“I believe that people do the best when they're doing something not only that they love but that gives them energy… it's about figuring out what gives you energy, where's your purpose and how are you going get there. Don't be a cork that floats on the water, but actually move towards what you want”
Alan: Welcome back I'm here today visiting with Howard Getson, he is the founder of Capitalogix, Howard welcome today's show.
Howard: Thank you so much it's great to be here.
Alan: So, Howard for the listeners can you give your background of what brought you through your career path to bring you up to where you are today.
Howard: So, most people think of what we do is running hedge funds but it's really a financial technology and in a platform if you came to the office it would it would look like a data science company tons of PhDs and people thinking about stuff but it's a lot of fun if you go back through the career though you it's interesting I never would have guessed that I'd be here. Looking backwards it makes sense but going forward it wouldn't have made any sense. I went to college playing football on track and was a psychology and philosophy major. In fact, I was at Duke at the same time Melinda French, Bill Gates's wife, was in the psych department at the same school, but then I couldn't decide whether to go to business or law school and I decided to do both and I'm kind of a little bit OCD so I ended up doing it quickly and I was finished with an MBA in law degree at 23. Got married moved to Dallas,
Alan: And what area of law?
Howard: Corporate securities but also intellectual property transactions so tech law, but the business side of tech law. The truth is I was really good at certain parts of it but I didn't like practicing law. I loved my clients, I loved my clients’ business, I envied them but I didn't love practicing law that was '86, by 1991 I started my first tech company and it was originally designed to provide tech services to lawyers and law firms.
Alan: So why did you start your first tech company?
Howard: It because I envied my clients and didn't like my partners. You know what it's funny you say that, I believe that how you do something is how you do everything. For example, if I'm watching somebody in an interview and they're in our waiting room and I can see that they're cheating on solitaire, what do you think that's going to tell me what they're going to do the first time they run into a problem- it so funny. But how that's relevant to why I started my first tech company is because I believe that people do the best when they're doing something not only that they love but that gives them energy and I think energy is like a Geiger counter that tells you if you're on the right path or not. When I would talk about technology or spend time with tech people, I was a better version of myself, it was a part of me that I never really thought about. You know, athlete, I love to read, but this was new, this was solving problems and not predicting the future but creating the future, it was really cool. So I spent more and more time doing that. I actually think this unique ability concept is something you get in trouble for in other aspects of your life and you got to find a way to take that natural path mother nature [intended] and basically say, how do I build a business around my natural tendency because I don't have to fight my natural tendency. And so I stopped trying to bill 2,000 hours a year and started solving problems and building things.
Alan: It's interesting and this is a common theme that we see entrepreneurs are out to solve problems unnecessarily to make the buck first. Here you were a lawyer with the business degree and you were starting into a software based company?
Howard: We were actually going provide technology services to lawyers and law firms. This is when there was a big case where they basically said, if a lawyer wasn't involved and email is discoverable, and so we figure if we got hired as co-counsel then we could build databases and do work for lawyers that wouldn't be discoverable and that was like the original idea that started the whole thing and who would think that now we've got millions of algorithms trading financial markets but really that that case was the beginning. Interesting sidelight there in technology one of the things that I get angry at it and our company is when we focus on the technology rather than the business solution or the opportunity and I hate technology in search of a problem. I love figuring out what you want to do and then how are you going do it, but starting with, oh this is a cool technology, what can I build with it- not so much.
Alan: So you started out in this first company and how long did that last?
Howard: Nine years, 1991 until 2000 and when I sold, it turns out my dad was on my board and he was one of my best friends, but he had gotten cancer and in that last year of my business I made 42 round trip visits to Philadelphia to try to take care of him and my mother, and every time I left Dallas I felt like I was a bad father or a bad CEO and every time I left Philadelphia I felt that was a bad son. It was a really weird cycle and it put a lot of things in perspective for me, ultimately my dad died in November, the VCs and I decided it was time to sell the company in January and I got divorced in February.
Alan: You had a perfect storm.
Howard: Yeah, but it was also a reset and I ended up using the same base business skills but to focus a little bit differently. I inherited my dad's- well before I say that- the last couple of years in our tech company I was investing in CEOs that I had met at conferences that I thought were great. I figured I had some inside information in the sense that I saw how they interacted with their people, I got a chance to see how they responded to me, it wasn't just, 'oh I see the name of their company,' and I didn't have to like the CEO, I made a lot of money off a steeples company, but I guess a blind squirrel finds acorns in the forest in a bull market and that was a lot easier in 98 through 2000 and it was after and so I thought investing was fun then when my dad died I kind of took over his portfolio and it was pretty large. There were you know hundred positions or so and it looked like a drunk monkey had picked it, I thought wouldn't it be cool if we use some of the technology we used at the old company to figure out what asset class we should be in, which techniques made sense to be in how much risk to take given current market conditions and it occurred to me that there would be some form of scale where I could basically say well if at each decision level I could basically say, this was a 78 and this was only a 73 and then I'll go this way and if we just went down the decision trees that would make investing easier. It wasn't nearly that easy and it's now been 17 years and about thirty million dollars of hard assets building a platform but some really cool stuffs come from it.
Alan: So when you're looking at your target market at Capitalogix, who are you aiming for?
Howard: So I was aiming for me. In my last company we used to joke, it was a form of artificial intelligence, it turns out that that software that we built for lawyers, my lawyer friend started giving to their clients and I would get phone calls from people saying hey I can't figure out how to put in my customers information and I'm like what are you talking about, who are you? And they were using something that we built as a case management system, a client management system. Lawyers have clients and matters and these people were using it for salesforce automation but before salesforce automation was real. You only have to kick me in the head 15 or 20 times and I said, hey we built the salesforce automation tool but as part of that there was some artificial intelligence, some rule-based and time-based technology that said, if you're an actor and a process and you're here, what are the three best next steps? And one of the concepts that we came up with back then was called filtered relevancy and it said, based on who the actor is and where you are in the process, how do you figure out the main thing or the top three things? So that the person feels like they have choice but really what you're doing is hiding all the bad choices for them. And it turns out that that's the basic idea behind what we're trying to do now. We call it, alpha by avoidance. We don't try to make money by having better and better algorithms, we try to find the algorithms that are making money and hide the rest of the algorithms from the system.
Alan: I'm visiting here today with Howard Getson, he's the founder of Capitalogix. I need to take a quick break and we'll be right back after these messages.
Alan: Welcome back I'm visiting here today with Howard Getson and Howard, you know you recently did a TED talk and talked about the power of our decision process.
Howard: The time value of life, the time value of a life worth living. So as I watched my dad going through the last days of his life, a couple things struck me and so I think at the end he would have given almost anything for one more month, one more year and I started to think, in the year that I was taking care of him, I put my life on hold and there were a ton of opportunities that I said, oh it's not the right time and you know to be aggressive in business- I'm going to wait and I realized that if you think about the time value of money, the same as the time value of the life, but as you get older it's harder to do things. The time value of my life is most valuable right now I have to maximize the moment and it's about figuring out what gives you energy where's your purpose and how are you going get there, don't be a cork that floats on the water, but actually move towards what you want. So many people focus on what they don't want or why it's not perfect, there's only one way for something to be perfect, every other way is not. If you focus on that it doesn't actually help you get to what you want and so it's really about figuring out where you are, where you want to go and how to get there.
Alan: How do you how do you guide a person through understanding how to put those big rocks together. A lot of people are like, yeah I want to go somewhere but I'm not sure where to start. Is there a process or way that you can advise individuals to work through, how do you define your purpose and your mission?
Howard: You know it's funny, stuff like Tony Robbins or Brendon Burchard is terrific for some people. Other people like to do it privately and I do one-on-one coaching with my friends, my clients and my senior leadership staff and so we've developed a curriculum and it feels like a conversation but what it basically gets them to focus on is the top three things they want in business and I start there because it's thinking, it's not feeling. There's this model that says think feel and know. You have to blow out the thinking before you can get to the feeling and you have to blow out the feeling before you can get to the knowing and we're talking about purpose and that's kind of knowing. And so, we work on business first and then I say, how would you want your daughter to describe you at your funeral. And they get a little bit emotional and they come up with things and I say, you described nouns, ways of being. They're kind of a state, but what are the verbs that you have to do? And they get confused for a second when I say, look if you think about values, if came up with a really great value exercise to figure out your real values, the problem is that's the recipe for the life you have, what we're trying to figure out is the recipe for the life you want and that means we have to change things. So you have to start with understanding your nouns and verbs and values, but then you have to figure out, how do I adjust the recipe? And it might be a different order, it might be a different intensity, it might be the focus on a word like love. In our company, I have three verbs for each person where they understand that they're doing their job if. And so, for me one of my first things is, I want to be thought-provoking, the next thing I want to do is demonstrate passion and for somebody else it might be: scout, navigate and build. But the point is it helps them figure out whether this is a good activity or not. One of the best exercises is to figure out how to say you know the things that take you off your path.
Alan: That's good advice, so I'm visiting here today with Howard Getson and Howard I need to take a quick break, and we'll be right back after these messages.
Alan: Welcome back I'm visiting here today with Howard Getson and Howard we're talking in the last segment about defining purpose in our life and you mentioned your TED talk and that you also do some personal coaching on this but for you personally, based on what you know now, how would you say the person gets the most out of life in defining. What are the value drivers?
Howard: I believe one of the most important ways to drive value is to understand how you or somebody else keeps score and so you think about gamification, but it's very hard for somebody to feel good about something if they don't feel like they're making progress. There are things that might create one point, in football it's an extra point, three points is a field goal, six points is when you score a touchdown, two points if you get a safety. I try to help people create a taxonomy or a hierarchy of things that they do and one of the challenges with this is it's often based on an external locus of control, where it's you know they want somebody to be loving to them. Well you can't control that so you might do all the right stuff and if you don't get what you want back, it makes you a victim. And so I try to help them create a scorekeeping system that's based on what they do or who they're being so that they understand whether they're making progress. Then I check in with daily, weekly or monthly as we've agreed to figure out whether they're putting more points on the board. It's actually a great way for somebody to start to focus on what's important. I started this by saying that energy is one of the most important indicators, well this is actually really a way to measure energy, and I find that as people start to get positive feedback that says this is working, they're willing to do a lot more, it's why Fitbit's are successful. It wasn't successful for me when I was supposed to get 10,000 steps a day, but as soon as I figured I could change it to 6,000, because for me that's just outside what my normal day is and I actually have to try, but I can hit it easily if I make the conscious effort, and that's actually what I think is important in life is to find a way to make the scorecard where it's easy to feel good and hard to feel bad because it's your life and why not feel good.
Alan: In the coaching process you go through, do you help people with setting goals?
Howard: The interesting thing is I don't do it for money, I do it for free and I do it with my executive team one on one, but I also do it on a group level for the people beneath it and I found that at first people are like oh no this is like homework, but they start to love it and then I get phone calls from them on a Saturday night or a Sunday saying, this just happened, and it lights me up and really that's part of my feedback system. It's awesome, but really it helps people become who they can be. In a corporation it's easy to hire talent, but it's harder to develop talent. In our company we've decided rather than paying headhunters and hiring really senior people, we want to hire the right people who are a cultural fit and grow them into what they could be even if it's not necessarily what we think the business needs because ultimately people are our greatest asset. It's interesting as an AI company that I still think that the way to grow the company is to grow the people- but I do.
Alan: I've heard out there that the philosophy is about balancing the team and they have systems like Kolbe and Briggs Myers-
Howard: And Predictive Index is another great one.
Alan: How relevant is that overall to building teams within organizations? When you're looking at trying to move processes and reach-
Howard: I actually think stuff like that's very important, but backwards from how most people look at it. Most people say, here's the job I want, this is the Kolbe profile I need or here's the predictive index I'm looking for. And I know in a sense that that works for some people. But really what I want to do is I want to find somebody who's a cultural fit that we talked about not fighting mother nature and just finding something that works. If I find somebody who has a great personality, it doesn't matter what their profile shows, there's no right or wrong profile. But if I understand their profile, I can help coach them better or I can create a job that's going to put more points on the board for them and for us.
Alan: I'm visiting here today with Howard Getson and Howard I know you've been doing this for free but here you have a TED Talk, can you give the name of the TED talk again that you did?
Howard: It's called The Time Value of a Life that Matters. And my website's Capitalogix.com and I'm sure you can find a link to it there. Capitalogix is c-a-p-i-t-a-l-o-g-i-x.
Alan: And so for the listeners today we'll have this all on the website, you can visit us at groco.com and in terms of reaching out to Howard and also we'll put a link to your TED talk there.
Howard: This has been a lot of fun, thanks so much.