Here is something that caught our eye this week:
We recently spent time with great friends who have impressive jobs at large, prestigious investment firms. As we caught up, we were struck by the long hours our friends put into their work on a regular basis and left wondering whether the Chenmark team was working hard enough or whether we might be allowing complacency and/or mediocrity to creep into our daily routine. Make no mistake, outside of our (hopefully) daily dose of exercise, business takes up almost the entirety of our mindshare, all day, every day. However, we also concede that we aren’t technically “in the office” for anywhere close to 80+ hours a week which we sometimes worry could impair our ability to turn Chenmark into a leading firm in the small business investment space.
This week, we were interested to find that the debate over whether or not hard work is a prerequisite for success is currently a hot topic in Silicon Valley. On one side of the dialogue is tech investor Blake Robbins, who recently Tweeted, “When I first got into tech. I thought it was ‘cool’ to work on the weekends or holidays. I quickly realized that’s a recipe for disaster. Not hanging with friends and family because you’re working isn’t ‘cool.’ Burning out isn’t ‘cool.’ I promise you…your competition isn’t beating you because they are working more hours than you. It’s because they are working smarter.”
The debate heated up when venture capitalist Keith Rabois responded saying Robbins’ point was “Totally false. Read a bio of Elon [Musk]. Or about Amazon. Or about the first 4 years of FB. Or PayPal. Or Bill Belichick. It is pure arrogance to believe you can outsmart other talented people.” Rabois is on the more extreme end of the “work hard” camp, as evidenced by a slide he gave as a guest lecturer at Sam Altman’s Stanford class on startups. The slide, posted below, presents a quote from legendary NFL coach Bill Walsh:
Rabois goes on to tell the students, “If this doesn’t sound appetizing, you probably shouldn’t start a company truthfully.” His point is that there are always trade-offs in life, that success requires sacrifice and that it’s simply misleading to tell aspiring entrepreneurs otherwise. One argument against the hard-work-at-all-costs-is-a-prerequisite-for-success mentality is that one should focus on working smart not hard, a topic which we explored in depth back in 2015. Another argument is that people like Rabois (who fund start-ups) promote personal sacrifice from their entrepreneurs in an effort to squeeze every last bit of life out of their investments. Entrepreneur David Hansson articulated this point in what he calls “trickle-down workaholism,” noting:
“There’s an ingrained mythology around startups that not only celebrates burn-out efforts, but damn well requires it. It’s the logical outcome of trying to compress a lifetime’s worth of work into the abbreviated timeline of a venture fund… It’s not hard to understand why such a mythology serves the interest of money men who spread their bets wide and only succeed when unicorns emerge… Of course they’re going to desire fairytale sacrifices. There’s little to no consequence to them if the many fall by the wayside, spent to completion trying to hit that home run. Make me rich or die tryin’.”
While we are fascinated by this debate, there are a few things that differentiate our experience at Chenmark. First, we don’t believe in the concept of work as an on/off switch. There is an embedded assumption in the commentary from both Robbins and Rabois that one is either working (being productive) or not working (wasting time). As a family business, the distinction between personal and business is blurred to the point where it’s all just life. Some of our best insights have come to us while eating BBQ and playing Settlers of Catan on Friday nights, but we’d be hard pressed to consider this work in the traditional sense.
Secondly, and more importantly, our investment strategy and philosophy is unburdened by the time compression mentioned by Hansson. At Chenmark we are in the business of long-term compounding. We love what we do, we want to keep doing it indefinitely, and part of that mission requires that we structure our life to ensure continuity of output. We believe targeted doses of intense effort at the office can and should be complimented by similar commitments to fitness, nutrition, family time, and recovery, because we feel such practices, while seemingly insignificant in the short term, will maximize our chance of being effective investors for the next several decades. Over the long run, and with all due respect to Bill Walsh, we believe “doing the job” isn’t necessarily 3 AM film sessions, but rather a fanatical commitment to consistency, durability, and incremental improvement.
Have a great week,
Your Chenmark Capital Team