This is the way: mercy, moderation, modesty (#8)

I've been writing a small series about Heartcore's foundational principles. You can find links to the previous posts below.

Our eighth foundational principle, perhaps a portentous number given the quote's provenance, comes from Verse/Chapter 67 of the Tao Te Ching:

"Be gentle and you can be bold; be frugal and you can be generous; avoid putting yourself before others and you can become a leader among men*."

There are many translations of this verse, and some perhaps more exact than the one above which I believe to be the most Westernized "self help" version. And then there's Ursula K. Le Guin's pseudo-translation, which is probably the most poetic but also the furthest interpreted. 

I think she's directionally correct. I invite you to interpret the "three treasures" widely:

The first is gentleness, kindness, compassion, mercy, love. The second is frugality, moderation, economy, temperance. The third is modesty, meekness, respectfulness, humility. 

I've underlined what Le Guin chooses: mercy, moderation, modesty. Three m's make for a good mnemonic. 

As we work with potential leaders of companies this is profound advice. Leadership is granted, not taken. To lead, you have to have a good reason for be granted leadership - a compelling vision for the path, a method of getting there, a way of enabling people to collaborate. And in this, "compassion wins the battle and holds the fort." 

Leadership is first and foremost about the people that you lead - the duty bestowed on you is to them, and the only way to do right by people is to see their innermost essence and will yourself to want the best for them. Leadership is not an ego game; it is about love.

The second "treasure" is moderation. To lead you need temperance - in character, in your marshaling of resources, in your stewardship and captaincy. Frugality is the necessary condition for generosity where it matters. It, too, is an outgrowth of compassion, of love.

And finally, modesty or humility. To recognize that you have talents that may not have been bestowed on others. That yours then is a path of enabling others to reach their full potential. That to lead is not to grab the reigns, not to rush to the front. There can be a competition between truths, between opinions. But the greatest leaders are humble in their greatness. They put their teams first, their customers first, their products first. It is them that they serve. True leadership is a calling of service, above all.

This is the way: mercy, moderation, modesty. These are not popular virtues in our time. 

*... people

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Heartcore Foundational Principles

Founders first. Always.

#1 No fear, no greed 
#2 We're the coach, not the athlete 
#3 It is only with the heart that one can see rightly
#4 Energy attracts like energy
#5 “Success is not final, failure is not fatal: it is the courage to continue that counts.
#6 "Love people, not things. Use things, not people.
#7 Ask, don't tell.

Ask, don’t tell (#7)

I've been writing a small series about Heartcore's foundational principles. You can find links to the previous posts below.

Number seven is "Ask, don't tell."

I once heard that the main thing causing disagreement in heterosexual couples is that men want to solve problems and women just want to be listened to.* That reminds me of some founder-VC relationships I've witnessed. 

Most venture investors I've worked with move way too quickly towards "solve" mode - essentially consulting or mentoring or (even) directing. When what's usually required is a coaching mindset: clarify, re-frame to overcome the block, forward the action.

The easiest way to do this is by asking open-ended, empowering questions in a spirit of humble curiosity

- What can you do about that?
- What other choices can you make?
- What's another way to look at that?
- What did you learn from that?
- What is really bothering you about this?
- What do you need to get that done?
- How can you find out more about that?
- Where do you believe that thought comes from?
- What will you get out of that?
- Why is that important to you?
- How is this an opportunity?
- How do you feel about that?
- If that doesn't work, what else could you do?
- What seems to confuse you?
- What beliefs are holding you back?
- How does that fulfill your purpose?
- Where are you limiting yourself?
- How can you stretch to get there?

Board members that focus on asking the right open questions rather than "telling" tend to be good board members.

I'd love to make this a more interactive blog. What are your experiences with asking questions versus telling? Comments are open below. 

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Heartcore Foundational Principles

Founders first. Always.

#1 No fear, no greed 
#2 We're the coach, not the athlete 
#3 It is only with the heart that one can see rightly
#4 Energy attracts like energy
#5 “Success is not final, failure is not fatal: it is the courage to continue that counts.
#6 "Love people, not things. Use things, not people.

* Anecdotally true. I love you, A. 

Love people, not things (#6)

I've been writing a small series about Heartcore's foundational principles. You can find links to the previous posts below.

The sixth principle is another quote, this one by Spencer Kimball, a prominent leader of the Mormon church:

"Love people, not things. Use things, not people.”

It sounds like another trite internet cliché, something you'd read on some celebrity's Instagram or on an inspirational Facebook page. But I'd contend that it is deeper than it seems.

Perhaps most importantly: it is a direct repudiation of the materialism of which much of the technology industry stands accused. 

In that sense it is "back to the roots": technology at its most basic as the creation and use of tools, the intent of such tools being the fulfillment of needs and desire of people. For the advancement, if you will, of humankind.

At first glance technology is amoral; only the usage of the tool implicates it in morality. But of course inherent potential has directedness: guns don't kill people, but guns certainly kill people more than teddy bears do. 

Which is not to say that the teddy as surrogate pet or friend is necessarily harmless: tools conquer their masters all the time - guns are an especially good case study for that. Temptation is such that the trigger wants to be pulled.  

Which brings us to networked software and the internet, more generally. With greater inherent potentiality also comes greater potential for misuse. 

Every time you put the sudo, or superuser, command into a Unix terminal, you get a variant of an old warning:

We trust you have received the usual lecture from the local System Administrator. It usually boils down to these three things:

#1) Respect the privacy of others.

#2) Think before you type.

#3) With great power comes great responsibility.

Wise words. One wishes everyone working on networked software would heed them. And perhaps especially the folks at Google and Facebook. 

Within us there is an ancient impulse, "Promethean" perhaps. I find it particularly strong with the internet. Something within us is causing us to build this giant network connecting humanity. Scott Adam speculates we are "reassembling God" and as someone living at the intersection of AMDG and H+ I think that's an interesting thought experiment. I'd really like an evolutionary psychology evaluation of this so I can integrate it with my rational being. 

There seems to me an oscillation at the moment in online culture between integrating into a larger global awareness and the tribalist identity politics that are taking hold locally. The internet is enabling both, which is very interesting and slightly terrifying.

Love people, not things. The call for brotherly love is perennial philosophy, the closest I can come to seeing a social consensus of metaphysical morality. It stands in direct contrast to materialism and the love of worldly things, which includes the worship of tools as idols. 

Incidentally Apple is a master at this - the promise of creativity as the differentiating factor in its early marketing.

The second part of this quote seems superfluous. But there's a beauty in the juxtapositions of opposites. The materialist "usage" of people be it through manipulation or coercion or by making them "human resources" violates the core tenet of civilization: that of the inviolability of the individual. 

A few decades ago one might have said "sanctity" of the individual and I think we'll probably get back there, but whatever. In the irreducibility of the individual (soul?) lies our dignity. 

The German constitutional law starts with "the dignity of the individual is inviolable", which is kind of a request of readmission to the human race because if the Germans showed anything in the last 100 years it is that the dignity of the individual is - in the materialist sense - very violable indeed.

And so "love people, not things" contains another, more subtle idea. On the one hand people are clearly different from things, separated by an observed but more importantly communicated difference (you may call this "soul" but expect to be laughed at). On the other, people seem to exist - unlike anything else - simultaneously on both the material (things) and spiritual (ideas) plane, and acting on both.

It is no accident that human history has become less violent as this idea of individual sanctity and integration of spiritual and material has spread. Modern culture seems ever more eager (yoga, meditation) to transcend the mind-body duality heresy.

You could argue that the soul-within-body is an idea, perhaps the idea, of civilization. 

And so "love people, not things; use things, not people" admonishes us to wield the power of technology with the responsibility conferred on us as individuals of more or less free will. It is a call for morality above all - to fight the urges of temptation (pleasure, greed, expediency) with the fortitude of our consciousness of the values that got us here in the first place.

I sincerely hope this makes sense to you (I seem to get sidetracked with interesting stuff as I write these). 

The courage to continue (#5)

I've been writing a small series about Heartcore's foundational principles. You can find links to the previous posts below.

The current principle, the fifth, is a quote that we (along with the rest of the web) are probably misattributing to Winston Churchill:    

“Success is not final, failure is not fatal: it is the courage to continue that counts.”

Grit, perseverance, tenacity is something we look for in the founders we work with. It is the dogged pursuit of what works, the search for truth: the truth about our work, the world, and - increasingly - about ourselves. 

There's an ongoing conversation in psychology that "grit" is just spectacular marketing of trait conscientiousness. But it is good marketing isn't it? When we were rebranding to Heartcore, the alternative "True Grit" made in onto the longlist. 

One of the reasons it didn't stay there is the movie, but another is that grit/conscientiousness seems to be a result, rather than the cause, of the fuzzier but more foundational concept of courage. 

Not incidentally courage is one of the four cardinal virtues of antiquity. 

It takes courage to start a company. Unless you are from a very privileged background, startups are precarious, risky endeavours. It is a fundamentally braver path than working for somebody else. 

Startups take a long time. Inherent in the perspective of perserverance is an aspect of endurance. It's a marathon, not a sprint. 

And then there's an aspect of moral courage: to not forego one's values in the face of difficulties. Of remaining honest, retainining integrity, growing into the genuine leader that you have the potential to be. 

We prize courage as moral because it lets us act on our values rather than our urges. At the mean between rashness and cowardice (Aristotle), courage is a path of moderation or temperance (another cardinal virtue!) of the animalistic. And thus it is at the very base of civilization (and good companies). 

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Heartcore Foundational Principles

Founders first. Always.

#1 No fear, no greed 
#2 We're the coach, not the athlete 
#3 It is only with the heart that one can see rightly
#4 Energy attracts like energy

Energy attracts like energy (#4)

I'm doing a small series on Heartcore Capital's foundational principles: the previous posts are "No fear, no greed"; "We're the coach, not the athlete;" and "It is only with the heart that one can see rightly."

This fourth one is "energy attracts like energy."

If you think this sounds like "law of attraction" pseudo-scientific type new age babble, you're right insofar as this principle has been widely misued by false prophets. This isn't about positive thinking, or manifesting success, or "the more you give the more you get" prosperity gospel sermons.

Instead, what we mean is that the attitude you bring to an interaction is usually what you get in return. If you meet someone angry with more anger, the likelihood that you will perpetuate a difficult situation is high. If you are anxious, you will instill fear. If you are careless, you will reap negligence. 

The attitudes we display to one another are self-reinforcing because they are mirrored

Walk into a company and you can tell a lot by the state of their reception desk. Is it clean, well-ordered, are you greeted by someone relaxed, friendly, and open? Chances are that this company is a well-run organization. Or are they surly, stressed, and distracted? Of course they might just be having a bad day. But more often that not, you can feel how a company is doing once you spend a bit of time at reception. Another good indicator is the state of its washrooms, but that's for another post!

Energy attracts like energy is, for me, a more positively framed version of "turning the other cheek." By changing the energy you bring to a conversation you can put in onto another trajectory. 

And this applies to more than conversations. The way you show up at your organization effectively determines your capacity for leadership. As a CEO, your behaviors will percolate through the company in ways you can't even imagine. There is no space for weakness here. Does that make you anxious? That's probably a good type of anxiety. You owe them your best.

As investors, the way we show up with founders is massively undervalued. Our industry talks a great deal about tangible value-add, like providing strategic insight or making introductions. 

But the way you behave, your conscious and unconscious intentions, has a great deal of influence on companies. That's because the energy with which we show up gets transmitted to the founder and, unless they are superb at their job, makes its way through the organization as a whole.

By the way, this isn't an admonishment for mindless optimism. Frequently the role of a VC is that of an agent of temperance - to help  take the long view and smooth the emotional rollercoaster. Above all, we believe in kindness, honestly, and living to your full potential (truth, love, and growth). 

If you bring that energy to any interaction, no matter how difficult, there's little that can stop you being a massive force for good.

It is only with the heart that one can see rightly (#3)

I'm doing a small series on Heartcore Capital's foundational principles. The first was "no fear, no greed" and the second "we're the coach, not the athlete."

This one is: “It is only with the heart that one can see rightly.”

It's a quote by Antoine de Saint-Exupery, from his book The Little Prince. If you haven't read it, stop reading this post and go read the book

The full quote is: “On ne voit qu’avec le coeur; l’essentiel est invisible pour les yeux.” That is, "it is only with the heart that one can see rightly; what's essential is invisible for the eyes."

Venture capital sits at the intersection of finance and engineering. It backs the commercialization of new technologies. As such, its cultural orthodoxy is that of investment management: “rational” decision making, fiduciary prudence, calculations of risk and return. Small dreams in a small world.

This is not the true core of venture capital. Venture capital seeks to realize the dreams that break rules, that defy gravity, that create greatness from nothing but the sincere desire of such creation.

The danger of intellectualization and cynicism is that it obscures this truth. The mind with its convoluted neural pathways of pattern recognition and other biases, need for validation and myriad other egoic attachments, prevents the leap of faith necessary to recognize greatness when it comes across it. The mind’s response to greatness is incredulity, envy, spite. The heart’s response is to beat faster in excitement, admiration, empathy.

As I said in a previous post:

To see with the heart is to see to the core of a thing. It means trusting gut, intuition, instincts, feelings to know whether a person and their dream are authentic or not. It is to use the heart to see to the heart of the thing and thus to gauge whether it is a thing worth supporting.

The path to truth is from the heart. 

Though we may elevate rationality to our ultimate value, in the end it is our love of the pursuit of the rational that leads us to truth. In that Feuerbachian sense, I have yet to meet an atheist scientist or founder.

And now it gets a bit more complicated: to see with the heart is to love. Because devoid of all obstruction, if we see all Beings for what they truly are, we have no choice but to recognize our own Being within them. This is the source of all forgiveness and all cooperation.

And the result of such love is growth. To be truly devoted, to see the truth in each other, that is to live in the full potential of our Being.

Thus: The path to truth is from the heart. To see with the heart is to love. The result of love is growth. These are the values at the foundation of Heartcore Capital.

It is only with the heart that one can see rightly, indeed.

We’re the coach, not the athlete (#2)

I'm doing a small series on Heartcore Capital's foundational principles. The first was: "no fear, no greed."

The second is: "We're the coach, not the athlete."

I don't even remember who told me this. Could have been Fred Destin when I was an analyst/associate/principal at Atlas Venture, now Accomplice. I think it's one of those things on the apprenticeship path of venture capital that you pick up.

Image result for coach friday night lights

It seems like a cliche, but it's useful to always remember.

The point is: you're not the one out there on the track. You're not the one in the race. You didn't get up every morning at 4:30 to train for this. In the bacon-and-eggs breakfast analogy: they're the pig (committed); you're just the chicken (involved).

So you have to put the founders first. Above all, you have to respect that it's their journey. Their company. Their life.

The work is to help them realize their potential. It's not about you, how smart you are, how much better you would be at running the company (newsflash: you wouldn't be). It's solely about helping them be the best they can be.

The sports (or life) coaching analogy holds. Sometimes you can suggest trying other tactics. But mostly they need help working on the big picture (strategy), on their own mindset and habits, on their leadership skills. They need someone to hold them accountable. To suffer with them, but also to celebrate the wins. Founder-CEO is a hard and lonely job. If you're the one they can turn to when it gets tough, you're doing something right.

Line up these things and, as the old coach saying goes, "the score takes care of itself."



No fear, no greed (#1)

I'm going to do a small series on Heartcore Capital's foundational principles

The first is: "no fear, no greed."

Fear and greed have a long history in finance. They are part of the Keynesian "animal spirits." Fear and greed are the "opposing irrationalities" that are the push and tug of volatility in financial markets; they thwart the beautiful simplicity of the efficient-market hypothesis. But they also create opportunity as in "be greedy when others are fearful", widely attributed to Warren Buffett.

In venture capital, which is more insulated from the mass psychology of capital markets, fear and greed manifest through the behaviors of people around the table: founders, executives, employees, board members and investors. And here they don't create opportunity: they collapse the multi-dimensional game of building large, world-changing companies to zero-sum. 

Fear and greed are incredibly disruptive to building a company. And they are incredibly disruptive in boards. Fear and greed are myopic, paralyzing. They drain the energy out of a room. They focus the conversation on the wrong things. 

Of course it's perfectly natural to be anxious. It can even be helpful - it keeps us conscientious, diligent, focused. The same is true for our acquisitive nature. It's why we get out of bed in the morning: to have or become something more than we were yesterday. 

But in their extremes, fear and greed reduce relationships to transactions. They take the joy out of building and work for work's sake. They are self-defeating.

Failure is built into the startup model. It is built into venture capital economics. What if we reframed every one of these challenges as an opportunity? What if every time a company went through hard times or “failed”, we’d see it as an invaluable, even indispensable step to become a better organization, a better partner, a better leader, a better person? 

Our bet is that a leadership that isn't based on ego-centricity - not on fear or greed or self-importance - results in a culture that's about people, not things. That directs energies outward - to care about product, customers, employees. And where "the score takes care of itself."

And that's also why we're called "Heartcore." Because the mind is the source of fear and greed; and the heart is the source of courage. "It is only with the heart that one can see rightly..."

The heart is the only way to steadfastly support authentic founders whose sincere dreams are not a product of mind, not an expression of lack - of fear or greed.

Heart is what's required for commitment to the journey. And it is a journey that requires the bravery of the truth-seeker: the truth about the dream, about the world, and about ourselves. 

To see with the heart is to see to the core of a thing. It means trusting gut, intuition, instincts, feelings to know whether a person and their dream are authentic or not. It is to use the heart to see to the heart of the thing and thus to gauge whether it is a thing worth supporting.

If the heart is unobscured, as a well-turned phrase goes, the result is love. Love makes it impossible to do the wrong thing, to act “immorally”, or against one’s better judgement. To unobscure the heart means to learn the truth about yourself. You cannot see the truth in others unless you first learn it about yourself. This is as much a journey of excising mind as the ego loss required of founders to become the leaders destined for greatness.

To operate from this place authentically means to meet founders from the heart. It means to express authentic interest in them and empathy with their journey. Each meeting creates the safe, accepting environment necessary for them to fully express themselves, and for us to fully learn who they are at their core.

Operated from this place, Heartcore Capital is venture capital without fear or greed. 

To be clear, this is an expression of intent. It is something we strive for. And every failure is an opportunity to get better at it.

Gilead (novel)

I was going to start this post off with "there aren't many books that make a grown man cry", but how true is that really? Off the top off my head I can think of To Kill a Mockingbird,  Anna Karenina, Elie Wiesel's Night, Cormack McCarthy's The Road, James Salter's Light Years.

Well I finished Gilead by Marilynne Robinson last night and I cannot believe it took 15 years since its publication for me to read it. I know Obama interviewed the author while he was president and there are many things I can fault the man for, but his taste in literature isn't one of them. 

This is a grand work and it belongs in whatever modern canon we are now using.

An epistolary novel, it is the fictional autobiography of a dying preacher in Iowa, written as a journal-memoire-letter for his young son to remember him by. You start the first pages with a lump in your throat.

The whole thing serves as a memento mori. It calls us to examine our life from the perspective of our death. And that's certainly one way to connect deeply with your Being.

If you enjoy reading fiction and you enjoy language and maybe if you enjoy theology, please read this. The end is one of the most powerful I've read in contemporary literature:

“I'll pray that you grow up a brave man in a brave country. 

I will pray you find a way to be useful.

I'll pray, and then I'll sleep.”

Image result for gilead book


EU Copyright Directive - please join the fight

Copyright is a good thing. It incentivizes creators, it lets capital fund creativity, and it is rooted in human morality of "fairness" about usage of original work.

But copyright terms have been extended multiple times in the past century. This runs counter to the technological revolution we have been witnessing. It has become much cheaper to create and so the "fixed cost of creation" argument for copyright is less valid that it used to be. It has become much cheaper to distribute work (zero marginal cost of replication/distribution). Thus limiting access to copyrighted work is a significant drain on public welfare. If anything, we should be limiting copyright.

Contrary to this, the European Union is moving a new Copyright Directive through its legislative process at the moment. The most problematic piece of it is Article 13. You can read it here and Ars Technica has a good run-down on the various issues. 

The key problem is that it shifts liability for the protection of copyright onto "sharing platforms." This does away with the "hosting" defence that is at the core of the growth of all online services, whether it is individual web hosts or the monolithic sharing platforms like YouTube or Facebook. In my view, there is no question that this is a mandate for upload filters.

While there is an exception for startups (less than five million monthly users or less than three years old or less than ten million in revenue), Albert Wenger of USV rightly asks "why would you start anything new if after 3 years or after reaching 5 million monthly uniques you were subject to this ridiculousness?"

The European Union works hard to support the startup ecosystem, not least through the fantastic support as a Limited Partner via the European Investment Fund. Legislative intiatives such as this make it much harder for Europe to stay a fount of innovative companies and compete with other geographies for the best online talent. If anything, we should make up for our relative weakness versus the US and China and create better legislation for intellectual property.

I strongly enourage you to make up your own mind. And once you have, to sign the petition on Change.org and put in a phone call to your Member of European Parliament. 

We previously won on net neutrality. Let's do the same on copyright.