Top None Percent

I love a peanut butter and jelly sandwich. My kids are not allowed to take one to school. Fast food delivery apps are welcome. Parents are developing more allergies also. Slowly spreading good stuff around for their kids would take precious time away from training to be great at something. The pressure is on to find passions.

Non-stop highlight reels fill their digital lens to the world, multiplying the pressure. The Pew Research Center study of teenagers released in 2019, shows that bullying, drugs, alcohol, money, and sex all take a distant back seat (in that order) to what teens say is their biggest problem of all: anxiety.

Parents’ screens at work and home, overflow with information and advice, which they copy and paste as proof - “It’s clear, research shows...” They know in a more competitive world, that kids better get started earlier on the “10,000-Hour Rule,” which Malcolm Gladwell made famous in his book Outliers. They know that more practice at a passion is the path to mastery. No wonder there are 6U travel baseball teams, apparently incapable of finding enough quality competition in their neighborhood anymore.

“One of the great tragedies of life is the murder of a beautiful theory by a gang of brutal facts.”

–Benjamin Franklin (who liked a lot of different things)

I chewed on today’s PB&J while watching a recording of a dear client’s kid graduate from college. For some kids, I started tiny college savings accounts 10-15 years ago, as part of their parents’ Financial Freedom Plans. So, dang right I get teary-eyed when one of them is giving her class speech! In front of more than 8,000 people, she crushed it!!

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Jenn has a smile bigger than the podium. I hear complaints about how hard it is to even get into some of these colleges and what’s worse, how much harder it will be for these kids in the real world. In Texas, a growing number of parents are so angry their kids have “no shot” to get into the same schools they went to years ago. So, the resulting pressure to polish resumes in high school is a four-year anxiety attack. They are always in a hurry, everywhere. Almost one in five meals are now inhaled in the car.

What in the world is going on here? If you have younger kids, you cannot imagine this yet. If you are already through this season of life as a parent, stick around, because I think what I found may be useful in a lot of other crowded adult fields, with even more competition.

First, I always start with the underlying math and data. This is not a political problem. It is not a breakdown in the educational system. It is not China’s fault. When I got into the University of Texas 27 years ago, the enrollment was almost the exact same as it is today. The population in the state has grown more than 70%.

“The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.” -William Arthur Wood

For most of the school’s history, the top 10% of a graduating high school class was automatically admitted to UT. A few lucky stragglers like me, distracted by too many different interests to ever sniff the top 10%, also could get in. Then, it started dropping first to 9%, then 8%, only 7% and now just the top 6%.

Since I am in no rush to cut back on slow-moving family dinners at the table, I wonder if there is a different question to wrestle with than ever before. I admit a biased belief that competition is never bad, and a wonderful way to find new solutions, at any age. My hardwiring as a professional money manager has trained me well. If I refer to my blood-stained trading diary, it is most clear about this topic – odds of success improve on un-crowded paths.

The problem finding those paths is that they violate almost every natural instinct you have. How unpopular is my idea? So far, I have yet to be invited to speak to any students to explain my recommendation: “Do not follow your passion...yet.”

Nothing is wrong with a passion. Actually, everything is right with it. But, not until we have tried enough different paths to know which ones pick us. Rather than trying harder to get better at one thing at all costs (some training costs exceeding the entire value of a college scholarship!), with no time to goof around anymore (or to do that math), what about trying a couple of different things instead? If a few paths are intersected, you may end up arriving at a place no crowd has ever seen.

Back to my favorite graduate this season. Jenn was not very good at sports. Her dad loves sports, so she watched. Her dad loved her even more, so they used that time to talk about other stuff, not grind about technique and ways to get better. She liked the cheerleading part, but was not athletic enough for that either. What stood out to her, in every arena, was how kids at a game always reacted to the mascot, the exact same way every time – pure joy.

So, she became “Topper the Goat.” Yup, that’s our speechmaker. She was on the floor of a recent Final Four in San Antonio, having the time of her life goofing around on the job. That IS the job.

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Her eye was drawn to those reactions, away from the games, for a reason. Her mom. She had taken Jenn on mission trips all over the world to serve others. The reactions from the kids who needed the most help, for many years of countless projects, formed her non-digital lens.

Next up for Topper was a career choice. Any guesses?

Let me give you a hint, and go back to that PB&J. Peanut butter became popular after Chicago’s World Fair, in 1893. It was a delicacy at first, served in the finest tea rooms alongside watercress and pimento. In 1917, the Welch’s grape family secured a patent for pureeing fruit into jelly. But, it was not until something so confusing came along that it required instructions (left side of image), that three ingredients came together. The local newspaper explained this “startling” development.

On July 7, 1928, the Chillicothe Baking Company in Missouri was the first to sell pre-sliced bread.

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Then, PB&J were sandwiched together on an important menu – the U.S. Rations for World War II. High protein combined with sweetness on pre-sliced bread, made it easily portable on long marches. When soldiers came back home after the war, sales of peanut butter and jelly soared.

It may seem so obvious, but it was impossible to even attempt without the third piece of the puzzle. Little kids were never allowed to make their own sandwiches because it required a sharp knife for the whole loaf.

Patent #1,867,377 is responsible for countless “best thing since sliced bread” comparisons since. It took at lot of patience and experimenting down different paths before Otto Frederick Rohwedder’s invention came together. Then a fire destroyed it, and all his blueprints. So, it took another 15 years and a few adjustments.

In today’s start-up culture, with caravans of unicorn hunters on the prowl for innovations, someone with curiosity like Rohwedder’s might be told to shut it down after 15 months instead. His uncommon patience can now be viewed in the Smithsonian museum.

The peanut butter guy was a doctor, then a cereal maker. The grape guy was a dentist, and a minister. The sliced bread guy was an ophthalmologist, who became a jeweler.

Perhaps letting a passion find us tilts the odds in our favor. Anxiety about focusing on what you are supposed to love might come from not even trying enough maybe-likes. The more paths we try, one may just jump on us instead.

Jenn’s academic success, combined with Topper’s side hustle of smile production, sandwiched together by a strong desire to help those who need it the very most, will start her career teaching at a special needs school. She wants specifically to help autistic kids. Her different paths will lead to an uncommon ability to connect with those kids.

So, what in the world is this doing in an investment blog? I am a sucker for stories on how very different ingredients come together for something better. I am also a dad of five kids, not yet in college (one filling out apps now…gulp). It turns out, this same recipe of very different ingredients coming together, works for investors and adults too. I will share one more example for middle-aged kids like me.

One dream that most ages and professions happen to share, is being early in some technology that takes off like a rocket. Few know that world better than Andreesen Horowitz, the legendary venture capital firm backing hundreds of wild successes including little shops you may have heard of called Facebook, Airbnb, Instagram, and Lyft.

I listened to a lot of interviews by that firm’s top experts, conducted with a bunch of different people and completely diverse backgrounds. If it makes you feel better, they are not always as happy as you would think. One poor guy openly discussed having a “mini-meltdown” on the job. He said he was “not ready” and “kinda miserable.” He went to his boss and confessed, “I don’t wanna do this. I led you astray, I led myself astray.” So, his boss re-assigned him to a secret project, something called “Purple,” at their struggling company.

But Andreesen Horowitz wants to learn from tragic failures and planet shaking successes, to tease out which paths they should invest in. I could hear the excitement in their partner’s voice as he interviewed all these different characters listed below, to see which one rose to the very top of what he gushingly called - “Silicon Valley’s one golden ticket to Willy Wonka’s Chocolate Factory.”

If you had to guess, of all these interviewed, who was the only one able to give them that golden ticket inside?

Worked for a newspaper

Ivy League educated at Yale

Professional Photographer

Undergraduate degree in history

Motorcycle mechanic

Global art and architecture expert

English teacher

Holds a Masters in Fine Arts

Hint: Who had the most unusual angle for entry?

Okay, one more hint. The Andreesen Horowitz partner doing the interviews says Silicon Valley’s Willy Wonka Chocolate Factory is the Apple Software Design Studios.

The name of the guy with that golden ticket is Ken Kocienda. He also happens to be the same guy who first took all eight of those very different paths listed above. He is all of them. And, he is the same guy who worked on that project called “Purple,” which you now call an iPhone.

“Genius…means little more than the faculty of perceiving in a unhabitual way.” -William James

When I talk to my kids, they are never going to hear about anything being harder, just different. Rather than seeing good or bad, I want their lens to find problems to solve. There are not many one-dimensional puzzles anymore, and that’s GREAT! Trying harder and harder to jam one passion into place may be the wrong move. Experimenting on a few different dimensions might end up fitting together better than anybody else has imagined, because it may not even exist yet. Some combinations have never even been attempted, so they might lead smack dab to the middle of the top none percent.

Postscript #1

I have no first-hand experience whether any of this applies to college acceptance. This is just an open diary of what I am sharing with my kids, with crossover success in what I have found works so well after school. Given my amateur status as a dad of a senior, I did what I always do – ask questions and research. I took diligent notes when I learned from quality sources, at two of the best schools in the country. Here they are:

The top 10%’ers are not likely the ones reading your kids applications. They are also not the quarterbacks or cheerleading captains. The source for this opinion concluded that what might have made his own application different was describing working his ass off at Taco Bell, while pursuing a deep interest in chess. This was probably a combination they had not seen before. He went on to work as a director of admissions for that same school after graduation.

The other expert noted that across two decades of her work in admissions there was one letter of recommendation that stood out. Among all the most impressive top 1%’ers in their fields (aka friends of some relative, asked for a favor), there was only one letter written by a kid’s high school janitor. The way that kid acted, across different situations with different people, earned a unanimous acceptance.

Postscript #2:

I found the original study that Gladwell built his famous 10,000-Hour Rule on. Then, I found Professor Anders Ericsson, who conducted the study. We have swapped notes and questions and answers since. Readers of Gladwell’s book and countless more who grabbed onto its lesson after just hearing it – all know that practicing one skill for that long is the prerequisite for mastery. Except for that fact it is not true.

Ericsson’s study was done fifteen years earlier, and concluded nothing like that. He studied only twenty violinists who had already been chosen as the best in their field for an elite Berlin music academy. Gladwell totaled the hours of solitary practice by the time they were twenty years old because that it made a round, memorable number. But, half of the supremely talented group totaled less hours, or even far less, than 10,000. The average number was 10,000 hours across this tiny highly-filtered sample size, and the rule was born. Professor Ericsson shared with me, “The rule is irresistibly appealing. It’s easy to remember, for one thing. And, it satisfies the human desire to discover a simple cause-and-effect relationship. Unfortunately this rule is wrong in many ways…nothing in my study implied this.” I asked Professor Ericsson knowing what he knows now (26 years after the original study), what advice he would give to young parents who want to find kids’ passions. He told me he should have a better answer toward the end of the year, from more studies he is working on.

He is still combining different interests from different paths after all these years and doing brilliant work - living his best lesson of all! Hours do not get counted when you never want to stop.