Playbooks + Pattern recognition.(John Chambers)

When I saw that Patrick O’Shaughnessy had posted an interview with John Chambers last week, I rushed to listen. The following quote contains a number of gems which I will continue to mine.

When Chambers uses the term “pattern recognition” and explains the concept, it’s so much more coherent than the latest BI and data science geek speak.

And when Chambers mentions “[seeing] the patterns so accurately… for 40 quarters in a row” the whole concept of “engineering growth” comes to mind, especially regarding the implications of a public company that can successfully and near-perfectly engineer growth over long time horizons. Cisco’s case reminds me of what I learned about Netflix’s growth levers, and Enron’s artificially engineered growth.

John Chambers was the CEO of Cisco from 1995 to 2015 where he helped grow Cisco from $70 million to $40 billion in annual revenue.


Begin quote (via Invest Like The Best)

Pattern recognition defers to the numbers. [It’s] the ability to be able to see the patterns based upon how an order rate went in a given day of any month, in a given week of any month [or] quarter, of a given quarter in a year—and to see the patterns so accurately that for 40 quarters in a row, we not only didn’t miss… we were plus or minus, always at the midpoint or above in the range of the market. [And that’s] even though eighty percent of our business was new every quarter. So we not only hit our year forecast, [but] we hit the quarter forecast, always at the number, usually 2 cents [per share] above…

…it was that pattern recognition that allowed us to spend money during the quarter and be able to develop in ways that others did not. [It was] pattern recognition that [enabled us so that] if there was a problem or an opportunity, we saw it at the very beginning, which we could then adjust appropriately to.

But it wasn’t just at the top, it was all the way empowered down through the various engineering and sales arms. They were able to see the numbers so accurately. [And] they knew what they needed to change and correct ahead of time on it.

So that pattern recognition is so key. The pattern recognition has always been driven by customers… I get an idea about a market transition enabled by a new technology and then I go straight to customers and say, “what do you think?”

[It’s the] pattern recognition amplified by listening to the right customers at the right time, on what they think, either on the issue or the company, [that] allowed us to do 180 acquisitions with the highest track record… in the hi-tech industry… we were a machine on acquiring [companies]…

We ran playbooks on everything that we did, from acquisitions to being [number] one or two in a product category, to how you digitize a country, etc., in terms of direction.

It is that pattern recognition [which is] then put into playbooks that allows [you as a company] to move at a speed that others can not.

A simple issue: Playbooks. Pattern recognition. Then replicating that pattern much like a great sports team… [for example, the] Warriors team that passes 130 times per game, which is more than anybody has ever done in history, and wins 98% of the games when they pass 130 times…

Watching the patterns, then replicate it and playing it through, and being able to tell those stories again of what works and why it’s applicable.”

End quote

One act at a time. (Jonathan Sacks)

News of Rabbi Lord Jonathan Sacks’ passing hit me pretty hard. I had met the man only once, yet through his teachings I felt so close to him. I’ve been reading his book, Lessons in Leadership, once a week for almost a year. I listened to many of his audio classes and interviews, especially enjoying his appearances in secular mediums, like his recent interview with Tim Ferriss.

It’s not difficult to describe why I am so attracted to Rabbi Sacks’ teachings. He was, in my opinion, a great rabbinic leader who made Torah accessible. His ability to dance between biblical sources, academic references, and business lessons was supremely attractive to my modes of thinking, learning, and perceiving the world around me. My worldview was and will continue to be heavily influenced by his work.

Source: rabbisacks.org

I hope that I can play some small part in contributing to Rabbi Sacks’ legacy, which I believe is to embody a fusion of both the Torah of the Jewish people and the wisdom of the world, in thought, speech and action.

The following is a powerful leadership quote from Rabbi Sacks’ essay on this week’s Torah portion, Ḥayei Sara, from his book, Lessons in Leadership:

“Perhaps….the most important point of [parashat Ḥayei Sara] is that large promises—a land, countless children—become real through small beginnings. Leaders begin with an envisioned future, but they also know that there is a long journey between here and there; we can only reach it one act at a time, one day at a time. There is no miraculous shortcut—and if there were, it would not help.”

This quote is apropos to so many current events in the world, as well as past and current events in my own life. And it resonates with me in an especially deep way as it connects to my current work with entrepreneurs on the theme of “growth”.

My name, Etan, in Hebrew is spelled איתן (spelled Alef – yud – tav – nun). Also, איתן was one of Abraham’s names. As I learned from Rabbi Moshe Schlass years ago on the streets of Jerusalem’s old city, the letters of my name represent the beginnings of future tense conjugations of Hebrew words:

  • א (Alef) = I will be…
  • י (Yud) = He/She will be…
  • ת (Tav) = You will be…
  • ן (Nun) = We will be…

Back to the Sacks’ quote and the theme of growth—we don’t know where tomorrow’s blessing will come from. Predictive data models based on past performance can take us only so far when it comes to estimating new revenue, customers, or other metrics we are tracking (and working to get more of) in a business.

The smartest data scientists, economists, and analysts will tell you the sameprediction isn’t perfect. With the current rise of AI, better prediction is becoming cheaper, but it’s still prediction, which is and will always be imperfect. I’m bringing up prediction here because I often see businesses fall into the trap of putting the “prediction work” (aka business intelligence, forecasting, etc.) in the category of “execution”. I believe that “prediction work” should be bucketed as “vision” (and not “execution”).

Great entrepreneurs and investors know that even the best ideas are free, and without execution they are worthless. You don’t know; you can’t know what will happen tomorrow, next month, next year, next decade, etc.

What Sacks is teaching us through the story of Abraham, is that we need both vision and day-to-day action, and further, we need to understand which is which, and which is real at any given moment. We can emphasize maintaining a strong and clear vision, putting the actual work in, embracing uncertainty and obstacles, and be ready to receive blessing whenever it comes.

A point of view spreads. (Jason Fried)

I’ve been following Jason Fried and his unconventional business wisdom for years, via his books like Rework, and Remote: Office Not Required (published 7 years before coronavirus was a thing!). I enjoyed this bit from his recent interview with Kara Swisher, where he talks about what I’ll call mission-driven business-building.

Instead of asking, “what products can we develop to generate profits”, and later trying to incorporate sustainability and mission, Fried takes the reverse approach. He and his team at Basecamp, and now their new ambitious email service Hey.com, give the impression that their values permeate who they are, what they stand for, and everything that they do as a company.

This idea also touches on the rising trend of new open-sourcing models as a distribution method.


I think [you can have a significant impact as an entrepreneur] is… about igniting a bunch of different fires. For example… [at hey.com] we’re going to open-source part of our tool. We put together a list of 40 or 50 services that track people… and are making that available on GitHub [so that] other people can add to that list.

If this feature ends up in 12 other products, wonderful.

We don’t have to dominate the world to have this [feature] spread. [It’s] the same thing with ideas.

As a small company we [at Basecamp] have had a very big impact on the industry. We’re a small company, but we have ideas and a point of view, and that spreads. And other people then pick up that point of view and maybe some adopt it, maybe some change it, maybe some reject it. But it gets spread, and it gets spread in other areas. And then those things happen.

It’s like seeds blowing in the wind… it’s not about one seed. You’ve got to seed ideas. And then the world will go with what is better.

But you have to provide an alternative to [products seeking global domination.

And if our impact is [only] 100,000 customers who are paying us for Hey, or 50,000 businesses that pay us for Hey… but it shines a spotlight on the ideas that have, the concepts that we have, and the point of view that we have… and other things sprout up because of that… that’s how you really change things versus going out and trying to dominate the world.

Trajectory (Michael Seibel)

Michael Seibel, Partner at Y Combinator and CEO of YC’s Startup Accelerator explains what signals and patterns they look for in applications from startups:

The number one thing that I look for, above all else, is that the team who’s applying has the ability to build and launch the first version of the product. And the second, and very closely tied item, is, I want evidence of forward motion.

Given the amount of time the founders have been working on the company, I want to be impressed with what they’ve done. And I don’t care if that amount of time is two weeks. I don’t care if it’s two years. I just want the sum of what they’ve accomplished during that time to be impressive.

And I think this is a hard concept for people to understand. I think everyone is trained on school where there are these absolutes (what was your SAT score? what was your GPA?). School doesn’t really measure trajectory, at all. Whereas with us [at Y Combinator], it’s really the only thing we care about. It’s trajectory. It’s, how much forward motion and momentum are you creating, as opposed to starting position?

Clinical vs. emotional thinking (Marc Andreesen)

How is that professional gamblers consistently win? Andreseen explains in his interview with The Observer Effect:


“I would never be a professional gambler but one of the things you find about professional gamblers – they may play poker at night but what they do during the day is they hang out together and they make side bets for large amounts of money. And it’s literally a side bet of sitting in a diner and betting on whether there are going to be more red cars than blue cars passing by. What they’re doing is ‘steeling’ their own psychology to be able to pull the trigger on bets like that with a purely mathematical lens and with no emotion whatsoever. They’re trying to steel themselves to be able to be completely clinical. And so as contrast, what they then hope for that night when they sit across the table from someone is to hope they’re dealing with somebody who’s super emotional. Because the clinical person is going to just slaughter the emotional person.

It’s this weird thing where it’s the kind of activity that should result in these wild highs and lows but the true pros are just indifferent. They don’t care because it’s a probabilistic outcome. That’s just part of the game and they’ll come back and they’ll probably be better the next day.”

Channeling deeper focus with emotions (Josh Waitzkin)

I’m definitely one to try and suppress emotion at times, which is why I love how Josh Waitzkin thinks about using emotions to one’s unique advantage. This quote is from his book, The Art of Learning: A Journey in the Pursuit of Excellence.


“There are performers who recognize the disruptive potential of emotions and try to turn them off, become cold, detached, steely. For some personalities this might work, although in my opinion denial tends to melt down when the pressure becomes fierce. Then there are those elite performers who use emotion, observing their moment and then channeling everything into a deeper focus that generates a uniquely flavored creativity. This is an interesting, resilient approach based on flexibility and subtle introspective awareness. Instead of being bullied by or denying their unconscious, these [performers] let their internal movements flavor their fires.”

Free-flowing unconscious process (Josh Waitzkin)

This Josh Waitzkin quote is from his book, The Art of Learning: A Journey in the Pursuit of Excellence. I love how Josh thinks about leveraging the power of unconscious states of mind. He refers to this in the context of chess and other learning mastery as “the moment when psychology begins to transcend technique.”


“…much of what separates the great from the very good is deep presence, relaxation of the conscious mind, which allows the unconscious to flow unhindered. This is a nuanced and largely misunderstood state of mind that when refined involves a subtle reintegration of the conscious mind into a free-flowing unconscious process. The idea is to shift the primary role from the conscious to the unconscious without blissing out and losing the precision the conscious can provide.”

What is intuition? (Josh Waitzkin)

This Josh Waitzkin quote is from his book, The Art of Learning: A Journey in the Pursuit of Excellence. I love how Josh defines intuition, calling it “our most valuable compass in this world”.


“In my opinion, intuition is our most valuable compass is this world. It is the bridge between the unconscious and the conscious mind, and it is hugely important to keep in touch with what makes it tick.”

What is creativity? (Josh Waitzkin)

This Josh Waitzkin quote is from his book, The Art of Learning: A Journey in the Pursuit of Excellence. I love how Josh defines creativity, and views the relationship between technical mastery and insight.


“When I think about creativity, it is always in relation to a foundation. We have our knowledge. It becomes deeply internalized until we can access it without thinking about it. Then we have a leap that uses what we know to go one or two steps further. We make a discovery. Most people stop here and hope that they will become inspired and reach that state of “divine insight” again. In my mind, this is a missed opportunity. Imagine that you are building a pyramid of knowledge. Every level is constructed of technical information and principles that explain that information and condense it into chunks… Once you have internalized enough information to complete one level of the pyramid, you move on to the next. Say you are ten or twelve levels in. Then you have a creative burst… In that moment, it is as if you are seeing something that is suspended in the sky just above the top of your pyramid. There is a connection between that discovery and what you know—or else you wouldn’t have discovered it—and you can find that connection if you try. The next step is to figure out the technical components of your creation. Figure out what makes the “magic” trick.”

What is marketing? (Rory Sutherland)

I love this philosophy on marketing from Rory Sutherland. Rory is the Vice Chairman of Ogilvy & Mather Group, and I heard this on Invest Like The Best (Source).


Begin quote:

First of all, don’t think that marketing is marcoms. Because is very many businesses the two are conflated to a point where marketing is sometimes dismissed as “the coloring-in department”.

Marketing should basically be the repository for any psychological insights, particularly those which are counterintuitive, or which run against normal economic assumptions in the space of human perception and behavior. That would apply also, by the way, to internal relations, shareholder relations, and obviously customer relations.

So marketing, in a sense needs to step back up to the plate and not allow itself to be trapped in the marcoms/communication “ghetto”. The second thing is, by being trapped in that ghetto, [marketing] tends to get framed as a cost; as a necessary evil, and not a source of value creation. Once you’re in that marcoms ghetto, you’re essentially a cost center. As a result, what you get judged by is the efficiency with which you perform the necessary. This turns the whole thing into this sort of marcoms insanity, where everybody is trying to target 2% more efficiently every month.

And I would argue that a large part of marketing needs to be both experimental and probabilistic. We shouldn’t turn it into this efficiency/optimization game.

…Maybe, actually you should do very inefficient mass advertising, simply because it increases your odds of getting lucky. You can’t predict how in advance, and you can’t attribute the success in retrospect, but yet nonetheless, fame is valuable, on balance. More lucky things happen to famous people simply because more people have heard of them.

…that’s the first thing [for new clients]: don’t turn into an efficiency/optimization game. Accept that it’s probabilistic. And accept that there need’s to be a trade-off between exploit and explore.

End quote.