The Financial Times (the pink-colored paper) just reported today (May 9th, 2011) that Apple Computer has overtaken Google to become the world’s most valuable brand with an estimated brand value of more than $153bn. This can largely be attributed to the explosive success of both the iphone and ipad. I myself own both of these products and I have to say they are ingenious. Absolutely addicting. I wouldn’t go so far as to say they’ve changed my life, but without these gadgets close at hand, I feel somewhat naked. That’s the genius of Steve Jobs. I don’t know how he does it but he’s got a real knack for inventing products out of thin air that once people got a hold of wonder how they could have done without them in the first place. Let’s take a peek into the mind of man who has revolutionized the way all of us work and play. These quotes are taken from “The Innovation Secrets of Steve Jobs”, ISBN 978-0-07-174875-9.
“Innovation distinguishes between a leader and a follower.” Pg. 1
"Some people aren't used to an environment where excellence is expected." pg. 67
"We may not know how we're going to do it, but we will figure it out.". Pg. 67
On the innovation process
“We don’t think, let’s take a class! Here are the five rules of innovation; let’s put them up all over the company! It’s like somebody who’s not cool trying to be cool. It’s painful to watch…It’s like watching Michael Dell try to dance. Painful.” Pg. 1
“You can tell a lot about a person by who his or her heroes are.” Pg. 7
“Have the courage to follow your heart and intuition. They somehow already know what you truly want to become.” Pg. 13
On dropping out of college
“After six months, I couldn’t see the value in it. I had no idea what I wanted to do with my life and no idea how college was going to help me figure it out. And here I was spending all of the money my parents had saved their entire life. So I decided to drop out and trust that it would all work out OK.” Pg. 15
“The minute I dropped out I could stop taking the required classes that didn’t interest me, and begin dropping in on the ones that looked interesting.” Pg. 16
“None of this (calligraphy) had even a hope of any practical application in my life. But ten years later, when we were designing the first Macintosh computer, it all came back to me. And we designed it all into the Mac. It was the first computer with beautiful typography. If I had never dropped in on that single course in college, the Mac would have never had multiple typefaces or proportionally spaced fonts. And since Windows just copied Mac, it’s likely that no personal computer would have them. If I had never dropped out, I would have never dropped in on this calligraphy class, and personal computers might not have the wonderful typography that they do.” Pg. 17
“The only thing that kept me going was that I loved what I did. The only way to do great work is to love what you do.” Pg. 18
“These Heathkits would come with detailed manuals about how to put this thing together, and all the parts would be laid out in a certain way and color coded. You’d actually build this thing yourself. I would say that this gave one several things. It gave one an understanding of what was inside a finished product and how it worked because it would include a theory of operation, but even more importantly, it gave one the sense that one could build the things that one saw around oneself in the universe. These things were not mysteries anymore. I mean, you looked at a television set, you would think, “I haven’t built one of those, but I could. My childhood was very fortunate in that way.” Pg. 19
“I think you should go get a job as a busboy or something until you find something you’re really passionate about because it’s a lot of work. I’m convinced that about half of what separates successful entrepreneurs from the nonsuccessful ones is pure perseverance. It is so hard. You put so much of your life into this thing. There are such rough moments in time that I think most people give up. I don’t blame them. It’s really tough and it consumes your life. If you’ve got a family and you’re in the early days of your company, I can’t imagine how one could do it. I’m sure it’s been done, but it’s rough. It’s pretty much an eighteen hour day job, seven days a week for a while. Unless you have a lot of passion about this, you’re not going to survive. You’re going to give up. So you’ve got to have an idea, or a problem or a wrong that you want to write that you’re passionate about, otherwise you’re not going to have the perseverance to stick it through. I think that’s half the battle right there.” Pg. 20-21
“You’re work is going to fill a large part of your life, and the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you’ll know when you find it. And, like any great relationship, it just gets better and better as the years roll on. So keep looking until you find it. Don’t settle.” Pg. 21
“I never did it for the money. Being the richest man in the cemetery doesn’t matter to me. Going to bed at night saying we’ve done something wonderful-that’s what matters to me.” Pg. 22
“I was lucky to get into computers when it was a very young and idealistic industry. There weren’t many degrees offered in computer science, so people in computers were brilliant people from mathematics, physics, music, zoology, whatever. They loved it, and no one was really into it for the money.” Pg. 38
“The Macintosh team was what is commonly known as intrapreneurship-only a few years before the term was coined-a group of people going, in essence, back to the garage, but in a large company.” Pg. 39
“We’re gambling on our vision, and we would rather do that than make “me-too” products. For us, it’s always the next dream.” Pg. 43
“We started out to get a computer in the hands of everyday people, and we succeeded beyond our wildest dreams.” Pg. 52
“I visited Xerox Parc. It was a very important visit. I remember being shown a rudimentary graphical user interface. It was incomplete, some of it wasn’t even right, but the germ of the idea was there. Within ten minutes, it was so obvious that every computer would work this way someday. You knew it with every bone in your body. Now, you could argue about who the winners and losers in terms of companies in the industry might be, but I don’t think rational people could argue that every computer would work this way someday.” Pg. 52
“These are team sports. You’re trying to climb up a mountain bringing a lot of stuff. One person can’t do it.” Pg. 56
“Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least one hundred times more on R&D. It’s not about money. It’s about the people you have, how you’re led, and how much you get it.” Pg. 58
“Let’s make a dent in the universe. We’ll make it so important that it will make a dent in the universe.” Pg. 59
“Here’s what you find at a lot of companies. You know how you see a show car, and it’s really cool, and then four years later you see the production car, and it sucks? And you go, what happened? They had it! They had it in the palm of their hands! They grabbed defeat from the jaws of victory! What happened was, the designers came up with this really great idea. Then they take it to the engineers, and the engineers go, ‘Nah, we can’t do that. That’s impossible.’ And so it gets a lot worse. Then they take it to the manufacturing people, and they go, ‘We can’t build that!’ And it gets a lot worse.” Pg. 68
“Companies, as they grow to become multibillion-dollar entities, somehow lose their vision.” Pg. 74
“Creativity is just connecting things.” Pg.79
“Part of what made the Macintosh great was that the people working on it were musicians, and poets, and artists, and zoologists, and historians who also happened to be the best computer scientists in the world.” Pg. 81
“It comes down to trying to expose yourself to the best things that humans have done and then try to bring those things in to what you’re what you’re doing. Picasso had a saying. He said, ‘Good artists copy, great artists steal.’ We’ve always been shameless about stealing great ideas.” Pg. 86
“I wish Bill Gates the best, I really do. I just think he and Microsoft are a bit narrow. He’d be a broader guy if he had dropped acid once or gone off to an ashram when he was younger.” Pg. 89
“Since 1979 Apple has invested millions of dollars and thousands of man-hours in the development of a consistent user interface that will take the crank out of the personal computer…The philosophy behind the Macintosh is very simple: in order for a personal computer to become a truly mass-market commodity, it will have to be functional, inexpensive, very friendly, and easy to use. Macintosh represents a significant step in the evolution of the mass-market personal computer. Macintosh is Apple’s crankless Volkswagen, affordable to the quality conscious.” Pg. 90
“We, too, are going to think differently and serve the people who have been buying our products since the beginning. Because a lot of times people think they’re crazy, but in that craziness we see genius.” Pg. 103
“The only consultants I’ve ever hired in my 10 years is one firm to analyze Gateway’s retail strategy so I would not make some of the same mistakes (when launching Apple’s retail stores) they made. But we never hire consultants per se. We just want to make great products.” Pg. 111
“It’s not about pop culture and it’s not about fooling people, and it’s not about convincing people that they want something they don’t. We figure out what we want. And I think we’re pretty good at having the right discipline to think through whether a lot of other people are going to want it, too. That’s what we get paid to do. So you can’t go out and ask people, you know, what’s the next big thing? There’s a great quote by Henry Ford, right? He said, ‘If I’d have asked my customers what they wanted, they would have told me ‘a faster horse,’’”
“Apple invented FireWire, and we ship FireWire on every computer we make. It’s built into iPod. It’s the fastest and only music player with FireWire. Why? Because it’s fast. You can download an entire CD onto an iPod in five to ten seconds. Let’s take a look at how it compares to USB. Five to ten seconds to load an entire CD with FireWire. On a USB, you’re talking five minutes. Let’s talk about one thousand songs. On iPod with FireWire it is under ten minutes, on a USB player it is five hours. Can you imagine? You’ve got to watch it for five hours as it loads the songs. Under ten minutes with iPod. It’s thirty times faster than any other MP3 player.” Pg. 114
“How much is ninety-nine cents? How many of you had a Starbucks latte this morning? That’s three bucks. You could have bought three songs. And think about how many lattes are being sold around the world today. Now let’s look at the downsides again. What does it mean to have unreliable downloads or encoding? Here is a typical scenario. You go to Kazaa to find one song. You never find one song; you find fifty to sixty of them. And you’ve got to pick which one of those is going to give you a reliable download. You often pick wrong. The download is as slow as molasses and craps out halfway through. You try again and get the same result. After a few times, you finally download the song, only to find the last four seconds is cut off, or it has a glitch in the middle, or it was encoded by someone who didn’t know what they were doing and it sounds bad. You try again and again, and after fifteen minutes you finally succeed in getting a clean version of the song you want. What that means is you’ll spend an hour to get four songs that you can get at under four bucks from Apple. That means you’re working for under minimum wage! In addition, you are stealing.” Pg. 116
“The most advanced phones are called ‘smartphones,’ so they say. They typically combine a phone plus e-mail plus a baby Internet. The problem is they are not so smart and they are not so easy to use…They’re really complicated…What we want is to make a leapfrog product that is way smarter than any mobile device has ever been and supereasy to use. This is what iPhone is…” pg. 118
“It was a great challenge. Let’s make a great phone that we fall in love with. And we’ve got the technology. We’ve got the miniaturization from the iPod. We’ve got the sophisticated operating system from Mac. Nobody had ever thought about putting operating systems as sophisticated as OS X inside a phone, so that was a real question. We had a big debate inside the company whether we could do that or not. And that was one where I had to adjudicate it and say, ‘We’re going to do it.’ The smartest software guys were saying they can do it, so let’s give them a shot. And they did.” pg. 119
“Most of us use laptops and a smartphone. A question has arisen, is there room for a third category of device in the middle? Something in between a laptop and a smartphone? We’ve pondered this question for years. The bar is pretty high. In order to create a new category of devices, those devices are going to have to be far better at doing some key tasks, better than the laptop and better than the smartphone. What kinds of tasks? Things like browsing the Web. That’s a pretty tall order. Doing e-mail. Enjoying and sharing photographs. Watching videos. Enjoying your music collection. Playing games. Reading e-books. If there’s going to be a third category of device, it’s going to have to be better at these kinds of tasks than either a laptop or smartphone; otherwise it has no reason for being.” Pg. 121
“Let’s go invent tomorrow instead of wondering about what happened yesterday.” Pg. 121
“I’m as proud of what we don’t do as I am of what we do.” pg. 135
“When we got to the company a year ago, there were fifteen product platforms and a zillion variants of each one. After three weeks, I said, ‘How are we going to recommend these products to others when we don’t even know what products to recommend to our friends?’ So, we went back to business school 101 and asked, ‘What do people want?’ Well, they want two kinds of products: consumer and professional. In each of those two categories we need desktop and portable models. If we had four great products, that’s all we need. As a matter of fact, if we only had four, we could put the A-team on every single one of them. And if we only had four, we could turn them all every nine months instead of every eighteen months. And if we only had four, we could be working on the next generation of each one as we’re introducing the first generation. That’s what we decided to do, to focus on four great products.” Pg. 139
“Process makes you more efficient. But innovation comes from people meeting up in the hallways or calling each other at 10:30 at night with a new idea, or because they realized something that shoots holes in how we’ve been thinking about a problem. It’s ad hoc meetings of six people called by someone who thinks he has figured out the coolest new thing ever and who wants to know what other people think of his idea. And it comes from saying no to 1,000 things to make sure we don’t get on the wrong track or try to do too much. We’re always thinking about new markets we could enter, but it’s only by saying no that you can concentrate on the things that are really important.” Pg. 139
On iPod’s simplicity,
“Plug it in, Whirrrrr. Done.” pg. 143
“When you start looking at a problem and it seems really simple with all these simple solutions, you don’t really understand the complexity of the problem. And your solutions are way too oversimplified and they don’t work. Then you get into the problem and see that it’s really complicated. And you come up with all these convoluted solutions. That’s sort of the middle and that’s where most people stop, and the solutions tend to work for a while. But the really great person will keep on going and find, sort of, the key, underlying principle of the problem. And come up with a beautiful elegant solution that works.” Pg. 144
“We’re going to start with a revolutionary user interface. Why? Here are four smartphones. What’s wrong with their user interfaces? The problem with them is in the bottom forty. They all have keyboards that are there whether or not you need them to be there. And they all have these control buttons that are fixed in plastic and are the same for every application. Well, every application wants a slightly different user interface, a slightly optimized set of buttons just for it. What we’re going to do is get rid of all these buttons and just make a giant screen.” Pg. 146
“Certainly the great consumer electronics companies of the past had thousands of products. We tend to focus much more. People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I’m actually as proud of many of the things we haven’t done as the things we have done. The clearest example was when we were pressured for years to do a PDA, and I realized one day that 90% of the people who use a PDA only take information out of it on the road. They don’t put information into it. Pretty soon cell phones are going to do that, so the PDA market is going to get reduced to a fraction of its current size, and it won’t really be sustainable. So we decided not to get into it. If we had gotten into it, we wouldn’t have had the resources to do the iPod. We probably wouldn’t have seen it coming.” Pg. 153
“You’ve baked a really lovely cake, but then you’ve used dog shit for frosting.” Pg. 197
“Every morning I look at myself in the mirror and ask myself, ‘If today were the last day of my life, would I want to do what I am about to do today?’ If the answer is ‘no’ for too many days in a row, I know it’s time to change something.” Pg. 222
Showing posts with label Business Quotes and Excerpts. Show all posts
Showing posts with label Business Quotes and Excerpts. Show all posts
Monday, May 9, 2011
Wednesday, May 4, 2011
Nassim Nicholas Taleb Dishes It Out!!!
Mr. Taleb has written one of the most intellectually stimulating books I’ve had the privilege to read this year titled the Black Swan. The black swan is a metaphor for those totally out-of-the-blue extraordinary events that when they occur literally change everything. The Lehman Shock is one example. 9/11 was another. The recent devastating earthquake that struck Japan on March 11th followed by the nuclear disaster at Fukushima is another prime example. Since I did some translation work for Tokyo Electric Power Company at the time, I know for a fact that the safeguards erected to protect the nuclear reactors’ cooling system were built to withstand a tsunami up to six meters in height. Now why six meters? Well, according to the records, the average height of all the tsunamis that ever struck that region was approximately one meter. Hence, at the time, the experts at Tokyo Electric figured that if they installed safety barriers that were at least six times the average, it would be more than sufficient to handle any onslaught of flooding waters. Turns out no such thing; the killer waves that bore down on the nuclear power plant that fateful day knocked out the cooling system resulting in one of the worst nuclear disasters in history. The earthquake and the tsunami that followed was a black swan, as totally unpredictable as the tremendous impact that ensued in its aftermath. However, what is so funny is how we humans try to rationalize what happened after the fact. Of course hindsight is always 20:20. It reminds of the saying: “If you want to make God laugh, simply make plans.” I look at my own life and am still in a daze as I become aware that things have turned out so contrary to what I had originally wanted or planned. The simple truth is WE CANNOT CONTROL OR PREDICT THE FUTURE and I submit that any control or predictive power we may seem to possess is illusory. Nassim’s book is a compelling tome on how we are regularly duped by the unexpected. His plea is simple. Learn to use uncertainty to your advantage!
“What we call a Black Swan is an event with the following three attributes. First, it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme impact. Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable.” –from prologue 1
“What did people learn from the 9/11 episode? Did they learn that some events, owing to their dynamics, stand largely outside the realm of the predictable? No. Did they learn the built-in defect of conventional wisdom? No. What did they figure out? They learned precise rules for avoiding Islamic prototerrorists and tall buildings.” –from prologue 4
“The human mind suffers from three ailments as it comes into contact with history, what I call the triplet of opacity. They are:
a) The illusion of understanding, or how everyone thinks he knows what is going on in a world that is more complicated (or random) than they realize;
b) The retrospective distortion, or how we can assess matters only after the fact, as if there were a rearview mirror (history seems clearer and more organized in history books than in empirical reality); and
c) The overvaluation of factual information and the handicap of authoritative and learned people, particularly when they create categories-when they ‘platonify’.” Pg. 8
“Consider the nature of information: of the millions, maybe even trillions, of small facts that prevail before an event occurs, only a few will turn out to be relevant later to your understanding of what happened.” Pg. 12
“I noticed that very intelligent and informed persons were at no advantage over cab drivers in their predictions, but there was a crucial difference. Cab drivers did not believe that they understood as much as learned people-really, they were not the experts and they knew it.” Pg. 14
“The overlap between newspapers was so large that you would get less and less information the more you read.” Pg. 15
“During the one or two years after my arrival at Wharton, I had developed a precise but strange specialty: betting on rare and unexpected events, those that were on the Platonic fold, and considered ‘inconceivable’ by the Platonic ‘experts’. Recall that the Platonic fold is where our representation of reality ceases to apply-but we do not know it.” Pg. 19
“Do you face the possibility of an adverse event? Don’t worry. Who knows, it may turn out good for you. Doubting the consequences of an outcome will allow you to remain imperturbable.” Pg. 46
“Consider a turkey that is fed every day. Every single feeding will firm up the bird’s belief that it is the general rule of life to be fed every day by friendly members of the human race ‘looking out for its best interests,’ as a politician would say. On the afternoon of the Wednesday before Thanksgiving, something unexpected will happen to the turkey. It will incur a revision of belief.” Pg. 40
“Many people labor in life under the impression that they are doing something right, yet they may not show solid results for a long time. They need a capacity for continuously adjourned gratification to survive a steady diet of peer cruelty without becoming demoralized. They look like idiots to their cousins, they look like idiots to their peers, they need courage to continue. No confirmation comes to them, no validation, no fawning students, no Nobel, no Shnobel. ‘How was your year?’ brings them a small but containable spasm of pain deep inside, since almost all of their years will seem wasted to someone looking at their life from the outside. Then bang, the lumpy event comes that brings the grand vindication. Or it may never come. Believe me, it is tough to deal with the social consequences of the appearance of continuous failure. We are social animals, hell is other people.” Pg. 87
“You play tennis every day with no improvement, then suddenly you start beating the pro. Your child does not seem to have a learning impediment, but he does not seem to want to speak. The schoolmaster pressures you to start considering ‘other options,’ namely therapy. You argue with her to no avail (she is supposed to be the ‘expert’). Then, suddenly, the child starts composing elaborate sentences, perhaps a bit too elaborate for his age group. I will repeat that linear progression, a Platonic idea is not the norm.” pg. 89
“We favor the sensational and the extremely visible. This affects the way we judge heroes. There is little room in our consciousness for heroes who do not deliver visible results-or those heroes who focus on process rather than results. However, those who claim that they value process over result are not telling the whole truth, assuming of course that they are members of the human species. We often hear the semi-lie that writers do not write for glory, that artists create for the sake of art, because the activity ‘is its own reward.’ True, these activities can generate a steady flow of autosatisfaction. But this does not mean that artists do no crave some form of attention, or that they would not be better off if they got some publicity; it does not mean that writers do not wake up early Saturday morning to check if The New York Times Book Review has featured their work, even if it is a very long shot, or that they do not keep checking their mailbox for that long-awaited reply from The New Yorker.” Pg. 89-90
“Most people engaged in pursuits that I call ‘concentrated’ spend most of their time waiting for the big day that (usually) never comes. True, this takes your mind away from the pettiness of life-the cappuccino that is too warm or too cold, the waiter too slow or intrusive, the food too spicy or not enough, the overpriced hotel room that does not quite resemble the advertised picture-all these considerations disappear because you have your mind on much bigger and better things. But this does not mean that the person insulated from materialistic pursuits becomes impervious to other pains, those issuing from disrespect. Often these Black Swan hunters feel shame, or are made to feel shame, at not contributing. ‘You betrayed those who had high hopes for you,’ they are told, increasing their feelings of guilt. The problem of lumpy payoffs is not so much in the lack of income they entail, but the pecking order, the loss of dignity, the subtle humiliations near the water cooler. It is my hope someday to see science and decision makers rediscover what the ancients have always known, namely that our highest currency is respect.” Pg. 90
“When you look at the empirical record, you not only see that venture capitalists do better than entrepreneurs, but publishers do better than writers, dealers do better than artists, and science does better than scientists (about 50% of scientific and scholarly papers, costing months, sometimes years, of effort, are never truly read). The person involved in such gambles is paid in a currency other than material success: hope.” Pg. 90
“If you are engaged in a black swan-dependent activity, it is better to be part of a group.” Pg. 94
“Numerous studies of millionaires aimed at figuring out the skills required for hotshotness follow the following methodology. They take a population of hotshots, those with big titles and big jobs, and study their attributes. They look at what those big guns have in common: courage, risk-taking, optimism, and so on, and infer those traits, most notably risk-taking, help you to become successful. You would also probably get the same impression if you read CEOs’ ghostwritten autobiographies or attended their presentations to fawning MBA students. Now take a look at the cemetery. It is quite difficult to do so because people who fail do not seem to write memoirs, and, if they did, those business publishers I know would not even consider giving them the courtesy of a returned phone call (as to a returned e-mail. Fuhgedit). Readers would not pay $26.95 for a story of failure, even if you convinced them that it had more useful tricks than a story of success. The entire notion of biography is grounded in the arbitrary ascription of a causal relationship between specified traits and subsequent events. Now consider the cemetery. The graveyard of failed persons will be full of people who shared the following traits: courage, risk taking, optimism, et cetera. Just like the population of millionaires. There may be some differences in skills, but what separates the two is for the most part a single factor: luck. Plain luck.” Pg. 106
“Have you ever wondered why so many of those straight-A students end up going nowhere in life while someone who lagged behind is now getting the shekels, buying the diamonds, and getting his phone calls returned? Or even getting the Nobel Prize in a real discipline (say, medicine)? Some of this may have something to do with luck in outcomes, but there is this sterile and obscurantist quality that is often associated with classroom knowledge that may get in the way of understanding what’s going on in real life.” Pg. 125
“The policies we need to make decisions on should depend far more on the range of possible outcomes than on the expected final number. I have seen, while working for a bank, how people project cash flows for companies without wrapping them in the thinnest layer of uncertainty.” Pg. 161
“It is often said that ‘is wise he who can see things coming.’ Perhaps the wise one is the one who knows that he cannot see things far away.” Pg. 163
“Being an executive does not require very developed frontal lobes, but rather a combination of charisma, a capacity to sustain boredom, and the ability to shallowly perform on harrying schedules. Add to these tasks the ‘duty’ of attending opera performances.” Pg. 166
“Popper’s central argument is that in order to predict historical events you need to predict technological innovation, itself fundamentally unpredictable.” Pg. 171
“To understand the future to the point of being able to predict it, you need to predict elements from this future itself.” Pg. 172
“If you survive until tomorrow, it could mean either a) you are more likely to be immortal b) that you are closer to death. Both conclusions rely on the exact same data.”pg. 188
“What you should avoid is unnecessary dependence on large-scale harmful predictions-those and only those. Avoid the big subjects that may hurt your future: be fooled in small matters, not in the large. Do not listen to economic forecasters (they are mere entertainers), but do make your own forecast for the picnic; but avoid government social security forecasts for the year 2040.” Pg 203
“Indeed, we have psychological and intellectual difficulties with trial and error, and with accepting that series of small failures are necessary in life. My colleague Mark Spitznagel understood that we humans have a mental hang-up about failures: ‘You need to love to lose’ was his motto. In fact, the reason I felt immediately at home in America is precisely because American culture encourages the process of failure, unlike the cultures of Europe and Asia where failure is met with stigma and embarrassment. Americas specialty is to take these small risks for the rest of the world, which explains the country’s disproportionate share in innovations. Once established, an idea or product is later ‘perfected’ over there.” Pg. 204
“People are often ashamed of losses, so they engage in strategies that produce very little volatility but contain the risk of a large loss-like collecting nickels in front of steamrollers. In Japanese culture, which is ill-adapted to randomness and badly equipped to understand that bad performance can come from bad luck, losses can severely tarnish someone’s reputation. People hate volatility, thus engage in strategies exposed to blowups, leading to occasional suicides after a big loss. Furthermore, this trade-off between volatility and risk can show up in careers that give the appearance of being stable, like jobs at IBM until the 1990s. When laid off, the employee faces a total void: he is no longer fit for anything else. The same holds for those in protected industries.” Pg. 205
PRACTICAL APPLICATION
“The legendary screenwriter William Goldman was said to have shouted ‘Nobody knows anything!’ in relation to the prediction of movie sales. Now, the reader may wonder how someone as successful as Goldman can figure out what to do without making predictions. The answer stands perceived logic on its head. He knew that he could not predict individual events, but was well aware that the unpredictably, namely a movie turning into a blockbuster, would benefit him immensely. So the second lesson is more aggressive: you can actually take advantage of the problem of prediction and epistemic arrogance! As a matter of fact, I suspect that the most successful businesses are precisely those that know how to work around the inherent unpredictability and even exploit it. Here are the (modest) tricks. But note that the more modest they are, the more effective they will be.
POINT ONE:
First, make a distinction between positive contingencies and negative ones. Learn to distinguish between those human undertakings in which the lack of predictability can be (or has been) extremely beneficial and those where the failure to understand the future caused harm. There are both positive and negative Black Swans. William Goldman was involved in the movies, a positive-Black Swan business. Uncertainty did occasionally pay off there. A negative-Black-Swan business is one where the unexpected can hit hard and hurt severely. If you are in the military, in catastrophe insurance, or in homeland security, you face only downside. If you are in banking and lending, surprise outcomes are likely to be negative for you. You lend and in the best of circumstances you get your loan back-but you may lose all of your money if the borrower defaults. In the event that the borrower enjoys great financial success, he is not likely to offer you an additional dividend. Aside from the movies, examples of positive-Black Swan businesses are: some segments of publishing, scientific research, and venture capital. In these businesses, you lose small to make big. You have to lose a little per book and, for completely unexpected reasons, any given book might take off. The downside is small and easily controlled. The problem with publishers, of course, is that they regularly pay up for books, thus making their upside rather limited and their downside monstrous. (If you pay $10 million for a book, your Black Swan is it not being a bestseller.) Likewise, while technology can carry a great payoff, paying for the hyped-up story, as people did with the dot-com bubble, can make any upside limited and any downside huge. It is the venture capitalist who invested in a speculative company and his stake to unimaginative investors who is the beneficiary of the Black Swan, not the ‘me, too’ investors. In these businesses you are lucky if you don’t know anything-particularly if others don’t know anything either, but aren’t aware of it. And you fare best if you know where your ignorance lies, if you are the only one looking at the unread books, so to speak. This dovetails into the ‘barbell’ strategy of taking maximum exposure to the positive Black Swans while remaining paranoid about the negative ones. For your exposure to the positive Black Swan, you do not need to have any precise understanding of the structure of uncertainty. I find it hard to explain that when you have a very limited loss you need to get as aggressive, as speculative, and sometimes as ‘unreasonable’ as you can be. Middlebrow thinkers sometimes make the analogy of such strategy with that of collecting ‘lottery tickets.’ It is plain wrong. First, lottery tickets do not have a scalable payoff; there is a known upper limit to what they can deliver. The ludic fallacy applies here-the scalability of real-life payoffs compared to lottery ones makes the payoff unlimited or of unknown limit. Second, the lottery tickets have known rules and laboratory-style well presented possibilities; here we do not know the rules and can benefit from this additional uncertainty.
POINT TWO:
Don’t look for the precise and the local. Simply, do not be narrow-minded. The great discoverer Pasteur, who came up with the notion that chance favors the prepared, understood that you do not look for something particular every morning but work hard to let contingency enter your working life. As Yogi Berra, another great thinker, said, ‘You got to be careful if you don’t know where you’re going, because you might not get there.’ Likewise, do not try to predict precise Black Swans-it tends to make you more vulnerable to the ones you did not predict. My friends Andy Marshall and Andrew Mays at the Department of Defense face the same problem. The impulse on the part of the military is to devote resources to predicting the next problems. These thinkers advocate the opposite: invest in preparedness, not in prediction. Remember that infinite vigilance is just not possible.
POINT THREE:
Seize any opportunity, or anything that looks like an opportunity. They are rare, much rarer than you think. Remember that positive Black Swans have a necessary first step: you need to be exposed to them. Many people do not realize that they are getting a lucky break in life when they get it. If a big publisher (or a big art dealer or a movie executive or a hotshot banker or a big thinker) suggests an appointment, cancel anything you have planned: you may never see such a window open again. I am sometimes shocked at how little people realize that these opportunities do not grow on trees. Collect as many free non-lottery tickets (those with open-ended payoffs) as you can, and, once they start paying off, do not discard them. Work hard, not in grunt work, but in chasing such opportunities and maximizing exposure to them. This makes living in big cities invaluable because you increase the odds of serendipitous encounters-you gain exposure to the envelope of serendipity. The idea of settling in a rural area on grounds that one has good communications ‘in the age of the internet’ tunnels out of such sources of positive uncertainty. Diplomats understand that very well: casual chance discussions at cocktail parties usually lead to big breakthroughs-not dry correspondence or telephone conversations. Go to parties! If you’re a scientist, you will chance upon a remark that might spark new research. And if you are autistic, send your associates to these events.
POINT FOUR:
Beware of precise plans by governments. Let governments predict (it makes officials feel better about themselves and justifies their existence) but do not set much store by what they say. Remember that the interest of these civil servants is to survive and self-perpetuate-not to get to the truth. It does not mean that governments are useless, only that you need to keep a vigilant eye on their side effects. For instance, regulators in the banking business are prone to a severe expert problem and they tend to condone reckless but hidden risk taking. Andy Marshall and Andy Mays asked me if the private sector could do better in predicting. Alas no. Once again, recall the story of banks hiding explosive risks in their portfolios. It is not a good idea to trust corporations with matters such as rare events because the performance of these executives is not observable on a short-term basis, and they will game the system by showing good performance so they can get their yearly bonus. The Achilles’ heel of capitalism is that if you make corporations compete, it is sometimes the one that is most exposed to the negative Black Swan that will appear to be most fit for survival. Also recall that markets are not good predictors of wars. No one in particular is a good predictor of anything.
POINT FIVE:
‘There are some people who, if they don’t already know, you can’t tell ‘em,’ as the great philosopher of uncertainty Yogi Berra once said. Do not waste your time trying to fight forecasters, stock analysts, economists, and social scientists, except to play pranks on them. They are considerably easy to make fun of, and many get angry quite readily. It is ineffective to moan about unpredictability: people will continue to predict foolishly, especially if they are paid for it, and you cannot put an end to institutionalized frauds. If you ever have to heed a forecast, keep in mind that its accuracy degrades rapidly as you extend it through time. If you hear a ‘prominent’ economist using the word equilibrium, or normal distribution, do not argue with him; just ignore him, or try to put a rat down his shirt.” Pg. 206-210
“Is the world that unfair? I have spent my entire life studying randomness, practicing randomness, hating randomness. The more that time passes, the worse things seem to me, the more scared I get, the more disgusted I am with Mother Nature. The more I think about my subject, the more I see evidence that the world we have in our minds is different from the one playing outside. Every morning, the world appears to me more random that it did the day before, and humans seem to be even more fooled by it than they were the previous day. It is becoming unbearable. I find writing these lines painful; I find the world revolting.” Pg. 215
“Take a cross section of the dominant corporations at any particular time; many of them will be out of business a few decades later, while firms nobody ever heard of will have popped onto the scene from some garage in California or from some college dorm. Consider the following sobering statistic. Out of the five hundred largest US companies in 1957, only seventy-four were still part of that select group, the Standard and Poor’s 500, forty years later. Only a few had disappeared in mergers; the rest either shrank or went bust.” Pg. 221
“If there is one thing on this planet that is not so uncertain, it is the behavior of a collection of subatomic particles! Why? Because, as I have said earlier, when you look at an object, composed of a collection on particles, the fluctuations of the particles tend to balance out. But political, social, and weather events do not have this handy property, and we patently cannot predict them, so when you hear ‘experts’ presenting the problems of uncertainty in terms of subatomic particles, odds are that the expert is a phony. As a matter of fact this may be the best way to spot a phony. ” Pg. 287
“Quitting a high-paying position, if it is your decision, will seem a better payoff than the utility of the money involved (this may seem crazy, but I’ve tried it and it works). This is the first step toward the stoic’s throwing a four-letter word at fate. You have far more control over your life if you decide on your criterion by yourself.” Pg. 297
“Imagine a speck of dust next to a planet a billion times the size of the earth. The speck of dust represents the odds in favor of your being born; the huge planet would be the odds against it. So stop sweating the small stuff. Don’t be like the ingrate who got a castle as a present and worried about the mildew in the bathroom.” Pg. 298
“What we call a Black Swan is an event with the following three attributes. First, it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme impact. Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable.” –from prologue 1
“What did people learn from the 9/11 episode? Did they learn that some events, owing to their dynamics, stand largely outside the realm of the predictable? No. Did they learn the built-in defect of conventional wisdom? No. What did they figure out? They learned precise rules for avoiding Islamic prototerrorists and tall buildings.” –from prologue 4
“The human mind suffers from three ailments as it comes into contact with history, what I call the triplet of opacity. They are:
a) The illusion of understanding, or how everyone thinks he knows what is going on in a world that is more complicated (or random) than they realize;
b) The retrospective distortion, or how we can assess matters only after the fact, as if there were a rearview mirror (history seems clearer and more organized in history books than in empirical reality); and
c) The overvaluation of factual information and the handicap of authoritative and learned people, particularly when they create categories-when they ‘platonify’.” Pg. 8
“Consider the nature of information: of the millions, maybe even trillions, of small facts that prevail before an event occurs, only a few will turn out to be relevant later to your understanding of what happened.” Pg. 12
“I noticed that very intelligent and informed persons were at no advantage over cab drivers in their predictions, but there was a crucial difference. Cab drivers did not believe that they understood as much as learned people-really, they were not the experts and they knew it.” Pg. 14
“The overlap between newspapers was so large that you would get less and less information the more you read.” Pg. 15
“During the one or two years after my arrival at Wharton, I had developed a precise but strange specialty: betting on rare and unexpected events, those that were on the Platonic fold, and considered ‘inconceivable’ by the Platonic ‘experts’. Recall that the Platonic fold is where our representation of reality ceases to apply-but we do not know it.” Pg. 19
“Do you face the possibility of an adverse event? Don’t worry. Who knows, it may turn out good for you. Doubting the consequences of an outcome will allow you to remain imperturbable.” Pg. 46
“Consider a turkey that is fed every day. Every single feeding will firm up the bird’s belief that it is the general rule of life to be fed every day by friendly members of the human race ‘looking out for its best interests,’ as a politician would say. On the afternoon of the Wednesday before Thanksgiving, something unexpected will happen to the turkey. It will incur a revision of belief.” Pg. 40
“Many people labor in life under the impression that they are doing something right, yet they may not show solid results for a long time. They need a capacity for continuously adjourned gratification to survive a steady diet of peer cruelty without becoming demoralized. They look like idiots to their cousins, they look like idiots to their peers, they need courage to continue. No confirmation comes to them, no validation, no fawning students, no Nobel, no Shnobel. ‘How was your year?’ brings them a small but containable spasm of pain deep inside, since almost all of their years will seem wasted to someone looking at their life from the outside. Then bang, the lumpy event comes that brings the grand vindication. Or it may never come. Believe me, it is tough to deal with the social consequences of the appearance of continuous failure. We are social animals, hell is other people.” Pg. 87
“You play tennis every day with no improvement, then suddenly you start beating the pro. Your child does not seem to have a learning impediment, but he does not seem to want to speak. The schoolmaster pressures you to start considering ‘other options,’ namely therapy. You argue with her to no avail (she is supposed to be the ‘expert’). Then, suddenly, the child starts composing elaborate sentences, perhaps a bit too elaborate for his age group. I will repeat that linear progression, a Platonic idea is not the norm.” pg. 89
“We favor the sensational and the extremely visible. This affects the way we judge heroes. There is little room in our consciousness for heroes who do not deliver visible results-or those heroes who focus on process rather than results. However, those who claim that they value process over result are not telling the whole truth, assuming of course that they are members of the human species. We often hear the semi-lie that writers do not write for glory, that artists create for the sake of art, because the activity ‘is its own reward.’ True, these activities can generate a steady flow of autosatisfaction. But this does not mean that artists do no crave some form of attention, or that they would not be better off if they got some publicity; it does not mean that writers do not wake up early Saturday morning to check if The New York Times Book Review has featured their work, even if it is a very long shot, or that they do not keep checking their mailbox for that long-awaited reply from The New Yorker.” Pg. 89-90
“Most people engaged in pursuits that I call ‘concentrated’ spend most of their time waiting for the big day that (usually) never comes. True, this takes your mind away from the pettiness of life-the cappuccino that is too warm or too cold, the waiter too slow or intrusive, the food too spicy or not enough, the overpriced hotel room that does not quite resemble the advertised picture-all these considerations disappear because you have your mind on much bigger and better things. But this does not mean that the person insulated from materialistic pursuits becomes impervious to other pains, those issuing from disrespect. Often these Black Swan hunters feel shame, or are made to feel shame, at not contributing. ‘You betrayed those who had high hopes for you,’ they are told, increasing their feelings of guilt. The problem of lumpy payoffs is not so much in the lack of income they entail, but the pecking order, the loss of dignity, the subtle humiliations near the water cooler. It is my hope someday to see science and decision makers rediscover what the ancients have always known, namely that our highest currency is respect.” Pg. 90
“When you look at the empirical record, you not only see that venture capitalists do better than entrepreneurs, but publishers do better than writers, dealers do better than artists, and science does better than scientists (about 50% of scientific and scholarly papers, costing months, sometimes years, of effort, are never truly read). The person involved in such gambles is paid in a currency other than material success: hope.” Pg. 90
“If you are engaged in a black swan-dependent activity, it is better to be part of a group.” Pg. 94
“Numerous studies of millionaires aimed at figuring out the skills required for hotshotness follow the following methodology. They take a population of hotshots, those with big titles and big jobs, and study their attributes. They look at what those big guns have in common: courage, risk-taking, optimism, and so on, and infer those traits, most notably risk-taking, help you to become successful. You would also probably get the same impression if you read CEOs’ ghostwritten autobiographies or attended their presentations to fawning MBA students. Now take a look at the cemetery. It is quite difficult to do so because people who fail do not seem to write memoirs, and, if they did, those business publishers I know would not even consider giving them the courtesy of a returned phone call (as to a returned e-mail. Fuhgedit). Readers would not pay $26.95 for a story of failure, even if you convinced them that it had more useful tricks than a story of success. The entire notion of biography is grounded in the arbitrary ascription of a causal relationship between specified traits and subsequent events. Now consider the cemetery. The graveyard of failed persons will be full of people who shared the following traits: courage, risk taking, optimism, et cetera. Just like the population of millionaires. There may be some differences in skills, but what separates the two is for the most part a single factor: luck. Plain luck.” Pg. 106
“Have you ever wondered why so many of those straight-A students end up going nowhere in life while someone who lagged behind is now getting the shekels, buying the diamonds, and getting his phone calls returned? Or even getting the Nobel Prize in a real discipline (say, medicine)? Some of this may have something to do with luck in outcomes, but there is this sterile and obscurantist quality that is often associated with classroom knowledge that may get in the way of understanding what’s going on in real life.” Pg. 125
“The policies we need to make decisions on should depend far more on the range of possible outcomes than on the expected final number. I have seen, while working for a bank, how people project cash flows for companies without wrapping them in the thinnest layer of uncertainty.” Pg. 161
“It is often said that ‘is wise he who can see things coming.’ Perhaps the wise one is the one who knows that he cannot see things far away.” Pg. 163
“Being an executive does not require very developed frontal lobes, but rather a combination of charisma, a capacity to sustain boredom, and the ability to shallowly perform on harrying schedules. Add to these tasks the ‘duty’ of attending opera performances.” Pg. 166
“Popper’s central argument is that in order to predict historical events you need to predict technological innovation, itself fundamentally unpredictable.” Pg. 171
“To understand the future to the point of being able to predict it, you need to predict elements from this future itself.” Pg. 172
“If you survive until tomorrow, it could mean either a) you are more likely to be immortal b) that you are closer to death. Both conclusions rely on the exact same data.”pg. 188
“What you should avoid is unnecessary dependence on large-scale harmful predictions-those and only those. Avoid the big subjects that may hurt your future: be fooled in small matters, not in the large. Do not listen to economic forecasters (they are mere entertainers), but do make your own forecast for the picnic; but avoid government social security forecasts for the year 2040.” Pg 203
“Indeed, we have psychological and intellectual difficulties with trial and error, and with accepting that series of small failures are necessary in life. My colleague Mark Spitznagel understood that we humans have a mental hang-up about failures: ‘You need to love to lose’ was his motto. In fact, the reason I felt immediately at home in America is precisely because American culture encourages the process of failure, unlike the cultures of Europe and Asia where failure is met with stigma and embarrassment. Americas specialty is to take these small risks for the rest of the world, which explains the country’s disproportionate share in innovations. Once established, an idea or product is later ‘perfected’ over there.” Pg. 204
“People are often ashamed of losses, so they engage in strategies that produce very little volatility but contain the risk of a large loss-like collecting nickels in front of steamrollers. In Japanese culture, which is ill-adapted to randomness and badly equipped to understand that bad performance can come from bad luck, losses can severely tarnish someone’s reputation. People hate volatility, thus engage in strategies exposed to blowups, leading to occasional suicides after a big loss. Furthermore, this trade-off between volatility and risk can show up in careers that give the appearance of being stable, like jobs at IBM until the 1990s. When laid off, the employee faces a total void: he is no longer fit for anything else. The same holds for those in protected industries.” Pg. 205
PRACTICAL APPLICATION
“The legendary screenwriter William Goldman was said to have shouted ‘Nobody knows anything!’ in relation to the prediction of movie sales. Now, the reader may wonder how someone as successful as Goldman can figure out what to do without making predictions. The answer stands perceived logic on its head. He knew that he could not predict individual events, but was well aware that the unpredictably, namely a movie turning into a blockbuster, would benefit him immensely. So the second lesson is more aggressive: you can actually take advantage of the problem of prediction and epistemic arrogance! As a matter of fact, I suspect that the most successful businesses are precisely those that know how to work around the inherent unpredictability and even exploit it. Here are the (modest) tricks. But note that the more modest they are, the more effective they will be.
POINT ONE:
First, make a distinction between positive contingencies and negative ones. Learn to distinguish between those human undertakings in which the lack of predictability can be (or has been) extremely beneficial and those where the failure to understand the future caused harm. There are both positive and negative Black Swans. William Goldman was involved in the movies, a positive-Black Swan business. Uncertainty did occasionally pay off there. A negative-Black-Swan business is one where the unexpected can hit hard and hurt severely. If you are in the military, in catastrophe insurance, or in homeland security, you face only downside. If you are in banking and lending, surprise outcomes are likely to be negative for you. You lend and in the best of circumstances you get your loan back-but you may lose all of your money if the borrower defaults. In the event that the borrower enjoys great financial success, he is not likely to offer you an additional dividend. Aside from the movies, examples of positive-Black Swan businesses are: some segments of publishing, scientific research, and venture capital. In these businesses, you lose small to make big. You have to lose a little per book and, for completely unexpected reasons, any given book might take off. The downside is small and easily controlled. The problem with publishers, of course, is that they regularly pay up for books, thus making their upside rather limited and their downside monstrous. (If you pay $10 million for a book, your Black Swan is it not being a bestseller.) Likewise, while technology can carry a great payoff, paying for the hyped-up story, as people did with the dot-com bubble, can make any upside limited and any downside huge. It is the venture capitalist who invested in a speculative company and his stake to unimaginative investors who is the beneficiary of the Black Swan, not the ‘me, too’ investors. In these businesses you are lucky if you don’t know anything-particularly if others don’t know anything either, but aren’t aware of it. And you fare best if you know where your ignorance lies, if you are the only one looking at the unread books, so to speak. This dovetails into the ‘barbell’ strategy of taking maximum exposure to the positive Black Swans while remaining paranoid about the negative ones. For your exposure to the positive Black Swan, you do not need to have any precise understanding of the structure of uncertainty. I find it hard to explain that when you have a very limited loss you need to get as aggressive, as speculative, and sometimes as ‘unreasonable’ as you can be. Middlebrow thinkers sometimes make the analogy of such strategy with that of collecting ‘lottery tickets.’ It is plain wrong. First, lottery tickets do not have a scalable payoff; there is a known upper limit to what they can deliver. The ludic fallacy applies here-the scalability of real-life payoffs compared to lottery ones makes the payoff unlimited or of unknown limit. Second, the lottery tickets have known rules and laboratory-style well presented possibilities; here we do not know the rules and can benefit from this additional uncertainty.
POINT TWO:
Don’t look for the precise and the local. Simply, do not be narrow-minded. The great discoverer Pasteur, who came up with the notion that chance favors the prepared, understood that you do not look for something particular every morning but work hard to let contingency enter your working life. As Yogi Berra, another great thinker, said, ‘You got to be careful if you don’t know where you’re going, because you might not get there.’ Likewise, do not try to predict precise Black Swans-it tends to make you more vulnerable to the ones you did not predict. My friends Andy Marshall and Andrew Mays at the Department of Defense face the same problem. The impulse on the part of the military is to devote resources to predicting the next problems. These thinkers advocate the opposite: invest in preparedness, not in prediction. Remember that infinite vigilance is just not possible.
POINT THREE:
Seize any opportunity, or anything that looks like an opportunity. They are rare, much rarer than you think. Remember that positive Black Swans have a necessary first step: you need to be exposed to them. Many people do not realize that they are getting a lucky break in life when they get it. If a big publisher (or a big art dealer or a movie executive or a hotshot banker or a big thinker) suggests an appointment, cancel anything you have planned: you may never see such a window open again. I am sometimes shocked at how little people realize that these opportunities do not grow on trees. Collect as many free non-lottery tickets (those with open-ended payoffs) as you can, and, once they start paying off, do not discard them. Work hard, not in grunt work, but in chasing such opportunities and maximizing exposure to them. This makes living in big cities invaluable because you increase the odds of serendipitous encounters-you gain exposure to the envelope of serendipity. The idea of settling in a rural area on grounds that one has good communications ‘in the age of the internet’ tunnels out of such sources of positive uncertainty. Diplomats understand that very well: casual chance discussions at cocktail parties usually lead to big breakthroughs-not dry correspondence or telephone conversations. Go to parties! If you’re a scientist, you will chance upon a remark that might spark new research. And if you are autistic, send your associates to these events.
POINT FOUR:
Beware of precise plans by governments. Let governments predict (it makes officials feel better about themselves and justifies their existence) but do not set much store by what they say. Remember that the interest of these civil servants is to survive and self-perpetuate-not to get to the truth. It does not mean that governments are useless, only that you need to keep a vigilant eye on their side effects. For instance, regulators in the banking business are prone to a severe expert problem and they tend to condone reckless but hidden risk taking. Andy Marshall and Andy Mays asked me if the private sector could do better in predicting. Alas no. Once again, recall the story of banks hiding explosive risks in their portfolios. It is not a good idea to trust corporations with matters such as rare events because the performance of these executives is not observable on a short-term basis, and they will game the system by showing good performance so they can get their yearly bonus. The Achilles’ heel of capitalism is that if you make corporations compete, it is sometimes the one that is most exposed to the negative Black Swan that will appear to be most fit for survival. Also recall that markets are not good predictors of wars. No one in particular is a good predictor of anything.
POINT FIVE:
‘There are some people who, if they don’t already know, you can’t tell ‘em,’ as the great philosopher of uncertainty Yogi Berra once said. Do not waste your time trying to fight forecasters, stock analysts, economists, and social scientists, except to play pranks on them. They are considerably easy to make fun of, and many get angry quite readily. It is ineffective to moan about unpredictability: people will continue to predict foolishly, especially if they are paid for it, and you cannot put an end to institutionalized frauds. If you ever have to heed a forecast, keep in mind that its accuracy degrades rapidly as you extend it through time. If you hear a ‘prominent’ economist using the word equilibrium, or normal distribution, do not argue with him; just ignore him, or try to put a rat down his shirt.” Pg. 206-210
“Is the world that unfair? I have spent my entire life studying randomness, practicing randomness, hating randomness. The more that time passes, the worse things seem to me, the more scared I get, the more disgusted I am with Mother Nature. The more I think about my subject, the more I see evidence that the world we have in our minds is different from the one playing outside. Every morning, the world appears to me more random that it did the day before, and humans seem to be even more fooled by it than they were the previous day. It is becoming unbearable. I find writing these lines painful; I find the world revolting.” Pg. 215
“Take a cross section of the dominant corporations at any particular time; many of them will be out of business a few decades later, while firms nobody ever heard of will have popped onto the scene from some garage in California or from some college dorm. Consider the following sobering statistic. Out of the five hundred largest US companies in 1957, only seventy-four were still part of that select group, the Standard and Poor’s 500, forty years later. Only a few had disappeared in mergers; the rest either shrank or went bust.” Pg. 221
“If there is one thing on this planet that is not so uncertain, it is the behavior of a collection of subatomic particles! Why? Because, as I have said earlier, when you look at an object, composed of a collection on particles, the fluctuations of the particles tend to balance out. But political, social, and weather events do not have this handy property, and we patently cannot predict them, so when you hear ‘experts’ presenting the problems of uncertainty in terms of subatomic particles, odds are that the expert is a phony. As a matter of fact this may be the best way to spot a phony. ” Pg. 287
“Quitting a high-paying position, if it is your decision, will seem a better payoff than the utility of the money involved (this may seem crazy, but I’ve tried it and it works). This is the first step toward the stoic’s throwing a four-letter word at fate. You have far more control over your life if you decide on your criterion by yourself.” Pg. 297
“Imagine a speck of dust next to a planet a billion times the size of the earth. The speck of dust represents the odds in favor of your being born; the huge planet would be the odds against it. So stop sweating the small stuff. Don’t be like the ingrate who got a castle as a present and worried about the mildew in the bathroom.” Pg. 298
Saturday, September 4, 2010
Scott Berkun Dishes it Out!!!
"Because of all the writing, speaking, and pontificating about innovation, you might believe that we truly understand it. This is wishful thinking. In the following interview, Scott Berkun explores (or, more accurately explodes) the romantic notions of how innovation occurs. He is the author of a recently released book called the The Myths of Innovation (O’Reilly Media, 2008). He also wrote the 2005 bestseller, The Art of Project Management (O’Reilly Media, 2005)"-Guy Kawasaki 2008
QUESTION:
How long does it take in the real world-as opposed to the world of retroactive journalism for an epiphany to occur?
ANSWER:
An epiphany is the tip of a creative iceberg, and all epiphanies are grounded in work. If you take any magic moment of discovery from history and wander back in time, you’ll find dozens of small observations, inquiries, mistakes, and comedies that occurred to make the epiphany possible. All the great inventors knew this-and typically they downplayed the magic moments. But we all love exciting stories-Newton getting hit by an apple or people with chocolate and peanut butter colliding in hallways are just more fun to think about. A movie called Watch Einstein Stare at His Chalkboard for Ninety Minutes wouldn’t go over well with most people.
QUESTION:
Is progress toward innovation made in a straight line?-For example, transistor to chip to personal computer to Web to MySpace.
ANSWER:
Most people want history to explain how we got here, not to teach them how to change the future. To serve that end, popular histories are told in heroic, logical narratives: They made a transistor, which led to the chip, which created the possibility for the PC, and on it goes forever. But of course, if you asked William Shockey (transistor) or Steve Wozniak how obvious their ideas and successes were, you’ll hear very different stories about chaos, uncertainty, and feeling the odds were against them. If we believe things are uncertain for innovators in the present, we have to remember things were just as uncertain for people in the past. That’s a big goal of the book: to use amazing tales of innovation history as tools for those trying to do it now.
QUESTION:
Are innovators born or made?
ANSWER:
Both. Take Mozart. Yes, he had an amazing capacity for musical composition, but he was also born in a country at the center of the musical world, had a father who was a music teacher, and was forced to practice for hours every day before he started the equivalent of kindergarten. I researched the history of many geniuses and creators and always found a wide range of factors, some under their control and some not, that made their achievements possible.
QUESTION:
What are the toughest challenges that an innovator faces?
ANSWER:
It’s different for every innovator, but the one that crushed many is how bored the rest of the world was by their ideas. Finding support, whether emotional, financial, or intellectual, for a big new idea is very hard and depends on skills that have nothing to do with intellectual prowess or creative ability. That’s a killer for many would-be geniuses: they have to spend way more time persuading and convincing others than they spend inventing, and they don’t have the skills or emotional endurance for it.
QUESTION:
Where do inventors and innovators get their ideas?
ANSWER:
I teach a creative-thinking course at the University of Washington, and the foundation is that ideas are combinations of other ideas. People who earn the label “creative” are really just people who come up with more combinations of ideas, find interesting ones faster, and are willing to try them out. The problem is that most schools and organizations train us out of these habits.
QUESTION:
Why do human innovators face such rejection and negativity?
ANSWER:
It’s human nature-we protect ourselves from change. We like to think we’re progressive, but every wave of innovation has been much slower than we’re told. The telegraph, the telephone, the PC, and the Internet all took decades to develop from ideas into things ordinary people used. As a species, we’re threatened by change, and it takes a long time to convince people to change their behavior, or part with their money.
QUESTION:
“If you have a seemingly stupid idea, according to the “experts,” how do you know if it will succeed or if it’s truly stupid?”
ANSWER:
“Don’t shoot me, but the answer is we can’t know. Not for certain. That’s where all the fun and misery come in. Many stupid ideas have been successful and many great ideas have died on the vine, and that’s because success hinges on factors outside our control. The best bet is to be an experimenter, a tinkerer-to learn to try out ideas cheaply and quickly and get out there with people instead of fantasizing in ivory towers. Experience with real people trumps expert analysis much of the time. Innovation is a practice, a set of habits, and it involves making lots of mistakes and being willing to learn from them.”
QUESTION:
If you were a venture capitalist, what would your investment thesis be?
VENTURE:
Two parts: Neither is original, but they are borne out by history. One is portfolio. Invest knowing most ventures, even good ones, fail, so distribute risk on some spectrum (e.g., one-third very high risk, one-third moderate risk). Sometimes seemingly small, low-risk/reward innovations have big impacts, and it’s a mistake to only make big bets. The other idea is people: I’d invest in people more than ideas or business plans-though those are important, of course. A great entrepreneur who won’t give up and will keep growing and learning is gold. It’s a tiny percentage of entrepreneurs who have any real success the first few times out-3M, Ford, Flickr were all second or third efforts. I’d also give millions of dollars to authors of recent books on innovation with the word myth in the title. The future is really in their hands.
QUESTION:
What are the primary determinants of the speed of adoption of innovation?
ANSWER:
The classic research on the topic is Diffusion of Innovation (Free Press, 2003) by Everett Rogers, which defines factors that hold up well today. The surprise to us is that they are all sociological: based on people's perception of value and their fear of risks-which often has little to do with our view of how amazing a particular technology is. Smarter innovators know this and pay attention from day one to whom they are designing for and how to design the Web site or product in a way that supports their feelings and beliefs.
QUESTION:
What's more important: problem definition or problem solving?
ANSWER:
Problem definition is definitely underrated, but they're both important. New ideas often come from asking new questions and being a creative question asker. We fixate on solutions, and popular literature focuses on creative people as being solvers, but often the problem is in reformulating a problem so that it's easier to solve.
Einstein and Edison were notorious problem definers: They defined the problem differently than everyone else, and that's what led to their success.
QUESTION:
Why don’t the best ideas win?
ANSWER:
One reason is because the best idea doesn’t exist. Depending on your point of view, there’s a different best idea or best choice for a particular problem. I’m certain that the guys who made telegraphs didn’t think the telephone was all that good an idea, but it ended their livelihood. So many stories of progress gone wrong are about arrogance of perception. What some people thought was the right path-often the path most profitable to them-isn’t what another, more influential group of people thought.
QUESTION:
Is innovation more likely to come from young people or old people? Or is age simply not a factor?
ANSWER:
Innovation is difficult, risky work, and the older you are, the greater the odds you’ll realize this is the case. That explanation works best. Beethoven didn’t write his Ninth Symphony until late in his life, so we know many creatives stay creative no matter how old they are. But their willingness to endure all the stresses and challenges of bringing an idea to the world diminishes. They understand the costs better from life experience. The young don’t know what there is to fear, have stronger urges to prove themselves, and have fewer commitments-for example, children and mortgages. These factors make it easier to try crazier things.
SOURCE: "Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition" ISBN:978-1-59184-223-1 Pages 127-129
QUESTION:
How long does it take in the real world-as opposed to the world of retroactive journalism for an epiphany to occur?
ANSWER:
An epiphany is the tip of a creative iceberg, and all epiphanies are grounded in work. If you take any magic moment of discovery from history and wander back in time, you’ll find dozens of small observations, inquiries, mistakes, and comedies that occurred to make the epiphany possible. All the great inventors knew this-and typically they downplayed the magic moments. But we all love exciting stories-Newton getting hit by an apple or people with chocolate and peanut butter colliding in hallways are just more fun to think about. A movie called Watch Einstein Stare at His Chalkboard for Ninety Minutes wouldn’t go over well with most people.
QUESTION:
Is progress toward innovation made in a straight line?-For example, transistor to chip to personal computer to Web to MySpace.
ANSWER:
Most people want history to explain how we got here, not to teach them how to change the future. To serve that end, popular histories are told in heroic, logical narratives: They made a transistor, which led to the chip, which created the possibility for the PC, and on it goes forever. But of course, if you asked William Shockey (transistor) or Steve Wozniak how obvious their ideas and successes were, you’ll hear very different stories about chaos, uncertainty, and feeling the odds were against them. If we believe things are uncertain for innovators in the present, we have to remember things were just as uncertain for people in the past. That’s a big goal of the book: to use amazing tales of innovation history as tools for those trying to do it now.
QUESTION:
Are innovators born or made?
ANSWER:
Both. Take Mozart. Yes, he had an amazing capacity for musical composition, but he was also born in a country at the center of the musical world, had a father who was a music teacher, and was forced to practice for hours every day before he started the equivalent of kindergarten. I researched the history of many geniuses and creators and always found a wide range of factors, some under their control and some not, that made their achievements possible.
QUESTION:
What are the toughest challenges that an innovator faces?
ANSWER:
It’s different for every innovator, but the one that crushed many is how bored the rest of the world was by their ideas. Finding support, whether emotional, financial, or intellectual, for a big new idea is very hard and depends on skills that have nothing to do with intellectual prowess or creative ability. That’s a killer for many would-be geniuses: they have to spend way more time persuading and convincing others than they spend inventing, and they don’t have the skills or emotional endurance for it.
QUESTION:
Where do inventors and innovators get their ideas?
ANSWER:
I teach a creative-thinking course at the University of Washington, and the foundation is that ideas are combinations of other ideas. People who earn the label “creative” are really just people who come up with more combinations of ideas, find interesting ones faster, and are willing to try them out. The problem is that most schools and organizations train us out of these habits.
QUESTION:
Why do human innovators face such rejection and negativity?
ANSWER:
It’s human nature-we protect ourselves from change. We like to think we’re progressive, but every wave of innovation has been much slower than we’re told. The telegraph, the telephone, the PC, and the Internet all took decades to develop from ideas into things ordinary people used. As a species, we’re threatened by change, and it takes a long time to convince people to change their behavior, or part with their money.
QUESTION:
“If you have a seemingly stupid idea, according to the “experts,” how do you know if it will succeed or if it’s truly stupid?”
ANSWER:
“Don’t shoot me, but the answer is we can’t know. Not for certain. That’s where all the fun and misery come in. Many stupid ideas have been successful and many great ideas have died on the vine, and that’s because success hinges on factors outside our control. The best bet is to be an experimenter, a tinkerer-to learn to try out ideas cheaply and quickly and get out there with people instead of fantasizing in ivory towers. Experience with real people trumps expert analysis much of the time. Innovation is a practice, a set of habits, and it involves making lots of mistakes and being willing to learn from them.”
QUESTION:
If you were a venture capitalist, what would your investment thesis be?
VENTURE:
Two parts: Neither is original, but they are borne out by history. One is portfolio. Invest knowing most ventures, even good ones, fail, so distribute risk on some spectrum (e.g., one-third very high risk, one-third moderate risk). Sometimes seemingly small, low-risk/reward innovations have big impacts, and it’s a mistake to only make big bets. The other idea is people: I’d invest in people more than ideas or business plans-though those are important, of course. A great entrepreneur who won’t give up and will keep growing and learning is gold. It’s a tiny percentage of entrepreneurs who have any real success the first few times out-3M, Ford, Flickr were all second or third efforts. I’d also give millions of dollars to authors of recent books on innovation with the word myth in the title. The future is really in their hands.
QUESTION:
What are the primary determinants of the speed of adoption of innovation?
ANSWER:
The classic research on the topic is Diffusion of Innovation (Free Press, 2003) by Everett Rogers, which defines factors that hold up well today. The surprise to us is that they are all sociological: based on people's perception of value and their fear of risks-which often has little to do with our view of how amazing a particular technology is. Smarter innovators know this and pay attention from day one to whom they are designing for and how to design the Web site or product in a way that supports their feelings and beliefs.
QUESTION:
What's more important: problem definition or problem solving?
ANSWER:
Problem definition is definitely underrated, but they're both important. New ideas often come from asking new questions and being a creative question asker. We fixate on solutions, and popular literature focuses on creative people as being solvers, but often the problem is in reformulating a problem so that it's easier to solve.
Einstein and Edison were notorious problem definers: They defined the problem differently than everyone else, and that's what led to their success.
QUESTION:
Why don’t the best ideas win?
ANSWER:
One reason is because the best idea doesn’t exist. Depending on your point of view, there’s a different best idea or best choice for a particular problem. I’m certain that the guys who made telegraphs didn’t think the telephone was all that good an idea, but it ended their livelihood. So many stories of progress gone wrong are about arrogance of perception. What some people thought was the right path-often the path most profitable to them-isn’t what another, more influential group of people thought.
QUESTION:
Is innovation more likely to come from young people or old people? Or is age simply not a factor?
ANSWER:
Innovation is difficult, risky work, and the older you are, the greater the odds you’ll realize this is the case. That explanation works best. Beethoven didn’t write his Ninth Symphony until late in his life, so we know many creatives stay creative no matter how old they are. But their willingness to endure all the stresses and challenges of bringing an idea to the world diminishes. They understand the costs better from life experience. The young don’t know what there is to fear, have stronger urges to prove themselves, and have fewer commitments-for example, children and mortgages. These factors make it easier to try crazier things.
SOURCE: "Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition" ISBN:978-1-59184-223-1 Pages 127-129
Friday, September 3, 2010
Guy Kawasaki Dishes out the Top Seventeen Lies of CEOs
1. “Working together, we’ve established our goals.” In other words, these are the goals that the CEO decided will make him look good. Few managers believe that these goals are doable, and yet they are the ones who are going to have to accomplish them. But that’s what “working together” means: The CEO decides and the workers do.
2. “It’s like a startup around here.” This could mean that the place lacks adult supervision, money is running out, the product is behind schedule, investors have given up, and employees are paid below market rates. Or it could mean that the company is energized, entrepreneurial, making meaning, and kicking butt. Just double-check.
3. “Your project will be a skunk works reporting directly to me.” This means that no one else at the management level buys into the idea. The CEO might protect you, as this lie implies. Or, you may be fighting for your life against the naysayers when the CEO moves on to the next brilliant idea du jour.
4. “I wanted to do this, but the board wouldn’t let me.” This is a cop-out. A good CEO tells the board what she’s doing. She doesn’t seek permission-forgiveness maybe, but never permission. So this statement means one of two things: The CEO didn’t really try her best to get something approved, or the board is losing confidence in her.
5. “I expect you to figure this out.” This is a loaded, backhanded compliment. It’s supposed to mean, “I have such confidence in you that I know you can do this.” Sometimes it does mean this. Most times, though, it means that the CEO has no clue and is praying that you can save his butt.
6. “Our sales pipeline looks good.” This means that the vice president of sales leaned on the regional sales manager who leaned on the regional sales rep to pump up the forecast, because the CEO doesn’t want to look bad to the board of directors.
7. “We will be profitable soon.” After he leaned on the sales organization and it “came through with a great pipeline,” the CEO could then “reliably” predict profitability. He never did check with the CFO, though. If the company isn’t profitable, then it’s the fault of the vice president of sales or the CFO, anyway.
8. “The stock price is not important; what’s important is building a great company.” There are a handful of visionary CEOs who mean this when they say it. However, you don’t work one of them. If one could get an honest answer out of CEOs, most would tell you that they’d rather have a rising stock price than a great company. Very few have the courage to build a great company and trust that a rising stock price is a natural outcome of this accomplishment.
9. “I’ve never worked with a better group of people.” This can be a legitimate morale-boosting statement when it is infrequently made. However, if a CEO spouts this off more than once every five to ten years and you know there are clearly bozos on the team (often protected by the CEO), then you know that he’s playing you.
10. “I’m open to new ideas.” The CEO must have recently read a book by a management guru. She’s certainly open to her own new ideas. She’s probably open to new ideas from the consultants that she hired at $10,000/day. Maybe she read a new idea in a blog, God help us. But is she open to new ideas from the rank-and-file employees who really know how to fix the company?
11. “I want to hear the truth; I don’t want yes-men around me.” Maybe this is the truth: He doesn’t want yes-men around-or maybe he wants yes-women. But it could be that he’s so arrogant that he believes that he’s always right, so there’s nothing to disagree with. But most likely he’s just lying, and he wants people to always agree with him.
12. “I will gladly step aside when the time comes.” Sure, with a $10 million severance package, who wouldn’t be glad to step aside?
13. “This is how we did it at (name of previous company he was fired from), and it worked.” And that’s why the company let him go. And that’s why the employees at the previous company rejoiced when the news spread. And, unfortunately, that’s why the directors of this company hired him: because he was a senior-level packaged-goods guy who was available, and the board thought that your tech products should be sold like laundry detergent.
14. “I don’t need to understand all that whiz-bang stuff to be a good CEO.” Absolutely. Your customers aren’t that smart. Neither are your employees, vendors, and partners. The CEO just needs to stand there tall, white, and gray-haired and let everyone kiss his ring.
15. “I don’t need to rehearse my speech.” He’s not going to gauge audience reaction, because his limo is waiting to whisk him away. He’ll simply ask his handlers. Trixie and Biff, how they think he did. And they will tell him that the emperor has very fine clothes indeed.
16. “We are a customer-focused company.” If only the CEO had appended two additional words: “this additional quarter.” Because next quarter the company will be an innovation-driven company. And the quarter after that, a Six Sigma-driven company. And the quarter after that, the company will be producing purple cows. And the quarter after that, it will be evangelistic (depending on whether the CEO reads my book or Seth’s first.)
17. “I can telecommute and still keep my house on the golf course in Carmel.” The CEO should be living and dying with the company. If anything, he should be there more than anyone else.
“Rather than these lies, here are four things a CEO should say:
1) “I don’t know.”
2) “Thank you.”
3) “Do what’s right.”
4) “It’s my fault.”
However, in all my interactions with dozens of CEOs, I can’t remember many instances of any of them uttering such wisdom.” –Guy Kawasaki 2008
SOURCE: "Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition" ISBN:978-1-59184-223-1 Pages 412-415
2. “It’s like a startup around here.” This could mean that the place lacks adult supervision, money is running out, the product is behind schedule, investors have given up, and employees are paid below market rates. Or it could mean that the company is energized, entrepreneurial, making meaning, and kicking butt. Just double-check.
3. “Your project will be a skunk works reporting directly to me.” This means that no one else at the management level buys into the idea. The CEO might protect you, as this lie implies. Or, you may be fighting for your life against the naysayers when the CEO moves on to the next brilliant idea du jour.
4. “I wanted to do this, but the board wouldn’t let me.” This is a cop-out. A good CEO tells the board what she’s doing. She doesn’t seek permission-forgiveness maybe, but never permission. So this statement means one of two things: The CEO didn’t really try her best to get something approved, or the board is losing confidence in her.
5. “I expect you to figure this out.” This is a loaded, backhanded compliment. It’s supposed to mean, “I have such confidence in you that I know you can do this.” Sometimes it does mean this. Most times, though, it means that the CEO has no clue and is praying that you can save his butt.
6. “Our sales pipeline looks good.” This means that the vice president of sales leaned on the regional sales manager who leaned on the regional sales rep to pump up the forecast, because the CEO doesn’t want to look bad to the board of directors.
7. “We will be profitable soon.” After he leaned on the sales organization and it “came through with a great pipeline,” the CEO could then “reliably” predict profitability. He never did check with the CFO, though. If the company isn’t profitable, then it’s the fault of the vice president of sales or the CFO, anyway.
8. “The stock price is not important; what’s important is building a great company.” There are a handful of visionary CEOs who mean this when they say it. However, you don’t work one of them. If one could get an honest answer out of CEOs, most would tell you that they’d rather have a rising stock price than a great company. Very few have the courage to build a great company and trust that a rising stock price is a natural outcome of this accomplishment.
9. “I’ve never worked with a better group of people.” This can be a legitimate morale-boosting statement when it is infrequently made. However, if a CEO spouts this off more than once every five to ten years and you know there are clearly bozos on the team (often protected by the CEO), then you know that he’s playing you.
10. “I’m open to new ideas.” The CEO must have recently read a book by a management guru. She’s certainly open to her own new ideas. She’s probably open to new ideas from the consultants that she hired at $10,000/day. Maybe she read a new idea in a blog, God help us. But is she open to new ideas from the rank-and-file employees who really know how to fix the company?
11. “I want to hear the truth; I don’t want yes-men around me.” Maybe this is the truth: He doesn’t want yes-men around-or maybe he wants yes-women. But it could be that he’s so arrogant that he believes that he’s always right, so there’s nothing to disagree with. But most likely he’s just lying, and he wants people to always agree with him.
12. “I will gladly step aside when the time comes.” Sure, with a $10 million severance package, who wouldn’t be glad to step aside?
13. “This is how we did it at (name of previous company he was fired from), and it worked.” And that’s why the company let him go. And that’s why the employees at the previous company rejoiced when the news spread. And, unfortunately, that’s why the directors of this company hired him: because he was a senior-level packaged-goods guy who was available, and the board thought that your tech products should be sold like laundry detergent.
14. “I don’t need to understand all that whiz-bang stuff to be a good CEO.” Absolutely. Your customers aren’t that smart. Neither are your employees, vendors, and partners. The CEO just needs to stand there tall, white, and gray-haired and let everyone kiss his ring.
15. “I don’t need to rehearse my speech.” He’s not going to gauge audience reaction, because his limo is waiting to whisk him away. He’ll simply ask his handlers. Trixie and Biff, how they think he did. And they will tell him that the emperor has very fine clothes indeed.
16. “We are a customer-focused company.” If only the CEO had appended two additional words: “this additional quarter.” Because next quarter the company will be an innovation-driven company. And the quarter after that, a Six Sigma-driven company. And the quarter after that, the company will be producing purple cows. And the quarter after that, it will be evangelistic (depending on whether the CEO reads my book or Seth’s first.)
17. “I can telecommute and still keep my house on the golf course in Carmel.” The CEO should be living and dying with the company. If anything, he should be there more than anyone else.
“Rather than these lies, here are four things a CEO should say:
1) “I don’t know.”
2) “Thank you.”
3) “Do what’s right.”
4) “It’s my fault.”
However, in all my interactions with dozens of CEOs, I can’t remember many instances of any of them uttering such wisdom.” –Guy Kawasaki 2008
SOURCE: "Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition" ISBN:978-1-59184-223-1 Pages 412-415
Penelope Trunk Dishes out the Nine Biggest Myths of the Workplace
1) “You’ll be happier if you have a job you like.” The correlation between your happiness and your job is overrated. The most important factors, by far, are your optimism levels and your personal relationships. If you are a pessimist, a great job can’t overcome that. Think of the jerks at the top. And if you have great friends and family, you can probably be happy even if you hate your job-imagine a garbage collector who’s in love.
2) “Job hopping will hurt you.” Job hopping is one of the best ways to maintain passion and personal growth in your career, and here’s some good news for hoppers-as I said earlier, most people will have eight jobs between the time they are eighteen and thirty. This means most young workers are job hopping. So hiring managers have no choice but to hire job hoppers. Ride this wave and try out a lot of jobs yourself.
3) “The glass ceiling still exists.” The glass ceiling is over, not because people crashed through, but because people are not looking up. Life above the glass ceiling is hundred-hour weeks, working for someone else, and no time for friends and family. And it’s not only women who are saying no to the ladder up: Men are as well. People want to customize success for themselves, not climb someone else’s rungs. So no one is climbing to the top, the glass ceiling isn’t keeping anyone down.
4) “Office politics is about backstabbing.” The people who are most effective at office politics are people who are genuinely nice. Office politics is about helping people to get what they want. This means you have to take the time to figure out what someone cares about, and then think about how you can help him or her to get it. You need to always have your ears open for when you can help. If you do this, you don’t have to strong-arm people or manipulate them. Your authentic caring will inspire people to help you when you need it.
5) “Do good work, and you’ll do fine.” For one thing, no one knows what the heck you’re doing in your cube if you’re not telling them. So when you do good work, let people know. It is not crazy to toot your own horn-it’s crazy to think someone will do it for you. Also, if you do good work but you’re a jerk, people will judge your work to be subpar. So you could say that good work really only matters if your coworkers enjoy hearing about it from you.
6) “You need a good resume.” Only 10 percent of jobs come from sending a blind resume. Most people get jobs by leveraging their network. Once you have a connection, the person looks at your resume to make sure there are no red flags. So you need a competent resume and an excellent network. This means you should stop stressing about which verb to use on the second line of your third job. Go talk to someone instead.
7) “People with good networks are good at networking.” Just be nice, take genuine interest in the people you meet, and keep in touch with people you like. This will create a group of people who are invested in helping you because they know you and appreciate you. Use LinkedIn to leverage those people’s networks, and you just got yourself a very strong network by simply hanging out with the people you like.
8) “Work hard and good things will come.” Everyone can put in a seventy-hour week. It doesn’t mean you’re doing good work. So here’s an idea: Make sure you’re not the hardest worker. Take a long lunch. Get all your work done early. Grand thinking requires space, flexibility, and time. So let people see you staring at the wall. They’ll know you’re a person with big ideas. Taking time to think makes you more valuable.
9) “Create the shiny brand of you!” There is no magic formula for having a great career except to be you. Really you. Know who you are and have the humility to understand that self-knowledge is a never ending journey. Figure out how to do what you love, and you’ll be great at it. Offer your true, good-natured self to other people, and you’ll have a great network. Those who stand out as leaders have a notable authenticity that enables them to make genuinely meaningful connections with a wide of people. Authenticity is a tool for changing the world by doing good.
“The core of Penelope’s message is that you’re responsible for your career and happiness. No one (and no company) is going to hand a good career and life to you. But using her radical thoughts can help you achieve both.”-Guy Kawasaki
SOURCE: "Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition" ISBN:978-1-59184-223-1 Pages 323-325
2) “Job hopping will hurt you.” Job hopping is one of the best ways to maintain passion and personal growth in your career, and here’s some good news for hoppers-as I said earlier, most people will have eight jobs between the time they are eighteen and thirty. This means most young workers are job hopping. So hiring managers have no choice but to hire job hoppers. Ride this wave and try out a lot of jobs yourself.
3) “The glass ceiling still exists.” The glass ceiling is over, not because people crashed through, but because people are not looking up. Life above the glass ceiling is hundred-hour weeks, working for someone else, and no time for friends and family. And it’s not only women who are saying no to the ladder up: Men are as well. People want to customize success for themselves, not climb someone else’s rungs. So no one is climbing to the top, the glass ceiling isn’t keeping anyone down.
4) “Office politics is about backstabbing.” The people who are most effective at office politics are people who are genuinely nice. Office politics is about helping people to get what they want. This means you have to take the time to figure out what someone cares about, and then think about how you can help him or her to get it. You need to always have your ears open for when you can help. If you do this, you don’t have to strong-arm people or manipulate them. Your authentic caring will inspire people to help you when you need it.
5) “Do good work, and you’ll do fine.” For one thing, no one knows what the heck you’re doing in your cube if you’re not telling them. So when you do good work, let people know. It is not crazy to toot your own horn-it’s crazy to think someone will do it for you. Also, if you do good work but you’re a jerk, people will judge your work to be subpar. So you could say that good work really only matters if your coworkers enjoy hearing about it from you.
6) “You need a good resume.” Only 10 percent of jobs come from sending a blind resume. Most people get jobs by leveraging their network. Once you have a connection, the person looks at your resume to make sure there are no red flags. So you need a competent resume and an excellent network. This means you should stop stressing about which verb to use on the second line of your third job. Go talk to someone instead.
7) “People with good networks are good at networking.” Just be nice, take genuine interest in the people you meet, and keep in touch with people you like. This will create a group of people who are invested in helping you because they know you and appreciate you. Use LinkedIn to leverage those people’s networks, and you just got yourself a very strong network by simply hanging out with the people you like.
8) “Work hard and good things will come.” Everyone can put in a seventy-hour week. It doesn’t mean you’re doing good work. So here’s an idea: Make sure you’re not the hardest worker. Take a long lunch. Get all your work done early. Grand thinking requires space, flexibility, and time. So let people see you staring at the wall. They’ll know you’re a person with big ideas. Taking time to think makes you more valuable.
9) “Create the shiny brand of you!” There is no magic formula for having a great career except to be you. Really you. Know who you are and have the humility to understand that self-knowledge is a never ending journey. Figure out how to do what you love, and you’ll be great at it. Offer your true, good-natured self to other people, and you’ll have a great network. Those who stand out as leaders have a notable authenticity that enables them to make genuinely meaningful connections with a wide of people. Authenticity is a tool for changing the world by doing good.
“The core of Penelope’s message is that you’re responsible for your career and happiness. No one (and no company) is going to hand a good career and life to you. But using her radical thoughts can help you achieve both.”-Guy Kawasaki
SOURCE: "Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition" ISBN:978-1-59184-223-1 Pages 323-325
Monday, August 30, 2010
Guy Kawasaki’s Friend ‘Penelope Trunk’ Dishes out Career Guidance for This Century!
"Penelope Trunk is the author of Brazen Careerist: The New Rules for Success (Business Plus, 2007). She is also a columnist at the Boston Globe. Previously, she was a software executive, and then she founded two companies. She has been through an IPO, an acquisition, and a bankruptcy. Before that, she played professional beach volleyball. I’ve included her interview because she provides radically different advice from most career advisers."-Guy Kawasaki 2008
QUESTION:
How much money does it take to be happy?
ANSWER:
It takes about $40,000. It does not matter how many kids you have or what city you live in-that’s splitting hairs, because people’s happiness levels are largely based on their level of optimism and the quality of their relationships. So as long as you have enough money for food and shelter, your optimism level kicks in to dictate how happy you are.
QUESTION:
Is it more important to be competent or likable?
ANSWER:
People would actually rather work with someone who is incompetent and likeable than competent and unlikeable. Most people nod in agreement when they read this. It’s the unlikable who form arguments in their head. But there’s more. At work, if you are unlikable, people start thinking you are less competent. So stop thinking you can skate by on your genius IQ because you can’t. You need emotional intelligence as well. This situation is so pronounced that there are special-education classes rife with kids who could read when they were three. Social skills matter as much as intelligence when it comes to long-term success, even for the geniuses.
QUESTION:
Should I sue a boss who is sexually harassing me?
ANSWER:
In most cases, you will destroy your career if you report sexual harassment. So unless you are in physical danger, you should not. The laws governing sexual harassment don’t protect women who report. The law protects companies from being sued by women who report. Human resource professionals are trained to protect the company, not the woman who reports. When you report harassment, it is usually the case that you lose your job through retaliation. Retaliation is illegal but nearly impossible to prove in court. And, even if you could prove it in court, you would go through emotional hell, with no salary, and high-profile drama that makes you unable to get another job; all this for a settlement that will almost certainly not enable you to retire. This is simply how the legal system works. I am not saying this is okay. But I’m saying that if you care about your career, you’ll do everything possible to not report. Most women are not in a position to sacrifice their career-and their earning power-in the name of trying to bring down one harasser. The legal system needs to step in and take care of this.
QUESTION:
When should I ask for a promotion?
ANSWER:
The average salary increase is 4 percent. Is that going to change your life in any meaningful way? On top of that, someone is promoting you up their ladder, but their ladder is not necessarily your best path. So stay focused on where you want to go instead of the paths other people have created for you. Getting a promotion is so last century. Instead of letting last century’s carrots dictate your workplace rewards, figure out what will be really meaningful to you: training, mentoring, flex time, whatever it is that means more than 4 percent more money. These are all things that can really improve your life and your career.
QUESTION:
What do I do about gaps in my resume when I traveled or couldn’t find a job?
ANSWER:
Talk about them well. A gap is really bad if you spent your days on your sofa watching cartoons. But if you watched cartoons to prepare for your next career move into children’s programming, then you sound focused and driven. Same TV, same sofa, two different stories. People don’t want to hear your life story. This is good news for people with sofa stints. In almost all cases, you learn something during a gap. Tell a great story about what you’ve learned and where you’re going, and your gap won’t get center stage. Leaving out details is not about lying; it’s about telling good stories.
QUESTION:
Will getting an MBA or any other type of advanced degree be a good use of time and money if I can’t find a job?
ANSWER:
No. If you can’t find a job, then you should invest in something like better grooming, or a better resume, or a coach for poor social skills. There are the things that keep people from getting jobs. Instead of running back to school, figure out why you can’t get a job, because maybe it’s something that a degree can’t overcome. Grad school generally makes you less employable, not more employable. For example, people who get a graduate degree in the humanities would have a better chance of surviving the Titanic than getting a tenured teaching job. Unless you are going to a top business school at the beginning of your career, you should not stop working in order to get the degree. Go to night school, because you will not make up for the loss of income with the extra credential. Law school is one of the only graduate degrees that make you more employable. Unfortunately it makes you more employable in a profession that makes people very unhappy. Law school rewards perfectionism, and perfectionism is a risk factor for depression. Lawyers have little control over their work and hours, because they are at the beck and call of their clients, and many are constantly working with clients who have problems that lawyers cannot solve. These two traits in a job-lack of control over workload and compromised ability to reach stated goals-are the two biggest causes for burnout.
QUESTION:
What’s the ideal length of a resume in a world where every resume is electronic and not viewed printed out on paper?
ANSWER:
One, still. Your resume is a marketing document, not a summary of your life, so every line should be about an accomplishment. The more amazing your accomplishments, the fewer you need to list. For example, if you can write “Evangelized Macintosh and made it one of the most beloved brands in the world,” then you don’t need any other sales and marketing bullets on your resume. If you have totally lost perspective, and you think you have two pages’ worth of incredible and relevant achievements, consider that hiring managers spend ten seconds evaluating a resume and a scanner looks for ten key words, which certainly fit on one page.
QUESTION:
How should I prepare for an interview?
ANSWER:
An interview is a test you can study for. So memorize answers to the fifty most common questions. Most interviewers ask standard questions, and there right answers to these questions. Whether you are a stripper or a CIA agent, the answer to your question, “What is your weakness?” is a story about how weakness interfered at work-in a specific situation-and you overcame it. Most of your other answers should be stories, too. This means you need to make them up before you get to the interview. Stories of your life are memorable. Lists of your life are not. Be memorable if you want to be hired. Another way to prepare is to go to the gym right before the interview. It doesn’t matter if you never go to the gym-although you should, because people who work out regularly are more successful in their careers. You should go right before an interview because people judge you first on your appearance, and if you do heavy lifting with your back and stomach muscles, you will stand up much straighter in the interview. This will make you look more confident, which is half the battle in being judged by appearance.
QUESTION:
What’s the right strategy for the search for a first job out of college?
ANSWER:
Don’t place too much importance on your first job. You’ll have a lot more. Most people have eight jobs before they turn thirty, and that’s fine. It is nearly impossible to know what career will be a good fit for you until you start trying things. So give yourself the latitude to try a lot. And don’t get hung up on a big soul search. To land a great job, you don’t need to know the meaning of life, just the meaning of hard work.
QUESTION:
Do only losers live at home after college?
ANSWER:
On some level, it would be insane not to move back home, which is why 50 percent of graduating seniors do it. Thus, moving back into your parents’ house is a smart step toward finding a career that’s right for you, because entry-level jobs typically cannot cover the cost of rent, college loan payments, and insurance payments-all of which are rising faster than wages. If you don’t have to worry about rent, you have more flexibility to wait for the right job and to take a job that feels very right but pays very poorly. The rise of the prestigious but unpaid internship intersects perfectly with the trend to move back home.
QUESTION:
What should I do if I work for a jerk?
ANSWER:
Leave. I know there are classic Bob Sutton (Stanford University professor who has written about assholes) examples of revered jerks like Steve Jobs, but I wonder about the people who put up with him. Can they not find another visionary to work for who is not such a jerk? Staying in a job like this makes you look bad. People wonder why you put up with him. Can they not find another visionary to work for who is not such a jerk? Staying in a job like this makes you look bad. People wonder why you put up with it. And, frankly, you should, too. It’s like being an abused wife. The wife who stays always defends the relationship by how much she gets out of it, but to everyone else it is obvious that she should leave. The problem is a loss of personal perspective.
SOURCE: "Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition" ISBN:978-1-59184-223-1 Pages 318-323
QUESTION:
How much money does it take to be happy?
ANSWER:
It takes about $40,000. It does not matter how many kids you have or what city you live in-that’s splitting hairs, because people’s happiness levels are largely based on their level of optimism and the quality of their relationships. So as long as you have enough money for food and shelter, your optimism level kicks in to dictate how happy you are.
QUESTION:
Is it more important to be competent or likable?
ANSWER:
People would actually rather work with someone who is incompetent and likeable than competent and unlikeable. Most people nod in agreement when they read this. It’s the unlikable who form arguments in their head. But there’s more. At work, if you are unlikable, people start thinking you are less competent. So stop thinking you can skate by on your genius IQ because you can’t. You need emotional intelligence as well. This situation is so pronounced that there are special-education classes rife with kids who could read when they were three. Social skills matter as much as intelligence when it comes to long-term success, even for the geniuses.
QUESTION:
Should I sue a boss who is sexually harassing me?
ANSWER:
In most cases, you will destroy your career if you report sexual harassment. So unless you are in physical danger, you should not. The laws governing sexual harassment don’t protect women who report. The law protects companies from being sued by women who report. Human resource professionals are trained to protect the company, not the woman who reports. When you report harassment, it is usually the case that you lose your job through retaliation. Retaliation is illegal but nearly impossible to prove in court. And, even if you could prove it in court, you would go through emotional hell, with no salary, and high-profile drama that makes you unable to get another job; all this for a settlement that will almost certainly not enable you to retire. This is simply how the legal system works. I am not saying this is okay. But I’m saying that if you care about your career, you’ll do everything possible to not report. Most women are not in a position to sacrifice their career-and their earning power-in the name of trying to bring down one harasser. The legal system needs to step in and take care of this.
QUESTION:
When should I ask for a promotion?
ANSWER:
The average salary increase is 4 percent. Is that going to change your life in any meaningful way? On top of that, someone is promoting you up their ladder, but their ladder is not necessarily your best path. So stay focused on where you want to go instead of the paths other people have created for you. Getting a promotion is so last century. Instead of letting last century’s carrots dictate your workplace rewards, figure out what will be really meaningful to you: training, mentoring, flex time, whatever it is that means more than 4 percent more money. These are all things that can really improve your life and your career.
QUESTION:
What do I do about gaps in my resume when I traveled or couldn’t find a job?
ANSWER:
Talk about them well. A gap is really bad if you spent your days on your sofa watching cartoons. But if you watched cartoons to prepare for your next career move into children’s programming, then you sound focused and driven. Same TV, same sofa, two different stories. People don’t want to hear your life story. This is good news for people with sofa stints. In almost all cases, you learn something during a gap. Tell a great story about what you’ve learned and where you’re going, and your gap won’t get center stage. Leaving out details is not about lying; it’s about telling good stories.
QUESTION:
Will getting an MBA or any other type of advanced degree be a good use of time and money if I can’t find a job?
ANSWER:
No. If you can’t find a job, then you should invest in something like better grooming, or a better resume, or a coach for poor social skills. There are the things that keep people from getting jobs. Instead of running back to school, figure out why you can’t get a job, because maybe it’s something that a degree can’t overcome. Grad school generally makes you less employable, not more employable. For example, people who get a graduate degree in the humanities would have a better chance of surviving the Titanic than getting a tenured teaching job. Unless you are going to a top business school at the beginning of your career, you should not stop working in order to get the degree. Go to night school, because you will not make up for the loss of income with the extra credential. Law school is one of the only graduate degrees that make you more employable. Unfortunately it makes you more employable in a profession that makes people very unhappy. Law school rewards perfectionism, and perfectionism is a risk factor for depression. Lawyers have little control over their work and hours, because they are at the beck and call of their clients, and many are constantly working with clients who have problems that lawyers cannot solve. These two traits in a job-lack of control over workload and compromised ability to reach stated goals-are the two biggest causes for burnout.
QUESTION:
What’s the ideal length of a resume in a world where every resume is electronic and not viewed printed out on paper?
ANSWER:
One, still. Your resume is a marketing document, not a summary of your life, so every line should be about an accomplishment. The more amazing your accomplishments, the fewer you need to list. For example, if you can write “Evangelized Macintosh and made it one of the most beloved brands in the world,” then you don’t need any other sales and marketing bullets on your resume. If you have totally lost perspective, and you think you have two pages’ worth of incredible and relevant achievements, consider that hiring managers spend ten seconds evaluating a resume and a scanner looks for ten key words, which certainly fit on one page.
QUESTION:
How should I prepare for an interview?
ANSWER:
An interview is a test you can study for. So memorize answers to the fifty most common questions. Most interviewers ask standard questions, and there right answers to these questions. Whether you are a stripper or a CIA agent, the answer to your question, “What is your weakness?” is a story about how weakness interfered at work-in a specific situation-and you overcame it. Most of your other answers should be stories, too. This means you need to make them up before you get to the interview. Stories of your life are memorable. Lists of your life are not. Be memorable if you want to be hired. Another way to prepare is to go to the gym right before the interview. It doesn’t matter if you never go to the gym-although you should, because people who work out regularly are more successful in their careers. You should go right before an interview because people judge you first on your appearance, and if you do heavy lifting with your back and stomach muscles, you will stand up much straighter in the interview. This will make you look more confident, which is half the battle in being judged by appearance.
QUESTION:
What’s the right strategy for the search for a first job out of college?
ANSWER:
Don’t place too much importance on your first job. You’ll have a lot more. Most people have eight jobs before they turn thirty, and that’s fine. It is nearly impossible to know what career will be a good fit for you until you start trying things. So give yourself the latitude to try a lot. And don’t get hung up on a big soul search. To land a great job, you don’t need to know the meaning of life, just the meaning of hard work.
QUESTION:
Do only losers live at home after college?
ANSWER:
On some level, it would be insane not to move back home, which is why 50 percent of graduating seniors do it. Thus, moving back into your parents’ house is a smart step toward finding a career that’s right for you, because entry-level jobs typically cannot cover the cost of rent, college loan payments, and insurance payments-all of which are rising faster than wages. If you don’t have to worry about rent, you have more flexibility to wait for the right job and to take a job that feels very right but pays very poorly. The rise of the prestigious but unpaid internship intersects perfectly with the trend to move back home.
QUESTION:
What should I do if I work for a jerk?
ANSWER:
Leave. I know there are classic Bob Sutton (Stanford University professor who has written about assholes) examples of revered jerks like Steve Jobs, but I wonder about the people who put up with him. Can they not find another visionary to work for who is not such a jerk? Staying in a job like this makes you look bad. People wonder why you put up with him. Can they not find another visionary to work for who is not such a jerk? Staying in a job like this makes you look bad. People wonder why you put up with it. And, frankly, you should, too. It’s like being an abused wife. The wife who stays always defends the relationship by how much she gets out of it, but to everyone else it is obvious that she should leave. The problem is a loss of personal perspective.
SOURCE: "Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition" ISBN:978-1-59184-223-1 Pages 318-323
Saturday, August 28, 2010
Guy Kawasaki Dishes It out on the Art of Blogging!!!
"I was late to blogging because I thought it was arrogant: “My thoughts are so important that you’ll want to know what I think every day about everything.” It’s taken three years but now I’m a believer, and I’ll tell you why. On a personal level, blogs are an outlet for expression and creativity. Truly, if no one but your dog reads your blog, it’s still worth doing. On a business level, blogs are a marketing and communications weapon. They’re fast, free and under your control. You can use a blog to reach potential customers, establish a brand, provide support, and build a community. You can also use it to do favors for people by promoting their books and products, so that they’ll do favors for you. As in other arts, there are techniques and practices that guide my blogging."-Guy Kawasaki 2008
- Think “book,” not diary. First, a bit of philosophy. Think of your blog as a product. A good analogy is the difference between a diary and a book. When you write a diary, it contains your spontaneous thoughts and feelings. You have no plans for others to read it. By contrast, if you write a book, from day one you should be thinking about spreading the word about it.
- Answer the little man. Now that you’re thinking of your blog as a product, ask yourself if it’s a good product. A useful test is to imagine that there’s a little man sitting on your shoulder reading what you’re writing. Every time you write a blog entry, he asks, “So what? Who gives a shiitake?” If you can’t answer the little man, then you don’t have a good blog/product. Take it from someone who’s tried: It’s tough to market crap, so make sure you have something worth saying. Or write a diary and keep it to yourself.
- Collect links for blog rolling. This is something I wish I had done on day one, but I was totally ignorant of this linking thing. If I had to do it over again, I would look for all the interesting blogs that cover similar topics. Then, I would blog-roll them all and ensure that Technorati pings my blog, so that the bloggers might find out that I exist.
- Scoop stuff. There’s a very interesting honor system in blogging. Suppose blogger A finds an obscure article and posts it to his blog. Blogger B reads about it on A’s blog and links to it. However, blogger B doesn’t link only to the article, she also links to blogger A to give him credit for finding the article. This means that if you hustle and scoop stuff, other bloggers will link to you.
- Supplement other bloggers with follow-up entries. Read the blogs of the top fifty or so bloggers and see if you have in-depth knowledge about their topics. Then instead of leaving useless drivel, craft a real comment that complements the blogger’s entry. When someone does this for my entries, I want to get down on my knees and thank God, because it’s less stuff that I have to write. I don’t know about other bloggers but one of the biggest challenges that I face is feeding the content beast. If you can help me feed it, I’ll gladly link to you and give you publicity.
- Acknowledge and respond to commenters. Only good things can happen when you read all the comments in your blog and respond to them. It makes commenters return to your blog. This, in turn, makes commenters feel they are part of a community, and that encourages them to tell more people to read your blog.
- Ask for help. If you provide value in your blog, don’t hesitate to ask your readers to help. In a perfect world, you provide something valuable in your blog and your readership will want to pay you back by helping you spread the word.
- Be bold. I’m not saying that you should intentionally piss other bloggers off, but if you can’t speak your mind on your own blog, you might as well give up and stay on the porch. This is a fascinating thing about blogging: Even when people torch you, they link to your site.
- Make it easy to join up. Enable people to get to your blog in multiple ways like RSS feeds and e-mail subscriptions. This is no different from distributing physical products through multiple channels.
"Two years ago my wife saw me typing away on my Macintosh late at night. She asked me what I was doing, and I answered, “Changing the world, 10,000 readers at a time.” Without missing a beat, she deadpanned back, “Oh, you’re blogging.” If you do it properly, she’s absolutely right." -Guy Kawasaki 2008
SOURCE: "Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition" ISBN:978-1-59184-223-1 Pages 237-239
- Think “book,” not diary. First, a bit of philosophy. Think of your blog as a product. A good analogy is the difference between a diary and a book. When you write a diary, it contains your spontaneous thoughts and feelings. You have no plans for others to read it. By contrast, if you write a book, from day one you should be thinking about spreading the word about it.
- Answer the little man. Now that you’re thinking of your blog as a product, ask yourself if it’s a good product. A useful test is to imagine that there’s a little man sitting on your shoulder reading what you’re writing. Every time you write a blog entry, he asks, “So what? Who gives a shiitake?” If you can’t answer the little man, then you don’t have a good blog/product. Take it from someone who’s tried: It’s tough to market crap, so make sure you have something worth saying. Or write a diary and keep it to yourself.
- Collect links for blog rolling. This is something I wish I had done on day one, but I was totally ignorant of this linking thing. If I had to do it over again, I would look for all the interesting blogs that cover similar topics. Then, I would blog-roll them all and ensure that Technorati pings my blog, so that the bloggers might find out that I exist.
- Scoop stuff. There’s a very interesting honor system in blogging. Suppose blogger A finds an obscure article and posts it to his blog. Blogger B reads about it on A’s blog and links to it. However, blogger B doesn’t link only to the article, she also links to blogger A to give him credit for finding the article. This means that if you hustle and scoop stuff, other bloggers will link to you.
- Supplement other bloggers with follow-up entries. Read the blogs of the top fifty or so bloggers and see if you have in-depth knowledge about their topics. Then instead of leaving useless drivel, craft a real comment that complements the blogger’s entry. When someone does this for my entries, I want to get down on my knees and thank God, because it’s less stuff that I have to write. I don’t know about other bloggers but one of the biggest challenges that I face is feeding the content beast. If you can help me feed it, I’ll gladly link to you and give you publicity.
- Acknowledge and respond to commenters. Only good things can happen when you read all the comments in your blog and respond to them. It makes commenters return to your blog. This, in turn, makes commenters feel they are part of a community, and that encourages them to tell more people to read your blog.
- Ask for help. If you provide value in your blog, don’t hesitate to ask your readers to help. In a perfect world, you provide something valuable in your blog and your readership will want to pay you back by helping you spread the word.
- Be bold. I’m not saying that you should intentionally piss other bloggers off, but if you can’t speak your mind on your own blog, you might as well give up and stay on the porch. This is a fascinating thing about blogging: Even when people torch you, they link to your site.
- Make it easy to join up. Enable people to get to your blog in multiple ways like RSS feeds and e-mail subscriptions. This is no different from distributing physical products through multiple channels.
"Two years ago my wife saw me typing away on my Macintosh late at night. She asked me what I was doing, and I answered, “Changing the world, 10,000 readers at a time.” Without missing a beat, she deadpanned back, “Oh, you’re blogging.” If you do it properly, she’s absolutely right." -Guy Kawasaki 2008
SOURCE: "Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition" ISBN:978-1-59184-223-1 Pages 237-239
Guy Kawasaki Dishes out the Top Ten Things He Learned from Reading iWoz
“I loved the book ‘iWoz: Computer Geek to Cult Icon-How I invented the Personal Computer, Co-founded Apple, and Had Fun Doing It (Norton, 2007)’ because it isn’t typical theoretical tome written by an expert or consultant (i.e., someone who can’t do but can write). Instead, the book takes you inside the mind of someone who was truly instrumental in one of the great revolutions of our time. After reading it, I was even prouder of having working for Apple. Also, I swear that Woz doesn’t use the word strategic once in the book-how many business books can you say that about? For your enjoyment, here’s a list of the top ten things that I learned by reading iWoz.”-Guy Kawasaki 2008
1. In the sixth grade, Woz scammed gubernatorial candidate Richard Nixon with a certificate from the school’s ham-radio club. The certificate was made with crayons just before the ceremony, and Woz was the only member of the club.
2. The Apple IPO made the most millionaires in one single day in history up to that point in time.
3. Woz and Jobs worked as Alice in Wonderland characters at a shopping mall in San Jose. (Steve Jobs doing this boggles my mind.)
4. Woz didn’t return to the University of Colorado after his first year because he ran up too much computer time sharing costs.
5. Woz tried to call the pope by impersonating Dr. Henry Kissinger. He almost got through, but the Vatican called the real Dr. Kissinger to verify the call.
6. A robber with a gun stole a blue box from Woz and Jobs in Sunnyvale.
7. Allen Baum alleviated Woz’s concern about leaving Hewlett-Packard to start Apple by telling him, “You can be an engineer and become an engineer and get rich, or you can be an engineer and stay an engineer and get rich.”
8. Woz lost approximately $12 million in each of the two US Festivals that he put on.
9. Woz taught computer technology to elementary school students for ten years.
10. The book ends with Woz’s thoughts on being a great engineer:
-Don’t waver.
-See things in gray scale.
-Work alone.
-Trust your instincts
When is the last time anyone told you to work like this? The first time an “expert” tells you that you need to conduct market research, run your design past focus groups, and set up offshore development, just remember what Woz said, and you’ll be fine.
SOURCE: "Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition" ISBN:978-1-59184-223-1 Pages 149-151
1. In the sixth grade, Woz scammed gubernatorial candidate Richard Nixon with a certificate from the school’s ham-radio club. The certificate was made with crayons just before the ceremony, and Woz was the only member of the club.
2. The Apple IPO made the most millionaires in one single day in history up to that point in time.
3. Woz and Jobs worked as Alice in Wonderland characters at a shopping mall in San Jose. (Steve Jobs doing this boggles my mind.)
4. Woz didn’t return to the University of Colorado after his first year because he ran up too much computer time sharing costs.
5. Woz tried to call the pope by impersonating Dr. Henry Kissinger. He almost got through, but the Vatican called the real Dr. Kissinger to verify the call.
6. A robber with a gun stole a blue box from Woz and Jobs in Sunnyvale.
7. Allen Baum alleviated Woz’s concern about leaving Hewlett-Packard to start Apple by telling him, “You can be an engineer and become an engineer and get rich, or you can be an engineer and stay an engineer and get rich.”
8. Woz lost approximately $12 million in each of the two US Festivals that he put on.
9. Woz taught computer technology to elementary school students for ten years.
10. The book ends with Woz’s thoughts on being a great engineer:
-Don’t waver.
-See things in gray scale.
-Work alone.
-Trust your instincts
When is the last time anyone told you to work like this? The first time an “expert” tells you that you need to conduct market research, run your design past focus groups, and set up offshore development, just remember what Woz said, and you’ll be fine.
SOURCE: "Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition" ISBN:978-1-59184-223-1 Pages 149-151
Guy Kawasaki Dishes Out the Lies of Engineers
1. “I don’t know anything about marketing.” This is a lie of false modesty. The engineer is thinking, “I don’t know a thing about marketing, but how hard could it be compared to what I’m doing? I should run marketing and engineering. I just hope that the MBAs come up with something that is worthy of my code.” However, don’t worry too much about this lie, because it self-corrects as the engineer misses deadline after deadline and comes to realize that he has bigger issues.
2. “We’re about to go into beta testing.” This is a meaningless statement because it doesn’t matter when you go into beta testing-what matters is when you come out of beta testing. (The only hard-and-fast deadline for coming out of a modern-day beta test is “before you run out of money.”) In the good old days, alpha used to mean, “All features are implemented though not necessarily working properly.” Beta used to mean, “There are no more repeatable bugs.” Nowadays beta means, “We’ve gone as long as possible past the shipping date that we promised our investors.”
3. “I’ll comment the code, so that the next person can understand what I did.” This is a lie of good intentions. The engineer did intend to comment the code, but as the schedule slipped, priorities changed. The question put to management became: “Do you want me to comment the code or finish it sooner?” Guess what the answer was. Luckily, the lack of comments usually doesn’t matter, because the code is so crappy that a total rewrite is necessary in a year.
4. “Our architecture is scalable.” This is the lie I enjoy hearing the most. Typically, an engineer who has never shipped a product says this after creating a prototype in Visual Basic. The whole lie goes like this: “Google’s architecture isn’t as scalable as mine. They can support 25 million simultaneous searches. We will be able to easily handle a billion.” Luckily, in most cases, the adoption of the product is slower than the CEO’s “conservative” forecast, so scalability never becomes an issue.
5. “The code supports all the industry standards.” This is almost a truth, except for a short omission: “This code supports all the industry standards that I agree with.” The engineer has made a personal decision to ignore standards he doesn’t like-for example, those promulgated by Microsoft. To the engineer, it’s no big deal because customers will never know.
6. “We have an effective bug-reporting database and system.” However, the assumption behind the design of the bug-reporting database and system is that there are no bugs in the code, so there’s not much to database and report. Generally speaking, if the largest number of documental bugs never exceeds 1,000 it means that the company isn’t tracking bugs carefully.
7. “We can do this faster, cheaper, and better with an offshore programming team in India.” Rank-and-file engineers usually don’t tell this lie; it’s the CTO who does. Somehow people got it in their heads that every programmer in India is good, fast, and cheap, and every programmer in the United States is lousy, slow, and expensive. This simply isn’t true.
8. “Our beta sites love it.” In twenty-five years of working in technology, I’ve never heard a company report that its beta sites didn’t like the product. There are three reasons for this: First, many beta sites are so honored to get prerelease software that they don’t want to say anything negative. Second, most beta sites haven’t used the software very much. Third, most beta sites don’t want to seem cruel by criticizing a company’s new product. Doing so is as socially unacceptable as telling someone that his baby is ugly.
9. “This time we got it right.” The scary thing about this lie is that the engineer really believes it. Again. The problem is that “this time” occurs over and over. I have great faith in engineers and believe that in the long run, they do get it right. It’s just that in the long run, we’re all dead.
10. “This code is so bad that it would be faster to write it all from scratch than debug and expand the current shipping code.” Every programmer says this about every other programmer’s code. And someone will say this about the rewritten version, too.
11. “I like thinking about architecture, but I can code.” The means that the programmer can’t code. And probably can’t design a good architect, either.
12. “It works on my machine.” And “my machine” is probably the only computer in the world that it does work on.
13. “Of course I can let go of the code and run the business instead.” These are the famous last words of every engineer turned entrepreneur. It means that he (or she) can neither let go of the code nor run the business.
14. “Even my mom can navigate the screens.” Of course, your mom has a PhD in computer science from MIT.
I love the lies that engineers develop for three reasons. First, their lies demonstrate the engineer’s childlike ignorance of how companies really work. Second, engineers really believe the lies they tell. You can’t say this about entrepreneurs, venture capitalists, and lawyers. Third, most of the lies they tell aren’t dishonest-they’re just “early” and will eventually come true. If you’re an engineer, now you know what you’re unconsciously doing. If you work with engineers, now you know when engineers are lying to you.
SOURCE: "Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition" ISBN:978-1-59184-223-1 Pages 139-142
2. “We’re about to go into beta testing.” This is a meaningless statement because it doesn’t matter when you go into beta testing-what matters is when you come out of beta testing. (The only hard-and-fast deadline for coming out of a modern-day beta test is “before you run out of money.”) In the good old days, alpha used to mean, “All features are implemented though not necessarily working properly.” Beta used to mean, “There are no more repeatable bugs.” Nowadays beta means, “We’ve gone as long as possible past the shipping date that we promised our investors.”
3. “I’ll comment the code, so that the next person can understand what I did.” This is a lie of good intentions. The engineer did intend to comment the code, but as the schedule slipped, priorities changed. The question put to management became: “Do you want me to comment the code or finish it sooner?” Guess what the answer was. Luckily, the lack of comments usually doesn’t matter, because the code is so crappy that a total rewrite is necessary in a year.
4. “Our architecture is scalable.” This is the lie I enjoy hearing the most. Typically, an engineer who has never shipped a product says this after creating a prototype in Visual Basic. The whole lie goes like this: “Google’s architecture isn’t as scalable as mine. They can support 25 million simultaneous searches. We will be able to easily handle a billion.” Luckily, in most cases, the adoption of the product is slower than the CEO’s “conservative” forecast, so scalability never becomes an issue.
5. “The code supports all the industry standards.” This is almost a truth, except for a short omission: “This code supports all the industry standards that I agree with.” The engineer has made a personal decision to ignore standards he doesn’t like-for example, those promulgated by Microsoft. To the engineer, it’s no big deal because customers will never know.
6. “We have an effective bug-reporting database and system.” However, the assumption behind the design of the bug-reporting database and system is that there are no bugs in the code, so there’s not much to database and report. Generally speaking, if the largest number of documental bugs never exceeds 1,000 it means that the company isn’t tracking bugs carefully.
7. “We can do this faster, cheaper, and better with an offshore programming team in India.” Rank-and-file engineers usually don’t tell this lie; it’s the CTO who does. Somehow people got it in their heads that every programmer in India is good, fast, and cheap, and every programmer in the United States is lousy, slow, and expensive. This simply isn’t true.
8. “Our beta sites love it.” In twenty-five years of working in technology, I’ve never heard a company report that its beta sites didn’t like the product. There are three reasons for this: First, many beta sites are so honored to get prerelease software that they don’t want to say anything negative. Second, most beta sites haven’t used the software very much. Third, most beta sites don’t want to seem cruel by criticizing a company’s new product. Doing so is as socially unacceptable as telling someone that his baby is ugly.
9. “This time we got it right.” The scary thing about this lie is that the engineer really believes it. Again. The problem is that “this time” occurs over and over. I have great faith in engineers and believe that in the long run, they do get it right. It’s just that in the long run, we’re all dead.
10. “This code is so bad that it would be faster to write it all from scratch than debug and expand the current shipping code.” Every programmer says this about every other programmer’s code. And someone will say this about the rewritten version, too.
11. “I like thinking about architecture, but I can code.” The means that the programmer can’t code. And probably can’t design a good architect, either.
12. “It works on my machine.” And “my machine” is probably the only computer in the world that it does work on.
13. “Of course I can let go of the code and run the business instead.” These are the famous last words of every engineer turned entrepreneur. It means that he (or she) can neither let go of the code nor run the business.
14. “Even my mom can navigate the screens.” Of course, your mom has a PhD in computer science from MIT.
I love the lies that engineers develop for three reasons. First, their lies demonstrate the engineer’s childlike ignorance of how companies really work. Second, engineers really believe the lies they tell. You can’t say this about entrepreneurs, venture capitalists, and lawyers. Third, most of the lies they tell aren’t dishonest-they’re just “early” and will eventually come true. If you’re an engineer, now you know what you’re unconsciously doing. If you work with engineers, now you know when engineers are lying to you.
SOURCE: "Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition" ISBN:978-1-59184-223-1 Pages 139-142
Guy Kawasaki Dishes out the Top Sixteen Lies of Lawyers
Although I like Fred Greguras, lawyers lie as much as venture capitalists, entrepreneurs, CEOs, marketers, and engineers. No matter who the source is, lies are lies, and you need to understand exactly what’s going on when you talk to your lawyers.
1. “I’m really excited about what you are doing and will give your company my personal attention.” Once someone gets to the partner level, “making it rain” is as important as doing work. This is part of a standard sales pitch, so don’t let it go to your head.
2. “Our firm is really excited about what you’re doing, so we’d like to invest in your company, too.” Also part of the standard sales pitch. Most firms invest in most of their startup clients-it’s simply the law of big numbers: Invest in enough dumb ideas, and one will be a Google.
3. “We can work on the billing so that you pay us when you get financed.” The final flattery in a good sales pitch. As with the others, don’t think you’re special. This is a standard offer.
4. “I’ll have that to you by the end of the day.” The important question to ask when you hear this is, “End of which day?” Because every day has an end. And you should find out how your lawyer defines the end of the day: 6:00pm or 11:59pm, today, tomorrow, or next week.
5. “Don’t worry about the date on that option grant; it’s not a big deal.” Unless you enjoy getting indicted, you should run from a lawyer who utters such stupidity.
6. “The bill would be lower if it weren’t for the lawyers on the other side.” The lawyers on the other side are saying this about your lawyers, too.
7. “I thought you were more interested in getting it right rather than saving a few dollars.” In other words, the legal bill for your Series A funding may exceed the amount of capital raised.
8. “Your case is much stronger than theirs; I’m sure we can convince them to see things to see things our way.” If your position is strong, you don’t need lawyers. It’s when your position is weak that you need them. Also, your opponent is hearing the same thing about their case.
9. “We have relationships at the highest level in Shanghai/Munich/Mumbai/New York/Los Angeles.” In other words, someone from the firm once flew in first class to Shanghai/Munich/Mumbai/New York/Los Angeles with the vice premier’s uncle’s sister’s nephew.
10. “We’d much rather be on the company side than on the investor side.” Let me get this straight: You believe your lawyer would rather be on the side of two guys/gals in a garage who are raising $500,000 than on the side of a venture capital fund managing $500 million whose partners play golf at the same country club?
11. “We usually don’t bill the full retainer; it only happens if there are unforeseen issues that come up.” One of two things is happening: Either you’ve been sandbagged with an artificially high estimate or your lawyer just passed the bar.
12. “Sure we’re busy, but I’ll make sure you don’t get handed off to a green associate.” Translation: Your main contact passed the bar a year ago.
13. “I’ve done work with Google/Microsoft/Apple, so I know how to structure deals with them.” Translation: “My favorite search engine is Google, which I use on my Windows laptop while I’m listening to my iPod.”
14. “We think you will have a very strong patent.” If you hear this, ask this question: “So if Microsoft infringes on our patent, we’d win the lawsuit?”
15. “We know the opposing attorneys, so we’ll be able to work out something quickly and cheaply.” There is no such thing as quickly and cheaply. There are only good and expensive, quick and lousy, and cheap and lousy. Pick one.
16. “I can call several venture capitalists to help you secure funding.” Actually, you should select your lawyer as much for his connections to the venture capital community as for his legal expertise. However, take this very literally: He “can” call. This is different from “will” call.
You probably found these lies amusing-as you should. You won’t be laughing, though, when you are the victim of them, and this is no lie. That day will come.
SOURCE: "Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition" ISBN:978-1-59184-223-1 Pages 59-61
1. “I’m really excited about what you are doing and will give your company my personal attention.” Once someone gets to the partner level, “making it rain” is as important as doing work. This is part of a standard sales pitch, so don’t let it go to your head.
2. “Our firm is really excited about what you’re doing, so we’d like to invest in your company, too.” Also part of the standard sales pitch. Most firms invest in most of their startup clients-it’s simply the law of big numbers: Invest in enough dumb ideas, and one will be a Google.
3. “We can work on the billing so that you pay us when you get financed.” The final flattery in a good sales pitch. As with the others, don’t think you’re special. This is a standard offer.
4. “I’ll have that to you by the end of the day.” The important question to ask when you hear this is, “End of which day?” Because every day has an end. And you should find out how your lawyer defines the end of the day: 6:00pm or 11:59pm, today, tomorrow, or next week.
5. “Don’t worry about the date on that option grant; it’s not a big deal.” Unless you enjoy getting indicted, you should run from a lawyer who utters such stupidity.
6. “The bill would be lower if it weren’t for the lawyers on the other side.” The lawyers on the other side are saying this about your lawyers, too.
7. “I thought you were more interested in getting it right rather than saving a few dollars.” In other words, the legal bill for your Series A funding may exceed the amount of capital raised.
8. “Your case is much stronger than theirs; I’m sure we can convince them to see things to see things our way.” If your position is strong, you don’t need lawyers. It’s when your position is weak that you need them. Also, your opponent is hearing the same thing about their case.
9. “We have relationships at the highest level in Shanghai/Munich/Mumbai/New York/Los Angeles.” In other words, someone from the firm once flew in first class to Shanghai/Munich/Mumbai/New York/Los Angeles with the vice premier’s uncle’s sister’s nephew.
10. “We’d much rather be on the company side than on the investor side.” Let me get this straight: You believe your lawyer would rather be on the side of two guys/gals in a garage who are raising $500,000 than on the side of a venture capital fund managing $500 million whose partners play golf at the same country club?
11. “We usually don’t bill the full retainer; it only happens if there are unforeseen issues that come up.” One of two things is happening: Either you’ve been sandbagged with an artificially high estimate or your lawyer just passed the bar.
12. “Sure we’re busy, but I’ll make sure you don’t get handed off to a green associate.” Translation: Your main contact passed the bar a year ago.
13. “I’ve done work with Google/Microsoft/Apple, so I know how to structure deals with them.” Translation: “My favorite search engine is Google, which I use on my Windows laptop while I’m listening to my iPod.”
14. “We think you will have a very strong patent.” If you hear this, ask this question: “So if Microsoft infringes on our patent, we’d win the lawsuit?”
15. “We know the opposing attorneys, so we’ll be able to work out something quickly and cheaply.” There is no such thing as quickly and cheaply. There are only good and expensive, quick and lousy, and cheap and lousy. Pick one.
16. “I can call several venture capitalists to help you secure funding.” Actually, you should select your lawyer as much for his connections to the venture capital community as for his legal expertise. However, take this very literally: He “can” call. This is different from “will” call.
You probably found these lies amusing-as you should. You won’t be laughing, though, when you are the victim of them, and this is no lie. That day will come.
SOURCE: "Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition" ISBN:978-1-59184-223-1 Pages 59-61
Guy Kawasaki Dishes Out the Top Ten Lies of Entrepreneurs
1. “Our projections are conservative.” An entrepreneur’s projections are never conservative. If they were, they would be $0. I have never seen an entrepreneur achieve even her most conservative projections. Generally, an entrepreneur has no idea what sales will be, so she guesses: “Too little will make my deal uninteresting; too big, and I’ll look delusional.” The result is that everyone’s projections are $50 million in year four. As a rule of thumb, when I see a projection, I add one year to delivery time and multiply by 10 percent.
2. “(Big name company) is going to sign our purchase order next week.” This is the “I heard I have to show traction at a conference” lie of entrepreneurs. The funny thing is that next week, the purchase order still isn’t signed. Nor the week after. The decision maker transferred to a different department; the CEO got fired; or there’s a natural disaster. The only way to play this card is after the purchase order is signed, because no investor whose money you’d want will fall for this one.
3. “Key employees are set to join us as soon as we get funded.” More often than not when a venture capitalist calls these key employees, who are vice presidents at Microsoft, Oracle, and Sun, he gets the following response: “Who said that? I recall meeting him at a cocktail party, but I certainly didn’t say I would leave my cushy $250,000/year job at Microsoft to join his startup.” If it’s true that key employees are ready to rock and roll, have them call the venture capitalist after the meeting and testify to this effect.
4. “No one is doing what we’re doing.” This is a bummer of a lie, because there are only two logical conclusions. First, no one else is doing this because there is no market for it. Second, the entrepreneur is so clueless that he can’t even use Google to figure out he has competition. Suffice it to say that the lack of a market and cluelessness are not conduciveness to success. As a rule of thumb, if you have a good idea, five companies are doing the same thing. If you have a great idea, fifteen companies are doing the same thing.
5. “No one else can do what we’re doing.” If there’s anything worse than the lack of a market and cluelessness, it’s arrogance. No one else can do what you’re doing until the first company does it, and ten others spring up in the next ninety days. Did anyone else run a sub-four –minute mile after Roger Bannister? (It took only a month before John Landy did.) The world is full of smart people, so you’re kidding yourself if you think you have a monopoly on knowledge. And on the same day that you tell this lie, the investor met with another company that’s doing the same thing.
6. “Hurry, because other several other venture capital firms are interested.” The good news: At any given time there are one hundred entrepreneurs in the world who can make this claim. The bad news: The fact that you are reading this book means that you’re not one of them. As my mother used to say, “Never play Russian roulette with an Uzi.” For the absolute cream of the crop, there is competition for a deal, and an entrepreneur can scare other investors to make a decision. The rest of us cannot create a sense of scarcity when it’s not true.
7. “Oracle is too big/dumb/slow/ to be a threat.” Larry Ellison has his own jet. He can keep the San Jose Airport open for his late-night landings. His boat is so big that it can barely get under the Golden Gate Bridge. Meanwhile, you’re flying on Southwest and stealing the free peanuts. There’s a reason why Larry is where he is and you are where you are, and it’s not that he’s big, dumb, and slow. Competing with Oracle, Microsoft, and other large companies is a very difficult task. Entrepreneurs who utter this lie look at best naïve. You think it’s bravado, but venture capitalists think it’s stupidity.
8. “We have a proven management team.” Says who? Because the founder worked at Morgan Stanley for a summer. Or McKinsey for two years? Truly “proven” in a venture capitalist’s eyes is founder of a company that returned billions to its investors. But if you were that proven, then you (a) probably wouldn’t have to ask for money and (b) wouldn’t be declaring that you’re proven, because it would be obvious. A strategy for you is to state that (a) you have relevant industry experience; (b) you are going to do whatever it takes to succeed; (c) you are going to surround her with directors and advisors who are proven; and (d) you’ll step aside whenever it becomes necessary. This is good enough for a venture capitalist who believes in what you’re doing.
9. “Patents make our product defensible.” The optimal number of times to use the P word in a presentation is one. Just once, say, “We have filed patents for what we’re doing.” Done. The second time you say it, venture capitalists begin to suspect that you are depending too much on patents for defensibility. The third time you say it, you are holding a sign above your head that says, “I am clueless.” Sure, you should patent what you’re doing-if for no other reason than to say it once in your presentation. But at the end of the day, patents are mostly good for impressing your parents. You won’t have the time or money to sue anyone with a pocket deep enough to be worth suing.
10. “All we have to do is get 1 percent of the $x billion market.” There are two problems with this lie. First, no venture capitalist is interested in a company that is looking to get 1% of the market. They want their companies to face the wrath of the antitrust division of the Department of Justice. Second, it’s also not that easy to get 1 percent of any market, so you look silly pretending that it is. Generally, it’s much better for you to show a realistic appreciation of the difficulty of building a successful company.
What do investors do when they hear these lies? There are three kinds of investors. First, some investors are too dumb to know that they are lies. You should avoid them. Second, some understand that you’re lying, but are so used to it that they don’t care, because they are going to pass on your deal anyway. You should learn what you can from this investor and write off this meeting as a learning experience. Third, some confront you, because they are actively engaged in the meeting and can’t stand being lied to. This is the investor that might invest and might even add value to your company. Don’t get me wrong: I’m not suggesting that you lie in order to see investor reactions. In the best case, you should tell no lies. Incidentally, telling a lie that you don’t realize is a lie is still lying. At the very least, tell new lies. If nothing else, it will be a more interesting meeting.
SOURCE: "Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition" ISBN:978-1-59184-223-1 Pages 45-47
2. “(Big name company) is going to sign our purchase order next week.” This is the “I heard I have to show traction at a conference” lie of entrepreneurs. The funny thing is that next week, the purchase order still isn’t signed. Nor the week after. The decision maker transferred to a different department; the CEO got fired; or there’s a natural disaster. The only way to play this card is after the purchase order is signed, because no investor whose money you’d want will fall for this one.
3. “Key employees are set to join us as soon as we get funded.” More often than not when a venture capitalist calls these key employees, who are vice presidents at Microsoft, Oracle, and Sun, he gets the following response: “Who said that? I recall meeting him at a cocktail party, but I certainly didn’t say I would leave my cushy $250,000/year job at Microsoft to join his startup.” If it’s true that key employees are ready to rock and roll, have them call the venture capitalist after the meeting and testify to this effect.
4. “No one is doing what we’re doing.” This is a bummer of a lie, because there are only two logical conclusions. First, no one else is doing this because there is no market for it. Second, the entrepreneur is so clueless that he can’t even use Google to figure out he has competition. Suffice it to say that the lack of a market and cluelessness are not conduciveness to success. As a rule of thumb, if you have a good idea, five companies are doing the same thing. If you have a great idea, fifteen companies are doing the same thing.
5. “No one else can do what we’re doing.” If there’s anything worse than the lack of a market and cluelessness, it’s arrogance. No one else can do what you’re doing until the first company does it, and ten others spring up in the next ninety days. Did anyone else run a sub-four –minute mile after Roger Bannister? (It took only a month before John Landy did.) The world is full of smart people, so you’re kidding yourself if you think you have a monopoly on knowledge. And on the same day that you tell this lie, the investor met with another company that’s doing the same thing.
6. “Hurry, because other several other venture capital firms are interested.” The good news: At any given time there are one hundred entrepreneurs in the world who can make this claim. The bad news: The fact that you are reading this book means that you’re not one of them. As my mother used to say, “Never play Russian roulette with an Uzi.” For the absolute cream of the crop, there is competition for a deal, and an entrepreneur can scare other investors to make a decision. The rest of us cannot create a sense of scarcity when it’s not true.
7. “Oracle is too big/dumb/slow/ to be a threat.” Larry Ellison has his own jet. He can keep the San Jose Airport open for his late-night landings. His boat is so big that it can barely get under the Golden Gate Bridge. Meanwhile, you’re flying on Southwest and stealing the free peanuts. There’s a reason why Larry is where he is and you are where you are, and it’s not that he’s big, dumb, and slow. Competing with Oracle, Microsoft, and other large companies is a very difficult task. Entrepreneurs who utter this lie look at best naïve. You think it’s bravado, but venture capitalists think it’s stupidity.
8. “We have a proven management team.” Says who? Because the founder worked at Morgan Stanley for a summer. Or McKinsey for two years? Truly “proven” in a venture capitalist’s eyes is founder of a company that returned billions to its investors. But if you were that proven, then you (a) probably wouldn’t have to ask for money and (b) wouldn’t be declaring that you’re proven, because it would be obvious. A strategy for you is to state that (a) you have relevant industry experience; (b) you are going to do whatever it takes to succeed; (c) you are going to surround her with directors and advisors who are proven; and (d) you’ll step aside whenever it becomes necessary. This is good enough for a venture capitalist who believes in what you’re doing.
9. “Patents make our product defensible.” The optimal number of times to use the P word in a presentation is one. Just once, say, “We have filed patents for what we’re doing.” Done. The second time you say it, venture capitalists begin to suspect that you are depending too much on patents for defensibility. The third time you say it, you are holding a sign above your head that says, “I am clueless.” Sure, you should patent what you’re doing-if for no other reason than to say it once in your presentation. But at the end of the day, patents are mostly good for impressing your parents. You won’t have the time or money to sue anyone with a pocket deep enough to be worth suing.
10. “All we have to do is get 1 percent of the $x billion market.” There are two problems with this lie. First, no venture capitalist is interested in a company that is looking to get 1% of the market. They want their companies to face the wrath of the antitrust division of the Department of Justice. Second, it’s also not that easy to get 1 percent of any market, so you look silly pretending that it is. Generally, it’s much better for you to show a realistic appreciation of the difficulty of building a successful company.
What do investors do when they hear these lies? There are three kinds of investors. First, some investors are too dumb to know that they are lies. You should avoid them. Second, some understand that you’re lying, but are so used to it that they don’t care, because they are going to pass on your deal anyway. You should learn what you can from this investor and write off this meeting as a learning experience. Third, some confront you, because they are actively engaged in the meeting and can’t stand being lied to. This is the investor that might invest and might even add value to your company. Don’t get me wrong: I’m not suggesting that you lie in order to see investor reactions. In the best case, you should tell no lies. Incidentally, telling a lie that you don’t realize is a lie is still lying. At the very least, tell new lies. If nothing else, it will be a more interesting meeting.
SOURCE: "Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition" ISBN:978-1-59184-223-1 Pages 45-47
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