Backcasting to build the future | Mike Maples Jr. on The Paradox Podcast

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Key Takeaways

  • During the pandemic, there’s been a lot of inflection points in belief. People believe in telemedicine, remote work, and eCommerce now more than ever before
    • “Part of these belief inflections happen because of the elimination of the paradox of choice. If you have no choice but to work remote, you figure out how to do it.” Mike Maples Jr. 
  • What’s the secret to becoming a great venture capitalist?
    • “I think it gets lucky in the first five years” – Mike Maples Jr.
      • Mike’s first investment was Twitter and most investors on the Midas list made an incredibly lucky first investment
  • A college degree is more of a signal than proof of skill
    • “Really what a college degree is, is it’s a signal. And companies have decided that they respect that signal.” Mike Maples Jr.
  • Instead of thinking of a startup or market when trying to start a company, think about inflections that you can become obsessed with. Then imagine multiple different futures that would be possible with that inflection and work your way backward to the present.
    • That’s backcasting: Using insight to predict multiple futures and then working backward to the present  
      • “The asymmetric upside of being right about the bet is where you have an awesomely powerful startup” – Mike Maples Jr.
      • More on Backcasting from Mike
  • Great entrepreneurs are able to resolve the impedance mismatch between people who live in the future and people who live in the present
    •  “What an entrepreneur really is, is a time traveler who based on inflections, identifies a valuable non-consensus future. Then comes back to the present and starts a movement, and recruits early people to join their movement.” – Mike Maples Jr. 
  • “The future is not something we try to predict, it’s something we create” – Mike Maples Jr.

Intro

  •  Mike Maples (@m2jr) is a partner at Floodgate and host of the Starting Greatness podcast (check out the Podcast Notes)
  • Mike is widely considered as one of the best technology investors of all time (he’s an early investor of Twitter, Cruise Automation, Chegg, Lyft, Okta, and Twitch)
  • Host: Kyle Tibbitts (@KyleTibbitts)

Books Mentioned

The Importance of Inflection Points

  • Mike tries to invest in companies at inflection points where there’s a breakthrough in technology, adoption, regulation, or another aspect of the business
    • Mike invested in Lyft because he saw that GPS technology was getting better and more people were using smartphones 
      • E.g: Smartphones went from 10% adoption to 50% in a few years
  • Major Inflection Points During The Pandemic: Telemedicine, remote work, and eCommerce now more than ever before
    • The pandemic accelerated 10 years of eCommerce growth in just a few months
    • “Part of these belief inflections happen because of the elimination of the paradox of choice. If you have no choice but to work remote, you figure out how to do it.” Mike Maples Jr.
    • Homeschooling: Before the pandemic, it was thought of as a wacky and kind of religious form of education. During the pandemic, homeschooling became the norm.
      • Lots of room for improvement in childhood education:
        • “Just like healthcare, K through 12 education in the US, is fundamentally broken in many ways” – Mike Maples Jr.

Lessons From His Father

  • When Mike was a kid, he entered a fishing competition with his father. Instead of constantly moving from one to spot in the lake to another, Mike tried to identify the best location and then spent the whole day there. He ended up catching a huge fish and winning the competition. 
  • Similarly, when it comes to investing in startups, you want to stay focused and not constantly chase the new shiny thing:
    • “Most of the people I’ve seen do really well are more about doing less but better and focused” Mike Maples Jr.
      • “The advantage of focus compound over time”
  • Think Bigger: When Mike was building a videogame software company, he told his father that maybe one day it would get bought by Disney. Mike’s father responded by saying he had the wrong end goal. He should be thinking about his company buying Disney. 
    • “Any strategy you have should be a strategy to lead, always” – Mike Maples Jr.
  • One of his father’s best pieces of advice: Know what is the ship date of your decision
    • Do you need to make a decision right now or do you have time to think about your options?

Entering The VC World

  • Mike didn’t know he wanted to be a venture capitalist, but after going to California and seeing all the interesting companies riding the Web 2.0 wave, he knew something special was happening
  • What’s one big difference between being a founder and an investor?
    • As an investor, you have less stress but it’s also less fun. Being a founder is like going on a crazy rollercoaster. The highs are super fun but the lows are terrible.
  • What’s the secret to becoming a great venture capitalist?
    • “I think it gets lucky in the first five years” – Mike Maples Jr.
      • Mike’s first investment was Twitter and most investors on the Midas list made an incredibly lucky first investment

College Degrees Are Outdated

  • A college degree is more of a signal than proof of skill
    • “Really what a college degree is, is it’s a signal. And companies have decided that they respect that signal.” Mike Maples Jr.
      • Mike is fascinated by the company Crash which lets people show their personality and skills in a modern way

Backcasting 101 

  • Instead of thinking of a startup or market when trying to start a company, think about inflections that you can become obsessed with. Then imagine multiple different futures that would be possible with that inflection and work your way backward to the present.
    • That’s backcasting: Using insight to predict multiple futures and then working backward to the present  
      • “The asymmetric upside of being right about the bet is where you have an awesomely powerful startup” – Mike Maples Jr.
  • You need to find insights that fit your passion and obsession
    • Elon Musk realized that the most expensive part of rockets was that they could only be used once. If he could make them reusable, it would be a huge business. And thus, SpaceX was born.
  • “When I get pitched by founders, the first thing I always ask is what inflections are you following?” – Mike Maples Jr.

Best Entrepreneurs Are Time Travelers 

  • Great entrepreneurs are able to resolve the impedance mismatch between people who live in the future and people who live in the present
    •  “What an entrepreneur really is, is a time traveler who based on inflections, identifies a valuable nonconsensus future. Then comes back to the present and starts a movement, and recruits early people to join their movement.” – Mike Maples Jr.
      • Steve Jobs walked into Xerox Park and could see an obvious future where everyone had their own computer. He then went back to the present and made that happen.
  • Polarization of a startup is usually a good signal because it means the idea isn’t obvious to everyone.
  • Usually, the more people that like your idea, the less innovative or revolutionary the idea. 
    • “A great insight breaks free from conventional wisdom and mundane ideas” – Mike Maples Jr.
  • The 3 phases to the breakthrough sequence:
    • Insight phase: Backcasting and thinking like a time traveler to find insights
    • Product phase: Doing customer development to go from 0 to 1
    • Growth phase: Growing from 1 to X

Additional Notes

  • “The future is not something we try to predict, it’s something we create” – Mike Maples Jr.
    • “Great entrepreneurs design the future and tell us how to think about it” 
      • Steve Jobs created the smartphone market. Elon Musk created the electric car market.
  • “Our irresponsible stewardship of our money has contributed to wealth inequality way more than people realize” – Mike Maples Jr.
  • It’s one thing to criticize and penalize tech companies for their wrongdoings, it’s another for the government to try to control or break tech companies:
    • “Turning big tech into the next railroad industry would be a tragedy” – Mike Maples Jr.
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Notes By Alex Wiec

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