Christian Rudder is a mathematician and cofounded OkCupid, that crazy dating site. Apparently he wasn’t good enough at math to work at a hedge fund so he started playing with data his company collected instead.

Good thing for us. His book, Dataclysm, is the most fascinating book I’ve read this year. It is simultaneously easy to read, intensely intelligent, and hilarious.

Dataclysm is not a business book by any means. Yet I found a lot of what he had to say more instructive for entrepreneurs than most business books.

I’ve put together a collection of some of my favorite lessons from the book.

 

“Just Be Yourself”

There’s no excuse for us to be dulled versions of ourselves anymore. Your fear of rejection for being weird should now finally be eclipsed by the fear of being unoriginal. It feels better, sure, we’ve always known that. Data has shown that it also gets us better results.

“In any group of women who are all equally good-looking, the number of messages they get is highly correlated to the variance: from the pageant queens to the most homely women to the people right in between, the individuals who get the most affection will be the polarizing ones. And the effect isn’t small—being highly polarizing will in fact get you about 70 percent more messages. That means variance allows you to effectively jump several “leagues” up in the dating pecking order—for example, a very low-rated woman (20th percentile) with high variance in her votes gets hit on as much as a typical woman in the 70th percentile.

…

Moreover, the men giving out those 1s and 2s are not themselves hitting on the women—people practically never contact someone they’ve rated poorly. It’s that having haters somehow induces everyone else to want you more. People not liking you somehow brings you more attention entirely on its own. And, yes, in his underground castle, Karl Rove smiles knowingly, petting and enormous toad.”

What’s the Aristotle quote?

“To avoid criticism say nothing, do nothing, be nothing.”

It turns out that criticism is a byproduct of doing something worthwhile (this is not to say that criticism signals that you are absolutely doing something right, though). Soylent has enjoyed a huge boost in popularity thanks to it’s controversial nature.

Peter Thiel talks about uniqueness of founders in Zero to One:

Perhaps the founder distribution is, however strangely, an inverted normal distribution. Both tails are extremely fat. Perhaps founders are complex combinations of, e.g., extreme insiders and extreme outsiders at the same time. Our ideological narratives tend to isolate and reinforce just one side. But maybe those narratives don’t work for founders. Maybe the truth about founders comes from both sides. 

He pictures this idea with this distribution:

 

Founders tend to sit at the extremes–both of them.

Nassim Taleb, author of The Black Swan and Antifragile has said that his ideas have spread further because of his detractors. People who fit the “perfect” mold (politicians, women with the “standard” type of beauty) are fragile—one misstep and they’re done. People who embrace their faults (artists, “funky” chicks) are antifragile—they actually benefit from breaking the rules.

Rudder continues:

“You can see a public implementation, as it were, of the OkCupid data in the rarefied world of modeling. The women are all professionally gorgeous—5 out of 5 stars, of course. But even at that high level it’s still about distinguishing yourself through imperfection. Cindy Crawford’s career took off after she stopped covering her mole. Linda Evangelista had the severe hair—you can’t say it made her prettier, but it did make her far more interesting. Kat Upton, at least according to the industry standard, has a few extra pounds.

…

So at the end of it, given that everyone on Earth has some kind of flaw, the real moral here is: be yourself and be brave about it. Certainly trying to fit in, just for its own sake, is counterproductive.”

Our biggest detractors at StartupBros have developed into some of our best relationships.

“An enemy who becomes a friend will stay a friend; a friend turned enemy will never become one.” – Nassim Taleb

A couple years ago I went to SXSW and saw Kevin Smith speak on a panel. He has leveraged the early success of his indie film Clerks into a massively successful media business.

His advice? Hold onto that piece of you that you most want to give up. That is the most valuable thing you own. If you give that up you give away a massive chunk of your potential net worth.

 

You Are Already Connected to the Resources You Need

One of the biggest excuses would-be entrepreneurs make is that they don’t have the resources they need to start their company. They don’t have any connections.

That’s true if you just look through your contact list. Chances are you’re not talking with a venture capitalist on a weekly basis. But maybe someone in your contact list is. If not, you can bet that someone in their contact list is.

“Forty years ago, Stanley Milgram was mailing out parcels (kits with instructions and postage-paid envelopes) to a hundred people in Omaha, working on his “six degrees of separation,” hoping maybe a few dozen adventuresome should would participate. His quaint methods—ingenious though they were—would give him the famous theory, but not quite its proof. In 2011, the unprecedented and overwhelming scale of Facebook allowed us to see that he was indeed right: 99.6 percent of the 721 million accounts at the time were connected by six steps or fewer.”

Now, this is fascinating but not particularly useful to us yet. Reid Hoffman, the cofounder of LinkedIn, explains why three degrees of separation is useful:

“Academically the [six degrees of separation] theory is correct, but when it comes to meeting people who can help you professionally, three degrees of separation is what matters. Three degrees is the magic number because when you’re introduced to a second- or third-degree connection, at least one person personally knows the origin or target person. That’s how trust is preserved.

Suppose you have 40 connections, and assume that each friend has 35 other friends in turn, and each of those friends of friends has 45 unique friends of his own. If you do the math (40 × 35 × 45), that’s 63,000 people you can reach via an introduction. People’s extended networks are frequently larger than they realize, which is why an early tagline at LinkedIn was “Your network is bigger than you think.” So how do you actually reach those connections? Via an introduction from someone you know, who knows the person you want to reach.”

So, this:

This is one of the reasons I avoid networking in the traditional sense. Life in general is better when you build solid relationships. When it comes time for you to meet a particular person, you will inevitably know somebody who knows somebody.

Rudder expands on this idea:

“Today, network theory, working on data sets enabled by technology, shows how people can find new jobs, sort information from nonsense, and even make better movies. When they built their headquarters, Pixar famously put the only bathrooms in the building inside the central atrium to force interdepartmental small talk, knowing that innovations often come from the serendipitous collision of ideas. Theirs was an application of “the strength of weak ties,” a concept postulated in the 1970s with samples in the dozens, but since amplified on new, robust network data: it tells us that it’s the people you don’t know very will in your life who help ideas, especially new ones, spread.”

I saw a study recently that showed that most job are filled via networks… but not from strong ties. Most of the time it’s a friend who knows a guy that’s looking to hire someone like you.

The point?

Just like the data from the first point proved to us that doing what we inherently knew would lead to a better life—being ourselves—was also a better strategy for business, we see here that we should do what we know is right: be a good friend and maintain strong relationships even if they don’t have immediate business benefit.

 

Split Testing Dilemmas

“As Steve Jobs said, “People don’t know what they want until you show it to them.” What he didn’t say is that showing them, especially in tech, means playing a game of Pin the Tail on the Donkey with several million people shouting advice.”

I was listening to a podcast the other day and one of the billionaire founders of AOL said that the best new marketers are closer to mathematicians than what we would normally consider marketers. Why?

Because they can pinpoint what makes you 2% more likely to click something. That 2% increase in clicking can add up to millions of dollars for a large company. (And this is selling them short–we regularly make 20-30% conversion increases based on tests.)

We advocate this “split testing” for everything. We tested 20+ names to get to “StartupBros”, 12+ logos to get to the current one, and 6+ taglines to get to this current one. We used this kind of testing for the Self-Made U book cover. The whole “lean startup” methodology is essentially running tests to validate businesses.

This data is vitally important… but we it’s important to remember it’s place.

“…one of Google’s best designers, the person who in fact built their visual design team, Douglas Bowman, eventually quit because the process had become too microscopic. For one button, the company couldn’t decide between two shades of blue, so they launched all forty-one shades in between to see which performed better. Know thyself: It was etched into a footnote of the Temple of Apollo at Delphi. But like the rest of the best wisdom that time has to offer, it goes right out the window as soon as anyone turns on a computer.”

If all entrepreneurs made decisions based on what people wanted we wouldn’t get very far.

Henry Ford is famous for saying that we’d still have horse-drawn carriages if we only cared about customer feedback.

When you’ve got a vision for something that people can’t understand until it exists then often the best strategy is to ignore all data and build toward your vision no matter what. It’s not the “rational” decision, but it’s the only way the world can move forward.

 

What Actually Matters: Ask Better Questions

Another measurement trap that entrepreneurs fall into is confusing easy to measure metrics for metrics that matter.

Our life is defined more by the quality of questions we ask than the quality of answers we get. I can find a lot of reasonable answer to the question, “Why do I suck so much?” but I’m fairly certain paying attention to that question is a bad idea. The question, “What can I do to help people build their businesses today?” will get me much more interesting, productive places.

“People tend to run wild with those match questions, marking all kinds of stuff as “mandatory,” in essence putting a checklist to the world: I’m looking for a dog-loving, agnostic, nonsmoking liberal who’s never had kids—and who’s good in bed, of course. But very humble questions like Do you like scary movies? and Have you ever traveled alone to another country? have amazing predictive power. If you’re ever stumped on what to ask someone on a first date, try those. In about three-quarters of the long-term couples OkCupid has ever brought together, both people have answered them the same way, either both “yes” or both “no.” People tend to overemphasize the big, splashy things: faith, politics, and certainly looks, but they don’t matter nearly as much as everyone things. Sometimes they don’t matter at all.”

The little things are the big things.

Where you put your attention matters. Ask yourself the meta-question: “Is that a good question?”

The Importance of Branding

There is this refrain that we shouldn’t judge people. The thing is: it’s impossible to not judge people. The only people without preferences are dead. Instead, we should be aware of whether our initial judgments of people make sense.

Know that your brain is making shortcuts and you can protect yourself from terrible misjudgments.

“More attractive people get better jobs. They are also acquitted more often in court, and, failing that, they get lighter sentences. As Robert Sapolsky notes in the Wall Street Journal, two Duke neuropsychologists are working on why: “The medial orbitofrontal cortex of the brain is involved in rating both the beauty of a face and the goodness of a behavior, and the level of activity in that region during one of those tasks predicts the level during the other. In other words, the brain…assumes that cheekbones tell you something about minds and hearts.” On a neurological level, the brain registers that ping of sexual attraction—Ooh, she’s hot—and everything else seems to be splash damage. “

Chinese corporations will hire tall Western white males to go to conventions to represent them not because they are smarter or know more about the business but because their appearance embodies something the firm wants to connect themselves with.

It’s not just the product you sell, it’s the frame you put around it.

A Tiffany’s box matters as much as the metal and rock inside.

I’m listening to Tony Robbin’s new audiobook, Money, and he spent an hour on the introductory chapter. It was freaking annoying… but I also know he knows what he’s doing. He’s building a framework he wants me to see the book through.

Oh, also, for my entire life I’ve looked at Tony Robbins as a joke. He’s that guy that people my parents’ age talked about for a while.

Then I learned that the founder of Salesforce said that he would never of built his company without Tony Robbins. Then I learned that Bill Clinton called him when he needed help and that Paul Tudor Jones pays him a million dollars a year for coaching.

Now I see Tony Robbins in a different framework. His connections to people I respect made me respect him.

What is a person’s first contact with your business?

What assumptions do they make about your business based on that first contact?

If you are selling design work from an ugly website you’re in trouble.

 

Autocomplete Your Mind

Our minds are being shaped by technology in ways that we are totally unaware of. The assumptions we make about the world are being shaped by what we’re exposed to.

The most aware among us are careful when we take in content but it’s near-impossible to appreciate how the options we are presented with change our minds.

Our choices are limited to what we consider choices. What if the best option is invisible?

““Why Do White People Have Thin Lips?,” is the title of a recent research paper that explores the dual purpose the feature serves: it reveals trends, of course, but because of Google’s ubiquity it has the power to set them as well. The paper suggests that autocomplete will eventually perpetuate the stereotypes it should only reflect, and it’s easy to see how: a user types an unrelated question, only to have other people’s prejudices jump in the way. For example, “Why do gay…couples look alike?” was not a stereotype I was aware of until just now. It’s the site acting not as Big Brother but as Older Brother, giving you mental cigarettes.”

The best entrepreneurs can see the options that are invisible to others (maybe because they haven’t invented them yet).

 

Sacrificing the Founder

If you win big and gain public interest you immediately become a potential sacrificial target for the mob. Ask yourself if you really want the attention.

Every person who we choose to worship as a society we will probably collectively attack as well. Consider Warren Buffett, universally admired and seen as someone who’s looking out for the best of the country. He’s giving away all his money and he’s on a campaign to get the world’s billionaire’s to do the same. Yet in the late 1990’ he was losing money and was publicly ridiculed. He was treated with disdain.

Shia Lebeouf got millions of dollars for acting with invisible robots and then put a paper bag over his head.

This happens on a smaller scale as well. Trolls have become famous for shitting on anybody with a viewpoint online.

Peter Thiel dedicates an entire chapter in Zero to One to this. The point is, if you put yourself in a position to be celebrated, don’t be surprised when the cheers turn to jeers. Thiel ties this tendency to our past using sociologist Rene Gerard’s theory of the necessity for sacrifice. Apparently it serves some need we have to feel okay about conflicts in the world. From Blake Master’s notes on Thiel’s Stanford course:

Where warring civilizations didn’t just collapse entirely, the most common resolution involved polarizing and channeling all the hostility into one particular person. Depending on the culture, witches were burned or people had their hearts cut out. The details differed. But the dynamic—a crazed community rallying around the sacrificial scapegoat—was the same. 

Rudder follows a similar line of thought when reflecting on a few people getting torn apart for controversial tweets.

“The stoning metaphor comes up again and again when you read the commentary on episodes like these. It’s no coincidence that it’s the death penalty of choice for the ancient religions: there is no single executioner; the community carries out the punishment. No one can say who struck the fatal blow, because everyone did together. For a burgeoning tribe, fighting to preserve itself and its god in a hostile world, what better prescription could there be? There is strength in collective guilt, and guilt is diffused in the sharing. Extirpate the Other and make yourselves whole again.”

When you build something worthwhile or say something that hits a nerve you will be attacked.

Your friends will envy your success and find reasons to resent you. Your audience will be offended that you changed your mind. People who you never know will despise you.

And, if you weather the storm, maybe they’ll love you again.

 

Attention-Entrepreneurs & Pseudo-Celebrity Us

Rudder goes on to describe the “obverse edge” of the “empowerment” the Internet has provided us.

You can build your company’s reputation easier than ever before—it can also be destroyed faster. This is actually a good thing in my view because it incentivizes us to have integrity. Still, it can be dangerous.

“Writing in the Boston Globe, Jesse Singal was discussing the motivations of traditional person-to-person gossip but might’ve easily been talking about Twitter when he said, “To the extent people do have an agenda in spreading rumors it’s directed more at the people they’re spreading them to, rather than the subject of the rumor.” The Internet gives people a wider audience than ever before.

The second change is that the Internet has also made everyone a public figure. High-status individuals were once chieftains, and then celebrities and presidents, but, the leveling scythe of technology shows its obverse edge. If anyone can become an overnight celebrity, anyone can become an overnight leper. One of my least favorite Internet-evangelist talking points is about technology “empowering” people—inevitably the most empowered of all is the speaker and his investors. But here we find some truth in the cliché—social media empowers you to the extent that it makes you worth tearing down. At the same time, it gives everyone else the tools to do it. Demon Rumor now has a million mouths.”

Politicians and celebrities spend a lot of energy understanding how to manage their branding. They put significant resources into understanding how to use the media to their advantage.

Now we are all responsible for this to some degree and we don’t have the team around us to support us.

Knowing the dangers of building our public images we can better appreciate how we do so and, perhaps, if it’s the best move.

 

How to Measure a Movement

 

Entrepreneurs need to understand the momentum of movements surrounding their businesses. If your business is capitalizing on the fervor of organic potato enthusiasts, you better have a way to measure whether that fervor will last. Here is one indicator to help:

“Using Western movements as his test subjects, MIT’s Peter Gloor has developed software to track the ebb and flow of sentiment in a network of protestors. He calls it Condor, because that’s what projects like this always seem to be called: Condor, spirit-bird of government grants. In any event, the software first establishes a group’s central personalities by looking at its social graph—much like we portrayed a marriage as edges and nodes before, the software lays out the network, then algorithmically determines its most important dots. Next, it looks at what those dots are saying. Condor has found that while the foci of a movement are positive in their word choice, the movement is vibrant. But negative words like “hate,” “not,” “lame,” and “never” signal decline, and when, as The Economist put it, “complaints about idiots in one’s own movement or such infelicities as the theft of beer by a fellow demonstrator” begin to appear, the movement is all but over. Oh, Occupy!”

Nothing keeps people excited forever. This is one way to measure the whether excitement is building or waning for a particular movement.

 

Old School Branding

As marketers, we like to think they’re cutting edge. In some ways we can be. Knowing how to use the newest technologies can certainly give us an edge.

When it comes to basics, though, little has changed in thousands of years.

“Archaeologists have unearthed branded oils and wine in desert tombs seals five thousand years ago. One label found in Egypt reads “finest oil of Tjehenu” beneath the royal emblem and a pictograph of a golden oil press. Compare that to the “choicest hops, rice, and best barley” beneath the “King of Beers” on a can of Budweiser—as far as branding has come, in many ways it will probably always be a Bronze Age science, because the emotions it plays to are eternal.”

Sometimes it’s best to stick with the basics.

 

It’s Hard to Focus on What Actually Matter

Followers on Twitter are more unequally distributed than wealth. That’s kind of wild.

Granted, not all followers are made the same. If you’re selling $10,000 consulting packages you don’t need as much attention to make a good living as a band selling 99 cent songs. Still, the disparity is shocking.

“Anyone hoping to build their brand on the service in the mainstream way—to become the one for the many—should realize that Twitter is very much the world of the One Percent. Its most precious resource, followers, is distributed far more unequally than wealth. The top 1 percent of all accounts has 72 percent of the followers. The top 0.1 percent has just over half. It is much, much harder to get to a million followers than it is to make a million dollars. There were 300,890 people who reported over $1 million in income to the IRS in 2011. Right now there are 2,643 Twitter accounts with 1 million followers, worldwide. Perhaps half are in the United States. Being an American with 1 million Twitter followers is roughly equivalent to being a billionaire. {The 2014 Forbes Billionaires list has 1,645 members.}”

Some things aren’t worth fighting for—and I would put Twitter followers in that category.

Emails from people who want to hear more from you, though? Those I fight for.

Why? We launched our first product to our email list, about 20,000 people at the time. The first week we brought in ~$100,000.

We had about the same amount of Twitter followers. What was the response from them? I don’t know, but it didn’t move the dial.

The point is this: some things are worth measuring and some things aren’t—and people spend a lot of money to distract you from the things that are worth it.

Rudder goes on to describe the problem:

“So this is what the self-as-brand can lead to: chasing empty metrics. I know when I tweet, I’m as interested in who shares it, and how quickly, as I am in whatever I was originally trying to communicate. The few times I’ve posted to Facebook I’ve sat there and refreshed the page to catch the new comments, as though I’d never been on the Internet before. Jenna Wortham from the Times describes this mentality well: “We, the users, the producers, the consumers—all our manic energy, yearning to be noticed, recognized for an important contribution to the conversation—are the problem. It is fueled by our own increasing need for attention, validation, through likes, favorites, responses, interactions. It is a feedback loop that can’t be closed, at least not for now.” I can tell you from the inside: companies design their products to jam that loop open. OkCupid shows you little counts of your messages, your visitors, your possibilities. We know that those numbers keep our users interested, especially when they go up. Without little bits of excitement, a webpage or an app seems dead and people drift off. The broad term for this is “user engagement,” how many people check in every week, every day, every hour. It’s basically how fast they are running in the hamster wheel that’s been set down for them there in cedar filings, and it’s one of the most obsessed-over measures in the industry. Sites show you counts, totals, badges, because they know you’ll come back to see them tick up. Then they can put your increased engagement on a slide to impress their investors.”

Facebook spends billions of dollars creating a product that is as addictive as possible. It’s engineered to keep you coming back—just like fast food.

If you want to know more about how this happens, how to avoid getting hooked, and, most productively, how to create these types of habits in other people, check out Hooked.

 

Data & Humans

Remember the Google designer who quit because he didn’t like how many tests were being run?

Did he maybe overreact? It’s easy to get worried that machines are taking over or that our ability to measure everything will turn us into robots.

This is the same kind of fear the Luddites had. It makes sense it’s hard to remember all the good that technological progress has done for you when you’ve been replaced by a machine. The trick is to work with machines instead of competing against them.

It also seems that no matter how much pressure we are under to maintain the perfect “personal brand” we can’t resist being ridiculous—thank god!

“More recently, Mountain Dew ran a “Dub the Dew” contest, trying to ride the “crowdsourcing” wave to cool new soda name and thinking maybe, if everything went just right and the metrics showed enough traction to get buy-in from the right influencers, they’d earn some brand ambassadors in the blogosphere. Reddit and 4chan got ahold of it, and “Hitler did nothing wrong” led the voting for a while, until at the last minute “Diabeetus” swooped in and the people’s voice was heard: Dub yourself, motherfucker.

The Internet can be a deranged place, but it’s that potential for the unexpected, even the insane, that so often redeems it. I can’t imagine anything worse for You! The Brand! than upvoting Hitler. Plus, what a waste of time, because obviously Mountain Dew isn’t going to print a single unflattering word in the style of its precious and distinctive marks. I find comfort in the silliness, in the frivolity, even in the stupidity. Trolling a soda is something no formula would ever recommend. It’s no industry best practice. And it’s evidence that as much as corporatism might invade our newsfeed, our photo streams, our walls, and even, as some would hope, our very sounds, a small part of us is still beyond reach. That’s what I always want to remember: it’s not numbers that will deny us our humanity; it’s the calculated decision to stop being human.”

The more mechanical the world becomes the more valuable our humanness will be. Our abilities to connect to others, to envision a better future, or to make decisions using our new wealth of data are what will matter in the future.

 

Opportunities in Finding Uses for All this Ridiculous Data

The best books have footnotes that are as interesting as the body of the book.

Let’s use one footnote to explore the uses one particularly interesting technological development. First, the footnote:

*From Nature’s discussion of the [Xbox One]: “It is fitted with a camera that can monitor the heart rate of people sitting in the same room. The sensor is primarily designed for exercise games, allowing players to monitor heart changes during physical activity, but, in principle, the same type of system could monitor and pass on details of physiological responses to TV advertisements, horror movies or even…political broadcasts.”

What!? Your first reaction might be outrage at the invasiveness of this technology. You might be pissed that now the NSA will be watching your heart beat—that now you’re internal bodily functions aren’t even private!

Okay, yeah, it’s an outrage. You have a right to be outraged.

There are a ton of technologies like this being developed that nobody knows how to use productively. If you can figure out how to better use them you win. Peter Thiel says the same about virtual reality—the technology is great, it has a ton of promise, but nobody has figured out how to capitalize on it yet.

The obvious uses for the new Xbox One sensor are mentioned in the above footnote. If you can figure out a new way to design advertisements using this information you will make a bunch of money. If you can help design a more perfect political speech you’ll do well too.

Maybe you can make a meditation app that helps people reach peak states faster by giving them feedback on their heartbeats. Maybe you can make some intimate game for couples. I don’t know—and that’s the point.

We’ve got a ton of data and nobody knows how to use it.

That’s a problem worth working on.

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