00:00hi everyone welcome to the a6 in the
00:02podcast I'm sonal and today's podcast is
00:04based on a conversation between Marc
00:06Andreessen and Clayton Christensen who
00:08is the father of disruption theory it
00:11took place at startup grind in San
00:13Francisco recently moderated by Derek
00:15Anderson and here's the conversation
00:17how has your theory on disruption
00:20evolved in the last 20 years since more
00:23since you released it almost none of the
00:25critical ideas that now are really
00:28important existed in the original theory
00:31but I think what we learned is that a
00:34good theory has to be able to confront
00:36and resolve anomalies I have a saw a
00:41sign outside of my office that says
00:43anomalies wanted because if somebody can
00:46bring to you something that's going on
00:48that the theory can explain then either
00:51have to put a boundary and say if the
00:54theory doesn't apply to that or no
00:56there's something else going on and even
00:59change the way we define things you know
01:01and so things that are really important
01:05are there are some industries like
01:07hotels where disruption never happened
01:10and historically higher education was
01:14never been disrupted you know and then
01:16we realized that the trajectory of
01:19improvement in the theory is not a
01:21constant but the rate at which
01:26innovators make good products better is
01:29of is an a variable and so hotels have
01:35been disrupted now because Airbnb has
01:38changed the business model and and
01:41online learning is improving in such a
01:44rapid rate that Harvard Business School
01:47is getting disrupted and that was
01:49unconceivable a generation ago why does
01:52the theory Marx thought so much power
01:53with on fares and VC's in Silicon Valley
01:5520 years later there are people that say
01:57hey it's not relevant anymore it's not
01:59and and what I had other people here
02:01think about it yes so the way I think
02:03about it is we had algebra of business
02:04and I described algebra business was
02:06kind of a very straightforward theory
02:07this was the case when I came to the
02:09valley this is kind of what all the
02:10experts would tell you is that basically
02:13big companies are well run then startups
02:15can't take them out and so you want to
02:17be very scared and weary of the
02:19companies that are that are well run and
02:21you basically as a as an entrepreneur
02:22you need to wait until a big company is
02:24poorly run and then they introduce form
02:25you know they get error again so they
02:27get they get lazy and that's when you
02:28attack for us for my generation for me
02:31disruption theory was sort of the
02:32equivalent calculus it sort of flipped a
02:35lot of the assumptions in their head and
02:36it basically told you actually the
02:37opposite which is the companies that get
02:39disrupted the big companies get
02:40disrupted or not the poorly run for
02:42companies as much as their the well-run
02:43of the companies right the thing that
02:45prevents a big company from adapting to
02:47disruption coming from below is that
02:49it's well-run right to be part of clays
02:51first book on the topic which is it's
02:53big companies that are well-run are very
02:55focused on their current customers
02:56they're very focused in their current
02:57customer needs they're very focused on
02:59their current customers ability to pay
03:00the revenue that they'll support they're
03:02very focused on the margins that they
03:04can get off off the current customers
03:05and it's because they're so well-run if
03:07this new thing comes up from below and
03:09looks like a toy and they say well
03:10that's never going to work because all
03:12these customers that we focus on aren't
03:13interested in it and so the the gap that
03:16opens up is a gap that opens up as a
03:17result of confidence not incompetence
03:19and out here that was kind of a
03:20swallowed the red pill kind of moment
03:22from the matrix which is basically the
03:24minute you wrap your head around that
03:25you're like oh right and then all of a
03:28sudden you can just like precalculus you
03:30can start to explain all these things
03:31that you see in business that otherwise
03:32don't make sense right these big
03:34successful important companies with all
03:36these resources and all these
03:38capabilities and all these incredibly
03:39sharp people and I hope you know all the
03:41magazine covers and the whole thing and
03:42yet they get taken apart you know
03:44sometimes extremely quickly with
03:45companies going public so much later now
03:47they use to where when does that start
03:49at what face do you see this with the
03:51companies you're working with the
03:52companies you've worked with is this
03:54starting before they go public are
03:55people already starting to get disrupted
03:57the big venture-backed companies are
03:59they already starting to get disrupted
04:00today or does it happen after the IPO
04:02and and they you know people start to
04:04get complacent so there's this thing
04:06outside the valley you see this a lot
04:08the press these days outside the valley
04:10there's this view that silicon you know
04:11Silicon Valley founders all of us are
04:13like you know basically arrogant and
04:14presumptuous and a big part of the
04:15arrogance and presumptuousness is the
04:18idea that basically we're starting all
04:19these companies that are trying to
04:20disrupt all of these establishes
04:21industries there is some truth to that
04:24but the other fundamental truth that we
04:26live with every day is
04:27companies to get disruptive the fastest
04:28are our own companies and in fact one of
04:30the things I find just so amazing about
04:32the valley and I would say both scary as
04:35an investor in entrepreneur but also
04:36just can continuously invigorating and
04:38exciting is exactly your point which is
04:40our own companies that we start can
04:42start to get disrupted very quickly you
04:44know I think most women startups have
04:47maybe a five-year window before they
04:49start to get locked into a pattern of
04:51doing business with a particular kind of
04:53customer and then these these these
04:54disruption opportunities emerge and as
04:56everybody everybody here knows the
04:57minute an opportunity like that emerges
04:59there are other Valley entrepreneurs who
05:00will immediately attack and so we see we
05:02see the theory kicking in very quickly
05:04out here and I think it it's almost in a
05:07mirror way venture capital companies
05:10themselves become disrupted because
05:13there is so much money
05:14then what used to be a really
05:17interesting five million dollar deal as
05:20you get so big five million dollars just
05:23doesn't it isn't worth your while and so
05:27they go they become later in layer
05:30private equity players not venture
05:33capitalists just because they have to
05:36put their money to use yeah you know
05:38yeah it's an interesting trend because
05:40we have we have this we have a group of
05:42kind of these micro VCS or they they
05:45have these kind of 50 million dollar
05:46fund some of them have stayed there and
05:48some of them have gone upstream and then
05:50you have people like the incubator so
05:53like YC who started at the really I mean
05:56when you talk about disruption that
05:57model I mean they started with those
06:00first companies who nobody really cared
06:02about and now look at them now with this
06:04huge fund I mean what Mark do you see
06:06how do you how do you work with people
06:08like that in the future because at some
06:09point they start competing with injuries
06:11and for those later stages they are now
06:13yeah so it's a venture capitals the case
06:15is sort of this term co-op petition and
06:17so you're sort of competing one day
06:18cooperating the next day it's a general
06:21thing I'd say it's been a revolution
06:22like the fact that we now have YC the
06:24fact that we have all these accelerators
06:25the fact that we have all these seed
06:26investors right it's just a much more
06:28vigorous much much more diverse
06:30environment and for us in terms of
06:32funding sources and then just in terms
06:33of the run number of startups they get
06:34picked and so you know kind of to Clay's
06:36point we find ourselves in some cases
06:37making about to us now as small as
06:39$100,000 in some cases as big as
06:41million dollars I enjoy I think it's
06:43great for the valley it requires it
06:45requires everybody to continuously adapt
06:46but I think it's what's keeping the
06:47valley so vigorous marts hit something
06:49you want to build upon that is part of
06:52my hope has been that if you have a
06:55theory that is useful and it describes a
06:58piece of how the world works and if
07:01smart people understand the theory they
07:04won't fail nearly as often and when you
07:07look at it in that way historically the
07:10way we have built companies was trial
07:14and error and is a very inefficient way
07:17of starting new businesses and what you
07:20see is the funds that are the companies
07:23that you start are smart people you
07:25teach them the theory but that creates
07:28its own problems doesn't it because jeez
07:31if everybody does everything right then
07:35creates the opportunity for the next
07:38wave of disruption yeah that's right
07:39because historically you succeeded
07:41because of their in their not
07:43understanding they had to win by trial
07:46and error that was that was easy to
07:47catch ya know if they do everything
07:50right what you ought to do is you should
07:52quit and become a professor at the
07:56Harvard Business because what I know I
08:03just have to talk I don't have to do
08:05anything you have said this stuff yeah
08:07do you think they love do you think
08:08they'd let me anybody would love to have
08:10you when the you know the market in the
08:11climate that you can kind of feel this
08:13little bit of a cloud from what has been
08:15this like huge party the last few years
08:17and kind of over the top at times when
08:19the market starts to turn when people
08:21start to get nervous about things the
08:23the venture capital the valuations are
08:25down and q4 when they've been up you
08:27know for the last couple of years so
08:28what happens is this a time or big
08:30companies as they look back right now if
08:33they look back three or four years in
08:35the future is this when they're getting
08:36disrupted or is this where when the when
08:39the bigger companies or or even the
08:41startups is this where they really
08:42buckle down and figure it out right now
08:44what store eclis what's happened can I
08:46give a hypotheses for mark to shut down
08:51the reason why I wanted to talk about
08:53the capitalist dilemma is that in fact
08:56there is capital everywhere and the cost
09:00of capital is I mean everybody would say
09:03that our return to capital is fifteen
09:06percent or whatever that's what we
09:07aspire to the reality is the return to
09:12venture capital over the last ten years
09:14overall has been nearly zero and yet
09:18you've got all of this capital you know
09:20and so it creates behavior that you just
09:24wouldn't imagine and the reason I wanted
09:26to talk about how there used to be
09:30abundance of bandwidth and so you could
09:34waste bandwidth I wonder if capital is
09:37doing the same thing to investment and
09:39that is it's a time when we shouldn't
09:41husband the use of capital but be
09:44aggressively putting the capital to work
09:47but that that also then drives up the
09:50value of the investments that were in
09:53there you know putting our money in to
09:55leave that's right so I think we can
09:57talk about what's happening specifically
09:59in the valley but there is a broader
10:00point the clay is bringing up which i
10:01think is important to understand which
10:03is we all want to talk about tackling
10:04when I talk about venture capital but
10:06the total amount of money going into all
10:07the tech companies all the unicorns is
10:09in the order of 50 billion dollars a
10:10year which is a large amount of money
10:12from an absolute standpoint or in terms
10:14of just how we think about money day to
10:15day it's a very very small amount of
10:17money from a global context and so I'll
10:19just give you one example of how to
10:21think about that two examples how to
10:23think about that so one is but fifty
10:25billion dollars going into height going
10:26into high-tech this year alone more than
10:29a trillion dollars will be distributed
10:31from from just the US as 500 biggest
10:33companies just the sp500 will distribute
10:35more than a trillion dollars of cash
10:37back to their shareholders right which
10:39is so those of you who are math majors
10:4020 times more money is going to come out
10:43of big established companies than is
10:45going to go into startups right and so
10:47to me the real question the macro
10:49question is not what happens with the 50
10:51billion that goes into startups the real
10:52question is what happens to the nine
10:53hundred and fifty billion that doesn't
10:55where does that go the other macro fact
10:58that you can look at that helps explain
10:59this I think is right globally there's a
11:01lot more money in debt than there is an
11:03equity global bond markets are much much
11:05the global equity markets globally
11:07there's six trillion dollars of bonds
11:10that are returning negative yield and so
11:12there are six trillion dollars six
11:15trillion dollars worth of money in
11:16financial instruments in the world where
11:18you have to pay for the privilege of
11:20owning them right you not only don't get
11:22any money you have to pay to own them
11:24right and again I just compared 50
11:26billion into startups versus 60 trillion
11:28where you have to pay to own a bond and
11:29so I think the critical crisis in the
11:32economy at large is not that the unicorn
11:34circle for value the critical crisis in
11:36the economy at large is that there
11:37aren't there aren't enough unicorns and
11:39then to Clay's point big companies I
11:41totally agree with them are not being
11:42nearly aggressive enough that investing
11:44for the future because what the markets
11:45are telling us is exactly your point
11:47capitals abundant opportunity of
11:49scarcity well historically there were
11:51about 10 companies every year that
11:53mattered in the valley now we have about
11:54a hundred companies more than a hundred
11:56companies value to over a billion
11:57dollars have we gotten smarter people
11:59involved his Steve Case says that
12:02founder of AOL says that 50 years ago
12:04everyone's smart one in a government and
12:05today everyone that's smart is going
12:07into startups is this a case that we
12:09just widened the pool have we open it or
12:11have we been fooled by some of these
12:13companies that just you know with the
12:15access of capital I think on average
12:17it's very exciting to be here and I
12:21think that we we teach marketing wrong
12:25at the business schools because when we
12:28will want to know whether there's a
12:30growth opportunity we look at the
12:33numbers about how many products are
12:36being sold and what's that trajectory at
12:39market but what's really interesting is
12:42all of the non consumption that's going
12:46on because nobody has yet made it so
12:49affordable and accessible that even more
12:52people have access to it so take for
12:55example the the boring business of
12:58Management and we're trying to teach
13:01people how to be managers you know how
13:04many people can actually go to the
13:06Harvard Business School or there's a
13:14it starts with an S oh that's oh yeah
13:17yeah it's it's the it's the back up
13:19school but there is so much non
13:26consumption of about how to manage in
13:30the world and online learning and
13:33corporate universities are emerging and
13:35so the market for learning is ballooning
13:39because it is being disrupted yeah and
13:43there is so much non consumption of so
13:46many things around us that we just
13:49narrow our potential if we think about
13:52consumption as opposed to non
13:55consumption on education is the way to
13:57disrupt education to give it to everyone
13:59for free or is it to do with technology
14:01or what would you all have to take on
14:02that so if you develop a product that is
14:06you can hire to get a job done almost
14:11always people will pay a premium price
14:13for a better product and the reason why
14:17people will make a premium price for a
14:18better product is if you hire a product
14:21that doesn't do a job very well at all
14:23then darn it you have to shop and try
14:27something else and it doesn't work and
14:30you have to return it and the cost of
14:32getting a product that doesn't work is
14:35so costly that when you develop a
14:37product that nails the job perfectly
14:39people are delighted to pay a premium
14:41price and so giving anything away free
14:45is absolutely the wrong way to think
14:47about the problem and so for example
14:50there's a job that arises in the valley
14:53occasionally which is the third of our
14:56five children actually did come to stand
14:59for it for whatever the black sheep yeah
15:02to get a doctorate you know and he
15:04called this up after he'd been here for
15:06a week and he said mom and dad I found
15:08my apartment I need to furnish my
15:10apartment tomorrow as a job he had I
15:13have to furnish the place tomorrow if I
15:17said that's a job is there something
15:20that you would hire to get this job done
15:23that just pops into your mind IKEA right
15:26they have designed their system so that
15:30anything that you need in order to
15:33furnish the apartment tomorrow it's
15:35there and you don't have to shop you
15:38know it's it's there and so the owner is
15:41the third richest guy in the world he
15:44got rich selling low quality furniture
15:48to the low end of humanity and he
15:51becomes rich right yeah and why is that
15:53it's people will pay a premium price for
15:56a better product and you don't have to
15:59go to Target and this and that and that
16:01to get the job done so there's a long
16:03way of saying I hope that we never think
16:07about free is a pathway to a total
16:13let's talk about founders versus
16:15managers mark your firm is really this
16:17is one of your kind of core tenants what
16:19advantages does a founder CEO have over
16:23a hired CEO that comes in down the road
16:26yes so we think that in tech we think
16:30founders are critically important we
16:32think that if you just look historically
16:34at many of the great you know important
16:37technology companies for the last 50
16:38years hundred years and many of them are
16:40run by their founders for decades and I
16:42would say it's not a religious point of
16:44view which is it's not always the case
16:45like I was a founder I was never CEO and
16:47liked it so it's not a religious case
16:48that the founder always has to be the
16:49CEO but that there's something very
16:51important about the founder or the
16:53founders and there's something very
16:53important about the founder mentality
16:55and a lot of it has to do with with
16:58disruption a lot of it has to do with
16:59responding to disruption and so in
17:01particular I would say there's this
17:02there's this cliche of founders that a
17:04lot of people believe are used to
17:05believe which is that founders are too
17:06stubborn and then founders get too
17:07locked into their original idea and they
17:09can't adapt as times change we've
17:11actually found the opposite to be true
17:13we found that when a company is going to
17:15get disrupted the person in many cases
17:17with the best odds of countering the
17:19disruption is the founder and I think
17:22there's a couple different reasons for
17:23that I think one is the founder
17:24remembers when the business was nothing
17:26the founder remembers and he loves you
17:28the audience will notice the founder if
17:29the founder remembers what it was like
17:30when there was like nobody's office with
17:32you and when you carried out your own
17:33trashcan like the founder remembers this
17:35thing used to be zero and so the
17:37a vision kind of in their heads they
17:38kind of haast them that says this thing
17:40used to be zero now it's something it
17:41could be zero again and so when an
17:44existential threat like somebody coming
17:46in with a disruptive product occurs the
17:48founder we often find is emotionally
17:50able to wrap their head around it and
17:52then able to actually figure out what to
17:53do about it because they know that if
17:55they don't they're there they're gonna
17:56be in real trouble the other thing we
17:58find with the founder with the founder
17:59mentality is if the founder can carry
18:01enormous moral weight inside the company
18:03to then be able to make the changes that
18:05are required right and so sort of though
18:06cliche of like having your name on the
18:08door you know it's a you know and Steve
18:10Jobs you know goes in Apple and says
18:12times are changing and we need to do X
18:13and X is heresy right as compared to
18:16everything Apple had done up until that
18:17point you know a Steve Jobs a founder is
18:19gonna be able to convince the company
18:21that they have to do that whereas a
18:22professional CEO shows up and says that
18:24and everybody's kind of like ooh you
18:26know I don't know and so we try really
18:29hard in our companies to have the
18:31founder be central we in many cases have
18:33the founder as the CEO and then even
18:34when we don't have the founder as the
18:35CEO or even when the founder doesn't
18:37want to be the CEO we try hard to pair
18:39the founder with the CEO so that they
18:41can have those strengths yeah but wonder
18:43if we could talk about a couple of
18:45companies and see which how you how you
18:46feel about them get your pinions on them
18:48in terms of where they're at let's start
18:49clay with you with Apple you know they
18:51just feel like we're getting in these
18:53cycles into this last year they've gone
18:55off the 2 year plan and now you can buy
18:56your iPhone very clearly very simply
18:58every 12 months get your new iPhone it's
19:01thinner it's a little bit more expensive
19:02what when you look at Apple and what
19:05they're doing did they follow this model
19:07of could be ripe for disruption in the
19:10next years what do you think my wife
19:12calls me the Jewish mother of business
19:16because the Jewish mother is always
19:19worried about everything regardless of
19:21how well it's running you know so I
19:24worry about Apple what I what I admire
19:29about jobs and his legacy is that he did
19:34his research in front of a mirror and if
19:38I have a need in my life and there isn't
19:41something I could hire to get that job
19:43done I bet you that job arises in lots
19:48and and I worry that Apple can easily
19:52lose that and do their research by
19:55looking outside and not understanding
19:59the essence of what the job has to be
20:01you know so historically they've been
20:06very disruptive at every step in the way
20:08in ways that I didn't even see myself
20:12coming but now I see modularity coming
20:16at the bottom of the market and
20:18accelerating the development cadence you
20:22know Josh if you guys will pray for the
20:25Harvard Business School I'll pray for
20:26Apple sure we'd be happy to do that I'm
20:31gonna have to think about that for a few
20:33minutes before I are UConn degree mark
20:37what would you do to fix Twitter what do
20:38you think needs to be done at Twitter
20:40yeah it's an interesting question so let
20:42me start by saying there's a lot that's
20:43going right at Twitter and I think they
20:45say it's a sign of the times it's a sign
20:47of the times that we have a company in
20:48the valley that's 10 years old that's
20:50doing 3 billion dollars in revenue and
20:52there's 300 million active users and
20:53then everybody's like wow they suck
21:05where I come from that's pretty good
21:07that's that that's a pretty good I think
21:10they have a lot to be proud of I mean I
21:12think their challenge is well-documented
21:13which is that the growth has slowed it's
21:15a network effect in the growth of the
21:16network has slowed it basically two
21:18schools of thought one is it's topping
21:19out and it just it is what it is and
21:21they've reached the limit and the other
21:22is that there are things that they could
21:23do in the product to expand the market
21:25and to have a lot more growth and so I
21:27think they're working through right now
21:29this question which is I
21:30they either I think have to accept that
21:32they are what they are and that they
21:34have to they have to lock in on that and
21:35they have to set expectations
21:36appropriately around that and then going
21:38to become very successful doing that
21:39basically what they're today or they
21:42need to do what I know they're you know
21:43and I certainly Jack is working hard on
21:45which is the the reinvention and product
21:47expansion the obvious challenge is that
21:49there are you know there was just
21:51Twitter for their use case and now there
21:53are other you know competition there's
21:55competition there's disruption and so in
21:56particular there's their services like
21:58Instagram snapchat that have kind of bit
22:00have taken some a number of use cases
22:01from Twitter or in the process of doing
22:03that so I would say it's a great case
22:05study of a company that what that has
22:07been very disruptive that now has
22:08disruptive challenges and is in the
22:10middle of trying to figure that out part
22:12of what causes this to happen is when
22:16you start up and you organize the
22:18company around an inside of a job that
22:21needed to be done and nobody's developed
22:23a product to get that job done well the
22:27data about that opportunity is passive
22:30data its data about the context what
22:34people are trying to get done in their
22:36lives and you then respond to that
22:39passive data to develop a product that
22:42just but then as the company becomes
22:45successful as mark describes it the
22:48nature of the data that surrounds the
22:50executives changes and now the data is
22:54all about products and competitors and
22:56features and in contrast to the first
23:01set of data which is passive in this
23:04space the data is very active and if
23:08these numbers aren't pointing up all the
23:11time you're in trouble and so the
23:14management loses their insight about the
23:19and now they believe that their business
23:21is about products and features and so on
23:25what made you great and then when you
23:29get even more mature and you have
23:33efficiency innovations the numbers
23:35change again and this is all about costs
23:38and free cash and so on yeah and that's
23:41a different language than these other
23:44two and what you've got to do is somehow
23:47put out all of that noise and the data
23:50and come back and figure out there's a
23:53lot of non consumption yeah you know how
23:56could we do the job better and so you
23:59should never say no but if they go in
24:02that direction following the numbers
24:05they'll they'll be finished very fast
24:07alphabet reported that they spent 3.6
24:10billion on moonshot ideas last year
24:12that's almost double from the year
24:13before certainly a unique position with
24:16the founders there should they be
24:18investing internally like this is this a
24:19good way to avoid disruption do you
24:21think they should just be buying more
24:22startups what what what do you think
24:25well what they need is not more
24:29technologies or narpro on or more
24:32products they need more business models
24:35that are new because this doesn't make a
24:38difference until it's this the worst
24:41place in the world to create a new
24:43business model is with what is within
24:45the old business model and even a
24:49company as capable as them they I think
24:53stopped short they have a great product
24:56and then they try to find a business
24:58model to stick it in and investing in
25:03what what are new business models that
25:05we could create that's where growth will
25:08come from otherwise it is what we would
25:10call sustaining innovations that don't
25:12lots of innovation but not mention
25:15growth certainly wouldn't argue with
25:18that I think it's very exciting though
25:19that we have a company and we have a CEO
25:20and Larry Page who's willing to buck
25:22that entirely and willing to go full
25:25throttle into new areas and and and had
25:27and has the business has the resources
25:29to be able to do I'll just give you an I
25:30mean this is sort of a
25:32the way to think about it we think a lot
25:34about it from a product lands because we
25:35see the self-driving car and all this
25:36all this stuff and it's all very
25:38impressive there's a financial way of
25:39looking at it which is Google sitting on
25:41how much cash they've got probably 60 or
25:4470 billion dollars of cash
25:45they've got sixty seventy billion
25:46dollars worth the cash that's piled up
25:48from just running their business and
25:49they probably generate another I don't
25:50know fifteen or twenty billion a year
25:51just by running their search business
25:53and so by default that cash either sits
25:55in their bank account returning zero
25:57percent interest or negative negative
25:59interest or that cash gets distributed
26:00back to their shareholders who turn
26:02around and invest it in these negative
26:04yield bonds I pay for the privilege to
26:09own it and so you know to be able to
26:11take 3.6 billion a year for example out
26:13of the 15 or 20 that they're generating
26:15and be able to put it into these
26:16moonshots that may return zero but by
26:18the way that money was going to return
26:19zero anyway right or may return right
26:22may build a next giant you know an a
26:24giant new self-driving car business or a
26:26giant new satellite business or whatever
26:27it's going to be you know if they get
26:29one or two or three of these moonshots
26:30to pay off the total return on their
26:32capital will be so much higher right
26:34then how any of the big established
26:36companies that are being more
26:37responsible in return and so as an elf
26:40of that shareholder I think you have to
26:41feel pretty good about that yeah
26:42clay a few years ago you wrote a book
26:44called how to measure your life
26:45personally is had a huge impact on my
26:47life or basically outlines the this
26:49theory and these tactics behind not
26:52getting divorced not kids not hating you
26:54and not going to jail what did you come
26:56up with this and you know why did you
26:58put this out going back to something
27:01Mark said what causes disruption to
27:05occur is not incompetence it is you do
27:08everything right and because you do
27:11everything right you get killed and
27:14nobody intended to get killed but
27:18because they did what they thought were
27:20the right thing it killed them and I
27:24look at my students who graduate every
27:28year not a single one of them has a
27:31strategy to go out and get divorced
27:34right or to raise kids that hate their
27:37guts you know and yet
27:40a shocking number of our graduating
27:42students actually implement that
27:45strategy that they did not intend to
27:47pursue and so what is it that causes
27:53them to do what they would not want to
27:55happen you know and it turns out that
27:58it's the very same causal mechanism and
28:00that is I invest in things that pay off
28:04fast so if you are the kind of person
28:08who has a high need for achievement and
28:11that includes at least a hundred percent
28:13of us right if that's if that's what we
28:17need to do in our lives
28:19then when we have an extra thirty
28:22minutes of time or ounce of energy in
28:25our mind subconsciously we will try to
28:27find what could I do with this time and
28:29energy that would promote the most
28:32immediate and tangible evidence that
28:34I've achieved something and our careers
28:37provide tangible and immediate evidence
28:40of achievement every day we close a deal
28:44we ship a product we get promoted we get
28:47paid and our careers are just filled
28:51with tangible immediate evidence of
28:54achievement on the other hand when we go
28:56home it's very hard to see achievement
29:01frankly our children misbehave every day
29:04you know then the house gets messy every
29:07day and so when we have a choice about
29:10how do we spend this extra ounce of time
29:14and energy in consciously we invest our
29:17time and energy where we get the
29:20immediate return and that's not at home
29:22and we don't intend to invest in things
29:27that because money doesn't bring
29:29happiness is just we know that right and
29:32yet we do it but it's because the way we
29:35allocate our time and energy driven by
29:38this achievement so just understand for
29:42me understanding that that's what
29:46happens then I might be able to deal
29:49with it in a more productive way
29:52so I'll just give you one example and
29:54but that's really what motivated by
29:57writing the book so when I got my MBA I
30:02got a job with the Boston Consulting
30:05Group and after I've been there about a
30:08month the project manager came to me and
30:11said clay we need to meet on Sunday at
30:152:00 p.m. because we have a big client
30:18presentation on Monday we got to be sure
30:20everything is in place and I said all
30:24das Mike I forgot to tell you I'm a
30:27religious guy and I just made a
30:29commitment that I wouldn't work on
30:31Sunday and he just went bonkers and
30:37everybody here works on Sunday and I
30:41said well I made a commitment that I
30:42wouldn't and he said look I don't know
30:46anything about your church but my church
30:48if I need to do something that's a
30:50little bit shady I just do it and then I
30:55find a priest and I confess that I did
30:57it and I promise never to it again you
31:01know and and he said doesn't your church
31:06have some kind of escape gallery and I
31:11said I've been looking for that out for
31:13a long time I don't think they have it
31:14and so I said I just I can't do it I'm
31:18sorry anyway so he blustered away and an
31:23hour later he came back and he said look
31:25clay I talked to everybody it's fine
31:27we'll meet on Saturday at 2 p.m. and I
31:31said oh man I forgot to tell you I made
31:36a commitment to my wife that I wouldn't
31:38work on Saturday Mike was just even more
31:43bonkers about it and he said look clay
31:46whatever commitments you made to your
31:48wife on set about Saturday just this
31:52in this particular extenuating
31:54circumstance isn't going to be okay to
31:57do it just this once and I said Mike I
32:03on this earth to make the partners of
32:06BCG to become richer you know I really
32:09want to be a good husband and a good
32:11father and if I spend my Saturdays
32:14here at BCG I will be implementing a
32:18strategy that I don't intend to pursue
32:20and he was really mad and so then he
32:27came back an hour later and he said look
32:30I talked to the team do you happen to
32:34work on Friday perchance it turns out
32:40that that decision is one of the most
32:42important decisions I ever made because
32:46it turns out that my whole life has been
32:49filled with an unending stream of
32:51extenuating circumstances and if I had
32:55said just this once the next time it
32:58occurred and the next time you said
33:00easier and easier and I decided that it
33:04is easier to hold to our principles a
33:07hundred percent of the time than it is
33:0998 percent of the time and so anyway
33:18that's why I wrote the book mark and
33:20clay thank you very much for being here
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