Thursday, June 14, 2007

Summer reading

Do you know anyone who’s lamented, “I read too much”? Me neither. Television and other passive mediums are easy to blame because they’re, well, so easy. Why do something (read) when you can do nothing (watch the tube)? It’s human nature.

I have a dozen or so books awaiting consumption. At the head of the table are two biz books (The Wisdom of Crowds and The Paradox of Choice) and a pair of novels (Michael Chabon’s The Yiddish Policemen’s Union and Khaled Hosseini’s A Thousand Splendid Suns). It’s going to be a four-sided coin toss; I can’t decide where to dine. And, post-absorption, it will be fun to pass them along.

Book sharing is a blast. I also enjoy learning about who’s reading what. One such list, published last month in US News & World Report, seeks to identify the best business books of all time, showcasing a CEO panel’s picks.

U.S. News spoke with 14 leaders from all walks of business life—from academics to entrepreneurs to corporate executives—about the five books they consider indispensable reading for managers. The responses ranged far and wide: Military metaphors popped up occasionally, with Sun Tzu's The Art of War rearing its age-old head. But books about biology were also surprisingly prevalent, not only for their insight into how business environments imitate the natural world but also, several executives said, because understanding biology helped them appreciate the concept of randomness.
Chris Anderson, author of my current read, The Long Tail, offered two of my favorites: The Cluetrain Manifesto and The Tipping Point. His takes:
  • Cluetrain: When they wrote this, it was still way too early. This was before blogging, before MySpace. People said, 'Who are these guys, ex-hippies and free spirits talking about economics and marketing and brands?' They talked about consumer empowerment, the inversion of power, that you don't control your brand–you share control of your band with your users. It sounded like a pipe dream, like useless utopian wishful thinking. And it's just remarkable to see how the world has basically evolved to demonstrate exactly everything they said.
  • Tipping Point: The best books on the economics of popular culture–the world we actually live in–are written not by economists but by writers like Gladwell. I suspect academia punishes economists who dabble in things like shoes and jeans and drug dealers–that's probably no way to get tenure. But it's superimportant, and it's a great tool kit to understand the world.
Mark Cuban (click here to read our entry about Mark) recommended The Gospel of Wealth, The Fountainhead, and The Innovator’s Dilemma ("helped me make sense of why things worked and didn't work in the technology industry"), among others. And Jim Collins, author of the great Good to Great, suggested an eclectic stack, including Everett Rogers’ 1962, ahead-of-its-time Diffusion of Innovations.
Everett Rogers was the person who first put out the concept of innovation adoption cycles. His essential insight is very profound: Innovation adoption is a social process. Innovations don't necessarily win because they're better; they have to be adopted. It had a huge influence on my own thinking about the evolution of ideas.
Happy reading.

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Post-script (7/6/07): Take a peek at a recent Signal vs. Noise blog post, The Way to Wealth: The best business book is also the shortest. Interesting stuff (Benjamin Franklin's terse 30-page read), including:
  • Creditors have better memories than debtors
  • If you want to know the value of money, go try to borrow some
  • It’s easier to suppress the first desire than to satisfy all that follow it
  • A life of leisure and a life of laziness are two different things
  • Keep your shop and your shop will keep you

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Post-script (8/14/07): Dug up a cool article from a late July issue of All the News That's Worth to Print. It's worth a quick read, and here's an interesting take: Serious leaders who are serious readers build personal libraries dedicated to how to think, not how to compete.

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Post-script (8/15/07): Interesting take from the 800-CEO-READ Blog talking about the Long Tail of interest in their 1,267-referenced business books. Their top-25 list is solid too.

Monkey business


I mentioned earlier this week that Curious George is one of my heroes. He’s one cool monkey. We were reacquainted a few years ago when our boys discovered George.

I’m also a big Jack Johnson fan. To me he’s a contemporary Jimmy Buffett, swapping surfboard for sailboat. One of his more popular tunes is Upside Down, which I just discovered is the theme song to George’s latest flick. As I shuttled four seven-year-olds yesterday to a last-week-of-school fieldtrip, Upside Down charmed through the CD player. “It’s the Curious George song,” one of my son’s friends exclaimed. “I love this tune!”

George + Johnson + Upside Down. The lyrics resonated:

Who's to say
What's impossible
Well they forgot
This world keeps spinning
And with each new day
I can feel a change in everything
And as the surface breaks reflections fade
But in some ways they remain the same
And as my mind begins to spread its wings
There's no stopping curiosity
My Volvo-entrapped kids screamed the lyrics, but I’m not sure if they got it. Jack Johnson continued:
Who's to say
I can't do everything
Well I can try
And as I roll along I begin to find
Things aren't always just what they seem
Correction: The kids get it, but I don't think they connected the lyrics with their actions. Who’s to say what’s impossible? Until children are normalized by society, next to nothing is impossible (in their minds). Who’s to say I can’t do everything? Kids believe they can; they live in a “yes, and …” world, not a “yeah, but” universe like most adults. As my mind begins to spread its wings, there’s no stopping curiosity. Unfortunately, most adults clip their cerebral wings, shelve their curiosity, and forget that the world keeps spinning.

Long live George.

Wednesday, June 13, 2007

Greed > Fear = $

I ran in to my friend Mark a few weeks ago. In our former lives (the early '00s), we trained and mentored entrepreneurs together. Dr. Mark is good, particularly when teaching valuations. What’s your company worth? What someone is willing to pay. I chortle at the recall.

Seeing Mark reminded me of an equation I employed. Greed > Fear = $. This basic algorithm was related to raising money from early-stage investors (particularly angels), and it’s based on a simplistic belief that investors invest because they want to make money. This, of course, is not entirely correct … many investors employ a bi- or tri-foci lenses, weighing (whether they know it or will admit it or not) their affinities – the entrepreneur’s gender, ethnicity, geography, industry, alma mater, faith, etc. -- alongside investment return. I buy the bi- and tri-, but still think fundraising’s pretty simple: The moment you get an able investor’s greed to outweigh their fear, you win. (BTW, same goes for many business-to-business sales and biz dev endeavors.)

What is fear? People are strange, phobias too. In an investment sense, fear is pretty simple: It is the undesirable product of failure (lose money, bruise your ego, tamper your credibility, harm your relationship with the invested-in entrepreneur). Investors – and entrepreneurs – want to minimize risk and maximize reward. Unfortunately, that’s not how the world works; as risk increases, so too do potential rewards.

How about risk? It’s derived from the Italian word risco, an oh-shit expression used by sailors to express the chances of ending up on the rocks. Risk is quantification of potential failure. Conversely, uncertainty – which drives fear -- is the absence of information to make an educated decision.

Large corporations play chess; emerging companies play poker. It’s tough to play poker (or invest in or start companies) without being comfortable with placing bets in situations with large uncertainty.

Back to the ways of the world: Whether you’re investing in a company or crossing the street, the world does not work with perfect information. As unknown unknowns increase, so too do risk and fear. Hence, it’s the entrepreneur’s responsibility – be it in pitching a product to a customer, recruiting a key management team member, or soliciting funds from an investors – to provide as much information as possible to enable people to make a comfortable, educated decision. To temper their fear and inflate their greed. And, hopefully, to raise a few bucks.

Tuesday, June 12, 2007

Why not?

The Great Tim Sanders checked in a few months ago with a bozo-bashing post, Ask someone, "why not?". In typical Sanders style, it’s terse and whimsical. Here’s a quick take:

Tomorrow at work, when you are told NO, ask "why not?". If you don't feel like the answer you get gives you a clear understanding of the picture, like a five year old, keep asking "why?”. Don't stop until you feel enlightened or the other person feels stupid for making that assertion in the first place.
Static thinking is commonplace. Things are because they, well, are; do not ask why. What a pile of manure. Sanders reminded me Kawasaki’s hilarious lampoon of nay-saying “bozos,” the in-every-organization ferrets whose normalized, overbearing stubbornness stunts collective creativity.

It also recalled two previous posts herein where we engaged the value of curiosity (and sarcastically championed Curious George). In the first post, Yes, and … (creative lessons from children), we opined:
Creative people are like kids: They question apparent facts by asking why, how and what. Plato believed -– though I do not think it’s as binary as he posited -- experience takes away more than it adds … young people are nearer ideas than old people.
The second relevant post was our take, Problem solver, or problem finder? A quick snippet:
But, if we are conditioned to mechanically solve problems (think: IQ testing), how do we seek problems? A.F. Osborn contends creativity is activated when we bombard the imagination with queries, stabs such as, “what if…” “what about…” “what else…” And, I would add, “Yes, and …”
Finally, Sanders reminded me of Nalebuff and Ayres' thought-provoking book, Why Not? How to Use Everyday Ingenuity to Solve Problems Big and Small. The book is loaded with contrarian thinking tools (if you have not read it, get it … it’s good). It opens with a quote from Robert F. Kennedy:
Some men see things as they are and say, “Why?” I dream of things that never were and say, “Why not?”

Monday, June 11, 2007

Let's dance

The memory of my first seventh-grade dance is, well, something I wish I did not remember. It was adolescence at its most painful. A steamy, barely lit gym full of several hundred similarly steamy teenagers, girls on one side, boys on the other, Stairway to Heaven spun by the DJ. Line dancing, if courage prevailed, and then the who-am-I-going-to-dance-with, it’s-dark-and-I-can’t-see last dance dissonance. Most of the time, the lights stayed low with genders wallpapered to their side of the gym.

Some new business opportunities, and the resulting business models, are similar to junior high dances. Opportunities germinate when disparate, disconnected audiences are connected. The gym is full with anxious and able participants, but the lights are out. Then, along comes a company with an enabling business model, one that brings the two audiences together. With the flip of a switch, connections are made and value is exchanged.

eBay did it with fragmented sellers of seemingly undesirable goods. They created a marketplace for anonymous, theretofore in-the-dark buyers and sellers to convene and conduct commerce. eHarmony and Match.com flipped the switch too, literally bringing genders together. Amazon connects independent book publishers with a previously unreachable audience of book buyers. iTunes too: Garage and indie bands can now sell to the masses. The lights are on.

If there’s a common, opportunistic thread, it’s an inefficient market where information, commerce, and connections are constrained, and where scarcity – in shelf-space and distribution (books and music), and connections (the ability to buy and sell, to meet and communicate) – is the rule. Thousands of micro, niche markets (junior high school gyms) do business in the dark, awaiting illumination.

Flip the switch and you’ll enable a market to operate efficiently.

Wednesday, June 6, 2007

Russ

We talked last week about Seth Godin’s latest, The Dip. My post focused primarily on the business lessons; the worthy read is loaded with personal, albeit somewhat overly motivational, tips too. I am now furiously digging in to The Long Tail … 30 pages deep and I can’t put it down. Therein, Chris Anderson (the author) references Tower Records vis-à-vis online music stores. Which reminded me of a personal story …

… a wonderful interaction I had with Russ Solomon, Tower’s founder and former chairman/CEO. When we met with him 10-plus years ago (we were developing, as part of a grad school marketing class, a marketing strategy plan – Can Tower Stay On Top? – suggesting how Tower could leverage the Internet [yikes!]), the visual symbols were most memorable. The long hallway leading to his office is flanked by an 50-foot-long-or-so glass frame, featuring several hundred snipped neckties. (If you wore a tie when meeting with Russ, he would ceremoniously cut it off.) His office was immense, packed with mountainous stacks of books and CDs and an out-of-this-world stereo system. Then there’s Russ: A genuine, curious, candid, bright-sparkle-in-the-eye, Birkenstock-wearing character. Russ – who started Tower by selling 78s out of his trunk – is a cool guy.

After volleying fluffy bschool questions, I asked him: What makes you tick? He sought clarification. Well, what else do you need, or what else do you want to do?

Russ chuckled (maybe it was a chortle; regardless, the following is paraphrased due to 10 years of too many senior moments) and looked to his left: I have all the music I need, and I love listening to music, nodding at the stacks of CDs. He glanced to his right: I have all the books I need, and I love to read, acknowledging the skyscrapers of unread books. He then looked at our team: I love ice cream too, so maybe I’ll open an ice cream stand. I can then listen to music, read books, and eat ice cream all day.

Russ was on top. He could afford (he deserved) to both fantasize about and actually purchase an ice cream stand (let alone Ben & Jerry’s). Most importantly, he was succeeding at something he enjoyed.

I’ve had the fortune of chatting with and presenting to hundreds of entrepreneurs. It’s ego bolstering, introspective and rewarding; I think I selfishly get more out of the interaction than the students or audience members. In my standard dog-and-pony, I share the adjacent Venn diagram, engaging whoever will listen to find the sweet spot: the intersection of their abilities, demand, and their ambitions. Simple stuff, but I would wager nine of 10 people are not there. Most people professionally park (out of necessity and/or ambivalence) in the lower two circles: They have skills that fill a need for a company, but they do not enjoy what they’re doing. Most artists, conversely, intersect between ambitions and skills; it’s tough to make money doing what they love. Successful entrepreneurs like Russ operate in the center.

And, they trade ties for Birks.

Post-script (6/14/07): Unearthed the below toons, both worthy of a good chortle (particularly if you're an artist). Enjoy.


Luck

I miss my late grandfather Sody. He passed away six years ago. Sody lived a full, rich but simple life. The son of Swedish immigrants, he matured through the Depression, a few world wars, and the birth and emergence of the Silicon Valley. He bought his first and only primary residence in San Carlos (1805 Cedar Street, if memory serves) in 1946: Half down, the balance ($6k) amortized via a 30-year, 4.25% FHA mortgage. Times changed and the Peninsula blossomed, but over 50 years the house remained the same. Just the way he liked it.

Sody was a fisherman, the Salmon Egg, bobber-floating, rainbow trout hooking variety. He summered in Miwok Village where – upon entering his cabin – you were greeted by a proclamation: Old fishermen never die. They just smell that way. Sody was also an engineer, a damn good one. This is where today’s story begins.

Sody began his career in the 1930s at Varian Associates in San Carlos. The company’s pioneering products included vacuum electron tubes, an embryonic accelerator, and various geophysical instruments. He also night-schooled at Stanford with two friends: Bill and Dave.

Sody’s friends invited him to dinner one night in the late 1930s. Gathered in Bill’s dining room, Bill and Dave shared with Sody their ambition to start a company. “And, we’d like you to be our first employee,” they pitched. An audio oscillator – right up Sody’s alley – was slated to be the company’s first product.

Sody mumbled and grumbled. Sounds kinda risky (my words). He was comfortably enjoying work at Varian, an established Valley engineering firm. Sody balked; Bill and Dave started their company.

Two relevant quotes come to mind: Luck is where opportunity meets preparation (Denzel Washington); and, Chance favors the prepared mind (Pasteur). Sody had prepared (school, professional experience, differential and desirable skill set) and an opportunity emerged (the chance to join Bill and Dave in their company launch).

Sody spent the next few decades at Varian Associates. The company excelled, and so too did he. A few years before he passed, my wife and I sat down with Sody. PowerBook powered up, Internet connection established, we toured Varian’s site (including a photo of Sody and his comrades, circa mid-40s) and then HP’s. How’d you do that? That machine generates audio signals! Where’d you get Dave’s picture? Wait, there’s the radio oscillator! That Dave Packard, he was a great man.

At the time, my wife worked at HP. She was employee number 500-thousand-and-something in the company’s history. As we started to talk about the ramifications of Sody’s prospective employment with HP – given his personality and the times, he probably would have spent three-plus decades at HP – Sody injected, Did I ever tell you about the time I had dinner with Bill and Dave at Dave’s house?

Garrison Keillor: “Some luck lies in not getting what you thought you wanted but getting what you have, which once you have got it you may be smart enough to see is what you would have wanted had you known.”

Sody could not have said it better. And, I could not have been luckier to have him as a grandfather.

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Post-script (8/15/07): The Great Marc Andreessen presents a roadmap for entrepreneurs to "getting luck on our side" (Luck and the entrepreneur, part 1: The four kinds of luck) ... yet another gem from Andreessen, and you've gotta marvel at his endurance/ability to generate excellent content.

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Post-script (3 Feb 08): My friend Andy checks in with a Sody, Bill and Dave-relevant post about the value of scientists (vis-a-vis businessman). A taste:

I am putting my money (or at least a lot of my time) on what I think is one of the few crucial levers we have: increasing the ability of scientists to make their research make a difference.

Frederick Terman, grandfather the Silicon Valley, once remarked (before transforming Stanford's School of Engineering into the powerhouse it is today) that the field of radio was dominated by businessmen who knew a little about science. He asked what would happen to the field if it was led by scientists who knew a little bit about business. Hewlett-Packard, Varian, and many others were businesses that emerged from the School of Engineering were examples of the impact that scientists can have when they assume the mantle of leadership in business.

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Post-script (25 Feb 08): Quick post from CreativityRulz about the virtue of making your own luck:

There are studies that show that some people really are luckier than others. But, the catch is that we make our own luck. You have to put yourself in a position where you have the chance to be lucky. For example, you aren't going to meet interesting friends if you spend all your time hanging out alone; you aren't going to win a Pulitzer Prize unless you begin writing; and you aren't going to start a cool new company unless you take the risk of starting one. As my wise father always said, "the harder you work, the luckier you get."

Tuesday, June 5, 2007

Gardening

I enjoy gardening. I enjoy starting companies. Therefore, gardening is like starting a company. Or, so goes my deductive, syllogistic, analogical thinking.

Let me explain. I was in my garden today (enjoying it), hose in one hand, cell phone in the other, chatting with a friend about starting a company (which we both enjoy) when it hit me: gardens and gardening are similar to companies and entrepreneurship.

First, gardens. All gardens begin with site selection: A gardener selects an area and commences preparation. The gardener will then plant seeds. Seeds are fueled by water (not too much, not too little), sunlight (the more, the better) and artificial and organic pesticides. As we explored last week, our pollen-transporting friends, bees, play a role too. Given a week or two of nurturing, the seeds sprout and plants emerge. Given many more weeks of nurturing and fuel, the plants grow, blossom, produce vegetables, and collectively dispel inconvenient truths. Visitors visit the garden, chat with the gardener, and (perhaps) enjoy its products. As the garden grows, more gardeners and more fuel are needed; the simple joy of seeds, soil and water evaporates. And, gardeners oftentimes create and cultivate new gardens with new plants in different sites. Great gardeners love what they do. They sweat. They get their hands dirty. They are protective, even defensive, of their garden. They – with help from mother nature – make something out of nothing. Eventually, gardens (or the plants therein) die. Generally, they are replaced or replenished. Most gardeners enjoy the fruit of their labor (fresh fruits and veggies and flowers), and some even make money at it.

Now, companies. All companies begin with selecting and preparing an idea. The entrepreneur (garden) then tests and incubates his ideas (seeds), fueled by seed capital, refrigerators full of Mountain Dew and Coors Light, and colleagues (team members, advisors, family). Given time, the company will sprout an embryonic (V1) product. Given more time and nurturing and fuel, the company matures, blossoming and producing worthy products (and perhaps propelling inconvenient truths). Visitors visit the company, meet with the entrepreneur and his fellow gardeners, and (perhaps) purchase products or add fuel (capital) to the company. As the company grows, more team members and more capital are needed; the simple joy of ideas, inspiration, and all-nighters evaporates. And, entrepreneurs oftentimes create and cultivate new companies with new products. Great entrepreneurs love what they do. They sweat. They get their hands dirty. They are protective, even defensive, of their company. They – with help from others – make something out of nothing. Eventually, companies (or their products) die. Generally, they are replaced or replenished. Most entrepreneurs enjoy the fruit of their labor (independence, pride, gratification, recognition), and some even make money at it.

Time to get back to my garden.

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Post-script (8.21.07): Dug up a relevant and terrific post from Richard Watson, Unearth Growth by Digging in the Dirt. Watson is brilliant and I love his encapsulation: Gardening has no end. There is no finish line. It is about a journey not a specific destination.

Monday, June 4, 2007

The Secret of Apple Design

We’ve explored the importance – the necessity – of simplicity, be it in pitching your company to investors, designing and marketing products, or creating sustainable business models. At times I think I have Einstein’s quote (making the simple complicated is commonplace; making the complicated simple, awesomely simple, that’s creativity) tattooed on my tongue. And Drucker: Effective innovations start small. They are not grandiose. They try to do one specific thing. Sage stuff.

The May/June Technology Review is loaded with solid articles, including The Secret of Apple Design: The inside (sort of) story of why Apple’s industrial design machine has been so successful (free registration is required). On the heels of last week’s Jobs-Gates reunion at the WSJ D conference, it’s a timely and worthy read.

Yes, I’m biased … I am pecking away on my 14th Mac (my first was an SE purchased in 1985), listening to tunes on an Apple HiFi, and I’m on my fifth iPod. Biased or not, Apple gets it: The wonderful simplicity, dependability, functionality, and beauty of their software and hardware products trump all others. How and why can Apple continue to design simple and desirable products, while other OEMs and software companies bloat along and create crap? “Though the idea of a simple high-tech device seems counterintuitive (why not offer more functionality if you can?), it's worked for Apple,” opines Daniel Turner, the article’s author.

"The hardest part of design, especially consumer electronics," explained Don Norman, who was vice president of advanced technology at Apple from 1993 to 1998, "is keeping features out." Simplicity, he says, is in itself a product differentiator, and pursuing it can lead to innovation.

"The most fundamental thing about Apple that's interesting to me," said Mark Rolston, senior VP of creative at Frog Design, "is that they're just as smart about what they don't do. Great products can be made more beautiful by omitting things."

Apple’s former director of industrial design (1989-1996), Robert Brunner, concurs: "The businessman wants to create something for everyone, which leads to products that are middle of the road. It becomes about consensus, and that's why you rarely see the spark of genius."

I have an apocalyptic memory of a Wired magazine cover in the mid-to-late 90s (around the time Steve Jobs returned). The sobering cover featured the colorful Apple logo encircled by barbed wire, with a drip of blood dropping from the logo and a one-word headline: PRAY. Jobs returned and things changed.

"Critical to Apple's success in design is the way Jobs brought focus and discipline to the product teams," Norman explained. "[Jobs] had a single, cohesive image of the final product and would not allow any deviation, no matter how promising a new proposed feature appeared to be, no matter how much the team complained. Other companies are more democratic, listening to everyone's opinions, and the result is bloat and a lack of cohesion.”

Norman continued: "There were three evaluations required at the inception of a product idea: a marketing requirement document, an engineering requirement document, and a user experience document.”

The unwavering focus on simplicity – in design, in a user’s experience, in functionality – is at the core of all Apple products. (Jobs has greatly simplified, integrated and focused Apple’s business model too.) Rolston elaborates: "Marketing is what people want; engineering is what we can do; user experience is 'Here's how people like to do things.'"

Well said.

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Post-script (6/11/07): Quick, relevant read in this week's Economist, Lessons from Apple: What other companies can learn from California's master of innovation. The article discusses Apple's approach to network innovation (the value of a combinatorial approach), and the secret of simplicity. Here's a quick morsel:

Apple illustrates the importance of designing new products around the needs of the user, not the demands of the technology. Too many technology firms think that clever innards are enough to sell their products, resulting in gizmos designed by engineers for engineers. Apple has consistently combined clever technology with simplicity and ease of use.

Post-script II (7/3/07): One of the original (I believe there were 17) Mac creators, Guy Kawasaki, shared this chart tracing the evolution of Apple product design from 1976 to 2007. Cool stuff.

Post-script III (8/13/07): My PC-slogging, black-and-white thinking amigos will enjoy a quick pictorial from metacool.

Ubiquity

I’m battling through a day of spotty Internet access. The New AT&T doesn’t get it, at least in our neighborhood. My drip, drip, drip connection makes me question the feasibility of ubiquitous Internet access. Some day it will be analogous to turning the faucet (water) or flipping a switch (electricity). Until then, we groan.

What is ubiquity? Literally -- existing or being everywhere, or in all places, at the same time – it’s not synonymous with my perceived definition, that of a pervasive or available-to-all state. The latter twist works well when applied to innovations and the resulting industries, companies and byproducts.

Five ubiquitous transformations come to mind: information (democratized – everywhere, anywhere – access through the Internet), communication (printing presses, postal carriers, telephones, cell service, Internet connectivity), refrigeration (check out our previous reference to Kawasaki’s story), electricity (quick wiki historical take here), and transportation (transcontinental railroads and freeways, public transportation, airlines). Sparked by a ubiquitous innovation, industries were born, byproducts spawned, and riches made.

Thanks to ubiquitous developments, the world is pancaking. Quickly. Here’s Thomas Friedman’s take from his 2005 eye opener, The World is Flat:

Whenever civilization has gone through one of these disruptive, dislocating technological revolutions – like Gutenberg’s introduction of the printing press – the whole world has changed in profound ways. But there is something about the flattening of the world that is going to be qualitatively different from other such profound changes: the speed and breadth with which it is taking hold. The introduction of printing happened over a period of decades and for a long time affected only a relatively small part of the planet. Same with the Industrial Revolution. This flattening process is happening at warp speed and directly or indirectly touching a lot more people on the planet at once. The faster and broader this transition to a new era, the more likely is the potential for disruption, as opposed to an orderly transfer of power from the old winners to the new winners.
As my wireless connection continues to stumble and bumble, I’m reminded of a presentation I enjoyed a few years ago, delivered by Intel’s then (still?) CTO. His talk centered on a historical look at connectivity, segmented into three phases. He commenced with phase one, archetyped by a 20-pound-or-so, 12-inch in diameter bundles of cables. He dropped -- THUMP! – the archaic mish-mash onto the stage, asserting that this is how most people communicate. He then held up a finger-width string of fiber-optic cables. This – TING! – is how many people communicate, he shared, dropping the optical cables to the stage. (The world is wired = The world is flat?)

The CTO then paused, a felt-like-a-minute, Paul Harvey-esque 15-second or so silence. The future? He paused and eyed the auditorium’s ceiling, arms outstretched, palms open. Air. It is ubiquitous.

Intel obviously did not invent air; it has been ubiquitous -- existing or being everywhere, or in all places, at the same time -- forever. But, the company’s future (as the CTO asserted) rests on its ability to maximize the utility and democratize and monetize the use of a free medium that has always existed.

Now, if they can just do something about my Internet connection.

Post-post note: I just skimmed this week's Barrons, including a review of Pop!: Why Bubbles Are Great For The Economy. While I've yet to read Pop!, it appears to sing -- with market bubble bursts as the catalyst -- a similar tune to our ubiquity discussion. Here are a few morsels from the Publishers Weekly review:
... these bubbles, with their hype and madness and overenthusiasm, are not to be feared—they're actually a primary engine of "America's remarkable record of economic growth and innovation." The author surveys modern bubbles and finds the benefits far more durable than the disruptions: in each case, most investors flopped, but businesses and consumers found themselves with a "usable commercial infrastructure" that they quickly put to new uses. The telegraph "led to the creation of national and international financial markets"; extra railroad lines made national consumer brands possible and gave consumers access to distant stores; extra fiber-optic capacity gave everyone Internet access after the bust.

Friday, June 1, 2007

The Dip


Yesterday was like Christmas: The USPS delivered a box of books from Amazon. I always forget what I’ve ordered, but then nod my way through the stack, settling on the first victim. Yesterday’s was The Dip: A little book that teaches you when to quit (and when to stick), the latest from Seth Godin. The Dip is a terse, insightful, ah-ha, I’ve been there read; I devoured all 80 pages (yes, it’s a little book) by dinnertime.

I'm not a fan of motivational books, but The Dip is worthy, not sappy. Godin begins with three premises: Quit the wrong stuff; Stick with the right stuff; and, Have the guts to do one or the other. The underlying engagement is to be the best in the world. Sounds unreasonable, eh? The world’s a large place, and few stand at the top. Godin boils “the world” down:

Anyone who is going to hire you, buy from you, recommend you, vote for you, or do what you want them to do is going to wonder if you’re the best choice. Best as in: best for them, right now, based on what they believe and what they know. And in the world as in: their world, the world they have access to.
As he has amplified in previous books – Permission Marketing is my favorite of his half-dozen – Godin asserts the mass market is dying:
There is no longer one best song or one best kind of coffee. Now there are a million micromarkets, but each micromarket still has a best. If your micromarket is “organic markets in Tulsa,” then that’s your world. And being the best in that world is the place to be.
He adamantly contends “best” is a subjective view in the eye of the consumer, and “world” is selfish: it’s the consumer’s definition, not yours. “It’s the world I define, based on my convenience or my preferences,” he states. “Be the best in my world and you have me, at a premium, right now.” As the world shrinks and choices increase – we’re being googled! -- being the best is more important than ever.

Godin gets it. Too often, companies take a horizontal, opportunistic market approach. Instead of mastering a solution for a specific micromarket, they generalize. The result: Mediocrity in a Groundhog Day manner. Too often too, individuals are generalists: We do a little of everything -- professionally, socially, athletically. Diversity is desirable, but it’s impossible to be the best if you’re half-ass involved in 10 activities.

Back to the Dip. What is it? As Godin opines, when you first start something (running a marathon, launching a company, learning how to snowboard), it’s fun. Over the next few days and weeks, the rapid learning you experience keeps you going. Whatever your new thing is, it’s easy to stay engaged. And then the Dip happens.
The Dip is the long slog between starting and mastery. A long slog that’s actually a shortcut, because it gets you where you want to go faster than any other path.
If you’re involved in a worthy cause – entering a new market, picking up a new sport, cultivating a desirable relationship – you need to lean into the Dip. Push hard. Change the rules. Get through it. If it’s not worthy – if it’s a Cul-de-Sac (French for “dead end”), as Godin archetypes – quit. Resist mediocrity. Do something new.

Jack Welch once said, “If you can’t compete, don’t.” When he reinvented GE, the most fabled decision he made was: If we can’t be #1 or #2 in an industry, get out. Why bail on a billion-dollar division that’s #4 in an industry? Because, Godin asserts, it distracts management attention. It sucks resources and capital and focus and energy. And most of all, it teaches people in the organization that it’s okay not to be the best in the world.

In previous posts we’ve explored the importance of focus and the imperative of succinct market segmentation (solving a specific problem for an identifiable, self-referencing, homogeneous market segment), particularly in resource-strapped organizations. Godin shares an apt analogy: A woodpecker can tap twenty times on a thousand trees and get nowhere, but stay busy. Or he can tap twenty-thousand times on one tree and get dinner.

As I type, Social Distortion is covering Johnny Cash's Ball and Chain: You can run all your life, but not go anywhere. Sounds like a confused woodpecker.