🌱 5-Bit Fridays: Everyone is now above average, what makes a great acquisition, how to learn anything, and more.

#49 (and a new format I'm testing out)

Nov 10, 2023

👋 Welcome to this week’s edition of 5-Bit Fridays. Your weekly roundup of 5 snackable—and actionable—insights from the best operators, bringing you concrete advice on how to build and grow a product.

To get better at product, growth, strategy, and startups… join 12,419 PMs and founders.

Happy Friday, friends 🍻

In case you missed it this week:

OpenAI is letting anyone create their own version of ChatGPT. It’s so easy to do, and allows you to make your own bots, or publish to the marketplace. A genius move that probably has several founders who were building GPT wrappers tearing up.
Humane, a startup founded by two former Apple designers, launched their first product yesterday: an AI lapel pin that costs $699 and is meant to replace your smartphone. It looks sweet.

WeWork, the real-estate company that went to Halloween dressed as a tech startup, filed for Chapter 11 bankruptcy this week. That shouldn’t surprise you—watch this space for a WTD post…
Amazon is reportedly racing to build a competitor to OpenAI’s ChatGPT and Google’s Bard. Amazon has doubled down on investing in AI. And their new AI model, “Olympus”, will likely be incorporated into Amazon’s online stores and smart speakers. Having your own AI model is the new “I also have a rocket going to space!” . Elon, where you at?
Leaked numbers show that Google’s fastest-growing product is YouTube TV. The company found that using TVs and tablets boosted watch time—and their going to be leaning in harder to the streaming wars.
Many people are reportedly interested in getting implanted with Elon Musk’s brain chips. Yea….

Okay, quick note before we get into today’s post. I’m trying out a new format for 5-bits this week, (h/t feedback from Rian van der Merwe ) and would love to know what you think. My goal is to make this weekly roundup more scannable and bite size. Not every bit each week is relevant for everyone, so this style should make it easier to (1) walk away with valuable soundbites, and (2) go deeper into topics that specifically peak your interest.

There’s a 1-second poll at the end of the post…if you get there, please drop a response. Feedback makes things better :D

Here’s what we’ve got this week:

What makes a great acquisition?
Welcome to CAPTCHA hell
How to land up at a fast-paced startup
Everyone is above average
How to learn anything

Annoyingly, all my post gets cropped in email. Hit the button below to read the full thing.

Read the full post

Make your thinking and writing visual

I’m a sucker for trying out new tools that make me more productive, or just help me to organize things better.

Most of them are just hype…I download the latest productivity hack, just to find it’s overpromised and underdelivered.

But recently I’ve been playing around with Scrintal, an online whiteboard that makes it super easy to visualize my thoughts and connect the dots in my head with each other. Basically, Scrintal brings the power of mind mapping together with networked note-taking.

It helps me crystalize my thinking, and as a visual thinker, it’s becoming a key tool that helps me convert my ideas into structured knowledge. I don’t lose context, I’m able to keep track of the big picture and the details simultaneously, and generally just keep more focused and maintain flow.

If visualizing things is your game, I really do suggest taking a look at what they’re building: a visual-first knowledge management tool where you can brainstorm, develop ideas and have the ultimate overview effect. There’s also minimal learning curve.

You can check it out here (it’s $5/mo, and HTG readers get a discount using code BITS10) to join over 65K other visual thinkers—the creators, founders, PMs—and stat building your own web of knowledge.

Sounds interesting

Want to learn more about sponsoring this newsletter? View packages

(#1) What makes a great acquisition?

M&A can be an absolute shit show. If the right processes are not in place you’ll likely kill the culture, burn through acquired talent, and waste time, money, and erode the value of the asset you just spend bucks on. 70% to 90% of integrations fail, which is why Roger Martin calls M&A a “mug’s game” .

But there’s huge value on the table, and M&A has changed the trajectory of companies. Just consider the ROI of these ones: FB <> Instagram, Google <> YouTube or Android, Disney <> Marvel.

So if you want to do it right—if you want to create a generational business like the big dogs—you must understand what makes a great acquisition.

Key quote 💎

One moral of the [Facebook/Instagram & Twitter/Vine] story is this: the right acquisition can change everything. A purchaser who finds the perfect business at the ideal time can unlock new markets, establish new moats, stave off decline, and accelerate growth. Think Google snagging YouTube, eBay grabbing PayPal, or Disney devouring Marvel.
Another equally true moral: picking the right acquisition is extremely difficult. It requires a mix of vision, operational acuity, financial discipline, cultural awareness, market storytelling, and timing.
— Mario Gabriele via The Generalist

Insight 💡

If you’re an introverted founder, find an extrovert executive partner to drive your M&A. There’s solid evidence to show that extroverts do more, and better, deals.
Practice, start small, and develop your M&A chops. The more deals you do, the better you get at spotting the right ones and applying 1+1=4 magic.
Create long-term synergy; short term independence. I wrote about this in our Cash App analysis: it’s important acquired companies get to maintain their own culture and work with autonomy, all while rooted in a shared “ecosystem” vision. AKA—empower with resources, add value, then get out of the way.
Culture fit is wildly important. This doesn’t mean slow incumbents can’t buy agile startups, but it does mean if your business ethos is “How does this lower costs?” and your target company’s is “How do we add more value?”… you’re gunna have problems.
Buy companies that either have critical acquired resources (i.e infrastructure/tech/operational advantages) or true customer behavior crossover in purchasing patterns. Of course, both if you’re able to.

Want to see what bad M&A looks like? Read Why Vine Died.

One thing you can do with this 🛠️

Consider your current product and market—where do you think things are going? Is anyone building in your space that you think will be accruing any advantages to win in that future world?

It’s a worthwhile exercise to create a list of potential acquisition targets (even if you have no plans on doing M&A now). It prepares you, and allows you to structure your thinking about who is interesting, why, and what may push you to actually do a deal.

Read the full post by Mario Gabriele

(#2) Welcome to CAPTCHA hell

Those little online puzzles—the ones started by the guy who created Duolingo—are about to get so much more annoying. And you know why…

Key quote 💎

Unlike the many other facets of life wrestling with that same AI conundrum—academia, coding, publishing—the one and only purpose of CAPTCHAs is to separate bots from humans. Researchers are highly motivated to figure out something quick and simple that humans do better than computers. Once, that was reading scribbly text; then it was identifying pictures; now, apparently, it’s some combination of surveillance and rotating animals. Whatever CAPTCHA comes next might be more of a nuisance and might produce more swearing whenever it appears on my computer screen. But what that next annoying little task is will suggest something about what it means to be human. It’s much less annoying than a world in which no task like that still exists.
— Justin Pot, via The Atlantic

Insight 💡

You may have heard the saying in business/product, “Fast, cheap, or good—you can pick two.” Well, with CAPTCHA the same logic applies with three different factors: security, usability, and accuracy. The easier the puzzle is to solve (usability), the the more likely it is bots will solve it (security).
So, CAPTCHA is either going to become less usable in order to remain secure—which will hurt the funnel for products the use them, or, be replace by something else entirely.
Any CAPTCHA based on a visual puzzle is at real risk of being made obsolete by AI—instead, activity monitoring may become the new norm. Much like how your credit card company uses AI to watch for odd behavior, your browser will do the same to make sure you’re a slow human.
The more interesting question though is…what can humans do better than AI? And even once we figure that out, who’s to say AI won’t just go and find a human to get past any puzzle thrown at it. Don’t be surprised, because in GPT-4’s testing phase earlier this year, the model solved a CAPTCHA by contacting and hiring a real-life TaskRabbit worker.

One thing you can do with this 🛠️

If you use CAPTCHA software in your own product to stop bots, ask yourself if you’re using a version that is defensible to AI. If you’ve seen an uptick of spam…that might be your answer.

Read the full post (paid) by Justin Pot.

(#3) How to land up at a fast-paced startup

Getting a job in product management, especially your first one, is flippin’ hard. Out of pretty much all tech jobs, product management in my view is the hardest to break into. Simply, because its hard to demonstrate you can do the job until you’ve done it.

Engineers and designers are way easier, because you can test for skill super easily. Either your design is good or it sucks. But product is far more nuanced to test for.

That being said, there are things you can do to help get your first PM job. The advice below applies to other roles in tech too.

Key quote 💎

Startups are more likely to want a T-shaped operator than someone who is a deep subject matter expert in one narrow area. Why? Because at a startup, the company needs (and, therefore, roles and responsibilities) can evolve every few months. On the flip side, demonstrating that you are flexible, coachable, and growth-oriented can help you get in. This is doubly true if you come from the corporate world or are trying to break into a new function or industry. Hiring managers at startups, like hiring managers everywhere else, want candidates who can start contributing immediately because they don’t have much bandwidth to train them.

— Wes Kao via Perspectives

Insight 💡

Lean into take home assignments—and hard. Projects dished out in your interviews are there to help distinguish you as a candidate. So, use them as an opportunity to show your ability, the “what” and “how” of your strategic thinking, your sense of judgment, and your level of care. I got my current job because I made sure nobody would have in an assignment like I did. Effort pays.
Proof of work matters more than credentials (generally). Write online, start a side hustle, create a portfolio…anything you can do to show your work. This is particularly true for green PMs.
Clarify what you’ll be doing in the job. Without clear conviction about what you can do and how you’ll move the product forward in said role, it can be hard to persuade the hiring manager (or yourself for that matter) that you’re the best fit for the job.

One thing you can do with this 🛠️

The road to becoming a PM can is by and large long and unpredictable . There isn’t a straight path. But, in a somewhat philosophical, yet practically true, sense—the job of a PM is all about determining what comes next. So…what comes next for your journey into product management? You can’t go wrong with starting to develop and demonstrate core PM skills, like strategic thinking, execution, communication, leadership through influence, data chops, and product sense.

Go read and learn from the best (i.e Aakash, Lenny, Leah, Aatir, etc), make notes to clarify your thinking and put your learnings into action however you can.

Read the full post by Wes Kao

Cool tools worth checking out 🛠️

Scrintal: The visual-knowledge base to capture creative ideas using canvas, boards, & cards. (learn more)
Sukha: Join other HTG readers in my Sukha group, where we all work daily using my favorite platform to stay in flow and manage deep work. (learn more)
Storylane: Create engaging and personalized video demos for your product. (learn more)

(sponsored)

(#4) Everyone is above average

AI is making low performers better at their jobs, moving more people towards what was the previous “average”.

Key quote 💎

We don’t know the ultimate shape of the new post-AI skills distribution, but we do absolutely know that things are changing. Even with the relatively primitive tools of our current, unspecialized AI systems, it is clear that we can become much more productive, and that less-skilled workers are now at much less of a disadvantage than they used to be.
Like so much else about AIs, the implications here are not completely clear, but we have agency over what happens next. Some of the highest-paid jobs are most impacted by AI - so what do companies do in response? Hire less skilled workers and have them boosted by AI? Expect more work out of all their employees? Focus on working with employees so that they become Cyborgs? Or are they tempted to cut wages or headcount? The answers to these questions are critical, and they will be made soon by companies, with influence from government, their employees, their stakeholders, and their customers. We should be thinking right now about how we want this new world of work to look.
And it isn’t just work. If AI turns poor employees into good ones, it might do the same for other fields. I suspect that it will have a major effect on entrepreneurship, giving every entrepreneur a personalized cofounder to fill in the gaps in their skills. This suggests a potential for an expansion of entrepreneurship, especially given that GPT-4 is widely available for free around the world, helping potential founders far from the usual technology hubs. However, without guardrails, AI may also do the same for criminals, increasing the competence of the worst actors in society.
— Ethan Mollick, via One Useful Thing

Insight 💡

AI is leveling the skill landscape and closing the performance gap. If you were a shitty writer, with all the GPTs out there, now you can be an average writer.
“AI as a leveler” so far is mostly benefiting the lower performers and moving them up the skill ladder (vs people already crushing it at the top), simply because the AI we have isn’t quite good enough to improve the skill of top performers.
But, the LLMs and use cases are only getting better, and fast. This means AI will go from an equalizer (getting everyone to the same level) to what the authors call “an escalator”—increasing the skills of everyone. After an adjustment period, the relative skill positions stay similar, but everyone gets more done, better, and faster.
In both cases, there will be some people who are just better with AI, adopting Cyborg practices. These folks will tear away in terms of desirability, and everyone will be on the look out for them. I imagine all sorts of questions in recruiting coming up, like “Tell me about how you’re using AI in your work, and give me an example of how you’re using it better than the next PM”. What would you say?

One thing you can do with this 🛠️

Don’t sleep at the wheel here. If you’re not trying new ways to use AI at work and staying on top of the latest advances, you’ll be falling behind because someone else is.

Just yesterday my incredibly creative fiance (we’re getting married in a month!) spent a few hours building out ~10 different GPTs for herself using ChatGPT’s new “make your own” tool. From work to personal, each GPT of hers has been made and tested to be an expert assistant in one thing.

So, as inspiration, I suggest two things:

Read up about OpenAI’s new GPT marketplace
Put it all together and just make a GPT for one task you do at work. It doesn’t have to be great, just test it out. Start here (it’s very easy)
Food for thought: Read Centaurs and Cyborgs on the Jagged Frontier

Read the full post by Ethan Mollick

(#5) How to learn anything

How on earth are you meant to know what’s important to stay on top of in the world, when the rug keeps getting pulled from under us and deeming the next thing to be more important.

It’s crypto. No, it’s Web3. Well, what about all this AI stuff? Actually, it’s semiconductors mate. Nvm, the worlds on fire you need to learn about climate change. Hmm, so you don’t know about the Middle East really, do you?

Yup, the world is complex and by the time you’ve decided to learn about X, it’s Y that matters.

So how do you form opinions, learn complex topics quickly, and transfer that knowledge into anything useful?

The answer to learning anything, as Josh Kaufman pointed out in a TED talk several years ago, is not wasting 10,000 hours on it.

Key quote:

It takes 10,000 hours to get to the top of an ultra competitive field in a very narrow subject. But as soon as Malcom Gladwell’s Outliers came out, reached the top of the best sellers list and stayed there for three month—suddenly the 10,000 hour rule was everywhere and a society-wide game of telephone started to be played. Suddenly this message of 10,000 to reach the top of your field became it takes 10,000 hours to become an expert at something, which became it takes 10,000 hours to become good at something, which became it takes 10,000 hours to learn something.
But that last statement is not true. … It takes 20 hours. And 20 hours is doable — that's about 45 minutes a day for about a month, even skipping a couple of days here and there.
— Josh Kaufman, via TEDxCSU

Insight 💡

10K hours is a misinterpretation. We don’t need to be “the best” in a field, we need to just understand things better. To do that, it actually takes about 20 hours of focused, deliberate practice to become proficient in a new skill, or to understand a new subject matter.
Start by having the right information sources, whether that’s podcasts, newsletters, folks on X, whatever. The key is picking overarching themes that things change within—like deep tech—and tapping into a few select sources to keep you up to speed. For example, you only stand to gain by being more informed about technology, markets and the economy.
By picking a key expert in each domain, your situational awareness and critical thinking will get sharper, and help you have a clearer picture of how a company or sector is doing.
Consuming lots of content, and using that content to actually develop a point of view, is the name of the learning game. Once you have POV, stress test it: read counter views, talk about it with others, and even consider writing the big ones down (the act of writing is a create forcing function for learning and checking you actually get something).

One thing you can do with this 🛠️

I’d suggest following one newsletter in a topic by a best-in-class author to just be more informed. They’re doing so much legwork learning, analyzing, and then sharing deep dives into complex subjects. That’s how you can keep a pulse on the big things that matter. If you’re interested, here’s who I follow:

Economics + Socio-political trends: Noah Smith from Noahpinion
Meta-knowledge: Gurwinder from The Prism
AI: Michael Spencer from AI Supremacy
Tech news: Casey Newton from Platformer
The future: Pirate Wires from The White Pill

If you picked even just one and read their work, you’d learn so much.

Watch the full talk by Josh Kaufman

And with our main bits for the week done…I now bring you two new short sections

Meme of the week 👀

Guess that product 🧩

To end the week off, want to try a quick puzzle? Here’s a riddle for a product, can you guess what it is?

"I emerged with hype, a tech titan's pride, In '14 I arrived, innovation by my side. With a view in 3D, and Firefly's light, Yet I failed to ignite the market's delight. Priced like a gem, but lacked the charm, In a field of giants, I caused no alarm. A Snapdragon's heart, but not the race's steed, My flame extinguished, despite the breed. Who am I, a story of ambition overblown, A retail giant's offspring, not fully grown?"

To guess, just reply to this email, or email me (hermannjaryd@gmail.com). Everyone who gets it right will get a shoutout next week. No cheating.

p.s these will get harder each week. We’ll start off with an easy one. 😉

🌱 And now, byte on one of these 🧠

And that’s everything for this week, folks.

Quick poll…

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