Starting a Company with Boxes and M&Ms

by abclarke

This article talks about the importance of projecting confidence while innovating, but that your confidence needs to be firmly based on principles, and regularly subjected to transparent review. It also has a short teaser about my new company and a commitment about that company.

The Law of the Box

Think back to high school. You’re wandering through the hallways skipping your class and a teacher sees you – It’s an instant recipe for detention.

Now, imagine the same scenario, except this time you’re confidently carrying a box on your shoulder when the teacher sees you. Suddenly the teacher assumes you’re doing something for another teacher, and lets you pass.

By looking and acting like you know what you’re doing, you can directly influence the behavior of others, even when there is no way you could actually know what you’re doing – This is the Law of the Box.

I first discovered the Law of the Box while carrying a box of text books for my English teacher in 9th grade: Three different teachers let me pass without even blinking.

Once I recognized the phenomenon I kept a collapsed cardboard box in my locker. I would skip class, run to my locker, reassemble the box, and walk off campus to get bagels, confident that I would not be stopped by any teacher for any reason. (I was a nerd in high school, but I was a sneaky nerd.)

Evil and the Law of the Box

The Law of the Box is a very powerful tool in the hands of fourteen year old kid. In the hands of an adult, the ability to project confidence in the face of the unknown can be even more powerful, and like Faith can be used for both good and evil.

It’s the evil examples we remember most. By looking like you know what you’re doing, by following the Law of the Box, you can do horrible things (even if you think your principles are sound). For example:

  • You can convince employees to invest and lose their retirement savings in your company;
  • You can convince 38 people to commit suicide simultaneously; or
  • You can convince a country to invade another country to rid a dictator of weapons of mass destruction.

As I start my own company(1), I’ve given a lot of thought to the Law of the Box. To some the Law may seem Machiavellian, or manipulative, and just plain wrong. And it can be.

But the truth is all successful people follow the Law of the Box at times. And in order to accomplish anything truly innovative with a team of people, you absolutely must follow the Law.

It cannot be avoided.

So if following the Law is necessary to do something innovative, and I will be forced to use it as I get my company off the ground, how do I ensure I use the Law of the Box for good?

I believe the way to do it is state clear principles that we’ll operate by (with Mr. Bush did do), but be transparent in my decision making (which Mr. Bush did not do). In other words, I must Run Naked.

Read on for why.

A Confidence Game

I made the claim that “all successful people follow the Law at times”. Does that mean that all successful people claim confidence in an area they really can’t be confident in? Yes, it does. Does that make them conmen? Not at all!

Take the world of medicine again… Doctors are constantly treating people with unknown illnesses. (In fact during the diagnosis stage, all patients have “unknown” illnesses by definition.) But good doctors are trained to always present themselves with confidence even if they don’t know the actual problem, and while they try not to lie, they do present their thoughts in a way that attempts to maintain the confidence of the patient.

For example, my mother tells me that she has “primary idiopathic hypertension” and that her doctors are on top of it and treating it well. “Primary idiopathic hypertension” is the official name of her illness, and I believe her doctors are, in fact, treating it extremely well.

But my mother has no idea that “primary idiopathic” just means “the most common form of blood pressure, but we have no idea what’s causing it”. Her doctors present the term to her in way that disguises the uncertainty, my mother feels more confident, she takes her medicine, and hence feels better. (If you like “idiopathic”, also check out “iatrogenic,” another term often thrown around by doctors.)

Physicians are not doing it to be malicious – they are doing it because they know that if a patient loses confidence their chances of a successful recovery decline. In other words, it is in the best interest of the patient for the doctor to act with confidence.

I’m not harshing on doctors – I have immense respect for anyone who goes into that field. My point is in order to effectively do their jobs in an inherently uncertain environment, they must always look like they know what they are doing, or patients will lose confidence and get sicker.

Doctors follow the Law of the Box. So does any person who needs to change, inspire, comfort, lead or manage other people in an environment of uncertainty.

Innovation, Faith & Confidence

This is why innovators and entrepreneurs must follow the Law of the Box all the time. By definition, if you’re accomplishing something new and innovative, you’re doing something that has never been done before. It’s therefore completely impossible for you to actually know completely what you’re doing.

Like with doctors, lack of confidence is contagious; if you don’t project confidence, your team will not weather the squalls of uncertainty that you’ll encounter on your voyage.

Could Columbus have manned a fleet of 3 ships to find a “passage to India” if he had not projected confidence in his ability to navigate (which he clearly overestimated)? Unlikely.

Could the US government have maintained the support of the nation to put a man on the moon of they had not projected complete confidence in their ability to safely do it? Unlikely, and yet if you look inside the Apollo program you see countless examples of uncertainty, and even cases of death on the way to the goal.

To innovate, you must (1) have Faith in your mission and (2) you must project a confidence in excess of the facts on the grounds (the Known) in order to keep your ship sailing. You must follow the Law of the Box.

Hippocrates liked M&Ms

So, the Law of the Box is pervasive, must be followed by all entrepreneurs, and can be used for both good and evil. How does one ensure it is used for good?

Again, let’s return to the medical world. Doctors, a group of the world’s best confidence-men and women, manage to use the Law of the Box for good. They do so by clearly stating the principles they operate by, and by having a method to ensure transparency.

The principle is Hippocrates’ oath: Do no (unnecessary) harm. Most every non-doctor has heard of this. And ask any physician and you’ll find they take the oath quite seriously.

But most lay people (non-doctors) have not heard of the medical culture and concept of M&Ms, and it is just as important as Hippocrates’ oath. M&Ms for doctors are not tasty chocolate candies – they are “Morbidity and Mortality” conferences. All major hospitals hold them regularly.

In an M&M conference, physicians present their own cases where their patient had a poor outcome and review their mistakes openly in front of their peers. They face critique. They get advice from other doctors on how do better in the future. They force themselves to get honest assessments for how well they live by the Hippocrates oath.

And in this way, they have a check and balance on their projections of confidence. Unlike Mr. Bush as he went to war in Iraq, Doctor’s regularly check themselves and hold themselves accountable to their principles.

In other words, doctors run naked.

How Naked is “Naked”?

But just as important as what happens in an M&M conference is what doesn’t happen in an M&M conference. M&Ms do not criminalize mistakes – doctors are human and recognize that mistakes will happen. They view the mistakes as a way to learn.

And doctors don’t open the M&Ms to the general public.

Wait, isn’t that a violation of Running Naked? Shouldn’t you Run Naked completely openly?

No.

The point of Running Naked is to make sure you allow some independent people to review how you adhere to your principles, but Running Naked does not require everyone to see everything.

In fact, you can often expose yourself, your organization and the world to unhealthy harm by being too naked.

It’s a balancing act of independence of your reviewers versus their familiarity with the problem space, and while I do believe you should lean heavily towards independence over familiarity, sometimes you must choose familiarity.

Consider this case of life and death. A non medical person may find it appalling that a doctor could deliver a fatal dose of a drug to a five year old child by misreading a syringe, and will often look to punish the doctor (for proof of this, just look at the medical ‘malpractice’ industry). But this is likely not going to help the emotional wellbeing of the patient’s family, the doctor in question, or the world at large, and certainty will not bring the child back to life. (It will often however help the legal malpractice attorney’s, and the patient’s family, financial wellbeing.)

An independent, but not public, M&M conference will look at the surrounding circumstances where the patient was in the emergency room, chaos was everywhere, and a split second decision needed to be made. The doctor being reviewed is a lot more likely to share unflattering details about his or her performance. The committee may see the doctor got distracted half way through filling the syringe when the patient’s heart beat stopping. They will see that the doctor tried to live by the Hippocrates motto, but made a mistake that any human could make, and will concentrate the remediation on fixing the system (as a result, some dangerous medicines now come in pre-packaged syringes that guarantee the correct dose).

In reality, they make the system stronger by not being 100% naked.

Want other examples of organizations that project confidence in a world of intense uncertainty, but still ensure they use the Law of the Box for good without being 100% naked? Take a look at how the FAA consistently projects confidence in the safety of the air travel industry, and how they use post-accident review processes to hold themselves and their industry accountable to their principles (note: these are mostly public, but not completely).

Starting a Company

So what does this have to do with my new company? I’m not posting exactly what the company is doing here because that’s not yet in the best interest of my (future) customers, team and investors. (I will tell you the company’s working-name is Vlideshow).

Instead, let me talk about confidence. To get this company off the ground, I’m going to have to deal with a lot of uncertainty. I am 100% confident there is an opportunity here, and a customer base with a need that we can serve better than everyone else. I am 100% confident that Vlideshow will meet that need with aplomb. But my confidence has many unknowns and assumptions underlying it. How can I be sure that my confidence guides me in a direction that will actually be good for my customers, team and investors?

To solve this problem, I plan to do two things. First, I will publish (openly) a set of Operating Principles that Vlideshow will live by. And secondly, I will set up a group of independent reviewers where I present the mistakes I make while trying to adhere to those principles for review and learning. This will not be a public review committee – as some of the things we learn would help our competition in ways that is not good for our investors or team – but the committee will have real teeth and I will follow its advice.

Now’s I recognize it’s lame of me to claim this post is about starting my company and not tell you what the Vlideshow product is, so if you’re curious as to what I’m up to, feel free to give me a buzz and I’ll happily chat with you about it.

I’m especially interested in hearing from you if you’re an engineer:

  • experienced in streaming media and/or web-applications;
  • always have an eye for scaling architecture but absolutely believe in “ship first, ask questions later”;
  • have a burning yen to change the world with the most fun product you’ve ever worked on; and
  • you’re up for some excitement (and some risk) in co-founding a company (I’d prefer if you’re based in the Bay Area or New York City).

If you’re that person, I want you to help decide the Operating Principles with me.

415-378-4554 is my cell, or e-mail me at “aclarke(at)vlideshow.com” (replace the (at) with @).

Thanks,

– Art

Help me raise money for people suffering from cancer

(1) For those who don’t know, I left Stolen Bases about a month ago to pursue my own company. It was a hard decision, and while I continue to believe in the Stolen Bases mission and assist the Stolen Bases folks (and they advise me on my new company), I was at a good transition point and I’m so excited about the opportunity my new company is pursuing I found I couldn’t stop thinking about it. So here I am.