“The Lifestyle Design fringe is actually that unevenly distributed future”

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Last February, on the TMBA podcast, we published a conversation with Venkat Rao, author of Ribbonfarm.com. I enjoyed talking with him very much, and listeners made it clear that they liked it as well. Many went on to read Venkat’s books and articles.

A few things that Venkat said, during that conversation, have continued to stick in my mind over the past 12 months, but I hadn’t thought specifically about the episode for almost a year. And then I came across a review in our iTunes page:

TMBA Podcast Review

Flattering stuff! This was, perhaps, the first episode where our new podcast production team — Ian, myself, Jane (producer) and Arison (engineer) — brought something to the feed that we wouldn’t have been able to do when it was just Ian and myself spitting gas. From a production point of view, there were many things we wanted to improve but our main goal was to put out a show every single week (which we accomplished).

Those production elements, though, are nowhere near as important as your guest. In many ways, I’d be preparing for this interview for years. Reading every post Venkat wrote, all of his books and newsletters.

Why? He’s one of the few resident philosophers of this movement — whatever you want to call it — of which we are all a part.

Preparing for an interview like that was actually quite difficult. Where do I even start?

Venkat made it easy, though. With minimal prompting he was able to discuss difficult concepts with extreme clarity. An interviewer’s dream.

I took the time to go back and revisit the episode. And I thought some parts were worth publishing here.

One other thing: for those of you who read this blog but might not listen to the podcast — and visa versa — for a year now we’ve been publishing transcripts of every episode, along with the audio. If you want to hear more about how we produce the podcast, we recorded a episode about it here.

Aside from the unquoted headlines, the words below are Venkat’s, edited occassionally for print. The full interview and transcript can be found here. 

 

*  *  *

What’s one thing you know about the Venture Capital Startup world that we — bootstrapped online entrepreneurs — don’t know about?

Here’s an interesting one: they hate you guys.

The start-up world seriously sees you, Lifestyle Design, bootstrap, non‐growth, non‐VC‐ funded,  ‘don’t take other people’s money’ kind of business models as a sort of philosophical and ideological threat to what they believe in. You can see why this is the case because, if your entire subculture in high‐tech is: work really hard and build huge businesses that create massive amounts of wealth, and put a dent in the universe – then if there are people around who are following a very different script, who also have a very high tech, and sort of technology‐positive approach to life, but they are saying something very different, which is, ‘The goal is not necessarily to be building a billion‐dollar company and running the corporations involving hundreds of thousands of people, and killing yourself 100 hours a week. The goal is to have like a lifestyle that you enjoy, and grow only as big as you want to, and not go for the aggressive curve’, you are offering an alternative to that script.

…they believe what you guys do wouldn’t be possible if other people weren’t working really, really hard to create the platforms you use.

You are building a business on top of Skype and WordPress and Gmail, and you are sort of rankling against the big tech. So that’s the funny part of it, but there’s actually a very healthy aspect of those dialectics as well, which is that I think the two worlds, whether or not they acknowledge it, actually need each other. Because, if Silicon Valley creates the platform that enabled the new digital world to emerge, Lifestyle Designers are the ones who are creating the culture on top of it, and sort of living the experimental lifestyle that will become the feed of everybody’s lifestyles in about 50 years.”

“There’s no such thing as passive income.”

One big [myth], that I suspect you and other experienced members of community know that perhaps the new members don’t, is: that there’s no such as passive income. That’s a huge blind spot. Income and cash flow streams are only as good as your, sort of, constant vigilance, and attention, and monitoring, and curation.

I think part of the reason a lot of people take the phrase ‘passive income’ a little too literally is, honestly, the marketing tagline of Tim Ferriss’ 4‐Hour Workweek. Like, a lot of people literally think it’s four hours. Whereas I tend to interpret it more philosophically as: you kill yourself putting in 40 to 80 hour work weeks maybe in the initial year or so, setting the whole thing up. Then, for a while, it’s stable. You can take time off, maybe, for a couple of years to sit back relax, and do lifestyle things. But, at some point, you will need to go in and put in another burst of work to either retain the business, shift it, or, if it’s dying terminally, start a new one. That’s kind of the way I think experienced lifestyle designers, who’ve been in the game for more than, say, two business cycles, think.

I know several of you guys now and, so far, I haven’t met anybody who has turned on the faucet and left it running for eight years, and nothing happened, and they are enjoying themselves. It’s like every two, three years you put in a huge burst of work to reimagine and rethink your business, right? That calibration of expectations is important. And I think that’s a big blind spot. And I think it accounts for a lot of people crashing out early. It’s the same with blogging.

What are some other blind spots in the boostrapped, lifestyle design community?

…[one is] disengaging from the mainstream economy to a certain extent, and sort of creating an island of economic stability for itself, not just in the geographic sense, but in the larger economic sense too. Not only are you sitting in Bali or Thailand or some place, you are also sitting on one of several relatively stable islands of economic opportunity. Like Internet marketing, or building websites for other people. And you might imagine that there are islands off from the main continent of economics, but they are not. The law of creative destruction applies to everything and, at some point, it could be that that one of the big billion‐dollar start-ups will figure out a way to create a massive marketing platform that puts all Internet marketers out of business by creating some sort of sass-y tool that allows corporate marketers to work without you guys.

You’re linked to the mainland of the economy, and the main continent of the economy, whether you like it or not, which means you have to stay alive to the opportunities that are emerging, and stay connected, sort of, in terms of in a mindful situation awareness of what’s going on in the main economy, even as you try to find a foothold on an island away from it.”

Managing businesses vs. paychecks.

“…when you are managing a business, as opposed to a paycheck and a career at a corporation, you kind of get to see the whole equation. Where, at a balance sheet level, you are looking at revenue, you are looking at costs, you are looking at margins, you are starting to think creatively about things like, ‘Oh, when I was in paycheck-world, a good rule of thumb was to try and invest between 5 to 10 per cent of my money in savings and a retirement fund’.

When you are a free agent, you start getting more creative and saying, ‘Alright, what does it mean to actually save for retirement?’ If I invested back in my business, that’s a high‐risk investment compared to the S&P, but also investing back in my own business is possibly the only chance I’ll ever get to invest in an early‐stage business because I’m not an accredited investor who can invest in, like, booming Silicon Valley start-ups. There’s another consideration there. Or, you might analyze it as: ‘Oh, really, what I’m saving for is living and retirement, and a big expense of retirement is health – and, actually, investing in a good gym membership, right now, is a better ROI than investing in a 401(k).

If you see only half the equation, and the other half of the equation is controlled by a corporation, or the government’s idea of what it means to save, well, you never kind of really take ownership of your relationship with money.

And the way I do that with a business philosophy is – try and understand your business. You get at it, sort of, one insight at a time. You can’t write a 50‐point manifesto and business mission on day one and expect it to actually capture all your learnings five years down the line.”

Is power literacy at the core of all of this? How does the Gervais Principle help show power dynamics?

company-hierarchy-red

via: Gaping Void

The Gervais Principle” itself, I’d say, as part of a, maybe, 150‐year‐old tradition in management thinking that sort of draws its inspiration from somewhat cynical observations about the gap between how people think businesses function, and how they actually function. The inspiration, as you know, was Hugh MacLeod’s cartoon on ‘gaping void’, which drew a little corporate hierarchy pyramid with a layer of losers at the bottom, a layer of clueless in the middle, and a layer of sociopaths at the top. The way to understand each of these three personas is, starting with the clueless in the middle: the clueless are the people who do not recognize the gap between what the organization says it is, versus what the organization is in reality. They kind of sincerely and un-ironically believe in the organization as it presents itself. Like, if the CEO presents a vision statement and an inspiring message, they’ll believe the organization is literally like that.

The losers, on the other hand, are conscious of the gap, understand it, and realize that there is a dissonance, but they choose to do nothing about it. The sociopaths are people who recognize the gap and, recognize further, that there must be somebody authoring the gap to further their own advantage and decide to become one of the people who author the gap rather than get caught in it, or reacting to it, and they become the sociopaths.

That’s roughly the model of the corporate universe. And Silicon Valley runs like this in some respects. And I wrote a series about that in Forbes where, in some part of that economy, the sociopaths can be the venture capitalists, and entrepreneurs are often the clueless types, who, sort of, un-ironically believe in the start-up vision without sort of critically thinking about what the start-up world actually is like.

The pattern occurs all over and the idea is that as people evolve in their careers, if they don’t develop enough self‐awareness, they get stuck at various layers. There is, almost, a Freudian notion there – that you start off clueless and, if you mature beyond a point, you can become a loser, or you can jump further to becoming a sociopath, right?

…any sufficiently large community that has sort of an independent economic machine driving it usually has all three archetypes…

“Power literacy is, in a way, learning how to fish…”

Most of the things you suggest are laid out in the form of: here are the recipes, you can probably improvise and modify them, but here are my scripts, or little pieces of fragments of scripts that actually work. And that’s like giving a person a fish and they’ll eat for a day.

Really, I think for people to mature, in power literacy, they need to learn to fish. Give them a small script fragment, and they’ll solve one problem, and navigate one tricky business situation one time. If you kind of make them consciously aware of just the calculus of power, and how this whole thing works, they can navigate completely in new situations where there are maybe no recipe fragments, and other people may have no advice, but they’ll still be able to navigate it with a certain amount of self-awareness.

So, I would say that there are maybe four or five different paths to power literacy. Sometimes it’s precipitated by crisis, sometimes by a piece of writing, sometimes by gradually accumulating experience. I would say, one way or the other, most smart people will become power literate by their mid‐30s at the latest. The proportion of people who are smart in that way, unfortunately, I think it’s less than a third. So two‐thirds of working people, for some reason, seem to lack the ability to achieve the breakthrough, and kind of stay stuck their whole life.”

“The Lifestyle Design fringe is actually that unevenly distributed future…”

This is, you know, the ‘William Gibson Code’: that the future is unevenly distributed, right? The Lifestyle Design fringe is actually that unevenly distributed future where what, I would say, a minority of less than 1% of the world are doing today will be 50% of the world by about 2070. So you guys are sort of the lab-experimental people of the future mainstream economy. And Silicon Valley may provide the enabling underlying infrastructure but they are like railroad companies – and just as the railroad laid the foundation for the industrial economy and by about, say, 1950 a huge economy lived on top of the railroads – but most of them didn’t work for the railroads, a lot of them sort of explored and experimented and created sort of economic possibilities on top of railroads as an infrastructure.

So that’s the relationship between Silicon Valley and Lifestyle Designers and, I think, in 50 years we’ll see a similar thing. There will be huge number of people working a free-agent location- independent-type lifestyle: very flexible, very experimental, with relationships to corporations that are not based on paychecks, but maybe on, like, on-going block chain contracts with Bitcoin, so these things are happening. That’s actually a healthy relationship.

And one of the things that I find slightly disappointing is the slight mutual suspicion between the two worlds of Silicon Valley and Lifestyle Design, it sort of leaves a lot of value on the table. Whereas if there was a lot more positive win‐win conversations between the two, I think you’d see a lot of really great new businesses and ideas taking shape. I would love to see, for example, Y Combinator set up an outpost in Bali or Thailand, and say, ‘All right, we want to fund growth businesses that are inspired by, and staffed by, people in the Lifestyle Design Community”.  This is not for everybody, but for those of you who are on that path, and feel it’s something that has that growth potential, we want to help you bridge the gap and grow like a Silicon Valley business, but maybe still say in Bali. So, I would like to see more economic activity in the gap between Silicon Valley and the Lifestyle Business world.

 

Other topics explored in the interview, were:

  • Scientism, career scripts, work ethic, writing output and creativity, hipsterdom and creative consumption as a third response (Startups and Lifestyle Design as two others), as a response to an increasingly technological world, and much more.

You can listen to the full interview here. 

Here’s the original transcript.

Thanks for reading! Would love to hear your thoughts about what Venkatesh had to say.

Dan

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Published on 01.31.17
  • TJ

    I think the recent sale of WP Curve to GoDaddy shows that the two approaches are not necessarily incompatible with each other, and we will see more successes like this in the future.

  • http://www.nomadicnotes.com/ James Clark

    I wouldn’t complain if Venkat was an annual guest ;)

  • http://www.tropicalmba.com/ Dan Andrews

    noted! :D

  • http://www.tropicalmba.com/ Dan Andrews

    agree! I think there’s a growing convergence here (I thought of that when Venkat said “I would love to see, for example, Y Combinator set up an outpost in Bali or Thailand, and say, ‘All right, we want to fund growth businesses that are inspired by, and staffed by, people in the Lifestyle Design Community”) perhaps if there’s hatred on their side it has to do with the fact that what was once solely their territory (change the world startups) are now accessible to the ‘lifestyle’ crowd.

  • TJ

    I think the problem is that Silicon Valley style VC investment has become overly fixated on “unicorns.” If a VC has 100 portfolio companies, two-thirds of those will run out of money and blow up due to premature scaling. Another 30% might get some traction but only be worth tens of millions of dollars. Nothing to sniff at, but in SV such companies are still regarded as “losers.” It’s the unicorns in the remaining ~5% (Uber, AirBnB, etc.) that cover their losses and generate their profits. I believe that many of the companies that blow up would be better off taking less money or bootstrapping. Lifestyle businesses run counter to the current VC model, so I doubt that Y Combinator would set up in Bali or Chiang Mai. If it happens, it will come out of this community (paging Dan Norris…)

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