

The Best Advice My Dad Ever Gave Me (for Demo Day) - dmor
http://distributionhacks.com/the-best-advice-my-dad-ever-gave-me-1

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choffstein
As someone who has started a business in the finance space trying to leverage
technology, I take some offense to this. My business partners and I have
worked our asses off over the last several years to get to where we are today:
billions of dollars in assets powered by our investment models. Trust me:
asking someone to give you money to put in your strategies is not easy. Unlike
the start-up space, there is no "minimum viable product," "traction" metric,
or even "asset" that has some intrinsic value (like a unique algorithm or
brand). You either have a track record, or you don't. New strategies don't, so
it's all "trust." Sure, I can show a "back-test" or "stress-test" -- but
everyone knows those are bullshit anyway.

You think you know stress? Imagine knowing that every day, your models are
making investment decisions for billions of dollars. Sure, it's a drop in the
overall pool of assets in markets, but it is enough to keep you up at night,
worried about someone's retirement or someone's college fund. Drop a few more
percentage points than the market? Goodbye hundreds of millions of dollars.
Yep, that's going to happen at 50 when you start your "easy life" as a hedge-
fund manager.

I'm not saying my stress is greater. I'm just trying to make the point that
every business has its own share of problems, and to say that being a tech
entrepreneur takes any more balls than being any other kind of entrepreneur is
naive.

Can we please stop, as a community, with the "woe is us, the tech
entrepreneur?" It's embarrassing. Starting a business is starting a business,
no matter the industry. In fact, I'd argue that we live in a golden age for
tech entrepreneurship that has never existed in another industry. Imagine
trying to start a bio-tech business or a manufacturing business (well,
arguably "outsourcing" could be the manufacturing entrepreneur's "scale"...).
There are no "seed" rounds. The assets you have to raise are probably 100x
what a tech entrepreneur has to initially raise. On top of trying to build a
product, you probably have to manage building and factory development,
understand legal regulations for your industry, and manage tons of labor.

We live in a time where you can roll the dice and start a business in the tech
space with a handful of smart people, some elbow-grease and maybe $50k in a
seed round. This is a golden era.

I respect the hell out of what you are doing -- starting a business is NOT
easy -- but please don't say it takes any more balls than starting a business
in any other industry. It doesn't.

~~~
savramescu
I see Dad's advice as going for something that can have more meaning to you
and for which you need balls then for the safe/low risk model.

It's not about stress, it's about the need of the individual to make a
difference. Doing something that has been done before it's not that exciting
for a 20-ish year old. But someone older will take comfort in it.

~~~
choffstein
I am a 20-ish year old and despite "what I do" has been done before, the "way
I do it" never has -- and that is plenty "exciting." There is nothing safe or
low-risk about starting a hedge fund.

I get your point about "having more meaning" -- but I'd argue that is true for
any business endeavor, not just tech startups. If what I was doing didn't have
truly personal meaning for me, there is no way I could stomach the stress.

Maybe I'm overly sensitive because the article seemed to compare the easy
hedge fund life to the tough tech start-up life, which I think is a gross over
exaggeration in the divergent profile: I believe that they are tremendously
similar.

~~~
savramescu
I think you're reading into it too much, and you're taking it too far away
from the context between Dad and Daughter. This is, and will be, their own
personal experiences. For some starting a hedge fund can be seen as high-risk,
when for someone that has run one for years (Dad's case) or for someone that's
been around one for years (Daughter's case) it can be seen as low-risk.

If Dad was an MD he would've said don't become a surgeon, do research and try
to change current procedures. At least that's my take on the blog.

~~~
choffstein
As I said, I am likely over-sensitive to these issues; finance isn't exactly
the most well-respected industry at the moment.

------
Knighty
The author, rightly, makes the point that finance, like most things, is
primarily about trust. But that's about the most interesting thing in the
article.

Capital introductions are hard, and everyone wants to cosy up to someone
looking for a 'home' for their excess millions. It's an environment where a
couple of dudes/dudettes with laptops and an idea might have a potentially
successful hedge-fund idea but lack the credibility and track record to make
the risk worthwhile for a potential investor. The investor could lose a lot of
money very quickly if _your_ idea is wrong. The chances are, that if your idea
is 'right' they'll listen to you explain it (because you really will need to
explain it in depth) and then go and find someone who they _do_ trust to
implement it for them.

My point is that, it would be very hard for me to gain sufficient trust from
prospective investors to raise $200m because I don't have any contacts or
access to the necessary capital.

However, the daughter of a financial advisor for high-net worth individuals is
playing a very different game to me. She very well might easily be able to do,
what I easily can not. So, for me at least, there's nothing of interest in
this article. I'm pleased for Elle to be in such a great position and wish her
well.

~~~
dmor
Thanks for the kind wishes. I think what I (the OP) failed to convey in my
post is that going into finance, given my background, would have been the easy
way out for me. Having someone tell me "oh you could totally do X" when I
thought X was this crazy out of reach thing, made me re-evaluate whether other
things I had put on the crazy shelf were do-able, too. Like founding a
startup.

~~~
Knighty
Yes, that makes more sense. In which case it feels like the point of the post
is more to do with following your own path before accepting the path that is
'mapped' out?

Perhaps you actually say this in the post somewhere, but it I don't recall
seeing it. IMHO it would make an interesting article if you emphasised that
point more.

In my experience there is something to be said for NOT always following the
money but following the 'fun'. More than once the 'fun' turned out to be
surprisingly lucrative after all ... :)

~~~
dmor
Absolutely agree, and happily that has been the case for me too! I think there
is a lot more I could say about not following the path, I have been very
contrarian and given the people who love me a lot of extra gray hairs. I think
it was pretty nuanced in the post, I'm trying this more conversational style
with dialogue.

------
kristofferR
I'm beginning to come to this realization myself - having balls is one of the
most important factors of having success (no matter what success means to you,
whether it's social, financial or something else).

If you don't have the balls to do the things necessary to archive the things
you want, with all your energy and will behind it, you simply won't archive
it.

Most people doesn't even try to do the things they fear, just a small minority
does. Of the small minority just a few tries with everything they have, most
of them unfortunately holds back because of their fear of failure. A fear of
failure is preventing them from giving it everything they've got.

~~~
unohoo
its not always fear of failure. Sometimes you have to pragmatic too. For
instance, doing a startup in Bay area with a family is not practical for a lot
of people, especially given the current rental/living expenses.

~~~
dkersten
_doing a startup in Bay area with a family is not practical for a lot of
people, especially given the current rental/living expenses._

That's still fear of failure, only in that case, the fear may be well founded.
If they fail, they cannot feed their family, so they are afraid of failing and
probably for good reason.

~~~
jackpirate
It's not fear of failure. It's possible that there are people who couldn't do
a startup even if guaranteed 100% chance of success in 10 years due to the
stress/lack of money in the mean time.

~~~
Domenic_S
IMO the calculation in that situation is _risk of ruin_.

The higher your financial obligations are, the more weight the _ruin_ side of
the equation holds.

------
gyardley
For me, this story was most interesting because it demonstrates the impact of
social class in America, something that's rarely discussed. Try to picture the
same story if the author's father was a millwright or a construction worker.

Not at all a criticism of the author - we absolutely should work with the
advantages we're given!

~~~
kylebrown
Same here, very interesting read. My only minor criticism is that it seems a
little insensitive or dishonest when every well-to-do family calls themselves
"upper middle class." So you can manage billions in assets and still be middle
class? I call people on it when this comes up and find that they either see it
as a social faux-paux to call oneself upper class, or the subjective threshold
to be considered upper class is ridiculously high at 0.1% or whatever. Sorry,
when your father manages billions there's no middle. Just a minor quibble
because, for being upper class, Danielle is refreshingly honest and open about
her background. I greatly appreciate that.

------
kintamanimatt
This might sound uncouth but that's the dad I wish I'd had.

~~~
Flow
I was thinking the same. My dad died when I was 2 years old and reading this
makes me realize that I never had the sort of guidance through life Danielle
seem to have had.

So, I'm sitting here sipping my first coffee of the day and have a huge
feeling of being directionless. Maybe the blog post was "drivel" to some here,
but not to me.

~~~
dkersten
I felt very very similar to you.

My own dad died when I was 8, so while he was around for some of my life, I
was still much too young to get the guidance that I wish I'd got. On the other
hand, I'm not doing too bad now, but sometimes I wonder if maybe I would be
doing better if I had someone like that helping me. Then again, I don't really
know what kind of dad he would have been as I got older - and he certainly
wasn't anything fancy like a financial adviser, so I don't know what kind of
advice or guidance I would have had - but I like to think it would have been
beneficial. Sigh.

------
dreese
I really liked this article. More generally, I think deliberately choosing to
do the "hard" things first (whatever that means to you as an individual) has
served me well in life. I wish I did it more often.

At a former company, in a large group setting, I was asked to identify what I
thought was the biggest roadblock to the company's success. I hesitated to
comment because I knew my answer would be controversial. But, taking the bull
by the horns, I answered, "Fear." I felt (still do) that when people are
nervous about their careers or how they will be perceived, then they tend to
censor themselves, sometimes without even realizing it. If the company took a
deliberate approach to making the company a safe place (safe to disagree, safe
to take risks, etc) then it would be a major benefit and help improve both
morale and performance.

The CEO immediately disagreed. She didn't like the idea that any of her
employees (200+) might be feeling some form of fear. Trying to address an
issue like that is hard because it implies that high-ranking employees and
"leadership" types were acting in a way that caused fear. It didn't even have
to be deliberate or conscious. She would've had to do a lot of soul-searching,
a lot of questioning the actions of her direct reports, many of whom were
friends, and a lot of listening to frustrated employees.

I think it's pretty common to avoid hard things. So I try to tackle the hard
things first. I think I learn more and it gets me out of my comfort zone. And
the benefits are normally much greater too.

------
veyron

        creating a hedge fund, or any kind of fund, was something i should be thinking about in my 40s or 50s when I wanted a more traditional role in finance with a lower risk/reward profile.
    

Many of the more prolific hedge funds were started by people much earlier in
life. David Einhorn, for example, started his fund at 28.

------
WiseWeasel
I hate to be _that_ guy bitching without offering any constructive criticism,
but this was painful to read. At least I had the courtesy to stick it through
to the end to be sure before I posted this. We deserve better than this drivel
at the top of HN.

~~~
dmor
Okay. I'm just telling my stories, I'm not entitled to the #1 spot and I'm not
canvasing votes (ok, I asked my husband to vote). If a couple of people read
this and got fired up to have some balls and take some risk, that's good
enough for me.

~~~
sachingulaya
Well, at least you're straightforward that this is your storytelling time. I
come to HN for the increasingly rare high signal:noise ratio content and
discussion. Given that I don't think HN is the proper medium for this kind of
expression.

I read more of your blog and see that you think these are 'troll posts'.
They're not.

~~~
dmor
I don't think you are trolling, I just can't control what makes it to the
front page or not. Clearly this resonated with some people. I am not sure why
my story as a startup founder isn't the right kind of stuff for HN, I've been
a part of this community for a long time and posted a broad range of stuff
from code to news to marketing advice and on and on... I'm not trying to fit
the mold, I'm just sharing my experiences and its way to late for me to get
apologetic about it

~~~
acoyfellow
I really respect your attitude towards the haters. I love learning things from
you Danielle, keep it up.

------
is74
Some people are extremely competent but are risk averse, so they don't take
the risk that's necessary for success. Others are risk tolerant but are not
very capable, so they are unlikely to succeed despite taking the risk. The
trick is to be in both groups simultaneously. So if you know in your heart of
hearts that you are competent, then it is worth taking the risk.

------
maxent
successful trader:analyst with clever idea::successful founder:wantrepreneur

------
azmenthe
Cool read and all but I work at a hedge fund that is currently raising
capital... It's nice that our parents always overestimate us

~~~
dmor
Yeah, seriously! You could say its the upside of entitlement, since not
believing something isn't for you frees you to go after all sorts of crazy
things.

There's a lot to write on that subject. Good luck with your raise!

------
junto
Where does that really cool Kudos widget come from on distributionhacks.com?

~~~
sbhat7
Its a part of all blogs on svbtle.com

