A Poem for Startup Entrepreneurs

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IF---


IF you can keep your head when all about you
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired by waiting,
Or being lied about, don't deal in lies,
Or being hated, don't give way to hating,
And yet don't look too good, nor talk too wise:

If you can dream - and not make dreams your master;
If you can think - and not make thoughts your aim;
If you can meet with Triumph and Disaster
And treat those two impostors just the same;
If you can bear to hear the truth you've spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to, broken,
And stoop and build 'em up with worn-out tools:

If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breathe a word about your loss;
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: 'Hold on!'

If you can talk with crowds and keep your virtue,
' Or walk with Kings - nor lose the common touch,
if neither foes nor loving friends can hurt you,
If all men count with you, but none too much;
If you can fill the unforgiving minute
With sixty seconds' worth of distance run,
Yours is the Earth and everything that's in it,
And - which is more - you'll be a Man, my son!


My favorite poem by Rudyard Kipling...

He must have been a startup entrepreneur ūüėČ

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Why your biggest political blindspot is not understanding how Government economics differs from yours.

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You don't need to understand an internal combustion engine to drive a car, and you don't need to understand a monetary system to participate in an economy.... BUT TO FIX AN ENGINE OR ECONOMY YOU DO.

I cringe when I see the majority of people believing what I did for most of my life, that our government borrowed to get money to spend (like we do).  THEY DON'T. I've written a little bit about this in How to Think About Economics.

Rebooting the U.S. Economy in a Thought Experiment

Pretend there is no money and we have to reboot the economy,  lets think  through this...

  1. The US gov't has a monopoly on creating money (a "fiat" monetary system)
  2. They "spend" the money into circulation (buy stuff from us) or "give" the money to us (social benefits)
  3. If they tax the same amount back (balance their budget)  WE HAVE NONE LEFT
  4. Therefore: The U.S. government Deficit MUST EQUAL our savings to the penny!

 

State and Local government economics are the same as you and I, they must "earn" (tax) their money since they cannot create it like the feds.

So applying the same economic rules and thinking for your household, business or state government DOESN'T APPLY TO THE FEDERAL GOVERNMENT when you understand the mechanics of "Money Issuers" vs. "Money Users".

Warren Mosler is a guru of "Modern Monetary Theory", and wrote a short book called  "The Seven Deadly Innocent Frauds of Economic Policy"

This book, shows why, in the fiat U.S. monetary system, the following  are FALSE understandings:

  1. The government must raise funds through taxation or
    borrowing in order to spend. In other words, government
    spending is limited by its ability to tax or borrow.
  2.  With government deficits, we are leaving our debt burden
    to our children.
  3. Government budget deficits take away savings.
  4. Social Security is broken.
  5. The trade deficit is an unsustainable imbalance that takes
    away jobs and output.
  6. We need savings to provide the funds for investment.
  7. It’s a bad thing that higher deficits today mean higher
    taxes tomorrow.

WOW... are you saying the federal deficit is a measure of how much money WE (the non-federal government entities--including their employees) have?     YES THAT IS WHAT I'M SAYING.   This is true for all fiat monetary systems which the U.S. has had since ~1933.  Remember the trillion dollar coin?  YES they can mint a $T coin but....this is all about DISCIPLINING government spending, there are no operational reasons.

In How to Think About Economics one of my takeaways is:

Ben Bernanke (Chairman of the Federal Reserve) said during a Congressional Testimony "... with all due respect Senator, the US will always pay it's bills unless you direct the Fed to not make the computer entry"

Why did we do it this way and what the hell is money anyway?

Reading about the history of money is 1/2 human psychology and 1/2 the rise and fall of governments and the interaction of politics, money and banking. I've read many books but recommend "Money,  the unauthorized biography" by Felix Martin.  From the Silicon Valley's of the ancient world, to Russia's attempt to abolish money and banking, to today's Vampire Squid (Goldman Sachs) and cryptocurrencies, Felix tries to convince you how inherently political money is. (This is a blind spot of bitcoin geeks who miss the transitive property:  money=power and  politics=power therefore money=politics).

Island of Yap highly developed Stone Money System

 

"There was in the village near by a family whose wealth was unquestioned---acknowledged by everyone--- and yet no one not even the family itself had ever laid eye or hand on this wealth...known only by tradition...the past two or three generations...lying at the bottom of the sea"

--- From "Money" by Felix Martin

 

Over the last few hundred years economists have generally agreed that money has 3 functions:

  1. A unit of account   (measure things in the unit of "dollars, yen or euros")
  2. A medium of exchange (equate  to  "dollars" and use them instead of barter)
  3. A store of value (store up my labor etc. in dollars or shekels  to spend later)

This is a useful framework because it gives you 3 axis to think about how politics and money interact. Examples include:

Example 1:  Monkey with the unit of account

The Consumer Price Index is used to index wages and Social Security benefits, hence by growing it slowly, the government "saves" money, this is why the measurement keeps changing.  shadowstats.com computes the CPI using the same algorithm as 1990 to show how it's been lowered.  A POLITICAL MOTIVE?

 

Example 2: Monkey with the medium of exchange

The cashless society is being pushed as a solution to big crime (money laundering). But physical money has a property no other representation has, ANONYMITY FOR ALL CITIZENS. All electronic transactions enable, the federal government(s) to  track global transactions and enforce new international tax regimes such as described here and here. A POLITICAL MOTIVE?

Example 3: Monkey with the Store of Value

The government gets to spend money first,  they usually issue debt to economically "sterilize" their expenditure. If the central bank purchases the debt by printing money, it's  "monetized" (didn't pull the same amount of money out of circulation).  If a "primary dealer" bank buys the debt the bank gets the first spend of all interest payments.  If the supply of money and credit grows faster then productivity and population (inflation targets), then the value of the currency declines and the first to spend it receives a purchasing power advantage. Rome did this by shaving the amount of gold or silver from the coins. Avoiding deflation or A POLITICAL MOTIVE?

TAKEAWAYS

Modern Monetary Theory Teaches us:

  • Federal Spending is limited by inflation. Government debt serves as:  a) a check and balance on spending, and b) a risk free asset in the private economy, it is not operationally necessary.

SPENDING MORE (Democrats) or TAXING LESS (Republicans) is the SAME ECONOMICALLY

  • Federal governments issue money, everyone else (including state and local government) use it. Hence state and local deficits are a debt burden on our children, federal is not.

BE MORE OF A TIGHTWAD on STATE AND LOCAL SPENDING

  • Deflationary forces (aging demographics + globalized labor + technology+high debt), moves money from spending to savings.

SHRINKING DEFICITS CAUSE RECESSIONS WITHOUT CREDIT OR VELOCITY GROWTH

  • When the deficit is growing (and money velocity is not slowing down), then money should increase GDP as it enters the economy.

DEFICITS CAUSE THE STOCK MARKET TO RISE (MONEY STORED IN THE PRIVATE SECTOR)

Money Velocity (GDP/Money Supply) Measures how many times a dollar gets spent in a year. Note the drop in velocity during recessions, especially 2008-Now.

  • Money is Politics

BUDGET CEILINGS, CASHLESS SOCIETIES USUALLY HAVE ULTERIOR POLITICAL MOTIVES

If you haven't watched this....  watch it...  How the Economic Machine Works.

-jeff

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What happened in the 2016 Election?

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Here are two articles about what happened in the 2016 election that I think are smart. The first from Nassim Taleb  author of "The Black Swan" and "Fooled by Randomness" and the second by George Friedman who founded Stratfor and now runs Geopolitical Futures.


From Nassim:

What we have been seeing worldwide, from India to the UK to the US, is the rebellion against the inner circle of no-skin-in-the-game policymaking ‚Äúclerks‚ÄĚ and journalists-insiders, that class of paternalistic semi-intellectual experts with some Ivy league, Oxford-Cambridge, or similar label-driven education who are telling the rest of us 1) what to do, 2) what to eat, 3) how to speak, 4) how to think‚Ķ and 5) who to vote for.

But the problem is the one-eyed following the blind: these self-described members of the ‚Äúintelligenzia‚ÄĚ can‚Äôt find a coconut in Coconut Island, meaning they aren‚Äôt intelligent enough to define intelligence and fall into circularities‚ÄĒbut their main skills is capacity to pass exams written by people like them. With psychology papers replicating less than 40%, dietary advice reversing after 30 years of fatphobia, macroeconomic analysis working worse than astrology, the appointment of Bernanke who was less than clueless of the risks, and pharmaceutical trials replicating at best only 1/3th of the time, people are perfectly entitled to rely on their own ancestral instinct and listen to their grandmothers (or Montaigne and such filtered classical knowledge) with a better track record than these policymaking goons.

Indeed one can see that these academico-bureaucrats wanting to run our lives aren‚Äôt even rigorous, whether in medical statistics or policymaking. They can't tell science from scientism --in fact in their eyes scientism looks more scientific than real science. (For instance it is trivial to show the following: much of what the Cass-Sunstein-Richard Thaler types‚ÄĒthose who want to ‚Äúnudge‚ÄĚ us into some behavior‚ÄĒmuch of what they call ‚Äúrational‚ÄĚ or ‚Äúirrational‚ÄĚ comes from their misunderstanding of probability theory and cosmetic use of first-order models.) They are prone to mistake the ensemble for the linear aggregation of its components as we saw in the chapter extending the minority rule.

The Intellectual Yet Idiot is a production of modernity hence has been accelerating since the mid twentieth century, to reach its local supremum today, along with the broad category of people without skin-in-the-game who have been invading many walks of life. Why? Simply, in many countries, the government‚Äôs role is ten times what it was a century ago (expressed in percentage of GDP). The IYI seems ubiquitous in our lives but is still a small minority and rarely seen outside specialized outlets, social media, and universities‚ÄĒmost people have proper jobs and there are not many opening for the IYI.

Beware the semi-erudite who thinks he is an erudite.

The IYI pathologizes others for doing things he doesn‚Äôt understand without ever realizing it is his understanding that may be limited. He thinks people should act according to their best interests and he knows their interests, particularly if they are ‚Äúred necks‚ÄĚ or English non-crisp-vowel class who voted for Brexit. When Plebeians do something that makes sense to them, but not to him, the IYI uses the term ‚Äúuneducated‚ÄĚ. What we generally call participation in the political process, he calls by two distinct designations: ‚Äúdemocracy‚ÄĚ when it fits the IYI, and ‚Äúpopulism‚ÄĚ when the plebeians dare voting in a way that contradicts his preferences. While rich people believe in one tax dollar one vote, more humanistic ones in one man one vote, Monsanto in one lobbyist one vote, the IYI believes in one Ivy League degree one-vote, with some equivalence for foreign elite schools, and PhDs as these are needed in the club.

iyi

More socially, the IYI subscribes to The New Yorker. He never curses on twitter. He speaks of ‚Äúequality of races‚ÄĚ and ‚Äúeconomic equality‚ÄĚ but never went out drinking with a minority cab driver. Those in the U.K. have been taken for a ride by Tony Blair. The modern IYI has attended more than one TEDx talks in person or watched more than two TED talks on Youtube. Not only will he vote for Hillary Monsanto-Malmaison because she seems electable and some other such circular reasoning, but holds that anyone who doesn‚Äôt do so is mentally ill.

The IYI has a copy of the first hardback edition of The Black Swan on his shelves, but mistakes absence of evidence for evidence of absence. He believes that GMOs are ‚Äúscience‚ÄĚ, that the ‚Äútechnology‚ÄĚ is not different from conventional breeding as a result of his readiness to confuse science with scientism.

Typically, the IYI get the first order logic right, but not second-order (or higher) effects making him totally incompetent in complex domains. In the comfort of his suburban home with 2-car garage, he advocated the ‚Äúremoval‚ÄĚ of Gadhafi because he was ‚Äúa dictator‚ÄĚ, not realizing that removals have consequences (recall that he has no skin in the game and doesn‚Äôt pay for results).

The IYI is member of a club to get traveling privileges; if social scientist he uses statistics without knowing how they are derived (like Steven Pinker and psycholophasters in general); when in the UK, he goes to literary festivals; he drinks red wine with steak (never white); he used to believe that fat was harmful and has now completely reversed; he takes statins because his doctor told him so; he fails to understand ergodicity and when explained to him, he forgets about it soon later; he doesn‚Äôt use Yiddish words even when talking business; he studies grammar before speaking a language; he has a cousin who worked with someone who knows the Queen; he has never read Frederic Dard, Libanius Antiochus, Michael Oakeshot, John Gray, Amianus Marcellinus, Ibn Battuta, Saadiah Gaon, or Joseph De Maistre; he has never gotten drunk with Russians; he never drank to the point when one starts breaking glasses (or, preferably, chairs); he doesn‚Äôt know the difference between Hecate and Hecuba; he doesn‚Äôt know that there is no difference between ‚Äúpseudointellectual‚ÄĚ and ‚Äúintellectual‚ÄĚ in the absence of skin in the game; has mentioned quantum mechanics at least twice in the past 5 years in conversations that had nothing to do with physics; he knows at any point in time what his words or actions are doing to his reputation.

notaiyi

 

But a much easier marker: he doesn’t deadlift...

 

<---  Not a IYI!

 


Whew...    well I must admit Nasim, I've never read Frederic Dard, Libanius Antiochus, Michael Oakeshot, John Gray, Amianus Marcellinus, Ibn Battuta, Saadiah Gaon, or Joseph De Maistre,  but I have gotten drunk with a Russian, and (used to) deadlift (when my back was younger) ūüėČ

Now if you'll excuse me, I have to get back to my Hecate and Hecuba studies...


fw-category-bar

By George Friedman

Donald Trump has been elected president of the United States. The extent of the bewilderment is significant. The pollsters were shocked. The media was surprised. The financial markets were stunned. Many in the Republican Party were astonished. And the Democratic Party was totally taken off guard. The thought that a man with Trump’s values and behavior could become president was, to many, unthinkable. I do not mean that they disagreed with him, or hoped that Trump would lose. They thought it inconceivable that a man like Trump could win.

Republican Presidential Nominee Donald Trump Holds Election Night Event In New York City
Republican President-elect Donald Trump delivers his acceptance speech during his election night event at the New York Hilton Midtown in the early morning hours of Nov. 9, 2016 in New York City. Donald Trump defeated Democratic presidential nominee Hillary Clinton to become the 45th president of the United States. Mark Wilson/Getty Images

That is the reason Hillary Clinton lost. The Democratic Party that nominated her has moved far away from the party that Franklin D. Roosevelt crafted or that Lyndon B. Johnson had led. Their party had as its core the white working class. The liberalism of FDR and LBJ was built around this group, with other elements added and subtracted. Much has been said about this group having become less important. Perhaps so, but it is still the single largest ethnic and social group in the country.

This group, as I have argued before, is in trouble. The middle class, with a median take-home pay in California of about $4,300 a month, can buy a modest house and a car but certainly can’t afford to send their kids to college. Hence the massive student loans their children must take out. The lower-middle class has a take-home pay of about $2,600 a month. A generation ago the lower-middle class could buy a small house in a not-so-great neighborhood. Now they are hard pressed to rent an apartment. Liberals are concerned with inequality. People in the lower-middle class are simply concerned with making enough money to live a decent life. They are two very different things.

Trump, it turns out, understood this problem. He also understood that these people had lost the culture wars that had been waged for the past generation. Their churches and parents raised and taught them that homosexuality is a sin, as is abortion and premarital sex. Evangelical Christianity wasn’t so much the issue, but rather the gut values with which they were raised. Many of this class had sinned, but they knew it was a sin and they valued the standards they’d been taught, even when they didn’t live up to them.

Within a generation, this lower- and middle-class group had been displaced. Pride that comes from working hard and making a good living for their families was lost. They found that values they had regarded as commonplace were now regarded as phobias, illnesses they must overcome in order to be politically correct. Values they were taught as children could no longer be expressed in public.

This middle-class group no longer had a place in the Democratic Party. They felt the Democratic Party not only had contempt for them, but also that it valued immigrants, and the rights and culture of immigrants, far more than it valued the beliefs of the white middle class. That was true, but it was not the immigrants the party valued, it was the upper-middle class, college-educated victors in the culture wars.

When Clinton made her extraordinary speech about Trump‚Äôs basket of ‚Äúdeplorables,‚ÄĚ she was expressing the chasm of contempt that had opened up within the Democratic Party between the educated and the working class. She said there were two baskets. In one was the homophobic, xenophobic misogynists. In the other basket were the poor who had been left behind. It was not clear that this second basket was deplorable, but those in it were certainly not her major concern. Clinton made the ‚Äúdeplorables‚ÄĚ statement to make it clear that not only was Trump unacceptable, but his followers were too. Clearly, she didn‚Äôt think she needed their votes. But she did need to reinforce her base‚Äôs sense of fighting the good fight against evil and failure.

What Clinton and the elite didn’t understand was that this group was sufficient to serve as Trump’s base and that he could add to it. Looking at exit polls, the hostility of women to Trump turned out to not be there. Over 20 percent of Hispanics voted for Trump. Trump built a coalition that Clinton believed could not be built. It was in some ways a broader coalition than she had created. The elite made assumptions about women, Hispanics and others implying it was inconceivable for anyone other than the deplorables to support Trump.

Clinton’s statement about Trump’s followers struck me at the time, and still does, as amazing. She was then a few points ahead of Trump, which meant that nearly half of the country supported him. By implication, she was saying that half the country is deplorable. Her statement was not only contemptuous, but showed her to be a terrible politician. To win the election, she needed to hold all of her supporters, plus take away some of Trump’s. The deplorable statement drove many off instead.

It was not only bad politics. It also represents a core internal problem. The elite of the United States ‚Äď and all countries have and need elites ‚Äď has become profoundly self-enclosed. This is similar to the situation in the U.K. when the elite was enraged at the Brexit referendum result, and hurled epithets at the narrow majority that voted for Brexit, calling them uneducated, incapable of understanding the issues and so on.

Economic stresses build up in all societies at various points. At this moment, European countries are undergoing the same sort of stresses as the United States, but even more intensely. Nationalist movements are growing in many of those countries. They are hostile to the European Union, oppose uncontrolled immigration and are resentful of policies that impose austerity that affects the middle and lower classes, without significant impact on the elite.

Trump is part of this broader crisis. Where European nationalists oppose the EU, Trump wants to renegotiate NAFTA. Where the Europeans oppose uncontrolled Muslim immigration, Trump opposes Muslim and Mexican immigration. Where the Europeans talk about ending austerity, Trump speaks of tax cuts to stimulate investment.

Whether these policies are appropriate is not what matters here. The issue is that extended economic dysfunction has inevitable political consequences. This presidential campaign pivoted on the fact that Clinton did not understand the political movement that was rising and dismissed it as marginal. Trump did understand it, played to it and won the presidency. But it goes one step deeper. He won the election by arguing that Washington and the media were oblivious to the economic problem. During the later days of the campaign, he consistently made the claim that the Washington elite in particular was completely out of touch with the reality of any Americans outside its class.

I can safely assert Trump was the better politician. He won, not an overwhelming victory, but a decisive one. Clinton’s weakness was that she saw her position at the heart of the political establishment as decisive. She dismissed Bernie Sanders in spite of his strength, and she never really took Trump seriously. She regarded the 3-point lead in the polls as sufficient. That was complacency, but it hid a lack of understanding that a political volcano was building in the middle class, and many others shared in the sense that things were going wrong.

Clinton didn’t see a major problem, although her predecessors in the Democratic Party (LBJ and FDR) had. Her advisers didn’t see it. Instead they saw an intemperate man hurling insults at others, totally unsuited for high office. Unfortunately, voters turned out to be far less interested in Trump’s rudeness than in Clinton’s cluelessness.

Some will lay blame for the loss on FBI Director James Comey’s letter. That undoubtedly contributed to it. But it was not decisive. Economic dysfunction leads to political upheaval, and Clinton didn’t grasp the significance of the dysfunction. And somewhere in her mind the fact that white males without a college degree opposed her indicated that only deplorable people opposed her, although why white males without a college education should be thought of as deplorable is an important question.

In any case, the election is a surprise only because the polls were so wrong. Trump was likely in the lead for quite a while. The decline in the accuracy of polls is noteworthy, primarily because Clinton might have thought more deeply about her situation if she had known she was behind.

Trump executed an obnoxious campaign. I was deeply offended by his attack on John McCain, not over the question of whether McCain was a hero, but rather because Trump said he preferred pilots who don’t get shot down to those who do. As commander in chief, he will, like every president since FDR, have to order troops into harm’s way. How does a commander order his pilots to strike, when they know that if they are shot down, their commander’s respect for them will decline? This was an election where offensive statements abounded. Trump had more than Clinton, but Clinton’s comments were a direct attack on a class of voters, which was more startling. In the end, the voters decided.

Trump will be president and he has made sweeping promises as all candidates do. It is easy to dismiss these promises, as it was easy to dismiss the idea that he would get the Republican nomination, or that he would win the election. Like all political leaders he will be constrained by reality. But seeing reality clearly enough to achieve what others think is impossible is what makes great leaders. I have difficulty imagining what his government will look like, but I was someone who thought he would never get the Republican nomination. It is important to be cautious about dismissing this man.

 

George would loose half his subscribers if he was political.  His years as an intelligence analyst enables him to follow the data without bias. Considering that Donald was opposed by both parties, the media, the powerful Clinton and Bush's,  and spent substantially less money than his opponents, I agree "... we should be cautious about dismissing this man."

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Tech CEO's...don't be a pansy if you're forced to layoff

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layoffnothinkingI've been involved in 6 layoffs, 3 on the delivery, 2 as a surviving employee and 1 on the receiving side. These included wildly successful companies before and after layoffs.  There are common elements in big and small companies but small companies suffer more organizational trauma (those affected suffer the same trauma). This post is directed at small competitive company CEO's (<100 people).

First and foremost as the CEO you need to lead, be in the middle, present and available for all meetings with the affected, feel the pain, remorse and self-examine what you could have done better. This event will shape the company culture and it's capacity and capabilities going forward. Laying the bulk of the problem off on your leadership team is pansy, this is your station as the CEO.

Follow advice from people experienced in human resources e.g. safety during the event (police present), documentation, exit interviews, outplacement etc. but this isn't HR's job,  as CEO you need to get the details right while keeping the big picture view to re-energize the company.

Here are my core principles:

Company

1) Future

The business outcome after the layoff is profoundly impacted by how well you managed these 2 issues:

1- Who's in the boat going forward?     -Everyone is fair game in a small competitive company cut, seniority and past contributions are tie breakers, not policy. Friends and founders are the hardest to let go.lifeboat

2- How deep did you cut?         -Size for the worst realistic scenario by cutting deeper than you think. You get one shot for people to bounce back from the adversity, make it over... take the big hit now! Rolling layoffs = dead company.

2) Speed

- One bad day. Execute swiftly in a single day, plan every 15 minutes, communicate clearly to everyone involved... all eyes are on you.

3) Relief

- After the affected have left, communicate clearly that it is over. It's OK to be sad and grieve along with the company.

4) Repurpose

- You're smaller... take work off the table and refocus on core initiatives going forward.

People Affected

layoff

1) Them

- Tell them you're sad, it was absolutely necessary, it's not about them you'll miss them, but the decisions are final.

2) Compassion

- Be compassionate to everyone, this will ripple through their self-esteem, lives and family. Expect crying, anger and shock, possibly even violence and vengeance,  treat with utmost respect.

3) Forward

- Describe how important it is for them to look forward to new beginnings but be the backbone that moves everyone along, thank them for their service and contributions.

4) Help

- Provide as much help, references, out-placement, severance etc. as you can. Employees will be watching, this is where the rubber meets the road for trust,  what-you-say vs. what-you-do is in high definition regarding company values around people.

Employee's Remaining

1) Imperfect

- Make it clear you did your best, probably made mistakes, but after discussing with managers, you made the final decision for the people that were forced to leave. Take the responsibility hit from your managers because some employees might think the company picked wrong people, you're batman... you can handle it.

2) Over

- Time for an all hands meeting message:   "... it's over, we planned for a worst case, you're secure ... questions?"

3) Sad

- Be sad the world's this way along with everyone else.

4) Focuslongdistancerun

-Communicate clearly that this is not for nothing, you need their help. Re-energize by removing some work and focus the whole company on the critical challenges, be it sales, new products, customer retention etc. Ask for inputs on improvements, remind everyone that business is a marathon, not a sprint.

My worst experience was as a CEO during the 2000 tech bubble burst when I had to layoff over 1/3 of thepansyceo company including founders and friends. Our VC' s had portfolio teams that curled up and sucked their thumb during those times, don't be one of those, they were pansy's and were canned.

Layoffs change all companies, from temporarily reducing morale to rewriting the "employee contract". Small companies don't have the "cultural momentum" large ones have, so they are always profoundly changed.

The best way to avoid layoffs is by making tough love business and people decisions everyday... especially when times are good.

I hope this helps.

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The latest research on bullshit

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Bohr not thinking

‚ÄúIt is impossible for someone to lie unless he thinks he¬†knows the truth. Producing bullshit requires no such conviction.‚ÄĚ

¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬†‚Äď Harry Frankfurt

I ran across this and thought some of my readers might enjoy it   On the reception and detection of pseudo-profound bullshit .  It attempts to quantify people's "bullshit receptivity" to their perception of how "profound" something sounds.  They speculate that there are word patterns that make things  "pseudo-profound" that trip people up.

Good stuff. Rupert Sheldrake should use this approach to show all the pseudo-BS the sciences have delivered to us before changing their mind over the years. Rupert is on a quest to free science from the "material world view" ( Setting Science Free from Materialism ) which he believes is starting to stagnate our progress.

For example, the "Big Bang Theory" of the universe was Introduced in 1949 and accepted by most cosmologists in the 70's  (about when I graduated from high school), but some are questioning it again.

My takeaway is simple, don't fall for bullshit just because it's wrapped in "Science"  or "Scientists Agree". Not all scientists are motivated by seeking truth (I've had PhD employee's tell me they kept going to school because they couldn't get a job!).   The vices of people are embedded in the people, hence they show up in all institutions.  I'm leary of any "Truth" that achieves its status by a vote.

Kurt Godel

Kurt Godel showed us that with our most rigorous thinking (mathematics) we can  "prove" things that aren't true and cannot prove everything that is!

-jeff

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Don't let nosebleed levels of abstraction kill your ability to make leadership decisions!

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Politicians spend their lives mastering it. Good BS'ers have practiced it for years. It's a great way to make people think you have "senior management potential".

budgetjoke

Abstraction  

  1.  the act of obtaining or removing something from a source : the act of abstracting something
  2. a general idea or quality rather than an actual person, object, or event : an abstract idea or quality
  3. the state of someone who is not paying attention to what is happening or being said : an abstracted state                                                                                   - from Mirriam-Webster

Back in the day I worked for a brilliant manager who had his team meet with 2 PhD psychologists regularly  to practice the latest and greatest theories on effective behaviors and team building skills. During one session we read and worked over "Language in Thought and Action" by S.I. Hayakawa (a U.S. Senator). First published in 1949, it is  considered a classic work on semantics.

My first takeaway was  to recognize conversations moving  from lower-to-higher or higher-to-lower levels of abstraction.  This is critical when making decisions since it is usually easier to move up rather than down yet YOU CANNOT RESOLVE ANYTHING MOVING UP!

Consider making a decision about Betsy, the cow....  cow1

cattle...we can talk about her contributions to our herd of cattle....

....or what a valuable piece of livestock she is but...
livestock

...unless we go the other way, perhaps applying our policies on Livestock to Cattle and Cattle to  Betsy,  we can expect a courteous and politically correct conversation  but CANNOT ADD DECISION VALUE on what to do about Betsy.

Unfortunately my experience is that  1) resolving problems  2) recognizing opportunities and 3) defining strategies happen at lower levels of abstraction (often the lowest).

"We're customer oriented"  detail-devil1

"Innovation is the lifeblood of our Company"

 "Lets make America Great Again!"

"It's time that we move from good words to good works, from sound bites to sound solutions"

"It's irresponsible to question the science of climate change"

Software indirection

Abstraction layering (implemented as indirection) has driven Software development productivity to grow exponentially by allowing us to label and manipulate "cumulatively all that went before". But even in this virtual world, constructs of the mind have limitations.


Good stuff, BUT going lower often makes conversations more confrontational, especially when stakes are high.  My second takeaway is that it is ALWAYS helpful to rebuild trust by moving up the abstraction ladder. Stating COMMON GOALS AND DESIRES rebuilds confidence that we're still on the same team. This leadership trait is demonstrated spectacularly in Apollo 13 by Jim Lovell when the crew is getting frayed from rapid-fire life and death decisions...

Jim Lovell (Tom Hanks): Gentlemen, what are your intentions?

[Jack Swigert and Fred Haise turn around and stare at Lovell]

Jim Lovell: I'd like to go home.

They did too.

 

" You've got to be careful when you're talking about reality"    -- my friend Ed Hudson

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5 Questions to Attack your Competitor's Strengths and Win

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"We are not in the watchmaking business, we are in the true luxury business."

- Yves Piaget

 

When I ask many young CEO's and marketing people "Who's your competition and why are you better?" they answer with a list of both strengths and the competitors' longer list of weaknesses.  In addition, they rarely include the big competitor which is the customer's status quo.

Here's how to think strategically about competition.

HIGHLIGHTING A COMPETITOR'S WEAKNESSES RARELY WORKSlion-and-mouse

  1. Today's customer's are more informed of competitor's strengths and weaknesses (especially if they are already using the products)
  2. Customers buy because the perceived strengths outweigh the weaknesses (which they're told are temporary)
  3. Often the competitors' strength is much broader than just the product (e.g. financial strength, longevity, service etc.)

DE-POSITIONING A COMPETITOR'S STRENGTHS CAN TIP THE BALANCE

Here are 5 questions to get you started  de-positioning a competitor...

1)  If me and my competitor both had the same product who would win and why? 

Neutralize those... through partnering, guarantee's, customer insurance etc.

2)  If we swap products with our competitor who would win and why?

Extends the issues from above, neutralize these also

3)  Who is  my "Perfect" customer that would buy from me instead of my competitor?

 Qualify leads to this description and keep closing gaps

4) What is my  competitors "Perfect" customer that will buy from them no matter what ?

FIlter leads and don't  spend energy here, learn what they value in the competitor's strengths

5) Can the opposite of my competitor's strength also  be a strength?

  If so... consider positioning there and migrate customers to the other side

nobody-gets-fired-for-buying-ibm

apple_think_different2

The opposite of a fact is falsehood, but the opposite of one profound truth may very well be another profound truth"    

- Niels Bohr

You must fulfill a minimum requirement on every axis of competition... but you only need to differentiate on one (see my 60 Minute Marketing MBA Presentation). Here are some examples I've experienced:

THEY HAVE...    Great technology              BUT...     not based on open technology price curves

THEY HAVE...    Large existing network    BUT....    compete with customer's  cycles of learning

THEY HAVE...    Financial strength              BUT...      not as strong as our combined partner's

THEY HAVE...   Been around                        BUT...      don't offer disaster insurance

THEY HAVE...   Big user base                        BUT...     you're not that important to them

You get the picture... a little progress here can pay off in higher sales!

Miles-Davis-Cool

"Half of being cool is doing what nobody else is doing."

-My friend Tommy Nelson

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I've Been Hacked!

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wordpress-hack

On August 20, I recieved an email from my hosting provider (www.Arvixe.com) saying they deleted something bad from my directory and I was likely part of a phishing scheme. When I went to the website every page  said:  "hacked by Hwins2005"    Bummer....

So here I am on August 23 after 20 hours of deep dives into WordPress,  (opening more PHP files than God intended), a bit of Apache, every tool CPanel offered and I'M BACK!  I still have a ticket with my provider which is making it's way up the queue.

This is a record of those lovely hours. I hope it is helpful for anyone that has to go through it.  First however is the emotional aspect... it is a mini version of a feeling I had many years ago when my house was broken into.  A feeling of invasion, violation of personal space and anger. People have this feeling  and it is why privacy is manifesting itself politically, whether it's the NSA, Scott McNealy's 2009 quote: "You Have Zero Privacy Anyway. Get Over It" or Facebook data-mining your friends to  get a better credit score on you... GET THE F*%$ OUT OF HERE!

So here's what I did:

TRY TO FIX THE EXISTING SITE

  1. Read about the first 6 or 7 search items on "WordPress Hacked"  (half were advertisements)
  2. Logged into wp-admin and realized that my backup settings were not scheduled and my backup was months old (while fearing I was doing something bad by logging in)... more Bummer
  3. Ran a backup because the searches said to
  4. Downloaded a malware plugin and ran it ( $ to get the fix-it plugin)
  5. Deleted that plugin then downloaded and ran another ( $ to get the fix-it plugin)
  6. Ditto for that plugin
  7. Spent some time cruising WP directories and opening files hoping for a hail mary
  8. Gave up
QNAP Storage Server

Qnap NAS Storage Server

ABANDON THE EXISTING SITE AND REBUILD ON A STAGING SITE

  1. Decided to build a "staging version" and was always intrigued what the performance of a WordPress stack would be  on my QNAP TS-419U II NAS
  2. Built a clean MySQL/WordPress/Apache stack on the QNAP and the
    performance SUCKED (minutes to do  single digit second tasks on my hosting provider)!
  3. BTW I'm a BIG fan of QNAP and their hardware/software. This server has a Marvell  2GHz single core processor and it just wasn't up to managing the RAID as well as the WP Stack.
  4. Before the hack I was moving my trading  code (C#.Net, C++, Amibroker and Matlab) to the cloud using virtual machines in Virtualbox mixing Win7 and Centos.  I intended to automate the configuration and provisioning with Vagrant.
  5. Great stuff but  realizing I was getting far away from fixing my blog,  I Gave Up ( ummm..... more like postponed to  fix the specific, instead of the general problem  )

TRY TO FIX THE EXISTING SITE OR REBUILD AT THE HOSTING PROVIDER

  1. I started running phpmyadmin browsing the SQL tables and removed a bunch of users, changed my admin account Usernames and Passwords and the character code from UTC-7??? Back to UTC-8.
  2. Deleted (not just de-activated) all plug-ins except the most basic.
  3. Without a terminal on CPanel to "grep" my way through all the WP files I kept wondering how long it would take to build a diff tool to compare my site to the WP release on GITHUB. Then I found Anti-Malware and Brute-Force Security by ELI.  I installed and ran it.
  4. The plug-in did not find the problem but gave me about 10 suspect files. I opened them with the CPanel editor and pasted the current GIT versions.  When saving, the editor informs whether anything changed, two files had changed.
  5. The site and pages still redirected to the "hacked by Hwins2005".  I figured if my php files were cool there must still be issues in the javascript
  6. I deleted my Theme and reloaded it
  7. I'M BACK

Whew....   probably saved $250 to have someone clean it for me but I learned alot about WordPress' architecture and improved my CPanel and overall web stack chops. I'll be attempting to harden things more going forward.

Cheers,

virtualbox       vagrant   centos

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5 Reasons You've Gotta Love to Fish to Execute Strategy

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strategy intersection

I just finished a great article in Harvard Business Review called "What is Strategy, Again?" by Andria Ovans (an HBR editor). Andria outlines  seminal articles and books on strategy.

Now I view strategy as fishing the intersection of Technology, Market and  Business (TMB) for a "Theory of the Company".  Many of the books Andria references are in my 60 Minute Marketing MBA Presentation .

The article  groups 40 years of strategy books, journal articles  and consultants.  They fall under these three headlines...

1) Do Something Different

2) Build upon what you already do

3) React opportunistically to emerging possibilities

MPython_different

bldfoundation

 

 

 

ducati_turnHer article lead me to another HBR article "Why Strategy Execution Unravels - and What to do About It" by McGrath & McMillan .   Their research from 8,000 managers in 250 companies found five myths people had about execution.  The research is continuing along with experiments at 40 companies where they make changes and  measure the impact on strategy execution. Here are the five common myths they've found:

1) Execution equals Alignment

- rowing in the same direction, "smart" goals, KPI's/MBO's,  adequate funding ...ISN'T IT

2) Execution Means Sticking to the Plan

- grit and gutting it out...ISN'T IT

3) Communication equals Understanding

- regular communication to reinforce goals...ISN'T IT

 4) A Performance Culture Drives Execution

- Israeli commando, seal team 6, never miss a beat...ISN'T IT

 5) Execution Should be Driven from the TopExecution_Bossidy

- Larry Bossidy, TJ Rogers, Henry Nicholas kick butt "I'll show you                                discipline"...ISN'T IT

So what is it?


I've noticed execution problems at even well run companies when trying to execute a strategy, which led me to some observations.

1) Since strategy is fishing a set of Technology, Market and Business (model) choices to  filter opportunities, focus resources and build ecosystems, then having STUDIED ALL POSSIBLE TECHNOLOGY, MARKET and BUSINESS OPTIONS, WHAT HAS AND HASN'T WORKED IS NECESSARY TO DEVELOP TRUE EXPERTISE ( the space is not that big and can be pared down heuristically pretty readily).

"True expertise requires making all possible mistakes"  -Neils Bohr

2) I've observed that a clear strategy in the hands of the senior people when the company gets big doesn't usually work.  McGrath &McMillan identify "Distributed Leaders" that get things done inside and outside the company as the key players, not just senior management.  The org chart is not a map of power and influence in a company. In fast changing environments those closest to decisions need a strategic compass.

The Distributed Leaders  need to learn and love to fish for the possible TMB combinations that fit their company. They need to love learning and talking about TMB strategies so they can synthesize ON-THE-FLY the agile decisions today's organizations need to make.  New management paradigms like Holacracy  as practiced by Tony Hsieh @ Zappos go much farther than I'm describing, but has ways to structure some of the same ground.

Bottom line is that the Distributed Leaders must love the strategy fish and learn the essence of what has worked, what hasn't and why.

girl-with-fish

Distributed Leadership needs a lesson in Love

 

 

 

 

 

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