In September of 2009, I was living in New York, and angel investing in start ups, when someone offered to sell me some shares in Facebook at $16 billion. I was (weirdly) uniquely positioned to value Facebook, as I had formerly been a Wall Street equity analyst (so I knew how to value companies) and I had also formerly been the CEO of Bolt.com, the largest social network (at 23M monthly uniques) before MySpace. I had actually been the first person to call Zuck and offer to buy Facebook (when he had about 1,000 members). I ended up buying the Facebook shares and writing the first research report on Facebook in March 2010 (my 2014 revenue estimate was off by just 1%).
As I was working on my Facebook report, I headed out to San Francisco to do some due diligence and find some second derivative plays on Facebook’s inexorable rise. I had a unique insight and I was going to capitalize on it. I flew in to Oakland International Airport, and went to pick up my car at Enterprise. I had always been a fan of Enterprise and their ultra-positive staff, a result of the tremendous opportunity for upward mobility at the privately held company. One of their peppy employees brought me to my car and pointed the way our of the parking lot. I was running a little late. So I thanked my Enterprise helper and was on my way. For about 200 feet.
I stopped when my two front tires were flattened by the steel spikes sticking out of the ground just passed the two red “Stop” signs warning that I was going the “wrong way” and that “severe tire damage” would occur (see picture above).
In addition to the tires, I also punctured the oil pan on the undercarriage (which is why there is a wet line on the pavement, in the picture up top, that occurred as I backed up after my tires were punctured).
The total damage to the car came to over $1,000, which I refused to pay, because I felt I was just following the directions of the Enterprise employee. So for the last 6+years, I’ve been blackballed by Enterprise.
I’m not telling this story to highlight that (like all of us) I can sometimes make head-scratching mistakes. But we try and learn from our mistakes. I realized that after I was given the directions I had a belief system. Once I was girded with that belief system, even bright red signs warning me to STOP, had no impact. I was simply not open to the new information. I had an orthodoxy about how I was getting out of the parking.
I’m telling this story because I’ve seen this happen time and again with startups. They come up with an idea that they’e passionate about, and somewhere along the line, the passion becomes an orthodoxy. And orthodoxies, by definition are stupid.
In fact, one of the major advantage that startups have over the incumbents is their ability to be agile. To turn on a dime. Wile the incumbents are big ships that take along time to turn. So don’t embrace orthodoxies like Twitter does. Always be open to new information, to new ideas. Always realize, that everything you know could be wrong. The world if full of black swans. Like the 2007 financial meltdown, that started based on the orthodoxy that, as highlighted in this great opening scene from The Big Short, “Who the hell doesn’t pay their mortgage”
If I had remembered not to have orthodoxies, I’d still be able to rent cars from Enterprise. In startups, the repercussions from orthodoxies can be far more dire.
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