Earlier tonight, we asked you to give up the full 13-page letter that Sam Hinkie sent to the Philadelphia 76ers as he resigned. None of you did, but ESPN’s Marc Stein thankfully just posted it in its entirety.
Earlier tonight, Tom Haberstroh tweeted that the letter contained references to a ton of celebrities and thought leaders, and boy was he right. Hinkie starts off his third sentence with a reference to a famous surgeon:
I hope this letter finds you well. I have been serving the Sixers at your pleasure for the past 34 months. Atul Gawande, a Surgeon at Brigham and Women’s Hospital in Boston, remains (from afar) one of my favorite reads. He laughs that reading scientific studies has long been a guilty pleasure. Reading investor letters has long been one of mine.
You can read it below. We’ll keep updating this post with the best nuggets.
From Page 2:
You can be wrong for the right reasons. This may well prove to be Joel Embiid.
From Page 3:
We talk a great deal about being curious, not critical. About asking the question until you understand something truly. About not being afraid to ask the obvious question that everyone else seems to know the answer to. And about the willingness to say three simple words, “I don’t know.”
Tesla’s Elon Musk describes his everyday stance as, “You should take the approach that you’re wrong. Your goal is to be less wrong.” The physicist James Clerk Maxwell described it as a “thoroughly conscious ignorance—the prelude to every real advance in science.” Bill James of the Boston Red Sox (and, I might add, a Kansas basketball expert) added a little flair when asked whether the learnings available via examining evidence were exhausted: “we’ve only taken a bucket of knowledge from a sea of ignorance.”
From Page 3:
A yearning for innovation requires real exploration. It requires a persistent search to try (and fail) to move your understanding forward with a new tool, a new technique, a new insight. Sadly, the first innovation often isn’t even all that helpful, but may well provide a path to ones that are. This is an idea that Steven Johnson of Where Good Ideas Come From popularized called the “adjacent possible.” Where finding your way through a labyrinth of ignorance requires you to first open a door into a room of understanding, one that by its very existence has new doors to new rooms with deeper insights lurking behind them.
From Page 4:
Jeff Bezos says that if Amazon has a good quarter it’s because of work they did 3, 4, 5 years ago—not because they did a good job that quarter. Today’s league-leading Golden State Warriors acquired Draymond Green, Andrew Bogut, and Klay Thompson almost 4 years ago, nearly 4 years ago exactly, and almost 5 years ago. In this league, the long view picks at the lock of mediocrity.
From Page 4:
Wins are a zerogrowth industry (how many of you regularly choose to invest in those?), and the only way up is to steal share from your competitors. You will have to do something different. You will have to be contrarian.
From Page 4:
While some organizations (like ours) have this as part of their ethos, for others it is the ethos. Check out the 10,000 Year Clock. It is no mere thought experiment, but an actual clock being designed to be placed inside a mountain in West Texas, wound, and left to tick and chime for ten thousand years. Why? Because to design something that lasts that long makes us all consider what the world will look like between now and then. In return, we might be inspired to do something about it.
From Page 4:
A few examples might help. Step away from basketball and imagine for a moment this is investment management, and your job is to take your client’s money and make it grow. It’s January 1, 2015 and the S&P 500 is $171.60, exactly the same price it has been since January 1, 1985. No fluctuation up or down. Flat every single day. And your job for every day of the past 30 years is to make money for your clients by investing. What would you do?
From Page 5 (emphasis ours):
The illusion of control is an opiate, though. Nonetheless, it is annoyingly necessary to get comfortable with many grades of maybe. Sixers fans come up to me to say hello and many of them say the same thing (almost instinctively) as we part, “Good luck.” My standard reply: “Thanks. We’ll need it.”
From Page 6:
“So if we want to think like a scientist more often in life, those are the three key objectives—to be humbler about what we know, more confident about what’s possible, and less afraid of things that don’t matter.” That’s from Tim Urban, who will soon be recognized as one of tomorrow’s polymaths (like many of you, he lives in New York—I’d recommend meeting him for coffee sometime).
From Page 7, in a section entitled “A reverence for disruption”:
This is true everywhere, as the balance in any market or any ecosystem ebbs and flows until something mostly unexpected lurches ahead. We see it in spades—past, present, and future.
- New Zealand’s flightless bird the moa (measuring in at 10 ft, 400 lbs.) had the life tramping around the South Island for a great long run; then the first Māori explorers washed ashore in canoes, and that was that.
- I still miss Blackberry’s keyboard, but the 2007 iPhone debut rendered it nearly obsolete to all but a few of us curmudgeons.
- Watch what’s happening with the collaboration between IBM’s Watson and M.D. Anderson or Google DeepMind’s AlphaGo. It won’t be just an ancient board game that’s disrupted. It’s also anything but a game to Lee Sedol.
From Page 9:
Robert is a mistake I rubbed my own nose in for over a year. The 2013 Draft was a flurry of activity for us—a handful of trades and selections in both the first and second rounds. We had more action following the draft as we tried to finalize our summer league team and get the myriad trade calls set up with the NBA. I could see this coming a few days before and we informed the media that this kind of approach might lead to an unusually late start for the post-draft press conference. Several of you were still there late that night. At about 1:00 a.m. I went downstairs to address an equally exhausted media on deadline from their editors. When I returned upstairs, the undrafted Robert Covington was gone, having agreed to play for another club’s summer league team, eventually making their regular season roster. He torched the D-League that year, haunting me all the while. When he became available 17 months later, we pounced. But I shudder, even now, at that (nearly) missed opportunity.
From Page 11:
Many of us remember exactly where we were when tragedy strikes and we think of what could have been. For me—and this is sad for my own mental well being—that list includes the January day in 2014 when Miami traded Joel Anthony and two second round picks to our formidable competitors the Celtics. I can still picture the child’s play table I paced around at Lankenau Medical Center on my cell phone while negotiating with Miami’s front office. This was in between feedings for our newborn twins, when my wife and I were still sleeping in the hospital. Danny Ainge finalized that deal (and several other better ones) and received one first-place vote for Executive of the Year that season: mine.
From Page 11:
In the upcoming May draft lottery, we have what will likely be the best ever odds to get the #1 overall pick (nearly 30%), a roughly 50/50 chance at a top-2 pick (the highest ever), and a roughly 50/50 chance at two top-5 picks, which would be the best lottery night haul ever. That same bounce of a ping pong ball (almost a flip of a coin) will determine if we have three first round picks this year (unusual) or four (unprecedented). That’s this year. Or this quarter, if you will.
If you were to estimate the value of those firsts and the ones to follow, from this point forward we have essentially two NBA teams’ worth of first round pick value plus the third most second round picks in the league.
From Page 12:
Your club is on solid footing now, with much hard work yet to be done. As we continued to invest in young players, acquire more draft selections, and maintain cap flexibility the forward-looking markets took notice. Our Future Franchise Rankings (ESPN’s) that began at 24th in a 30-team league in May of 2013 climbed to 19th in 2014, 17th in 2015, and most recently via RealGM’s rankings in December of 2015, 12th. I think that is imminently reasonable, as is a couple of spots higher.
From Page 13:
I will be repotted professionally. That is often uncomfortable; most growth is. But it’s also often healthier over the longer sweep of history, too.