Auren Hoffman is the CEO of LiveRamp. He has started and sold five businesses, and has started many more that have failed, he also invests in lots of companies. He writes about success and failure, and all of the lessons and observations he has gathered throughout his life.
“I don’t think failure is necessarily good. Failure definitely has consequences. But if we don’t ever fail, it means we’re probably not pushing the envelope. If you want to grow, you essentially need to be in a position to fail.”
People coming out of college usually take jobs with a 10% chance of failure. Auren argues that we should be taking jobs where we have a 1/3 – 2/3 chance of failure. “Whatever we’re doing, especially at work, we should be doing things that are really challenging to us. ”
It is often riskier to do things that society says are low-risk.
“Risk and failure don’t necessarily equate. You could be a high failure and low risk person. Being an entrepreneur in Silicon Valley is way lower risk than working at a big company. Your downside scenario is you learn a lot, you grow a ton…your worst case scenario at a larger company is you get stuck, you might not be growing much, you might be unhappy.”
“To be an entrepreneur is to be an owner. It’s about a mindset. You almost always want to be an entrepreneur, even if you don’t start a company.”
One risk of not being entrepreneurial is to develop a generic, non-unique set of traits. In the future, people will be divided into two buckets: those who are the best at what they do and those who are at risk of being outsourced or obsolesced through automation.
“Many more things will be automated in the future than today. If you are picking something to invest in for the future, you would want something that would have a very good return over the next fifty years–something that will not be automated. Computers are much less likely to be good at left-brain thinking.”
Going forward, there will be less emphasis on systems-thinking, and more emphasis on creativity and judgment.
“Judgment is really important. One of the things that we’ve done a lot of in our society is to create all of these rules. There’s no room for interpretation. In many situations, this doesn’t work. You can’t write down every rule, and having all of these rules leads to things moving at a slower rate. Having fewer rules with more emphasis on judgment often can work much better.”
“If you’ve ever read the bible, the two most famous sets of rules are The Ten Commandments, which is smaller and easier to understand, and Leviticus, which is this very weird rule book that is incredibly hard to understand and remember. It’s much easier to be in a society with The Ten Commandments than Leviticus.”
Auren referred to the famous Netflix Slideshare as an example of an organization succeeding with minimal rules.
“Netflix basically has one overarching rule: to do what’s in the best interest in the company. That incorporates a lot of judgment, and a lot of creativity. An employee needs to understand all of the basic facts of the company, and an employee needs to be applying judgment and some creativity.”
The past is probably a less effective bellwether for the future than our intuition suggests.
“Most people understand that the future is really hard to predict. There will be some changes that will change society significantly–that is the only thing that we can predict. We don’t know where that change will happen or how it will happen. The same strategy that worked in the last fifty years will not work in the next fifty years.”
“Using history to help predict it is all you can do. But the conventional strategy of putting money in stocks when you are young and switching it to bonds as you get older may be stupid in the future, even though it was smart in the past. Often people don’t question it. And not only do people make the fallacy of looking at history to predict the future, but they focus on local history, rather than taking the broader worldview.”
The highest upside investment, particularly in an indefinite future, is often an investment in one’s self. Education is something individuals should always be investing in, whether they are spending money or time in exchange for that investment. “People don’t realize that if they are smart and they believe in themselves, an investment in yourself will be the best investment they can make, especially if you are young.”
For each individual, there is a personal exchange rate between money and time. The aggression with which someone should convert money into time depends on her circumstances.
“I try to invest money into buying time. There are lots of ways to buy time. However, it’s not always available to people. And some people have lots of time and not a lot of money. Some young people have a spare forty hours a week, so buying time doesn’t make sense.”
“All my life I have been extremely conservative about how I have spent money–except when it comes to time. I will pay a higher price for something if I can get it faster. When I was younger I was less in a position to do that.”
In one answer about personal growth, Auren suggests using synergy between two skills to develop one unique skill.
“A combination of two skill sets is a new skill set. You become the best at your niche. Focusing is about playing to your strengths, and developing a strength that is hopefully better than anyone else in the world, and hopefully is useful to other people.”
Recognizing that most people have a unique advantage, it is often worth focusing on seeing the strengths of others rather than the flaws. This is as true in relationships as it is in management.
“Everyone has flaws. You have a choice–you can give them negative feedback and focus on their flaws. Or you can focus on their strengths. It’s a lot easier to have discussions when you have conversations that focus on strengths.”
An exception to this is when a flaw is so harmful, there is no choice but to address it.
“If a weakness is really getting in the way of your strengths, the way to grow your strengths is to focus on that weakness.” If you have a very debilitating weakness, it will probably be an impediment to building the strength. “But generally working on weaknesses has a massive diminishing return. Presumably these are weaknesses you have had all of your life, and they are there because they are incredibly hard to change. You are probably going to get higher dividends by focusing on strengths.”
Auren believes that the job of CEO is vastly more difficult than the next lowest job on the ladder. This difficulty is not necessarily offset by the joy of being in charge. “Most CEOs out there are not in charge anyway–they have board pressure, shareholder pressure.”
Individuals who spend time as CEO remain capable of later playing a role below the head of the organization.
“The vast majority of CEOs have spent their jobs in position where they were not CEO. They know what it’s like not to be in charge.” Further proof is Google’s success in acquiring companies and making the CEOs executives. “There’s a lot of ex-CEOs doing a great job at Google.”
As a CEO of a marketing technology company, Auren provided some authoritative information about advertising fraud. There are fleets of bots on the Internet viewing ads. It is a hard problem to distinguish between when a bot views an ad and when a human views an ad. As a result, advertisers are less sure of how much to pay for advertising space.
“Ad fraud is a pretty big problem today. Long-term, fraud in the ad space will definitely be solved, but I think it’s a short term problem. It’s like email spam in 2002.”
“Ad fraud is a subset of viewability, which is a big problem. If an ad is displayed and paid for by an advertiser, it is really important that it is viewed by the intended customer. This isn’t always the case today. There’s a lot of fraud and viewability issues and the industry needs to solve this problem, and I’m confident that we will.”
“If you think of marketing, we’ve been struggling with this for years. People can skip through commercials on their DVRs, or get up to go to the bathroom during commercial breaks.”
Ad fraud is priced into the online advertising market. “If we can eliminate it, we’ll see fewer ads shown, but the price of ads will go up.”
“It will have a net positive effect on the ad economy. It’s extremely problematic when you have an ad that is not viewed. In the future, we might never have ads that are paid for but not viewed.”
Who is making these bots that consume ads fraudulently?
“I don’t know. There is a lot of fraud on the Internet in general. There’s lots of hacking on the Internet, there’s lots of scamming and fishing. There will always be fraud, unfortunately. But I think the ad fraud is going to be much less of a problem in the future.”
Another topic in the advertising space is the delineation between content and advertising.
“Some of the best content is advertising. If you are subscribing to Groupon, you really want the content, but it’s advertising. Even a lot of the content that doesn’t have paid advertising is promoting a particular point of view. People often think that content and advertising is this church and state thing that can’t mix. But it can–and in responsible ways as long as one is clear about it. Today, most content is not clear.”
“If you think of my posts on Quora, it’s content but also I am advertising my point of view.”
Quora also allows him to crowdsource better grammar and style. “I have been a long-time consumer of Quora. I was a taker and not a giver until a couple months ago. One of the non-obvious things I like about Quora is it makes my writing better.”
Auren concluded by emphasizing that resilience is a skill with high long-term value.
“One thing I’ve been thinking about a lot is the core skills that one should have in their life, and in their career. One of the skills I’ve been thinking about is resilience. Focus, and being great at something is really important if you want to become the best. Resilience is a little bit different. It allows you to put a floor on your earnings, and assure that you are never long-term unemployed. If you are truly resilient, you will almost surely never be in a position where you have long-term unemployment.”
“Developing skills that ensure resilience, especially for a young person, can be really important for society. It gives you a floor where you can always provide for your family at some level. For example, if you are good at sales, you are almost certainly resilient. Someone who is good at sales can almost always find a job that is higher than the median salary.”
“Having some sort of resilience, so you have a floor to your earnings and it doesn’t go from great to zero is very important. A lot of people get laid off because the economy is so dynamic, and as a society it would be great if we could talk about and teach more resilience–especially to people at a young age, so they think about and practice it, so they are not completely reliant on one thing.”