
How To Spot a Breakthrough: Tips from Early Amazon Investor Nick Hanauer - waderoush
http://www.xconomy.com/seattle/2008/12/03/how-to-spot-a-breakthrough-tips-from-early-amazon-investor-nick-hanauer/
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nostrademons
Something I'm wondering - how do you spot that "transformational" value in
foresight, when the next element ("social disruption") is all about how these
huge shifts in value creation are never really apparent at first glance?

For example, I think that YouTube is easily a 10x improvement over things like
VHS tapes. I was just hunting for the opening credits of children's shows that
I watched as a kid, and I found every single one (except Voyage of the Mimi
;-)) in about 15 seconds. My _dad_ has been searching for the songs he grew up
with, in the 40s, and they're all there. It's like a vast nostalgia library.

But that didn't exist until enough people started using YouTube that basically
everything became available online. When I first saw YouTube, around the fall
of 2005, I was basically like "What's the point?" You were limited to 10
minute clips, and it didn't have anything I wanted on it. Even when Google
acquired them for $1.6B, many people say they overpaid. Heck, people _still_
say they overpaid.

And Google Video, which came out before YouTube and offered a very similar
feature set, never really caught on. Nor did the zillion other video-sharing
startups.

Ideas? My cofounder once talked with Clayton Christiansen about this (who's
done a lot of work on disruptive innovation), and he said that on a micro
level, it was basically all luck. You know what _doesn't_ work, but finding
out what _does_ is basically just a matter of trying lots and lots of ideas
and letting the vast majority fail.

~~~
maxwell
YouTube succeeded because it's a good brand and good enough software. If
Google had just integrated video results more tightly into search, thus making
it a feature rather than a distinct product, and made uploading
straightforward, they might have won. They still could, actually; a lot of
people I know use Google to find YouTube videos in the first place.

I've noticed that whenever Google launches Google _, where _ isn't a search
filter, it more often then not fails. It's the branding. I think that for a
lot of people Google = web search. Google Image Search is popular because it's
an easily comprehensible feature of search. Google Docs is a shit brand; if I
only knew about Google search and Gmail, I'd guess it's document(ation)
search. Or just a word processor. It's not immediately clear that it's a web-
based office suite.

A large part of Gmail's success was in creating a distinct brand; my hunch is
that if it was launched as just Google Mail, it wouldn't have been nearly as
successful (technical merits aside).

~~~
fallentimes
Youtube was hemorrhaging cash. If someone wouldn't have bought them, Youtube
would have been in big trouble. especially if we had been in a recession.

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sireat
Interesting that despite numerous cases of success, he still believes in the
big ol' bag of luck. Highly successful people usually loathe to admit the part
of luck in their lives.

~~~
sanj
I've found that the people who are most successful are those that ascribe
their success to good luck. And when things fail, they examine what they did
wrong: externalize success, internalize failure.

Those that believe that luck has "nothing to do with it" are generally endowed
with a huge ego and no way to see around it. Strangely, they're also the ones
most likely to blame _bad_ luck when things go wrong: internalize success,
externalize failure.

The advantage to internalizing failure is that you can learn from it.

~~~
kirse
From an optimistic (and even mental health) perspective, externalizing failure
and internalizing success - aka "I did the best I could but the situation did
not materialize" - is much healthier than internalizing failure and blaming
yourself when things go wrong. Externalizing success never gives yourself due
credit when things go right, and internalizing failure always blames yourself
when things go poorly. See the problem?

This is not to say one should have an inflated sense of value or "don't learn
from your mistakes", but it is much healthier to optimistically look at
failure as not a personal thing, but something external.

People who have succeeded and are confident in themselves are never afraid to
look back and admit that a little bit of luck (and opportunity) was part of
the equation. But by no means will they discredit their own personal influence
and attribute the entire success to something external.

~~~
nostrademons
I recall a psych study on this. They found that people who externalize failure
and internalize success are _happier_ , but those who internalize failure and
externalize success are _more successful_. And yeah, they did find the
corollary that more successful people tend to be less happy. Makes perfect
sense really.

~~~
kirse
I could understand that study. When one roots their personal value in
something external, like a measure of success, they spend their whole life
working ridiculously hard and sacrificing everything to validate themselves
based on the measuring stick of that externality.

The only problem is the measuring stick always keeps growing taller. So what
is "success" to that specific individual when they can't enjoy it or even
recognize it as "good enough"? Others will tell them they're an amazing
success, but they'll never believe it was enough of a success. That definition
of being _more successful_ is based on the others' perception.

Not only that, but you'll notice the study did not say internalizing success
means you'll be _less successful_. It's possible to be content by valuing
yourself in foundational principles like "hard work, integrity" etc. and
through that achieve both success and happiness.

I'd be interested to see that psych study, but it does seem pretty common
sense, though. The more you value an outcome in life the more you'll spend
your life chasing it - and the higher probability you'll reach it.

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danielhodgins
Using the 10, 100, or even 1000X better rule leads to some interesting,
dangerous thoughts about how to solve some of the world's toughest problems.
Kudos to Ganauer for mentioning Qliance- a dangerous new model for treating
non-catastrophic health problems that might just mortally wound the fat-cat
insurance companies.

Here in Canada everyone gets free health care, and Scandinavian countries are
even more progressive than we are. Residents in some Scandinavian countries
attend university for free. Free university and health-club-style medical for
everyone!

~~~
nazgulnarsil
this is a startup focused news site. we're all aiming to be one of the fat-
cats one day.

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gruseom
This stuff is as much better than the average advice post as this guy is more
successful than the average investor.

