Should You Drink the          Kool-Aid?                           Venkatesh RaoWith contributions from:•   Greg Rader•   K...
If the odds of making it as a [rockstar | movie star |       entrepreneur | best-selling author | President] are so       ...
the usual answer: PASSION AND TRUE BELIEF            the common motif is KOOL-AID12/6/2012          Venkatesh G. Rao      ...
…very hard to study…  “Death wish” …       PASSION           +      TRUE BELIEF                                      IRONY...
Speculative              Simulation                          Fiction        game theory models                  anecdata, ...
Backstory: Gervais Principle (2009)                                        True Believers12/6/2012      Venkatesh G. Rao  ...
initial attempt to map model to startups…circa 2009                                                VCs                    ...
long story short, 4 years later, this became…     “Entrepreneurs are the New Labor”                                  …to p...
not insiders vs. outsidersnot investors vs. foundersnot winners vs. losers            only difference: different cognitive...
The Clue at Quantico                  “We use Myers-Briggs/Keirsey here in                  the Marine Corps…most of us ar...
If an important decision is to be made [the Persians] discuss the    question when they are drunk, and the following day t...
Narrative Approach               Character vs. Situation vs. Plot                               http://tempobook.com12/6/2...
Probabilities don’t change when drunk….                                          What’s the point of this     I should be ...
So what happens when* you fail?     * rounded up from if12/6/2012            Venkatesh G. Rao   14
Courage Wolf Meme12/6/2012    Venkatesh G. Rao   15
Dutch Courage Wolf Meme12/6/2012      Venkatesh G. Rao       16
Alan: Wait a minute, that’s your big secret? Alcohol?     Charlie: Shhh. Don’t tell anybody.     Alan: But isn’t that just...
If an important decision is to be made [the Persians] discuss the    question when they are drunk, and the following day t...
The reasonable man adapts himself to the world; the            unreasonable one persists in trying to adapt the           ...
drunk = punch drunk?            Dragline: Stay down. Youre beat.            Luke: Youre gonna hafta kill me...12/6/2012   ...
“Learn to fetishize the pain of learning something new”                                         -- Andrea Kuszewski12/6/20...
more than a death-wish though…                                 What’s the point of this                                 so...
Grit*             unwavering                  P      urpose  an UNFALSIFIABLE mission that cannot be invalidated  by any a...
Mattie Ross: Whos the best Marshal?            Sheriff: Hmm, Id have to think on that….12/6/2012             Venkatesh G. ...
“Bill Waters is the best             tracker. Hes part Comanche;             it is a pure joy to watch him             cut...
“…The meanest is                        Rooster Cogburn; a                        pitiless man, double                    ...
“…Id have to say the fairest is               L.T. Quinn; he always brings               in his prisoners alive. Now, he  ...
Mattie Ross: Where would I find this Rooster?12/6/2012             Venkatesh G. Rao        28
to achieve unreasonable things, find someone  with a death-wish and leash them to a Purpose12/6/2012      Venkatesh G. Rao...
BUT…            What happens when DOZENS of Matti Rosses            need HUNDREDS of Rooster Cogburns?12/6/2012           ...
can true grit be scaled?12/6/2012       Venkatesh G. Rao   31
• Ancestor of Matti Ross                                   • Founder of cult of assassins                                 ...
Kool-Aid Characterized     Cognitive capture by a nascent organization     at the edge of existing institutions defined by...
The passion is sacred       patterns of argumentation that threaten it are       systematically delegitimized             ...
Code RED: extra-judicial killings       We use words like honor, code, loyalty. We use these words as the backbone of     ...
In the 1960s and 1970s, classic social psychological studies were conducted thatprovided evidence that even normal, decent...
Sociopath moral code          Kool-Aid law              (no institutions)             (emerging institutions)  The meanest...
“If you’re not actually doing a startup,                                            you don’t get to talk…or at least, I d...
“You can’t handle the truthiness”12/6/2012     Venkatesh G. Rao   39
True wolves are rare                      Sheep+Kool-Aid creates scalability                                           401...
Jung for “Startup Scene”                            (with help from Greg Rader)ESFJ                       ENFJ            ...
http://www.xeromag.com/fun/personality.htmlESFJ                ENFJ               ESTP               ENTP  Control Freak  ...
WARNING: neither prescriptive nor descriptive Jung/Myers-Briggs measures preferences You don’t always get what you want….1...
Belief TypesOUTSIDERS      OLD INSTITUTION STEWARDS OUTSIDERSNon-Drinkers       Champagne Kool-Aid   Home-brewersVANGUARD ...
Tragedy                                   Farce     (early part of an economic age)           (late part…)12/6/2012       ...
Col. Jessep: You want answers?    Kaffee: I think Im entitled to…    Col. Jessep: *You want answers?*    Kaffee: *I want t...
“In the work and its profits the Nation was an       essential partner and equally entitled with the       individual to s...
Which side is right?            For every complex problem there is an answer that is clear, simple,            and wrong. ...
For every complex problem there is an answer that is clear, simple,             and wrong. – H. L. Mencken            In t...
H                                    NASA                  Big Military, Big Corps,                National Parks         ...
Planned              2014               http://gameofpickaxes.com/12/6/2012         Venkatesh G. Rao          51
Tentative Conclusions•   Kool-Aid is how you scale true grit•   It works through cognitive capture•   Takes unironic passi...
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Usc annenberg

  1. 1. Should You Drink the Kool-Aid? Venkatesh RaoWith contributions from:• Greg Rader• Kevin Simler• Jane Huang• BAR Group 11.27.2012 | USC Annenberg Innovation Lab
  2. 2. If the odds of making it as a [rockstar | movie star | entrepreneur | best-selling author | President] are so completely awful, why do people still try?12/6/2012 Venkatesh G. Rao 2
  3. 3. the usual answer: PASSION AND TRUE BELIEF the common motif is KOOL-AID12/6/2012 Venkatesh G. Rao 3
  4. 4. …very hard to study… “Death wish” … PASSION + TRUE BELIEF IRONY “Acting Dead” – Bruce Sterling12/6/2012 Venkatesh G. Rao 4
  5. 5. Speculative Simulation Fiction game theory models anecdata, gossip, TV shows, agent based models movies, cartoons, narrative long-term historical sims theories, personality theories We’ll mostly be what-ifs histories, biographies, hyann media stories, blog posts, Numbers Thick Description Stories Science Duckworth Grit scale interviews, longitudinal studies a la Vaillant institutional talent flow patterns embedded reporting macroeconomic studies fund-raising war stories Kauffman type research incubator lore correlations, distributions hacks, metis of startuppery Conservative12/6/2012 Venkatesh G. Rao 5
  6. 6. Backstory: Gervais Principle (2009) True Believers12/6/2012 Venkatesh G. Rao 6
  7. 7. initial attempt to map model to startups…circa 2009 VCs Founders Option Lottery Players12/6/2012 Venkatesh G. Rao 7
  8. 8. long story short, 4 years later, this became… “Entrepreneurs are the New Labor” …to polarized reactions • “You nailed it!” • “That has not been my experience” • “This whole thing is stupid, you can’t analyze this way”12/6/2012 Venkatesh G. Rao 8
  9. 9. not insiders vs. outsidersnot investors vs. foundersnot winners vs. losers only difference: different cognitive processes viewed different types of argument as valid12/6/2012 Venkatesh G. Rao 9
  10. 10. The Clue at Quantico “We use Myers-Briggs/Keirsey here in the Marine Corps…most of us are SJ types… Guardian/Protector… very passionate, very emotional…”12/6/2012 Venkatesh G. Rao 10
  11. 11. If an important decision is to be made [the Persians] discuss the question when they are drunk, and the following day the master of the house. . . submits their decision for reconsideration when they are sober. If they still approve it, it is adopted; if not, it is abandoned. Conversely, any decision they make when they are sober is reconsidered afterwards when they are drunk. – Herodotus12/6/2012 Venkatesh G. Rao 11
  12. 12. Narrative Approach Character vs. Situation vs. Plot http://tempobook.com12/6/2012 Venkatesh G. Rao 12
  13. 13. Probabilities don’t change when drunk…. What’s the point of this I should be thankful for so-called life? I might my good, secure job, as well die. I AM others have it even QUITTING worse. This startup idea TOMORROW AND is not worth the risk. DOING A STARTUP. But subjective utilities do…12/6/2012 Venkatesh G. Rao 13
  14. 14. So what happens when* you fail? * rounded up from if12/6/2012 Venkatesh G. Rao 14
  15. 15. Courage Wolf Meme12/6/2012 Venkatesh G. Rao 15
  16. 16. Dutch Courage Wolf Meme12/6/2012 Venkatesh G. Rao 16
  17. 17. Alan: Wait a minute, that’s your big secret? Alcohol? Charlie: Shhh. Don’t tell anybody. Alan: But isn’t that just a temporary solution. Charlie: It’s only temporary if you stop drinking. Alan: I like it. Something Salted and Twisted [3.10] - Two and a Half Men http://www.youtube.com/watch?v=AtituB9WRQU12/6/2012 Venkatesh G. Rao 17
  18. 18. If an important decision is to be made [the Persians] discuss the question when they are drunk, and the following day the master of the house. . . submits their decision for reconsideration when they are sober. If they still approve it, it is adopted; if not, it is abandoned. Conversely, any decision they make when they are sober is reconsidered afterwards when they are drunk. – Herodotus what happens if you never sober up?12/6/2012 Venkatesh G. Rao 18
  19. 19. The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man. – Shaw12/6/2012 Venkatesh G. Rao 19
  20. 20. drunk = punch drunk? Dragline: Stay down. Youre beat. Luke: Youre gonna hafta kill me...12/6/2012 Venkatesh G. Rao 20
  21. 21. “Learn to fetishize the pain of learning something new” -- Andrea Kuszewski12/6/2012 Venkatesh G. Rao 21
  22. 22. more than a death-wish though… What’s the point of this so-called life? I might as well die. I AM QUITTING TOMORROW AND DOING A STARTUP.12/6/2012 Venkatesh G. Rao 22
  23. 23. Grit* unwavering P urpose an UNFALSIFIABLE mission that cannot be invalidated by any amount of A/B testing or “customer development” or reframed away with “pivots” *Google “Duckworth grit scale…” for a more empiricist take…12/6/2012 Venkatesh G. Rao 23
  24. 24. Mattie Ross: Whos the best Marshal? Sheriff: Hmm, Id have to think on that….12/6/2012 Venkatesh G. Rao 24
  25. 25. “Bill Waters is the best tracker. Hes part Comanche; it is a pure joy to watch him cut for sign.” This is the hacker-entrepreneur, see THE TURPENTINE EFFECT /12/6/2012 Venkatesh G. Rao 25
  26. 26. “…The meanest is Rooster Cogburn; a pitiless man, double tough. Fear dont enter into his thinking….”12/6/2012 Venkatesh G. Rao 26
  27. 27. “…Id have to say the fairest is L.T. Quinn; he always brings in his prisoners alive. Now, he might let one slip by every now and then, but...” This is the PRAGMATIC actor who sees no problem with ACQUI-HIRING and other REASONABLE ADAPTATION models12/6/2012 Venkatesh G. Rao 27
  28. 28. Mattie Ross: Where would I find this Rooster?12/6/2012 Venkatesh G. Rao 28
  29. 29. to achieve unreasonable things, find someone with a death-wish and leash them to a Purpose12/6/2012 Venkatesh G. Rao 29
  30. 30. BUT… What happens when DOZENS of Matti Rosses need HUNDREDS of Rooster Cogburns?12/6/2012 Venkatesh G. Rao 30
  31. 31. can true grit be scaled?12/6/2012 Venkatesh G. Rao 31
  32. 32. • Ancestor of Matti Ross • Founder of cult of assassins • Originator of fedayeen* "They call him Shaykh-al-Hashishim.** He is their Elder, and upon his command all of the men of the mountain come out or go in... they are believers of the word of their elder and everyone everywhere fears them, because they even kill kings." Hassan-i Sabbah (1050 – 1124) - Benjamin of Tudela*from Wikipedia: “someone who redeems himself by risking or sacrificing his life”** etymology/story of assassin == hashashin == hashish possibly apocryphal, but military-political-guerrilla tactics are not12/6/2012 Venkatesh G. Rao 32
  33. 33. Kool-Aid Characterized Cognitive capture by a nascent organization at the edge of existing institutions defined by us-versus-them discourses based on boundaries created out of trial-by-fire bonding experiences12/6/2012 Venkatesh G. Rao 33
  34. 34. The passion is sacred patterns of argumentation that threaten it are systematically delegitimized this is both a strength and a weakness12/6/2012 Venkatesh G. Rao 34
  35. 35. Code RED: extra-judicial killings We use words like honor, code, loyalty. We use these words as the backbone of a life spent defending something. You use them as a punchline. I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the blanket of the very freedom that I provide, and then questions the manner in which I provide it. -- Col. Jessup12/6/2012 Venkatesh G. Rao 35
  36. 36. In the 1960s and 1970s, classic social psychological studies were conducted thatprovided evidence that even normal, decent people can engage in acts of extremecruelty when instructed to do so by others. However, in an essay published November20 in the open access journal PLOS Biology, Professors Alex Haslam and StephenReicher revisit these studies conclusions and explain how awful acts involve not justobedience, but enthusiasm too—challenging the long-held belief that human beingsare programmed for conformity.http://medicalxpress.com/news/2012-11-human-obedience-myth-conformity.html#jCp12/6/2012 Venkatesh G. Rao 36
  37. 37. Sociopath moral code Kool-Aid law (no institutions) (emerging institutions) The meanest is Rooster Cogburn; a pitiless man, double tough. Fear dont enter into his thinking…. Rule of law (established institutions) …Id have to say the fairest is L.T. Quinn; he always brings in his prisoners alive. Now, he might let one slip by every now and then, but...12/6/2012 Venkatesh G. Rao 37
  38. 38. “If you’re not actually doing a startup, you don’t get to talk…or at least, I don’t have to listen to you.” often “big company people” “building” “passion” We use words like honor, code, loyalty. We use these words as the backbone of a life spent defending something. You use them as a punchline. I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the blanket of the very freedom that I provide, and then questions the manner in which I provide it. “wealth/jobs”12/6/2012 Venkatesh G. Rao 38
  39. 39. “You can’t handle the truthiness”12/6/2012 Venkatesh G. Rao 39
  40. 40. True wolves are rare Sheep+Kool-Aid creates scalability 4012/6/2012 Venkatesh G. Rao
  41. 41. Jung for “Startup Scene” (with help from Greg Rader)ESFJ ENFJ ESTP ENTP Pillar of Social Player Inventor Community Revolutionary (Se/Ti) (Ne/Ti) (Fe/Si) (Fe/Ni)ESTJ ENTJ ESFP ENFP “New Labor” Hustler Promoter Conference Goer (Te/Si) (Te/Ni) (Se/Fi) (Ne/Fi)ISTJ INTJ ISFP INFP New Org Rank+File Hacker Loyalist “Sharing Economy” (Si/Te) (Ni/Te) (Fi/Se) (Fi/Ne)ISFJ INFJ ISTP INTP Pillar of Idealist Organization Man Armchair Thinker Community (Ni/Fe) (Ti/Se) (Ti/Ne) (Si/Fe) 12/6/2012 Venkatesh G. Rao 41
  42. 42. http://www.xeromag.com/fun/personality.htmlESFJ ENFJ ESTP ENTP Control Freak Cult Leader Conman Mad Scientist (Fe/Si) (Fe/Ni) (Se/Ti) (Ne/Ti)ESTJ ENTJ ESFP ENFP Bureaucrat Evil Overlord National Enquirer Scientologist (Te/Si) (Te/Ni) Headline (Ne/Fi) (Se/Fi)ISTJ INTJ ISFP INFP Thought Police Outside Crackpot Idealist (Si/Te) Contractor (Fi/Se) (Fi/Ne) (Ni/Te)ISFJ INFJ ISTP INTP Martyr Conspiracy Psycho Vigilante Egghead (Si/Fe) Theorist (Ti/Se) (Ti/Ne) (Ni/Fe) 12/6/2012 Venkatesh G. Rao 42
  43. 43. WARNING: neither prescriptive nor descriptive Jung/Myers-Briggs measures preferences You don’t always get what you want….12/6/2012 Venkatesh G. Rao 43
  44. 44. Belief TypesOUTSIDERS OLD INSTITUTION STEWARDS OUTSIDERSNon-Drinkers Champagne Kool-Aid Home-brewersVANGUARD TRUE BELIEVERS VANGUARDHappy hour Koolaidaholics Party drinkersOUTSIDE OLD INSTITUTION STEWARDS OUTSIDERSNon-Drinkers Social drinkers Non-Drinkers12/6/2012 Venkatesh G. Rao 44
  45. 45. Tragedy Farce (early part of an economic age) (late part…)12/6/2012 Venkatesh G. Rao 45
  46. 46. Col. Jessep: You want answers? Kaffee: I think Im entitled to… Col. Jessep: *You want answers?* Kaffee: *I want the truth!* Col. Jessep: *You cant handle the truth!* …. Either way, I dont give a damn what you think you are entitled to.12/6/2012 Venkatesh G. Rao 46
  47. 47. “In the work and its profits the Nation was an essential partner and equally entitled with the individual to share in the dividends.” -- Andrew Carnegie, Gospel of Wealth II (1906)12/6/2012 Venkatesh G. Rao 47
  48. 48. Which side is right? For every complex problem there is an answer that is clear, simple, and wrong. – H. L. Mencken12/6/2012 Venkatesh G. Rao 48
  49. 49. For every complex problem there is an answer that is clear, simple, and wrong. – H. L. Mencken In the spirit of phillosophical bipartisanship, it would be pleasant to conclude that each of these traditions of political economy [Hamiltonian and Jeffersonian] has made its own valuable contribution to the success of the American economy… but that would not be true. What is good about the American economy is largely the result of the Hamiltonian developmental tradition, and what is bad about it is largely the result of the Jeffersonian producerist school -- Michael Lind, Land of Opportunity12/6/2012 Venkatesh G. Rao 49
  50. 50. H NASA Big Military, Big Corps, National Parks Big Banks Rockefeller FDR J. P. Morgan Big Welfare State Carnegie Eisenhower Hoover Teddy Roosevelt GI Bill Morrill OSRD-DARPA NSF, NIH #Occupy L R Startup Scene Reagan Manifest Destiny Hippie Homestead Act Movement Thomas Jefferson Transition/Permaculture Tea Party Locavorism Andrew Jackson J Startups are weird because they start out Jeffersonian but nurse deep Hamiltonian ambitions12/6/2012 Venkatesh G. Rao 50
  51. 51. Planned 2014 http://gameofpickaxes.com/12/6/2012 Venkatesh G. Rao 51
  52. 52. Tentative Conclusions• Kool-Aid is how you scale true grit• It works through cognitive capture• Takes unironic passion, not all can do it• It drives institutional creative destruction• Transient phase moral hazard12/6/2012 Venkatesh G. Rao 52
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