Steel Sharpens Steel: Picking your Tribe and Environment

I spend plenty of time thinking about personal development and excellence. I think a lot of the quote: “Talent is everywhere but opportunity is not.” Why do some people do well in life and others do not? Is it luck? Is it nature or nurture? Maybe all of this.

I recall a conversation with my partner Carlos at Diaspora Ventures. For those who don’t know, we invest in European pre-seed founders who are targeting the US market. At that moment, we’d done about 40+ deals and looked at thousands of startups. We were looking through our portfolio and like in all portfolios there were clear winners and clear losers. As we dug into the numbers, it became obvious what the difference was. The founders and teams who were based in the US far outperformed the teams based in Europe by a long country mile, whether in plain traction, growth or even learning curve. 

Why is this? I think it all comes down to being in the market. Being in the environment, surrounded by people moving at a faster and more intense pace. 

This is relevant even at a micro-city level, not just country level. The famed VC Bill Gurley said when asked where he would start a company today. “Place can be very impactful so if I were a 22 year old founder starting something, I’d go to Silicon Valley just because it would increase your odds of success.” 

When asked about Miami, LA, Boston? He responded: “I think many cities, whether it’s Austin or Miami, they have a problem that sounds ironic. They are a lot of fun. And so there is a question whether you attract the very most determined founders. Which may explain why Seattle has done so well. Not that it’s not a wonderful place but for two thirds of the year it’s dark outside. I think there are alot of contagious qualities to successful startups. Constantly around other people all in the same game is super helpful.” 

As the title says, steel sharpens steel.  As Codie Sanchez said: “Go where the game is being played.” You have to be in the middle of the game and always playing. If you want to get better, you play against better players. This is true whether in chess, judo, pickleball or tennis. The power of osmosis and seeing excellence helps you drive your own standards up. Being in the best and toughest place you end up learning and understanding what is global maximum, not local maximum.

There was nothing in my childhood that pointed to where I ended up today. I can say, almost everyone I grew up with in Canada was far smarter, disciplined and talented than I was. The only difference was I moved to Taiwan and then Silicon Valley which showed me how big the world was. It provided me opportunities to put my drive and tremendous capacity for work against them, so I could learn. Thankfully this worked as a little bit of this rubbed off on me. 

I was lucky to join great companies, get good mentors and surround myself with people smarter and better than me in business and investing. You become who you hang out with. 

And without this sounding too transactional you need to be with good, strong people. Preferable diverse people of diverse backgrounds and industries. I hang out with people who are startup people, VCs, hedge fund investors, agency & Holding Company business owners, people who run family offices. 

My personality criteria for who I consider for my tribe:

Does this person have ambition?

Are they honorable and reliable? 

Can I learn from them? 

Can I help them in any way? As friendship is a two way street. 

Do they meet the airport test? Ie. If you were stuck at the airport together for 6 hours would it be an ordeal or not. Preferably not an ordeal, of course. 

Hanging out with ambitious, smart people is always good. And it’s why I still continue to live in San Francisco despite its very visible decline in quality of life. 

Place really matters. Your tribe really matters. 

So really pay attention to these two factors if you want to have excellence in your life.