At MIT one of my statistics classes was taught by Prof. Jerry Hausman (of the Hausman test). In every class Prof. Hausman would at some point reach a result and then exclaim “and this proves that life is unfair” (usually it was that your statistical test had less power than you would have hoped for). Reading Nick Bilton’s Twitter story in the NY Times Sunday magazine reminded of that. I read it not because I expected to find something new but because it is always fun to see an event described in the press or in a book that one had front row seats to (in my case I spent a bit of time with the Twitter team shortly after USV invested).
So why does the Twitter story remind me of Prof. Hausman’s admonition? Because it demonstrates the relative importance of hitting upon the right thing at the right time over early execution. This goes a bit against one of the historic ideas held dear in venture capital that execution matters more than ideas. And yes it remains true that an idea alone is worthless, you have to build something. But beyond that it turns out that building the right thing at the right time will let you get away with all sorts of mistakes. Conversely, hypothetically perfect execution but too early or too late or on the wrong variant will not get you very far. For everyone working really hard on a startup that’s not going gangbuster this seems, well, unfair.
So there you have it. Prof. Hausman was right all along. Actually not quite. I used to think that but more recently I have changed my outlook to: Life just is. Unfair implies some kind of moral standard. Somewhere somebody right now is building the next big thing and most likely it is not you. Just accept that and you’ll be happier.
P.S. The Twitter story also shows that beyond a certain point even when you have hit a gusher (ie you built the right thing at the right time), you eventually need to build a real company. Inevitably many of the people who were there early on won’t be part of that organizational growth. That is a different kind of fair (or unfair) and does involve moral standards.
