Preface: The Quest for Truth
“If someone can prove me wrong and show me that something I thought or did was mistaken, I'll gladly change, because my goal is the truth, and the truth has never harmed anyone. The man who's harmed is the one who persists in his own self-deception and ignorance.” - Marcus Aurelius, “Meditations”
In this article, the author, Alex Ren, reflects on the challenges faced by engineers, entrepreneurs, and investors in Silicon Valley during 2021-2022, using his experience as an investor and entrepreneur, and combining it with the philosophy of Stoicism. He offers a Stoic mindset and attitude towards life as a source of encouragement.
*Stoicism: A Greek philosophy founded by Zeno of Citium in the early 3rd century BC in Athens. Stoicism advocates self-control and resilience in the face of difficult emotions. It believes that people should strive to be unbiased thinkers, in order to understand the causes of the universe. Its primary focus is the improvement of personal ethical morality. “Meditations” by the Roman Emperor Marcus Aurelius is one of its representative works. Those who believe in Stoicism are called Stoics.
Review: The “Golden Age” and the Shattering of Dreams
"The wise man will not be carried away by the present troubles but will reflect on those of the past and see that they have not passed away but have only changed their appearance."
- Epictetus, “Discourses”
"My stock market annual return has been as high as 40% in the past few years. How much return can you give me?"
"Our team plans to expand three times next year. How can you provide candidates at the fastest speed?"
As the founder of Fellows Fund and TalentSeer, I was asked the above two questions countless times in 2021. The first question makes me nervous because even the most successful investor, Warren Buffet, only has an annual return of around 20%. The second one excites me because the opportunities seem endless.
After hearing numerous similar questions, like many others, I felt pumped up and full of confidence for the future. The concept of "Blitzscaling" – rapid expansion – was trendy at the time, with companies operating aggressively and seeking to grow at lightning speed. Every company I came across, including my own, was talking about ambitious expansion plans. Valuations of these companies continued to increase, and investors were willing to compromise on terms to invest in startups – such as not setting a cap on valuations and giving up board seats – in their pursuit of quick profits.
In the period from 2020 to 2021, it appeared that every engineer was caught up in the frenzy of rapid expansion. Engineers were frequently offered salaries much higher than their hiring managers, and they would negotiate and compare stock and cash offers from various companies, although the terms were unreasonable. Despite having raised millions of dollars, some startups even started considering moving outside of Silicon Valley because of the high cost of hiring software and AI engineers.
In 2021, Silicon Valley was reminiscent of the "gold rush" era. Immersed in the excitement, we believed we were taking on the "fast lane" toward the destination of financial freedom, unstoppably. However, in 2022, brought on by a series of incidents, such as the Russo-Ukrainian war, the supply chain crisis caused by the pandemic, global inflation, and the US Federal Reserve's tightening policy, the bubble burst unexpectedly. This caused a de-bubbling of high-tech stocks, most depreciating by more than 50%.
The digital currency sector was also affected, with Bitcoin plummeting 40% straight when I attended the Consensus conference in June ‘22. Instead of feeling the hot summer in Austin, I just felt the market cooling. Layoffs and bankruptcies also followed for most tech companies. Every high-tech worker felt the same thing – the cold of winter was confirmed, an icy chill penetrating to the bone, constantly undermining our confidence and faith.
2021 is remembered as a golden age. Nonetheless, 2022 brings the crushing disappointment of shattered dreams.
Reflection: Control and the Lack of Control
"You have power over your mind -- not outside events. Realize this, and you will find strength."
- Marcus Aurelius, “Meditations”
After the intense fluctuations of 2022, most people immediately feel regret, regretting joining that good-looking Pre-IPO company, regretting investing in the stock of that high-income listed company, regretting making too aggressive company expansion plans, regretting missing the best financing opportunity, and so on. We also often think, if we had another chance, could we make a calm analysis and decision? Which factors and variables are within our control, and which are not?
After reading Marcus Aurelius's "Meditations," I had a sudden realization. We have control over our thoughts and actions. However, we cannot control external events, such as the global financial environment, inflation, wars, etc.
Within the limited scope of what we can control, it's common to overestimate our influence during optimistic times and make unrealistic judgments and predictions. Conversely, during pessimistic times, we may underestimate our power and feel like we can't accomplish anything, convinced that the world is beyond our control and that our efforts are futile.
We go from one extreme to another – when we are extremely positive, we are like wild horses, galloping freely without anyone stopping us; but when we are extremely conservative, we are like scared snakes, shrinking into the corner and not daring to move at all.
Calm and Peace: Decisive Power
"The things that happen to me don't concern me; it is how I deal with them that is my concern." - Epictetus, “Discourses”
We need to be calm and peaceful. Stoicism believes that inner peace and tranquility are necessary conditions for a good life. To achieve this condition, we need to understand a fact: the world is constantly changing, and we cannot control external events.
A saying once struck me that leadership is the ability to make decisions, and this ability has nothing to do with emotions. While these emotional reactions often influence our major decisions, many correct choices are made when we are in a calm state of mind and have thought through the options carefully. It can be helpful to cultivate a "God's eye" perspective, which involves analyzing problems from a neutral, third-party standpoint rather than from our own or the view of the group we belong to. This ability to analyze and judge beyond the self, beyond our group, and beyond the present moment is something that we should aspire to. The lack of these skills often leads to trouble and dead ends.
Many technology professionals start by learning about and dealing with objective things, such as math, physics, and programming. We may understand how the physical world works but often need an understanding of humanities, including people, history, and the philosophical and religious concepts that have shaped human life for thousands of years. Without these understandings, we may face challenges in dealing with complex situations and making difficult decisions.
Returning to the Heart and Values: Where is the Soul?
"Everything is transient; everything quickly becomes the stuff of stories and then is quickly buried by complete oblivion." - Marcus Aurelius, “Meditations”
Human beings are mysterious animals, and in most cases, rational people seek their spiritual appeals: where is my soul?
Engineers, entrepreneurs, and investors in Silicon Valley, where is your soul?
We frequently discuss investing, entrepreneurship, and pursuing the next unicorn. But why do we do this? And what is the ultimate goal? The tides of fortune rise and fall and one generation are replaced by the next. What does the fleeting success and decline of the present mean? Today, you may be in the spotlight, enjoying your momentum and enthusiasm, but little do you know, Sam Bankman-Fried's FTX also went bankrupt in just three days...
Drunk on the inexplicable sense of achievement, promotion, and excitement about starting a business, raising the first round of funding, accepting every interview, and making it onto Forbes' lists, does it matter?
What happened to the previous "startup star"? Did they end up bankrupt or in jail? When the old men die, the young ones betray. For all sentient beings, triumph is temporary.
According to Stoicism, honor and flattery are considered “indifferent,” which are not inherently good or bad but depend on how we perceive and utilize them. Instead of allowing external factors to shape our identity or becoming overly reliant on them, we should regard them as neutral and prioritize cultivating inner virtues and wisdom.
In the past few years, I have seen many entrepreneurs become over-excited once they receive a large investment, and accept media interviews every day, thinking that getting funding is a success. As a result, too much energy is wasted on useless things, the team loses its focus, and soon it collapses; on the other hand, successful entrepreneurs like Zoom's founder Eric Yuan, Pinterest’s founder Ben Silbermann and Figma's founder Dylan Field are all extremely humble and customer-focused people. They are willing to spend all day and night focusing on customer issues and getting into details for this. This is the soul of PLG (Product-Led Growth) in today's entrepreneurship model.
Ultimately, death is inevitable for all of us, even those who are more robust, famous, and successful. Eventually, even the memory of these individuals will fade away. As Marcus Aurelius said, "Everything is ephemeral - not just the rememberer but the remembered as well." We should strive for virtue and wisdom in life, not superficial pursuits.
In hindsight, greed and delusions may seem childish, so it's essential to focus on what truly matters. We can avoid feeling frustrated and discouraged by working towards our dream of using technology to improve humanity and making progress toward what is right every day.
As we grow older, even basic physical movements become difficult; we will come to value the times when we were at our most energetic and tried to do great things, such as starting a business, helping others start a business, conducting scientific research, or other meaningful pursuits. Whether we were successful or not, we can be proud of having done our best and contributing to advancing human civilization and progress without regret.
Understanding Wealth: Goal or Means?
"Wealth is the slave of the wise. The master of the fool." - Seneca
Career success brings wealth, but it should be viewed as a means to an end rather than a goal in itself.
While desires are a natural and essential driving force for human progress, wealth can quickly corrupt a beautiful mind. Too much success and easy life can lead to failure for many young heroes. On the other hand, a simple and humble life can inspire us to be more motivated and focused.
When we have wealth, we should use it as a starting point for a good life and a healthy personality and as a means towards the goal of human progress. Wealth, represented by cold numbers, does not bring happiness, but it should make us honest and responsible. When we are given more resources, we have to ensure that we use them efficiently to distinguish ourselves from other animals and make a positive impact on humanity.
The End is the Beginning: Setting Sail Again
"The impediment to action advances action. What stands in the way becomes the way."
- Marcus Aurelius, “Meditations”
Life is rarely easy, and our challenges can strengthen us as we navigate the ups and downs and continue moving forward. Many great people, such as Walt Disney, Henry Ford, and Mark Twain, found their purpose in life after experiencing a fall from prosperity. By gaining a deeper understanding of ourselves and the value of our wealth, we can find meaning in our failures and setbacks.
During market cycles, the bottom of despair can be the start of hope, and many great start-ups are born after severe recessions or crises. When the market becomes rational and values real value again, competitive entrepreneurs have unlimited potential if they can survive. For investors, especially early-stage VC investors, this can be a "golden age" because an early-stage venture is a long-term investment, and the timing of entry is crucial. There are many undervalued company shares available, and even the best companies may be more willing to accept investment, providing good opportunities for bear market start-up entrepreneurs and investors.
In conclusion, when making decisions about the future, whether you are an engineer, entrepreneur, or investor, consider the following perspectives:
- Who am I? What can I control? What can't I control? For example, consider your background and role when making an investment or career decision. As an engineer, you may be able to handle technical choices, but not the more extensive market environment, such as the competitive and capital landscape facing a company. For entrepreneurs, another question is how to increase control over things that are not controllable through learning and building a cooperative ecosystem.
- Why am I doing this? What do I want? Understand your original intention and find the north star that drives your actions. For example, as an entrepreneur, ask yourself what the purpose of starting a business is – is it to prove your ability, seek temporary fame, or solve a real problem and create tangible social value? If you can't find a purpose, perhaps starting a business isn't the right move. For job seekers, it is essential to find work that genuinely excites you and to identify your career goals. Each job should help you get closer to your goals, rather than getting too caught up in salary and benefits or title level.
- How would this decision look from someone else's perspective? Identify your limitations and biases. For example, if you have always worked in a large company, consider your biases when investing in a startup project and recognize the startup's flexible and fast-evolving nature; For investors, it is important to recognize the assumptions underlying each decision and whether they are based on personal biases. For entrepreneurs, it is crucial to assess the founding team objectively and whether there are significant gaps in experience, etc.
To the engineers and entrepreneurs in Silicon Valley, may you overcome challenges and use your calm and rationality to reflect on yourself and your surroundings to make thoughtful decisions about your life. May you have the wisdom to tide over 2022 with all its ups and downs, and 2023 be a very successful one!
Happy New Year to all!
Postscript: Fellows Collective
"We're all working together towards a single end, some consciously and knowingly, others in ignorance. Everyone makes a different contribution; there’s room even for the man who doesn’t like what’s happening and tries to resist it and make it not happen. The universe needs them too." - Marcus Aurelius, “Meditations”
All of the reflection, learning, and execution mentioned above cannot be separated from the team cooperation of the entire group. That's why we've created Fellows Collective (FC), a community platform for like-minded engineers, entrepreneurs, and investors. Our mission is to build the next generation of companies driven by conviction within the community. In FC, you'll find mentors, partners, advisors, and investors to help you achieve your goals. FC is the place for career development, investment, and startup success in the future! New members go through a review and approval process, and early members receive additional resources and voting rights. Join the community at fellowscollective.com
Special thanks to Vijay Narayanan, Daisy Zhao, and 100 other engineer leaders and founders for their valuable feedback and editing contributions.
