In tech, the use of analogies has become trite. The “Stripe for X” or “Uber of Y” pitch has long been cliché, and too often analogies used in the industry are poorly thought out or just plain wrong. Good analogies are found through effort. And it's better to not use analogies at all, then to share a meaningless one. Analogies that are too simplistic or far removed from the specific context of a business come off as shallow thinking. In a pitch, when founders try to frame their business around another successful company or strategy without fully understanding the nuances involved, things can quickly fall apart.

Another danger of using analogies is the potential for motivated reasoning. Business systems are complex, and founders may be tempted to use analogies that justify their preconceived notions, rather than making decisions based on an objective evaluation of evidence. This can lead to a confirmation bias, where founders seek out ideas that support their existing beliefs and dismiss or ignore ideas that challenge them.

Despite the pitfalls, there is value for startups in identifying effective analogies, especially in the context of fundraising. Raising a new round of financing is valuable opportunity for founders to define the key aspects of their business and think through the analogies that accurately distill key concepts. This is particularly important for startups operating in emerging industries, like AI and web3, where good analogies are especially hard to find and there is a lot of complexity that needs to be translated to different stakeholders.

To find good analogies, it's important to first identify the key concepts or ideas that need to be explained. Then, think about other contexts or domains that share similarities with those ideas. To make this more concrete, the next addition to our research hub will be a system thinking primer which will go into more detail on this process.

What defines a good analogy? A good analogy is one that effectively and accurately captures the essence of the idea being explained, while also being relatable and understandable to the audience. For example, if we are trying to explain a transformer model to a non-technical audience. We might say, a transformer model can be thought of as an orchestra conductor. Just as a conductor coordinates the performance of different instruments in an orchestra to produce beautiful music, a transformer model processes and combines different pieces of information from a variety of sources to generate high-quality outputs. Like a conductor who has to manage the timing, tempo, and volume of each instrument in the orchestra, a transformer model has to balance the importance of different parts of the input data and decide how to weight each piece to produce the best output. The model can also selectively attend to specific pieces of information, just as a conductor might ask a particular section of the orchestra to play a more prominent role in a particular passage.

This analogy might help our non-technical audience better understand transformer models at a high level, but is not practically useful if they wanted to start building one. Analogies are most useful for founders as a translation tool—making the complexity of a business digestible to a broader audience. But they are not a substitute for domain knowledge. If a founder is tackling an unfamiliar problem, analogies can help identify interesting places to dive and learn more, but should not used as a proxy for deeper thinking. Ultimately, the key to finding good analogies is to think creatively and critically, and to be willing to explore multiple possibilities before settling on one that works. Use them wisely!

https://twitter.com/stewbradley

AI chatbots encode text into numerical vectors (called embeddings) and then predict a response using an attention mechanism that allows them to “look” at relevant parts of the conversation and generate informed responses. These models are pre-trained on a large corpus of text, which allows them to recognize patterns and form their own understanding. In this context, understanding doesn't mean developing a thorough comprehension of the subject matter, but rather an ability to generate a relevant and appropriate response to the question. Because they search for commonalities between large sections of data, they excel at generalizing. But this same dynamic makes them clumsy when a topic is nuanced or rapidly changing. I believe that understanding the strengths and limitations of these tools is key to leveraging them in the most productive ways.

Breadth of knowledge is essential for innovation. Having a wide array of ideas and information from different disciplines can help to create new ways of thinking and uncover creative solutions to problems. Innovation rarely comes from just knowledge about a particular subject or field. It requires the ability to look at things from different angles and see how ideas from one area can be applied to another. Looking at the same situation from different perspectives can help to spark creativity and uncover new solutions to old problems. Science is littered with the benefits of cross pollination of ideas; from chemists using breakthroughs in crystalography to map the ribosome, to psychiatrists using novel techniques like optogentics to better understand how our emotions impact the physical structure of our brains. As we seek to develop our understanding of the world, tools like ChatGPT can play a pivotal role in expanding our intellectual range.

Ultimately, AI chatbots are an interesting way of exploring new concepts and quickly gaining insights. It is early days for generative AI, but these tools have already changed my own workflows. And I’m excited to watch the evolution of the space and the wide ranging knock-on effects. I’d love to hear other people’s experience with these tools and how they are being used in their daily work. DMs are open if you’d like to share.

https://twitter.com/stewbradley

Our gaming crew formed during our high school and college days, and most of us have never met in person. After a 15+ year hiatus, it was remarkable to me to find the same group of gamers still regularly playing together. The core group had endured job changes, starting families and other obligations life brings. On top of that, the underlying technology we used to play and communicate had evolved radically (keep in mind, when this group formed iPhones didn’t exist). Yet, the group remains as vibrant as ever.

Why is this? What dynamics exist in gaming that enable groups to be so resilient? I'm still thinking through it, but here are a few things that came to mind:

1. Shared passion and cooperation: Gaming communities form around a shared passion for games, and an interest in the culture and lore surrounding them. With groups often forming around a specific game type (e.g. shooters, role-playing). Experiencing a game as a group heightens the excitement of progress. The feeling of personal achievement as you master a game is amplified as a shared experience with other players. This creates a sense of camaraderie that encourages people to keep coming back.

2. Integrated social systems: As gaming has grown in popularity the social side has become an integral part of the experience. Gamers use a variety of social systems to communicate and work together. Messaging apps like Discord keep players connected across different games. Multiplayer services like Xbox Live, make it easy to join friends and share achievements. Games themselves are often designed with social mechanics such as team leaderboards or guild systems, which foster a sense of accountability among the group—as dropping out would negatively impact other players' ranking. These social systems help enrich the game experience and enable groups to maintain an on-going dialogue. They provide hours of immersive entertainment, as well as opportunities for friendship and connections that can extend beyond the game itself.

3. Finding new friends is high friction: Online gaming is a big space, and parts of it are notorious for being toxic. Game chat—the in-game feature open to all active players—makes it easy to meet new gamers, but is also where most of the toxic behavior happens. Platforms like Discord and Xbox Live allow friends to create party chats and avoid game chat altogether. When compared with the prospect of finding new friends in the hellscape of game chats, sticking with existing friends is an easy choice. Because of this, game crews tend to stay together

4. Content: The proliferation of video game content over the past decade has had a major effect on de-stigmatizing gaming and keeping existing gamer groups engaged. Movies, shows, streaming, and YouTuber channels have all helped to create interest and normalize the activity of gaming. This content is major source of fodder for group discussions.

5. Competition: The rise of esports has been a huge boon for gaming as well. Esports tournaments featuring some of the best players in the world draw hobbyists into competitive scenes for their favorite titles. Esports is also a great source of new strategies and techniques for players who are motivated to improve. The idea of practice wasn't common in games ~15 years ago, but that has changed. Gaming groups now regularly convene for practice or warm-up sessions before joining ranked matches.

It's clear that gaming groups have found ways to create a shared culture and maintain enthusiasm over the long-term. What other ways do the design of these systems stimulate the longevity of communities? And how can these dynamics be leveraged in other areas, like education, business, or healthcare/fitness? These seem like questions worth exploring.

https://twitter.com/stewbradley

Special shoutout to the COD crew: Killbox, Grizzdad, and Flying Squirrel!

To improve, I knew I needed to log time on the board. My strategy was get at least 30 minutes of skating in each day. So for the past 195 days (~6.5 months), I have skated everyday. When it is nice out, I push around the neighborhood. When it rains, I push around in the garage. If I have a work trip, the board comes with me. It doesn't matter what form it takes, as long as I find some time each day to be on the board. The consistency has started to pay off. I'm by no means an expert, but I have come along way. I can now drop into a half-pipe, grind on a ledge, board-slide a small rail, and do some basic flat ground tricks—all things that seemed impossible for me a few months ago.

One of the elements of skateboarding that I love is the community. As a dad in my late thirties, I don't epitomize cool. And my novice skills aren't impressing any experienced skater. But in my daily pushes—in skateparks across the country with skaters of varying skill, from pros to fellow beginners—I've felt accepted and encouraged. From my experience, the only requirement for acceptance is that you try. If you attempt a trick around other skaters, whether you land it or fail miserably, you're likely to the skaters applause—when skaters hit their boards on the ground to show appreciation. Skateboarding is physically demanding, but the mental aspect of it is what's most challenging. And I think that is why skaters are so effusive with encouragement. Skateboarders refer to the development of skills as 'progression.' Whether you're Tony Hawk trying to land the first 900 at the X-games, or a frumpy dad trying to complete a lap around the parking lot without falling, progression is about pushing your personal limit. And it's the willingness to push that limit which garners respect. Trying is everything.

It is easy to look at the obstacles in front of us, see them as insurmountable, and give up. But often if we take a closer look, the obstacles we face can be broken down into smaller bits. Bits that are a little less scary, and that, with effort, we can overcome. Little by little, if we keep at it, each small hurdle we overcome starts to add up. And eventually that once insurmountable hurdle, looks more like a speed bump.

It is important to recognize that how our brains react to mistakes depends heavily on our mindset; this means that the mental state we are in before a problem arises has a major impact on how we cope with it. If we can cultivate an attitude of openness and curiosity towards what lies ahead, expecting hurdles and setbacks, then our reactions will not only be more constructive but also more creative. Failure is uncomfortable, but it's vital to our growth. The U.S. Navy SEALs have a saying that encapsulates this well: "Get comfortable being uncomfortable."

Accepting discomfort as something natural within the learning process can help us remain focused on finding solutions when things get hard, rather than spiraling into self-criticism or feeling overwhelmed by what needs to be done. Mistakes allow us to grow, but only if we take the proper mindset. A growth mindset isn’t about avoiding mistakes, it's about embracing them. Understanding that they are the stepping stones on the path to progress can make us more resilient in moments of failure. Accept the discomfort, embrace your progression, and keep pushing!

@stewbradley

Introducing El Cap

Collision theory states that when suitable particles hit each other, only a certain percentage of them will result in a change. These collisions are the ones with enough energy at the moment of impact to break existing connections and form new bonds. In many ways, El Cap’s story is one of collisions—where people, companies, and technologies combine in powerful new ways. This is how our partnership came to be, and it’s a core concept of our investment philosophy.

Before starting El Cap together, we took wildly different career paths. Stew, a Salt Lake City native, spent the first seven years of his career as an NFL linebacker. After retiring from professional football, he joined Goldman Sachs’ investment banking division on the TMT team. His experience there led him to Steadfast, a Tiger Cub hedge fund in NYC, where he invested in technology companies.

Coming out of undergrad, Kunal, an Indian immigrant raised in New York, joined his family’s international logistics business to help modernize operations, grow revenue, and ultimately exit the business. As a lifelong early adopter of technology, his curiosity led him to Collaborative Fund, where he explored early-stage investments and worked closely with existing portfolio companies. Recognizing that there was real value in being on the other side of the table, he later joined Core Labs, a 500 Startups-backed product studio that was focused on building tools around the future of work.

Forming new bonds

While we are incredibly different people, we do share some similarities. We are both men in our 30s, who enjoy Harry Potter, fantasy shopping on Zillow, and eating Mexican food. We are also drawn to technology, and passionate about its potential as a transformative force and engine of progress. When we collided for a coffee in mid-2018, these shared interests became evident early in our conversation and we quickly formed a strong bond.

Energy alone is not enough for a successful collision. Particles must also be of a suitable type. When we were introduced through a mutual friend—and a forty-five-minute chat turned into a wide-ranging, several-hour discussion—it was evident that despite our differences in experience and as people, we shared a common set of beliefs, priorities, and attributes. Some of these were apparent in that first conversation, others surfaced gradually, in the hours we’ve spent learning, debating, and building together.

In computing, primitives are the simplest elements available. They are the building blocks used to construct everything else. At El Cap, our primitives—teamwork, curiosity, tenacity, and independent-thinking—are the foundation of our partnership; the common ground that enables our constructive and open dialogue. They also underpin the relationships we have with founders and will be the basis for new bonds that we form. While many aspects of our job are focused on identifying and embracing change, our primitives should be immutable. Constants to keep us grounded and stalwart amid the ever-shifting technology landscape.

Technology collisions

Another of our similarities is an enthusiasm for the history and evolution of technology. In the early days of our partnership, as we mapped the disruptive path of technology across different industries, business models, and market types, a common theme emerged. In each major disruption, the collision of new technologies and changing behaviors played a vital role—creating reinforcing feedback loops that intensify adoption and accelerate change. A phenomenon with the power to disrupt old models and form new bonds. Despite this common thread, technology’s chronicle has been one of contingencies—a meandering path of switchbacks, dead ends, and missed opportunities, rather than a linear progression from one breakthrough to the next. Meaningful change doesn’t happen on the back of a single innovation, but when a constellation of technologies—some old, some new—reacts to each other in novel and unexpected ways. It is this interplay between seemingly disparate parts that gives technological progress its haphazard nature as well as its potency.

Why are these collisions so impactful? And what makes them exciting from an investment perspective? A collision is effectively a web of interlocking technologies with emergent properties. A combination that creates the potential for new business models, market opportunities, and even entire industries to blossom. Not only do they unlock latent market demand, they provide structural advantages for new entrants as well. In most markets, customer preferences are static and well-defined, thus it is typically advantageous to be an incumbent. In stable conditions, there are few opportunities for new entrants to successfully enter a market. And while it’s not impossible to break in by brute force, it’s certainly hard—like turning the proverbial difficulty setting to insanity mode. But collisions upend the status quo, and customer preferences are no exception. When the customer’s needs rapidly change, the advantage of being an incumbent quickly erodes. All of the corporate sprawl, the root of incumbent power, becomes an anchor hindering their ability to respond. Leaving legacy companies with the operational inertia, and the associated overhead, of a product that fewer customers want.

Collisions can have a powerful impact on customer preferences—a vital ingredient for upstarts looking to successfully enter a market. But they also enable new entrants to build around unique core concepts, fundamental ideas of the job to be done that materially differ from incumbents. By creating solutions with distinct primitive elements that are also more highly attuned to the evolving needs of customers, upstarts in a new market can gain a structural advantage that is difficult for incumbents to counter. It’s these low-level conceptual differences that turn an incumbent’s advantage of an established product and existing user base into a weakness that impedes their ability to counter upstarts.

Take Adobe and Figma as an example. How was a startup, like Figma, able to successfully enter and scale in a design market that Adobe had owned for decades? Adobe had built its design tools for editing photos and images, creating a powerful toolset for isolated design work. Adobe solutions were primarily built with a single user in mind, collaboration was never a native part of their products. As internet adoption became pervasive the demand for digital products sky-rocketed. Projects became bigger and more complex, requiring larger teams of both designers and non-designers to complete. Collaboration became a vital part of the design process for these bigger projects, and with more participants working together on a project version control became a nightmare. The job to be done for design tools had evolved. By leveraging technologies like WebGL and CRDT, Figma built a solution—based on a different set of fundamental concepts—that did this new job well. As a browser-based design tool tailored to help teams collaborate on complex digital projects, Figma can serve new use cases in a way that Adobe structurally can not.

Collisions come in various forms, sometimes they are subtle events, perceptible only by natives of a niche industry. Other times they are violent, deeply impactful tectonic shifts—market entropy incarnate, disrupting the status quo and helping to diffuse new best practices throughout an industry. Collisions are also often interconnected, forming a self-organized meshwork of markets and hierarchies. This co-mingling is key to unearthing new utility from existing technologies through combinations with recent breakthroughs—like microorganisms of the technology ecosystem, reinjecting nutrients vital to future growth.

One of the larger and more exciting collisions today is occurring at the intersection of cloud, connectivity, and data. A collision that encompasses both our investment focus looking forward and all the investments we have made to date. The ramifications of this collision will be tectonic and we are excited to continue partnering with companies leveraging this opportunity.

As monikers for massive trends, cloud, connectivity, and data are loosely defined and widely used. As we think about them: cloud refers to software, databases, and services that are accessed over the Internet, and powered by computers in data centers all over the world. Connectivity is the capacity for different platforms, systems, and applications to interconnect. And, data is information captured, processed, and/or stored by a computer.

By using the cloud, companies don’t have to manage physical servers or run applications on their own machines. Because the cloud allows resources to be shared across many users, it has dramatically lowered the cost of access, allowing companies to leverage computing power they otherwise wouldn’t be able to afford.

Increased connectivity doesn’t just mean more businesses building websites or consumers transacting online, it also signifies the growing appetite for direct connections between businesses; a willingness to leverage things like peer-to-peer networks, APIs, and web applications in core business functions. As connectivity grows, it’s unlocking exciting opportunities and new business cases in nearly every market. The impact of increased connectivity has already been wide-ranging and deeply impactful and it is still early.

As businesses and consumers have moved online, each action they take creates new event data to be captured and analyzed. As a society, we’ll create more data in the next three years than in all of human history. The numbers here are mind-boggling. But not all data is equally valuable, and siphoning through the mountains of potential insights from it can be difficult. As businesses better understand how to interpret and learn from the data available to them, they are able to move faster and more decisively. Efficiently using data to inform business decisions can create material advantages for companies. As data helps define new best practices for building a business, it is also unlocking new market opportunities for businesses to serve.

Cloud, connectivity, and data form a positive feedback loop that is characteristic of a powerful collision. Cheaper access to computing leads to greater capacity for interconnection, which creates more data to store and analyze, and in turn, grows the demand for compute and storage. This flywheel is playing a transformative role across industries and unlocking opportunities that wouldn’t otherwise exist. New frontiers enabled by this collision—like blockchain and machine learning—are already proving disruptive to the status quo and will create trillions of dollars in value.

While the opportunity set is massive, it is critical to avoid the facile conclusion that strong tailwinds will make building a company easier. In fact, the opposite is often true. Collisions are turbulent for markets, a time of transition when the competitive landscape can change quickly. Making even a rough sketch of competitors and partners can be a challenge. Plus, the operational best practices for building in these evolving markets are typically not established. Without the proverbial guidebooks that founders in more stable industries have at their disposal, navigating a business in these conditions can be treacherous.

New best practices

The fluid aspects of building near collisions are not limited to operations and competition. Often the customers themselves are still learning precisely what they want. A dynamic that brings challenges, but also gives companies the opportunity to change how customers think about their own workflows. Successful companies will introduce better fundamental concepts that meet user needs in a way that pushes their customers forward, spurns greater adoption, and enables new ecosystems to form. The best companies don’t stop there but take an active role in fostering and directing the growth of these ecosystems in ways that further empower participants. Taking a staid approach to building a business is insufficient in today’s rapidly evolving world. Companies have greater visibility into customer usage than ever before, and winners and losers in a given market will be decided by which teams can more efficiently experiment, iterate, and learn. In this paradigm, customer experience is the new logistics, integrations and data are the new suppliers, and rapid learning and iteration are the new operations.

As best practices for building a company evolve, the approaches that investors take must adapt in kind. Finding the proper balance of opportunism and forbearance is the enduring struggle of any investor. Too often, those who have had success doing things a certain way become sclerotic in their approach—rigid and unwilling to adapt. Continued self-assessment is one of the ways we hope to hone our balance and avoid common pitfalls. And as we take stock of the funding landscape, new business formation, and tectonic shifts in how businesses are built, we are more enthusiastic than ever about our positioning and approach. It is an incredibly exciting time to be investing at the earliest stages of innovation.

The other half

An investment framework is a formalized and structured method to help with decision-making, serving as a guidepost for decomposing a problem and focusing attention on the most critical factors. It is an important part of the investment process. But in Venture, particularly at the earliest stages, deciding to write a check is only half the battle. We don’t believe that venture investing should be a passive activity, and while we are aware and respect that it is ultimately the team's job to build the business, too many investors use this as air-cover to not get involved at all.

Our approach with a company post-investment is a little different and can be summarized with this simple axiom: add value, don’t just capture it. Capital is abundant, focus and engagement are not. We don’t view an investment as a ticket to ride, but rather as an invitation to roll up our sleeves and get to work. We never want to simply be a check for entrepreneurs. Building is hard, and we believe involved investors can have a material positive impact on the outcome of a business. Taking on project-level work is a defining part of our approach and our willingness to do so is often a differentiator that founders value when evaluating whom to work with. It also enhances the working relationship post-investment, and we can’t imagine doing this job in a more passive way.

Getting closely involved with companies also creates a virtuous cycle for us. Taking on project-level work grows our institutional knowledge by giving us hands-on experience solving problems. This new learning informs future interactions with all companies, deepens our understanding of the challenges that founders face, and makes us better investment partners for the founders we work with. Our goal at El Cap is to be as closely aligned with founders as possible. Regular communication and collaboration help to remove the performative dynamic that invariably exists between founders and investors.

Investing is not an abstract exercise, we are bound to specific companies, full of people with unique imperatives and personal histories. At its core, early-stage investing is a people business, and it is that aspect of our job that gives us the most pleasure: the part that doesn’t fit on a spreadsheet, that resists structure and design. The way in which, when it works, a partnership between investor and operator—and by extension, a company—proves to be a chorus rather than a string of solo acts. When disparate ideas, experiences, and desires are harmonized into something greater than the individual parts. When faced with inevitable adversity, it is the human connections, the bonds formed in joint effort, that fortify an organization and ultimately determine its fate.

This letter is published on our website for two reasons. The first is for you, the founder who is searching for a partner in your journey to build a business. We want you to better understand who we are, what we’re excited about, which values drive us, and how we think about working with people. If a lot of what you just read resonates, then at the very least, we imagine we’d have a great conversation. The second reason is for both of us. We composed this letter at a period in time when we’re scaling our firm and laying a foundation that will allow us to do this work for many years to come. Time and progress have a way of sometimes clouding one’s perspective on what’s truly important. This document serves as a totem for us, something to revisit from time to time, ensuring that we are being true to our past selves, who had all the excitement and clarity of building something new.

Stew & Kunal

The initial days of building a company are messy and complicated. Often more of a tactical exercise than a strategic one. Rather than trying to boil the ocean, the pragmatic move is to focus on a single wedge into a market, defining a use case that you can solve better than competitors. At this phase of building many aspects of a company are still being defined. One of these that is too often overlooked is defining the core concepts of your approach—crafting a narrative of the basic buildings that your products and operations are built upon.

It's worth drawing a distinction between a narrative of product/operational concepts and one crafted by the marketing team. While both important, the latter is much easier to change and not the focus of this post.

Generally, narratives get a bad rap. In large part due to VCs (myself included) distilling companies down to the elements they share with notable unicorns. [Insert business] is the Uber for [insert market]... Founders often push back when hearing these simplifications as having little practical use. Clearly, a narrative description of a business glosses over many of the nuances and subtleties that exist. But it is because narratives strip away details that they are easy to remember and highly transmissible. And it is precisely these factors that make them worthy of founders’ attention.

Whether you focus on them or not, narratives naturally form around companies and products. And as a product gains users, it is the interactions with the product itself—rather than marketing efforts—that determine how users think about a company. Twitter could spend millions on a marketing refresh, but without a coinciding product overhaul, it likely wouldn't change how people think about the company. In the minds of users, product experience trumps marketing.

It is the power of the product to define a company that makes employees—the people actually building the product—the most important audience for a clearly defined set of core concepts. When there is a poor understanding of these inside an organization, like a game of telephone, even small deviations can manifest as decisions sub-optimally aligned with a companies vision. Over time, these small discrepancies build up and calcify, turning into a meaningful problem—narrative debt expressed as unwanted feature creep.

The process of examining a business and finding the highest-fidelity simplification of a companies approach is not the job of outsiders. Only with a complete understanding of the problem, full context for the product, and its journey to date, can an accurate distillation be made. It’s essential for founders, and companies themselves, to regularly do this type of house cleaning.

In the past, founders might only have done this type of self-evaluation when an external event—starting to fundraise or entering a new market—caused them to. But the best companies are starting to internalize the value, and cost, of a crisply defined operational narrative. As more work is done by distributed teams the value of these totems will only increase. An assessment of internal narratives is a key aspect of emerging best practices for founders and should be a more common exercise for companies.

@StewBradley

The NFL draft is happening this weekend and having gone through that process myself, I can't help but look for parallels in the business world. The draft is a confined hiring game. A slightly warped microcosm of the broader labor market. And while the draft has rules in place specifically to give each team a fair shake, there are organizations that persistently outperform and others that consistently struggle—no need to name names… I see you Jets fans.

Throughout his career, Andy Reid, the head coach of the Kansas City Chiefs, has been one of those coaches that have persistently drafted well. Picking up Patrick Mahomes, the future league MVP, after nine other teams passed on him being a great example. I played for Andy in Philadelphia and he had a framework for navigating the NFL draft that has stuck with me. Don't draft for need, pick the best player available. It doesn't matter if you already have an all-pro quarterback and the current NFL leader in passer rating, as the Chiefs did in 2017 when they drafted Mahomes. If the best available player is a quarterback, that is who you should draft. This strategy boils down to a simple axiom: you can't coach talent, and ultimately, it is talent that wins games.

Clearly, there are practical limitations to this strategy for a business. Hiring a talented salesperson when you need a front-end engineer would be foolhardy. But there is still an important lesson here. To the degree you can, put the resume on the shelf and look for talent. Too many times I have seen a hiring process whittled down to a few candidates and the final decision is made based on prior experience. A choice that often proves to be short-sighted, particularly for startups where things can change quickly and the ability to adapt and learn is paramount.

Putting less weight on experience and more weight on talent also enables a company to expand the pool of potential candidates. And with lines that previously separated different labor markets quickly evaporating as a result of the pandemic, it's also pragmatic. Hiring is a challenge for every business, whether it's Amazon or a two-person startup. And it's no secret that the quality of talent inside an organization is the primary determinant of future success. Whenever possible, pick the best player available.

@stewbradley

In Salt Lake City, a few blocks east of I-15 between a discount dentist’s office and a Maverick gas station is a squat brick building. There is no sign outside, no identification besides four sun-faded plastic stickers indicating the address. Inside, a large room with shoddily painted cinder block walls and a rubber padded floor is flanked by a tiny office and two small bathrooms. Weight racks holding a cornucopia of dumbbells, kettlebells, and plates from different manufacturers frame the room. Cast off remnants from a decade’s worth of garage sales. This gym is the antithesis of an Equinox and makes your local CrossFit look like a Four Seasons. Not a single mirror inside.

Since its inception, this gym has taken a unique approach to training and early on developed a cult-like following. So much so that the gym adopted the name Gym Jones, a tongue-in-cheek homophone to the late cult leader. The following exploded when the director Zach Snyder asked the gym to train the actors for an upcoming movie he was directing called '300.' While the quality of the movie is debatable, the fitness level of the actors is not. The growth in popularity attracted a clientele from backgrounds as diverse as the weights in the rack. Retired teachers, soccer moms, professional athletes, alpinists, triathletes, soldiers from special operations units, etc. This diversity would make you think the place was inclusive, and by many measures it was. It didn’t matter where you came from, what you did for work, how fit you were, who you loved, or how you voted. The only criterion for admittance was effort. And that was nonnegotiable. The audition was simple and open to anyone. Ten minutes on an AirDyne, maximum output.

The Schwinn AirDyne is an exercise bike first released in the late 1970s. You might have seen one in your grandma's basement. It uses wind resistance, which means the harder you pedal the more difficult it becomes. At the gym, fear of this geriatric exercise equipment was so great it was dubbed “satan’s tricycle.”

The ten-minute audition for Gym Jones was brutal. The test was designed to see how you react after reaching exhaustion. With lactic acid pooling in your stomach, fire spreading in your lungs, and waves of nausea bombarding you, will you keep going? Or will you pull back? A willingness to endure in the face of exhaustion was all that was needed to pass the test. In the gym, this point of exhaustion was referred to as “the blowup.” The telltale signs of a blowup are easy to see. As core muscle groups reach their limit, the body starts to writhe; arms contorting, head bobbing violently from side to side, and torso rocking back and forth. It is not a pretty sight, nor is it comfortable to experience. No matter how in-shape your body is, once you blow up, everything is mental. It may sound subjective, but if you see the test happen there is little ambiguity in the result.

There was a strong sense of camaraderie in the gym and often at the end of a tough workout bystanders would congregate to cheer people on. In one such workout, as I flailed about on the AirDyne, a veteran gym member gave me some sage advice. "Slow is smooth, smooth is fast." It caught my attention because it ran so counter to the rhetoric typical of a workout brouhaha. The message was clear. Your energy is finite, don’t waste it. It had an immediate impact on me. Excess body movement stopped. Face muscles relaxed. A sense of calm took over. The shift was mental, but it manifested as physical change. By focusing on removing the wasted energy my performance dramatically improved. The difference wasn't a change in effort, it was a change in efficiency. Efficiency is the ability to avoid wasting materials, energy, efforts, money, and time in producing a desired result.

A stationary exercise bike is effective in illustrating the importance of focusing on efficiency. But its simplicity makes it a poor analog for our complex lives. Finding efficiency in the real world is as much a challenge of definition as it is of execution. How do we know one set of actions is efficient while another is not?

At El Cap we use three inputs; resources, goals, and priorities to measure the efficiency of our work. Resources [focus, effort, capital] are our engine. Goals are the destinations we plan to visit. Priorities act as our GPS as we navigate forks in the road and try to avoid traffic jams. Being candid about the status of each of these variables adds a layer of accountability to our work, and helps bridge our long-term goals and near-term decisioning.

When we first launched El Cap there was so much to do that I soon resembled my younger self flailing around on the AirDyne. It was like my effort had turned to water, flowing to the path (tasks) of least resistance. Light on sleep, long on to-do's, and decreasing in productivity, I had in Gym Jones speak, blown up. Only by slowing down, re-underwriting my goals, refining my priorities, and refocusing on being efficient with my efforts did I find my bearings. Like my experience on the AirDyne, the focus on efficiency had a material positive impact on my output.

The importance of efficiency has particular relevance for young businesses, where resource constraints are a daily part of life. Finding ways to maximize the impact of those resources is vital to success and is too often overlooked. Growing businesses do need to expand their access to resources; like new hires and additional capital. But the cadence of resource growth is lumpy, and day-to-day focus is better spent finding efficiencies. It can be a tricky balance but they should be done in tandem. Efficient allocation of resources is a skill that takes time to develop. It's also one of the most important operating proficiencies, so it's worth the effort.

Building a business can feel like an AirDyne sprint. Exhausted and jumping from one fire drill to the next, while advisors and investors urge to "push harder" and "go faster." At El Cap, we ascribe to a different approach. Slow down, set your priorities, and focus on the most efficient way forward, because slow is smooth, and smooth is fast.

@stewbradley

The past year of working from my bedroom saw us get increasingly busy. As January rolled around, the frequency of Zoom calls reached a fever pitch, unscheduled time on the calendar felt like a rare treat, and the tenuous boundary between work and life all but evaporated. Facing an ever-growing list of to-dos is not unusual when building something new, I knew what I was signing up for. But as investors, continued learning is more than an optional exercise, it's a job requirement. Ensuring I was finding enough time outside of the daily blocking and tackling to do this learning was a must. For over a year we've been using a system we call Level Learning to manage our reading. But as the calendar got more chaotic, simply tracking the reading I was doing wasn't enough. I was forced to start scheduling reading time each week to make sure I wasn't falling behind. Reading is something I've always enjoyed, and over the years I've developed a decent sense of the pace I can absorb new material. It's worth noting that me carving out this explicit reading time wasn’t an attempt to increase my consumption, I was just trying to keep up. And while my reading pace stayed consistent, the insights and new ideas I was generating felt stunted and forced. It's as if the combination of work-from-home and an increasingly packed schedule had broken some aspects of how I learned.

As working from home became the new normal and people started weighing in on the pros and cons of leaving the office, time savings has often topped the list of benefits. A bulk of these savings come from the lack of commute, but that isn't the only source. All the time spent navigating a workplace that isn't also our living space adds up. The short wait for the elevator, the two minutes in the queue at the coffee station, or the walk to and from in-person meetings are all examples of little moments throughout the day when we couldn’t be sitting at our desks doing work. Let’s call this time, in aggregate, the friction around in-office work. And while I agree that losing this friction has potential benefits—I love the 6-foot commute from my bed to my desk—there are some elements about it that served a purpose. While it sounds counterintuitive, the friction around in-office work actually gave us time. Not more time for work, but the time when we couldn't be working. Time to think.

Unbeknownst to me, the friction around work had naturally injected a balance between ‘doing work’ and thinking into my day. Because I'd thought of that friction as waste, once it was gone I filled the extra hours by 'doing’ more work. More reading, more calls, more writing, all of which are good things. I had just failed to also carve out time explicitly to do more thinking. Looking back, I imagine myself these past few months as the knowledge worker equivalent of the Cookie Monster—bear with me. If you’ve ever seen the Cookie Monster eat a cookie, you may have noticed that while he chews, crumbs flying everywhere, he doesn’t actually swallow a single crumb. As I got busier I focused on making sure I was still chewing a lot of proverbial cookies, but hadn't worried about making time to swallow. Instead, I’d be on the next project, cracking the next book, taking the next call, or laboring over the next blog post.

In his book, “Elastic” theoretical physicist Leonard Mlodinow makes the point that it's the moments when we aren’t intently focused on a task that our most creative thinking happens.

“Your association cortices are always running in the background, but when you are not focused on some task—for example, when you are doing something mindless, like driving—that’s when your mind is most free to roam. That’s why that is when you most actively create new ideas.”

"Something mindless" is a broad category, but I'm fairly certain the work I was doing in my newly found time didn't qualify. I’m not sure about you, but blocking out time to do nothing except think is not a habit I’d developed working at Goldman Sachs or a NY hedge fund. Sitting at my desk in the Goldman office, with my screen off, staring out the window would definitely have garnered some sideways glances. But realizing that doing work is only half the battle and that unplugging is a vital part of learning and more than just a way to avoid burnout has helped me lean into the practice. Despite my trepidation, I now block time on my calendar each week for thinking. This means, no screens, no music (TBD if that one will stick), no talking or phone calls, no writing, and no reading. I've found playing fetch with my dog Iggy to be a good thinking time task.

I’m only two months into this experiment, but as I’ve taken time to step away and do something mindless I have felt notably more settled and, dare I say, productive. But the sample size is small, and the jury is still out. As a regular practice, will thinking time help me manage the growing day-to-day demands of my job with the need to continue learning or just build up my backlog? Will the benefits of fewer hours spent doing work be a net positive over the long run or make me less productive? While early signs are positive, the devil is in the details, and finding the right balance will be pivotal. I’ll keep you posted.

@stewbradley

World Autism Month is an event each April centered around sharing stories and providing opportunities to increase awareness and acceptance of people with autism. A core part of that message is the concept of neurodiversity, the idea that autism, and other neurological differences like ADHD and dyslexia, are natural variations of the human genome rather than diseases to be cured.

Our five-year-old daughter Bo has autism. She is bright, curious, loving, and enigmatic. Like many parents, much of what I thought I knew heading into this gig has turned out to be either wrong or less than the whole picture. Bo has shifted my perspective on many aspects of life, but it is around human connections where her lessons have been most profound. She's helped me see parenting as a relationship to be nurtured rather than a skill to be mastered. She has shown me that being a good example is more impactful than giving good instructions. And she has highlighted that being present, fully, is table stakes for building and maintaining a strong personal connection. Looking back, I'm humbled at how far I had drifted from these fundamentals, and how stunted my facile generalizations of neurodiversity were, before our badass Bo came along.

Advocating for a neurodiverse child shines a harsh light on how we, as a society, view neurological differences. How these differences, which may be hard to see as an outsider looking in, so often go unnoticed, and how that ignorance can lead to intolerance and confusion. How we've only scratched the surface of fully understanding autism and other neurological differences. And how our collective lack of knowledge can make fitting into the world a herculean task for the neurodiverse. Bo opened my eyes to the potential of neurological differences in those around me, and in turn, helped me gain a deeper understanding and acceptance of my own idiosyncrasies. As someone with sensory processing disorder (SPD) and attention-deficit/hyperactivity disorder (ADHD), how I think about these conditions has shifted from a furtive suppression to a sincere sense of gratitude. My own differences are not something to be cured or embarrassed about, rather, they are core elements of what makes me 'me.' The idea that these elements of myself are somehow divisible is a fallacy. And through this growth in perspective, I've been able to embrace and even feel empowered by my differences.

Neurodiversity brings real challenges, but also many gifts. There is no shortage of examples of innovators whose contributions to society are a result of the way they think differently. Many of the most influential scientists and creative geniuses in history are believed to have been on the autism spectrum. Is the unique way these people experience the world what led to their innovative ideas? At El Cap, out-of-the-box thinking is at the heart of what we do—supporting innovators as they find creative and novel solutions to big problems. And it's exciting to see companies that have embraced different types of thinking in a more formal way. A great example of this is Ultranauts, a QA services business where over 75% of professionals are on the autism spectrum. Ultranauts is on a mission to demonstrate that neurodiversity is a competitive advantage, and their progress to date is encouraging.

Academic thinking and research around neurodiversity are rapidly advancing, but we still have a long way to go. The idea that neurological differences are natural variations in the human genome—like height or eye color—is still a novel concept for many. And better understanding how these variations can convey extraordinary skills and aptitudes will have vast ramifications; from how we educate and foster the neurodiverse, to a deep cultural shift that embraces and celebrates human intelligence in a wider range of forms. My hope is that increased awareness will help us interact with more empathy and acceptance. And over time, will change not only how we talk about neurodiversity, but creativity and innovation as well. Understanding that the differences in how we see, process, and interpret the world are sources of strength and the commonality that makes us human.

@stewbradley

The recent run in crypto prices and the blossoming zeitgeist around all things blockchain has drawn comparisons to the dot com bubble. I have no plans to prognosticate on crypto prices, but I find the comparison fascinating given the role bubbles have played in major technology shifts over the past few centuries. Are there interesting parallels we can draw between today and those previous shifts? And what might those parallels teach us about the impact the blockchain could have on society?

Referring to everything that touches the blockchain as a single thing called the blockchain is a gross oversimplification of what is happening in the space. But it feels about the same as using the internet as a catch-all term for everything that touches the internet, YOLO. Plus, there is a reason for thinking about the blockchain holistically, as a single constellation of related technologies, and it has to do with technology revolutions and the work of Carlota Perez. Technology revolutions are periods of accelerated technological progress when new innovations are rapidly adopted and abrupt changes in society occur. If you aren't familiar with Carlota's work, she studied the major technology revolutions of the past few centuries and recognized a consistent pattern among the interplays between capital markets, new technologies, the global economy, and society. She observed that each revolution has two phases: (1) installation phase, when the core infrastructure needed for the new paradigm is built (highways for automobiles), and (2) deployment phase, where the technology gains widespread adoption and externalities emerge (increasing adoption of the automobile + highways = suburban expansion). See a graph of the In each of these revolutions, a key ingredient was a constellation of new and existing technologies that, when combined, enabled a paradigm shift. This is why looking at the blockchain as an agglomeration of related technologies can be useful, specifically when thinking about potential long-term implications.

The innovations that fuel these revolutions are often built on the back of technology breakthroughs from prior generations. Universal electricity was an innovative technology in the early 20th century, but by the 1970s, and the birth of the microprocessor, electricity was a commodity and served as a foundational layer for the computer age. The internet's adoption rate followed a similar trajectory to that of electricity; and will undoubtedly play a foundational role in the next revolution.

Technology, on its own, is actually a poor indicator for when a paradigm shift will happen. One of my favorite aspects of Carlota's work is how it highlights human behavior as a vital determinant of tech revolutions. How the changes in how we interact with technology—our collective technology *best-practices—*are the highest signal indicators of a pending revolution. And it is the changes in human behavior around the blockchain that get me most excited about its potential impact.

The most challenging form of innovation is changing human behavior. It is the one persistent and unknowable variable new technology must solve to unlock adoption. When viewed through that lens, the fervor around the blockchain bodes well for its staying power. Despite a user experience that is objectively pretty terrible, millions of people are flocking engage. Sure, some of the draw has been to speculate on crypto prices, but I think it's deeper than that. Discussions about the future of blockchain with people close to the space often turn from heady to pollyannaish. You can almost hear the echoes of someone describing the potential of the internet in the 90s. It's like a religion, and newly baptized members are spreading the word. Attracting more people to experiment and engage with these technologies. I found this recent announcement from Visa a particularly strong signal that corporate affinity for the blockchain is growing. Minds are being changed, and behavior along with them. That is as strong a signal as any that we are in the midst of meaningful and broad-based technological change. It's also a tell-tale sign that things might be frothy in blockchain land.

To be clear, I am not saying we are in a blockchain bubble, that a crash is imminent, or even that long-term correction is inevitable. I am also not saying that a crash won't happen. Do I think the path to broad-based adoption for the blockchain will be linear and smooth? It seems unlikely. But how the vicissitudes play out, I won't pretend to know.

What I do believe is that the blockchain is here to stay. As my friend Packy McCormick is apt to say, "genies don't go quietly back into bottles." There are certainly some overvalued, highly speculative, and even fraudulent projects in the space. But there are many others, built by legitimate teams focused on solving real problems, that have the potential to meaningfully change how we interact and exchange value with one another. Finding stability will take time. Matriculation of the masses will happen as the user experience improves and use cases expand. And judging by the broad range of project types popping up almost daily, this seems to be underway. The road ahead won't be without bumps and setbacks, but the adoption of the blockchain will exponentially expand in the coming decade. The community of builders and believers is passionate. And they're not going anywhere.

The revolution is now begun. It's gonna be a wild ride.

@stewbradley

In early October, we decided to move from LA to Salt Lake City. My wife and I have roots in the area and the allure of being closer to family while we wait out COVID was too much to ignore. With a two-stage move from NY to LA already under my belt this year, I was eager to mix it up. My big idea was to rent two 26-foot U-Haul trucks, fly my Dad and brother in from Salt Lake, and make the drive ourselves. It would cut the cost of moving significantly and be a fun bonding experience to boot. It was only supposed to be a 10-hour drive. How bad could it be?

Turns out, a 26-foot U-haul packed to the brim and careening down an under-construction mountain highway is about as sketchy as it sounds. With the sweat from my hands running off the plastic-coated steering wheel into pools at my feet and stress-induced cramps spreading from my neck into my shoulders, I had serious doubts about the profundity of my plan. But at that point, what could I do? Stopping wasn’t an option. With no freeway exits for 60 miles and the fawnish hue of dusk quickly fading to black, my best option was to keep chopping wood, or in other words, stick to the plan and keep driving.

Keep chopping wood, a phrase that reminds me of my 9th-grade gym teacher—an irascible man with a beer belly and an endless collection of tube socks—bellowing at disinterested teenagers to finish running their laps. Despite the tube socks, there is wisdom in the saying. Whether running laps, jamming on a work project, or building a business, sometimes there aren't shortcuts or growth hacks. The sooner we accept and embrace the process the better our results will be. The phrase is still a reminder for me that the unremarkable everyday tasks are often difference makers in life. That consistency in the effort is the path to remarkable achievement.

There have been many times during this pandemic where I've felt much like I did driving that U-Haul through the desert. Times when uncertainty and stress sent my mind racing for alternative paths. But I've been fortunate to have people—my wife personally, and my partner Kunal professionally—who have, like my old gym teacher, harped on me to keep chopping wood.

The challenge with trying to write pithy blog posts is that real life doesn't fit neatly into margins—it’s messy and nuanced. So while it’s true that building something requires dogged persistence, successful people are rarely one-dimensional. Putting in the time to maintain connections with people in your life; recognizing the importance of finding balance by unplugging from what we’ll call your primary task is as vital a step as any for success. I'm flagging this because chopping wood is not about focusing on your goals at the expense of everything else in your life. It's about accepting that progress can seem slow and even non-existent at times, but in the long run, if you stay consistent, it will pay off. Chopping wood is like body punches in a boxing match. They aren't the shots that make the highlight reel, and in the early rounds, they don't seem to be doing much. But their effect is cumulative, and as the fight wears on, it is body punches in the early rounds that pave the way to victory. It's understandable to want to land the haymaker, but that isn't how most fights are won.

The path to success is anything but linear. Whether you’re landing haymakers or sweating in a U-Haul, your position on the road of progress is always in flux. Knowing that doesn’t make it easy, but I hope it helps us find consolation in our setbacks and solidarity with others striving to overcome similar challenges. I’ve leaned heavily on my gym teachers these past few months and hope to fill that role for others when I can. It’s been one hell of a year, and for many, it may seem like Lady Luck has left for Rumspringa and lost interest in coming home. I say Lady Luck be damned, let’s get to chopping.

@stewbradley