Levered Work, Balanced Sheets

Just meet me at Buck’s, and we can talk about it,” he told me.

I did not know where, or what that was.

I’d never been to Woodside, California. And, I had no idea what a rookie portfolio manager from Texas was supposed to wear for my first trip into the heart of Silicon Valley, on that day in 1999.

In hindsight, I see the wink and smile from the Market Gods…okay maybe a full belly-laugh at me, when my host walks in dressed like a redneck farmer. His worn-out denim shirt, over a pair of old jeans was disruptively comfortable to sit with. The founder of a wildly successful semiconductor company was one of the easiest people to ‘talk about it’ with, that I’ve ever come across, in the two decades since.

I was sitting smack dab in the middle of the technology bubble. For all the comparisons being made today, with what it must have felt like in 1999, I will share my opinion from the tip of the spatula that day, that it's different, very different (but it always is). Comparisons and predictions do not last as long as the people and businesses, not distracted by them. It took me a long time to learn the depth of that simple truth, and what it requires. Thankfully, I keep good notes and wanted to share a few in case they help anybody else find the 5 un-crowded paths he mastered.

#1 Aggressive humility 

I will never forget my host’s opening and closing remarks before the menus he didn’t need, never arrived. “I don’t know what’s going to happen next, but it does not matter, I want to take some chips off the table. Only thing I know is you should get the blueberry pancakes.”

Levered Work, Balanced Sheets.jpg

Later that day, just up the hill from where we sipped our coffee, the largest private real estate transaction set a new high closing price in America.

Buck’s is three miles from Sand Hill Road’s offices of the most powerful venture capital investors in the world. Planet shaking deals are still made at each one of those little tables. Offering one of the very first wireless hotspots in the country, helped some of those historic presentations. From the first demonstration of Paypal, to the incorporation of Netscape, out into the parking lot for the bright yellow prototype of something called a Tesla – countless moonshots launched here.

He said he didn’t need to get rich twice, he was more excited about getting back to work than worrying about money.

#2 meet luck half-way - undistracted - at work

My host knew nothing outside of semiconductors. Only years later did I find out that he specifically wanted someone as far away from the Valley, with a completely different perspective to talk to that day. Turns out, a trusted engineering friend from his early days, who had relocated to Houston worked across the hall from me, and always saw me in the office early and late, and on Saturdays. (I had no idea, oblivious anybody would even care, and it didn’t matter to me. I loved the work so much).

He simply wanted to move some assets from a sector he thought was too crowded, into others that he guessed were un-crowded and could pay him dividends. He heard from his friend that is what I was focused on. He guessed right, but what I failed to realize at the time was what he was really after. He did not want to retire, or even slow down, and he didn’t really care about those other sectors at all. He just wanted to have even fewer worries so he could get back to the craft he loved being consumed by.

#3 A true craftsman has a deep love of NOT knowing

Twenty-one years later, this lesson rings the loudest to me. At a time when it is impossibly harder to stay on top of everything, fewer people are choosing to spend precious time to get to the bottom of anything. My only prediction here is that focused ability will become the next super-power. Now that I have had the extraordinary privilege to study other true craftsmen(&women!), I have learned it is not grabbing what you want even tighter. It is letting go of distractions. The more things I enjoy saying “I do not know” about, the smarter I am by virtue of building a better operating system of other craftsmen all around me. Trust is rocket fuel for different kinds of moonshots.

#4 Discipline unlocks more doors than it closes

He was excited to talk about the “risk” of selling too soon, knowing how much was already enough for him – in order to unleash peace of mind, to go create something again. I did not properly value at the time, what I have since become fascinated by, and continue to take endless notes on. A disciplined plan is the opposite of what most without one are afraid of. It is not limiting. It is liberating.

He took some chips off the technology table. He went on to do more amazing things and earn more than he needed. Again.

He went right through the technology stock crash, while still holding shares of the technology company that is stronger today than ever before - just a much smaller position, and a lot more cash and dividends around it.

Bubbles and crashes do not care about names, trends, companies or sectors. They wreak havoc on too much leverage.

#5 No Leverage

He paid cash for our breakfast that I’ll never forget. I think about him any time I hear somebody who knows they should take chips off the table, but talks themselves out of it. When he originally asked me to “talk about it,” the “it” was not selling. There was no discussion about that part.

The magic of sell disciplines (of any kind) is not just better math, but the freedom to spend time working on better stuff.