’t.  Or worse, they say “someday”…

The fear of death manifests, in the form of being someone elses devoted employee for the whole of their healthy adult life.  “I’m not a risk taker”, they tell themselves.

Look, I get it.  It’s fine if you are truly happy as an employee.  What I can’t tolerate is when people make up BS excuses for not doing something with no logical reason.

So how to think about things?  How do you decide what is truly risky and what isn’t?

The Two Types of Risk

I believe that there are two types of risk.

  • Compound Risk

This is the type of risk which builds up over time and then ultimately does result in poor life outcomes such as bankruptcy and death.  Ironically people take these risks all the time without any consideration for their ultimate effect.

For example the decision to not exercise today, or the decision to just have that pizza instead of sticking to the diet.  These types of risk compound over time and then one day give you a heart attack or stroke.

  • Simple Risk

These are risks that can be calculated and taken with no hidden / compound effects.  If for example you decide to buy a car with cash you can easily calculate if you can afford it and what type of risk a reduction in your bank balance will lead to.

The problem is that these two types of risk often become conflated. 

People think that starting a business is a “compound risk” instead of a “simple risk”.  When in fact starting a business has a limited downside and a possible large upside.  It’s a calculated, simple risk.  

Or people think that “eating one more slice of pizza “is a “simple risk” and not a “compound risk”.  They think that one more slice of pizza or drinking one more alcoholic drink is no big deal.  They fail to realise how the risk compounds with time and that that “one more” may lead to an unpredictable heart attack somewhere in the future.

This conflation of the types of risk is what’s happening in the patients who have back pain demanding that “something has to be done”.  They don’t realise that when a doctor has competently assessed you and has ruled out “red flags”, which could indicate a serious underlying issue, that the risk will not compound.  It doesn’t matter if you’ve had the back pain for a day or a year.  If the clinical scenario has not changed then the risk is still a “simple risk” and will not “compound”.

Yes, physiotherapy and lifestyle change is still the way forward.

*Usually men and women alike tend to think that they have metastatic cancer if they have lower back pain.  They fail to realise that they have developed the pain because their body is trying to signal to them that they have poor muscle development (usually due to being overweight and inactive).

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When It Feels Like You’re Pushing A Rock Uphill

There’s a running gag in “It’s Always Sunny In Philadelphia”.

One of the main characters keeps getting more and more fat in the name of “cultivating mass”.  He claims that he’s not obese, but muscular and strong.

4Tl7yi3

The reason the gag is funny is because there are so many people out there who claim they’re going to the gym, that they’re eating a healthy diet, that they’re fit.  But in reality they’re still their usual, unhealthy self.

This self-deception seems to come from adopting habits which superficially look like they should lead to a healthier self.  But whereas “Dry January” and grabbing a protein shake from time to time may seem like healthy habits, they often don’t lead to any significant changes in health and well-being.

When you try to reach a goal, whether that be in business or in life, it’s easy to fill your time up with actions which may seem helpful.  Many founders of companies are guilty of this.  They go to “conventions”, to “networking events”, they meet investors “just in case” they need to raise money.  It’s easy to fill your time up with stuff instead of doing the important work which will get s*%t done.

But how to decide what is worth your time and what isn’t?  I think it comes down to this:

Speed ≠ Velocity

The higher the speed, the more it may seem like you’re doing productive work.  But what happens if your speed is in the wrong direction?  What happens if you’re trying to get to London, but you end up in Leeds?

In physics, speed with a direction is called “Velocity”*.  

When you’re trying to get s*%t done, velocity and not mere speed is what counts!

The three points to remember when you’re trying to achieve something are:

  1. When you undertake a specific action you have to be able to measure the specific outputs you are hoping to see.  What specifically were you hoping to achieve by doing actions X, Y and Z?  If there isn’t a measurable, observable, repeatable outcome then it could be that you’re simply wasting your time.
  2. If you do a specific task, which leads to a measurable, observable, repeatable outcome then you’re not wasting your time.
  3. It then follows that if you modify or change your specific task, you will be able to achieve different outcomes if you wish.

So the questions of the day are; What are the tasks that fill up your day?  And what are the outcomes you are hoping to achieve with those tasks?

*Velocity is therefore considered a “Vector” in physics, i.e. movement with a direction.

Screw That! Do The Opposite!!

Apple it seems, is a bit greedy.  They want you to ditch your old iPhone for a shinier, new version.  They do this by pushing updates that reduce the battery life of older iPhone’s and make them run slower.

The other day I saw a classic Rolls Royce drive past me.

rolls

It was a thing of beauty.  As it drove by everyone was staring at this majestic work of art.

This made me think:

There are very few things which get better with time*.

I find it sad that so few things are built to last.  

In fact nowadays, “planned obsolescence” – where products are designed to break after a period of time – is part of the plan so that people will upgrade or buy more of the same products.

This sort of impatience and nearsightedness doesn’t do anyone any favours and yet it seems to be affecting people’s thinking when it comes to all sorts of things.

People even talk about “flipping businesses”!  As soon as they start a business they’re looking for an “exit” to literally get out.

Screw that!

Do the opposite!

Instead of looking for a way to get out, plant deep roots.

Instead of “flipping a business”, serve your customers for the long-term.

Instead of making sure your product breaks, make something that gets better with time.

If you as a freelancer, an artist, a writer an entrepreneur can lean in when others bow out, then there will always be people out there who would like to be served by you.

*Off the top of my head I can only think of a few things which get better with time; old recipes, certain watches, certain cars, fine wines, art, nature….

I Can Guarantee Something That Will Never Ever Change And It’s Where To Find All The Opportunities.

There’s an old business story about a cookie factory owner.

Cookie

His company was making millions of cookies and was very profitable.  However, his board was always asking for more profits.

One day the cookie factory owner thought of a great idea!  “What if we got rid of 1 of the 13 spices we put in the cookie?  No one will probably realise and our expenses will go down!”.

He tried it out and got rid of one of the ingredients.  None of his customers realised and the boards profits and margins improved!

He went on to have another idea: “Well, no one realised that the cookie now only uses 12 spices.  Why don’t we get rid of another spice?”.

This went on for a while and at some point his cookie sales started to dwindle.  People just weren’t interested any more.  The cookie owner tried to recover, but his brand was permanently tarnished and due to the new way the cookies were being manufactured the business didn’t recover and he went out of business.

Here’s the thing.  Often things change, but really slowly.  Each small increment of change is not noticeable, but at some point when you stand back and observe, you’ll notice that the landscape has drastically changed.

The one thing I can guarantee will never change, is that everything will change.

When things change, new opportunities arise.  But the places where change occurs the most is at “the edges”, not the mainstream.

The mainstream ends up following “the edges”.

Donald Trump & Brexit

I have a confession to make.  I didn’t follow Donald Trump’s election campaign throughout 2016, which lead to his election in 2017.

I remember waking up in the morning when it was announced that he had won.  I didn’t think anything of it, but when I got to work there seemed to be some kind of mass hysteria which had overtaken everyone.  My disinterest has continued since his election and my life hasn’t changed in any way since before he was elected.

I have another confession to make.  I didn’t follow anything to do with Brexit, which resulted in the United Kingdom announcing that they would leave the European Union.  Once again, since Brexit has been announced, my life has not changed in any way.

Now, what I’m not saying is that these two events don’t matter, will never have an impact on me and on others.  But my observation is that both of these events were unpredictable and unexpected.

Election campaigns are like “The Edge” of a given field.

“The Edge”, as I define it is the place where change is rapid, where present data does not correlate with outcomes and where if you play your cards right you can gain massively from disorder by creating and innovating.

The reason why there was and is mass hysteria surrounding Trump’s election and around Brexit is because the mass population is not used to “The Edge”.  The mainstream lives in a world where change is slow, where change makes some kind of sense, where change happens to you.  

The Edge

When things hit the mainstream, the opportunities you get exposed to will be incremental in nature.

When you get to “The Edge”, opportunities aren’t incremental, they aren’t even exponential, they’re of a whole new category.

Think of a couple of the current buzzwords in the medical world at the moment: “automation” and “robotics”.

You’ll get visions of futuristic robots with lasers carrying out the work of surgeons.

ironman

I will use always every opportunity I have to stick in an Iron Man jpg into my blog posts.

To the mainstream surgeons – the typical surgeon working in small general hospitals – robotics and automation seems like several decades away, or it may be that they think robotics will never hit the mainstream.

And this is the point of this essay once again:

The one thing I can guarantee that will never change, is that everything will change.  And when change happens the people who were the main players at “The Edge” win.

Say for example that you were doing “mainstream” open heart surgery in the early 2000’s.  By the early 2000’s heart surgery was already kind of figured out.  Any further improvements since then have been incremental in nature.

“The Edge”, at this time was actually the move to minimally invasive surgery.  This is where you can operate on the heart by creating a tiny incision on a patients thigh and then introducing some instruments into the main blood vessels of the leg.  These instruments are then navigated towards the heart where you can carry out procedures such as angioplasties and valve replacement procedures.

The minimally invasive techniques have a faster recovery rate, are cheaper and increasingly have better outcomes in every respect in comparison to open heart surgery.

Being at “The Edge” at the time when minimally invasive surgery was being developed would have provided all the opportunities that people often look for – it would have allowed the innovators to have their say on how to perform procedures, to pioneer new techniques, to develop new instruments and tools which you could build a new business around etc.

Yes, “The Edge” may sound crazy, it may be exclusive, the odds of a lot of new technologies causing a dent in the world may be random or low, but nonetheless it is still where change occurs and where opportunities live.

Don’t Say That!

tram

“I stink, therefore I tram.”

I spent some time living in Prague, Czech Republic.  The summers would get really hot and I couldn’t help but notice that the Czechs had a strange aversion to deodorants.  This would become painfully obvious when riding the public trams.  I wasn’t the only person that noticed this, but of course if you generalise and say something along the lines of:

“Population X has characteristic Y.”

people get upset….really upset….

But what happens if it’s true?  All cultures have their own characteristics.  If you go to India and say that Indians behave – generally speaking – in a different way to people in the UK, is that controversial?

I think it’s fairly obvious that human beings get emotion and logic mixed up all the time.  We make bad choices when we’re angry or upset for example.  But I think the problem goes even deeper than this.

I think that we avoid thinking things, because it makes us uncomfortable.

It seems that ideas and thoughts fall under four categories:

 1) Wrong & Nice 4) Right & Mean
2) Right & Nice 3) Wrong & Mean

1) Wrong & Nice

Being Wrong & Nice is one of the most dangerous categories of thought.  I have seen people come to real harm as a result of this.

When a patient, for example, is very likely to have cancer should you not just be honest and tell the patient the truth?  Are you doing the patient any real favours by not telling them that they most certainly do have cancer or that their treatment is going to be painful and life altering?

How about if an employee keeps asking for a raise?  Is it fair to just keep leading them on, or is it more appropriate to explain that if said employee doesn’t bring more value to the table that they can just be replaced by someone else who will work for less.

2) Right & Nice

This is where the majority of people spend their time.  This is conventional wisdom.  It is mainstream knowledge, with mainstream thought processes.  No need to rock the boat.

Perhaps it is because we are taught from a young age that “being right” goes hand in hand with being “nice” that we conflate being “nice” with being right.

3) Wrong & Mean

Mean people are douche bags.  No one likes them.  They often have short tempers and don’t think things through.  They often only have one perspective – their own!

Again, from a young age it seems that we’re educated out of being mean.  Because being mean or being a “bully” is bad.

4) Right & Mean

The problem is that it is possible to be both right and “mean”.

When a mother tells a child off, they may be mean, but it will likely lead to a more disciplined person down the line.

When a doctor looks a patient in the eye and says “there’s nothing more we can do”, it’s often mean, but right.

I think that being mean is undervalued by society.  As a result there’s a lot of value to be found in “mean but right” thoughts.

Peter Thiel often asks the question:

“Tell me something that’s true, that almost nobody agrees with you on”

The reason he asks this question is because great businesses are built on insights which are overlooked by the majority of people. All great businesses are built on an insight or a secret which the other people in the marketplace overlooked, because if it’s not then you will face a lot of competition and your profits will be competed away.

When Uber had the idea that taxi services were corrupt, worked in cahoots with the government and were opposed to making things better despite their customers suffering, Uber could be called “mean but right”.

It is likely that there are many other successful businesses which could be built in the “right but mean” category of ideas.

But beyond business as well, there are a lot of “right but mean” thoughts which get ignored in the public discourse.  I fear that nowadays it is increasingly becoming more acceptable to be “wrong and nice” rather than “right and mean“.  It seems that society in general is moving down a more emotional, less rational trajectory.

If It Looks & Swims & Quacks Like A Duck, It Might Not Be A Duck

I was shocked at what the pyramids looked like up close when I went to Egypt.  I always thought that they’d be smooth* on the outside.  But when I got up close to them they were made of very large stones.

Pyramids of Giza

Pyramids of Giza

More recently I found out that many of the Greek and Roman architects tilted columns and spread them out unevenly to give the appearance that the columns were actually spread out evenly and absolutely straight.

parthenon-feature

The Parthenon in Greece uses a technique called “entasis” to make it appear that the columns are absolutely straight when in fact they are slightly curved

The point is that when we observe something superficially, we may be fooled into thinking a certain way.  And sometimes it takes someone to point it out and say; “Hey, look at it this way”, before we ever even notice the truth.

It strikes me that when people talk about “success” and “failure” they are often described as the opposite of one another.  People make it sound like there’s a spectrum like height, where there’s a tallest person and where there’s a shortest person.

The reality is very different.

The reality is that when you set out to accomplish something “failure” and “success” often require the same amount of effort, the same actions, the same thought processes, the same sacrifices, but one has an outcome which we call “failure” and the other has an outcome we call “success”.  Failure and success it seems are just two sides of the same coin.

“Mediocrity” is in fact the real opposite of both “success” and “failure”.  Coming somewhere in the middle, not standing out and fitting in is the path that people who are trying to accomplish something avoid at all costs.

*I am aware that the pyramids in Egypt were in fact smooth on the outside many years ago, but nonetheless they definitely aren’t smooth today.

Is Someone Getting The Best Of You?

True story.

I was once working in a hospital that was desperately short of doctors to cover the night shift.  The hospital somehow managed to find a senior doctor to cover one of the night shifts to oversee the work of the junior doctors, admit new patients and ensure patients were safe over night.

Usually the doctors that are hired in short notice get generous hourly pay because the hospital needs the doctor, but the doctor doesn’t need the hospital.

When this particular doctor arrived to start his night shift he was very angry because he was promised hot food and a place to eat.  Because the hospital didn’t organise this for him, he got up and said he was going to leave.  The nurses begged the doctor to stay, but he drove off while all the nurses looked at each other in horror, realising that there was no senior cover for the night.

What’s the lesson?

The person who has the most options always wins.

If you have no or few options in life, then by definition someone has power over you.

boss

A lot of decisions in life come disguised as logical and “safe”.  But they often bring with them hidden pitfalls and loss of optionality.

The person working in a “safe” job in an office making a steady income for example is counter intuitively a lot more vulnerable than an Uber driver.

The Uber driver can earn the same amount as most office workers.  Granted, he may have more variability in his take home pay month to month, thus making his job “unsafe”.  But when the office worker gets fired in his mid 40’s with no transferable skill set he is in a lot of trouble.

The Uber driver by contrast will be able to detect if his livelihood is at stake early and retrain / develop his skill set before getting laid off.  By working with the “safe” company the office worker gave up optionality later in life without realising.

Moral of the story:

In the majority of decisions, the decision which will provide most optionality is the correct one.

*Money is attractive to people as it represents pure optionality.  You can do anything you want with it.  But only if you own the money outright.  Money often has strings attached – either you owe it back, or someone gets a portion of your company or even worse you trade a portion of your life to get a paycheck.

In a startup this matters.  If you take a loan or you raise money, all of a sudden you’ve lost optionality as the people you took money from want it back and often with interest.  This limits your ability to innovate and explore different options.