Signal Vs. Noise

At the end of each day, I encourage you to reflect on whether you spent your day on "signal" or "noise." Let me explain.

Recently, I wrote a post titled Managing Priorities. In it I talked about the idea of P1's. My weeks start on Monday morning so my P1 for the current week (which ends in about 20 hours since I usually get up at 5am on Monday morning) is to get a draft of the new book I'm writing with Jason Mendelson to our publisher (Wiley). That's it--one P1 for the week. Of course I did a ton of other things last week, including spending two days at Blur doing an HCI brain soak, working on closing a new investment, working on two M&A deals, having a few board meetings, giving a few talks, meeting with a bunch of people, and having a few enjoyable dinners with friends. But every morning when I woke up I thought about my P1 (the book) and every night before I went to bed I thought about whether or not I had made progress on it.

I committed to myself to spend all day Saturday and Sunday on the final edit push. Now that I'm on my second book, I know my limits and know that six hours is the most I can work productively on the book in one day. So yesterday I slept in, did email and my normal Saturday morning info scan, and then settled in for six hours of editing. Every 30 minutes I took a short break--did email, had lunch, took a nap, talked to Amy, and did a 15 minute phone call with another VC who was struggling with an issue in real time. But I got my six hours in and then went out to dinner with Amy and a bunch of friends. Today I'm going to catch up on email until about 11, head to my condo in Boulder, and spend a good solid six hours on the final pass before hitting send on the draft. I'll reward myself with dinner with some friends, although I have no idea with whom at this point.

So, while I let a little noise drift into my weekend, I'll have spent the majority of it on signal (my P1). This morning as I was doing my morning infoscan (Daily Web Sites, Twitter, RSS Feeds) I noticed a ton of stuff that I'd put in the noise category. There were apparently a few debates that blew up yesterday--I'll use the one around Angellist as an example of noise.

I love Angellist and think it's a remarkably interesting thing. However, it's of relatively little direct utility to me--of our 35 investments made from Foundry Group, none have come from Angellist. Regardless, it has had an undeniably huge impact on angel and seed investing in the past few years. At the minimum, it's interesting to watch the social dynamics of it. Will it impact a new generation of successful entrepreneurs and angel investors or will it result in a big money pit? Who knows--check back in ten years.

However, I saw a bunch of tweets about it (including some hostile ones followed by some conciliatory ones from the same people) linking to a handful of blog posts, comments, and more tweets. After reading a few of them, I'm not actually sure what the debate is actually about. I thought it was about "is Angellist helpful or not", but it quickly evolved into something else.

As I was pondering this, I saw a tweet from Paul Kedrosky that said "I have had more than a few entrepreneurs complain lately about VCs/angels tweeting/blogging up storms, but ignoring emails." While I'm not 100% sure Paul was building off of the Angellist noise, I know Paul pretty well and am going to guess that at the minimum it inspired his tweet. And his tweet is on the money--I know plenty of VCs who are making a ton of "content noise" these days but don't seem to be able to respond to their signal-related emails. And if entrepreneurs think VC to VC email is somehow special, I'm included in that category (there are plenty of emails I've sent to my VC friends with specific stuff in them that are never responded to.)

Now, this is not criticism of the Angellist discussion or VCs not responding to emails. Rather, it's an effort to give an example of noise overwhelming signal. In this case, Angellist is the signal. The discussion around it in the last 48 hours is mostly noise (I'm sure there's some signal in there, but it's a lot of work to pull it out, which results in a bad signal to noise ratio.)

In my little corner of the universe, signal matters a lot. I can't consume signal 100% of the time (or my head would explode) so I let plenty of noise creep in, but I've got very effectively tunable noise filters. Anyone involved in the entrepreneurial ecosystem should ponder this--I encourage you to focus on amplifying signal, not noise.

Reprinted from Feld Thoughts

Brad Feld is a managing director at Foundry Group who lives in Boulder, Colorado. He invests in software and Internet companies around the U.S., runs marathons, and reads a lot. Follow him at twitter.com/bfeld.

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