When I was young, it always confused me why grownups never seemed to know how to use any technology. Changing settings on a TV (ok using some poetic licence here – when I was young in Russia, TVs didn’t have settings), sending text messages, using the internet. All of it seemed beyond them.
And then 2016 turned up, and I started to see where they were coming from. Don’t get me wrong, I’ve still had time to write some skills for my Alexa to check my car’s battery and to switch on a TV show, so I’m not ready to give up on technology yet. But I’m definitely finding myself deprioritising things. Working out what’s new with Windows 10 has simply not been important enough to allocate time to.
Between running my company, which now takes up what I’m pretty sure is two full-time jobs, and my wife and parents, I’ve had little time for many things I used to do and enjoy. Looking back I wrote a grand total of three blog posts last year, which is how many I used to write each month at the beginning of my journey with Ometria.
But there’s one thing that is still at the top of my list of priorities, and that is the process I follow for analysing all the important decisions which I make, in order to improve my ability to make them in future. We live in an uncertain world, and most of the decisions I have to make are based on limited information – they are ultimately made by instinct, not rational process. So to keep my instincts as sharp as possible, I write down every decision I make, my reasoning behind why I made it, and then come back to those notes a year later to see whether I was right, and what I should have done differently. On the first of January each year, I go back over a whole year’s worth of notes and see if some wider trends appear – trends which will help me shape my own character and personal development.
So for the fifth year in a row, just as I wrote on the 1st of January 2016, 1st of January 2015, 1st of January 2014 and 1st of January 2013, here is my list of learnings from my analysis today. Like last year, they fall into four broad categories, but slightly different to last year’s ones.
1. Growing income lets you sort out most problems, but needs a growth mindset.
There are currently three P&Ls that significantly affect my life. My overall personal one, my passive income one built over a decade of following the advice in Rich Dad Poor Dad, and the most important – the Ometria one. Across all three, but especially for Ometria, it’s been clear that focusing on growing income has resolved many problems. Unexpected costs always turn up, that’s just the way life is. Having a growth mindset – believing that the growth will come, and dedicating time on identifying a clear plan for achieving it – has been the approach that has helped me overcome the many challenges we have faced.
2. Having positive cashflow leads to happiness and success.
But what I truly learned over this year has been the importance of positive cashflow to overall happiness and success. The emotional pressure of negative cashflow is significant – it clouds judgement and makes good decision making very difficult. When you’re spending personal savings instead of building them, when you’re burning investor cash instead of building a warchest, each decision you make is a short-term one based on the runway you have. Making your P&Ls add up removes those constraints – it lets you make decisions over a life-long horizon, which I believe is how all decisions should be made.
3. There are times in life when you have a high bank balance. Use that time to take the long-term strategically valuable actions.
However it’s simply a certainty that over the course of our lives we will go through ups and downs, in many different ways, but especially financially. There will be times when funds will be plentiful. That is the time to make long-term investments in the future. For a company, that means investing in product, clearing technical debt, hiring a senior team that will have longer-term payback. For an individual, that means investing in a pension or in personal development. It’s easy to miss these opportunities, we will only get so many of them, and it’s only a matter of time before we find ourselves in challenging times again.
4. Hire young, hungry, excited, committed, hard-working people, and prioritise that over experience.
Many of the lessons I end up taking away from this Key Decision Analysis process are ones that I’ve read about before. But it takes actually living them to truly internalise them. This is one of those – everyone tells you to hire young and committed people over experienced people any day. But it’s surprisingly easy to get swayed by people with impressive backgrounds. I’ve realised I fall for that quite a lot, and need to stop doing it. People should be judged by how they think and what they do. Not their CV. Our interview process is focused around identifying if they’re the right person – I just need to learn to ignore all other signals.
5. However, coach and manage those people closely as they don’t know the basics and will make lots of mistakes.
The flipside of having lots of extremely committed young people in an organisation is that they often don’t really know what they’re doing. To be fair most of us don’t really know what we’re doing, so that’s fine – the key is to ensure that the people who know slightly more are always there to coach and guide those who know slightly less. Just sitting back and letting people make all of their mistakes is not as effective as coaching them and guiding them to ensure they develop as quickly as they possibly can. We’ve implemented a lot of coaching over this year, and will be doing even more in the year to come.
6. People make mistakes without meaning to. Their reaction when they realise this can be emotional. Managing that with kindness and forgiveness will make them even better friends or colleagues.
This came out of a very specific situation. One person didn’t quite know what he was doing and made a series of ongoing mistakes because of it. When he realised how major these mistakes were, his initial reaction was an emotional one – he was distressed, and started rethinking all of his life choices. We jointly made a plan to replace him in the organisation as he said he wanted to do something else entirely with his life. However after a few weeks, we both had the chance to assess the situation, and he came back asking to stay. This was a major decision for me – one of my biggest learnings from previous years is that I always have a tendency to give people too many second chances, and that it always comes back to bite me. In this case however, the reason for the second chance was a genuine mistake, not anything intrinsic. I gave him the second chance, and 18 months later he has become more committed, and more effective, than he had ever been before. It taught me that when a mistake is genuine, a second chance should always be given, and that sometimes you actually have to guide people towards wanting to accept that second chance.
7. If you like your family, make time for them, otherwise you’ll drift apart.
This has been a big one for me. I grew up here in London, with my mother raising me and my father staying in Russia and working non-stop. Until my twenties I never really took time to think about the relationship between my parents and me. Even in my twenties, I mostly got on with my life, and it was my parents who shaped our relationships. But for the past few years, I’ve realised that the responsibility has shifted onto me, and that I should have worked on them earlier. Happiness and success comes from many different places, not just from building a company. And family relationships take as much work.
8. Plan ahead for old age – both your parents and yourself.
I’m always grateful when I make preemptive decisions that turn out to be right. This has happened quite a lot related to my mother – as she has got older I’ve become her primary carer, and have put in place everything necessary to ensure that she is safe, fed, and happy. So far I’ve managed to do this ahead of her actually needing it, and I’m really grateful for making those decisions correctly – this year in particular, with a lot of help from my amazing wife. The concept of old age never really crossed my mind before, but now I constantly think ahead to what is going to come next, and how I will make sure that the rest of her life is as happy as possible. I’m also thinking about how to make sure I don’t put pressure on my future family when it comes time to care for me.
9. If you want to sell something, work out what people want, and make sure you have that first.
Whether it’s a product, an equity stake in a company, or a property, there is no such thing as selling. There is only giving people what they want. It’s easy to get swayed by overly excited people who tell you they want something, and then waste time trying to sell it to them before realising that they didn’t actually want it. I’ve learned to not get swayed by the excitement, and instead to deeply analyse the needs of the other side, to evaluate whether what I have actually matches those needs, and only then to guide the other side through to understanding that there is a perfect match. This is the process we now follow when selling Ometria, and as we do a fundraise early this year, this will be the process that I follow too.
10. Sometimes there’s a high chance of a negative outcome. Minimise the downside of that negative outcome so you can focus on the positive outcome entirely.
Many decisions I have to make are very high leverage. The upside is huge. The downside is significant. The problem with these decisions is that there is always worry. And as my very first ever blog post says.. Well I’ll let you track it down yourself. So I’ve realised that the key to these decisions is to first do everything necessary to minimise the downside if the outcome is negative, and then do nothing but focus on making sure the positive outcome is the one that is actually reached. This way there is no worry, as you’ve already done everything you can to protect yourself from the worst case scenario. So that means you can put all of your energy into making sure that what you actually hope will happen happens.
11. Always follow the correct process whenever things are related to legal matters – friendship gets overridden.
This one has come up before, and I still keep falling for it. I see my business as a family – the people I work with are people I choose to spend time with, all day every day. They are people whose company I truly enjoy, and I see and treat them as friends. But sometimes I’m reminded that they don’t necessarily see me that way. There are situations that require a formal legal process, employment-related matters for example. In those situations I need to learn to stop letting those friendships get in the way. The outcome needs to be determined using that process. The downside is too great otherwise.
12. Any environment changes quickly but gradually so you may not notice it’s changed. Step back and reflect regularly to spot the trends.
This last one is the reason why I will always have time for my Key Decision Analysis. Things move extremely quickly, in business and in life. But they move gradually, and so irrespective of the pace it’s often hard to actually spot the changes which have occurred. To spot the changes you need to do two things – have a record of the way things were, and dedicate some time to analysing whether things are different now. That’s exactly why I follow this process and write these blog posts. My company has got bigger, my parents have got older – these are all continuous things that will continue happening. But there have been major discrete changes too. I hope to spend more time next year analysing these discrete changes, and making sure that I know where our market is going, where my family is going, and where my life is going.
May 2017 bring you health and happiness. The rest is just a byproduct of these two things. Health we can only control to a certain extent, but happiness is typically in our hands – whether it’s changing the reality around us, or just changing our mindset, we can put ourselves on a path that makes us happy. And with that will come all the energy necessary to achieve the goals which we set ourselves for the year ahead. Let’s make it a great one.