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When 10% is Bigger than One
Leverage in Music Production and Product Development
“Make your favorite things… you be the audience. Make the thing for you, the audience.” – Rick Rubin on the Lex Fridman Podcast, 4/10/221
I listened to Rick Rubin listen to Lex Fridman. Rick is a music producer. Lex is a podcaster. Both men are considered by many to be among the greatest at doing what they do. As an amateur musician and an amateur podcaster, I listened with interest.
Two things struck me.
Rick did most of the listening despite being the interviewee. Notable in isolation, but exceptional given the interviewer, Lex, is a master of patience who once waited 21 seconds in silence for Elon Musk to answer a question2. Twenty-one interview seconds is a long time to wait.
When he spoke, Rick’s descriptions of producing music could have been describing producing financial technology.
Rick starts with something he did not know, “I didn’t know this was a job.”
Maybe the greatest work-life balance statement ever. Building Point Focal is not what I set out to do with my life. It is where my path of learnings and experiences took me. It is not a job I could have envisioned earlier in life. And it is not something that feels like a job.
If you do something that does not feel like a job, you are among the lucky. And if what you used to do felt like a job, you likely possess great appreciation for your luck. Rick and Lex share a profound appreciation for being able to do what they want to do. It is a state worth understanding, identifying, and pursuing.
Creativity takes many forms. Rick transforms sonic space and time to enrich songs. Lex transforms language to enrich understanding. Point Focal transforms words and numbers to enrich decisions.
In the end it’s all art.
A music artist creates something from nothing. A song from silence. Rick produces the song, turning something into something better.
The band is zero to one. Rick is 1 to 1.1.
This is the transition I have been reflecting on at Point Focal. Our path from zero through one to 1.1.
Going from zero to one is the greatest thing a company does. Even if going from 1 to 1.1 advances the company further, zero to one is the production of something from nothing. It is the genesis of a business in two senses. First, a product goes from not existing to existing. And second, the value generated by the product is shared between a customer and the business.
Zero to one is a business. Business creation is written in letters, zero to one, as taught by Peter Thiel3. Product updates are written numerically, 1 to 1.1. Zero to one wins one customer. 1 to 1.1 can win many customers.
A music artist cannot do better than reaching Rick Rubin as its one listener. When Rick helps the artist move from 1 to 1.1, they reach many listeners. The same is true of financial technology. The first user matters and can help a business reach many users.
Going from 1 to 1.1 can have greater impact while also being less difficult than going from zero to one. There is less distance to travel when something already exists.
Rick, on getting to a song’s end state: “I don’t think we need to know. We need to see what works… It doesn’t really matter why as long as it does the thing that you want it to do.”
Here Rick is unknowingly channeling a great product manager in front of an Agile board. He is explaining product wisdom to the business owner and the technology team. It doesn’t matter why as long as it does the thing that you want it to do.
Use the right combination of resources and tools for the right functions. It does not matter why, or how. It only matters that the song or the product does the thing you want it to do. The music producer wants the song to move the listener. The software designer wants the product to move the user. The movement is the thing.
The last three Focus Signal posts explain Point Focal’s zero to one journey. From nothing to alternative data in an analytics stack. A product. And a customer with whom we shared the value generated.
This Focus Signal post explores Point Focal’s transition from zero to one to 1.1. As I wrote in Pub Sub Fit, I believe there is value in telling the story from within the story.
Zero to one is brute force. It is will. And it is creation.
1 to 1.1 is momentum. It is leverage. And it is scale.
Zero to one is longer, but 1 to 1.1. is still long. Getting to one does not need to be pretty. You can live with a lot of inefficiencies if it results in a product and a customer. Reid Hoffman said, “If you’re not embarrassed by your first version of your product, you’ve launched too late.”4 Going from 1 to 1.1 is the process of fixing many of your first version’s failings.
The objective of 1.1 is to retain your first customer while making it possible to acquire many more customers. This means rebuilding your product in the form of its promise. Zero to one is when the promise is created. Early adopters understand and believe in the promise. And early on, they will tolerate the fact that much of the promise is unfulfilled. Getting to 1.1 means closing the promise gap.
It means leaving a lot of what was created behind.
When developing a product, it is liberating to appreciate that everything you are building you will eventually destroy. The destruction is a byproduct of rebuilding your product. Zero to one is incredible because you’ve produced a product and an audience. But the learning experience it leaves in its wake is humbling. Point Focal went from zero to one despite all the mistakes we made. Surviving our mistakes is a theme that opens Solving an Earnings Challenge:
Time kills startups. Solving problems creates businesses. Startups are in a race to solve problems before running out of time.
Rick on risk-taking, “Oh this doesn’t sound like it’s gonna do as well as your last thing, that’s not the point.”
Keep playing. Keep producing. And keep building.
Every band and every business need to avoid becoming a one-hit wonder. This means growing beyond your original vision. It means doing what you do in a different way that attracts a larger audience. It means pleasantly surprising your original audience by exploring new territory, living uncomfortably, and taking risk.
Going from 1 to 1.1 Is not only additive, it is also subtractive. Rick spoke about identifying song elements that upon removal helped reveal the music’s fundamental essence. Improving a product requires the same elimination of anything not helping the audience.
Removing noise clarifies signal.
Undoing mistakes is creative destruction. It allows you to do more with less to improve your product. From a stronger baseline, adding to your product becomes non-linear. 1 + 1 > 2.
It is beautifully rewarding to optimize a product through iteration to make version 1.1 far better than version 1. Music producers are optimizers. In financial technology, less latency and higher performance is the product equivalent of a band’s improved timing.
Our version 1.1 doubles Point Focal data sets. And it doubles them in a completely re-architected environment. R scripts previously run in BI tools are now python lambdas running in AWS. Flat data files have become DynamoDB and MySQL databases. Portfolio updates have gone from 24-hours to real-time. User on-boarding has gone from people and days to technology and minutes. Production reporting scale has increased by orders of magnitude. My sleep schedule has gone from untenable to livable.
1.1 is much further in product distance from 1 than it is in numerical distance. It is the payoff of going from zero to one and avoiding one-hit wonder stagnancy.
Rick on suffering, “The same things that make an artist uncomfortable other people don’t feel at all.”
If all creativity is art, then product developers and entrepreneurs are artists. And in a small, humble way I can empathize with the suffering Rick describes. Living in an environment that makes one uniquely uncomfortable can be a great motivator for change. Envisioning the environment transformed can lead one to create an album or build a product.
Becoming comfortable being uncomfortable can result in sustained, high-quality production. The discomfort can drive one to continuously create the next new thing. Change becomes normal. New space is explored. Boundaries are stretched. Constraints are re-imagined. Creative destruction repeatedly displaces every new thing with the next new thing.
Prince, Madonna, Coldplay.
Apple, Amazon, Facebook.
Artists and businesses that went from zero to one and from 1 to 1.1.
Juxtaposing music production with product design is not analogy or metaphor. Creativity and suffering are universal. Art is art.
When a musician loses touch with the things that make an artist uncomfortable, creative change ends. And the audience knows. The next album is not a new thing. It sounds like the last album. The old thing.
When an entrepreneur loses touch with the things that make an artist uncomfortable, creative change ends, the audience knows, the next release is not a new thing. It feels like the last release. The old thing.
The uncomfortable nature of the creative process is the suffering and the reward.
Rick, on understanding our body’s head and heart, “I believe we know close to nothing about anything.”
Rick is an absolute master of his craft. Endlessly sought out by the world’s greatest artists, his work can be found at the Grammy’s, in the Rock and Roll Hall of Fame, and on Hollywood Boulevard5. His work is probably on your phone right now. And yet he starts from a place of spectacular humility.
Accepting our lack of omnipotence does not mean we must lack conviction. It leads to an honest, critical assessment of when one decides to act with conviction. It means listening to designers, engineers, and producers to understand their ambition. And connecting that ambition with an audience.
Navigating the 1 to 1.1 space is very different from navigating the zero to one space. It requires different human, technical, and capital resources. To reach 1.1, artists must adapt or change or be replaced. The next new thing demands it.
Rick is the momentum, the leverage, and the scale that lives between 1 and 1.1.
Any success Point Focal has had is the result of beginning with humility, listening to our audience, and thinking critically about when to act with conviction.
Appreciating the unknown is a healthy disposition. It is conducive to skepticism and unconventional methods. Whether producing music or financial technology, spectacular humility is a good place to start.
Elicited by Lex’s curiosity, Rick’s words describing what makes the human state real may capture the space between 1 and 1.1 best. “A place where you can be your most vulnerable without questioning it.”
If learning to live with discomfort is going from zero to one, balancing the highs and lows of suffering and reward is going from 1 to 1.1.
We have listened to and learned from everyone who has said yes and no to Point Focal. We have listened to and learned from advisors, investors, partners, and supporters. We try to balance this input the way Rick balances sound to optimal levels and frequencies. Our inputs are our momentum, scale, and leverage.
1.1 is a different journey than zero to one. There is more to lose. Becoming comfortable being uncomfortable helps you suffer through continuous next new things.
Listening to Lex, Rick described the 1 to 1.1 path from concept to completion: believing we know close to nothing about anything, understanding the magic is making it do the thing you want it to do, not worrying if it may not be as good as your last thing, and feeling uncomfortable.
This belief, this understanding, this not worrying, and this feeling are what has moved Point Focal from 1 to 1.1. It has produced bigger vision, new capital and resources, stronger partnerships, new clients, and greater distribution.
Momentum, scale, and leverage.
Rick’s description of producing great art completed the connection between music and tech production, “Make your favorite things… you be the audience. Make the thing for you, the audience.”
The analytics we’re building at Point Focal are the analytics I wanted when I was trading. They create the insight I wanted when I was an analyst. And they use the analytics stack I wanted when I was designing financial technology.
We are making my favorite things. And we are our own audience. By sharing our favorite things, we have found clients, advisers, investors, and partners. And they have become part of our favorite things as we move from 1 to 1.1.
May you be so lucky as to be making your favorite things.
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Question: “When do you think SpaceX will land a human being on Mars? Silent pause: 21 seconds. Answer: “Best case is about 5 years. Worst case 10 years.”
If there aren’t any typos in this essay, we launched too late!, by Reid Hoffman