Jawbone UP Band – we are what we measure

I recently received a Jawbone UP band as a gift.  It is one of a handful of devices on the market designed to help you live a better, happier, life through measurement.  And who doesn’t love fun with measurement?!

The are tons of UP product reviews out there so I won’t take a full stab at that.  In terms of my experience with the UP band, I find it comfortable to wear, reassuringly low-tech (techies grouse that it doesn’t use Bluetooth to synch to your iPhone, I find that somewhat comforting since I’m wearing it 24/7), and I love the fact that the battery lasts for 10 days so I don’t have yet another device to charge daily.

It syncs to my iPhone using the audio (headphone) port which was surprising but which works very well and quickly.  UP’s iPhone software is slick enough, and except for a few minor annoyances (around logging and editing activities) I don’t have any real complaints.  I have already lost the tiny charger – which is hard to find anywhere but online – and people complain about losing the cap at one end of the wristband, thought I’ve managed not to lose mine, yet.

Unlike the Nike Fuelband, Jawbone’s UP band measures both activity and sleep.  Given how structured my days are, I quickly discovered that measuring my activity level (steps taken) has been interesting but has had little effect.  I walk 3.75 miles each day as part of my commute, and I generally move around a good deal while I’m at the office, so while I enjoy seeing the activity information I could soon live without it.

The part that has been more revolutionary is sleep information.  I have no idea of the accuracy of the data, but the UP band tells me how long I’ve slept, how often I’ve woken up (though I’ve found it can’t fully distinguish between asleep and lying in bed with my eyes open), and it gives a minute-by-minute tracking of light and deep sleep.  This has been quite profound, because seeing the feedback on my sleep has taught me how sensitive I am to the amount of sleep I get and how my body does what it can to catch up when I fall behind on sleep (more deep sleep after nights of less sleep).  I can see the effects of just 10 minutes of meditation before bed (better, deeper sleep).  I can see the direct tradeoff I end up making between sleeping and exercising.  And I can no longer trick myself into thinking that missing an hour of sleep, or even a half hour, doesn’t affect me – it does.

Perhaps the most interesting societal part these observations is that while we know that sleep and activity are the two most important ingredients to living a happy and healthy life, it would seem natural to talk about exercising more and hitting a daily 10,000 steps goal (I’m not – I’m usually at around 7,800); whereas boasting that I’m doing a much better job at getting the 7 ½ hours of sleep I need seems odd.  It’s as if being a high-achiever and sleeping enough are somehow at odds, as if acknowledging that I need as much sleep as the next guy is an admission of just a little bit of frailty.

In one of the funniest and most honest interviews I ever read with GE CEO Jeff Immelt, Immelt joked that “If I put my head down at your feet right now, I’d be asleep in 30 seconds. I can sleep anywhere, anyplace, anytime.”  That’s how tiring it was to be the CEO of GE.  These stories abound.  And while I admit to secretly wanting to be the kind of person who can produce at high levels and feel great with 4 or 5 hours of sleep, the truth is I’m not wired that way.

So, while I can’t tell you whether the UP band is better or worse than the Fitbit or the Nike Fuelband as an activity tracker, I will say that I prefer having a device that helps me keep track of how I spend all 24 hours of my day and not just the 16 ½ (or so) that I spend awake.

And it seems pretty clear to me that the next iteration of the smartphone is going to be some sort of wearable device, and I wonder if 10 years from now we’ll all laugh that we had those clunky things in our pockets, as we’ll have devices on our wrists that have all the functionality of our phones and of activity-trackers, and we’ll use glasses or any screen in front of us as visual displays.

In the meantime, sleep well.

Attaining excellence

Continuing on the theme from last week’s post from Bruce Feiler’s The Secrets of Happy Families, I also appreciated the book’s inquiry into how we attain excellence.

American families are obsessed with having their kids play organized sports, so Feiler took to investigating where great athletes come from.  He turned to research by psychologist Benjamin Bloom who, in the 1980’s, analyzed the trajectories of world-class performers in six different areas, “concert pianists, Olympic swimmers, sculptors, tennis players, mathematicians, and neurologists.”

Bloom’s results, documented in Developing Talent in Young People, are surprising:

The child who ‘made it’ was not always the one who was considered to be the most ‘talented.’  Many parents said another one of their children had more ‘natural ability.’  So what distinguished the high achiever from the underachieving sibling?  ‘A willingness to work and a desire to excel,’ Bloom wrote.  The most common words used were persistence, determination, and eagerness.

While I’m not specifically interested in what makes star athletes, I’m hugely interested in people reaching their full potential, and Bloom’s observations ring true.  Time and again, the people I meet who are exceptional are the ones who have decided that they are going to be great at something.

Recently I heard Maria Popova, the now-famous Brain Pickings blogger, describe her path from college to where she is today.  Maria hated college but discovered that she loved discovery, she loved self-directed learning.  And so she started exploring and writing about what she was learning and sharing it on a blog.  It was hard work, it sounded pretty lonely, and it didn’t pay anything.  For four full years Maria gutted things out, barely getting by, and doing her work.  In just one telling illustration, Maria decided she needed to take a computer course to learn how to code for her own blog.  The only problem was that she was broke.  So Maria chose to eat beans and tuna for weeks to save up the money she needed for one HTML course.  And that was just one step on her long journey to becoming Maria Popova.  One of a thousand decisions she made to do the work she needed to do.  Maria didn’t spend four lonely years waiting to get discovered, she spent four years honing her craft to become someone worth discovering.

In some ways Maria’s story is familiar: the heroic figure who toils in obscurity for years and then breaks through.  But there’s a danger in this heroic narrative.  It insulates us from the story, it allows us to trick ourselves into thinking that because we are not heroes, because we’re doing what we’re doing and not what they did (*gasp* because we JUST have a job) that we don’t have the potential to transform or the right to be great.

Part of the problem, I think, is that when you have a job you see all the signposts of title and official job responsibility and, yes, how much you are paid.   The concreteness of those external markers supersedes the much more important personal reckoning of discovering who we are and where we are in our own development.  Instead, we play by the rules of whatever system we are in, and in the process we create a numbing separation from the work we do.  We make an uneven exchange of “persistence, determination and eagerness” for doing what needs to be done to get the kinds of rewards bestowed by the system we are in.  And then we get frustrated because the system doesn’t give us what we really want AND we aren’t growing the way we hoped we would grow.

One way to break the cycle is to wake up to the fact that we have greatness inside of us and to find the joy in creating what we are meant to create in this world – even if today we are creating just a small part of it.  The simple act of caring and making personal investment transforms the quality of everything we do, big and small.  Suddenly we put ourselves into the things we create, and we create them as part of a broader undertaking of daring and learning and failing and picking ourselves up again.  The ultimate power of this broader undertaking, this broader narrative, is that we begin for the first time to see that our own growth happens in long cycles.  We trade in “where am I going to be 12 months from now (job, title, etc.)” for “what’s the real work I need to do now to be a transformed person in five or 7 or 10 years’ time?”

Reflecting on my own growth and development, I know that if I can make just one real, substantive change in how I work each year then I’ve had a transformational year.  Think, then, of the shape of the arc that gets me from where I am today to where I need to be.

Of course it is hard to see, looking forward, that we will only become who we are going to become in the long run, and that in fact we have the time we need to get there.  The easily quantified, externally-recognizable stepping stones to get from here to come at the pace they are going to come.  But there’s no escaping the real work we need to do to become the person we are meant to be.

Persistence, determination, and eagerness.

Four tips for better group decision-making

I’m most of the way through Bruce Feiler’s The Secrets of Happy Families.  The book takes the best, recent insights on how groups/organizations perform and applies it to families and raising kids.  This results in surprising suggestions like using agile development principles to make getting kids to school on time less stressful or coming together to write down and display family mission statements.  Feiler is non-doctrinaire in his writing, avoiding “must do” and “top 7” lists in favor of a series of surprising, useful, often counter-intuitive recommendations, many of which seem worth a real shot.

Outside of the book’s relevance for anyone raising kids, The Secrets of Happy Families is also a great refresher on new thinking in organizational behavior.  There’s lots to mine here, and I thought Feiler’s summary of four factors for better group decision-making were particularly on point.  (all the quotations below are from The Secrets of Happy Families).

1. Too Few Cooks Spoil the Broth.  This addresses the wisdom of crowds (Surowiecki) and how large groups with the right information can be smarter than the smartest person in the group.  The part that I found most interesting was: “Uzzi [a sociologist] analyzed 321 Broadway musicals and found that teams of people who had never met did not work well together and produced more flops.  Meanwhile, groups that had collaborated before were also not that successful, because they tended to rehash ideas and not come up with fresh concepts.  The sweet spot was a mix of strong and weak ties, where trust existed but new ideas could flow.”  To me this speaks to the need to have fluidity of both people and ideas (often from outside the organization) to get to the best decisions.
2. Vote first, talk later. “I was shocked to learn that groups are better at making decisions if participants express their views at the start of a meeting before they’ve had a chance to listen to anybody else.  Countless studies have shown that once the discussion begins, the people who speak first tend to persuade others of their position, even when their positions are wrong.  Daniel Kahneman offered a helpful blueprint. ‘A simple rule can help: before an issue is discussed, all members should be asked to write a very brief summary of their position.’   This seems like the easiest tactic of all to employ – simply ask people to write down what they think at the start of an important conversation.
3. Hold a premortem.  “As the conversation reaches a climax, it’s important to encourage people to express their true opinions, especially if they disagree with the group…psychologist Gary Klein calls [this] a ‘premortem.’  When teams engage in prospective hindsight…they increase their ability to identify what might possibly go wrong…[e.g.] ‘Let’s imagine it’s a year from now.  We’re following this plan, and it hasn’t worked out.  Let’s write down what we think would have gone wrong. Klein says the main value of a premortem is to legitimize doubts and let skeptics voice their concerns.”     What’s powerful about this is that it engages us in a concrete thought experiment that grounds a conversation of “what if’s” and complex dependencies.  By placing ourselves in a future space, we can see the decision from a new vantage point and understand the risks and opportunities of the different paths we might take.
4. The Law of Two Women.  “One night I was having dinner with an executive at Google, and I asked him to tell me the most significant change he’s seen in how his company runs meetings.  Without hesitating, he told me they always make sure there is more than one woman in the room.  He then told me about the study that led to this principle…”  I won’t summarize the subsequent MIT study – the punchline is “groups that had a higher proportion of females were more effective.  These groups were more sensitive to input from everyone, more capable of reaching compromise, and more efficient at making decisions.”      This one is fascinating and, again, very easy to implement.

Increasingly I’m coming to appreciate the importance and power of small groups that come together to make decisions.  I’m also coming to understand that just putting a handful of smart, effective people together and saying “be an effective group” is a pretty terrible strategy.  You need trust and safety and mutual investment and a sense of shared purpose and higher goals.  And you also benefit greatly from tactics that are proven to result in better decisions.

This list seems like a great way to start the important work of making your groups as high-performing as the individuals in them.

Not just whether, how

One way to end a sales meeting is with the big push.  You’ve done the work, you’ve made the pitch, you go to close the sale.

Before that moment, and in the meetings preceding that meeting, you’re having a different conversation.

And it IS supposed to be a conversation.  That means questions are very often the answer.  One of the biggest mistake people make in trying to make a sale is the rush to get out your “whole story:” your job is to make a pitch, and you’d better say everything you need to say the clock runs out on your meeting.

Of course the problem with that is that you can’t solve someone’s problem if you never bother to find out in the first place what their problem is.

The other day I was stopped cold by a great question I’ve never asked so directly (but wished I had):

“What factors are most important for you in making this decision?”

So simple, but I’d never actually paused to ask that clear, direct, transparent, non-threatening, and quite objective question.

I wouldn’t do it in every situation – this question can, if not asked in the right way, put your prospect in a “head” rather than “gut” or “heart” space in terms of her decision-making, which might not always be the right thing to do.

But if you’re in a complex, relationship-based, multi-faceted decision-making situation, asking directly how the decision is going to be made is probably going to help most of the time.

Rock out

My morning commute to work is punctuated by the Music Under New York performers.  Each day of the week a different musician with a different sound and a different vibe.

Luke Ryan has been at this for 30 years.  His shtick is to be clever and snarky, to put in your face that you’re walking by him, head down: there’s nearly as much commentary about “putting a little money in the case” as there is music, and a fixture of his guitar case is a sign that reads: “I’M A STREET MUSICIAN…TOO WEIRD TO LIVE TOO MEAN TO DIE.  GIVE ME MONEY OR I’LL PLAY MUSIC.”  Luke’s “show” is build around that gag and about making you aware that you’re walking by with your head down and your hands in your pockets.  My experience, when I put money in Luke’s case, is a bit of guilt, some awareness of separation, a sense of obligation.

On Friday mornings in that same spot, the Ebony Hillbillies rock out with their mean, jumping bluegrass music.  It is soulful.  It is uplifting.   It is joyful and ebullient and raucous.  It’s a jolt, it puts a spring in your step.  I see the performers smile, not for me, but for themselves.  My experience, when I put money in the case, is gratitude that they’ve shared their joy with me, connection, humanity, and perspective.

Yes, the Ebony Hillbillies’ case is always fuller than Luke’s.

And no, this post isn’t about street musicians.

What it takes to build dreams – Part 2

Paula Goldman, Omidyar Network’s Director of Knowledge & Advocacy and co-author of the excellent “Priming the Pump” blog series made a very helpful and clarifying comment on the last post (emphasis added):

Sasha, excellent post. I agree with you that as a field we need to get a lot smarter about the risk/social impact equation — this will make or break the field. I also agree with you that the path to scale here isn’t just about making this an asset class. Commercial markets are already incredibly good at allocating capital efficiently, including to businesses that generate positive impact and solid financial return. The risk is that by pumping up the industry in this way, there will be nothing incremental or new about investments labeled as impact investing.

I would ask you though to reconsider the use of the term ‘crummy’ economics. While the economics in many cases for impact investing are sometimes different than traditional investing, taking on additional and different types of risk doesn’t necessarily mean lowering financial returns.

This comment shines a light on exactly the distinction I’m trying to make, because, for this conversation, I’d like to take a pass on the whole discussion of what the returns are in “impact investing” (and whether or not they are “crummy”) since I don’t believe you can answer that question without better defining which segment of impact investing you have in mind.

Instead I’d like to ask whether, as I observe anecdotally, there are sectors/project outside of impact investing that attract huge amounts of capital that have “crummy economics.”

To recap the sorts of conversations I’d love to redirect:

Question 1: “What is the risk/return profile for impact investing?”

My current answer: “It really depends on what you mean by ‘impact investing.’  For some (significant) part of what could broadly be defined as impact investing, the financial returns may well compensate an investor and her LP well for the financial risk she is taking.  However, there are also big and important parts of impact investing – including those segments where the non-negotiable is impact; and those segments focused  on the poorest, hardest-to-reach populations – where the financial returns likely won’t fully compensate the investor or her LPs for the risks they are taking.”

Question 2: “But if the returns aren’t there, doesn’t that mean that the sector will never grow? Doesn’t that mean that capital will never flow in in significant ways, in which case the sector will never scale and reach its potential?”

AHA!  THIS is the question I’m aiming to dig in to, not the prior one.   This is why I said that I’d observed that “increasingly across sectors I meet more and more people who acknowledge that most of the most important (dare I say the most “impactful”?) work they do has crummy economics.”

Namely, I’m finding the discussion on “what the returns are” to be circular, because it hinges on how you define “impact investing” and what particular niche/sub-segment you are in.  The dead-end I’m trying to break through is the one that says “IF the returns aren’t there versus the risks people are taking, then capital won’t flow in.”

My hunch – and the thing I’m looking for data on – is that this statement might be empirically incorrect.  My hunch, informed by conversations with people in sectors far away from impact investing, is that the overall NET returns for huge swaths of projects that create public good (and have an underlying long-term economic logic) might be low (aka “crummy”).  But these projects and the people backing them find a way to make them happen at scale – whether by layering capital, layering risk, layering returns, bringing in philanthropy….. in such a way that lots of stakeholders and lots of stripes of money get what they want.

And so, my non-empirically-proven hunch is that the fundamental net (total project, total portfolio) return being low doesn’t inherently limit the ability of billions, even trillions of dollars, to find its way to meaningful project that have a blended return.   That’s the data I’m looking for.

One reader kindly pointed out the Kauffman Foundation’s recent report that revealed that 78% of their traditional venture capital funds “did not achieve returns sufficient to reward us for patient, expensive, long-term investing.”   And yet $22 billion a year still flows into venture capital.

Not exactly what I had in mind, but that seems to be a pretty great data point showing that failing to compensate LPs adequately for the risks they take doesn’t mean that money won’t flow in.

What it takes to build dreams

I keep on bumping into the same parallel conversations around the future of the impact investing sector.

With those in the trenches, what I hear continuously is that it is a long, hard slog.  That companies take a long time to build, that the costs of getting things right are high, that grants and really forward-looking and patient risk capital is key, and that there’s not a straight path from here to there.

And yet the reports that keep on coming out and the sectoral conversations continue to cheerlead about all the capital that is coming into the space – prevailing estimates for total potential market size by 2020 are in the $500 billion (Monitor Group) to $1 trillion (JP Morgan) range – and to get there, we’re told, impact investing has to become an “asset class.”  Part of getting from here to there, it’s implied, might mean sweeping under the rug the significant segments of impact investing where the economics don’t seem to fully work and where the financial risks are too big relative to the expected financial returns.

An investor I recently met at a roundtable on understanding and quantifying impact put it simply to me: “anyone who is looking at less than a ‘market’ rate of return is mispricing risk.”

(Whereas I think the big problem in the world is that we’re mispricing returns by equating returns with what we can see in a discounted cash flow analysis, thereby demoting “impact” to a fuzzy, non-quantifiable something for which it’s not worth taking actual, real risk.)

Without getting dragged into what is clearly a definitional conversation – namely, until we agree on what we mean by “impact” we can never have a serious conversation about the economics of “impact investing” – I have an observation that keeps on nagging at me: increasingly across sectors I meet more and more people who acknowledge that most of the most important (dare I say the most “impactful”?) work they do has crummy economics.  Getting these projects/endeavors/businesses to happen requires the dogged determination to get many different stripes and flavors of capital to come together, lots of irregular stakeholders to develop a shared vision of the future, and, usually, a healthy dose of subsidy or public funding because there’s a clear public good being created when you succeed.

And yet in the impact investing sector we often hear that if investors aren’t fully financially compensated for the risks they take, capital will never flow in any serious way.

If that’s right, how do we explain away the fact that we have managed to create trillions of dollars’ worth of parks or mixed-use developments or hospitals or museums or great schools, most of which don’t make full economic sense but all of which are integral to a vital, vibrant society?  The truth is that markets don’t fully work all the time, and yet huge amounts of capital are regularly mobilized to create things that are worth creating.

What I’m struggling to do is to better explain, by looking outside our sector, my feeling that the conversation we’re having in the impact investing sector is far too narrow and binary.  When I identify the underpinnings of what makes vibrant, successful societies – you know, all those things that disappeared for a little while when Hurricane Sandy hit – and if I think about all of the incredible pure market plays that have been built on top of the existing infrastructure that was provided by the public sector….well it becomes clear that the “markets” / “not markets” conversation we’re having is far too simple.

And yet I don’t know specifically which data to look for to help tell this story.   I need more examples across sectors and history, more evidence that helps explain clearly and succinctly what I know to be true: that solving big, intractable problems for disadvantaged communities by and large doesn’t pay (nor should it pay) handsome financial rewards.  And the fact that it doesn’t isn’t some sort of failure of a prevailing orthodoxy, it is in fact a vindication of a rich history of bringing public, private and third sector players together – to bring the best of what each has to offer, including skills and preferences and the right kind of capital – to solve big problems.

I’ll be talking about some of these questions next month at the Global Philanthropy Forum, and I’d love your great ideas on how to prepare for this talk.

So, help, please! What are the best examples out there from other sectors (housing, roads, infrastructure, parks, museums, schools, biotechnology, the Internet, telecommunications…) that will bust open this “market return” mindset that is hobbling our thinking about how to create real and lasting change through impact investing?