In life there seems to be a pretty clear default path in terms of societal, parental and personal expectations: go to college, get a job, get married, have kids. In addition to the default general path, there is a default choice for each of these: continue doing whatever it is you are doing. The easiest thing to do is to stay in your current job, live in your current city, in your current apartment, with your current significant other. Time spent in a default position seems to create a momentum of its own on that position across all categories.
The reality is that we are generally lazy and don’t take the time to question either our general life direction or the specific choices within that direction. Yet, many of these results come from happenstance or circumstance.
The last thing we want is to wake up late in life realizing we have been running in the wrong direction. Because we are so busy living on a day-to-day basis, I find that it’s important to take the time to take a step back and be deliberately introspective about life’s major decisions. To do so I created a process and framework for making these decisions.
After several iterations, I came up with a process.
Step 1: Assess in writing where you stand and the options available to you
We usually have a vague sense of pros and cons of various options in our mind, but I find that’s it’s extremely valuable to write them down. The process of writing down an analysis of your frame of mind helps you crystallize your thinking and make the options much more explicit.
I typically start with an evaluation of my current mindset in the default position and weigh the pros and cons of staying in that default position. I then generally lay out a set of different paths. In doing so I found it best to follow a few rules:
- Be as open and honest with yourself as possible in terms of assessing your frame of mind
- Don’t put any limitations on the paths you could explore and force yourself to include highly unlikely and difficult things
- Don’t try to reach a conclusion in the email to yourself. Laying out the options and their pros and cons is enough. The answer will come in the following days, weeks or months
- When evaluating alternative paths be careful to imagine yourself on a typical day and not an idealized version of that path
Sometimes there are clear points at which you should write this email to yourself because you are facing an obvious important life decision:
- You are hesitating between several jobs to take
- You are wondering whether you should propose to your girlfriend
- You are considering selling your company
- You just sold your startup and are wondering what to do next
In a way those are the easiest times to take a step back and be introspective because there is a clear life break. However, because of the power of momentum, it’s essential to do it when there are no such obvious breaks. I would recommend doing it whenever you feel a general sense of malaise in life.
Evaluate how happy you are in your current life relative to what you used to be or would like to be and assess if there are changes you should make. Sometimes you are not even aware of said malaise which is why it can be good to force yourself to write this assessment at artificial points in time. I either do it on my birthday or at the beginning of the new year at the very least once every other year.
Here are a few examples I wrote to myself in different contexts. In The Power of Introspection and Detached Analysis, I shared the email I sent myself in January 2001 when evaluating what to do after I had (badly) sold my first startup, Aucland. I was 26, the Internet bubble had burst, and it seemed liked the Internet was dead, or at least was not going to be something big. I had been at the right time, at the right place, with the right skills, and left a unique opportunity in life pass me by. I raised tens of millions in venture money and employed hundreds. I had been on the cover of every magazine and newspaper in France. I was featured on popular TV shows, and was generally publicly recognized as a disruptive entrepreneur, before it all very publicly came crashing down. I had soared to great heights and wondered what lay ahead, what path to take, and whether anything would ever feel so magical again.
I also share below an email to myself right before my birthday in 2012. This one was written from a very different perspective. I was already a successful Internet entrepreneur and angel investor with numerous exits. I was co-founder and co-CEO of OLX. The company was super successful, an amazing platform and a tremendous source of meaning given its societal impact. I was also publicly lauded and recognized for my work. However, I could not shake the feeling that something was off. As such, I wrote myself an email laying out what seemed unimaginable, leaving a position of power, respect, meaning and opportunity, because the day to day was no longer palatable.
From: Fabrice Grinda
Sent: Monday, July 30, 2012 11:15 PM
To: Fabrice Grinda
Subject: Thoughts on what I should do next with my life…
I have been putting some thought into where I stand in life and what I should focus on over the next year. I came up with 8 objectives.
1. Leave OLX
OLX is really the company I envisioned running for the rest of my life. It seems paradoxical to consider leaving OLX now that we have succeeded. We have hundreds of millions of unique users per month. We are the largest classified site in countless countries. We are making a meaningful difference in the lives of millions of users. Receiving thousands of love letters from users every day is a source of pride and meaning.
I also don’t underestimate the value of having a platform with hundreds of millions of users. It’s an amazing launchpad for new verticals and ideas. Every test we do is statistically significant. Investors keep telling entrepreneurs to multivariate test everything, but the reality is that unless you have the traffic to meaningfully test everything, it’s hard to make informed decisions. With the traffic OLX has we know within an hour if an idea is going to work. With this traffic level, disruptive product change can be 1% improvements done 1,000 times over.
So why leave? The reality is that the nature of work at OLX has changed now that we are part of a large publicly traded company. Partnering with Naspers was the right bet. When Naspers approached us in 2010, we realized that the business was essentially a natural monopoly on a national level and that we had to be absolute leaders in a few strategic countries. To withstand the onslaught of Schibsted and well-funded competitors like Quikr in India, it made sense to get the support of a deep pocketed strategic backer.
Naspers has proven to be a fantastic acquirer. They are the very opposite of the Japanese who had acquired Zingy. They are strategic, thoughtful and incredibly aggressive. I was pleasantly surprised and sometimes downright frightened by their aggressiveness, which is saying a lot given that it’s in my nature to be very aggressive. I can say with confidence that we would not be where we are today had it not been for Naspers investing.
We put the money they gave us to good use and won the war over the last three years but had to lose our independence to do so. While I have tremendous pride in what we have accomplished and love the recognition I get as co-founder and co-CEO, I no longer love the day to day job. When I built OLX with Alec, we never talked about who would do what. We have overlapping skills being Ivy League educated consultants and auction site CEOs and each can do the work of the other. The role split happened automatically driven by our interests, geographic location (him in Buenos Aires and me in NY) and lifestyle choices.
I ended up overseeing the product strategy, investor relations, front line M&A (identifying and reaching out to targets), business development and English PR. He took the lead on operations, post-merger integration and Spanish and Portuguese PR. We both jointly set the strategy.
It has often been said that it’s a bad idea to have co-CEOs and work with friends, but when you can make it work it’s much more powerful. You have a level of trust that does not exist in traditional business relationships. We never argued or disagreed, and our friendship has never frayed. Likewise, I am still close friends with William and Ariel despite working with them for many years.
Post-Naspers investing, the nature of my work started changing. I no longer had to manage investor relations. The M&A and business development roles disappeared as we started focusing on organic growth. Simultaneously, we started needing to have a structure and budgeting rigor commensurate to our size, not to mention being owned by a large publicly traded company. We now must create detailed annual budgets, quarterly budgets and updates to the quarterly budget, and make sure we hit those numbers. Our decision-making process is no longer an (hopefully) enlightened dictatorship as we need to get shareholder approval for strategic initiatives.
All that to say, that I am not loving the day-to-day. I don’t think OLX needs two co-CEOs anymore. Frankly Alec is better temperamentally suited for managing a shareholder and organization like Naspers’, while I find myself yearning for a new adventure.
Next step: Talk to Alec and Naspers.
2. Try to convince Craigslist to let me run them
Craigslist has 30 billion page views per month. If I was running it, I could both improve content and site quality dramatically and make it relevant for the 21st century. Craigslist has the potential to be a $100+ billion company given that it has liquidity in so many valuable categories. However, as it is, it is profoundly flawed. Women are the primary decision makers in all household decisions: which house or car to buy, what babysitter to hire etc., yet Craigslist is the least female friendly site in the world.
They should take a page from OLX and pre-moderate all content before it goes live to make the site spam and scam free. They should remove personals which make the site creepy. They should build a delightful mobile experience and redesign the site.
They should also change their business model to replicate OLX. Classifieds are a wonderful business that can have upwards of 75% EBITDA margins and you don’t even need to charge listing fees. They charge listing fees because they are too lazy to moderate the site. For them it’s a form of spam control, but it also limits liquidity in certain categories. Even by going 100% free and hiring 1,000 people to moderate the site, I could easily make it generate several billion (yes with a b!) in profits per year.
My pitch to Craig is as follows:
- I share your vision of providing a public service to the community
- You could be doing a much better job by improving content and site quality
- You don’t necessarily want to do the work, but I am happy to do it for free
- Just give me 3% of equity / year worked. The equity vests after 1 year so if you are not happy with my work just get rid of me on day 364 and I cost you nothing
I had a quick chat with Craig about the future of classifieds (and did not pitch myself for the job). He told me to speak to Jim who is CEO and introduced me. I told Jim I was going to be in SF and would love to meet for a quick coffee. I was not going to be there but would have gone had he said he was available. He did not reply. I also sent him a follow-up email to which he did not reply.
I will forward the email I sent him to which he did not reply.
Next step: Find people who know Jim Buckmaster well and convince them to have him meet me.
3. Try to extract the non-strategic countries out of OLX to have a dividend stream + try the classifieds 3.0 strategy
Those countries generate $7.5 million in revenues and $5 million in profits per year for OLX, yet Naspers has repeatedly asked us to close them.
They obviously don’t want me to get them for my own purposes, but I am trying to convince them that they have no real strategic value and as such we should try to build a next generation classifieds 3.0 site which is the only way to have a shot of being relevant in those countries
To do that effectively, we would need to spin it off as it would require a complete product redesign to a mobile first (and perhaps only) experience, with a super simple photo-focused listing process with an optional buyer paid payment and escrow solution.
Next step: Pitch the idea to Naspers in the coming months.
4. Think through the new idea I should build or company I should run
I thought long and hard about creating a VC or angel fund. The issue is that fund economics only work if you have several hundred million under management. Moreover, each fund has a 10 year life which is a huge time commitment. I tend to get restless before then. The way it would have worked would have been as follows: raise a $50 million fund, raise a follow-up multi hundred million fund in 3 years and another one 3 years later. In other words, it’s at least a 16 year commitment with a lot of administrative / boring work in terms of raising money from LPs, doing reporting, etc.
I am also not sure it’s something I really would want to do full time. I have been meeting VCs and PE firms to discuss:
- Which of their portfolio companies I could run
- Which public companies we should take public and have me run
- What are the hot trends / companies to see if there is room for a competitor / differentiated version of the idea
I am trying to move away from mere idea arbitrage:
- It’s harder if not impossible to build $10+ billion companies outside of the US
- I don’t really want to travel as much as I am currently traveling
- I am less effective managing a product and technology team remotely than I am when they are right next to me
The conversations have been interesting and I was approached to be CEO of a few publicly traded companies which is ego boosting. However, there was nothing as appealing or interesting as being CEO of Craigslist.
I explored a lot of categories in terms of new ideas to build. I spent a lot of time on 3D Printing, which will be a huge category, before deciding not to pursue it. I also considered bringing www.made.com to the US, before also discarding this idea. I am happy to explain why in more detail.
The one idea that has bubbled up and that we are exploring further is building a next generation version of www.justanswer.com. Shockingly the company is on a $150+ million revenue run rate. Given how much of the economy is in services and information, this has the potential to be extraordinarily big if done right. Moreover, the unit economics are nearly as good as the one in stock photography which has not proven to be a winner take all business. I will send you an email on that category.
I am doing a lot of research right now into Just Answer: interviewing their customers and experts, trying to figure out how much liquidity they have in each category, thinking through what product improvements could be done, etc. We’ll see where I end up falling on this.
Next step: Keep studying the model.
5. Find the next thing to incubate – possibly a Viajanet for Indonesia and South East Asia
Some of the clear lessons of the past few years of angel investing and working with Jose on incubating companies in Brazil are:
- Travel is a huge category
- Incubating a company allows you to have a disproportionate share of equity for very little
- A few companies generate most of the returns
Based on recent market analysis, there seems to be a clear opportunity to build an Expedia for Indonesia and possibly all of South East Asia. We are currently evaluating the market:
- Interviewing CEO and cofounder candidates from various business schools and people with travel background in the region
- Talking to various travel wholesalers
Next step: Go to Indonesia September 3-7 to meet all the potential cofounders and partners.
6. Keep angel investing in the most interesting / attractive projects
I invested in 105 companies over the last few years and evaluated over 3,000 projects. I actually loved meeting all the entrepreneurs, hearing their ideas, figuring what was hot at any given point in time. Beyond the sheer promotion of entrepreneurship which is valuable in its own right, the process is informative in terms of understanding larger trends to better decide what projects to incubate or start on my own.
Interestingly enough, so far we seem to have been good at selecting logical projects that have earned good returns. We have the best win – loss ratio of any angel investor or VC I know with 14 wins for 7 losses. However, none of the winners have proven to be home runs. In other words, we seem to be great at picking companies with good on base percentages which hit singles, doubles and the occasional triples, but we have not been good at finding disruptive winners. In a way we are attempting to assuage this limitation by investing more in “crazy” ideas from US companies instead of just investing in international idea arbitrage businesses.
One potential idea for scaling this part of the business might be to pitch Naspers on running a $100 million angel / series A investment fund for them should they accede to giving us a floor on the put.
Next step: Continue meeting companies, being more vigilant about our investments given the frothy times in angel investing, yet trying to be open minded enough to increase the probability of home runs.
7. Try to buy the IP for Rise of Nations
This is more of a “love project” than anything. Rise of Nations is my favorite strategy games in the history of strategy games. It mixes the real time gameplay dynamics of Age of Empires, Warcraft, Starcraft and Command & Conquer with the strategic and tactical depth of Civilization. Big Huge Games, the company that developed it, stopped focusing on this IP 9 years ago and instead started building role playing games. Their huge bet in the category recently failed and the company filed for bankruptcy in a very public scandal. There is currently a legal discussion over the jurisdiction of the case. Once it’s settled, I would like to try to find a way to buy the assets for cheap with the intent of building Rise of Nations 2. It would simply be a multiplayer version of Rise of Nations 1 with updated graphics and the tactical unit control of a game like Company of Heroes. I would try to get it funded through Kickstarter.
Next step: Bid on the Rise of Nations IP once it’s for sale.
8. Become a credible public economic commentator
I had political ambitions growing up and still spend a lot of times interacting with people in think tanks and various thought leaders. However, I am starting to feel as much apathy, if not antipathy, for the body politic as Peter seems to feel given his comments in the New Yorker article. I agree with him that Rand type entrepreneur can have more impact on society.
That said, post our conversation, I am starting to think that an appointed position like being on the council of economic advisors to the president would be interesting. Unfortunately, the world approves and rewards specialists rather than generalists. I get no credit for predicting the financial and real estate crisis. In order to get more visibility and improve the chances of such an appointment, I reached out to Nouriel Roubini, Paul Krugman, Niall Ferguson and Matthew Bishop (the editor in chief of the Economist for the US) asking for their ideas on how best to promote the ideas.
I put a fair amount of thought about how to engage them to maximize the probability of a reply. Unfortunately, they have not replied yet. I will send you some of those emails.
Next step: Keep approaching thought leaders and pitching them my ideas.
Many of the 8 priorities are mutually exclusive. Should I get the CEO role at Craigslist, I would essentially drop everything else given how big that opportunity is relative to the others. In that context I would not mind completely stopping angel investing and incubating startups. I do it because I find it interesting, I love promoting entrepreneurship, meeting hungry entrepreneurs and it keeps me in the game, but I don’t find it to be as fulfilling and meaningful as doing something massive on my own.
I also wonder if it would not be healthy to make a clean break and take 6 months to a year off just to recharge and clear my mind. It’s unclear to me if in that context I should also stop angel investing to fully disconnect, or maybe only take meetings every other week. Likewise, I have to think through whether it would be a full disconnect to focus on getting really fit playing tennis, kiting and skiing vs. focusing on intellectual pursuits – writing, partaking in intellectual conversations, reading, etc.
I suspect “the right answer” would be a pleasant mix of all the above:
- Don’t connect at all in two week increments.
- Mix intellectual and physical pursuits.
- Spend some time going to see my closest friends wherever they are in the world to spend quality time with them.
- Make all the angel investing decisions and meetings in 1 or 2 weeks per month.
I would probably not pursue this until my hip is fully healed so that I can make the most of my free time and until the situation regarding the put is resolved one way or another.
What do you think?