Quality over Quantity: Tracking Smart People to Find the Future
Super smart Investor and founder Chris Dixon once wrote “What the smartest people do on the weekends is what everyone else will do during the week in ten years.”
This has been one of the deepest insights that I’ve used to understand what the future looks like. I remember it used to be called “Cool Hunting” back in the 90s. It’s incredibly relevant for figuring which companies to join or leave, which industries are going to be hitting critical mass; which cities or countries are on the rise and conversely which ones are on the downward slope. Basically you see if there are magnets of opportunity or the reverse where very few opportunities & growth for young smart people and thus they leave. And I should add it’s almost always the youngest, most ambitious, best and brightest who have the option to leave.
I have stated many times how I overstayed at all the places I worked at. For example, at Yahoo! was a hot house of talent from 2003-2008. But frankly most of the best engineers, sales people, product people and executives started leaving in 2007 and this brain drain accelerated from that point onwards to a bunch of rising companies like Facebook for example. Looking back in retrospect, the writing was clearly on the wall for Yahoo! back in 2008. Paraphrasing Tencent’s founder Pony Ma, the corpse was still warm.
The movement of the youngest and most exceptional talent is hard to track but it’s incredibly helpful as a leading indicator on which companies or industries to go deeper on as an investor, employee or founder. So for example, from 2020, what I see from an industry perspective is that the best people are moving and trying to get into Web3 aka Crypto or Climate-tech. On the company front, it seems all the best folks are trying to join Stripe, Carta or OnDeck as the next major big mega-startup.
This is reflective of the movement of super smart people back in the 1980s for Wall Street, or the early 90s for Management Consulting, and the early 2000s for Technology & Hedge Funds. Where there is growth and opportunity, the most exceptional and ambitious people go.
This also works incredibly well for Countries. I track whether the best and brightest young people leave or stay in their country. So for example, I see a net inflow of talent into Israel or Canada. The United States up until recently was a mass attractor of great young talent. Dubai & Singapore are net importers of talent. People don’t just stay in this place, people elsewhere choose to go there. Poland used to be a net exporter but I’ve seen in the last few years, many expat Poles returning home and many young choosing to stay and build their careers at home. These are good signals for these places.
On the reverse side, we see many of the best and brightest leaving places like Russia or the various Balkan countries. The exodus of young talent does not bode well for these countries despite being nice places to live.
When it comes to cities, New York has always been a center for talent: being the center for finance, advertising, fashion, and art. Despite a challenging 2020 and what seemed like an exodus of people, it seems to have recovered fairly well unlike in San Francisco or Los Angeles. And How can I not raise the examples of Miami? The Miami example is most instructive to show how a few quality people can really change the trajectory of an ecosystem and city. Mayor Saurez is a brilliant & PR savvy mayor and through his charm offensive was able to get key Silicon Valley & New York tech individuals to come visit and even stay in Miami. Very prominent tech players like Keith Rabois, Anthony Pompliano, Harry Hurst, Bobby Goodlatte, David Blumberg, Jack Abraham and many others. This was the critical mass that has attracted even more tech folks both as new residents and regular visitors.
The point is that people really matter. There is a quote I love by Bryant McGill “One person really can make a difference. Each person is the revolution.” A critical mass of great people can literally change the direction of a country or company.
To really understand the future and the health of a company, industry, city & country, track where the best and brightest are going. This is one of the best leading indicators one can use to understand the emerging new world.