So I've been riding the New York subways pretty frequently lately. Between annual meetings, conferences, and the entrepreneurial scene, there's been a lot to do in The Big Apple this fall. And every time I hop on the train, it takes me back to my childhood. You see, a quarter-century ago I rode the subway to middle school. Imagine that: a 12 year old with an overdeveloped sense of adventure and a transit pass that offered unlimited access to the lurid expanses of Metropolis!
(Let me take a moment to apologize to Mr. Criscuolo and my other afternoon-class teachers. A fake bellyache and a hangdog look was all I needed to get permission from the school nurse to go home after lunch. And as my time in middle school began to wane, I started scooting out about once a week in an effort to see the entire city, one subway stop at a time . . .)
But, despite my school-skipping, I actually did learn stuff on the subway, my very own classroom on rails. And who knew I could apply those lessons to private equity and even investing more broadly? Only recently have some of those lessons come into focus. Let me run you through five scenarios and their associated learnings in what may be the first in a series of "Lessons From The Subway":
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Scenario #1: Have you ever been barreling through a tunnel on the local train as an express pulls up alongside you between stops? For several seconds, the two trains hurtle down the tracks together side-by-side before the local starts its inexorable deceleration into the next local station while the express pulls away, charging ahead to the next express stop. For a moment, there's an intimacy with some of the passengers in the express train. It's almost a voyeuristic feeling, like looking into someone's living room window; sometimes you even make eye contact with one of the passengers in the other train. Do not give that person the finger or stick your tongue out or make menacing gestures. There's a chance that they will get off at the next stop, wait for the local to pull in, and kick your behind.
Lesson: Life is a multi-period interaction. What happens at one moment resonates into the next. Even the most random encounters can presage subsequent ones. Don't be a jerk and always have integrity. Why soil the canvas?
Scenario #2: Your train pulls into the station on one of those muggy summer days that seem all the hotter and more acrid below ground. Car after car blurs by, stuffed with people; as the train starts to slow, one car is nearly empty. But hold on a second; today's not your lucky day, the day you get a seat for the long ride. Rather, the odds are that the air conditioning simply isn't working and that car is hotter and stuffier than August in Houston.
Lesson: There's information in crowds. While one never wants to be a lemming, there can be limits to being a contrarian. Sometimes, leaning against the gales can work, other times, it just gets you windburn and a face full of leaves and other wind-blown detritus.
Corollary / Scenario #2a: Speaking of reasons why cars might be empty, sometimes there's an, ahem, stinky dude on a train car that clears out all the people. Again, there's a reason that train car is empty and, odds are, that funky cat is going nowhere.
Lesson: If something stinks, it's likely that the stink will linger, no matter how you try to rationalize away that hinkey feeling about, say, the GP that does't feel right or the story that doesn't quite hang together. Trust your nose.
Scenario #3: Don’t give the finger to a policeman. Ever. Catch me sometime offline and I'll tell you a story . . .
Lesson: The people who make and enforce the laws know and understand them far better than you do. And even if they're wrong, they're right. And they can make your day a lot more aggravating than you can imagine. You get a lot further by smiling and saying "yes, sir" than you do by being petulant. This may be a good thing for our industry to remember as the shadow of regulation lengthens across our sun-kissed land of private investments.
Scenario #4: If someone starts talking to you on the train, it's likely that they're a looney toon, but there's a chance that they're lost or want to talk about something interesting. Subway philosophers end up having a lot of things to say, some of which are worthwhile. Once, though, I talked to old Brit about what to see on holiday and he gave me a 50p coin as a souvenir. It was the coolest thing I'd ever seen. Another time a kid told me about a pizzeria over on Ditmas Avenue that had a Space Invaders game that would give you 10 credits if you held the coin return while you put in your quarter. Needless to say, I became the master of Space Invaders that spring.
Lesson: Be generous with your time. You have to be careful, but you never know what you might find out.
Scenario #5: Every mass transit system seems to have a few stops that are central nexuses (nexi?) of the tangle of lines that ferry people to the disrparate and far-flung reaches of their city. At these stops the trains disgorge their contents and refil with cats connecting to elsewhere. Jay Street - Borough Hall in Brooklyn was the one that occupied my imagination (where exactly does that exotic A train go? Why do people write songs about it?) but 42nd Street/Grand Central and Fulton Street/Broadway-Nassau were other such network nodes, full of hurly-burly. Here's the thing: if you're leaning against the door and not paying attention as the train arrives at one of these stations, you're likely to get pushed out. And getting back in to your train can be as challenging as swimming upstream with the salmon.
Lesson: Don't block the exits! Sometimes, people need to get off the train. There may indeed be better connection options for them (like West 4th Street,) but sometimes people need a bird in the hand instead of two in the bush. This is a big concern right now, as I worry that GPs may be suboptimizing exits, but if there's an A train waiting at Jay Street, it probably makes sense to hop off the F train and change, because you never know if you'll wait in vain at West 4th for a delayed A train that never comes . . .