I came across this great quote by a guy whose father ran a jewelery store during the Great Depression. He carried on to build Helzberg Diamonds into a big enough (and wonderful enough) business that Warren Buffet eventually wanted to buy it:
"When growing up, I was intrigued that my father only concerned himself with those business elements that were controllable. He refused to acknowledge the Depression and did quite well during that period. He was unwilling to talk about recessions or 20-inch snowfalls. He only thought about and talked about those conditions within his control. I saw this daily in Dad’s actions. I never knew when the country was in a recession because Dad wouldn’t talk about it. People would suggest we close the store on Labor Day because everyone would be out of town. He’d say, “How many will be gone?” Of course, we’d stay open and do just fine. He taught us to concern ourselves only with those things over which we have control. I thought he was unique in this until I realized this is one of the key common traits of highly successful people. Those folks are never victims; they take what comes and handle the situation. The rest is a waste of time."
- Barnett C. Helzberg (from "What I learned Before I Sold to Warren Buffet")
This quote hit me like a ton of bricks. Barnett Helzberg, in describing about his father, simply and concretely described a prototypical "hedgehog entrepreneur" in a way that I could not. (See Foxes and Hedgehogs).
Hedgehogs don't concern themselves with a lot of nonsense. They know what matters. They ignore the rest.
There are some clever foxes who see themselves as intellects who have a mission in life to combat oversimplification. They like to say, "well, actually it's a bit more complicated than that." True. Unfortunately, in the process they may obfuscate the issues.
Albert Einstein once said, "any intelligent fool can make things bigger, more complex and more violent. It takes a touch of genius - and a lot of courage - to move in the opposite direction." Most people understand that it takes intelligence and deep knowledge to simplify (if you can't explain something simply, then you really don't understand it). But why does it take "a lot of courage"?
Reducing complexity involves making decisions. If you choose to march down a certain path, it means you are cutting off your other options. In business and life, we always have to make decisions in environments of uncertainty. The need to choose can create fear, anxiety and paralysis. The choices can be tough.
By choosing, you are rejecting other options. You live with the consequences. Sometimes, it can be a matter of choosing between the lesser of evils. It's never black or white. We live in a Machiavellian world - full of greys (whatever his faults may have been, Machiavelli was a realist. He tried to see the world for what it was, not what he wished it to be).
Some people will find Heltzberg's advice not useful at all. They will ask, well, just what is controllable? What is not? What is knowable? What is not? What is important? What is not? The answers depend on the situation. There are no easy answers, no one size fits all formulas.
To quote Einstein again, "make everything as simple as possible, but not simpler." There are no pat answers. Think for yourself. Each situation is different. The only universal truth is that there is never a clear roadmap, no pre-defined plan (experienced venture capitalists know that business plans always change). Just be mentally prepared to "take what comes and handle the situation."
Great entrepreneurs thrive in environments with high degrees of uncertainty (like the Depression). They tinker, experiment and figure things out along the way. They stay vigilant because they know that change is constant and the world is full of risks and uncertainties. Robert Ruben, the former co-head of Goldman Sachs and Secretary of the Treasury had this to say:
"some people I've encountered in life seem more certain about everything than I am about anything. That kind of certainty isn't just a personality trait that I lack. It's an attitude that seems to me to misunderstand the very nature of reality - its complexity and ambiguity - and thereby provide a rather poor basis for working through decisions in a way that is likely to lead to the best results."
The best entrepreneurs know how to simplify. It doesn't mean that things are so easy. It's never easy. There will always be randomness (if you don't understand what is going on things will appear random). Clever foxes sometimes try to anticipate those twists and turns in life. They seek certainty and control, put together fancy models and perform calculations to Nth degrees of precision. Those poor foxes often have a tougher time of it than hedgehogs who honestly don't think that they know as much (perhaps this makes them more immune to illusions of control).
Hedgehogs keep their noses to the ground. They stay in tune with reality because it's a matter of survival. They do learn along the way. They do adapt - but they don't dart around (like those quick and clever foxes). Hedgehogs know what they know (which is not a lot) and they know what they don't know. They know that there are always things are beyond their knowledge and control - like luck - yet they keep moving forward.
Everyone will have their share of luck - both good and bad. Some people will be prepared when opportunities pass by. Others will be asleep...or perhaps darting the other way (in the wrong place at the right time...or at the right place at the wrong time).
Hedgehogs are not simpletons who over-simplify. They get it. Which is why they are so effective. They don't waste time or effort. They make decisions and move forward. They get shit done.