Newsletter 76: thoughts on content creation and social capital
This week I am taking a break from my web3 writing. After two years of closed borders, I made a trip to Europe and across the countryside of Bulgaria 🇧🇬. Connecting with family and friends feels incredible. I am very grateful for each and every moment. In addition, the trip has given me a lot of time and space to think, a rare commodity in today’s busy world.
As I reflect on the past year, I spent a lot of time thinking about two things: content creation and social capital. So I took a moment to summarize my thoughts; enjoy ✌️.
Content Creation
When I started this newsletter, I focused on startup-related content. If you ever met me personally, you would know that I live and breathe startups. The thought of starting something new excites me, like a few things in life.
After all, technology has removed many barriers to starting a business. In addition, the past 20 years of progress have reduced costs and personal risks. As a result, my mind has been trained to convert daily frustrations into business opportunities.
While startups and tech are the dominant focus of my writing, I have let all sorts of day-to-day interests and reading guide my writing efforts. Initially, I was not sure if that made sense. After all, we often talk about the importance of focus and having a north star metric in the startup world. Yet, the more I let my interests guide me, the better I feel. Covering what’s on top of my mind has allowed me to do deep dives on various topics that have piqued my interest. In turn, that has helped me to have clarity of thought while stumbling on serendipitous opportunities.
In the past year, I have written 24 essays. Over time my essays have gotten longer. Additionally, my interests have helped me cover various topics like web3, tactical advice, lessons learned from my startup journey, mental models, personal updates, and even startup ideas.
Today that looks like quite a bit of content for a side hustle. But two years ago, when I was contemplating whether I should start writing or not, the thought seemed quite scary. After all, I am not a native English speaker and never had the opportunity to create any written content. Even today, I feel a fair share of insecurities whenever I press the publish button on a new essay. There is something about sharing your raw ideas that makes you feel vulnerable.
On the other hand, the process of researching, writing, and storytelling is quite rewarding. In fact, a lot better than I could imagine. So many strangers have reached out offering job opportunities, asking to work for me, or simply expressing support.
At the same time, my existing network feels better connected than ever before. So the more content I create, the more benefits I get. It’s a fascinating process.
You see, writing is permissionless. I do not need anyone's permission to start. Yet, it compounds. The more I write, the more value I get from it. People who follow my journey feel more connected. In turn, I can build trust faster, show what I am good at, and differentiate myself.
While I do not earn any money from my writing directly, I get a lot of intangible value. For example, my content has strengthened relationships with old friends while helping me meet new interesting people.
Naval puts it nicely in this tweet. To meet someone worthy, you got to have proof of work. Writing is a great one.
It’s hard to list all the benefits coming out of creating content. But there is one overarching perk that comes out of writing - it’s a source of social capital, which brings me to my second point.
Social Capital
You might have noticed how in Q3 and 4 of 2021, I spent a few months writing on everything web3. Writing content on the topic has helped me understand how web3 will be the next big paradigm shift in technology.
The unprecedented appreciation of bitcoin, coupled with the innovation brought by Ethereum, has encouraged a lot of experimentation across cryptocurrencies.
We now have digital currencies with better portability, durability, and even scarcity than regular currencies (e.g., USD, EUR, CNY, etc.) which naturally creates a lot of hype. Yet, we tend to forget about an older and more valuable currency.
No, that's not gold. The oldest medium of exchange of value is social capital.
I like the definition of social capital by Robert Putnam, mentioned in his book Bowling Alone. Later, reiterated by Alex Danco in his infamous essay on the topic:
“a form of wealth that can compound and throw off real dividends when it’s cultivated, or wither and die when it’s drawn down or neglected. Having access to social capital is a privilege. In the business world, social capital is earned over decades, and doled out carefully by those who have it: you can’t just give that stuff away.”
As an entrepreneur, I have learned how important social capital is. You need credibility and momentum whenever you want to build something new. That’s the only way to navigate a world that gets more complex by the day. For people to take you seriously, you got to have social capital. Otherwise, you face an incredibly steep climb out the gate.
Some people think of social capital as a form of status. Yet, I would argue that while complementary, the two concepts are different. Status implies that for one to win, another has to lose. Whereas growing your social capital does not decrease anyone’s else wealth. Having said that, status plays an essential role in society (e.g., politics or sports), but I tend to stay away from it. Growing your influence by putting other people down does not sit well with me. Meaning, status is zero-sum, whereas social capital is a positive-sum game. Having a high status does bring some social capital, but it also costs you some every time you put someone down. Therefore, status is not the most sustainable or compoundable way to grow as a person.
Luckily, there are more sustainable ways to earn and retain social capital. Being a founder is one. A history of success another. Working at a hot startup or recognized brand will bring some. Content creation, if done well, grows your social capital at scale. Obviously, boosting your wealth results from a mix of activities rather than one single event in your life. Becoming a founder on its own won’t increase your social capital considerably. You can think of it as lego bricks. Each brick is essential and plays a role in building your credibility. Some pieces are more significant than others. Yet, having just a few of them won’t result in much progress. Pieces that represent activities that feed your status are wild cards. Sometimes they cause growth. At others, your decline. When building your lego castle, you want to use pieces that get stronger over time. Not a fragile material that may backfire.
One final argument against status is the golden rule in tech circles: “Treat others as if they might be the next great founder.” Unfortunately, in the early days of web2, too many investors sought people with high status to invest in. As a result, they missed some of the biggest opportunities in their life.
“the Bay Area is different because many more people have experienced upside regret. Hang around for enough time in the Bay Area, and at some point you will meet someone – although you won’t know it at the time – who goes on to do something wildly successful. If you brush them off, it’ll come back to haunt you. This will really make you pause, every time you meet with someone new for the first time, because this new person might be a special founder too. Since there’s a chance they might already be on a status rocket ship, you’d better treat them with that possibility in mind.”
Social Capital in Sillicon Valley by Alex Danco
That chain of thoughts made me think of what are the activities that brought me the most social capital? Especially actions that helped me grow my social capital. Not as in a sudden burst but in a compoundable, sustainable, and uninterrupted way. Reflecting on my journey, I concluded the following ways to grow your wealth:
Walk the talk - operating with a high degree of integrity earns a lot of trust and respect in my experience. Stand behind your words. Do not write anything in an email about someone else you won’t share face to face. Do not suggest anything; you won’t be willing to do it yourself.
A friend in need is a friend indeed - we all go through difficult moments. Sometimes it's a result of our own mistake; others are beyond our control. So if someone needs help, be there for them when they need you. Timely support can mean the world to a friend in need.
When someone is worth it, break your back to help them - we all know that feeling when you meet someone worth it. People in the top 10% in their field are worth the effort. So keep them in your close circle. Anticipate their needs and be there for them.
Give unconditionally - the world is full of too many transactional folks. People who want to monetize every activity even before delivering any value whatsoever. Don't be like that. Help people because it's the right thing, not because you want something back.
Follow the silver rule "do not treat others the way you would not like them to treat you" - we all go through a ton of frustrating moments every day. The natural reaction is to take out on the next person you meet. Close the cycle. Do not be the cause of someone's else frustration. For example, if you realize that a colleague might be busy, take the extra mile. Offer more context, do not expect them to have done all possible reading about your case. Help them complete a task that's not your responsibility. Put yourself in the other person's shoes and think about what they would not like to experience. Then act accordingly. Do not treat others the way you would not want them to treat you.
Create content - going back to the first half of this essay, even if you have an external role in your career, there is a limit to how many people you can meet. Creating content earns less social capital than direct interactions, but it's more scalable. It reaches more people. Over time, strangers will reach out and talk like they know you well. People you have never met or helped (directly) will think highly of you.
No politics - just no. Talking behind people's backs is just wrong. Don't do it. If you find yourself in a very political organization, move on. Life is too short for this shit.
Surround yourself with great people - confidence is contagious. If a group of people has a high degree of social capital and credibility, you will absorb some of it. Do consider, though; great people keep the bar high. So for you to be around them, you have to be great in at least one dimension yourself.
“The more social capital there is in the community, the more status and credibility you can acquire as a newcomer, and the more you’ll want to bestow it on other people when it’s their turn.”
Social Capital in Sillicon Valley by Alex Danco
Remove friction - to earn as much social capital as possible, you will need to surround yourself with like-minded people. In my case, I have determined that I need people who have high energy, integrity, and ambition. Being an entrepreneur, I acknowledge how vulnerable new projects are in their infant stage. Any unnecessary friction may be the cause of your project or startup death. Additionally, building something new is hard. It would help if you had peer-group support to push through the early days.
That’s why in the tech sector, early employees in startups are asymmetrically rewarded. I am referring to the equity component in comparison to late employees. The wealth generated by a successful startup rewards early members disproportionately to late employees. That's still true even if the late employees happen to be a lot more qualified. Remove friction where possible; it will help you grow. In Bulgarian, we say “сговорна дружина планина повдига” which translates roughly as “like-minded union results in strength.”
Move to an ecosystem where you can amplify your social capital - as a person who has lived in six countries so far, I have experienced how different societies can push you up or drag you down. My first negative experience with an ecosystem occurred 11 years ago in my home country Bulgaria. The Bulgarian culture is status-driven to a flaw. While this is changing for the better, at the time, that was not obvious. In time, I realized how status is not a sustainable way to build myself up and moved to Denmark to pursue my studies. Denmark did not have any status issues, but it was challenging to integrate. To get a good job, I needed to learn the Danish language. As a person, who is not good with languages, I knew this would take several years. In turn, committing to learning the language instead of other activities would have slowed down my overall career growth. So I made a choice that did not make a lot of sense to many of my friends at the time and moved to Indonesia. In Jakarta, I gave up on the quality of life I am used to but had the opportunity to grow based on merit. Not the languages I speak.
This is obviously a very simplified summary. Both Bulgaria and Denmark are great countries with plenty of opportunities and bright people. Perhaps it was a matter of culture-person-fit. You know best what ecosystem can nurture your growth. In my case, moving to Asia paid considerable dividends in social capital. I am not sure if a similar outcome would have been possible should I have stayed in Europe. Sometimes you have to make bold steps that cause discomfort in the short term to accumulate growth in the long run. The right ecosystem can serve as an amplifier of social capital.
Enough said about the various ways one can accumulate social capital. Let’s talk a bit about the benefits.
It's hard to measure your social capital quantifiably. But its weight is a lot heavier than money in your bank account or followers on social media. In its essence, social capital is about helping good people. Having helped good people is an invaluable asset. Think about it; those people will have a strong urge to reciprocate when you need them.
If you have not read Nassim Taleb’s Antifragile, I strongly recommend you to check it out. As per Taleb’s thesis, we all should strive to become antifragile. Meaning we ought to be able to thrive under conditions of disorder and suffer at rest. Growing your social capital is an activity that causes you to be in a constant flow of paying forward. Helping other people, especially people who are worth it. The more you invest in the right relationships, the more benefits you will harvest. Once you accumulate a critical mass of paying forward activities you will get close to an antifragile stage. You will be able to compound benefits without interruption, in a sustainable way. The key here is to be careful how much you invest in zero-sum vs. positive-sum activities. The more positive-sum games you play, the more antifragile you become. You will thrive when things are going well while having the support of many good people when you need them.