Ambition, Risk, and Building Your Dream Team

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I'll say that a little bit tongue in cheek , but it is a fun time for me to sit down with KP and really kind of pick his brain about what he has written on LinkedIn . And if you're not following him on LinkedIn , you should be .

If you want to know about the AEC world , about innovation where things are headed , circular economy and all things innovation for the built environment , you should be following KP Ready on LinkedIn . So it's KP Ready R-E-D-D-Y . I am joined today , as always . Probably not a surprise to you after that introduction , but I'm joined today by KP Reddy . Hi , kp .

If you scroll through KP's posts on LinkedIn , most of them are not super long , but a one sentence post is pretty rare . So I'm going to read it and then we're going to jump into it . So it goes like this how do you think about the correlation between ambition and risk aversion ? All right , what , uh ? What was it that inspired you to write that ?

So if you're a startup and you have 12 months of cash left and you're really ambitious , it's like either unicorn or die , right , which is uh , if you're venture backed , that's how you have to kind of think , right , and you're not sure if you're gonna , where the net , where the month 13 of payroll money is coming from right do you reduce expenses in month one

to try to last longer , or do you actually cut your burn rate in half and say fuck it , like we're either doing this or we're not doing this , and if it's not happening , I'm going to move on to the next thing and figure it out . Yeah . Right . So someone that is thinking unicorn , thinking big , they'll actually say you know what ?

Let's just burn through twice as much money and figure out an outcome in six months . A less ambitious person actually says yeah , let's tighten some stuff up . I'm going to take a pay cut , let's give ourselves some more runway . And the point is like runway for what ? So , uh , your son plays baseball , right , so are you swinging for a home run ?

Bases are loaded . Are you swinging for a grand slam ? Are you like leaning into the pitch so you can get hit ? That's like the spectrum of things you can do Right , yes , Right , you're sitting there and you're at the plate , and so I think , like in life , not just founders , everyone has to make these decisions .

You can bunt your way through life , right , right , you can be the guy that can always get on base like solid single , you know , just knows how to funk it right in the right spot , perfect . And if you look at like batting averages and all that stuff , right you'll . We see this stuff , right , we see .

You know , it's kind of funny , baseball is a very statistical kind of thinking sport . By the way , they took all of that from cricket from all my Indian friends . It was ball bar from cricket . But the point being is those are the decisions you get to make on an everyday basis .

Is those are the decisions you get to make on an on an everyday basis , whether it is walking up to you , know you ? You see jeff bezos at a conference . You try to walk up to him , knowing the security might just throw you on the ground , right ?

I mean , it's all these decisions we make every day , and the spectrum of decisions are do I want to just like lean into the pitch and get hit , be a good actor ? Or I just want to like grand slam or go home ? And those are like the spectrums of decisioning that needs to be made .

So when I'm like , hey , I want to own a formula one team , that's how I think . Like that's how I think in my days , right , um , like I got mad the other day and you know it drives my friends and family . And saying I'm like , hey , you know , nfl teams are allowed to sell up to 10 of their equity . It's like private equity .

People like , why isn't my phone ringing ? I want to own part of an nfl team , because my theory is , if I own part of an nfl team , I'm on the path to owning a formula one team sure , okay , right right . So , and the fact that I get mad about that , and , of course , my kids are like dad , you don't have that kind of money .

I'm like that's the problem . We got to work on that like we need to have that kind of money . You know what I mean . So , and some people will be like you're insane , right . So my someone might look at that and go kp . Like you're insane , right ? Someone might look at that and go KP you're out of your mind . However , am I ? Am I out of my mind ?

Like I'm either like going to do it and die trying or I'm just not willing to bunt my way through life . But that's my life , right , that's not everyone's life . So when people say they're ambitious , I don't think being ambitious is a binary , a binary type thing right I asked you what your ambition is .

Cool , awesome , jeff , and I'm trying to support you in your ambition right on this damn zoom call , right like here we are . It's not for me , it's for you . You're welcome , right , right , but that's fine , that's like your life , that's your life , that's the life experience you want .

So I'm never like here to say everybody should want to own a Formula One team , because if everybody wants to own a Formula One team , I'm probably not going to ever own a Formula One team . Right , not going to ever own a formula one team right .

There are definitely people smarter and more talented and more access to capital than me , but they may not be as ambitious as me , right ?

And so I think , like checking this is this one seems like checking your ambition , and one of the things when I talk to founders , I want to hear a little bit of ridiculousness , right , want to hear a little bit of ridiculousness , right , we think general motors is doing it all wrong . I'm going to start a car company and put general motors out of business .

Sounds insane , right ? Sounds insane . Or is it right ? Right , think about everything , elon . I mean whatever you think about el Musk I'm not going to get into debates about his tweets or whatnot but the dude with Tesla , he had two months of payroll left . And put all his PayPal money into it . He could have just not done that .

He could have been like I'm just going to sit on my PayPal money getting 5% interest on it . Right , I got $100 million in the bank . I can get $5 million a year just doing nothing Instead , almost like bankrupts himself .

68 , 67 said we're going to put a man on the moon , that's not like , oh , we're going to build a more efficient car , we're going to escape the Earth's atmosphere and send a human being to a different rock in the solar system . Yeah , that that's , that's big thinking .

That that literally changes the world , uh , changes the course of history , opens the door to all kinds of things . And you know when we , when we think about where we are right now the AEC , space , aec industry we were talking about this in the last episode . Actually , you know the kind of the , the echo chambers , and you know this is the way .

I don't know that we actually said this in the last episode , but this is the way we've always done it , right ? This , these incremental changes at some point's , just I'll , I'll keep my comment to the the aec industry at some point .

If we stick to these slow , small , incremental changes , there are portions of this industry that are likely to die versus being ambitious and completely changing business models and aiming to put a man on the moon , so to speak in your jfk

example .

You know where people and what it was . Someone made a comment to me . They said they were ambitious and my first reaction was like no , you're not , which is my fault , I shouldn't . That's actually not true . It's true if whatever my definition of ambition is compared to theirs .

The reality is , everybody is allowed to live their own lives the way they want to , right and if . And that's why I asked you , right , what is your ambition ?

Well , it shouldn't be right , and but I think where either your ambition is driving your risk aversion or your risk aversion is driving your ambition , and that's the correlation , right , because you're probably like KP , this is what I want to do and have a good quality of life , and I'm at a certain age , and blah , blah , blah .

You'll have whatever your reasoning is around it . But if you're like , hey , I want to build the next CNN or whatever , right , I want to build the next box media , then it's like second mortgage , the house man , that's what it takes .

That's what it takes , and I think , while we don't talk as much about the people that second mortgage their house and lost everything , there's plenty of those Plenty . If you read my second book , what you Know About Startups Is Wrong . I talk about it all the time .

I haven't had all winners in my life , right , I've struck out plenty of times , but I think I've done a better job . Now , when I fail at something is like rewatching the game tape to go , oh , this is what I probably did wrong and let's not do that again .

Right , let's not make the same pattern of mistakes , but so I think that's something people should just think about . Right Is your risk aversion . Some of that's situational , some of that's psychological .

When I graduated , I would say most of the guys that graduated me with me , actually a couple of more like , uh , come to our events and stuff , uh , I think , uh , people don't know it , but like I've known these people since college , they're like unsurprised about the trail that I've blazed right and the things that I've done and bouncing back from failures , and

like they're just like unsurprised , like , dude , it's in college . You were like that . In college you were hustling , right , you had three jobs and three businesses . In college you were hustling something all the time , unsurprised , right , unsurprised that you're doing what you're doing and so .

But a lot of people , they I'm surprised that you're doing what you're doing . So a lot of people , they're just not interested . They have other interests , right , but I wouldn't say even those other interests and ambition . I kind of give people a hard time about pickleball . It's like activity , not a sport .

I'm a tennis purist , but I think there are people that are very ambitious at pickleball . They're very ambitious at other things . It's not always work , they're music , they're this , they're that . Unfortunately , I'm just wired where ambition and income and money and job are like for me . That is my thing . Am I trying to grow out the longest beard in the world .

I mean , I probably could . I probably could . This is , like you know , a week or two .

But I think thinking about that , even ambition in like a hobby , right , like you were talking about mountain biking . If you decide one day like , hey , I'm going to go on the senior tour of mountain biking and compete , right , just stop me , just stop . The risk would be right . There'd be some financial risk .

You have to buy all the right gear and all that .

that example , the irony is that sometimes , when you just roll over it and we have this fear , right , often we have this fear of speed , we have this fear of crashing , or , oh , here's this rock garden or whatever .

The irony is that oftentimes , speed is your friend , and so you may say , hey , the safer way is to roll over this and then find out , unfortunately , really quickly , that that was not the safe way to do that . Right , you know it .

Everything from hey , you need you have to shift your weight differently in order to navigate it at slow speed , to there's , there's something right You're , you're going slow . The momentum is it going to carry you over that little lip at the bottom or whatever . It is right it's . It's obviously situationally specific , but you mentioned something , you know .

You mentioned something . You know you were talking about our kids and being in college , and there's this thing that we do , we go , you know , take risk when you're young , and so I'm thinking , you know , as we're talking , it's like okay , well , how do we make this applicable to a startup , the leader of an engineering firm , something like that ?

And we could say okay , well , when you're a young firm or when you're a small firm or whatever , you know , maybe you've got some flexibility , some fluidity , you know , like the wisdom , you know telling that to to young people . But sometimes you know you're talking about buying a formula one team .

The first thing that popped into my my mind was well , gary vaynerchuk wants to buy the jets . Right , that's for years and years and years , that's been his shtick is he wants to buy the Jets . One of the things that Gary Vaynerchuk talks about is hey , if you're 55 , you got 20 good years of work left .

So we often look at the young people and go hey , you've got a lot of runway ahead of you or a lot of road ahead of you . Take your risks now , before the the priorities change , before you know life right . But I think at the same time there there is some reality to say hey , you can , right , you can start over , you can .

There's significant data that says entrepreneurs over the age of 50 actually are more effective and partly it's because of the life work experience . Generally they're kind of like you're kind of an empty nester , now right , so you have more time , you have better network , you might have , you know , a little bit extra disposable money in the bank .

But you know , one of the things that I find interesting I have a lot of of like half of my family is entrepreneurial , half of my family's very corporate . Like one of my cousins , I think , 35 years at proctor and gail like first job out of college and it's still there like they're all like that .

Right , there's that half of the family and I remember early on like , oh man , you guys take some risks , and I think that the misnomer about entrepreneurs anyway , good entrepreneurs , it's all calculated risk . Right , it's all calculated From the outside .

Looking in , it's like , oh my God , these guys are just not insane , right , and it was interesting because there's this great I don't know if it's true or not , I wasn't there Fred Smith , with FedEx , was running out of money , basically , took the whole next payroll and went to Vegas Right and played roulette and won it back Right and won back enough to fund

the company , keep the company going right , and whether that , who knows what is true or not , but the thing is he didn't play blackjack .

I think what they get good at is taking calculated risks , and part of that calculation of risk is also kind of how they think about capital deployment . I mean , I do it right , Like how do I deploy capital against different ideas ? You know , I don't want to deploy capital against an idea that's mediocre .

I'm also not going to over-deploy capital against something that's really more of an organic growth thing , and it's interesting when you look at that . There's some businesses . Think about it . This it's organic growth , Think of it as a tree and capital is water you can dump all the water on it you want . You're probably gonna kill it , right ?

It just takes time . Organic growth businesses don't just take capital and resources . It one of the biggest things it needs is time to develop , um , whereas some things are more like you . You know , jet fuel , right , right , it's either going to like take off or blow up . That's just what's happening .

Yeah , that's interesting because I'm I'm often a thesis advisor and um , most often the students that approach me about being their advisor or on their advisory team , they're wanting to do something in the realm of architect as developer , and I got some specific insights and knowledge into , into that model and I have often looked at that model and gone my gosh , why

don't all architects do this ? and I'm one of the very few that think like that , right there . You know well we can't do that or whatever . And the the biggest barrier between an architect and going from a traditional model to architect as developer , as a business model , is not understanding the risk . Architect as developer , the entire .

The crux of the model is understanding the risk and risk mitigation .

And my argument would be that it's as long as you understand and you implement , you execute on that , that risk mitigation , it's no more risky a model than the traditional , maybe less risky a model than the traditional architecture firm model , but it's that risk aversion that comes from not even understanding the risk and how to mitigate the risk that's involved .

Because , you know , we have one of our clients , one of our advisory clients actually is going through this process right of being going from a pure architecture firm to getting into development and , and what's interesting is , um , it's a great study on aligned incentives right yeah , his incentives are not to build more hours .

His incentives are to build less hours . Right , that's the incentive , um , in being a developer , right , um , and being a developer , right , and , and it's quite , it's , it's a . It's a pretty interesting study . But also , um , it's taken him a minute to understand the capital stack . Like , how does the finances work ?

Because sometimes you partner with a developer and like , oh yeah , we're gonna do this thing , blah , blah , blah . Okay , so cool , send me the pro forma forma . You're an architect . You don't understand how real estate pro formas work . You have no way of like , really understanding what the risk is .

The pro forma is , even if you say , hey , you know , if you're listening to this and you're like a small firm architect , or you focus on single family residential , there's still a performa per se . Your client doesn't use that word , doesn't think of it the same way , but it's there , it's still there . Move up to multifamily or health care or anything else .

There's a performer there and it dictates all of the pressures on you and your work . If you don't understand that , you know you're , you're like wandering around , blindfolded somewhere .

It's like I and actually I've yet to see this happen Right , I've yet to have a startup pitch me , which is fascinating and , by the way , also , like I tell all my founders , like I literally put all this stuff out here in podcasts and like if you keep up with me , you should be able to be very well prepared to meet with me .

Like I put everything out right , I've yet to see a pitch deck that says , if you put in a million bucks , here's how this is going to affect your fund . This is how it's going to affect your personal returns .

Nobody cares about that . That's not a value proposition . But understanding how you're impacting the life of your client , that's the value proposition . I love that you know that idea . I'll take that to my graduate students because , as you know , they have to basically compete in a shark tank environment for their final um .

So part of it is are you surrounding yourself with people that have a similar ambition , both in your professional life and your personal life ? Right , and one of the reasons you know quite transparently I'm moving to be near Silicon Valley is I don't find a lot of my people in Atlanta definitely not Asheville , but in Atlanta , right .

The only other market I find my people are in like New York , right , my people are in the Middle East , like the people that I like socially . And you know , because it's really tough when you're thinking about you know , whatever your ambition is , you kind of become .

I mean , I've been told like , hey , you kind of come off as a jerk and I'm like , yeah , I'm like maybe , but this is the stuff I care about . And if you care about something your ambitions are different and you care about something different . It's really hard for us to find something that is in common .

And I think , especially when you're a founder , if you surround yourself with other founders that have an equal ambition , at whatever level right , want to own a small country to . Hey , I want to build a nice $20 million a year cashflow business , cool , hanging out with those people professionally and personally will drive the right behavior right .

It becomes helpful , and I've even found it too with vendors . I've started this thing now where , if a law firm wants to do business with me , I ask the person hey , what's your ambition ?

Because if their ambition isn't to have their name on the firm , I don't want to deal with them yeah right , if I'm dealing with an accountant , I'm just pretty happy doing the things like , oh , you don't want to start your own firm one day ?

Well then , get out of here like I don't want to do business with you because , uh , and I think we , you know , we we've been looking at some partnerships for our business , right , and one of the number one things that we found in talking to people that we want to partner with , they're just very comfortable , they're very content and that's not my ambition ,

right , they're not going to align . I don't want partners that are happy like , oh , I get 10 weeks of vacation , love being in business for myself because I get to take all the vacations I want to take . No , thank you , I don't want to hang out with you .

If you're going to become the average of them , you better shoot higher and align yourself with people that are beyond that point and align yourself with people that are beyond that point Right . If you want to be number one in the over 50 mountain biking league you better be riding with the number one in the 30 and under 100% right .

Yeah , and they're going to be like hey , jeff you can't roll over that hill , man .

You know because for those that may be new to this like so , for our programs generally , people meet with you because you have to be with so many programs and you're triaging fit .

I mean , it's definitely been something that's super top of mind for me , because one of the challenges when you trying to have like high ambition , it's hard , it's really hard . Right , there's lots of , lots of failures along the way , right , and people that are not equally as ambitious with you as you and you don't surround your people with those people .

It's really really tough to um , it's , it's on those tough days it's really hard . Like you feel very alone . Yeah , right , you feel very alone because , um , if , if , if you go hang out with your friends that are not ambitious and you had a tough day , they're like , dude , get over it . Like you , you have a great , you get this .

Like you have a great life . Just what are you complaining about ? I'm like I never said anything about my life being great or not great . I'm just like I'm pissed off . I mean , here's the thing , right , like sounding like a jerk .

Right , if I'm in mixed company with people that have different ambitions than my own or different cadences of ambition , I'm so pissed off I'm not getting a shot at my own part of an NFL team . What does that sound ?

Yeah , when you're the outlier , right , you're seen differently , definitely yeah yeah , and also to your point , that also means that there's a lot of people that want to hang out with me . Because they want to , you know , they want to be around someone that's probably has a different ambition than them . Or maybe a greater in their mind a greater ambition .

I'm going to use the term different .

Right , you become the average of the five people you spend the most time with , which means you have to be very careful , of course , of course and this and this will sound arrogant coming out of my mouth but you have to be careful and intentional about who you surround yourself with . Right , because there there will be right , there's that magnetism .

Oh yeah , well , my five people and I'm aiming high , right , so my five people need to be up here , and it may include KP . But you're saying , hey , my , my five people are up here and it doesn't include these people down here . Right , and , and you know , and there's , it's five people you spend the most time with .

So there's , you know , we're not , we're not saying we're going to cut everybody else out of our life , necessarily , but we have to be intentional about those choices .

Whenever people ask me what I do for a living , I say civil engineering um , because otherwise I'll get , otherwise I get pitched . Hey man , I got a great idea for you .

You should invest in me , nobody's pitching you road projects no , they're like , I'm usually like , yeah , I'm a civil engineer and they just like walk away like boring nerd roads , roads , soil or underground piping yeah , zero times with anyone said that's amazing . Tell me more highways or runways . It's usually like nice to meet you , and then they move on .

So again , I don't know how you've gotten to this point without hearing the beginning , if you have , but these KP Unpacked episodes are my opportunity to ask KP hey , what were you thinking ? What was the inspiration ? Where is this post coming from ? Thinking you know what was the inspiration ? Uh , where is this post coming from ?

And so if you're not following kp on linkedin , you should be . So kp ready , r-e-d-d-y . If you're watching the video , it's right there on the screen . Both of our names are right there on the screen . Uh , ethan will link our producer , ethan will link um , these things in the show notes .

But this whole conversation is about , you know , as we're recording this , you you must have posted this on LinkedIn about maybe Saturday the 14th or Friday the 13th or so of December . But it goes like this how do you think about the correlation between ambition and risk aversion ? That's where we started the conversation .

We've gone all over the place , but I think we've gone to some really good places here in this conversation . So thanks for listening in Again . Follow KP on LinkedIn and all the links to everything that we talked about will be in the show notes . Ethan will drop them down there . Kp , thanks for joining me today . Great conversation , all right . We'll see you .

Yep , thanks for joining me today .