Ben Casnocha: The Blog

Notes from Spring Speakers '08

I saw a bunch of speakers this spring who visited Claremont. Below are my rough notes from Joel Kotkin, David Gergen, Sonja Lyubomirsky, Rodrick MacFarquar, David Brooks, Jonathan Rosenberg, Joel Fleishman, Orville Schell, Seth Leher, Marcy Wheeler, Robert Rosenthal, Gregg Vanoureck, Josh Lerner, and Kazuhiko Togo.

Here are my notes from last semester, which include Bono, Gregg Easterbrook, William Kristol, Anderson Cooper, Peter Wehner, and Orhan Pamuk.

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Joel Kotkin, author, The City: A Global History and The New Geography: How the Digital Revolution is Reshaping the American Landscape

On cities and California's economic future:

• Superstar cities don't have room for a true middle class.
• Are cities still vehicles for upward mobility?
• Second tier cities should stop trying to model themselves after creative cities -- every city is different. Kansas City invested $500 M in a performing arts center instead of focusing on the basics.
• Catholic Church weakening in influence is a problem for cheap, good education.
• Cities should focus on growth and retention of jobs, esp blue collar ones.
• Shortage in plumbers, welders. We don't need more PhDs. More machinists, less poets.
• LA job growth - 9th out of 10th out of the top ten metro areas in US. That's bad.
• The left is a holding cell for every kind of special interest lunacy.
• Republicans demonize immigrant groups, but they're 40% of the CA population.
• CA infrastructure used to be 20% of its budget; now only 3%.
• 1/3 of LA-USD budget is paying retired teacher pensions.

Here's a QuickTime version of Kotkin's speech.

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Sonja Lyubomirsky, author, How of Happiness

• "Hedonic adaptation" - as we adapt to good things the positive effects of the good thing diminish. The moment something is in your attentional background (you stop actively noticing the new car smell) - you've adapted.
• Definition of happiness has two components: Positive emotions and a sense that one's life is good.
• Determinants of happiness:
  • 50% genetic
  • 10% circumstances
  • 40% uncharted: intentional activity
• If you study happy people you find commonalities. They're social, gracious, savor the present, spiritual religious, etc.
• Everything in life requires effort. Why is your emotional life exempt from this? Happiness takes effort.
• Acts of kindness make you feel good. They involve sacrifice. Acts not normally expected are good.
• People who practice optimism and gratitude letters, etc are happier over the long term. Gratitude more powerful than optimism.
• "Art of Happiness" by Dalai Lama is good book.

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Rodrick MacFarquar, Leroy B. Williams professor of history and political science, director, John King Fairbank Center for East Asian Research, Harvard University

On China:

• Empire concept collapsed because it no longer had guiding ideology.
• Warring period: 1916-1928.
• 1950's - class struggle yrs - many died and suffered
• Can't understand China if you don't understand cultural revolution.
• CCP have lost credibility - members in the party today don't believe in anything.
• More Chinese are better off today than ever before.
• There will be a traumatic event that triggers a revolution of sorts.

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David Brooks, columnist, New York Times:

• "I'll be brief because many of you are academics, and you're not here to hear me talk, you're here to hear yourselves talk."
• He likes Edmund Burke.
• People learn when there's an emotional connection.
• All factions of conservative movement united around distrust of government - this ain't enough.
• Obama's perceptiveness / self-awareness / stability is striking.
• McCain's morality is based on honor, not morality. #1 trait is aloofness - somewhat detached personality.
• Conservatism shouldn't have permanent policies (like tax cuts): don't get moral about a situational policy issue.
• Conservatism is about not knowing much; modest about what we can know/do.
• Conservatism is philosophy first, policy second. Liberalism is policy first, philosophy later.
• Conservatism values social mobility more than equality.
• Top issues in the election: bipartisanship, immigration, healthcare.
• People aren't solely self-interested economic rational creatures. If this were the case, why would 30% of students drop out of high school even though it's econ ruinous to do so?
• What's the point of being a democrat if you can't play the class card?
• Bush seems 40 IQ points smarter in private than in public.

Here's a QuickTime version of Brooks' speech.

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Jonathan Rosenberg, senior vice president of product management and marketing, Google, Inc.

Keys to innovation:

• Small groups of specialists are bad
• ideas can come from anywhere
• hire great people
• sharing/openness: trust your people with things
• can't control the platform anymore
• morph ideas but do not kill them
• convergence will be at the data level, not device level
• users before money
• disinformation is online; but the truth also emerges faster
• iterate on products
• data must drive everything. at GOOG when making a prez there are two projectors, one for your PPT, the other for your source data
• have big vision / think big
• Bet on a trend or fall victim to one
• accept a smaller piece of a bigger pie, rather than a big piece of a small pie
• Feed the winners, starve the losers
• HIPPO - be careful of the highest paid person in the room's opinion - don't let him/her dominate or over-influence
• Never surrender
• Reward innovation: pay the best guy the most
• Learn how to learn

Here's a YouTube video of Rosenberg's speech.

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Joel Fleishman, professor of law and public policy, director, Samuel and Ronnie Heyman Center on Ethics, Public Policy, and the Professions, Duke University; author, The Foundation: A Great American Secret- How Private Money is Changing the World

On foundations and philanthropy:

• Last year there were 20 gifts @ $400 M or more
• Buffett gave $31 B to Gates Foundation
• Gates will spend itself out of existence within 50 yrs of the death of the last of three survivors
• Foundations have done more than most know
• They need to be more transparent
• Only 5% of foundations have acknowledged failures in public
• US Treasury loses $40-50 B a year from tax savings on gifts
• There's no R&D in non-profit world - crazy - they need to spend to figure out how to best spend their money.
• Last year $1.4 trillion was spent by non profits

Here's a QuickTime version of Fleishman's speech.

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Orville Schell, Arthur Ross Director, Center for U.S.-China Relations, Asia Society; former Dean (1996-2006), Graduate School of Journalism, U.C. Berkeley

On China and the environment:

• China thinks they have a right to develop
• Den Xiaping wanted to reform China economically, not necessarily politically
• When China does something, they do it extremely
• Several million people pulled out of poverty recently
• Leninist capitalism: more stable than Kenya, for example
• Coal is what makes China work
• Historical baggage: US polluted during their industrial revolution. Why should China have to hold back just because US has gone Jesus on global warming?
• Tibet is the water tower of Asia; glacier melt
• 25% of particles over LA is from China
• 750k people dying prematurely due to pollution
• Their challenge is our challenge: the environment

Here's a QuickTime version of Schell's speech.

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Seth Leher, Avalon Foundation in the humanities and professor of English and comparative literature, Stanford University; author, Inventing English: A Portable History of the Language

On linguistics:

• Economic constrains affect the aesthetic content of a book. In the Victorian Era, reading took place on trains, so books came out in three volumes.
• Movies are its length due to economics, not necessarily aesthetic value.
• Is a linguist supposed to describe language or prescribe what language is supposed to be? not possible to legislate language use. Can't impose linguistic rules and regs.
• Language will change at points of linguistic contact -- e.g. Eng/Span.
• Sports reporting goes on in the present tense. Children today talk more in the present tense - self-description in the present.
• Strunk and White represent core puritan values, simple, direct, etc. Just one aesthetic.

Here's a QuickTime version of Leher's speech.

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Marcy Wheeler, political blogger (emptywheel), Comment is Free section, Manchester Guardian Online; author, Anatomy of Deceit: How the Bush Administration Used the Media to Sell the Iraq War and Out a Spy

On bloggers and journalism:

• When politicians feed journalists, the journalists re-hash the soundbites.
• Journalists try to propagate the narrative about journalism -- journalism first, story second. Judy Miller depicted as this first amendment martyr even though she had been printing the erroneous WMD stuff Bush fed her, and the Scooter case.
• Gotta understand the sources of journalists: everyone has a source and we do their biddings, sometimes.
• Bloggers can help build timelines -- reporters have tunnel vision because they have daily deadlines.
• Bloggers can do deep dives on publicly available information
• An aide to Dick Cheney said, "When Dick Cheney goes on Meet the Press, he controls the agenda." We need to accept that it's not as it sometimes seems -- ie that Russert asks tough hitting questions.
• Every journalist has their own definition of "off the record".

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Robert Rosenthal, distinguished professor of psychology, U.C. Riverside; co-author, Contrasts and Effect Sizes in Behavioral Research: A Correlational Approach

• expectations matter - those labeled "genius" outperform others
• Interpersonal expectation effect is powerful
• Undergrads do stuff b/c they don't know it can't be done

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Gregg Vanoureck, author of Life Entrepreneurs

• Biz entrepreneurship is 1.0, Social entrepreneurship is 2.0, life entrepreneurship is 3.0
• Entrepreneurial life is not linear; it's iterative.
• Finding your purpose in life is a combination of reflection and action.
• A business entrepreneur owns his own enterprise. A life entrepreneur owns his life.
• Common traps:
  • Walking a path in life that others have chosen - ie, not YOUR path
  • Sticking with the first path you choose - if you're successful on a path, the switching costs increase over time, so you get locked in and have a hard time jumping off the train. As Drucker said, your odds of choosing the right career/job right out of school is one in a million
  • Postponing happiness - "someday I'll be able to lie on a beach" etc.

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David Gergen, frmr presidential advisor, author, Eyewitness to Power: The Essence of Leadership, Nixon to Clinton.

• "Reagan: when faced with two temptations, I choose the one which gets me home by 9:30 PM."
• The next presidency will face some of the most difficult challenges...ever? In the first year s/he will deal with economic issues and foreign policy. Year two Bush tax cuts expire. Year three social security/healthcare. Healthcare costs are massive.
• American superpower status has been great for the world.
• Bill Clinton is a hard dog to keep on the porch.
• There's the inside game - DC people. And the outside game - the people. Gifted politicians can play both games.
• Hillary Clinton would be a great OMB director.
• With Clinton we'll get a predictable D.C. slog.

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Josh Lerner, Jacob H. Schiff professor of investment banking, Harvard University; co-author, Innovation and Its Discontents: How Our Broken Patent System is Endangering Innovation and Progress, and What to Do about It

Are there job losses in a firm that gets taken over by a private equity firm via an LBO? First two years yes, but long term no difference.

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Kazuhiko Togo, former Japanese ambassador to the Netherlands; visiting professor of international relations, Seoul National University; author, Japan's Foreign Policy 1945-2003

On Japan:

• Abe tried to revise constitution away from pacifism
  
• Defeat in WWII was searing and to understand Japanese psyche requires understanding this loss
• Koizumi partnered w/ US on many things
• '78 - China reform: doing diplomacy
• '82 - controversies about how to refer to China in school textbooks
• '89 - Tiannamen incident - Japan said it was unacceptable but "we shouldn't isolate China" - this won good will w/ China
• '95 - Murayama statement apologizing for its aggression against Korea
• Koizumi re-tensified relations w/ Korea and China...regional cooperation decreased and progress diminished.

Here's a QuickTime version of Togo's speech.

Fundamental vs. Instrumental Reasons

From the always-interesting Dan Pink, in an interview with Cal Newport:

What’s the biggest myth about the post-graduation search for a job that you would like to dispel?

That you need to have a carefully articulated plan.   Too many people make career decisions for instrumental reasons — because they think what they’re doing will lead to something else.  Not enough people make decisions for fundamental reasons — because of the value of the activity itself.

The dirty little secret is that instrumental reasons don’t work. It’s way too tumultuous out there. The people who really flourish are those who make decisions for fundamental reasons. They have to live with a certain amount of ambiguity about not knowing what’s going to happen next. But that keeps them alert to unexpected opportunities and the serendipity you talked about earlier.

Quote of the Day

We think we know the ones we love, and though we should not be surprised to find that we don’t, it is heartbreak nonetheless. It is the hardest kind of knowledge, not only about another but about ourselves. To see our lives as fiction we have written and believed.

That's the opening of the new novel The Story of a Marriage, as found in this review.

Admitting to ourselves that we were terribly, terribly wrong about something is never easy. This is particularly difficult when it involves an errant character judgment. The quote above refers to love. It is also true about friendship. When, two years into a friendship, I discover I've dramatically mis-understood or mis-judged some aspect of a person's character (say the person is a compulsive liar and I just missed it) I am less angry at the friend and more angry at myself for failing to see it. And it makes me less certain in my other reads of people. If I was so wrong about Bob, could I also be missing something in Joe?

Since I'm a people person, honing my ability to size people up -- my ability to get a sense for someone's value system, ethical sense, etc -- is an on-going challenge.

Book Review: Smile When You're Lying

Chuck Thompson's book Smile When You're Lying: Confessions of a Rogue Travel Writer is a delicious collection of travel stories and rants. In addition to recounting his own adventures, in endlessly original and engaging language, he also directs missiles at his fellow travel writers and the travel industry more generally. Anyone who's read guidebooks or travel memoirs will sympathize with Thompson's take-downs. He rails against their trite, superlative-laden descriptions; their tendency to remarkable-tize everything and anything; their collusion with the very people they're supposed to be writing about in an objective manner. His thoughts here reminded me of my visit to India a couple years ago when I was comparing what my Lonely Planet guide was telling me and what the, um, messy reality outside actually was.

His own stories are entertaining, if a bit hard-to-believe at times. One chapter it's hookers in Thailand, the next it's the "Penis Olympics" in Japan. Through and through, though, he tells the stories with striking vividness.

Some favorite excerpts below. I recommend this book for anyone who enjoys international travel.

On Manila, Philippines:

Like Bangkok, Jakarta, and a handful of other festering, beggar-laden Third World megatropolises, Manila is one of the great sprawling shitholes of Asia, a reeking mess of poverty, traffic, smog, crime, corruption, and filth. Bursting with people who somehow maintain a bulletproof optimism in the face of decay, disorder, and daily tragedy, these are frentic slum-cities where anything, from blow jobs to military coups, can happen at any time. Cities that you love just slightly more than you loathe.

Rules on life and travel:

• Clean up your own mess, no matter how tough a job it is.
• Foreigners are almost never as bad as you think they'll be.
• A lot of interesting things can happen when you run out of gas.
• If the world can forgive the Germans, it can forgive anybody.
• Just when you think you've seen the best the world has to offer, there'll always be Canada.

One of many hits on travel writers:

Their bidding is done by an army of doltish travel writers whose inability to seize upon anything beyond the obvious and trite is based on either a profound inexperience abroad or by the kind of tittering acceptance that turns everything foreign, no matter how mundane or evil, into a "charming," "authentic," or "hilarious" cultural experience.

On Thailand and sex:

There are two kinds of girls you have sex with in Thailand. Those you pay and those you marry.

On why we should be more grateful for one of the "most complex, cooperative, and successful private systems ever constructed":

At DFW Airport in Dallas, a wildlife control office keeps a room filled with birds -- barn owls, doves, geese, and so on -- collected from troublesome avian populations that refuse to be driven from runway areas. Because birds can damage and potentially bring down a plane if enough of them get sucked into an engine, autopsies are performed on the salvaged birds to determine what they've been eating to eradicate their food source. That's called obsessive attention to detail, and an A-plus commitment to safety rarely seen by the public.

On why Chinatowns anywhere are overrated:

Every Chinatown distills the worst of the obligatory tourist trap: worthless trinkets, no public bathrooms, impossible parking, hit-and-miss food. Most of the guys cooking aren’t even real chefs; they’re recent immigrants dragooned into manning the grill. Chinatowns have stolen more time from weekend vacations than weather at O’Hare.

America and High Tech Entrepreneurship

I wrote an essay for the U.S. State Department on high tech entrepreneurship and what policies and cultural attitudes in America enable the creation of new businesses. It's written primarily to be translated into other languages for various U.S. embassies overseas. (Here's the Russian and Arabic versions online already.) As a result the sentences are short and simple.

Excerpts:

America’s cultural attitudes are even more important to its entrepreneurial success. In the United States, if you have the courage to start a business, you are celebrated and you are encouraged. You are seen as an innovator, a pioneer, a successful rebel. If you fail -- and there’s a good chance you will if you start your own business -- most Americans will shrug it off as a learning opportunity. There’s no shame in failing. Families, schools, and the media alike share this acceptance of failure.

In one sense, in the United States you have a permanent fresh start. Youth, in particular, are seen as beacons of innovation and creativity. As an aspiring young entrepreneur, I benefited from these attitudes. I became proud of my individuality and pursued my ideas without embarrassment.

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In the United States, the most successful entrepreneurs look different. Google, one of America’s powerhouse technology companies, was co-founded by a brainy Russian immigrant who did not care much for media attention. He earned a PhD in computer science at a top university. He studied how mathematical formulas could improve search engine results. Oracle, another powerhouse technology company, was founded by a college dropout who grew his company with aggressive sales strategies. He has become a media celebrity. All successful American entrepreneurs don’t look or act like real estate mogul Donald Trump; in fact, few do. Instead, successful business owners find the right path for themselves.

Unhelpful Predecessors and "Most Influential" Lists

Last week I posted about Jack Welch earning the title "least helpful predecessor" in his public remarks about Immelt. Today, on the front page of the Wall Street Journal, former CitiGroup CEO Sanford Weill says about the current CEO Vikram Pandit:

At a time like this, you really want people marching shoulder-to-shoulder with you. The leader needs to relate to the people. They need to know who they're following.

Which implies, of course, that the people are not marching shoulder-to-shoulder with Pandit. What good does this do? Why do former CEOs feel the need to give advice to the current CEO via the press? Egos, I say, egos. They want the spotlight.

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Yesterday's WSJ named Gary Hamel the "most influential business thinker alive," ahead of Bill Gates and others, based on this methodology. Umm, is there any businessperson who thinks Gary Hamel is more influential than Bill Gates? Has anyone even heard of Gary Hamel? Almost all such lists / rankings devolve into silliness because it's impossible to really measure these things. (By the way, their methodology was based on Richard Posner's methodology in his book Public Intellectuals -- it's a great book for understanding the role and organization of public intellectuals, but even Posner's "most influential" list of thinkers was a stretch.)

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Odds and ends: I'm on an 11 AM panel on Friday (May 9) at UCLA Anderson School Entrepreneur Conference and will also be speaking at ETH-Zurich (the best technical school in Switzerland) on May 19 at 7:15 PM in Zurich. Come one, come all!

What I've Been Reading

A few recent reads:

1. The Myth of the Rational Voter by Bryan Caplan. Tons already written about this on the blogosphere. One of the most influential political science books in recent years. Here's Bryan's article length summary on Cato Unbound which is a good starting point. I liked this book. I'll be writing more about it in a future post.

2. Who's Your City? by Richard Florida. Richard is a provocative thinker and always presents fascinating insights on cities and how place affects our well-being. This book continues the tradition, as he discusses why, contrary to popular belief, place matters more than ever in the age of globalization, how and why clustering happens in certain geographies, and the relationship between where one lives and happiness. I highly recommend the book.

3. Predictably Irrational by Dan Ariely. This had some fun moments and insights, but frankly didn't meet my expectations. I know by now that humans are irrational and we undergo all sorts of weird mental jujitsu when making decisions. I guess I have some fatigue with the behavioral science / pop econ genre at this point.

4. How'd You Score That Gig by Alexandra Levit. Here's my blurb in the book: "First, Alexandra Levit broadens your imagination about what kinds of careers are possible, and then after tantalizing you, she provides specific tips for breaking into the field. Enormously valuable!" It's a good resource for any young person wondering what s/he could do for a job...

5. Life Entrepreneurs: Ordinary People Creating Extraordinary Lives by Christopher Gergen and Gregg Vanourek. If you've heard me speak you've heard me talk about "entrepreneurship as life idea." So I smiled when I got introduced to the authors of a new book on the topic. Christopher and Gregg take a slightly different tack than me -- they emphasize the "purpose" part of life, I talk more about the nitty gritty of entrepreneurial approaches to activities. If you liked Bill George's and Peter Sims' True North, you'll probably like this book as there's some overlap.

6. Three Moves Ahead: What Chess Can Teach You About Business by Bob Rice. Bob and I share a publisher and shared an editor. He's not only a very successful businessperson but also an accomplished chess player and founder of the Wall Street Chess Club. This book explores the chess-life analogy. He creatively explores how chess concepts and pieces (bishop, knight, etc.) map to business. The problem with the book is it tries to appeal to non-chess players, too, hence preventing him from going deep on chess examples. And though he smartly acknowledges the limits of a single analogy driving the book, there are still moments where the analogy is a stretch.

7. Improv Wisdom: Don't Prepare, Just Show Up by Patricia Ryan Madson. This is the Stanford drama / acting teacher abstracting life lessons from the world of improv. Amazon reviews are all five stars and someone recommended this to me. I found her advice good and endearing but ultimately not very impactful or original.

This list was largely motivated by trying to keep up with friends' books and whatever is hot off the press. This summer I'll be reading more novels, and longer / older books.

The Saddest Paragraph I Read Today

The first and second time her husband shot her, the distressed woman in her 30s rejected advice to file a complaint. To do so, she explained, would require the presence of her obligatory male guardian, who happened to be...her husband. Without him, her testimony would not be legally valid. Besides, the all-male police might accuse her of “mixing” with the opposite sex, a crime in the eyes of most Saudi judges. The third time her husband shot her, she died.

That's from the Economist on the status of women's rights in Saudi Arabia.

Why China's Infrastructure Projects Zoom

Paul Goldberger had a piece in a recent New Yorker on why and how airports are so poorly designed from an aesthetic perspective. Near the end he expresses awe at size and pace of construction of China's new airports. I myself remember being stunned by the sheer capacity of China's airports -- dozens of unused gates, built in anticipation of expansion. Goldberger makes this important point when comparing the new Beijing terminal to Heathrow's new BA terminal:

The Beijing terminal cost $3.65 billion to build, which in China bought a structure bigger than all five terminals at Heathrow put together, for less than half the cost of the new Terminal 5. The project was conceived, designed, constructed, and opened in four years, whereas the Heathrow terminal, from conception to completion, took twenty years...These widely divergent timetables are not a matter of Chinese efficiency versus British dallying: the British, like the Americans, pay the price of democracy. The Chinese government does not have to contend with environmentalists, financing problems, or recalcitrant airlines; the public hearings over the Heathrow terminal took the same amount of time as the entire construction of the Beijing one. China simply decrees what it will build, and floods the construction zone with migrant workers whose daily pay probably wouldn’t buy a British construction worker’s lunch.

And that lack of democracy, of course, is what makes China so different from emerging-market rival India. China kicks India's butt from an infrastructure perspective. But perhaps India has the more sustainable political infrastructure in the long term.

What People Remember or Relate To: Other People

What people remember, and relate to, quite simply, is other people.  There are few truths in marketing more important than that.

That's Tyler Cowen, as told to Kevin Gentry and included in his "Fundraising Tip of the Week" email. Kevin goes on to say that marketing your personality is key in business.

All good bloggers are able to in some way convey their personality through their blog. If your blog has no voice or personality, readers will flee. What makes blogs fun to read is that they're personal and don't pretend to be Objective (aka, the Voice of Death). Many people who have shown up to the blogosphere recently, particularly academics and journalists, write like they would in a newspaper. Usually doesn't work.

Tyler is one of the best at conveying his personality through blogging.

People Who Make You Want to be Smarter

A commenter on this YouTube video clip of David Foster Wallace says:

He makes me want to be smarter. He makes me want to hit the library and not leave until I pass out from reading.

A powerful image. I myself have had moments like this. It's usually when I have an overwhelming desire to take out a tape recorder and record every word the person is saying -- that's when I know I'm really being inspired to soar. Not every person who's smarter than me inspires me to want to be smarter. But there are some who do, it's a short list, and I try to talk to them (or read them - if I don't know them personally) as much as possible.

Do you have a list of people who make you want to be smarter?

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The Wallace clip is from a series of readings / clips taken at the Harper's 150th Anniversary. Tom Wolfe, Annie Dillard, Lewis Latham, Richard Rodriguez, George Saunders all have their own YouTube pieces.

Getting to the Point of "I Can Do This!"

Before you can embark on a new project, you need to believe you can do it. In order to believe you can do it, you need have to some self-confidence. In order to have self-confidence, I think you need to do one or both of the following:

• Accumulate small wins. Successfully take baby steps. So if you want to write a book, for example, you first write and publish an article that gives you confidence in your writing ability.
• Expose yourself systematically to the techniques and habits of those who have already done it. In other words, demystify the accomplishment. If you want to start a company, read tons of first-hand accounts and talk to entrepreneurs to understand step-by-step how they did it. This will de-mystify the achievement, not allowing you to attribute John Doe's success as some "magical talent" that's been with him since the womb (a typical excuse).

By the way, self-confidence -- telling yourself, "I believe I can do this!" -- is only half the job. The other litmus test before starting something is, "Does this excite me?" Both must check out positive for the project to succeed.

How else do you cultivate the self-confidence that will allow you to set forth towards an ambitious goal?

(hap tip to Cal Newport for helping spark and think through this idea)

The Surest Defense Against Evil

From Joseph Brodsky's 1984 commencement speech at Williams College:

The surest defense against Evil is extreme individualism, originality of thinking, whimsicality, even -- if you will -- eccentricity. That is, something that can't be feigned, faked, imitated; something even a seasoned impostor couldn't be happy with. Something, in other words, that can't be shared, like your own skin: not even by a minority. Evil is a sucker for solidity. It always goes for big numbers, for confident granite, for ideological purity, for drilled armies and balanced sheets.

Wonderful. Found in his collection of essays entitled Less Than One.

(hat tip: Robert Faggen)

CEO Pay Gap - Research Summary

Bob Sutton has a great summary of the research around CEO comp and how overpaid CEOs affect business performance / recruitment. Here are the findings he cites, some editing on my part:

• You can overpay other senior executives too and thus entice them to stay; or you can create a big gap between the overpaid CEO and everyone else, which leads other senior executives to jump-ship. Either way, overpaying the CEO has costs beyond the extra dollars the CEO gets.


• When there are bigger pay differences between the CEO and other members of the top management team, organizational  performance tends to suffer -- and the negative effects of such pay dispersion is most pronounced in high-technology firms.


• When the CEO is getting a lot more money than the next executive, he or she will likely be afflicted with other signs of narcissism.


• If the CEO is overpaid, the decision to overpay the rest of the top team isn't a purely good thing -- reducing pay dispersion when the CEO is overpaid can cause a company to waste even more money.


• While this research so far seems to be that paying the CEO a lot more than others isn't a good thing for the company, there are some studies that suggest this isn't always the case.

I've seen firms fall prey to the fourth point -- they pay the CEO what the market rate is (they have no choice if they want the best) and then, in an effort to narrow the gap between his comp and everyone else's, they overpay the senior execs. I would advise a company to pay the CEO what he could command in the market, pay the senior execs what they could command in the market, then use other types of incentives to retain and please the senior execs as opposed to simply escalating their cash comp to reduce the pay dispersion between #1 and #2, 3, 4, and 5.

Peter Thiel's Optimistic Thought Experiment

Peter Thiel is one of the most successful start-up entrepreneurs in recent time (PayPal), start-up investor (Facebook), and hedge fund manager (Clarium). Needless to say, it's worth following his thinking.

I've now twice-read his 10,000 word essay in the latest Hoover Policy Review entitled The Optimistic Thought Experiment: In the Long Run, There are No Good Bets Against Globalization. I still can't get my head around all his points, including his proposed connection between financial bubbles and the level of globalization. Hopefully you, dear reader, can help me. Until then I thought I'd excerpt some of the more interesting paragraphs that jumped out at me.

He frames his essay thusly:

For macro investors, it would be an abdication not to wrestle with the central question of our age: How should the risk of a comprehensive collapse of the world economic and political system factor into one’s decisions?

From the point of view of an investor, one may define such a “secular apocalypse” as a world where capitalism fails. Therefore, the secular apocalypse would encompass not only catastrophic futures in which humanity completely self-destructs (most likely through a runaway technological disaster), but also include a range of other scenarios in which free markets cease to function, such as a series of wars and crises so disruptive as to drive the developed world towards fascism, anarchy, or both.

Are all past bubbles part of The Great Boom?

It is beyond the scope of this essay either to enumerate all drivers of these trends or to determine whether the pro- or anti-globalization forces will gain the upper hand in the longer term. Still, the following conclusion seems safe: Since we are very far from any stable equilibrium, the future is likely to be much more or much less globalist than the present.

Nevertheless, this Great Boom is also very different from all previous bubbles. This time around, globalization either will succeed and humanity will achieve a degree of freedom and prosperity that can scarcely be imagined, or globalization will fail and capitalism or even humanity itself may come to an end. The real alternative to good globalization is world war. And because of the nature of today’s technology, such a war would be apocalyptic in the twenty-first century. Because there is not much time left, the Great Boom, taken as a whole, either is not a bubble at all, or it is the final and greatest bubble in history.

On technology vs. "technology":

...There also exists a critical distinction between technology and investments called “technology.” To take a particularly easy case from the prior technology bubble, a “technology” company that sells pet food online by purchasing Super Bowl advertisements offline may not be a technology company at all. The solutions to hard engineering problems are not necessarily valuable, but it is unusual for the solutions to easy engineering problems to have much value in the long term.

On the China bubble:

To say the least, there are many eerie parallels between the Chinese stock market of early 2007 and the Nasdaq of early 2000: an abstract story of long-term, exponential growth; rampant speculation; and unprofitable or overvalued companies.

One intermediate possibility is that the China of 2014 will be like the internet of 2007 — much larger, but with winners very different from the ones that investors today expect. The largest New Economy business is Google, a company that scarcely registered in early 2000. Might it also turn out that the greatest Chinese companies of 2014 will be concerns that are private and tightly controlled businesses today, rather than the high-profile and money-losing companies that have been floated by the Chinese state?

By the way, here are some video interviews with Thiel on the BigThink, a wonderful collection of stimulating, brief interviews with smart people.

Are You a Golden Juggler?

Some people are born to lift heavy weights, some are born to juggle with golden balls, says Joseph Epstein:

The golden jugglers are the ones with wit, the ability to pierce pretension, and the calm detachment to mock large ideas and salvationist schemes. They eschew anger and love small perfections. They go in for handsome gestures...have wide sympathies, and understand that a complex point of view is worth more than any number of opinions.

That's from Epstein's latest essay collection called In a Cardboard Belt! via a Claremont Review of Books review. The late Bill Buckley called Epstein the wittiest writer alive.

Other Epstein nuggets found in the review:

• "Charm is the desire to delight, light-handedly executed."
• "Writing cannot be taught, but it can be learned."
• On how to act now that he's 70 years old: "If the game is to be played decently at seventy, one must hark back as little as possible to the (inevitably golden) days of one's youth, no matter how truly golden they seem...Start talking about thenadays and one soon finds one's intellectual motor has shifted into full crank, with everything about nowadays dreary, third rate, and decline and fallish. A big mistake. The reason old people think the world is going to hell, Santayana says, is because they believe that, without them in it, which will soon enough be the case, how good really can it be?"

What is the Meaning of Democracy?

Here's E.B. White's take on "the meaning of democracy" as written in The New Yorker during the middle of World War II:

It is the line that forms on the right. It is the don't in don't shove. It is the hole in the stuffed shirt through which the sawdust slowly trickles; it is the dent in the high hat. Democracy is the recurrent suspicion that more than half the people are right more than half of the time. It is the feeling of privacy in the voting booths, the feeling of communion in the libraries, the feeling of vitality everywhere. Democracy is a letter to the editor. Democracy is the score at the beginning of the ninth. It is an idea which hasn't been disproved yet, a song the words of which have not gone bad. It's the mustard on the hot dog and the cream in the rationed coffee.

(Hat tip to my Mom, who spotted this in a book she's reading about Churchill and Roosevelt's friendship.)

Jack Welch: Least Helpful Predecessor

Jack Welch, legendary former CEO of GE. Jeff Immelt, current CEO of GE. Welch groomed Immelt.

So this is not what Immelt probably expected from his former mentor as GE suffers a bit on Wall Street:

On April 16th, in an apparent bid to wrest the title of "least helpful predecessor" from Alan Greenspan, the suddenly outspoken former Federal Reserve chairman, Mr Welch informed viewers of...CNBC, that "Jeff has a credibility issue. He's getting his ass kicked," before promising to "get a gun out and shoot him if he doesn't make what he promised now."

It'd be one thing if Immelt was thought to have a motivation issue or didn't know that he was in some deep shit. That's not the case here. This is just dumb on the part of Welch.

On the topic of Welch, I've long been befuddled by how much businesspeople idolize the guy. I mean, OK, so he had an incredible run at GE. He's been one of America's most successful CEOs. That doesn't mean every business owner can learn from him.

Circumstances matter. Are the tips from a CEO of a $300+ billion dollar company going to be useful to someone running a 10 person company, or even a 1,000 person company? I doubt it.

There are many successful CEOs and it'd be smarter, it seems to me, to find someone who is doing a little bit better than you (ie, 3-5 years ahead in terms of progress), and study that person.

Instead, we flock to read Welch and Trump and Gerstner, thinking that their experiences can help us understand our own. Worse yet, people fork over thousands of dollars just to hear Donald Trump speak in-person at a Learning Annex conference or whatever. I couldn't think of a worse way to invest professional development money.

Should You Take Notes in a One-on-One Meeting?

Recently I met with some young, green entrepreneurs to discuss their business idea. I gave them a bunch of feedback at the end of the meeting. They nodded hungrily and said they appreciated it.

One problem. Neither took a single note during the meeting. As I read off a list of 6 or 7 specific things I had written down in my notebook, they nodded but did nothing else.

I'm a notebook-and-pen kind of guy. I try to carry a notebook around with me everywhere because I never know when a good idea will strike me, or when someone will tell me something I want to remember. In meetings, I not only take notes to remember things -- I'll trust paper notes over someone's memory any day of the week -- but also to signal respect to the person talking. I want to show that I value their ideas.

I apply this value the other way, too. That is, if I give someone specific, responsive feedback over several points, I appreciate it when he writes it down because it shows he's taking my time / ideas seriously.

Here's the catch: sometimes there's rationale not to scribble notes in a meeting. If you're trying to build a personal relationship with someone, or are out with a friend, sometimes taking notes can make the interaction seem too transactional. Also, if you are taking notes but your partner is not, a subtle power dynamic can emerge (ie, the person taking notes is less than the person not taking notes).

In the end, it's a personal choice. I take notes all the time, regardless of situation. There's no worse feeling than trying to remember that golden nugget of wisdom that you didn't write down. I also try to signal that I value my partner's time. But I can appreciate the perspective that in certain non-professional interactions taking notes can be weird and maybe counterproductive in the long-run.

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One logistical note: sometimes a "notebook and pen" can be digital -- ie, your PDA. I use my T-Mobile Dash to write down blog posts, quotes, etc. that come to mind during the day, and then transfer to my computer at the end of the day.

Here's Tim Ferriss on "how to take notes like an alpha geek." To me, this is over-optimizing the organization part of it (which is a central problem I have with many productivity hacks -- over-optimization), but it's worth a read to see different people's systems.

The Guilty Sense of Privilege

From the latest positive review of Keith Gessen's new book, this time in Slate:

One of the pleasures of Gessen's novel is how well he reproduces the speech patterns of brainy, left-wing Ivy Leaguers—their sardonic deployment of social-theoretical jargon, their riffs on technology and capitalism, their anxiety about status, and the pride in small failures meant to refute their guilty sense of privilege.

I want to riff on the "refute guilty sense of privilege" bit.

Since 70% of our population does not have a college degree, anyone who has the opportunity to go to college in America is privileged. Those of us at selective colleges and universities are even more privileged, as a red-carpet path to power unveils itself after graduation via alumni networks and brand name prestige.

Regardless of whether you "earned" your privilege or not, the fact is the moment you enter the gates of a selective higher ed institution you are immediately thrust ahead in the societal rat race. Colleges often remind their students of this fact. They do so rather bluntly.

Convocation speeches might detail the extraordinary opportunities presented to we students, ask us to "look around and remember how lucky we are to have these opportunities," and then insist, in more complicated language of course, "Now go save Africa!" I sat in an assembly in high school once that made precisely this point, where by the end everyone felt terrible that we had thick shiny textbooks while the schools in Bangladesh of which we had just seen pictures hardly managed a physical classroom, let alone textbooks.

The do-gooders among us ran off to set up a "donate your used textbooks drive," but no one was pondering the implicit idea the school was endorsing which was action-to-assuage-guilt is better than no action at all, or at least action motivated by other things.

It's not just schools -- most charitable organizations in the U.S. use guilt-tripping as a primary mechanism to induce individual donors to give.

I've long said that as someone who was born in the richest state in the richest country in the world, I couldn't have gotten any luckier out of the gate. Does this create some amount of guilt due to un-earned privilege that has allowed me to do things that I just couldn't have done had I been born in, say, Peru, or even born into a broken family in Compton with no daddy and a crack-abusing mommy? Yep. Is this guilt healthy, does it create a sense of a gratitude and/or motivate me to make the most of my winning number in the genetic lottery? Maybe. Probably. Maybe not?

Dealing with guilt due to privilege is itself a privileged worry to have, relatively speaking, but many Americans have it, and I think there's an opportunity to explore the emotion in a way more nuanced than it's being approached. Maybe this is literature's purview -- maybe even Gessen's. I'll have to read his book to find out.

Cuckoo for Switzerland

John Fund has a piece in a recent issue of The American on how under-appreciated Switzerland has become the envy of Europe. It's good fodder for those of us who love Switzerland.

The country is consistently at the top of quality of life rankings. Its people are among the most productive in the world. Its culture is fascinating (four official languages!). And as Fund emphasizes, its smart economic policies have led to a high level of prosperity and innovation.

The summer after my junior year of high school I left America for the first time to participate in a student-exchange program in Zurich. That trip opened my eyes to international travel...and the rest is history.

I'm excited to be going back to Switzerland in less than a month. I'll be in St. Gallen for a week, as I was a winner in the St. Gallen Symposium essay contest. Then I'll be in Zurich for a few days visiting friends, and then Massimo and I will go to Prague for a few days. Drop me an email if you live in any of these three cities and want to meet up, or if you have tips on Prague.

Quote of the Day on the Media

From Alexander Solzhenitsyn's scandalous commencement address at Harvard in 1978, on the press/media:

Because instant and credible information has to be given, it becomes necessary to resort to guesswork, rumors and suppositions to fill in the voids, and none of them will ever be rectified, they will stay on in the readers' memory. How many hasty, immature, superficial and misleading judgments are expressed every day, confusing readers, without any verification. The press can both simulate public opinion and miseducate it. Thus we may see terrorists heroized, or secret matters, pertaining to one's nation's defense, publicly revealed, or we may witness shameless intrusion on the privacy of well-known people under the slogan: "everyone is entitled to know everything." But this is a false slogan, characteristic of a false era: people also have the right not to know, and it is a much more valuable one. The right not to have their divine souls stuffed with gossip, nonsense, vain talk. A person who works and leads a meaningful life does not need this excessive burdening flow of information.

Hastiness and superficiality are the psychic disease of the 20th century and more than anywhere else this disease is reflected in the press. In-depth analysis of a problem is anathema to the press. It stops at sensational formulas.

Assorted Links from Around the Web

1. James Surowiecki reviews Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism. It's terrific in its even-handedness and layman's language.

2. Ask the Harvard MBA. Chris Yeh's new Q&A site - ask him anything. In a recent answer he notes how men can be picky when filtering through woman:

Of course, the crowning example might be the friend whose criteria for a woman were: “Regular user of Twitter and del.icio.us. Must subscribe to the Atlantic Monthly.”

Now, who in the world would ever hold criteria such as these?!

3. Billionaires trying to fix the school system. A NYT Magazine piece which asks, "If I'm super rich and want to help education in America, what should I do?" An interesting conversation...

4. Podcast interview with me. I did about a 30 minute podcast interview (MP3) with life coach Christine Hassler. We cover a bunch of career/life issues. Skip the first five minutes.

5. Aguanomics. A blog called Aguanomics is an excellent take on water economics issues. Here's his recent post on how farmers are trying to dodge water cuts even though they pay less to begin with. Farm policy in America is so fucked up.

6. How to make yourself look good and others look bad. In other words, things not to say in a meeting, courtesy of always-stimulating Gretchen Rubin. My favorites (and yes - it all depends on context and tone):

“You might be right.” You seem open-minded while simultaneously undermining someone else’s authority and credibility.
“I think what Pat is trying to say is…” You show that you’re a good listener and give credit to others, while demonstrating that you can take Pat’s simple thought further than Pat could.
“I can see why you might think that.” Variant: “I used to think that, too.” You sound sympathetic, while indicating that you’ve moved far ahead in understanding.

7. Marty Nemko on You U. How Marty acquired professional-level skills in career counseling, rose breeding, screenplay writing, and strong amateur-level skills as an actor and play director without ever having taken a course in any of the above. Hint: his answer is only one paragraph long.

You Have to Make People Give a Shit

One way blogging makes you a better writer is it forces you to work hard for your readers' attention. On the web, it takes less than a second to close the page or click a new link. Your readers are busy and distracted.

This means you must engage the reader out of the gate and take nothing for granted. If you start sucking in the second paragraph, you'll likely lose the reader's attention.

Contrast this to school. In a writing class I'm taking this semester, everybody writes essays and turns them in to the class to be workshopped. Our homework is to read each others' essays. As a writer, you know your classmates and professor are going to read your writing -- no matter what. It's their job. In a recent workshop, I was thinking to myself, "This is good for what it is, but I would never read this in my free time." I'm sure professors across other disciplines, like History or Philosophy, think this all the time. School, then, might breed a bad habit for aspiring writers and thinkers: the illusion that people will always read your entire essay just because it's you.

The so-called real world is super competitive. Nobody will read your stuff (well, other than your mom) just because it's you. The real-world reality is: No one cares what you think. It's up to you make people give a shit.

The blogosphere, with its tens of millions of competing blogs just a link a way, captures this brutal "life" reality perfectly. Nobody cares what you did yesterday. Nobody is reading your archives. Nobody is reading your bio. Show me something today.

Six Habits of Highly Effective Mentees

There's no shortage of people hailing the benefits of mentors. There's also ample advice on how to find mentors. Few talk about what to do once you've made contact with someone who wants to help you. You sit down to lunch with a potential mentor. What do you say? How do you act? How frequently do you follow up, especially if the person is busy and important?

I know many professionals who would like to be mentors but are not, mainly because once they start interacting with a potential mentee they find it's not nearly as fulfilling as they imagined. I place the blame in many cases on the mentee and how s/he approaches those early interactions. Smart mentees realize that successful mentoring relationships don't necessarily happen automatically; rather, they're the result of genuine engagement and sustained effort.

Drawing upon my own experience and that of others, here are six habits of highly effective mentees.

1. It's all about the questions you ask.

Here's an example of a bad question: "What career should I go into?" Expect a worthless blue sky answer, or something that corresponds closely to what he does.

Here’s a better question: “I’m deciding between these two jobs, which each offer these benefits and these drawbacks. What do you think? Which factors should I consider most highly – salary, geography, etc?”

In other words, present options and then get help on how to think about the options.

Here’s a common question mentees ask that I think is problematic: “What would you do if you were me / you were in my shoes?” This is ambiguous. This either means, “What would you do in this situation?” which is asking what the mentor herself would do after considering her own situation, which is not what you really want. Or, it means, “If you were me, you had all the same strengths, weaknesses, opportunities, and threats as me, what would you do?” It’s unlikely the mentor (or anyone) knows you well enough to have a 360 degree perspective. So the question fails with either interpretation.

2. Have strong beliefs, weakly held.

This is maybe the hardest habit: How do you at once demonstrate greenness, a blank slate, and open-mindedness (ie, a genuine interest in hearing an advisor's ideas and potentially incorporating them into your own life) while also showing potential through your existing ideas and convictions? In other words, mentors want to mentor someone they can influence, but they only want to influence people they think can be successful, and people bound for success tend to have beliefs about the world. Asking a million questions but putting forth no ideas of your own, or simply nodding hungrily at anything and everything the mentor says, puts you too far in the "green" direction. By the same token, acting like you've figured out the world is just as much a turn-off -- who wants to help someone who thinks he doesn't need help?

So how do you walk the line between these two extremes? Try articulating your existing stance to your mentor in an expository fashion: here is what I feel, here is why, here is my level of certainty.

3. Have a long term perspective.

Mentoring relationships are like any friendship or romance -- it takes time. Lots of time. Years of time. If things are going well, don't try to cover every topic on your mind in one meeting. Meander. Dive deep. Have a memorable conversation about just a couple things. Don't bring a "pump-and-dump" attitude to the relationship.

4. Be open to topics not on your short-term agenda.

Say you're trying to start a business and you meet with a start-up expert. You want to pick her brain about successful start-ups. One problem: everyone wants to ask this gal about start-ups. She's bored of doling out the same advice. So spend some time probing her on off-the-beaten path topics. Religion? Politics? Wander on the path less trekked upon.

For example, if you're young, everyone is going to want to give you advice about colleges and higher ed. Be open to hearing it.

In the long term, you’ll have plenty of time to cover the topic that made you interested in her in the first place.

5. Follow up by showing interest in them (at least four times a year).

To form a long term relationship you need to stay in touch. But what does "stay in touch mean"? A meeting a year? An email every month? Phone calls? It all depends on the situation.

Nothing beats an in-person interaction. So aim for those, but it can be hard to see busy people. At the least, email him four times a year.

Remember, in your communications, show interest in his life, and he’ll reciprocate and show interest in your life. Send a relevant article, or comment on a move his company recently made. Set a Google News Alert on his name.

If the mentor reads blogs, maintaining a blog is one of the best ways to stay in touch. Because it is "opt-in" -- people choose to read blogs -- you can get away with more frequent communications. If you email someone, he feels an obligation to read and respond. If you write a blog post, you've created no such obligation, and he still will probably read it in his RSS reader.

Try to be creative in your communications both in format (try postcards!) and timing (never send an update during the holiday season).

6. Don’t make the mentor do the work.

It’s not up to the mentor to figure out how to mentor you. It’s up to you to figure out what you need help on.

Need an introduction to someone? Need to figure out which of three options is best? Have a life/personal question that would be great over a cup of coffee? Take the initiative.

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What should be added to this list?

For more on this check out my book My Start-Up Life. Thanks to Chris Yeh, Ramit Sethi, and Cal Newport for giving feedback on this post.