Technology

Creativity, Inc. – Ed Catmull

Creativity, Inc. – by Ed Catmull
Date read: 1/22/19. Recommendation: 9/10.

One of the best modern examples of the impact that comes from harnessing creativity and building a culture where the creative process can thrive. Catmull discusses the evolution of Pixar Animation, including the philosophies and strategies that have established them as creative force. Most notably, the team at Pixar embraces the years of ambiguity inherent to the creative process as a story evolves into its own. Instead of becoming attached to a single storyline or character, they seek out a deep truth at the core of the film–the guiding principle–and craft the story around that. Catmull also emphasizes the role of leadership in cultivating creativity. It starts with loosening your grip, accepting risk, trusting your people, and giving them space to do what they do best. See my notes below or Amazon for details and reviews.

My Notes:

Problems are the rule, rather than the exception. Even at great companies.
Mentality at Pixar is that they will always have problems, many of them hidden. But they work hard to uncover them, embrace the discomfort, and band together to solve them.

“The desire for everything to run smoothly is a false goal–it leads to measuring people by the mistakes they make rather than by their ability to solve problems.” EC

Blending Art + Technology
Walt Disney embraced new technologies…he would incorporate it into their work (blue screen matting, multi-plane cameras, xerography) and talk about it on his show to highlight the relationship between art and technology.

Catmull and Pixar took the same approach, blurring the lines between disciplines. Result was Toy Story, the first computer animated feature film.

Leadership
Goal is to enable people to do their best work. That means more creative freedom (autonomy + empowerment), less tightening your grip.

The best leaders all have a single trait in common – self-awareness.

People > Ideas (because ideas come from people)
Always try to hire good people who are smarter than you. Then figure out what they need, assign them to projects that match their skills, and ensure they work well together.

“It is the focus on people–their work habits, their talents, their values–that is absolutely central to any creative venture.” EC

Bet on Yourself
George Lucas, instead of demanding higher salary after success of American Graffiti (the norm in Hollywood, bump up your quote), skipped the raise and asked to retain ownership of licensing and merchandising rights to his next film, Star Wars.

Ed Catmull felt like a fraud in his early years as president of Pixar. He didn’t share the aggressive tendencies of other flashy leaders. Imposter feeling finally went away after years later after repeated experience of weathering failures, watching films succeed, building Pixar’s culture, and developing relationships.

Decisiveness
“As long as you commit to a destination and drive toward it with all your might, people will accept when you correct course.” EC

Make your best guess and go with it. Decisions can be made far faster (product development) if you assess them in terms of how reversible they are (*See Shane Parrish’s interview with Shopify’s CEO, Tobi Lütke).

Avoid the temptation to oversimplify (and overcomplicate)
In early days of Pixar while Catmull was selling the Pixar Imaging Computer to make money, he sought advice of experienced professionals because he was unsure and stressed. Simple answers were seductive and prevented him from asking more fundamental questions.

Many leaders assume too much credit in their successes and ignore the role of randomness and luck.
*See Nassim Taleb’s Fooled by Randomness + Occam’s Razor

Important to acknowledge role of randomness and luck, because this allows you to keep an open mind, check your ego, and make rational decisions. Not everything you did was a stroke of genius.

Make room for the unknown in creativity. It can bring inspiration and originality. Not everything needs to have a point or be about productivity/efficiency.

Thinking Fast vs. Slow
Steve Jobs would often shoot down Ed Catmull’s arguments when they disagreed because he was a much faster thinker. Catmull would wait a week, collect his thoughts, deliberate, then state his case. Jobs always kept an open mind.

Candor and Trust
“A hallmark of a healthy creative culture is that its people feel free to share ideas, opinions, and criticisms. Lack of candor, if unchecked, ultimately leads to dysfunctional environments.” EC

Without candor, you fail to establish trust. Without trust, creative collaboration becomes impossible.

You are not your idea. If you emotionally invest and overidentify with your idea, you’ll become defensive when challenged or given feedback.

Guiding Principles
The search for a story is the search for a guiding principle. This allows Pixar’s films to evolve drastically from their original treatments. Once they find the guiding principle, easier to build the characters, storyline, settings to better communicate that.

Don’t become emotionally attached to a single character or storyline, become emotionally attached to the guiding principle. Look for deep truths and build from there.

“Originality is fragile. And, in its first moment, it’s often far from pretty. This is why I call early mock-ups of our films ‘ugly babies.’ They are truly ugly: awkward and unformed, vulnerable and incomplete. They need nurturing–in the form of time and patience–in order to grow.” EC

Pixar’s use of “guiding principles” could be interchangeable with “vision” in product development. Don’t get attached to a single feature. Invest in the vision.

Experimentation and Failure
“Experiments are fact-finding missions that, over time, inch scientists toward greater understanding. That means any outcome is a good outcome, because it yields new information.” EC

Animated shorts are Pixar’s version of prototypes. Relatively inexpensive way to test the waters and see if they’re onto something.

Make it safe to take risks: “Rather than trying to prevent all errors, we should assume, as is almost always the case, that our people’s intentions are good and that they want to solve problems. Give them responsibility, let the mistakes happen, and let people fix them...Management’s job is not to prevent risk but to build the ability to recover.”

Constraining creativity is a steep price: “The cost of preventing errors is often far greater than the cost of fixing them.”

Depth
“We all know people who eagerly face the unknown; they engage with the seemingly intractable problems of science, engineering, and society; they embrace the complexities of visual or written expression; the are invigorated by uncertainty. That’s because they believe that, through questioning, they can do more than merely look through the door. They can venture across its threshold.” EC

Creativity
“Creativity has to start somewhere, and we are true believers in the power of bracing, candid feedback and the iterative process–reworking, reworking, and reworking again, until a flawed story finds its through line or a hallow character finds its soul.” EC

“Craft is what we are expected to know; art is the unexpected use of our craft.” EC

Learn the fundamentals and key players (the map), then rip it up and make your own way (*See Bob Dylan, Chronicles). At its core, creativity is about embracing ambiguity and discomfort.

“There is a sweet spot between the known and the unknown where originality happens; the key is to be able to linger there without panicking.” EC

“Unleashing creativity requires that we loosen the controls, accept risk, trust our colleagues, work to clear the path for them, and pay attention to anything that creates fear.” EC

Multiculturalism
When Disney acquired Pixar, Catmull helped run both animation departments separately. Wanted each to have their own identities and be able to differentiate themselves, as long as they shared a sense of personal ownership and pride in the company.

Tobi Lütke, CEO of Shopify, has a similar approach. He encourages each group within the company to establish their own culture. He doesn’t try to impart a single homogenous culture across the entire organization.

Inspired – Marty Cagan

Inspired: How to Create Tech Products Customers Love – by Marty Cagan
Date read: 1/9/19. Recommendation: 7/10.

A valuable resource for technology teams that’s tailored to product management. Cagan discusses the principles of strong product teams and breaks down the individual roles–product managers, designers, engineers, product marketing, and other supporting positions. He also discusses the process of getting to the right product through discovery, ideation, prototyping, and testing. At times it can be a bit prescriptive and could use a few more stories to illustrate the concepts and techniques. But overall, worth the read for entrepreneurs operating in this space or those looking for an introduction to technology product management.

See my notes below or Amazon for details and reviews.


My Notes:

The best product teams share three main principles:
1. Risks tackled up front (value, usability, feasibility, business viability)
2. Products are defined and designed collaboratively
3. Focus is on solving problems, not implementing features

Product/market fit: smallest actual product that meets needs of a specific market of customers.

Product Manager key responsibilities (all focused on evaluating opportunities and determining what gets built):
1. Deep knowledge of customer (issues, pains, desires)
2. Deep knowledge of data and analytics
3. Deep knowledge of all aspects of your business (stakeholders, finance, marketing, sales, legal, technical capabilities, user experience)
4. Deep knowledge of your market and industry

Successful product people are a combination of smart, creative, and persistent.

VPs of Product should have these four key competencies:
1. Team development
2. Product vision
3. Execution
4. Product culture

How to organize teams:
1. Alignment with investment strategy
2. Minimize dependencies
3. Ownership and autonomy: build teams of missionaries (they’re force multipliers), not mercenaries
4. Maximize leverage: establish a balance with shared services
5. Product vision and strategy
6. Team size: 3-10
7. Alignment with architecture: otherwise dependencies, slow pace
8. Alignment with user or customer: team focused on buyers should be different than the team focused on sellers
9. Alignment with business

Management’s responsibility is to provide product teams with business problems, objectives, and vision (NOT solutions). Let the team figure out the best way to solve the problems.

Product Discovery:
Collaboration between product, UX, and engineers to tackle risk before writing production-quality software. Outcome is a validated product backlog.

Purpose is to address value, usability, feasibility, and business viability risks.

Goal is to gain deeper understanding of customers and validate product ideas (qualitatively and quantitatively).

Dedicating time to framing the problem and communicating this can make significant difference in results.

“But one of the most important lessons in our industry is to fall in love with the problem, not the solution.” MC

Opportunity Assessment Technique:
1.
What business objective is this work intended to address?
2. How will you know if you succeeded?
3. What problem will this solve for customers?
4. What type of customer are we focused on?

Customer Letter Technique:
Product manager writes an imaginary press release or letter from hypothetical perspective of a customer talking about how it has improved their life.

Product Opportunities:
Assess the market and pick lucrative areas where pain exists. Or look at what technology enables and match that up with a pain point. Or encourage customers to use products to solve problems other than what you planned for.

One of biggest innovations at eBay was watching how customers used platform to sell things the team never would have imagined (concert tickets, fine art, cars). Built capabilities to facilitate these types of transactions after demand was established.

Customer Interviews:
Always be working to understand if your customers are who you think they are, if they really have the problems you think they have, how they solve the problem today, and what would be required from them to switch.

Prototypes:
Provide the ability to learn at much lower cost (time and effort) than building the full product.

Always ask, “what’s the fastest way to learn this?” MVP should be a prototype, never an actual product.

Benefits of prototyping: forces you to think through the problem at a deeper level, team collaboration, quickly assess one or more of the product risks.

A/B Testing:
Optimization A/B testing: Small changes, different calls to action, colors, fonts. 50/50 distribution. Conceptually similar.

Discovery A/B testing: Big differences, different concepts. Live-data prototype shown to 1% of users or less.

Necessity leading to invention:
In the early days of Netflix they had the same model (pay per rental) as Blockbuster. One of the many tests they ran was to assess customer interest in a subscription service (monthly fee for unlimited movies). They generated significant interest but created more problems in the process of bringing it to life. Most people wanted to rent the newest films which was prohibitively expensive. Netflix needed to get people to ask for a blend of old/new (inexpensive/expensive) titles. This was how the queue, rating system, and recommendation engine were born.

Make Time – Jake Knapp + John Zeratsky

Make Time: How to Focus on What Matters Every Day – by Jake Knapp and John Zeratsky
Date read: 11/28/18. Recommendation: 7/10.

Strategies and tactics for creating more time to focus on the things you care about. It’s not about productivity, it’s about setting your own priorities. Similar to Sprint, they offer a framework to assist in the process: Highlight, Laser, Energize, Reflect. The real value of the book comes from the individual tactics they suggest, such as creating a distraction free phone, differentiating between “fake” and “real” wins, and bucking cultural norms. It’s all about becoming more intentional in how you spend time and allocate your energy. If you want to work on improving your own priorities and ability to focus, this is a solid resource.

See my notes below or Amazon for details and reviews.

My Notes:

Make time for the things that matter. Not about productivity, but creating time in your day for the things you care about.

Framework: Highlight, Laser, Energize, Reflect

Highlight: Start day with single focal point and goal. Prioritize and protect that activity on your calendar.

Three strategies for choosing your highlight:

  1. Urgency - what needs to get done?

  2. Satisfaction - what do you want to get done?

  3. Joy - what will bring me the most joy when reflecting at end of day?

“You only waste time if you’re not intentional about how you spend it.”

If you’re stuck on what you should choose as today’s highlight, try redoing yesterday...gives you a second chance, build momentum, creates habits.

It’s never too late to change or choose your highlight...if the day isn’t going according to plan, recalibrate and focus on something ahead of you (i.e. enjoying dinner with friends).

Laser: Make higher-quality time to focus. “Every distraction imposes a cost on the depth of your focus. When your brain changes contexts–say, going from painting to a picture to answering a text and then back to painting again–there’s a switching cost.”

Distraction-free phone: Remove email, Infinity Pool apps, and web browser from your phone. Clear your home screen. Restores a sense of quiet to your day and helps you become more intentional.

“The best way to defeat distraction is to make it harder to react.”

Fake wins vs. real wins: Updating spreadsheet instead of focusing on harder, more meaningful project. Cleaning the kitchen instead of spending time that was intended for your kids. Email inboxes. This is all time and energy that could be spend on your highlight.

Email: “Every time you check your email or another message service, you’re basically saying, ‘Does any random person need my time right now?’”

Become a fair-weather fan: “Sports fandom doesn’t just take time; it takes emotional energy. When your team loses, it sucks–it might bum you out and lower your energy for hours or even days. Even when your team wins, the euphoria creates a time crater as you get sucked into watching highlights and reading follow-up analysis.”

Sports satisfy deep tribal urge. Unpredictable story lines that finish with clear outcomes (win/lose), which is deeply gratifying since it’s unlike real life.

Buck cultural norms (TV, sports, etc.) to free up time and unlock creative energy. “If you’re constantly exposed to other people’s ideas, it can be tough to think up your own.” ^Similar to drawdown periods from Ryan Holiday.

It’s okay to be stuck. Stare at blank screen, switch to paper, go for a walk. But keep focus on project.

“You know the antidote to exhaustion is not necessarily rest...The antidote to exhaustion is wholeheartedness.” Brother David Steindl-Rast
-Let go of caution, throw yourself in with sincerity and enthusiasm.

What matters is that you’re setting your own priority. “As long as we’re making time for what matters to us, the system is working.”

The Messy Middle – Scott Belsky

The Messy Middle – by Scott Belsky
Date read: 10/20/18. Recommendation: 9/10.

More than a business book, and that’s what I loved about it. It’s a book about embracing the long game and leading through ambiguity–whether you’re a founder, entrepreneur, or artist, you’ll find relevance. Belsky details the endurance it takes to bring an idea to life. It’s not always as pretty as the beginning or end, but the middle is worthy of equal attention since it’s where most of the journey takes place. As a product manager, I found the book to be particularly insightful for my daily work and career. The next time I’m asked for a great product book, I’ll be recommending this. But again, the beauty of this book is that it’s relevant for anyone who’s building something from nothing. Those who are leading others (or themselves) through uncertainty will benefit greatly from it. Far from a generic business book with the same recycled ideas, it’s original, practical, profound, and one of the best books I’ve read all year.

See my notes below or Amazon for details and reviews.


My Notes:

You cannot travel the path until you’ve become the path. Embracing the middle is the only way through.

Values/Principles:
-“The truth about telling the truth is that it does not come easy for anyone. It’s not natural or organic. The natural thing to do is tell people what they want to hear. That makes everybody feel good…at least for the moment. Telling the truth, on the other hand, is hard work and requires skill.” Ben Horowitz

-“There is no better measure of your values than how you spend your time.” SB, accounting of how you spend your minutes is hard truth of your values.

-Routines backfire when you do them without thinking. Throw a wrench in every now and then to see if it feels liberating and is no longer relevant/effective.

-Sometimes you guard your time too closely. Fluidity/flexibility to adapt is important, or else you won’t reach full potential. Need to create and preserve some margin of downtime in your day to accommodate opportunities. 

-You deserve this and you are enough. There’s a part of all of us that fights our own progress. Overcome these insecurities and doubts.

-"You are not your org chart, your department budget, or your title. Don’t let success at a company prevent you from pursuing scary and wonderful new opportunities to build.” Hunter Walk

Endurance:
-“You need to do your fucking job.” What Belsky would tell himself before going into a tough meeting, negotiation, or firing someone.

-“Playing the long game requires moves that don’t map to traditional measures of productivity.” SB

-“Curiosity is the fuel you need to play the long game.” SB 

-Resourcefulness is a competitive advantage. “Resources become depleted. Resourcefulness does not.” SB

-80% on boulders, 20% on pebbles.

Lead your team:
-Teams need to be reminded of where they are and progress they’ve made. Call out landmarks you pass and the terrain ahead.

-When discussing your teams efforts so far, weave in stories and leverage the perspective that excites you the most.

-Your perspective during trying times will help your team overcome moments of self-doubt.

-Not all meetings end with a solution, quit seeking a false sense of closure. Instead actively lead through a process of self-discovery.

-Unresolved conversations are draining. If you can’t provide closure, add energy, turn negative into positive. 

-“Your story has more gravity than you realize. Your job is to help your team make sense of the strategy–what they’re seeing, doing, and working toward. You are the steward of your team’s perspective, and there is always a way forward so long as you explain it.” SB

-Don’t aggressively market yourself, celebrate the people on your team and empower great makers. “Ego is rust. So much value and potential are destroyed in its slow decay.” SB

-Pick your fights and don’t deprive others of their own process. Sometimes the best way to instigate change is to plant questions as seeds and let them take root so you can avoid immediate reactions. 

Conviction:
-“For extraordinary outcomes, seek conviction in your work and build teams that value conviction over consensus.” SB

-Hesitation breeds incrementalism.

-Most effective way to communicate a vision is to declare it, rather than blunting blow with a comforting narrative that makes it sound less drastic.

-Progress is only possible once a decision is made. Can always backtrack and adjust as you learn along the way. Keep moving!

-Make your mind up quickly and go with the option that feels most right at first (don’t survey every available option). Otherwise you’ll waste time and energy searching for alternatives that may only be mildly more beneficial.

Self-awareness:
-Self-awareness is the greatest competitive advantage for a leader.

-Your sense of self shifts when you’re at a peak or in a valley. 

-Effort to understand how your mind works is only path to reliable self-awareness during intensity/stress.

-“You cannot win unless you know how you’re most likely to lose.” SB

-“Knowing when to ignore your experience is the true sign of experience.” -John Maeda

Ambiguity:
-Avoid temptation to describe what you’re building in context of what already exists (i.e. “It’s Airbnb for X”). 

-When you feel overwhelmed, remember the vision. Compartmentalize your ideas, look ahead, worry less about day-to-day concerns. 

-When you feel lost in ambiguity, ask a different question. i.e. Not “why aren’t people signing up?” but “what kinds of people would benefit most?”

-When you’re building something new, focus on asking the right questions instead of having the right answers. 

Defy prescribed roles:
-Directing blame and expressing disappointment take more energy than tackling whatever you’re criticizing. Take the initiative, even if it falls outside of your job description.

-“There is rarely a scarcity of process or ideas but there is often a scarcity of people willing to work outside the lines.” SB

-“You’re either a cog in the system or a designer of better systems…challenge every system you find yourself confined by.” SB

-Asking for permission to do what you know needs to be done will yield hesitation at best, rejection at worst.

Prioritize your team:
-“I have met many founders who obsess over product and steamroll their team. Most of them have failed. Team comes first.” SB

-If you want to execute well over time or make great products, prioritize your team over your goals and tend to your team before your product.

Hiring:
-Hire people seeking a journey rather than a particular outcome.

-Closing the confidence gap of new hires is more important than closing skills gap. Building confidence is important if you want to unleash someone’s potential. 

-Maturity and perspective > age and accolades.

-Best reason to fire people who aren’t performing is to keep your best people.

-Salary bands: subconsciously biased by age, years of experience, gender, and other characteristics that don’t correlate with indispensability. 

Founders:
-“What distinguishes great founders is not their adherence to some vision, but their humility in the face of the truth.” Paul Graham

-Greatest thinkers anchor ideas around a central truth they believe is unique and unrealized by others, but embrace questions when someone challenges them…they don’t look the other way.

-Poor leaders are too worried about being loved. The best founders have conviction in their ideas and aren’t hedging by spreading resources thinly across too many ideas. 

-Hold on to the openness, humility, and brashness you had in the begging.

Product:
-Speed through the generic stuff, but take time to perfect the things you’re most proud of. This is what differentiates your product, so it deserves a disproportionate investment of resources.

-Uniqueness of your product needs to be baked in, not sprinkled in at the end. Otherwise it’s likely to taste bland.

-Customers don’t engage with functionality, they engage with experiences. Make it more human friendly and accommodating to natural human tendencies.

-Competitive advantage is as much about what you choose to let go and not be, as it is about what you focus on. 

-One feature in, one feature out. Keeps you focused on simplicity.

-Having to explain your product, least effective way to engage new users.

-Empathy for your customers and humility in your market are powerful filters. Focus on these before you fall in love with your solution.

-Greatest brands developed by playing at far end of the spectrum and not trying to be everything to everyone. “Playing to the middle makes you weak.” Don’t give up your edge to appeal to broader audience.

-Engage emotionally as you create, but detach yourself when you’re evaluating.

Innovation:
-Every product or service in your life either helps you spend or save time. Best products remove a daily friction.

-Don’t be too different, familiarity drives utilization. Train customers on something new only when it’s core to what differentiates your product. Helps reduce cognitive friction.

-Big part of innovation is saying ‘you know what I’m really sick of?’ What frustrates you likely frustrates many others.

-True innovators value art up front and compete against incumbents through stuff that doesn’t intuitively scale. Give your customers something precious, uniquely personal, emotional, and seemingly scarce that cannot be easily scaled, automated, or commoditized. Preserving the art in your business gives it a soul that people can connect with. 

-At the beginning, must run manual experiments, spend endless amount of time with customers, and tinker until you find something special.

The Product Lifecycle:

  1. Customers flock to a simple product.

  2. The product adds new features to better serve customers and grow the business.

  3. Product gets complicated.

  4. Customers flock to another simple product.

The First Mile:
-Fewer options, shorter copy, simpler steps.

-Need to prime your audience to know, 1) Why they’re there, 2) What they can accomplish, 3) What to do next.

-30% of your energy should be allocated here. Top of funnel for new users, deserves to be well thought out. 

-Remember, people are lazy, vain, and selfish. You have 30 seconds to engage and address each concern.

-Best hook is doing things proactively for customer. Once you help them feel successful and proud, will engage more deeply and take time to learn and unlock the greater potential of what you’ve created. 

Measuring Success:
-Always ask “what is the real goal here?” Answer is rarely as measurable as you may think.

-Avoid too many measures, the more numbers you’re tracking, the less attention you pay to any of them.

-Boil your business down to one or two core metrics.

-Prefer, a referral network for independent professionals, uses a single metric, “number of working pairs.” Allows them to focus on what matters instead of getting caught in surface measures like revenue or downloads.

-Iconic and breakthrough product insight are not the result of trying to improve a metric. Square’s iconic UX requiring everyone to sign using a finger instead of bypassing small transactions.

Investors:
-“For strong companies, financing is a tactic. For weak companies, financing is a goal.” SB

-Is the team attempting to defy a likely outcome or make it happen in a better way? Invest in the latter. Uses forces already in play.

Editing:
“The question that I find most helpful to ask is, ‘if you had to keep 10 percent, which 10 percent would you keep, and if you had to, absolutely had to, cut 10 percent, which 10 percent would you cut?’” Tim Ferriss

Desire to Learn:
-Warren Buffett spends 80% of each day reading. When asked about keys to success, Buffett pointed to a stack of books on his desk and said, “Read five hundred pages like this every day. That’s how knowledge works. It builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it.”

-Annual letters to investors, Buffett is self-reflective and self-deprecating. Admits when he struggles to understand something or has made dumb decisions. Remarkably open to changing his mind. All because of his persistent desire to learn.

Zero to One – Peter Thiel and Blake Masters

Zero to One – by Peter Thiel & Blake Masters
Date read: 1/12/18. Recommendation: 8/10.

I had high expectations for this one, considering it has become a sacred text for many startups and entrepreneurs. But Zero to One did not disappoint. The core of the book emphasizes that there is no single secret to innovation and entrepreneurship. But Thiel explains that if we want to to create a better future, we can't wait around, we have to go out and actually build it. He touches on concepts like vertical progress, opposite principles, monopolies, luck, venture capital, and the importance of getting the founders right when launching a new startup. The first half of the book is particularly brilliant. If you're an entrepreneur or working in technology, there's a reason this book is so highly rated.

See my notes below or Amazon for details and reviews.

 

My Notes:

The paradox of teaching entrepreneurship is that such a formula necessarily cannot exist; because every innovation is new and unique, no authority can prescribe in concrete terms how to be innovative.

Successful people find value in unexpected places, and they do this by thinking about business from first principles instead of formulas.

"What important truth do very few people agree with you on?"

Brilliant thinking is rare, but courage is in even shorter supply than genius.

Horizontal or extensive progress:
-Going from 1 to n
-Taking a typewriter and building 100
-Globalization (China)

Vertical or intensive progress:
-Going from 0 to 1
-Taking a typewriter and building a word processor
-Technology (Silicon Valley)

Spreading old ways to create wealth around the world will result in devastation, not riches. In a world of scarce resources, globalization without new technology is unsustainable.

Focus on building from small groups of people bound together by a sense of mission: It's hard to develop new things in big organizations, and it's even harder to do it by yourself. Small size affords space to think.

Conventional beliefs only ever come to appear arbitrary and wrong in retrospect; whenever one collapses, we call the old belief a bubble.

Opposite principles that are more correct than common startup lessons:

- It is better to risk boldness than triviality (instead of making incremental advances)
- A bad plan is better than no plan (stay lean and flexible)
- Competitive markets destroy profits (improve on the competition)
- Sales matters just as much as product (focus on product not sales)

To build the next generation of companies, we must abandon the dogmas created after the crash (dot-com).

The most contrarian thing of all is not to oppose the crowd but to think for yourself.

Under perfect competition, in the long run no company makes an economic profit.

If you want to create and capture lasting value, don't build an undifferentiated commodity business.

Competition is an ideology–the ideology–that pervades our society and distorts our thinking.

Higher education is the place where people who had big plans in high school get stuck in fierce rivalries with equally smart peers over conventional careers like management consulting and investment banking.

If you can recognize competition as a destructive force instead of a sign of value, you're already more sane than most.

The value of a business today is the sum of all the money it will make in the future.

Every startup should start with a very small market. Always err on the side of starting too small. The reason is simple: it's easier to dominate a small market than a large one.

The perfect target market for a startup is a small group of particular people concentrated together and served by few or no competitors. Any big market is a bad choice, and a big market already served by competing companies is even worse.

"Victory awaits him who has everything in order–luck, people call it." -Roald Amundsen

The strange history of the Baby Boom produced a generation of indefinite optimists so used to effortless progress that they feel entitled to it. Whether you were born in 1945 or 1950 or 1955, things got better every year for the first 18 years of your life, and it had nothing to do with you...A whole generation learned from childhood to overrate the power of change and underrate the importance of planning.

Instead of working for years to build a new product, indefinite optimists rearrange already-invented ones–bankers, lawyers, management consultants.

In an indefinite world, people actually prefer unlimited optionality; money is more valuable than anything you could possibly do with it. Only in a definite future is money a means to an end, not the end itself.

But indefinite optimism seems inherently unsustainable: how can the future get better if no one plans for it?

But leanness is a methodology, not a goal. Making small changes to things that already exist might lead you to a local maximum, but it won't help you find the global maximum.

Darwinism may be a fine theory in other contexts, but in startups, intelligent design works best.

Long-term planning is often undervalued by our indefinite short-term world.

A business with a good definite plan will always be underrated in a world where people see the future as random.

Vilfredo Pareto – In 1906 discovered the "Pareto principle," or the 80-20 rule, when he noticed that 20% of the people owned 80% of the land in Italy–a phenomenon that he found just as natural as the fact that 20% of the peapods in his garden produced 80% of the peas.

The biggest secret in venture capital is that the best investment in a successful fund equals or outperforms the entire rest of the fund combined.

VCs must find the handful of companies that will successfully go from 0 to 1 and then back them with every resource.

Venture-backed companies create 11% of all private sector jobs. They generate annual revenues equivalent to an astounding 21% of GDP. Indeed, the dozen largest tech companies were all venture-backed.

An entrepreneur makes a major investment just by spending her time working on a startup. Therefore every entrepreneur must think about whether her company is going to succeed and become valuable.

The power law means that differences between companies will dwarf the differences in roles inside companies. You could have 100% of the equity if you fully fund your own venture, but if it fails you'll have 100% of nothing. Owning just 0.01% of Google, by contrast, is incredibly valuable (more than $35 million as of this writing).

A conventional truth can be important–it's essential to learn elementary mathematics, for example–but it won't give you an edge. It's not a secret.

If everything worth doing has already been done, you may as well feign an allergy to achievement and become a barista.

Bad decisions made early on–if you choose the wrong partners or hire the wrong people, for example–are very hard to correct after they are made.

Anyone who doesn't own stock options or draw a regular salary from your company is fundamentally misaligned...That's why hiring consultants doesn't work.

You need people who are not just skilled on paper but who will work together cohesively after they're hired.

If you've invented something new but you haven't invented an effective way to sell it, you have a bad business–no matter how good the product.

PayPal: Needed smaller niche market segment with a higher velocity of money–found this segment in eBay "PowerSellers." There were 20,000 of them. Because eBay's solution to the payment problem was terrible, merchants were extremely enthusiastic early adopters.

If you can get just one distribution channel to work, you have a great business. If you try for several but don't nail one, you're finished.

The most valuable businesses of coming decades will be built by entrepreneurs who seek to empower people rather than try to make them obsolete.

The most valuable companies in the future won't ask what problems can be solved with computers alone. Instead, they'll ask: how can computers help humans solve hard problems?

Companies must strive for 10x better because merely incremental improvements often end up meaning no improvement at all for the end user.

Apple's value crucially depended on the singular vision of a particular person. This hints at the strange way in which the companies that create new technology often resemble feudal monarchies rather than organizations that are supposedly more "modern." A unique founder can make authoritative decisions, inspire strong personal loyalty, and plan ahead for decades.

We cannot take for granted that the future will be better, and that means we need to work to create it today.

The Inevitable – Kevin Kelly

The Inevitable: Understanding 12 Technological Forces That Will Shape Our Future – by Kevin Kelly
Date read: 12/27/17. Recommendation 7/10.

Kelly is a great teacher when it comes to helping others think beyond the realm of current possibilities. I often find myself fighting the inertia of the way things currently are, instead of looking at the inevitable trends and determining what's next. The specific forces he outlines become a bit repetitive, as there is significant overlap to each. But as a whole it's a great exercise in reminding yourself to take your thinking to the next level. Kelly is also refreshingly optimistic about the future of technology. He suggests that while we have little control over the inevitable technological forces on the horizon, we do have influence over their character and how symmetrical those relationships end up being. 

See my notes below or Amazon for details and reviews.

 

My Notes:

Everything, without exception, requires additional energy and order to maintain itself. I knew this in the abstract as the famous second law of thermodynamics, which states that everything is falling apart slowly...Existence, it seems, is chiefly maintenance.

Most of the important technologies that will dominate life 30 years from now have not yet been invented.

Technology is taking us to protopia...a state of becoming rather than destination. It is a process. In the protopian mode, things are better today than they were yesterday, although only a little better...This subtle progress is not dramatic, not exciting.

The revolution launched by the web was only marginally about hypertext and human knowledge. At its heart was a new kind of participation that has since developed into an emerging culture based on sharing.

The accretion of tiny marvels can numb us to the arrival of the stupendous.

Coming out of the industrial age, when mass-produced goods out-performed anything you could make yourself, this sudden tilt toward consumer involvement is a surprise. We thought, "That amateur do-it-yourself thing died long ago, back in the horse-and-buggy era."

But the web in 2050 won't be a better web...It will have become something new, as different from the web today as the first web was from TV.

The AI on the horizon looks more like Amazon Web Services–cheap, reliable, industrial-grade digital smartness running behind everything, and almost invisible except when it blinks off.

The business plans of the next 10,000 startups are easy to forecast: Take X and add AI. Find something that can be made better by adding online smartness to it.

"AI is akin to building a rocket ship. You need a huge engine and a lot of fuel. The rocket engine is the learning algorithms but the fuel is the huge amounts of data we can feed to these algorithms." -Andrew Ng

If AI can help humans become better chess players, it stands to reason that it can help us become better pilots, better doctors, better judges, better teachers.

Nonhuman intelligence is not a bug; it's a feature. The most important thing to know about thinking machines is that they will think different.

Because of a quirk in our evolutionary history, we are cruising as the only self-conscious species on our planet, leaving us with the incorrect idea that human intelligence is singular. It is not.

One of the advantages of having AIs drive our cars is that they won't drive like humans, with our easily distracted minds.

Industrial revolution eliminated all but 1 percent of farming jobs, but automation created hundreds of millions of jobs in entirely new fields.

Third age of computing: prime units are flows and streams. We've moved from batches or daily, to real time.

The union of a zillion streams of information intermingling, flowing into each other, is what we call the cloud...The cloud is the new organizing metaphor for computers. The foundational units of this third digital regime, then, are flows, tags, and clouds.

A universal law of economics says the moment something becomes free and ubiquitous, its position in the economic equation suddenly inverts. When nighttime electrical lighting was new and scarce, it was the poor who burned common candles. Later, when electricity became easily accessible and practically free, our preference flipped and candles at dinner became a sign of luxury.

Deep down, avid audiences and fans want to pay creators...But they will only pay under four conditions that are not often met: 1) It must be extremely easy to do; 2) The amount must be reasonable; 3) There's a clear benefit to them for paying; and 4) It's clear the money will directly benefit the creators.

Book reading strengthened our analytical skills, encouraging us to pursue an observation all the way down to the footnote. Screening encourages rapid pattern making, associating one idea with another, equipping us to deal with the thousands of new thoughts expressed every day.

Ownership is casual, fickle. If something better comes along, grab it. A subscription, on the other hand gushes a never-ending stream of updates, issues, and versions that force a constant interaction between the producer and the consumer.

Bitcoin:
-The most important innovation in Bitcoin is its "blockchain," the mathematical technology that powers it.

-When I send you one bitcoin, no central intermediary is involved. Our transaction is posted in a public ledger–called a blockchain–that is distributed to all other bitcoin owners in the world. This shared database contains a long "chain" of the transaction history of all existing bitcoins and who owns them.

-A new transaction like ours must be mathematically confirmed by multiple other owners before it is accepted as legitimate. In this way a blockchain creates trust by relying on mutual peer-to-peer accounting.

-A number of startups and venture capitalists are dreaming up ways to use blockchain technology as a general purpose trust mechanism beyond money. For transactions that require a high degree of trust between strangers, such as real estate escrows and mortgage contracts...

As we increase dematerialization, decentralization, simultaneity, platforms, and the cloud–as we increase all those at once, access will continue to displace ownership. For most things in life, accessing will trump owning.

The need for some top-down selection would only increase in value as the amount of user-generated content expanded...Facebook and Twitter's algorithm to sort your feed, Wikipedia's veteran editors. You don't need much of them, just a trace.

I have learned that in collaborative work when you share earlier in the process, the learning and successes come earlier as well.

The more powerful the invention or creation, the more likely and more important it is that it will be transformed by others. In 30 years the most important cultural works and the most powerful mediums will be those that have been remixed the most.

How we handle rewards for innovation, intellectual property rights and responsibilities, ownership of and access to copies makes a huge difference to society's prosperity and happiness. Ubiquitous copying (and tracking) is inevitable, but we have significant choices about its character.

The fastest-increasing quantity on this planet is the amount of information we are generating. New information is growing at 66 percent per year, doubling every 18 months, which is the rate of Moore's Law.

In our everyday lives we generate far more information that we don't yet capture and record...Taming this wild information will ensure that the total amount of information we collect will keep doubling for many decades ahead.

Metadata is the new wealth because the value of bits increases when they are linked to other bits.

Ubiquitous surveillance is inevitable. Since we cannot stop the system from tracking, we can only make the relationships more symmetrical.

Bitcoin transparently logs every transaction in its economy in a public ledger, thereby making all financial transactions public. The validity of a transaction is verified by a coveillance of other users rather than the surveillance of a central bank.

There is a one-to-one correspondence between personalization and transparency. Greater personalization requires greater transparency. Absolute personalization (vanity) requires absolute transparency (no privacy).

If today's social media has taught us anything about ourselves as a species, it is that the human impulse to share overwhelms the human impulse for privacy...Vanity trumps privacy.

If anonymity is present in any significant quality, it will poison the system. While anonymity can be used to protect heroes, it is far more commonly used as aw ay to escape responsibility. That's why most of the brutal harassment on Twitter, Yik Yak, Reddit, and other sites is delivered anonymously. A lack of responsibility unleashes the worst in us.

Like all trace elements, anonymity should never be eliminated completely, but it should be kept as close to zero as possible.

Wikipedia works because it turns out that, with the right tools, it is easier to restore damaged text (the revert function on Wikipedia) than to create damaged text (vandalism).

No one would have believed 30 years ago that there was an $82 billion business in answering people's questions for cheap or for free (Google).

Part of the increasing ease in providing answers lies in the fact that past questions answered correct increase the likelihood of another question. At the same time, past correct answers increase the ease of creating the next answer, and increase the value of the corpus of answers as a whole. Each question we ask a search engine and each answer we accept as correct refines the intelligence of the process, increasing the engine's value for future questions.

A good question is not concerned with a correct answer.
A good question challenges existing answers.
A good question is the seed of innovation in science, technology, art, politics, and business.
A good question skirts on the edge of what is known and not known, neither is silly nor obvious.

Question makers will be seen, properly, as the engines that generate new fields, new industries, new brands, new possibilities, new continents that our restless species can explore. Questioning is simply more powerful than answering.

Sprint – Jake Knapp

Sprint: How to Solve Big Problems and Test New Ideas in Just Five Days – by Jake Knapp
Date read: 5/28/17. Recommendation: 8/10.

Targeted to those working in technology, but useful lessons that can be applied more broadly. The authors pioneered their own rapid sprint process at Google Ventures. The book documents, step-by-step, the best way to examine, prototype, and test new ideas with customers, in a single week. The faster you can test out a new idea out and gather real feedback, the better. Great framework for creative problem solving, no matter what project or initiative you're working on.

See my notes below or Amazon for details and reviews.

 

my notes:

The sprint is Google Venture's unique five-day process for answering crucial questions through prototyping and testing ideas with customers. It's a "greatest hits" of business strategy, innovation, behavioral science, design, and more–packaged into a step-by-step process that any team can use.

Monday: Make a map, choose a target. Tuesday: Sketch competing solutions. Wednesday: Decide on the best. Thursday: Build a realistic prototype. Friday: Test with target customers.

Solve the surface first:
The surface is important. It's where your product or service meets customers. Human beings are complex and fickle, so it's impossible to predict how they'll react to a brand-new solution. When our new ideas fail, it's usually because we were overconfident about how well customers would understand and how much they would care.

Get that surface right, and you can work backward to figure out the underlying systems or technology. Focusing on the surface allows you to move fast and answer big questions before you commit to execution, which is why any challenge, no matter how large, can benefit from a sprint.

Fragmentation hurts productivity.

Longer hours don't equal better results.

If you're looking at a screen (laptop, phone, etc.), you're not paying attention to what's going on in the room, so you won't be able to help the team. What's worse, you're unconsciously saying, "This work isn't interesting."

Imagine you've gone forward in time one year, and your project was a disaster. What caused it to fail? Lurking beneath every goal are dangerous assumptions.

*An important part of this is rephrasing assumptions and obstacles into questions.
Q: To reach new customers what has to be true? A: They have to trust our experience.
Q: How can we phrase that as a question? A: Will customers trust our experience?

Turning these potential problems into questions makes them easier to track–and easier to answer with sketches, prototypes, and tests. Also creates a subtle shift from uncertainty (which is uncomfortable) to curiosity (which is exciting)

Map the challenge:
Map should be simple, include only the major steps required for customers to move from beginning to completion.

Each map is customer-centric, with a list of key actors on the left. Each map is a story with a beginning, a middle, and an end. Keep it between 5-15 steps.

How Might We's: take notes in the form of a question, beginning with the words "How might we...?" (How might we re-create the cafe experience? How might we ensure coffee arrives fresh? How might we structure key info for screening patients? How might we streamline discussion with outside doctors? How might we make reviewing electronic medical records faster?)

Lightning Demos:
Team takes turn giving three-minute tours of their favorite solutions from other products/different domains, etc.

Finding Customers (for prototype/interviews):
-Recruit customers through Craigslist (post a generic ad with a link to a screener survey)
-Recruit customers through your network

Storyboard:
Best opening scene for your prototype will boost the quality of your test (can help customers forget they're trying a prototype and react to your product in a natural way)

The trick is to take one or two steps upstream from the beginning of the actual solution you want to test...How do customers find out your company exists?

It's almost always a good idea to present your solution alongside the competition. As a matter of fact, you can ask customers to test out your competitors' products on Friday right alongside your own prototype.

When in doubt take risks, sprint is great for testing risky solutions that might have  a huge payoff.

"Prototype" mindset – it isn't a real product, it just needs to appear real.

Interview customers and learn by watching them react to your prototype.

After you've recruited and carefully selected participants for your test who match the profile of your target customer.
-Why five people? 85% of problems are observed after just five people.
-Testing with more people doesn't lead to many more insights - just a lot more work.
-The number of findings quickly reaches the point of diminishing returns.
-When 2-3 people out of 5 have the same strong reaction, positive or negative, you should pay attention.

One-on-one interviews are a remarkable shortcut. They allow you to test a facade of your product, long before you've build the real thing.

Offer important insight that's nearly impossible to get with large-scale quantitative data: why things work or don't work.

Remind the customer that you're testing the prototype, not her.
-"There are no right and wrong answers. Since I didn't design this, you won't hurt my feelings or flatter me. In fact, frank, candid feedback is the most helpful."

NOT: "Now that you've seen the site, would you be ready to sign up now, or do you need more information?"
YES: "Now that you've seen the site, what are you thinking?" (after answer, "why is that?)

DON'T ask multiple choice or yes/no questions (would you, do you, is it?)
DO ask "Five Ws and One H" questions

You can also learn a lot by just remaining quiet. Don't always feel compelled to fill the silence with conversation.

Being in a curiosity mindset means being fascinated by your customers and their reactions.
-Always ask "why?"

Once you've run your test an identified patterns, look back at your sprint questions. This will help you decide which patterns are most important, and also point you toward next steps.

Instead of jumping right into solutions, take your time to map out the problem and agree on the initial target. Start slow so you can go fast.

Instead of shouting out ideas, work independently to make detailed sketches of possible solutions.

Adopt the prototype mindset so you can learn quickly.

Test your prototype with target customers and get their honest reactions.