Saturday, June 02, 2012

Money and Power

In sufficient quantities, money and power are fungible. Just ask Michael Bloomberg.

But in lower quantities, they are not. If you are the sheriff of a small town, you have a great deal of power, but even if exploit your power for money, you're not likely to become a millionaire.

If you earn $100K a year in Budapest, you're a wealthy man who can exert some real influence. If you earn $100K a year in Palo Alto, you're busy trying to conceal your poverty from your neighbors.

The sad fact is that humans are comparison engines. Absolute wealth is less important than relative wealth. Power, because it is relative to the people around you, is a more reliable source of happiness.

Of course, neither money or power is a useful goal. These extrinsic motivations are less productive than intrinsic ones like caring relationships, personal growth, and community involvement. And studies show that even those who achieve their extrinsic goals remain unhappy.

So if someone asks you, "Money or Power," the correct answer is "Neither." (Though if pressed, go for power!)

This post began as a comment on PandaWhale, which is fast becoming a go-to part of my information diet.

Friday, June 01, 2012

The Great Andy Bechtolsheim

I had the good fortune to attend Stanford's most recent "Engineering Hero" lecture, featuring Andy Bechtolsheim, the legendary entrepreneur and investor.

You know that you're pretty darn amazing when founding and selling Granite Systems to Cisco Systems is only *third* on your career highlight reel, behind founding Sun Microsystems and making $1.7 billion as the first investor in Google.

I feel a special bond with Andy, because he taught me a valuable lesson via his example. Back in 2002, I was attending the SDForum Visionary Awards (at the time, I was running the Founder's Forum SIG). We had to park and take shuttle buses to the event. I sat next to a friendly fellow in a conservative suit with a pleasant German accent, and we struck up a conversation about blogging, emerging technologies, and many other topics. He listened attentively and appreciatively to my thoughts and opinions. At the end of the ride, I introduced myself, and he replied, "I'm Andy." As we got off the bus, he showed me that he was wearing sandals. "I can't stand those dress shoes," he said with a twinkle in his eyes.

I later learned, of course, that I had been sitting next to the great Andy Bechtolsheim, one of the visionaries being honored that very evening. Andy showed me that no matter what your accomplishments, you can remain friendly, humble, and open to new ideas. He has been a role model for me ever since, though sadly, I can't possibly aspire to his level of intellectual rigor.

(Side note: I spent most of that evening hanging out with Jonathan Abrams and Dave McClure, who were much less well-known at the time. Jonathan told me about a new project he was working on called "Friendster.")

At any rate, when I heard about Andy's lecture, I hastily RSVPed. Here are my notes from his talk. As you'll see, Andy was dropping a lot of pearls of wisdom.

If you want to see the entire video, Stanford has made it available here.

"Being first is not important (Google, Facebook), being the first to solve a relevant problem is all-important." -Andy Bechtolsheim

"The hardest thing is to say no." -Steve Jobs

Apple spends less on R&D than any of its peers. Innovation isn't a function of R&D budget.

The top sources of innovation are employees, partners, and customers.

Companies don't pay enough attention to the discovery phase.

The Horizon Effect: We don't pursue goals beyond the horizon. We only pursue goals we where we can see the path.

Most funding is applied to safe bets. Very little is applied to risky bets. You need to manage your innovation portfolio.

Apple's Innovation Strategy:
Beautiful products
Hardware, software, and cloud
Expect to invent the next big thing

Hire engineers out of school
Expect to solve the impossible

Hire people who like a rapid pace of change
Try lots of things at once

"Innovation is the never-ending search for better solutions." -Andy Bechtolsheim

"The most important thing is to pick the right project."

Why Do New Products Fail?
1. Too Early
2. Too Late
3. Too Difficult
4. Not Relevant
5. Too Expensive

A startup succeeds because of focus. It is spending 100% of effort on a problem that the big companies have overlooked.

Tuesday, May 29, 2012

The Nut Clip Principle

I eat a lot of nuts as part of a modified Bulletproof Diet. This means that the office at PBworks is filled with different types of nuts, ranging from raw walnuts and almonds to roasted pistachios.

One of results of having so many bag of nuts and other snacks is that you need a way to keep them all from spilling. We've used binder clips as a solution.

The problem is, there always seemed to be a shortage of binder clips. We'd end up doubling up (clipping shut two bags with a single clip) or leaving a bag unclipped (which led to the disastrous sunflower seed spill of '11).

Over the past few years, many of our team members have used their highly valuable brains and time to double clip nut bags, tie them with rubber bands, and otherwise maintain order.

This morning, I took 3 minutes to go to our supply closet, pull out a box of 12 binder clips, and single clip all the bags. There were three clips left over, which I left next to the securely sealed bags.

For years, we've been wasting our time futzing around with a clip shortage when 50 feet away, hundreds of binder clips lay unused.

How many nut clip situations can you find, either in your work or your personal life? In how many ways could you improve your productivity and happiness by taking a few minutes to tackle eminently fixable problems?

P.S. This is very similar to Stephen Covey's principle of sharpening the saw, but I think the nut clip principle goes further. Covey focuses on making investments in yourself; the nut clip principle shows that solving even seemingly trivial problems that have persisted because of sheer inertia can have a real impact on your day.

Monday, May 28, 2012

The Future of Music is Crowdfunding

I have seen the future of music, and it is crowdfunding.

This weekend, I ran across a Kickstarter project for Amanda Palmer's new album.

Three relevant facts:

1) Until this weekend, I had never heard of Amanda Palmer, and I imagine that's true for most of you.

2) The average advance that a major studio might provide a musician is $250,000.

3) Amanda's Kickstarter project has over 20,000 backers, and is just under the $1 million mark.

Now it's true that Amanda has certain advantages, like half a million Twitter followers, but there's nothing preventing other musicians from emulating her example. (Except for marrying Neil Gaiman; I'm pretty sure there's only one of him)

And the interesting thing is that despite her Twitter fame and semi-celebrity, I'm pretty sure she got a lot more out Kickstarter than she would have from a record label.

So if you don't need a record label to finance an album, produce the music, distribute the videos, or sell the tickets, what exactly do musicians need them for?

The fans have always been the ultimate source of money for the music ecosystem; musicians finally have the tools to let them tap that source directly.

Successful in Silicon Valley

It's funny to be called "successful" in Silicon Valley. So often, we think of success as being measured by liquidity events or other markers of worldly success.

The reason I think I'm successful is that I have everything that money can't buy: love, family, friends, health. Yet these are things that we rarely hear about in Silicon Valley (unless you think your Klout score measures your friendship...and if you do, I think you may want to take a vacation).

In fact, I think that success becomes more likely after you realize that money and fame aren't the goal. I was fortunate to realize this shortly after I turned 30.

I think it's pretty clear that I've experienced more worldly "success" since abandoning my frantic efforts to achieve it, and focusing instead on the kinds of things that actually make us happy.

As many philosophers (and now scientists) have noted, "success" doesn't make you happy. Become happy, and you'll improve your chances of "success."

UPDATE: Eric Barker has a good summary of The Happiness Advantage on his blog.

(This post originally appeared as a comment on Adam Rifkin's, a very cool online community)