Two Biographies
My posting schedule has been delayed mostly because I am trying to settle into a new routine now that I am back in Singapore. I hope posts will be more consistent going forward. Always eager to hear from readers, if any.
I have read two biographies recently, Cable Cowboy and Chaos Monkeys. I tried watching the recently released Netflix documentary on Bill Gates with L and T, but it was quite obvious from the first episode that there is going to be more noise than signal, so I gave up.
I normally avoid biographies for the usual reasons: narrative fallacy, survivorship bias, history being written by the victors, etc. When watching the Netflix documentary, I am reminded of the following excerpt from Taleb’s Fooled By Randomness:
[Assuming the extreme scenario where a fund manager’s performance is exclusively driven by luck, drawing from a large enough set of fund managers, there will be one person who consistently outperforms due to pure luck.] Meanwhile if we throw one of these successful traders into the real world we would get very interesting and helpful comments on his remarkable style, his incisive mind, and the influences that helped him achieve such success. Some analysts may attribute his achievement to precise elements among his childhood experiences. His biographer will dwell on the wonderful role models provided by his parents; we would be supplied with black-and-white pictures in the middle of the book of a great mind in the making.
But a huge advantage of biographies, compared to denser, argumentative texts trying to “Prove a Point”, is that they are mostly a breeze to read. Given how human cognition works, we probably learn much more effectively from stories and anecdotes, compared to precise but abstract statements.
Between the two books, I would generally recommend Chaos Monkeys over Cable Cowboy.
Cable Cowboy, a bio on John Malone written by a WSJ journalist, is a recommendation by G from a long time ago. As is usually the case with people with biographies, John Malone is a very successful person who made his billions in cable. As a result of the above-mentioned reservations, I kept putting it off and only got around to reading it now. Having finished the book, I don’t think my initial skepticism was altogether unfounded. The alert reader would quickly realize that many details are embellishments and thus unnecessary for understanding the overall arc (or, conversely, not sufficiently granular to truly understand the choices confronting the protagonist).
Chaos Monkeys is an autobiography and the subject/author, Antonio García Martínez, (at the time of writing) cannot be said to be as successful as the typical subject of biographical attention. He is a physics PhD dropout who left to work at Goldman Sachs and subsequently Silicon Valley (first at a mid-stage startup and subsequently going through the Y-Combinator grind as a founder before getting acqui-hired). The author’s searing introspection, entertaining (if a bit pretentious) writing style and undying idealism wrapped up in thick layers of cynicism combine to make this an interesting read.
Brief Thoughts on Cable Cowboy
Cable Cowboy tells the interesting history of cable in the US, from its humble beginnings (serving rural customers neglected by the national broadcast networks), to becoming a force of its own (creating its own programming and using satellite etc.) and subsequently serving as the underlying backbone of the Internet age (because only its pipes were ‘fat’ enough to satisfy American’s voracious appetite for data). Each of these transitions were fueled by technological changes which in turn led to business model innovations, both predicted and unpredicted. Does anyone still remember the so-called ‘information superhighway’?[1] Cable was lucky to be able to benefit from these serendipitous developments and the buccaneering companies were simultaneously cutthroat and clubby, as they stared down rivals from adjacent industries (broadcast TV, Microsoft and so on) and locked horns with regulators. Their pursuit of monopoly profits led to the creation of basic infrastructure for the American information consumer.
The author does a good job of highlighting this tension. Consumers and local governments are naturally resentful of cable companies, who promise the world and end up providing shitty customer service, as you would expect in a natural monopoly. At the same time, shareholders who put up their own money for a risky endeavor do deserve a cut of the value they ultimately created.[2]
Some of my takeaways from:
Skin in the Game
Malone gave up a cushy job to head up Warner Communications’ cable TV operations to take a pay cut to helm TCI, a struggling cable company that was constantly on the verge of bankruptcy. He did not simply join TCI as a manager; he took up personal loans to purchase TCI equity and, in the first few years, became technically insolvent. (Fortunately, a gentleman’s agreement with the bank to not call in the loan saved him from financial ruin.) These risks taken in the early years tend to be overlooked in hindsight after success is achieved and almost seems preordained.[3]
Malone also allowed executives to privately own cable systems that, for regulatory or financial reasons, TCI could not own directly. More than strategic consideration and a compensatory scheme, he reasoned, "Guys will understand a cable system a hell of a lot better if they have skin in the game."
Difficulty of Succession
After Malone put TCI onto a firm financial footing, the next time the company ran into significant problems was when his appointed successor, Brendan Clouston, took over the actual day-to-day operations. I think the book did not sufficiently reconstruct the business environment to fully judge why Clouston’s strategy failed, but it was interesting to note that faith in credentials (Clouston had been to business school when Malone hadn't) and a lack of skin in the game (Clouston hired an army of consultants from outside industries, indeed “the best consultants money could buy”) seemed to have played a role. Malone ultimately took back the reins, fired Clouston and appointed a different successor. (I recently came across this short clip, which seems relevant here.)
Fox, not Hedgehog
The author also noted Malone was someone who held conflicting theories in his mind and even spoke about these theories to his rivals. The ability to give ideas contrary to one’s worldview fair consideration is still severely underrated, despite our collective lip service. Relatedly, it is also interesting that in the book, Malone’s success seemed to stem from opportunistically seizing openings that contingently arose. In contrast, his vision of ‘interactive TV’ mostly failed and caused greatest reduction of personal wealth. It's tough to make predictions, especially about the future.
Brief Thoughts on Chaos Monkeys
In addition to what was written above, Antonio García Martínez is also on Twitter providing somewhat interesting and irreverent commentary. It also appears he is undertaking a subsequent ad-tech venture. So AGM’s life story is still ongoing.
I will not try to condense my takeaways as I have done with Cable Cowboy, but I will say that I personally found the book very inspiring as I contemplate my own life choices.
It covers things like:
Theory of startups (“People go into startups thinking that the technical problems are the challenges. In practice, the technical stuff is easy, unless you’re incompetent or really at the hairy edge of human knowledge—for example, putting a man on Mars. No, every real problem in startups is a people problem, and as such they’re the hardest to solve, as they often don’t have a real solution, much less a ready software fix. Startups are experiments in group psychology. As CEO, you’re both the therapist leader, and the patient most in need of therapy.”)
Family formation (“Long story short, you wanted to tie your genetic wagon to the bucking horse of her bloodline”)
Organization theory (“As I observed more than once at Facebook, and as I imagine is the case in all organizations from business to government, high-level decisions that affected thousands of people and billions in revenue would be made on gut feel, the residue of whatever historical politics were in play, and the ability to cater persuasive messages to people either busy, impatient, or uninterested (or all three)”)
Stoicism (“There’s a Jewish folktale about a biblical king who dispatches one of his wise men to craft him a mantra that would both humble the proud and console the unfortunate. After searching in the market, where our wise man consults a local jeweler, he returns to the king with an engraved ring. The king holds the ring close and reads: THIS TOO SHALL PASS. So remember that, when lamenting your troubles, contemplating the perceived triumphs of peers and competitors, or rejoicing in that rare entrepreneurial triumph. It will all soon pass, and much faster than you think.”)
Uncanny parallels between capitalism and socialism (or is it really just human nature?)
Trade-offs/Self-actualization/Whatever this is:
To be someone or to do something, which would I choose?
A man occasionally reaches a fork in life’s path. One road leads to doing something, to making an impact on his organization and his world. To being true to his values and vision, and standing with the other men who’ve helped build that vision. He will have to trust himself when all men doubt him, and as a reward, he will have the scorn of his professional circle heaped on his head. He will not be favored by his superiors, nor win the polite praise of his conformist peers.
But maybe, just maybe, he has the chance to be right, and create something of lasting value that will transcend the consensus mediocrity inherent in any organization, even supposedly disruptive ones.
The other road leads to being someone. He will receive the plum products, the facile praise afforded to the organization man who checks off the canonical list of petty virtues that define moral worth in his world. He will receive the applause of his peers, though it will be striking how rarely that traffic in official praise leads to actual products anybody remembers, much less advances the overall cause of the organization.
And these are just the things I remember offhand or bothered to write down.
Two interesting side notes:
First, coincidentally, as I started read the book, I found out that the Chinese translation of the book was recently released. I will probably re-read this book again in Chinese at some point in the future .
Second, AGM calls Taleb an intellectual poseur but, as he notes in two footnotes, nonetheless finds himself quoting his concepts. When people I find insightful have substantive disagreements, this is usually a chance to test my own judgment. But I can’t quite tell if it’s simply clashing male egos at work here.
[1] Relatedly, Microsoft created Xbox because they were afraid Sony Playstation would become the primary channel for consumers to access the Internet. Funny we don’t really associate either with the Internet very much today!
[2] As an aside, this is in sharp contrast to Chinese telecommunications provider, which are built by state-owned enterprises and subsidized both directly and indirectly by the state, who naturally has a say in their daily operations. In terms of developmental economics, this probably works during a country’s catch-up phase, but probably is less effective when approaching the production possibility frontier. Whether the Chinese political economy can make this transition successfully will determine how rich China ends up becoming.
[3] The book also implied that John Malone and Bob Magness performed shady (potentially illegal?) financial shenanigans to get around covenant restrictions on their loans in these difficult days. Of course, success forgives all sins.