In the summer of 2009, I had the distinct honor of working with artificial intelligence pioneer David Cope.
A Professor Emeritus at the University of California, Santa Cruz, Cope has spent over four decades researching a very specific question in artificial intelligence. For successful individuals who find a niche, and stick to it, David Cope may be the proverbial picture in the dictionary.
Here’s the question Dave’s been asking for the last 40 years: “Can a computer be programmed to make music?”
It’s a simple question, with broad implications. Can a computer think? Can it feel? Can it emote? Can it fool us into thinking it is human? Can it connect with us? Cope believes the answer to these questions will unlock a brave new world of artificial intelligence. After all, what is more human than a song?
Armed with his emacs and a Lisp interpreter, in the 1960’s he began to write the answer using code.
Admitting that life is algorithmic
Reading one of Cope’s books, or attending his lecture, the first chapter always discusses the ubiquity of algorithms in life. It’s the keystone in his archway, the lynchpin in his wheel: in Cope’s world, man, thought, and creativity are all algorithmic. There is no hand of God reaching through the clouds with divine inspiration. There is no ineffable or intangible ingredient in genius. There is no magic. There are inputs and outputs. Cause and effect. Algorithms determine the rest.
I admit, it took me several times reading and watching to understand why this disclaimer always proceeded his research. But then, it became clear: algorithmic music composition would be impossible unless you adopt a belief that life itself is entirely algorithmic.
Many are left uneasy with this thought. I was, as well.
But then Dave showed me this video. It’s a song called The World Anthem. The music, and lyrics, were created by his algorithm.
Saying that music is algorithmic does not imply that the algorithm is simple. These algorithms are vast, complicated, multifaceted. But they do exist; and, for the inquisitive researcher, they are documentable. Music is algorithmic.
Entrepreneurship is algorithmic
How I saw startups took on new direction after meeting David Cope. In a decade-long study of entrepreneurship, Cope’s omni-algorithmic worldview has become the centerpiece of my belief system.
Will a social networking app survive its competitor? Can a new hair care product get enough distribution to break even? How long can a company last on outside financing if they have no revenue? Will this product be a home run?
These questions have definitive answers because entrepreneurship is algorithmic.
Now, that’s not nearly as revolutionary as it might sound. Millions of books, seminars, and tutorials sold every year prescribe methods, processes, and rules for the entrepreneur to follow. A best-selling hit, The Lean Startup, is one such algorithm of the entrepreneurial process. Algorithms for the entrepreneur already surround us.
For the scientific entrepreneur, algorithms are the answer.
The entrepreneur IS GOVERNED BY AN ALGORITHM
Then, I had a revelation: the entrepreneur himself is governed by an algorithm. His process, his traits, his attributes, his behaviors, and his beliefs are all parameters in a delicate formula. A formula that, if measured correctly, produces billions in value; or one that, just as swiftly, results in a Uhaul truck headed towards his parent’s garage.
Over the last ten years, a careful study of entrepreneurs revealed three “parameters” that predict success: what he is doing, how he is doing it, and his mental state. Should one take the interest to reverse engineer these three parameters, he will find nearly all successful founders excelled in them.
Parameter 1: What the entrepreneur DOES
What the entrepreneur does refers to the opportunities he undertakes. Successful entrepreneurs engage in a new startup carefully, deliberately, and rarely. The old proverb, “Choose your battles carefully,” has never been more germane.
A belief has infiltrated the startup community – “an idea is worth a dime” – and the algorithmic entrepreneur despises it. He responds by quoting Sun Tzu: “The battle is won before the first foot steps on the battlefield.” Once the plan is set in motion, the entrepreneur’s algorithm has started running and the die is cast. Therefore, the business idea – what the entrepreneur is doing – will determine the future.
The algorithmic entrepreneur may keep a checklist of criteria that must be satisfied before any venture is undertaken:
- Does the company have an IP advantage?
- Is there a way to prevent, or delay, competition?
- Will developing the venture promote an efficient use of assets?
- Is there a large enough market to justify the risk?
If the venture is not going to lead to a definite victory, the algorithmic entrepreneur declines. Instead, the successful founder waits for the venture that meets the entirety of his checklist. He then acts swiftly.
(See Sequoia Capital’s algorithm for a comprehensive approach).
Parameter 2: How the entrepreneur DOES IT
When I was growing up in the woody suburbs of Philadelphia, my family hired an au pair to watch after me. I was, as my mother will surely tell you, a “handful.” Let me tell you, that was a polite way of putting it!
The au pair’s name was Helen. Helen was a kind, old woman. She was an ex-slave from the South. She wore aprons, and cooked cauliflower – two things you didn’t see often in the North – and she lived in a world of old traditions.
Around the age of five, Helen taught me one of the first lessons of my life: “It’s not just what you do, it’s how you do it.” With respect to Helen, who to my sadness passed away a few years ago, I discovered algorithmic entrepreneurship follows the same rule:
- What does the entrepreneur do first: write a business plan, or test his product in the marketplace?
- When an employee proposes a major shift in the direction of the company, does he listen with an open mind or dismiss it?
- If a contractor delivers work below the high standards he has set, does he fire the contractor or sit down to talk with the team?
- In meetings with his project manager, does the entrepreneur demand major releases or small, measurable steps?
An ideal business opportunity (Parameter 1) might be squandered depending on how the entrepreneur manages it.
Parameter 3: The entrepreneur’s mental state
As an entrepreneur, the buck stops with you. Your decisions, your ethics, and even your clarity of thought will affect those who depend on your leadership.
It is taught in the ancient Hindu epic the Gita that a warrior must deal with his mind before entering battle. Entrepreneurs who have not attended to their personal mental state will, sadly, be doomed for failure before the sword is picked up. A penchant for stubbornness, an immaturity that leads to temper tantrums, a poor stress coping mechanism, or a insecurity about relationships are waves that will ripple throughout an entire organization. They can, and will, destroy a company, from the inside out.
In addition to attending to his diagnosable faults, the entrepreneur must commit to positive psychology as well. He must obtain and defend an indestructible sense of dedication and determination for the road ahead. It is not enough to be free of disorders; the entrepreneur must be mental strong, fit, and ready.
The entrepreneur’s education, sophistication, and intelligence contribute to his mental preparedness as well. His IQ is inextricably woven into his mental state, and his decision-making process.
The investor’s trifecta
Investors are wise to evaluate entrepreneurs on these three inputs. If an entrepreneur scores favorably on all three components, he is what Broadway producers call a “triple threat:” an superb actor, singer, and dancer. This is the entrepreneur who needs, and deserves, capital partners. His algorithm is ready for showtime.
The entrepreneur’s perspective
An algorithmic approach is the rational, methodical way to build a successful company. Entrepreneurs around the world are using their creative spirit to assess which parameters need work. And, from there, they take a targeted approach to learning and growth.
Along the way, instead of building a company, I’m here today to urge you to build your algorithm. Find a way to systematize. Eliminate the variables. Hone in on successful best practices. Beat the game.
In conclusion, the ALGORITHMIC ENTREPRENEUR IS THE serial entrepreneur
When an entrepreneurial algorithm excels, a person creates not just one billion-dollar company, but a family of billion-dollar companies. He is able to teach others how to build companies of similar magnitude.
At the highest level, the entrepreneur must attend to three parameters: what he is doing, how he is doing it, and his mental state. Below these, all other topics and strategies are subordinate.
Follow this algorithm. Focus on these three parameters of improvement. Invest yourself in them.