Indiana Jones, Business Families, and Treehouses
The Tail community is now 58 subscribers strong! The push to 100 starts NOW. Above is a picture of Piper, my four month old Golden Retriever puppy. It has nothing to do with this week’s post, but she thought it might help user engagement rates.
If you’re a first time reader, then welcome to the team! Every Friday, you’ll receive 3-5 highly curated pieces of content from people who I consider experts on a variety of topics. The concept for this newsletter was inspired by the following quote from author/gambler/businessman Jonathan Bales: “So much of finding success, in my opinion, is being able to identify and tail the right people.” The Tail turns this statement into action.
Here’s the content for the week:
Raiders of the Lost Bank - Dror Poleg
Tobi Lütke’s Email to Shopify Managers - Tobi Lütke
A Project of One’s Own - Paul Graham
Raiders of the Lost Bank
“Banks are seen as “ruthless capitalists,” but the level of inefficiency, incompetence, and wasted effort within them is mind-boggling.” (Article)
I discovered Dror Poleg after reading his response to Packy McCormick’s recent post called “The Great Online Game”. Poleg’s newsletter, Rethinking, explores the future of work, cities, and human communities. Rethinking is well-written, and the topics covered are extremely relevant to the predicaments facing our post-quarantine society.
Poleg’s article entitled “Raiders of the Lost Bank” is a response to the following controversial statement by Jamie Dimon, CEO of JPMorgan Chase, about his employees returning to work later this year:
“We want people back to work, and my view is that sometime in September, October, it will look just like it did before. And everyone is going to be happy with it, and yes, the commute, you know people don’t like commuting, but so what... I’m about to cancel all my Zoom meetings… I’m done with it.”
Poleg argues that Mr. Dimon’s position exposes the CEO’s unawareness of the looming threats awaiting the entire banking industry. Part of the story is that remote work is not going anywhere, and Mr. Dimon’s defiance will only accelerate the long-term trend that the “best and the brightest” are choosing to enter the tech industry over banking. For instance, last week, Mark Zuckerberg, CEO of Facebook, announced that he would work remotely for at least half of the next year and that he expects half of its workforce to be entirely remote within the next decade.
However, Poleg contends that Dimon’s greatest threat is a technological one: The entire banking industry is stuck in the previous century. “Banks are seen as “ruthless capitalists,” but the level of inefficiency, incompetence, and wasted effort within them is mind-boggling.” Poleg uses the examples of executing a trade on Robinhood and using Uniswap for trading cryptocurrencies to demonstrate the simplicity of emerging financial products. The technical details involved in using Uniswap are beyond the scope of this post, but Poleg’s main point is that a “pre-programmed protocol is doing, automatically, what hundreds or thousands of people would do in a traditional financial institution. And it does so without paying giant bonuses, without favoring powerful clients, and without even knowing who the clients are.” And Uniswap is just one example of thousands of related projects focused on disrupting traditional finance.
I’m not sure Poleg is making any friends in the banking industry with this essay, but I was personally annoyed with Jamie Dimon’s insensitive remarks, so I felt instantly connected to the author’s message.
Tobi Lütke’s Email to Shopify Managers
“Shopify, like any other for-profit company, is not a family. The very idea is preposterous.” (Email)
It’s not often that we get intimate access to the leadership style of a top tier CEO. Tobi’s August 2020 email addressing the managers of Shopify qualifies as one of those rare moments. Acknowledging the difficulty of leading through times of crisis, Tobi felt that leadership at Shopify was struggling to set clear expectations across the organization and addressing this issue would be paramount to the company’s lofty goals moving forward. To clarify the message, Tobi tactfully explains what Shopify is not: “Shopify, like any other for-profit company, is not a family. The very idea is preposterous…The dangers of “family thinking” are that it becomes incredibly hard to let poor performers go. Shopify is a team, not a family.”
Shopify is also not the government. Tobi admits that the company believes in liberal values and equality of opportunity. However, Shopify only advances these causes when it directly helps its business and/or merchant ecosystem and not because of a moralistic framework.
Tobi also clearly outlines his expectations for employee performance at Shopify. Using the historic 40%+ growth rate of the company, Tobi argues that everyone needs to show up at least 40% better every year to qualify for their current jobs. Besides the direct performance output, Tobi also highlights the threats of employees engaging in “endless Slack trolling, victimhood thinking, us-vs-them divisiveness, and zero sum thinking.”
Tobi ends his email by emphasizing Shopify’s mission stating that Shopify is an ambitious company that obsesses over building products that enable merchants to digitize their businesses. Tobi warns that while Shopify is currently succeeding despite muddying the company’s true values, this will not work for much longer as the company continues to rapidly scale.
Whether you agree with Tobi’s stance or not, this email is an excellent lesson on transparent leadership. Tobi has a clear vision for Shopify’s culture and he’s willing to address difficult issues directly instead of avoiding conflict. If you’re looking for more Tobi content, then I’d recommend listening to him as a guest on the Invest Like the Best podcast episode: Building a Modern Business.
A Project of One’s Own
“It’s a bit sad to think of all the high school kids turning their backs on building treehouses.” (Essay)
I recently discovered Paul Graham’s essays after listening to an old Invest Like the Best podcast episode with guest Morgan Housel called Walking and Talking. At one point in the episode, host Patrick O’Shaughnessy said the following about Paul Graham’s essays that caught my attention: “I would argue that if you dedicated yourself to reading, in whatever order you want, all of his essays that you’d have a better education in business and in life than most college degrees.” I stumbled across Graham’s essay titled A Project of One’s Own this past week and I found the message directly relatable to my current interests. I highly recommend reading the entire piece because I think it will motivate you to recapture the ability that you once had as a kid to carelessly and confidently work on new projects without worrying about wasting time or comparing yourself to others.
In A Project of One’s Own, Graham argues that working on a project of your own is as different from ordinary work as skating is from walking. Not only is skating more fun, but it’s also much more productive and engaging. Unfortunately, societal norms often discourage kids from spending meaningful time working on individual projects outside of school by labeling these activities as “playing” or “hobbies”. Using the example of building a treehouse, Graham contends that adults subconsciously conceal the direct (though long) route from working on this type of project to becoming an architect or engineer, by not referring to it as “work”. Instead, adults tell kids that careers are developed solely through school, which tends to be quite different from working on your own projects. And as schoolwork intensifies, the side projects often do not survive. Graham explains the consequences by saying: “It’s a bit sad to think of all the high school kids turning their backs on building treehouses and sitting in class dutifully learning about Darwin or Newton to pass some exam, when the work that made Darwin and Newton famous was actually closer in spirit to building treehouses than studying for exams.”
That’s it for this week. But before you go, please check out the new feedback survey below. Good or bad, I’d love to hear from you!
Thanks to Lewis for another stellar job in the editing department.
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Thanks for reading and see you next Friday,
Parker