Wednesday, December 19, 2007

AiC Contest: Free Economist Subscription

Loyal readers:

As you know, I'm a big fan of The Economist. Each December, I renew my subscription. It causes me a bit of pain, because it is so expensive, but it's definitely worth it.

This year, as I looked at the renewal form, I noticed that one of my options was to give a free gift subscription to a friend.

Alas, most of my friends have subscriptions already, but it occurred to me that some of you might not.

Therefore, I'm announcing the first annual Adventures in Capitalism free Economist contest. The reader who executes the most effective program to boost AiC readership (and then posts the results as a comment to this post) gets a free subscription to The Economist.

I'll be the sole judge of the entries, though I will pay attention to comments by other readers. I'll be curious to see what develops!

Tuesday, December 18, 2007

Make Sure You Consider Magnitude *and* Percentage

Loyal reader Foobarista had a great comment on my recent post on capital efficiency:

"Pay attention to the right spending. In a company I worked at, the CEO paid close attention to things like printer cartridge expenses and other office supplies while running up huge bills on unnecessary lawyer consultations and expensive "business consultants"."

When you're analyzing things like revenues and costs, make sure that you consider both the magnitude and the percentage.

It might be that your printer cartridge expenses are 50% higher than you expected. After all, a swimming pool of HP ink would have a street value of $5.9 billion. However, if that 50% variance represents $100 per year of additional spending, you might be better served to pay attention to a 5% variance in the $1,000,000 per year you spend on McKinsey engagements.

On the other hand, you can't simply ignore the percentages--these are critical leading indicators that tell you a lot about the nature of your business. If your business has a profit margin of 10 basis points, then you need to run through $1 billion per year just to generate profits of $1 million. This works fine if you're talking about the Vanguard S&P 500 index fund, but not so good if you're trying to scale up a chain of specialty retailers that sells accessories for pet ferrets.

Quotes of the Day: Life and Leadership

"We make a living based on what we get, and we make a life based on what we give." --Winston Churchill

"You manage things. You lead people."
--Stephen Covey

Friday, December 14, 2007

In Praise of Capital Efficiency: How Being A Cheap Bastard Leads To Startup Success

Whenever a boom comes around, I read articles about how it's dangerous to be too cheap and too cautious. One saying I learned during the last boom was "You can't save your way to prosperity."

Maybe. But as you start to hear the siren song of profligacy (last time, we called it "Get Big Fast"), remember that history teaches us that capital efficiency is one of the most important traits of successful companies.

I had breakfast with a VC from a top-tier firm this morning. He told me that his firm had commissioned a research project to investigate how much capital VC firms deployed in their best investments versus the rest of their portfolio.

The answer stunned them: $2.7 million.

The investing principle of cutting your losses and letting your winners run would seem to predict that top investments would receive more capital. Instead, their research showed that the most successful VC investments typically consume far less capital than the average investment.

I'm not surprised.

One of the lessons I've drawn from studying the great military strategists of history (Hannibal, Alexander the Great, Napoleon) is that successful generals are economical in their use of manpower. They don't commit all their forces to every battle.

What sets them apart is their uncanny ability to sense the critical moment during the battle when it pays to take decisive action. It is then that they commit their reserves, turning a close fight into a stunning victory.

As an entrepreneur, think of yourself as one of these great generals. Be a cheapskate, and conserve your capital until you have eliminated enough risks and uncertainties to allow you to sense the turning point. Then step on the gas.

Tuesday, December 11, 2007

The Difference Between How Good and Bad Organizations Handle Disagreements

One clear way to distinguish between a good organization and a bad one is to look at how it handles disagreement.

The mark of a good organization is that disagreement leads to improvements in the business.

The mark of a poor organization is that disagreement leads to a worsening in the business.

In the chaos and uncertainty of the startup environment, disagreement is inevitable. Good organizations make sure that disagreements are heard, and that the relevant team members work together to find an acceptable resolution.

In contrast, bad organizations either fail to focus, or end up battling internal rather than external foes.

The temptation exists to ignore disagreements and simply hope that they go away. This may seem attractive, but becomes quickly untenable. Startups don't have the resources or the time to vacillate or pursue multiple approaches. Everyone has to agree and work towards a single focus.

I've seen teams of smart, talented people who didn't have the discipline to resolve their disagreements, and they almost always head south.

Remember, of course, that resolution doesn't have to mean that everyone agrees...what it does mean is that everyone agrees on what course of action the company will pursue--even those who disagree. You can't let people employ the passive-aggressive approach and just take their ball and go home.

As a side note, I feel that a lack of disagreement is also a warning sign. Given that there are seldom clear right answers, a startup that lacks disagreement is either not trying, not thinking, or not composed of human beings. A talented team consists of people with different backgrounds and skills--they are bound to disagree on some things. The trick is how you handle those disagreements.

Sunday, December 09, 2007

Rules, Damned Rules, and Heuristics

Since I don't have the patience to reconstruct the elegant arguments of my lost post (including the careful and humorous references to Genghis Khan, The Princess Bride, football referees, and Dungeons and Dragons), I'm going to give it to you straight and raw.

Rules are dangerous because outside of natural laws of physics and chemistry, rules are rarely universal and consistent. You don't get the chance to attempt a saving throw to save your business from going under.

Whether or not "Get Big Fast" works as a rule for startups depends a lot on the external environment. Sometimes it is a good idea to get involved in a land war in Asia.

The best rule is consider the situation carefully and systematically, use heuristics when possible to save time and energy, but ultimately to trust your own judgment.

Your VCs care more about whether you build a successful business than whether you follow their suggestions. Google offered $30 million for Friendster, and Yahoo! offered $1 billion for Facebook. Yet Jonathan was wrong to turn down $30 million and Zuck was right to turn down $1 billion.

Browser-Based Madness

Yet again, a browser failure has eaten one of my posts. And despite Google's claim that Blogger now autosaves posts every minute, there is no sign of my lost post on "Rules, Damned Rules, and Statistics." Screw you, Blogger.

Alas, I lack Eric Sink's technical dexterity and sheer cussedness to recover the post. Any bright ideas, Google readers?

Wednesday, December 05, 2007

Evil Business Idea of the Day

According to the latest paper co-authored by Freakonomics author Steven Levitt, the Klu Klux Klan functioned more like Amway than Al-Qaeda:

"The terrorist group was primarily a pyramid scheme selling hate and was far more successful at making money than at influencing politics."

Thanks to dues, taxes, and of course, exorbitant robe prices, the Klan's top salesmen raked in the dough:

"Levitt and Fryer calculated that in one year, David Curtis Stephenson, the Grand Dragon of Indiana and 22 other states, took home about $2.5 million (in 2006 dollars). “The Klan was able to bundle hatred with fraternity and make a real sell of it,” says Fryer."

In a world full of hatred, the Klan business model could certainly work again. For example, what about a new secret society dedicated to anti-immigration policies.

But why not take it a step further? If such societies are largely ineffectual, and function to strip resources from the hateful, why not start such a society and then secretly funnel the proceedings to fighting the very cause espoused? Now that would be a neat feat of jujitsu marketing.

Tuesday, December 04, 2007

Transparency is a Prerequisite of Collaboration

You hear about transparency all the time. "We're in a new era of transparency." "We live in a transparent society." But I can't help feeling that while transparency is all around us, when we ask about the benefits of transparency, we often get an opaque answer.

Transparency is in danger of becoming yet another buzzword, like "long tail" or "Web 2.0" whose clarity of meaning is inversely proportional to its usage.

For me, transparency is important because it is a prequisite of collaboration. I think about this all the time in the context of a business. In most businesses, what people do and how they are performing is incredibly untransparent*.

Many people instinctively fear transparency. "If everyone can see what I'm doing, maybe they'll figure out that I'm not doing much!" Or, less cynically, "I haven't got time to explain to everyone what I'm up to. I've got work to do, for cryin' out loud!"

But as an entrepreneur and leader, I need transparency. Especially in a small company with little room for error, I need to know what's going on.

Startups often have greater transparency than larger companies simply because of their size; if everyone is squeezed into a single room, everyone will have a pretty good idea of what the others are working on. But even a one-person company can benefit from transparency.

If you need to make your tasks and priorities clear to others, you are forced to make them clear to yourself.

And once you make your tasks and priorities clear to others, they can help you. That's collaboration**. But if others don't know that you need help, or how they can contribute, don't expect them to spend their precious time dragging it out of you.

For example, one simple way I've promoted transparency is using a wiki (from my investment PBwiki, of course!) to maintain tasks an priorities for each person in the group (this could be a workgroup at a larger company, or the entire company in the case of a startup). I ask each person to answer a few simple questions:

NAME's Job Page

1. My areas of responsibility are....

2. My three top goals are....

3. The tactics I plan to use to accomplish these goals are....

4. My key projects are....

5. The ongoing tasks I perform daily/weekly are....

6. The tasks I want to complete this week are....

7. I'm depending on other people for....

8. Other people are depending on me for....

9. Other thoughts....

While at first it may seem like a pain to keep something like this up to date, it takes only a few minutes a day, and has the added bonus of making it abundantly clear both to you and the folks you work with what you're up to.

The key is questions 7 and 8--by making it explicit what you need from others and inviting them to make it clear what they need from you, you minimize the chances of nasty surprises as deadlines draw near.

If you want to use PBwiki for your own transparency project, visit the Transparency Project wiki that I've created to copy the page template, or live a completely transparent life by posting your own page to the public, a la 43things. Give transparency a whirl, and let me know how it goes for you!

* Sales people are the exception; I met with one of the top executives at Salesforce.com recently, and he explained how their sales model is a well-oiled machine, with about 10 key metrics that they watch like a hawk. Any time one of the metrics deviates from its customary range, they know that they need to fix the machine. Try that with any of your other departments!

** Of course, you do need to make sure that your colleagues are capable of helping you. Check out my post on "Feel for the Game" to determine if they can.

Saturday, December 01, 2007

Contextual Authority, or Who Cares What Arrington Did Before TechCrunch?

The old way of thinking about authority was static and hierarchical. Seniority and rank are crude, linear, black and white tools. While they have the advantage of being simple and clear, even organizations that are thought of as being strictly hierarchical, such as the military, have long abandoned such simplistic thinking.

The Web has brought a new form of contextual authority. Mike Arrington has tremendous power in the Web 2.0 world. This is not because he has any great experience. While Mike is a smart guy, before he started writing TechCrunch, he was just another ordinary lawyer and entrepreneur. In the grand scheme of things, his background is no more or less impressive than Penelope's.

Mike gained authority because his writing ability (and hustle) allowed him to build a massive audience which trusts him to bring things to their attention. Ultimately, I doubt any TechCrunch readers care about whether or not Mike was successful in his prior life; what we care about is whether or not he keeps delivering scoops and insightful analysis.

(This post is part of a longer comment on Penelope Trunk's blog.)

Friday, November 30, 2007

Darn you, biweekly!

I just ran into a situation today where I wasn't sure whether biweekly meant twice a week or once every two weeks.

Whaddya know, according to Webster, it means both!

Make up your mind, darn it.

Monday, November 12, 2007

The Black and White Mistake

This week's Economist has a great little piece on a recent report with the unwieldy title, "Civil Paths to Peace: Report of the Commonwealth Commission on Respect and Understanding."

The report, which is the work of Nobel laureate Amartya Sen, along with Kwame Anthony Appiah, Adrienne Clarkson, and Lord John Alderdice, takes the common practice of reducing the world into black and white categories (e.g. "Muslims" and "Americans") and tears it a new one.

"People who are trying to put an end to conflict—be they soldiers or nice peace-brokers—often fall into the same trap as the belligerents, by assuming that people naturally divide into simple categories.

Instead of addressing, say, Protestants and Catholics and urging each “side” to think better of the other, it may be wiser to remind them that they have lots of other identities too: as parents, sports enthusiasts, believers in a political or economic ideology, music fans or whatever."

The principle articulated here is simple, but critical. We all have a very human desire for simplicity which manifests itself in Manichean "good guys and bad guys" thinking. I'm as likely as anyone to start chanting "U-S-A" when the Olympics roll around, or to demonize Yankees fans.

But the kind of chauvinism which seems like harmless fun in the sporting world (unless you have the misfortune to encounter British soccer hooligans) becomes far more sinister in the real world, where demogogues have always excelled in getting people to focus on a common identity and a common enemy in order to wield power. Whether Hitler's focus on Germans versus Jews, Vladimir Putin's dichotomy of Russians versus Westerners, or Pat Robertson and Lou Dobbs' division of Americans versus everyone else, the purpose is to present a simple story that requires little effort to swallow and follow.

Moreover, the real insight here is that even peacemakers are far too apt to fall into this black and white trap. Trying to reconcile the two sides of a conflict implicitly assumes that there *are* two sides. You end up treating the symptoms, while ignoring the underlying cause, which is the politics of division.

This gets to the heart of something which has always bothered me, but which I couldn't articulate until now, which is the way that political correctness actually reinforces the divisiveness it is supposed to combat.

If you're trying to fix the problem of racial prejudice of one group against another (say, whites against African-Americans), perhaps your first step should be to stop treating the two groups as two distinct and monolithic groups. The tendency of activists to emphasize group identity via the concept of "pride" is simply the other side of the bigot's coin. Two wrongs don't make a right.

"The existence of lots of competing affiliations which pull people in different ways is the best hope of silencing gloomy talk of a “clash of civilisations” (with religion, and Islam in particular, often seen as the defining characteristic for giant global blocks). Such thinking is “deeply flawed on a conceptual level and deeply divisive in practice,” the report says.

As everybody knows deep down, the authors suggest, people belong to lots of categories (family, language, personal interests, political ideology) and spend their time shifting between them—unless some conflict arises in which a detail of family history becomes a matter of life and death.

At a minimum, say these authors, the authorities who are trying to keep inter-communal peace should not empower people whose authority depends on keeping divisions sharp. "It could be argued that, in Britain and America, attempts at engaging against terrorism...have had, at times, a perverse effect of magnifying the voice of extreme Islamists...faith-based approaches make it more difficult for politically secular Muslims to speak out against terrorism and violence."

I recall reading that even in that most intractable of conflicts, Israeli vs. Palestinian, projects that have brought the various residents of Israel together in a different context (youth basketball, etc.) help the participants realize that they all share similar interests and experiences, regardless of how their various governments and politicians attempt to keep them apart and at each others' throats.

Why is it that we focus on national, religious, and political identities, rather than universal ones like "father," "sister," "teacher," or "student?" Are we simply too lazy to deal with the potential ambiguity? It's all too telling that the only movies that depict all nations banding together generally involve alien invaders or killer asteroids. Why do we need a "them" in order to be "us?"

The next time you're tempted to think in terms of "us" versus "them," or even more insidiously, as "these" versus "those," step back, and try to remember all the identities that they have in common, rather than the ones that divide them.

P.S. Why on earth isn't the full text of the report available online? One would think that such a work should be disseminated as widely as possible!

Sunday, November 11, 2007

The Problem With Religion

For years now, I have been promising to write about religion. While I have touched on the subject before, especially in the context of positive psychology, I have never dealt with it directly.

Until now.

The Economist's recent special report on religion does a fantastic job of taking a balanced, reasoned look at the role of religion in today's world. It makes my job as a blogger much easier, because it provides a wealth of concrete data and context for thinking about religion.

It also provides a useful word of warning that I'll echo: "Given the emotion the subject arouses, the chances are that some of what follows will offend you."

The Economist's report is well worth reading, but for the sake of time, I'll summarize some of its key points below:

1) Religion and religiousness are on the rise. In 1966, Time famously ran a cover story, "Is God dead?" Believers would note that He certainly has had the last laugh.

2) Religion is now a key factor in politics and policy, rather than simply being a matter of private belief, especially given the rise of sharia law in many states with a majority Muslim population.

3) One of the factors in the rise of religion has been the competitive free market (especially in the United States). Private religions do better than state-sponsored religions. The power of competition lets new religions like Pentecostalism and Mormonism, and even movements such as today's increasingly noisy Atheists gain adherents rapidly.

4) "Hotter" more extreme religions are doing better in the marketplace than "cool" religions that emphasize tolerance and ecumenicism.

5) While religion is rarely the cause of war, it often makes conflicts harder to resolve. For example, when two peoples each believe that their God has granted them a particular territory (Jerusalem, Ayodhya), compromise becomes extremely difficult

6) The "culture wars"--the battle over culture, science, and economics--have drawn religion and the religious into the fray for issues ranging from gay marriage to intelligent design and creationism to capitalism and globalization. Different groups slug it out on different points on the spectrum. Conservative American churches are pro-capitalism, but suspicious of science and modern popular culture. Catholic Europe is mildly hostile to all three, and Muslim fundamentalists despise them.

It is within this context that I'll examine what I believe is the central problem with religion.

There is no question (despite the writings of Hitchens, Dawkins, et al) that religion can be a powerful force for good. In the 20th Century's great battle against totalitarianism, religion and the clergy played a critical role. Religion has played a similar role in attacking other evils, and in relieving suffering and providing aid.

Happiness research shows that religious faith and regular church attendance are two of the most powerful predictors of happiness. For millions of people, religion is an integral and largely positive pillar in their lives.

Yet as described above, religion has also been a powerful force for evil, and has been used to justify all manner of atrocities and violence, including the oppression of women, minorities, and gays and lesbians.

Clearly, there is no simple way to decide whether religion is "good" or "bad." What I do believe, however, is that there are certain characteristics of religion that are more dangerous than others.

Ultimately, the problem with religion is a matter of certainty and accountability. Religions that emphasize certainty and believe that one's primary accountability is to an unseen God are fraught with potential danger.

Certainty, especially a certainty born of faith, is a loaded gun that falls all too easily into the wrong hands. I believe in approaching everything with a healthy skepticism. I've been wrong far too many times to believe that I know the answers. The same holds true for mankind. We've been around for millions of years, and we laugh when we look at the mistaken certainties of previous generations. Yet you can bet the farm that our descendants will think the same about us.

Anyone who is absolutely certain about a belief is likely to be wrong. And in the case of people who are certain that theirs is the one true God, it's a virtual certainty. If there is one true God, and one true religion, the vast majority of humanity is barking up the wrong tree. Even Christianity, the world's most popular religion, accounts for only 20% of the world's population--and that's not even taking into account the various flavors of Christianity.

Even worse, if you have perfect certainty, logic dictates that 1) debating the point is a waste of time, and 2) you should attempt to convert as many people to your belief as possible. If you are truly certain that your religion is the one true faith, you shouldn't waste time looking for evidence, and nothing should stop you from trying to help as many as possible to see the light.

In that sense, the very behavior that secular atheists cite as showing the illogical nature of religion is actually the very logical result of certainty.

By the way, the problem of certainty is by no means limited to religion--it is a problem for politics, science, and those doomed souls who are fans of the New York Yankees and Dallas Cowboys. However, the issue of accountability makes it especially dangerous in the context of religion.

Another eminently logical conclusion resulting from belief in a supreme being is that you are ultimately accountable solely to God. If God is all-knowing, all-powerful and can choose to either welcome you to paradise or condemn you to damnation, you'd have to be pretty dumb to do anything against His (or Her) wishes. God knows better than you what you should do.

This accountability would be fine if all of us had a direct line to the almighty, and we received crystal clear instructions. The problem is that George Burns or Morgan Freeman notwithstanding, God tends not to manifest Himself as a kindly older man who tells us exactly what to do. Instead, we generally work through intermediaries like the Torah, Bible, and Koran, or through popes, priests, and imams.

The problem is that ancient texts don't have much to say about many modern issues, and that people, no matter what their title or what kind of uniform they wear, are all too fallible. You may be accountable solely to God, but if someone else is acting as God's interpreter, you are ultimately accountable to that interpreter moreso than to God.

To ascribe infallibility to an all-powerful God is circular, but self-consistent. To ascribe infallibility to a human being who claims to speak for God is logically inconsistent and probably a bad idea. Because God doesn't issue press releases or answer customer service calls, there's no way to be certain that you are doing His work.

Then, when you mix in the concept of an unknowable but all-important afterlife, religion becomes explosively dangerous.

If a religious leader tells his followers that God has promised victory in battle, that is a provable hypothesis. If the battle goes poorly, you can be fairly certain that many of those followers will rethink their belief.

On the other hand, if a religious leader tells his followers that A) their earthly lives are unimportant in comparison to the glories of the afterlife and B) God will reward those who obey his commands by welcoming them into paradise, that is an unprovable hypothesis. No matter how many people that religious leader sends to their deaths, someone who truly believes in A) and B) will continue to obey, believing a horrible death in this world to be a far preferable fate to eternal damnation in the next.

Bad enough, but it gets worse. Once you start to believe in fates worse than death, death starts to become a pretty good alternative, both for yourself, and for others. Better to kill the unbeliever or convert him at gunpoint, than to let him damn himself with false beliefs.

I've joked many times that starting a religion is a marketer's dream. Salvation is the ultimate product--the cost of goods sold is zero, and the buyer's willingness to pay should be infinite. Logically, it is better to spend every last dime to ensure salvation than it is to die a billionaire and be damned. Forget contextual ads; selling indulgences is the ultimate business model.

People rightly find this prospect repulsive, yet it is the logical conclusion of believing in an all-important yet unknowable afterlife.

I respect faith and religion, but we can't ignore the fact that some religions or religious leaders employ a potent and dangerous mix of certainty and accountability to the unprovable. Belief in God and a higher purpose are incredibly powerful, but can be turned into negatives if misdirected.

I believe the world would be a vastly better place if people approached the subject of religion with less certainty (and that goes for you too, Atheists!), and with an emphasis on accountability in this world, rather than the next.

What troubles me is the fact that it seems like those religions which emphasize certainty and zealous obedience to God are the ones that are winning in the marketplace. As someone with a near-religious belief in free markets and the freedom of choice, I'm very uncomfortable that we may be collectively making a choice that is antithetical to both, and doubly uncomfortable that I'm not sure what we can do about it without violating my own principles.

Perhaps what the world needs are some marketing geniuses to sell the world on skeptical, tolerant religions. Any volunteers?

Friday, November 02, 2007

Pick Your Battle(field)s

Entrepreneurial success is less about picking your battles than it is about picking your battlefields.

Amateurs focus on tactics--working around the clock, hard-selling, flooding the world with business cards. The truth is that most battles are won or lost before the opposing forces take the field.

During the Second Punic War, Hannibal beat the Roman army at Cannae by tricking the Romans into fighting on a battlefield of his choosing. By attacking one of their supply depots and then retreating, and in violation of every rule of warfare, establishing a position in front of a river, he goaded the Romans into attacking. The Romans saw a battlefield where they could finally corner the wily Hannibal and use the weight of superior numbers to defeat the Carthaginian genius.

The Romans, outnumbering Hannibal 3:1, attacked, trying to drive Hannibal's army into the river. Hannibal's center slowly gave ground, encouraging the Romans to press forward. At the crucial moment, Hannibal swung the left and right wings of his army inward, completely enveloping the Roman formation. He utterly annihilated a Roman army of 80,000 men.

By all rights, Hannibal should not have picked a battle against a vastly larger force. But by picking the right battlefield, he prevailed. This holds just as true in business as in war.

Google chose the battlefield of making search fast, easy, and better. This nullified the advantages of Lycos, Excite, Altavista, et al, who had many times the traffic and resources. Those "portals" could provide an endless array of services, ranging from news to Web-based email. But on the battlefield of plain old ordinary search, none of those services helped. In fact, they hindered their efforts to combat Google, whose simple, empty search page completely outclassed the cluttered homepages of its competitors.

The fact that Google's search results were better was certainly important, but had Google battled its entrenched competition head on, it would have lost. Google's genius lay in picking its battlefield.

Pick your battles, but more importantly, pick your battlefields.

Tuesday, October 30, 2007

Feel For The Game

In startups, just as in basketball, one of the most important qualities to look for in a teammate is "feel for the game."

I have the (mis)fortune of being a Los Angeles Lakers fan. But one of the joys of being a Lakers fan is getting the chance to watch Luke Walton play basketball. Luke has an incredible feel for the game. Basically, what this means is that he understands the rhythms of the action, and knows how to do the right things at the right time to help his team win, whether it's rewarding big men who run the break by getting them the ball, or knowing how to space the floor to give Kobe Bryant room to operate.

Because of his feel for the game, Walton is a key player for the Lakers, despite the handicaps of
being slow, (relatively) short, and unathletic.

Similarly, some people have a feel for the startup game. They know when to raise money, and when to bootstrap. They can sense the right time to launch a product--not so early as to make a bad impression, not so late as to be a me-too competitor.

Working with someone who has a feel for the game is a joy. Progress can seem effortless, and wins just keep piling up.

On the other hand, working with someone who lacks a feel for the game is frustrating and unproductive. You can't trust them to do the right thing on their own, and micromanaging them simply produces a time-consuming and unreliable robot.

Feel for the game may not be obvious from a resume--it's not about going to the right schools or working at the right companies, just as basketball isn't simply about obvious factors like height and athleticism. But once you've worked with someone, you'll never be in doubt.

Monday, October 29, 2007

Your Hard is Another's Easy

Entrepreneurs are often very independent. You generally don’t choose the risks and pains of starting a company unless you’re pretty dead set against having a boss tell you what to do. But don’t let this independence blind you to other perspectives.

I recently worked with a great team of young entrepreneurs. They had done a phenomenal job of building a product that their customers loved, but were having problems figuring out how to sell it to big companies.

Off the top of my head, I ticked off the usual things you need to make an enterprise sale: analyst coverage, trade press, white papers, case studies, etc. They were amazed, because trying to figure out this world had been so difficult for them.

The key to remember is that your hard is another’s easy. Maybe you’re great at programming, but you think “the revenue thing” is a dark and somewhat sinister mystery. To a business guy, it’s a simple matter of selling a product to the same customers that he’s sold to for decades.

That doesn’t mean that the business guy is any smarter or more capable, just that he has different skills and experiences. Remember, to a business guy, extreme programming is what you call it when coders drink Mountain Dew and code while skydiving.

The ideal path is neither the arrogance of believing that what you do is more important, or the cringing self-flagellation of always looking to others for approval. Focus on doing the things that others find hard, but you find easy, and find partners who can do the things that you find hard.

Friday, October 26, 2007

Wednesday, October 24, 2007

Quote of the Day: "You must take your joy with you"

"Paradise is here or nowhere: You must take your joy with you, or you will never find it."
--O. S. Marden

Monday, October 22, 2007

Quote of the Day: Leadership

"Leadership: The art of getting someone else to do something you want done because he wants to do it."
--Dwight Eisenhower

Sunday, September 30, 2007

A Farewell To Dead Caterpillars

I hate those bloggers who take long breaks, and then post something like, "I know I haven't blogged in a long time, but I'm so busy that I just don't have time, and I'll be back at it soon."

Alas, as Pogo said, we have met the enemy and he is us. I could tell you about everything we've been doing at Ustream, including a couple of major breakthroughs this past week, such as our first live viedo campaign event with Barack Obama.

But hey, that would make me just like everyone else. So instead, I'll illustrate my situation with the story of the dead caterpillar.

Earlier this year, Palo Alto was infested with a particular species of fuzzy caterpillar. They were everywhere for weeks.

One day, one of the caterpillars dropped on my shirt without my noticing. My son saw it and grabbed the caterpillar to play with. When it survived the ride home, I decided we should adopt it.

I emptied out a jar of food and gave the caterpillar a new home. For weeks, we harvested leaves at the Mountain View Public Library to keep it fed, and it grew and grew.

Finally, when it came time to transform into a moth, it spun a cocoon around itself, and the kids settled down to wait for it to hatch.

Alas, at this point, the story veers into tragedy. A fungal infection attacked the cocoon, and the moth never emerged.

So I had a dead caterpillar, in a mold-infested cocoon, sitting on the kitchen table.

Which is where it sat for about 3 months.

My in-laws are coming into town tomorrow, and I decided that I'd better clean out the jar. It took all of 5 seconds.

That's how bad I've been. But hey, at least you got a good story out of it!

Friday, August 17, 2007

Blogger Bug--Am I Going Crazy?

I don't know why, but I can't comment on any Blogger-generated blogs. Any time I go to such a page, the comments page just keeps reloading and reloading. Does anyone have any idea what's going on? Obviously other folks are able to comment on my posts...but I can't.

Naturally, I tried both Blogger help and Googling the issue, but apparently I'm the only one with this problem!

Oh yeah, if you're reading this Google, I also want to note that your CAPTCHA *never* works the first time. I always have to retype a second CAPTCHA.

The Secret to Dying Well

On July 12, I attended the Silicon Valley Junto meeting on "dying well." It was a particularly moving meeting, with attendees sharing incredibly personal experiences. Check out the meeting page to read some of what was shared.

At the time, I argued against the romanticization of death and dying. Death, I told the attendees, didn't change the nature of life. When the family gathers around the bedside of the dying loved one, the faultlines of a lifetime don't magically disappear. Death doesn't magically make everyone behave differently than they always had.

After the meeting, while I was moved by the many different speakers, I still didn't feel I was any closer to forming my own opinion on dying well.

Ironically enough, that very night, my uncle Ben, whose illness had given me a close look at death, finally lost his long battle with cancer.

Yesterday was my uncle Ben's funeral. It took place on what would have been the 44th wedding anniversary for him and my auntie Mayling.

Speaker after speaker came up to talk about the things that Ben had done for them, a curious parade of high-energy physicists there to mourn the mentor who had been responsible for so much of their careers, and young extended family members who remember him as a second father in their lives.

He truly was a great man, not just for his accomplishments (for 38 years, he was a professor of physics of UC Riverside, and as professor and longtime chairman of the department, he personally recruited most of the current faculty), but for the way he lived. He welcomed everyone into his life, and was always quick with a twinkling smile. He was the life of the party, and always led the family onto the dance floor for a rendition of the electric slide at family weddings.

Almost 30 people spoke about Ben, and it was apparent the impact he had on their lives. My favorite stories were the ones that showed how he refused to let his illness dictate his life.

One old friend recounted how he had visited Ben a week before his death, and seeing him seemingly in a coma, shouted in his ear, "Don't worry Ben, we'll take care of everything!" Uncle Ben smiled, opened his eyes, and said, "I know you will...you don't have to shout. I'm dying, not deaf."

Another friend, his oldest colleague in the physics department, talked about how even during his illness, Ben had been pestering him to help him place an order to restock his wine cellar, picking out an extensive collection of fine wines. He finalized the order just weeks before he died, and never had a chance to place it. After his death, his friend completed the order, and his favorite wine (the finest Cabernet I've had the privilege to taste, a 2004 Phelps) was served to us at the reception.

I saw how so many friends, colleagues, and proteges had looked to Ben for guidance throughout their lives, and realized that they still would in the future, relying on his memory and asking, "What would Ben do?"

In the end, the words of the great country song, "Three Wooden Crosses," performed by Randy Travis came to mind: "It's not what you take when you leave this world behind you/It's what you leave behind you when you go."

What Uncle Ben left behind him was a legacy of love and wisdom. People saw and admired the way he lived his life, with both gusto and generosity. Those who knew him became better people as a result, trying to live up to his example.

In the end, the secret to dying well is simple: living well.

How you spend your final months will have little impact on your legacy; that is the work of a lifetime.

Uncle Ben lived well, and in the process, showed a lot of people how they could live their lives better. If that isn't a summary that covers every great spiritual leader throughout history, I don't know what is. It's something we should all aspire to.

Goodbye, Uncle Ben, and thank you.

Sunday, August 05, 2007

Movie Review: Little Miss Sunshine

Alisha and I watched "Little Miss Sunshine" last night.

The thing about my movie-watching habits is that A) I'm a parent of two young children, and B) I'm cheap, which means that I only get to see movies when the library decides to buy the DVD and when either C) the kids go to sleep early, or D) I'm willing to stay up to an outlandish hour. By the time I get around to watching a movie, I've probably read 3-5 movie reviews, and know the basic plot points. I'm the farthest thing from a tabula rasa you can get without actually watching the movie.

In the case of "Little Miss Sunshine," I was already familiar with both sides of the argument. The fans argue that it's a side-splitting comedy with a stellar cast that satirizes our American obssession with winning and beauty pageants. The critics argue that it's yet another indie film that tries to wring laughs out of studiously "offbeat" characters and ridiculous, condescending situations.

I wasn't necessarily sure what to expect.

In the end, I think both fans and critics miss the point. The fans are correct that the movie is often funny as well as touching. The critics are correct that the characters and situations are unrealistic, and that it revels in sitcom-y family dysfunction.

Yet for me, while the filmmakers (first-timers who are sitcom vets) may have indulged the current indie trend for preciousness, the film works as an examination of family and self-awareness.

What ties the film together is that each of the main characters discovers that their most cherished dream is an unattainable illusion.

The dad realizes that he'll never become rich as a motivational speaker. The mom realizes that her efforts to promote "honesty" in her family have simply served as cover for the fact that she is a terrible mother whose kids are more mature than she. The uncle realizes that he truly has ruined his life and career after losing his lover to his greatest rival. The son realizes that his cherished dream of attending the Air Force Academy and flying fighter jets is impossible due to his color-blindness. And the daughter realizes that she is a fat little girl who will never win a beauty contest.

Yet it is precisely these realizations that make them better people. Up to that point, each of them views the other family members largely as a means to an end, rather than as someone to love and cherish. It takes the shattering of their self-centered illusions to realize that ordinary life is worth living. To quote one of my favorite authors, Lois McMaster-Bujold, "You just go on."

Accepting reality is the first step towards changing it. Are the characters in the movie better off at the end than at the beginning? Though their illusions have been shattered, the good thing is that their illusions have been shattered. And they've learned that love, family, and Rick James' "Superfreak" are powerful forces for happiness.

Sunday, July 29, 2007

Quote of the Day: The Happiness of Harmony

"Happiness is when what you think, what you say, and what you do are in harmony."
--Mahatma Gandhi

Simple, yet profound and beautiful. Or more simply, "be true."

Thursday, July 19, 2007

Quotes of the Day

"There is nothing so useless as doing efficiently that which should not be done at all."
--Peter Drucker

"Opinion is really the lowest form of human knowledge; it requires no accountability, no understanding. The highest form of knowledge, according to George Eliot, is empathy, for it requires us to suspend our egos and live in another’s world. It requires profound, purpose‐larger‐than‐the‐self kind of understanding."
--Bill Bullard

Sign of the Apocalypse, T-Mobile Edition

On Wednesday, I switched to the 5,000 minutes per month plan. After starting out with the 1,000 minute plan, switching to 1,500 early this year, and to 2,500 a month ago, I'm starting to see a disturbing pattern.

Apparently, this is the highest plan that they have. God help me if I ever find myself needing more!

Thursday, July 05, 2007

Marketing Salute: General Motors

It's so seldom that GM does anything right, that I'm always shocked when they do something "not dumb." Which made it even more noteworthy when they actually latched onto a stroke of genius this summer.

"Transformers" promises to be the monster hit of the summer. As one movie reviewer put it, "It has cars that change into giant robots. What's not to like?"

A completely unscientific tally of people I know who have told me, without my asking, that they're dying to see the movie include 1) the founder of a super hot company, 2) a major business guru, and 3) my wife's *female* friends from work.

In other words, this movie is as hot as anything I've ever seen.

And GM was smart enough to sign up as a major sponsor, which allowed their vehicles to be featured in the movie as the heroic Autobots.

Not only is this great exposure that will win them major cool points, the key here is the emotional attachment that so many men still feel to the Transformers. I have seen Autobot leader Optimus Prime described, without a trace of irony, as an important father figure for a generation of latchkey kids. I can't tell you how many friends I know who still have a lovingly cared for collection of Transformers, including a still-working model of Soundwave.

Editor's note: By "friends," I am actually referring to friends. I'm too cheap to have ever collected Transformers.

By sponsoring this movie, GM is reaching two generations of young moviegoers, ranging from teens to 30-somethings. And it's reaching them at an emotional and visceral level, which may cause folks to forget just how crappy GM cars are.

I never thought I'd say this, but GM, I salute you.

Sunday, June 10, 2007

Newsflash: Chris Yeh Becomes CEO of Ustream.TV

I have accepted an offer to become CEO of Ustream.TV.

I've been lucky enough to be an investor in and advisor to the company for several months, and when this opportunity arose, I jumped on it.

It certainly helps that Ustream has built incredible buzz since its launch in March. I'm pretty sure it's a good sign when people start tossing around the term "YouTube beater" less than a month after the company's launch.

I was also blown away by the enthusiasm of our users, the Ustreamers. Our Ustreamers are truly the ones in the driver's seat, and their creativity and passion are probably our greatest asset.

The deciding factor was the team. Johnny, Brad, and Gyula (who founded the company with their friend Adam), did a phenomenal job of building the Ustream platform, and are eagerly building on the foundation they laid. We've also been fortunate enough to bring on board Tim Villanueva as our CTO, a guy who's been both Chief Architect (Intuit) and CTO (HotJobs.com) of major publicly traded companies. I'm proud and delighted to be a member of such a great team.

I've dispensed a lot of advice to other entrepreneurs over the years, and I recognize that it's a lot harder to do it than to say it. But it's a lot more rewarding too. I'm glad I'm getting the opportunity to put my own advice to work.

As long as I'm getting back in the saddle, I figure I should mention that Ustream is hiring. We're always looking for great PHP, AJAX, and Flash developers, as well as folks familiar with building and running massively scalable systems.

On the business side, I'm looking to hire a product manager with consumer Internet experience, as well as a community manager to nurture the Ustream community.

Finally, we're looking for an experienced product management contractor to come in and provide some immediate assistance as we build out our vision for the product.

Let the adventure begin.

Tuesday, June 05, 2007

New Book Outlines: Brazen Careerist, Happiness, Simpleology

On my recent vacation in Maui, I polished off a number of books that I had been meaning to read. As usual, I've added my notes to the Book Outline Wiki.

Brazen Careerist
This book by the redoubtable Penelope Trunk is the first to provide useful career management advice for a new generation and a new workplace. Penelope is passionate about how Xers and Millenials need a new career model, and about helping them achieve success on their terms. She's also unafraid of controversy, including advising people to avoid long hours, and to use sexual harassment to advance their careers. Well worth a read.

Happiness - Lessons From A New Science
Yet another in my long line of happiness books. What sets "Happiness" apart is Layard's willingness to advocate specific governmental policies to improve happiness. These include some difficult-to-swallow but thought-provoking suggestions like keeping income taxes high to take into account the externalities of the envy provoked by high earnings. He ends with a quote from Jeremy Bentham, his favorite philosopher, which I'll reprint here:

"Create all the happiness you are able to create: remove all the misery you are able to remove. Every day will allow you to add something to the pleasure of others, or to diminish something of their pains. And for every grain of enjoyment you sow in the bosom of another, you shall find a harvest in your own bosom; while every sorrow which you pluck out from the thoughts and feelings of a fellow creature shall be replaced by beautiful peace and joy in the sanctuary of your soul."
--Jeremy Bentham

Simpleology
The latest from online marketing guru Mark Joyner, Simpleology is a radical departure from previous bestsellers like "The Irresistable Offer." Simpleology is nothing less than a book about how to live one's life. The first section of the book outlines the various fallacies and frames that distort our thinking, while the last section explains Joyner's theory of Simpleology--common sense principles that most of us fail to follow. This is a very personal book that is clearly a labor of love. It is thought-provoking and an easy read. At the least, you'll never look at your beliefs the same way again.

Sunday, June 03, 2007

59 1/2: Takeru, You're Next

Forget about Barry Bonds' pursuit of Hank Aaron-- real sports fans know that the hottest ticket in town this summer will be July 4th's Nathan's Hot Dog Eating Contest.

That's where 6-time winner Takeru Kobayashi, the Michael Jordan of competitive eating, will face his stiffest challenge yet: Joey Chestnut of San Jose, California.

Chestnut just smashed Takeru's record of 53 3/4 hot dogs by downing a remarkable 59 1/2 Nathan's franks, complete with buns.

Will the sport's greatest champion rise to the occasion? Or will he simply prove once again that no dynasty lasts forever? I know what I'll be watching on July 4th this year. And it won't be the fireworks.

Saturday, May 26, 2007

Brainstorming Technique: "The Search Party"

This concept comes courtesy of Dave Franchino of Design Concepts, and his client Rite Hite.

The way it works is as follows:
  • A group of individuals are seated in a room, each in front of computers facing the same direction and connected to the internet.
  • There is a LCD projector at the front of the room and a selector switch that allows any individual to share what they are looking at on their computer up on the screen.
  • The team begins to search for web links on a specific topic of interest.
  • If anyone finds a link that is interesting or applicable to the topic at hand, they stop the group and put it up on the screen for everyone’s review and discussion.
  • Relevant links are copied into a shared document in real-time. (Hope they use PBwiki --Ed.)
  • The team uses found links to co-educate and to branch out the search and try to explore and document all relevant aspects of the topic in a short amount of time.
Sounds like a great technique for combining two typically distinct tasks--brainstorming anf Googling. Can't wait to give it a try.

Wednesday, May 23, 2007

How To Persuade Americans, Germans, Spaniards, and Chinese

Fascinating article on how different cultures respond to different forms of persuasion. The bottom line? When asked to do something, Americans ask what's in it for them. Germans ask if the request complies with rules and regulations. Spaniards consider whether or not the person asking the favor is a friend. And Chinese consider the status and connections of the requester.

Perhaps there is something to our cultural stereotypes after all!

Morris and colleagues surveyed Citibank branches within four different countries-the United States, Germany, Spain, and China (Hong Kong)-and measured employees' willingness to comply voluntarily with a request from a co-worker for help with a task. Although the survey respondents were influenced by many of the same factors, some factors were more influential than others.

Employees in the United States, for instance, were most likely to take an approach based on direct reciprocation. They asked the question, "What has this person done for me?" and felt obligated to volunteer if they owed the requester a favor. German employees, on the other hand, were most likely to be influenced by whether or not the request stayed within the rules of the organization. They decided whether to comply by asking, "According to official regulations and categories, am I supposed to assist this requester?" Spanish Citibank personnel based the decision mostly on friendship norms that encourage faithfulness to one's friends, regardless of position or status. They asked, "Is this requester connected to my friends?" And finally, Chinese employees responded primarily to authority in the form of loyalties to those of high status within their small group. They asked, "Is this requester connected to someone in my unit, especially someone who is high-ranking?

Monday, May 21, 2007

Book Pick: My Start-Up Life

Starting a company is hard. And starting your first company is nearly impossible.

Now imagine how hard it would be if A) you were still only 15 years old, and B) were struggling to finish *high school*.

That's the situation in my friend Ben Casnocha's first book, My Start-Up Life, which earns my hearty recommendation.

Ben's book mixes together the story of how he came to found his first company, and the lessons on entrepreneurship that he picked up along the way.

It's a great book for first-time entrepreneurs, or for any of us old fogies who've forgotten what it was like our first time out.

Plus, if you buy it today, you can help Ben push it into the Top 100 on Amazon!

http://www.amazon.com/My-Start-Up-Life-Learned-Journey/dp/0787996130/complainandresol

Sunday, May 20, 2007

Long-term Perspectives for Young Entrepreneurs

I was talking with my friend Penelope Trunk (side note: BUY HER BOOK, like everything else about her, it's great), who encouraged me to post a few of the tidbits I shared. Thank you, Penelope.

I work a lot with young entrepreneurs, which means that I work with a lot of first-time entrepreneurs. Some of the most valuable advice I give them is to take a long-term perspective.

"Don't confuse effort with results."

The romanticized image of working 24/7 often causes young entrepreneurs to think that the key to success is hard work. Hard work is necessary, but not sufficient. The smart entrepreneur focuses on results, rather than simply trying to outwork the competition.

"Don't let your natural instinct for action overwhelm your view of the big picture."

Many entrepreneurs, being action-oriented, think that the first thing to do when a challenge arises is to rush into solving it. WRONG! Reacting instantaneously to everything that happens is a certain recipe for incoherent strategy and business disaster. It's like the dieter who weighs himself every day--basing his self-worth and actions on a metric that naturally varies on a day-to-day basis. Unless you learn something that invalidates your strategy and goals, it's best to focus on the important things, rather than the urgent ones.

"There will be times when you feel invincible. There will be times when you feel doomed. You're wrong in both cases."

Entrepreneurship is a rollercoaster ride. If you treat each step forward as a triumph, and each step backwards as a tragedy, you'll find yourself emotionally exhausted and, likely, making bad decisions. Keep your eye on the big picture, and don't let the highs and lows get away from you.

Monday, May 14, 2007

The Posts Of The Beast

Remember when I was considering declaring feed amnesty a few months back? Well, I managed to dig myself out of that hole (3,308 unread posts) with some concerted effort, but I think my back is really against the wall this time.

I'm currently up to 6,666 unread posts in Bloglines. If you're wondering why I haven't been commenting on your posts recently, well, now you know.

I wonder if the universe is trying to send me a message?

My latest thinking is that I might be able to use some of my vacation in Hawaii at the end of the month to catch up. How sad is that?

Wednesday, May 09, 2007

Jawdropper of the Day: Google has 12,000 Employees

No, that is not a misprint.

According to the Wall Street Journal, Google has 12,200 employees to Yahoo's 11,700.

How many employees did Google have at IPO? 1,000?

What the heck do all those people do?

That's a lot of coconuts!

Sunday, May 06, 2007

The T-Mobile Update

Thank you, Consumerist. After posting my complaint, I quickly received a call from the executive office telling me that T-Mobile would credit my account the full amount of the spurious overage charge.

My one criticism is that the executive escalation representative tried hard to make me feel guilty about accepting the concession--if you're going to be paying anyways, why not do so graciously, and in a manner designed to elicit goodwill, rather than grudgingly at blogpoint?

No matter, the point is that T-Mobile responded quickly and decisively to keep me as a customer. Verizon and Cingular, take note!

Tuesday, May 01, 2007

Hello T-Mobile Customer Support!

Welcome T-Mobile customer support representatives!

Since I haven't been able to resolve my customer service issue over the phone, and since the email form on the T-Mobile Web site doesn't accept long messages, it looks like the best thing for me to do is to publish my complaint on this blog. Hey, it worked for Jeff Jarvis!

I was misled by one of your customer service representatives, and as a result, am being billed for overage charges that I could have avoided. Both tier 1 and tier 2 customer support have failed to resolve the issue. As a longstanding customer, I am very disappointed that this issue could not be resolved after 40 minutes of discussion with customer support, and would like to see this resolved as quickly as possible.

Here is the sequence of events:

Beginning of the cycle: I called in to customer support to discuss the possibility that I would exceed the usage included in my plan (Nationwide 1500 w/ free nights and weekends). I told the representative that I projected that I would be right on the border of 2500 peak minutes of usage, and that I needed to know if I could change my plan twice during the month (the second time in case I needed to go to the 5000 minute plan). That representative told me that I should simply call in on the last day of the billing cycle, and that I could decide on which plan to use then.

April 23, 2007:
On the last day of my billing cycle, I saw that I was going to exceed the 2500 peak minute limit. Therefore, I called customer support and asked whether I needed to switch to the 5000 minute plan, or if I could be given additional bonus minutes to eliminate the overage charges. The representative told me that he would be happy to give me the bonus minutes. I asked him explicitly, "Please confirm that once these bonus minutes are applied to my account, I will not have to pay any overage charges for this billing cycle." The representative confirmed this.

May 1, 2007:
I receive my bill, which includes total charges of $569.58. It appears that I have mistakenly been assigned to the 2500 minute plan *without* free weekends. I call customer support and explain the situation. After some discussion, I'm told that I will be credited for the missing minutes, but that I will still be charged for 115 overage minutes. The representative explains that the bonus minutes I have been given can not be applied to overage minutes that have already been recorded, only for future overages. The representative then tells me that they will be crediting my account with $442.

At this point, I point out that it appears that she has made an error in my favor, since the amount she proposes to credit to my account would represent essentially no overage costs. After she checks her math, she reduces the credit to $399.

I point out that on April 23, I was assured by the representative I spoke with that I would not be paying any overage charges for that billing cycle. The representative tells me that the note associated with that call indicates that I had 115 overage minutes, and that they cannot provide any additional credits. I point out that it was economically irrational for me to stick with a 2500 minute plan and pay overage charges, when I could just as easily have switched to the slightly more expensive 5000 minute plan and actually paid less money. The representative tells me that she can't help further. I then ask her to escalate my call to a supervisor.

After I explain the situation to the supervisor, she essentially repeats the same arguments as the previous representative, and tells me that she can't help me. I point out that all of my actions are inconsistent with her scenario--why would a customer who was careful enough to call several times about his billing plan and in fact spoke with a customer service representative on the last day of the billing cycle then be foolish enough to select the wrong calling plan? And why would a customer who pointed out an error in his favor be dishonest enough to lie about what he had been told by representatives? That being the case, did it make any sense for T-Mobile to penalize a loyal and valuable customer because one of the company's representatives had misled him (however accidentally)?

Despite my arguments, she simply reiterates her previous arguments and tells me that she will not give me any additional credits, adding that my bonus minutes would apply to future overages. When I ask for further escalation, she tells me that I can either fax in a complaint, or send an email from the Web site.

When I go to the Web site to email my tale of woe, I discover that the email form has a length limit, which cut me off after only two or three paragraphs. This forces me to call customer service again to get the address for Customer Relations so that I can mail in my complaint.

It's at this point that I realize that I have the perfect solution. Yes, I'll mail in my complaint, but
I'll also post it to my blog, and email a link to the post. I will be very interested to see how this situation resolves itself!

Tuesday, April 24, 2007

Sell, Sell, Sell

A recent New York Times article cautioned that the rich are getting out of hedge funds.
"Some 38 percent of the wealthy investors surveyed [net worth > $25 million]
had money in hedge funds in 2005. That number fell to 27 percent last year, and
the amount of money that wealthy investors had in hedge funds fell by an even
greater percentage. The average balance, which was $2.8 million in 2005, was
just $1.6 million last year, a 43 percent decline."

Okay, pretty scary. But I think a far scarier fact is that hedge fund managers are getting out of hedge funds.

Let's say that you believe that hedge fund managers are the smartest investors on the planet, and that they use their macrocephalic intellects to deliver above market returns with little risk. If that was the case, then presumably they wouldn't be frantically selling themselves off.

Fortress Investment Group has already IPOd, and the article linked to above describes nearly a dozen others who are rumored to be heading out the door. Even my old employer, D. E. Shaw & Co., L.P. (incidentally, the world's largest hedge fund) sold a 20% stake in its business to Lehman brothers for a multi-billion dollar price. (Congrats David!)

When the smartest money in the world starts cashing out, perhaps it's a sign that now isn't the time to jump in.

Friday, April 20, 2007

Dying To Work

I've been out of commission in terms of the blogosphere for the past few weeks, so hopefully this isn't too much of a repeat:

Worker Dead At Desk For Five Days

"[George Turklebaum] quietly passed away on Monday, but nobody noticed until
Saturday morning when an office cleaner asked why he was working during the
weekend."


Don't let this happen to you!

Monday, April 16, 2007

Paying Your Dues -- Fact or Crap?

Ever have someone lecture you about paying your dues?

It's remarkable how often "you need to pay your dues" really translates into, "I had to go through hell, so I'll be damned if you get off scott free."

Think about the antiquated system of rotations for doctors, where people are required to work 36 hour straight, even though the effects of sleep deprivation towards the end of the shift are probably worse than being drunk. We would never tolerate doctors swigging tequila straight from the bottle before performing surgery, so why the heck should we tolerate what is essentially a hazing system to cause needless deaths?

On the other hand, CEOs and top executives regularly make critical business decisions without having seen an actual customer using their product in years, possibly decades!

We all have to pay our dues in the sense that we need to invest the hard work it takes to truly understand the issues. But paying your dues isn't something that you do once when you're young, and then get a free pass on for the rest of your life. Paying your dues is a continuous process that applies to everyone. We should all be paying our dues every single day.

(Originally posted as a comment on Penelope's blog.)

P.S. Sorry for the light posting--things have been extremely busy!

Wednesday, April 11, 2007

The Last Word On Blogging Codes Of Conduct

He's rude, crude, and lewd, but as usual, the Fake Steve Jobs has the last word on blogging codes:
"Look, when it was just civilians being attacked, that's one thing. But now these a-holes are attacking bloggers. Including a blogger who's friends with Tim O'Reilly. This is where we draw the line, folks. You want to call your neighbor a child molester, or claim some politician is taking bribes, or leak trade secrets from Apple so that every cloner in Asia can make a knock-off of our products, hey, that's "protected speech," and the Electronic Frontier Foundation will fight to their last breath to defend you. But don't you dare start making fun of A-list bloggers! These are the heroes who are toppling the mainstream media and bringing truth and sunshine to the world. These are the defenders of free speech. If you're going to make fun of them, well, you're gonna get your pee-pee slapped, and you're gonna get shut down. Simple as that."

I'm a big fan of Kathy Sierra's work, and the kind of abuse she suffered is deplorable, but Fake Steve is dead on in highlighting how the blogosphere only lurched into action when the target of slander and abuse was one of its own, rather than politicians, major media companies, or corporations.

Bottom line, wrong is wrong, no matter how you feel about the victim, be they suspected terrorists, Fortune 500 corporations, or even A-list bloggers.

Saturday, April 07, 2007

Great Writing of the Day: "The Suetonius of Sleaze"

"The Suetonius of Sleaze"

As a writer, sometimes I just have to sit back and marvel at the appropriateness of a turn of phrase. The juxtaposition of the famed ancient Roman historian with the modern sleaze of Times Square; the alliterative nickname, complete with allusion to Ruthian "Sultan of Swat" and rich with the aural joy of simply pronouncing "Suetonius"; all work together to create a layered and entertaining experience that passes by in less than three seconds as a throwaway parenthetical.

The fact that it comes in a Time Magazine review of a Tarantino movie only makes it more enjoyable!

It's Easy To Be Remarkable. So Why Don't We Do It?

I read a great little post in FastCompany about how valuable and easy it can be for a business to create a sense of abundance and generosity:
When I arrived, the restaurant was packed and we were told we'd have to
wait a short while for a seat. The wait ended up being a minute or two, and in
the interim we were offered a selection of donut holes.


This place doesn't make people wait to get fed, Andy said. He
explained that depending on the time of day a selection of extras were offered
to diners, everything from donut holes to prunes. After dinner, customers were
given a free scoop of ice cream.

"I mention this place in my book," Andy said. "Donut holes are not
much, but it makes a difference to people. People will talk about it with their
friends."


In the end, a rational economic analysis would say that donut holes, prunes, and free ice cream are a cheap way to buy goodwill. But that's not the point. The point is that these little perks are a reflection of an attitude of generosity and caring for the customer...and they are a hell of a way to generate goodwill and word of mouth.

Whether you're running a business, or simply trying to manage your social life, take 5 minutes to think about how you can create a (genuine) reputation for generosity and abundance, simply by showing a little kindness and courtesy.

Should We Use Science To Take Away Rights?

I ran across this little doozy of an article about teen brain development:

Neurological researchers around the country, spearheaded by Jay Giedd of the National Institute of Mental Health, have in recent years found that the brain is not fully developed until after 18. The brain system that regulates logic and reasoning develops before the area that regulates impulse and emotions, the researchers say.

The implication?

"Adolescents are at an age where they do not have full capacity to control themselves," he [Temple University psychologist Laurence Steinberg] says. "As adults, we need to do some of the controlling."

While I am certainly pro-science, something about this attitude makes me very queasy.

As a thought experiment, simply substitude "African-Americans" or "hourly workers" for "adolescents." Not quite so innocuous anymore, is it?

Who's Afraid Of The Big Bad Blog?

Bruce Nussbaum notes that while senior executives are busy investing in many aspects of Web 2.0 (63% for web services, 28% for peer-to-peer networks, and 19% for social networks), only 16% are investing in blogs.

Bruce argues, "Managers in general still worry about loss of control with blogs. Letting their employees and consumers into the conversationn and allowing them their say frightens them."

I think Bruce is definitely correct that managers worry about the loss of control, but I think it's also true that it's not always easy to get your employees to blog.

I tried to launch an employee blogging initiative at my company, with senior management blessing, but none of our employees wanted to be bloggers. Even having our VP Sales directly order his people to blog had no effect--I got the distinct sense that a lot of people would rather be fired than blog!

Bloggers have to remember that something that seems as natural as breathing to them still scares the hell out of people--not for the loss of control, but simply because it's new and different. And for every grandma blogger, there are legions more who don't.

Tuesday, April 03, 2007

Stat of the Day: Paid Maternity Leave

Out of 168 countries surveyed by Jody Heymann, who teaches at both the Harvard School of Public Health and McGill University, the U.S. is one of only five without mandatory paid maternity leave—along with Lesotho, Liberia, Papua New Guinea, and Swaziland.

--The Opt-Out Myth, by E. J. Graff

From an economics standpoint, I'm not sure what impact this has--the increased labor flexibility may compensate for the economic hardship of unpaid maternity leave--but it is a pretty striking stat.

Saturday, March 31, 2007

The Global Business Leader, Updated

One of my all-time most popular posts is "Can the Global Business Leader Balance Work and Family?"

In it, I discuss Shai Agassi's brutal travel schedule, and ask whether or not it's possible to be a global business leader without sacrificing one's family in the process.

The update, of course, is that Shai has resigned from SAP, citing, among other things, a brutal travel schedule that included 4 million miles of airline travel over the past 6 years (670,000 miles per year, or about 2,700 miles per day assuming that he traveled every single day, 250 working days per year).

Whether this indicates that Shai decided that he wanted to spend at least a little more time with his family, or that he simply got impatient after SAP failed to make him Co-CEO in 2007 as he had been promised is a bit murky, but it is certainly food for thought.

Wednesday, March 28, 2007

Quote of the Day: Genius and Insanity

"The distance between insanity and genius is measured only by success."
--Bruce Feirstein

So what exactly does it imply when so many people call me "crazy?" Food for thought....

Friday, March 23, 2007

Book Review: True North, by Bill George and Peter Sims

I've been a fan of Bill George for years. He helped me ponder the issue of balancing work and family, and has been a role model for me. As CEO of Medtronic, he grew the company's market cap 60-fold, delivering a 35% annual return to shareholders, and he coached his sons' youth soccer teams the whole time:

I strongly support your belief in balance. I used to take my son to day care as well. He may seem young now, but he will grow up very quickly. The time you spend with him now is very formative in your relationship, and cannot be replaced by spending more time with him when he is 20+.

When my younger son graduated from high school, I felt very proud that I had never missed an important event in their lives due to business. Now at 30 and 27 1/2, my sons feel like very close friends: we talk over everything and have great times together. Both boys are very proud that I coached their soccer teams for a total of 13 years.

At the end of the day, what is more important to you, your family or your money? One is a lasting legacy, the other just disappears when you die.

You CAN have a successful career and a successful family life - you just have to work at balancing the two every day. More hours on the job do not make you a better executive or a better leader.

What Bill and Peter Sims have done in their new book, True North, is to expand on Bill's concept of Authentic Leadership by telling the stories of 125 different business leaders, ranging in age from 23 to 93, to show that the path to success lies with knowing one's authentic self, deciding which values and principles matter, discovering what motivates you, and then finding people who can help you build a life on these truths.

To me, what really works about the book is how Bill and Peter have gotten these business icons to open up about their lives, and to talk about their very real struggles and problems. Somewhere in the book, you'll find someone you identify with, whose story can show you that you're not alone in the challenges in your life.

The book must be touching a nerve--it hit #7 on the Wall Street Journal's list of business bestsellers, and #37 in the same category on Amazon.

If I have any criticism of the book, it is that I wish I had more of a chance to follow the stories of the individual business leaders, rather than focusing on the book's big themes. That's one of the reasons why I loved Po Bronson's Why Do I Love These People more than his best-selling What Should I Do With My Life. But I understand why Bill and Peter structured the book as they did--telling 125 different stories would make it a 1,000 page book!

Regardless of any minor quibbles, I highly recommend True North for its focus on the all-important inner components of leadership, and for the glimpses it provides of the lives of successful leaders, warts and all. In a world in which garbage like "The Secret" sits atop the bestseller lists, it's nice to see something like True North do well.

Update:
Bill and his team actually emailed me to note that True North is now #6 on the WSJ's bestseller list, and #6 on Amazon's list of leadership books. You can learn more about the book at their Web site, www.truenorthleaders.org.

Quote of the Day: Boredom and Curiosity

"The cure for boredom is curiosity. There is no cure for curiosity."
--Dorothy Parker

Wednesday, March 21, 2007

Four Simple Life Hacks That Build Friendships

As you know, I love Penelope Trunk for the questions that she raises. The following post originally appeared as a comment on her post about friendship.

1) Religiously email your friends on their birthday. No matter what, you’re guaranteed to bring them a smile and get an update on their life.

2) Any time you meet someone interesting, ask them to lunch. There’s nothing like a good 1:1 session to build a real relationship.

3) Any time you see something that person might like, email them a link. It shows you care, and gives them an opportunity to write back.

4) Hold on to the friends you have. Relationships do tend to decay over time, and a long-standing friendship is really something special. If you simply make sure that you don’t lose your friends, you’re already ahead of the game.

How To Tell Seth Godin Has A Mainstream Audience

He can write a post that is simply a definition of the word "mashup".

Sometimes we forget what a strange world we inhabit, and that most of the people in this country think network neutrality has something to do with the merger of UPN and the WB.

Saturday, March 17, 2007

Either Marx is Dead, Or He Has A Better Sense Of Humor Than I Thought

Here's a license plate I saw when driving down University:

DAS KPTL

The car? A Porsche Carrera.

Foxes, Hedgehogs, Slashes, and Expected Value

One of the (many) books I am reading right now is Marci Alboher's new book, One Person/Multiple Careers: A New Model for Work/Life Success.

The book focuses on the phenomenon of "Slashes." No, not the Guns 'n Roses guitarist, or homoerotic Star Trek fan fiction. Marci uses "slash" to refer to people who pursue multiple careers simultaneously, like the psychotherapist/violin maker she interviews.

It's a great book, and highlights what I think is an important trend: the desire to live a meaningful and happy life, and the unwillingness to subordinate that desire to fit into a particular career "box."

Nonetheless, I think we also need to examine the downside of the slash life. In a comment to Ben's review of the book, I wrote:

As a dad/entrepreneur/investor/mentor/writer, I'm not one to talk, but I do wonder sometimes if focus is a better strategy.

As Archilochus wrote, "The fox knows many things, but the hedgehog knows one big thing."

Jim Collins has noted that great companies tend to be led by hedgehogs not foxes.

For a pretty interesting discussion of this topic, check out: http://www.kheper.net/topics/typology/Fox_and_Hedgehog.html

This highlights an issue that Ben and I often struggle with, as entrepreneurs/pointy-headed intellectuals: Great entrepreneurs are usually obssessively focused; being blessed/cursed with multiple talents and interests will certainly detract from that focus.

A more nuanced view may be that the slash lifestyle may have as high or even higher an expected value, but far lower variance. If the distribution of outcomes is more extreme for the hedgehogs (fat tails both left and right), then more of the legendary figures are likely to be hedgehogs, even if on average, foxes do better.

In the end, however, I think Marci put it best:

If you're a slash. you would have a really hard time living another way. It's not usually a choice, more of a disposition.

At the end of the day, no matter what you decide about expected values and standard deviations, we are not created equal. And trying to deny your true nature in the interests of some theoretical optimization of your career is likely to be a self-defeating exercise in futility.

Different strokes for different folks.

I am a slash, and I have to embrace the strengths and weaknesses of my nature, or I'll simply end up as a pale imitation of something I'm not.

Wisdom = Asking Good Questions

Why is it so much easier to comment on other people's blogs, rather than posting to our own?

I think it comes down to this: It's much easier to come up with great answers than it is to ask great questions.

Good blog posts implicitly or explicitly ask the reader good questions. They make us think and feel.

In fact, I think you can easily generalize and say that the key to wisdom is asking good questions.

And if that's the case, here's a question for you:

Why does our educational system focus on teaching us how to give good answers, rather than how to ask good questions? Can a multiple-choice test ever help you develop wisdom? And if not, why do we make kids take the SAT?

(Thanks to Penelope Trunk for triggering this thought)

Wednesday, March 14, 2007

Fame, Feeds, and an Apology to Matt Blumberg

Something happened recently that illustrates the perils of non-unified messaging:

On Friday, my fellow MyWay blogger Matt Blumberg blogged about the TED conference. I commented on his post, then turned my comment into a full post on this blog.

Matt replied to my comment via email, and he and I exchanged a few more emails that night clarifying what he meant and setting up an in person meeting the next time we were to be in the same city.

On Monday, Matt picked up my post, and because of the asynchronicity of our communications, thought that I had written my post AFTER our email conversation, and thus had willfully ignored his email clarifications to beat on him like a vicious 8-year-old attacking a pinata. And while I wrote back telling him that I didn't mean to be harsh, I didn't pick up on his misapprehension about the timing of my post, and thus didn't clarify the timing.

In response, Matt wrote his own post clarifying his original post, saying, "I think Chris missed my main point, and since he decided to go public blasting me, I'll repeat here what I emailed him privately before he decided to blog this."

Now, of course, I find myself in the bind of how to respond. I certainly didn't mean to insult Matt to begin with. I could respond via email, but that would leave Matt's blog readers with the impression that I was a first-class jerk. I could comment on Matt's blog, but that wouldn't clarify matters for the folks who read the post before I could comment, or for the folks who picked it up via RSS reader and didn't bother checking out the comments.

In the end, as nutty as it might seem, I concluded that the best thing I could do was to issue my own post clarifying the matter, and in turn, ask Matt to post his clarification of my clarification of the misunderstanding that occurred when Matt thought my post came after his private clarification of my comment on his original post.

See? Easy as pie!

And so: Matt, I'm sorry that we had this misunderstanding about the timing of our posts, emails, and comments. I didn't mean to offend or hurt your feelings, and had I known what you meant to say in your original post before I blogged, I probably would have toned down the tenor of my post (though I still stand behind my main point on fame).

Sometimes, we who blog are in such a rush to get our words out into the public eye that we don't stop to think about whether or not what we write might unintentionally hurt someone. And this post, which illustrates the incredible effort it takes to correct even a minor misunderstanding, just underscores the potential costs of our tangled web of communications.

Iran To 300: Drop Dead

Iran's government and top officials are complaining bitterly about the movie 300, which they see as an attack on Persian history.

They feel that the comic book flick portrays them as decadent, evil, and sexually deviant. Come to think of it, I can't really blame them for being upset--essentially, the filmmakers spent two hours of screen time depicting their ancestors as the ancient equivalent of Andy Dick.

That being said, running a headline like "Hollywood declares war on Iranians" does seem a bit over the top....

Monday, March 12, 2007

Feed Freedom

After a frenzied weekend of feed reading, I'm finally caught up on all my feeds. Perhaps I should have declared RSS bankruptcy, but by gum, I just couldn't bring myself to do it. I go now to collapse into bed and curse Daylight Savings Time.

Friday, March 09, 2007

Stop Treating The Rich And Famous Like They're Better Than You

There's something about meeting the rich and famous that makes people lose their brains. Just these past few days, I've been reading tons of gushing posts about being at TED. My fellow MyWay blogger Matt Blumberg even wrote post entitled "Humbed at TED."

This kind of fawning makes me sick.

No matter how famous a person is, they're still only human. Bill Clinton has to get up in the morning and put on clothes, just like you and me.

Treating the successful as if they were on another plane simply perpetuates the belief that you'll never achieve the same kind of success. Which is rot.

Success isn't a god-given right, or a sign of divine favor. It's the result of smarts, hard work, and a good dose of luck. And you shouldn't treat a guy any differently just because he has a few extra zeros in his bank account, or a few extra interns in his pants.

Gretchen has a great post about why we love simply seeing the famous. It's an atavistic, religious response:

Darshan is a Sanskrit Hindu term meaning “sight” or “auspicious viewing.” Darshan is the beneficial glow that comes from being in the presence of a great spiritual leader (or holy place or object). Merely looking at such a person – and even better, receiving his or her glance – bestows a blessing.

In Vikram Chandra’s fantastic novel set in India, Sacred Games, I noticed, people also sought darshan of a rich and famous mobster.

So when people crowd into a store because Jennifer Aniston is inside, or follow Woody Allen down the street for blocks, or stand outside in the freezing cold to see Barack Obama speak instead of watching him on TV, it’s because they want darshan.

Look, I'm not trying to denigrate the rich and famous. Many, if not most of them richly deserve their success. But as they say in the mutual fund industry, past performance is no guarantee of future results, and that's even more true when it comes to issues outside their area of expertise. Bono may be a great musician, but what the hell does he know about economics or foreign policy? Would you take fashion tips from Bill Gates? Hell, you probably shouldn't even take technology tips from him. And Lord knows, I'm not sure what Silicon Valley has to learn from Cameron Diaz.

Hero worship, fame, religion...it's fine to feel an emotional reaction to extraordinary circumstances. But don't let that feeling overwhelm your faculties. In the end, you should seek the truth and believe in yourself. That's the only sure formula for success.

The Secret, Three-Part, Can't Fail, Guaranteed Marketing Formula

I really enjoy Jim Logan's B2B marketing blog, and this post (extensively excerpted below) is an example why. Here, he provides his formula for copywriting success:

Benefits.
No one wants to buy anything we offer. For some this is a hard thing to grasp, but it’s true. No one wants to buy our products or services. People want to buy the things our products and services do for them.

As an oversimplified example – no one wants to own a computer. What we want is the ability to create and edit video and audio, desktop publish, surf the Internet, shop online, sell products, email family and friends, etc. We don’t want to buy the computer, printer or other peripherals. We want to buy the things we can do with them.

Difference.
Assuming you’re not the only person on earth selling the benefits you offer, what’s different about you and your offer? In other words, why should I buy your particular offer…why shouldn’t I purchase from your competitor?

An important thing to note is difference only counts if the buyer recognizes it as a value that offers a benefit. Being different isn’t enough, it has to be difference the buyer recognizes as something of value.

Reason to Believe.
Assuming your prospect wants the benefits you offer and acknowledges the difference of doing business with you and your company…why should they believe you? More importantly, why should they believe in you and your company?

Your prospective customer wants to know why you can be trusted and are worthy of being their vendor, capable of delivering on the benefits and difference you claim.
=====
Combining the three elements above and weaving them throughout marketing and sales campaigns has proved to have a significant impact in the ability to grow a company’s revenue. It’s that powerful.


This is a post that every high tech marketer should print out and memorize. I can't tell you how often we as an industry fall back on selling the features, focusing on differences that only matter to us and our competitors, and spouting the same empty words about being committed to being customer-friendly.

Finding the Essential Story

"Never let the truth stand in the way of a good story!" --Delbert Trew, Texan Historian

Today marks the release of the comic book epic, 300, about the Battle of Thermopylae. While critics may end up panning the movie for its loving depiction of muscular, nearly-naked caucasian warriors decapitating a faceless army of swarthy foes, the story behind the movie is certainly worth of note.

At Thermopylae, 300 Spartan warriors fought to the last man against a Persian army of over a million soldiers, delaying the advance of the army long enough to allow the Greeks to regroup and ultimately defeat the Persians. In doing so, the Spartans, led by King Leonidas, won everlasting fame and glory.

Well, at least the last sentence is correct.

You see, nearly everything about the story we all remember and believe is wrong.

The 300 Spartan warriors did fight to the last man, but they were joined by 700 Thesbians who chose to stay and fight. (I guess "1,000" didn't seem quite as cool a title)

The Persian army probably numbered around 250,000.

A Greek army of several thousand, led by the Spartans managed to delay the Persians for three days, before the Persians managed to outflank them (a covering force of Phocian troops inexplicably abandoned their post, sealing the defeat). Leonidas and his men chose to stay and die, possibly in order to fulfill a prophecy from the Oracle of Delphi who had stated that Sparta would burn unless a Spartan king died. At any rate, the sacrifice of the 1,000 bought the Greeks exactly one additional day, as they were quickly overwhelmed by fighting superior armies on two fronts.

While Thermopylae was a tactical victory (the Greeks inflicted perhaps 100 times the casualties that they suffered), it was a strategic defeat, and the Persian army continued to advance. Ultimately, the Greeks won the second Persian war because of the Athenian general Themistocles, who correctly reasoned that the Persian army was dependent on the sea for resupply, and managed to inflict enough damage on the Persian fleet during the battle of Salamis to force the Persians to end their campaign.

Yet in the end, few people remember that the Greeks won because of their understanding of Persian logistics. They remember, even 2,500 years later, that 300 Spartans gave their lives to defeat the Persians.

That, my friends, is the essential story. Storytelling isn't about conveying a sequence of events. It's about making an impression and being memorable. It's about stripping out the extraneous information and focusing on a simple core message that has the power to compel. Freedom. Honor. Glory.

As you attempt to persuade, simply using the weight of facts isn't enough. You need to tell a story that taps into our universal emotions, that takes us on a journey. Don't just talk about the benefits of your product--help the prospect paint a picture in their mind, both of their struggle, and (with the help of your product) their eventual triumph.

In this larger sense, Thermopylae was a strategic triumph. The sacrifice of the Spartans, while of negligible military value, served as the core of an extremely persuasive story, a story which the Greeks told to themselves to boost their morale and hearten them for the struggle, a story which still resonates with us today.