Business Dynamics | Alessandro Perilli

The Three Dimensions of the Good Life

peris — Sun, 22 Sep 2024 17:56:09 +0000

We present empirical evidence that happiness, meaning, and psychological richness are related but distinct and desirable aspects of a good life.

The post The Three Dimensions of the Good Life first appeared on Alessandro Perilli.

How to Hire a CEO (According to Vinod Khosla)

peris — Wed, 10 Jul 2024 20:52:08 +0000

How to Hire a CEO:

1. Define the Ideal Candidate Through Real Examples

Instead of writing a spec, which generally looks like god in hard to meet form, start with a dozen top resumes that you can annotate. Highlight positive and negative experiences and characteristics to create a spec based on realistic candidates, and then hand these markups to your recruiter.

2. Choose the Right Search Firm

Smaller search firms often have a better network and instinct for entrepreneurial candidates than large firms that are used to staffing F500 companies. I have generally found that their instincts for entrepreneurial talent can be off. Smaller firms are more attuned to the needs of startups and growth-stage companies.

3. The Technical Athlete, Not the “Expert”

My bias is to find someone who hasn’t spent too much time in the industry to which the startup belongs. Some time is helpful, but too much leads to sclerosis. For example, when hiring for a medical device business, avoid candidates with too much time in medical devices. But the candidate should have experience working in complex engineering outside of medtech. The latter, coupled with deep technical expertise and just a small dose of medtech experience is likely to be more innovative and faster-moving.
There are very few areas where somebody innovated in an area where they’ve spent their life deeply entrenched. In the 40 years in which I’ve participated in disruptive innovation, I actually can’t think of one example. That’s an unusual kind of statement, and I’ve looked hard. Were space launches disrupted by Airbus, Lockheed and Boeing? No. It was SpaceX and Rocket Lab. All that activity is coming from people who weren’t in the business.

4. The Golden Goose not the Golden Egg

Prioritize finding someone who is the absolute best team builder and a good leader. That will give you the agility to navigate anything from complex engineering problems to an FDA process. A great team builder who can execute the job is more valuable than someone with narrow expertise who knows how to execute that particular job. The ability to assemble a specialized team is crucial for complex projects. And with the frequency of changing plans in a startup, someone who can constantly adapt and build for the next S-curve will pay dividends over someone whose “expertise” and “experience” handles the issue at present.
With regard to more technically complex projects, especially one that spans a multitude of different types of engineering, a CEO with a diversity of technical skill is required to make judgment calls, but again, the most valuable skill set will be in building various teams in specialized domains.

5. Growth Velocity Over Experience

When considering a first-time CEO, the most crucial factors for me are their quality of thinking and their ability to grow rapidly. It’s challenging to define this in a job specification, but I prioritize finding someone who can manage change, adapt to new situations, and build a great team over domain expertise. I prefer individuals who can quickly learn and grow, rather than those with extensive CEO experience, especially in new and evolving fields.
For example, while domain expertise is important for getting a device to FDA approval, I might prioritize someone who demonstrates rapid learning and critical thinking and who can hire the domain expert. Experience can mostly be traded off for these qualities. A candidate who is a great thinker, learner, and team builder is ideal for me. Leadership, goal setting, and understanding the technical space are key, as these are harder to learn from scratch.
I am open to giving someone a chance to grow into the role, even if they may not be the definitive long-term CEO. But they’d better be curious, a broad thinker, a first principle thinker, action oriented, a great recruiter and able to lead with vision…

6. Synthesize Diverse Information

The second important aspect is aligning the expectations of all stakeholders involved. For a company creating an artificial womb for example, stakeholders on the science, business, and impact front may include the OB-GYN, neonatologist, engineers, mother, child, and surgeon. The CEO of such a company must integrate feedback and relay it effectively to the relevant team members to both understand each of those stakeholder’s “workflows” and how the tech fits in and solves their problem. Failure to do so will result in critical requirements being omitted from the project. A CEO must gain a deep understanding of all involved constituents; integrating and addressing diverse needs is a must. In the early stages, sufficient technical/scientific background is often essential to be able to exercise judgment on hard technical/scientific choices.

7. Prioritize Effectively and Make Trade-offs Wisely

Smart individuals can quickly figure out a thorny issue if they can pare it down into its structural components, prioritize, and make decisions effectively based on the identified fulcrums. Thinking clearly and critically is often more important than experience in new technical areas.

8. Raise Funds

Even at the development stage, it’s important to find a candidate who can raise funds effectively. This ability can be crucial for sustaining and growing a company. Selling investors, employees, and partners is also a critical skill.

The post How to Hire a CEO (According to Vinod Khosla) first appeared on Alessandro Perilli.

Only 163 books out of 45,000 sold more than 100,000 copies

peris — Tue, 30 Apr 2024 08:03:10 +0000

There were more than 450,000 new titles issued last year according to Bookscan. A title is a book in a specific format–so the audio counts as separate from the hardcover, etc. To be conservative, you can triple the sales numbers here, to account for digital and audio formats of the same title.

If we narrow that down to the 45,000 books published by the largest publishers —books that by every definition are not self-published, and that required a team to create— we get this chart.
…
Scarcity made the book publishing world work as a business, and scarcity is gone.

Write a book because you can and because it might make a difference. But don’t listen to your publisher’s suggestions simply to sell more copies. You probably won’t.

The post Only 163 books out of 45,000 sold more than 100,000 copies first appeared on Alessandro Perilli.

How to do R&D (especially about AI)

peris — Wed, 03 Apr 2024 08:40:31 +0000

Zen and the Art of Research Management (with apologies to Sun Tzu),
John Naughton, Robert W. Taylor

Hire only the very best people, even if they are cussed.
Perhaps especially if they are cussed. Your guiding principle should be to employ people who are smarter than you.
One superb researcher is worth dozens of merely good ones.
Once you’ve got them, trust them.
Do not attempt to micro-manage talented people.
(Remember rule# 1.) Set broad goals and leave them to it.
Concentrate your own efforts on strategy and nurturing the environment.
Protect your researchers from external interference, whether from company personnel officers, senior executives or security personnel.
Remember that your job is to create a supportive and protective space within which they can work.
Much of what you do will fall into the category of absorbing the uncertainty of your researchers.
Remember that you are a conductor, not a soloist.
(Rule# 1 again.) The Lab is your performance.
Do not pay too much attention to relevance, deliverables and other concepts beloved of Senior Management.
Remember that creative people are like hearts – they go where they are appreciated. They can be inspired or led, but not managed.
Keep the organisation chart shallow.
Never let the Lab grow beyond the point where you cannot fit everyone comfortably in the same room.
Make your researchers debate with one another regularly.
Let them tear one another’s ideas to pieces.
Ensure frank communication among them. Observe the strengths and weaknesses which emerge in the process.
Be nice to graduate students.
One day they may keep you, even if only as a mascot.
(Moreover, they are a lot of fun!)
Install a world-class coffee machine and provide plenty of free soft drinks.
Buy aeron chairs. Remember that most computer science research is done sitting down.
Institute a toy budget, enabling anyone in the Lab to buy anything costing less than a specified amount on their own authority.
And provide a darkened recovery room for accountants shocked by the discovery of this budget.
Pay attention to what goes on in universities.
Every significant breakthrough in computing in the last four decades has involved both the university and corporate sectors at some point in its evolution.
Remember to initiate and sponsor celebrations, when merited.
When in doubt, ask yourself: what would Roger Needham do in similar circumstances?

The post How to do R&D (especially about AI) first appeared on Alessandro Perilli.

The person who talks the most is the most likely to become the leader

peris — Sun, 31 Mar 2024 20:52:16 +0000

The person who talks the most is the most likely to become the leader.

https://perilli.com/wp-content/uploads/2024/03/Adam-Grant.mp4

The post The person who talks the most is the most likely to become the leader first appeared on Alessandro Perilli.

As a senior executive, what do you really get paid to do?

peris — Fri, 29 Mar 2024 11:38:37 +0000

I need eight hours of sleep. I think better. I have more energy. My mood is better, all these things.

And think about it.

As a senior executive, what do you really get paid to do?

As a senior executive, you get paid to make a small number of high quality decisions. Your job is not to make thousands of decisions every day.

So let’s say that I slept six hours a day. Or let’s go really crazy and say I slept four hours a day.

So now I just got four so-called productive hours back. So if I was going to have, say, 12 hours of productive time during any waking day, now all of a sudden I have 12 plus 4. I have 16 productive hours.

So I have 33% more time to make decisions. So if I was going to make 100 decisions, now I can make 133 decisions.
By the way, if I did that arithmetic wrong, I’m sorry. And so you make 133 decisions.

Is that really worth it if the quality of those decisions might be lower because you’re tired or grouchy or any number of things?

Now, it’s different if it’s a startup company…But Amazon’s not a startup company.

And all of our senior executives operate the same way I do. They work in the future. They live in the future.
None of the people who report to me should really be focused on the current quarter.

I always tell people, sometimes we’ll have a good quarterly conference call or something, and Wall Street will like our quarterly results.

And people will stop me and say, congratulations on your quarter. And I say, thank you. But what I’m really thinking is that quarter was baked three years ago.

Right now, I’m working on a quarter that’s going to reveal itself in 2021 sometime. And that’s what you need to be doing.
You need to be out two or three years in advance.

And then, why do I need to make 100 decisions a day?
If I make three good decisions a day, that’s enough.And they should just be as high quality as I can make them.

Warren Buffett says he’s good if he makes three good decisions a year. And so I really believe that.

The post As a senior executive, what do you really get paid to do? first appeared on Alessandro Perilli.

Failure is massively overrated

peris — Fri, 01 Mar 2024 18:12:17 +0000

Q: How important is failure in business?

A: Well, I think failure is massively overrated.

Most businesses fail for more than one reason.

And so when a business fails, you often don’t learn anything at all because the failure was overdetermined.

You will think it failed for reason number one, but it failed for reasons numbers one through five.

And so the next business you start will fail for reason number two and then for three and so on.

And so I think people actually do not learn very much from failure, and I think it ends up being quite damaging and demoralizing to people in the long run.

My sense is that the death of every business is a tragedy.

It’s not some sort of beautiful aesthetic where there’s a lot of carnage, but that’s how progress happens, and it’s not some sort of educational imperative.

So I think failure is neither a Darwinian nor an educational imperative.

Failure is always simply a tragedy.

The post Failure is massively overrated first appeared on Alessandro Perilli.

Leadership is about having a belief system

peris — Fri, 09 Feb 2024 22:04:26 +0000

That’s leadership. Having a belief system. Knowing what’s driving you to do what you do, not you fitting in to do career enhancement.

The post Leadership is about having a belief system first appeared on Alessandro Perilli.

People write like bureaucrats because of the mistaken belief that it lets them off the hook

peris — Thu, 28 Dec 2023 10:44:09 +0000

My building had an elevator problem. The management company sent everyone this note:

Please be advised we have been experiencing intermittent issues with the elevator. Our priority is your safety, and we are taking immediate action to address the situation.

After a thorough investigation by our electrician, it has been identified that there may be an issue with low voltage affecting the elevator’s performance. The electrician has reported this matter directly to Con Edison and is working collaboratively with them to rectify the situation promptly. Con Edison will not be able to address this issue until sometime next week.

Until this matter is resolved, the elevator will be taken out of service.

We understand that any disruption in elevator service can be inconvenient, and we sincerely apologize for any inconvenience this may cause. Your safety is our top priority, and we assure you that we are taking every necessary step to resolve this matter as quickly as possible.

We appreciate your understanding and cooperation during this time.

I asked ChatGPT to rewrite it for humans. It responded with:

We’re fixing the intermittent elevator issues to ensure your safety.

Our electrician found a potential low voltage problem affecting the elevator. They’ve informed Con Edison and are working together to solve it quickly. However, Con Edison can only start repairs next week.

For safety, we’re shutting down the elevator until it’s fixed.

We apologize for the inconvenience this causes and are working fast to resolve it. Thank you for your patience and cooperation.

I took it one step further:

You have probably noticed that the elevator is broken. The electrician is working with ConEd but they don’t expect it to be fixed until next week.

We know it’s a hassle, and thank you for being patient.

People don’t write like bureaucrats because it’s easy or fun. They do it because of the mistaken belief that it lets them off the hook.

The post People write like bureaucrats because of the mistaken belief that it lets them off the hook first appeared on Alessandro Perilli.

In any given meeting, make sure there’s at least one piece of bad news

peris — Wed, 01 Nov 2023 10:30:00 +0000

One thing I was going to mention. This rule is sort of implicitly implemented at SpaceX and Tesla, but I’m going to be much more explicit about it and also apply at our company, X Corp.

In any given meeting, make sure there’s at least one piece of bad news. You can have more than one piece of bad news.

If you’re in a meeting with me, try to bring up at least one bit of bad news or more than that. My meetings at SpaceX are really good in this regard. They lead with the bad news.

Generally, bad news should be loud, repeated, and immediate. Good news can be said quietly once. So just consider it mandatory to at least have some bit of bad news in any given meeting, and start with that.

Another way to think of it is we’re looking for a feedback loop that is as good as possible, and sometimes it is uncomfortable to bring up bad news.

The post In any given meeting, make sure there’s at least one piece of bad news first appeared on Alessandro Perilli.