Meet Ari Gold

Ages and roles and the Marine Corps

As has been the theme for this Spring, I've been thinking about what is wrong with big companies. Another aspect that came to mind is the age old dynamic between young and old people: young people think older people are complete fossils and the old people think the younger people are obnoxiously arrogant and don't respect age. But the thing is that the last couple of generations of work force are part of a very fundamental shift in technology, which can be shortly characterized as the first time in history when technology life cycles have become shorter than the working lives of people. What this in practice means that your technical skills will be significantly outdated well before you ever reach retirement.

In practice this is quite obvious if you look at technological evolution. Agricultural technology took a lot longer to become widespread than the printing press, which in turn had a longer life cycle than the steam engine, which in turn was outpaced by radio technology, and so on leading up to the niches of today's IT world. To put it blatantly, I'm twentysomething and I've already sort of fallen out of the cutting edge of technological evolution that I once was very much into. In the current world of the world wide webs, cycles are measured in years, at best, and in months at worst. So while all of the above might not necessarily be exactly accurate enough to be an academic thesis, the trend is still clear.

This in fact led me to think about how different people create value. As an analogy I started thinking about a friend of mine who plays floorball very actively and is apparently quite good at it. The situation that he is encountering is that now that he's about 30, he can no longer keep up with the young guys. So instead he has to start playing with more intelligence. I also get the impression that he also brings a lot of spirit into the team and is in fact very crucial in fostering the team spirit and acting as an "older brother". So in brief, the value add that he brings is different from the value add that the 20-year-old guy brings to the team.

Related to this, I was recently skimming over the US Marine Corp's document named MCDP 1: Warfighting. It is a very interesting read and one of the things that I think fits here nicely is the concept of different levels of war, which range from strategic to operational to tactical. In brief, the strategic level is focused on the question of how to win wars. The operational level in turn focuses on how to win campaigns, while the tactical level addresses how to win battles. So if we apply this type of approach in a very raw fashion to the floorball analogy and ages, we might get something like the following situation: the 20-year-old guy operates on the tactical level, i.e. how to win over the ball and score goals. The 30-year-old guy operates on the operational level and works on keeping the spirits up, the team functioning during the match and is ultimately looking at how to win games. Then, the coach, who I guess can be of various ages but for the sake of discussion is now 40, then operates on the strategic level and is focused on how to win the whole season.

So it's clear that the value add that each of these guys brings to the table is fundamentally different and is based on each one's intrinsic capabilities, which are also very much tied to age. The 20-year-old guy is often very self-centered and focuses on shorter time horizons (take it from someone who is still twentysomething... :). The 30-year-old is getting into the family-fostering mode, to be provocative. While the 40-year-old is slowly starting to realize that if he wants to leave behind any type of legacy, then now is the time to start doing so or else it's not going to happen. But these guys can't generally operate very efficiently on each others' levels as they don't have the capabilities for that. And there's nothing wrong with that, because everyone is still needed.

Now, how does this in any way relate to big companies? Well, in big companies it's not so different: recent graduates are very keen on technology and represent the running power of the athlete and are able to do the heavy lifting. Slightly older guys in turn have slightly more perspective and experience and while no longer representing the cutting edge of technology, they might still be able to contribute by being efficient in managing the younger guys and pointing them in the right direction while being able to support and serve their subordinates in their daily jobs. And eventually we should ideally have people who have seen how the world works, have become the statesmanlike leaders that the world needs and are still able to stand solidly enough to keep things sane (we younger guys tend to like to run very fast and if we're not careful, we often just run for the sake of running and occasionally in the wrong direction). But again, to overly simplify the situation, these roles and the types of people may have difficulty operating on the wrong levels.

The problem, then, is when this nice and neat theoretical approach doesn't work out in practice. You have the middle-aged guy who is painfully outdated technologically trying to keep up in the role that's in fact meant for the twentysomethings. Or when a recent graduate is thrown into the difficult task of making longer-term strategic decisions without the capabilities and the experience of truly understanding or appreciating the complexity and trickiness of the task at hand. And this, I argue, is one large problem in large incumbent companies. How should one solve this, then? That's a completely different question and hopefully the statesmanlike leaders are able to solve that question. Because I sure can't...

Why some people play with sharp knives...

By talking to a couple of people who have practiced Krav Maga for quite a while I heard of an interesting trend: at some point people tend to start practicing with sharp, real knives. I talked about this with other people and most of them held the view that it is incredibly stupid to do something like that as the probability of something bad happening in the form of an unintentional accident increases dramatically. However, reading a paper by Chet Richards had an interesting quote from Musashi's The Book of Five Rings, which actually sheds some light on this:

Most warriors only perform tricks … In order to understand life and death, you must actually be in a situation where the possibility of death exists ... Through constant practice, you become free of your own ideas of what and how things should work

It actually makes sense...

On gifts

The culture of gift giving is a very fascinating thing: while the fundamental ideas are good, I keep getting a strong feeling that nowadays it is dominated by selfishness and self-entitlement: people are no longer pleasantly surprised by gifts but instead they implicitly expect and demand them. Nowhere is this more evident than in weddings, where I guess traditionally the concept was to help the new couple create their new home. But times change and these days couples that are getting married often already have been living together for a while and thus the need for cutlery and coffee machines should have been satisfied. But lo and behold, these days we have interactive gift lists with detailed descriptions and specifications for what is expected and acceptable to the couple. Or if you don't find anything from the list that you want to give, don't just wing it but instead give cold hard cash...

Somehow these types of things annoy me incredibly: I give gifts if I feel like giving them. If someone is demanding something from me, I don't typically give it to them merely on the grounds of them demanding it. And when friendships and relationships are in question, demanding material is in my opinion very much questionable.

Now, another funny aspect of the dominant demand-culture is that if you actually look at only the cash flow, it's a silly cycle of people sending money between themselves. While thinking about this topic, I browsed over some blogs and comments where people were giving out all types of guidelines about how much cash they typically give if they attend the wedding and how much if they don't attend. Then there are the people who motivate the discussion by noting that they do demand gifts and money because they have given gifts and money, which just results in this cycle. Money is good as you can shuffle it back and forth, but for some odd reason these same people tend to dislike it if they have given you a gift and you give it back to them when they have a celebration.

What I typically do during Christmas, for instance, is that if A gives me chocolate (C1) and B gives me chocolate (C2), I just act as a proxy and give A the C2 chocolate and B the C1 chocolate. If I get chocolate from more people, then I just hand them out in a random fashion back to the people. That way everyone is happy and I, not liking huge amounts of chocolate, don't get stuck with any useless stuff.

At this point I guess I should just say it out loud very clearly: I do not want or expect presents. If you must give me something, please donate to some good cause and tell me about it. It's a lot more useful than filling my already small apartment with all sorts of crap that I don't need. Alternatively if you don't want to help charitable foundations and still want to give me something as a present, please call me and I'll tell what equities you can purchase and transfer under my name to complement my existing investment portfolio.

Mission statements

Zephyr Holdings aims to build and consolidate leadership positions in its chosen markets, forging profitable growth opportunities by developing strong relationships between internal and external business units and coordinating a strategic, consolidated approach to achieve maximum returns for its stakeholders.

Well, maybe not. But visions and missions are in fact important. And doing the properly is bloody difficult... (And the above is from Max Barry's brilliant book, Company.)

Small cap, medium cap, large cap

If big company executives aren't necessarily a good fit for small companies and if small companies are the ones driving the change and the big companies need to change, does the big company executive have any role in a changing organization?

Of course, but Ben Horowitz has an interesting blog post about the mismatches between big company execs and small companies. I was just thinking a couple of steps ahead and wondering if the big companies should bring in small company executives to drive the change. A provocative thought...

Eating out

In the past half a decade I can trace a very clear trend in regards to eating out. During my time as a freshman eating out was something that you did out of necessity: I am incredibly bad at cooking and I had to get food somewhere. It had to be cheap and there had to be lots of it. The typical student strategy, which more often than not resulted in government subsidized student meals twice a day, once at 10.30 when the restaurants opened and another time at 18:00 just before the restaurants closed. In retrospect the food was horrible but I survived.

Eventually your income starts rising and quality of life improving. As a proxy of this phenomenon someone once suggested the size of your stomach: you must be wealthy if you can afford to be fat. That may have worked in the era when only wealthy people could avoid manual labor and grow fat off of their capital income. But, for me the increases in income resulted in middle-of-the-road dining experiences. Chain restaurants. Bad service, mediocre food, and extraordinarily astronomical prices compared to what you got. So in a way this was not my finest hour, but something necessary to learn a bit more about how the world works: there are too many fools that can be ripped off by restaurant chains that play the volume game.

As is typical, after the dark ages people start getting wise again. And in my case my renaissance began when a couple of lawyers provided dinner at Chez Dom. I got interested and checked out the prices, and lo and behold, they were not even that bad. Nowadays a two Michelin star restaurant will serve you lunch for 30 euros: amuse-bouche and three courses. Relatively speaking a fair bit more expensive than your typical 10 euro lunch, but in absolute terms not that horrible. And this was the crème de la crème of Helsinki, mind you.

So, since then I've changed my strategy in regards to eating out. If I'm just hungry, I typically keep a mental list of the places with the cheapest prices for the most amount of food with the boundary condition of a certain threshold in regard to the quality of food (the "no frills" strategy, so to say). And then I have a separate list of places where I will eat if I eat out with other people. The common aspect for those places is that none of them is a chain restaurant, none of them is in the absolute high-end category, but just below (the best is if you are able to find a restaurant that is destined to get their star, but hasn't gotten it yet, so the price point is still slightly lower but the food and service is fantastic). And interestingly enough more often than not the prices are in fact only marginally higher than with chain restaurants and the other places that rip off ignorant middle classes.

And as a result, I can finally say that I am eating better than ever and at a fraction of the cost that I thought this type of life style would require. Unfortunately many people don't see the above dynamic about how middle-of-the-road restaurants rip you off and how much you could better your experience with a marginal increase to the cost. This ignorance also shows up in other aspects of certain people from this group, namely the inability to handle simple processes like reserving tables, arranging dinners, and so on. Fortunately we all have the possibility of choosing who we eat out with and who we engage with. Thank god.