The Hamster Wheel -Credits to Timothy Lee

The Hamster Wheel

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If you talk to business travelers above a certain age, they’ll tell you about the good old days of airline travel. Airports used to be less crowded, the food was better, the service was more attentive, and the stewardesses were more attractive. This was because price controls kept fares high, and airlines competed for passengers with generous perks. The situation was great for the small minority of rich people and business travelers who could afford it because they didn’t have to deal with the hoi polloi clogging up the airports. But it sucked for everyone else, for whom an airplane flight was a rare luxury.

In the late 1970s, the law was changed to allow airlines to give consumers what they actually wanted, which was mostly lower prices. As fares fell, the airlines dropped most of the frills that once came with an airplane ticket. Today the food isn’t as good, service is mediocre and airports feature long lines and screaming children. But a lot more people can afford to fly home and visit their families, which is what’s really important.

This came to mind as I was reading Jonathan Rauch’s latest:

Every time someone who could have done good science does sloppy science, or does worse journalism instead of better journalism, or mediocre writing instead of fine writing, it’s a loss. When resources are scarce—and of course human talent is the most scarce and precious resource of all—it matters if blogging is inducing ADD in many of our best writers and thinkers, or driving talent away altogether.

I watch with growing concern as young journalists get channeled into content mills where they post three, seven, who knows how many blog snippets a day. I spoke with one young guy who told me he puts up seven posts a day and would like to break into longer form by doing only three. One of the most promising young journalists I know couldn’t take it and quit for medical school. Another young writer tells me he longs to “get off the hamster wheel.”

As I mentioned last week, Jonathan Rauch is old enough to remember the pre-Internet media world. Because media outlets had few competitors, they tended to be extremely profitable. As Roger Cohen andJohn Podhoretz have written, this allowed them to offer their writers a variety of perks that are hard to come by today, including a generous salary and a light schedule that allowed them to put a lot of time and effort into each story.

It’s not hard to see why Rauch would want to return to that world, just as some business travelers wish they could go back to the 1970s. But it’s important to remember that the declining fortunes of elite publications is inextricably linked to the democratization of publishing. Incumbent publications are having trouble making ends meet because they’re facing a lot more competition than they used to. And that competition is a direct consequence of the fact that everyone now has a freedom to write for a national audience.

It would be silly to deny that this has disadvantages. The New York Timesreally does do good work, and it’s been sad to see them lay people off. Writers now have to work harder to make a living and sometimes they’re tempted to cut corners. There really is a lot more “sloppy science” and “mediocre writing” than there used to be.

But the collapsing barriers to entry has also had tremendous benefits. In 1990, if you didn’t snag a coveted job at a national publication, you essentially didn’t get to be a writer at all. Today, anyone can have a blog. This has made the national conversation livelier, richer, and more interactive. It has created opportunities for people with non-traditional backgrounds to reach readers who are intensely interested in what they have to say. People with deep interests in niche subjects—linguistics, feminism, patent law, knitting—have access to an unprecedented range of material on their favorite subjects.

This is an issue I take personally because I’m probably one of the riff raff who wouldn’t have made the cut in the pre-Internet media ecosystem. The publication I do most of my writing for could only exist online. It has thin margins and asks its writers to turn stories around relatively quickly. Maybe Rauch would look down his nose at the work we do.

Publish Post

I’d love to have a job at a publication that gave me weeks to work on a story, but so far none of them has offered me a job. And indeed, no conceivable economic system could offer that kind of job to everyone who wants one. The great thing about the Internet is that you don’t need a job at one of those publications to write about topics of public concern. This is understandably irritating to longtime members of the profession that used to hold a lucrative monopoly on soapboxes. But in my view the increase in freedom for everyone else is an overw

helmingly positive development.

A Crisis in Reporting? - All credits to Timothy Lee

Clay Shirky is one of my intellectual heroes (see my 2008 interview with him), so I read his latest post on the future of reporting with interest. He says that as readers have shifted online, newspapers have suffered from an “analog dollars to digital dimes” problem: the amount advertisers are willing to pay for online readers is dramatically less than what they used to pay for print readers. Shirky argues that news organizations are going to have to learn to live with dramatically lower revenue per reader.

He makes some sensible recommendations for how the news industry and the broader society should deal with the situation. But what stuck out for me was Shirky’s uncritical endorsement of the conventional wisdom that we’re in the midst of a grim “crisis in reporting,” which, he says, “isn’t something that might happen in the future. A 30% reduction in newsroom staff, with more to come, means this is the crisis, right now.”

Shirky is sometimes criticized for the rose-colored tint of his spectacles, but here I think he’s giving too much credence to the pessimistic conventional wisdom. It’s clear that newspapers are facing a crisis, and obviously if you’re a newspaper employee or shareholder you should be worried. But whether this is a problem for the broader society is far from clear.

To tell whether the decline of newspapers is just a normal story of disruptive innovation or something the rest of need to worry about, we need to look at outputs, not inputs. It wasn’t a “crisis in telephony” when the switch to automatic dialing allowed AT&T to lay off thousands of phone operators (unless you got laid off). It wasn’t a “crisis in computing” when the PC put minicomputer manufacturers like DEC out of business. By the same token, a 30 percent decline in newsroom staff might just reflect increased journalistic efficiency.

How could this be? A reporter’s job is to collect, organize, and summarize information about important events in the world. The more of the world’s information that comes pre-organized, the easier the reporter’s job will be. And the Internet is a gigantic information-organizing machine. Sites like Google, Wikipedia, and Twitter provide vast amounts of information “pre-digested.” Reporters still have to do some work to get the information they need from these tools and turn them into publishable copy. But more and more of the basic work is done for us.

For example, in my last post, I included some statistics about Microsoft and Google’s patents. Because the patent office has a searchable online patent database, this only took about 20 minutes. I also save a ton of time any time I’m covering legal stories because statutes, court opinions, and other primary documents are usually available as PDF downloads. Similarly, Matt Yglesias regularly writes posts like this where he graphs some kind of data pulled from a government website. This kind of information retrieval is now so easy that we barely even think of it as reporting. But in the pre-Internet world it would often have been a much bigger undertaking.

Another example: I get many of my story ideas from Twitter. Every couple of weeks I do a tweet like this asking what I should be writing about. More often than not, one or more people reply with great suggestions. I also follow a number of activists, academics, and think tankers who do work related to my beat. Their tweets frequently give me story ideas. As a result, I spend less time hunting for story ideas, and more time actually writing them.

The Internet is also reducing duplication of reporting effort. The 20th century newspaper industry had a lot of reporters covering identical beats in different cities. Obviously, each metro area needs its own reporters covering city hall. But a ton of stuff in the newspaper—technology and medicine, national business and politics, movie and book reviews—isn’t tied to any specific metropolitan area. As the Internet eliminates geographic boundaries, there’s no longer a good rationale for having so many people writing redundant content.

Another important way the Internet makes reporters more productive is by reducing bureaucracy. A significant part of a newspaper reporter’s job involves negotiating with her editor about which stories she should write, when they’ll run, and how much space they’ll get. Print reporters sometimes waste time on stories that get spiked, file under-reported stories to meet arbitrary deadlines, or cut out interesting material to save space.

Shirky has called this a “filter, then publish,” process. In contrast, Forbes bloggers like me operate on a “publish, then filter” model. We write whatever we want, the Forbes editors decide which content to promote on the Forbes home page, and we’re paid based on the traffic we receive. This is more efficient not only because we don’t have to waste time negotiating with our editors, but also because there are fewer perverse incentives: we get paid if and only if we write stuff people want to read.

I could go on, but you get the idea. Add all of these factors up and I think it’s entirely plausible that the news industry’s productivity has improved enough to offset that 30 percent fall in newsroom headcounts.

Many of us look back at the 1970s and find it hard to imagine a world with just 3 or 4 national television networks. I suspect that in the 2030s, people will look back at the 1990s with the same kind of astonishment that people were satisfied with the limited amount of news available from a single newspaper. So why do so many people today see the decline of monolithic newspapers as a calamity rather than a sign of progress? Partly it’s cultural inertia, but I suspect it also has something to do with the fact that the companies whose oxes are being gored own some of the nation’s tallest soapboxes.

Why Zynga Might be Worth $25 Billion in Five Weeks

By Conor Sen May 25, 2011 11:30 am

Houses and durable goods aren't the future of the US economy. Neither are commodities. It's the virtual world people are gravitating toward.

The point of this piece is to provide intellectual justification for how LinkedIn (LNKD) could be worth $25 billion in five years, and how Zynga might be worth $25 billion in five weeks. Yep, the maker of Farmville and Mafia Wars is looking to IPO, perhaps as soon as next month, and with roughly $1 billion in revenues and $500 million in profits over the past year, a $25 billion market cap is a possibility.

Kevin Depew wrote back in 2008 in Five Things You Need to Know: Social Mood Shift Brings Stark Changes about the re-pricing of financial and intangible assets that was likely to occur as a result of the socionomic shift of the last cycle:

But this mania has created the overvaluation of all financial assets. So what is left that is undervalued? Intangible assets; relationships, time, quietude, reflection -- objects/ideas that are difficult to define and whose value deflated in the mania of accumulation of all manner of consumables and financial assets.

But now social mood is shifting. As a consequence of that shift many intangible assets will be re-priced.

Little did we realize how right he was -- Facebook, LinkedIn, and Zynga were hard at work building multi-billion dollar businesses around the idea of virtual, or intangible, assets, and relationships.

This is the future, what Professor Pinch and I are calling the data economy, and what I intend to keep writing about until it becomes widely accepted.

That brings us to this morning's durable goods print, which was weak, falling 3.6% vs a consensus drop of 3.0%. This comes on the heels of yesterday's new home sales report, which shows the housing market continuing to bounce along the bottom. Who cares? Houses and durable goods aren't the future of the US economy. Neither are commodities. Rick Bookstaber put it better than I, noting:

People who are staring at a tsunami of demand for commodities from the developing world and predicting a doomsday of $400 oil and $4000 gold are missing the longer-term retreating tide of demand as citizens of the developed world actually demand decreasing amounts of energy, large goods, and heavy infrastructure. We won't be packing up and moving to Mars, as the science fiction solutions to resource depletion propose. We will pack up and move into the virtual world.

That brings us to a final point, on credit and interest rates. Rising economic themes are capital-light. Food trucks and CSA (community-supported agriculture) programs instead restaurant chains and global agrobusiness. Cloud computing and tablets/smartphones instead of a large IT footprint. Renting instead of owning. Why are people worried about a spike in interest rates and the damage it will have on the economy when our lives will increasingly demand less and less credit? Why can't the government run large deficits for a few more years in this environment?

Sounds crazy, I know. Sort of like saying the US could have the biggest boom it ever had without a corresponding increase in per-capita oil consumption.

The Groupon IPO!

Groupon is Effectively Insolvent
By Conor Sen

Investors beware -- the company owes $230 million more than it has, appears to be burning through $100 million or more a quarter, and is using money raised from later investors to pay back early investors.


I'll start by tipping my hat to Andrew Mason. He caught social mood just right, creating a coupon/local/flashmob hybrid business model at the perfect time, and has created the fastest-growing company on a revenue basis in American history. That being said, it's operating like a Ponzi scheme that needs constant infusions of cash to stay afloat as it's hemorrhaging money.

We'll start by looking at the balance sheet, which is typically a waste of time for hypergrowth companies. However, for Groupon there are all kinds of red flags. They have $290 million in current assets ($208 million in cash) and $520 million in current liabilities -- current assets minus current liabilities puts them $230 million in the hole. This wouldn't be a problem except for the fact that they're wildly unprofitable, which we'll get to in a moment. Another concerning part of their current liabilities is that $290 million of it is "accrued merchant payables" -- in the US they take up to 60 days to repay merchants. So that $290 million is merchants who have rendered services waiting to get repaid by Groupon. Not exactly the best merchant experience. Oh, and by comparison, LinkedIn (LNKD) has current assets well in excess of current liabilities, and isn't losing money.

The income statement is even worse. In Q1 of last year they had net income of $8.5 million on $44.2 million in revenue, for a profit margin of nearly 20%. Not bad! At some point around that time, they decided to abandon a profitable growth strategy and went for the hypergrowth revenue strategy. For the remainder of the year they had $669 million in revenue (simply staggering), but had a net loss attributable to Groupon of $398 million. This year, Q1 results showed revenue growth continuing to soar, with revenues of $644 million, but a net loss attributable to Groupon of $102 million.

They lost $49 million in Q3, $313 million in Q4, and $102 million in Q1, with revenue leaping from $185 million to $396 million to $644 million, so it's incredibly difficult to have any idea what Q2 will look like let alone what the business will look like 6-12 months from now. That being said, the most likely reason why they're going public now is because they desperately need the cash, plain and simple.

There are all kinds of questions about the business. How can they possibly sustain this kind of revenue growth? Can they get costs under control? What about merchant and customer fatigue? How about deep-pocketed and savvy competition, either doing exactly what they're doing (LivingSocial) or coming to the table with a ton of customer data, i.e., Facebook and Google (GOOG)? The Daily Deal I got offered today was for a restaurant 30 miles away: how does that make sense either for the customer or merchant? How can you possible build a sustainable business by going from 0 to 8,000 employees in two years? Why did the COO and CTO both leave the company in late March, barely two months ago? How do you value a business that could do $3 billion in revenue this year but might not be able to keep the lights on in 12 months?

Follow Conor Sen on Twitter @conorsen
Most concerning of all, however, might be how their most recent capital raises have been handled. Their Series F and G capital raises, which occurred in April and December of 2010, raised a combined $1.08 billion. Of that $1.08 billion, $150 million went to the company for working capital purposes. The other $930 million? Paid back to founders and early backers by buying their shares from them.

So a company that owes $230 million more than it has, and appears to be burning through $100 million or more a quarter, is using money raised from later investors to pay back early investors? Sounds vaguely familiar. I'm not accusing Groupon of doing anything illegal or unethical. Ponzi, Enron, and Madoff all swindled their investors by misleading them about the financial health of their enterprises. As Minyanville's Todd Harrison likes to say, "The only difference between intervention and manipulation is communication." Groupon is telling you exactly what they are in their filing forms and by their actions. Invest at your own risk.

When Managing Complexity, Less is More

When Managing Complexity, Less is More-- Justin Fox

The answer is to make things simple, says Bill Allen, head of Group Human Resources at Copenhagen-based A.P. Moller-Maersk. He contends that activities at the group level — beyond public company requirements like reporting numbers to investors — should be restricted to a core set of five that enable and enhance business performance.

Those five group-level activities are
(1) portfolio management (deciding which businesses should be part of the group);
(2) performance management (setting ambitious goals and holding business managers accountable for achieving them);
(3) capital allocation (making investments in the businesses where they can produce the greatest returns);
(4) executive talent management (making sure that the best people are working the mission-critical jobs); and
(5) synergy capture (for very large opportunities that cross the businesses).

Other than that, individual businesses are in charge of delivering their results as they see fit. Because of this simple operating system, Maersk was able to bounce back quickly from the effects of the global recession so that 2010 results were the best in company history.

Even if you aren't managing a conglomerate like Maersk, sometimes the best way to address the most complex management challenge is to do less, not more. Select the handful of critical leverage points that will have the biggest impact on success and relentlessly focus on doing them better — without getting distracted by anything else. By following this principle, Maersk reduced headcount at its corporate headquarters by 40% in two years and did a better job of enabling the businesses to produce results. The Group HR function alone went from 87 to 23 people, and according to Allen is much more effective.

The reality is that without ruthless prioritization, smart workers will always identify new opportunities, therefore perpetuating a cycle of increasing activity that is difficult to break. And this is where much of the complexity comes from in organizations, both at the corporate level and within business units. This doesn't mean that these activities are not useful, value-added, or worthwhile — but unless they are absolutely critical for achieving strategic goals, they need to be questioned or eliminated.

Here's a quick example: In one large consumer products company, the CEO insisted on having detailed operational reports rolled up every month to the corporate level, which she then used for a monthly review meeting with business heads and corporate staff. Creating these reports required a small army of corporate financial analysts while also creating a cascade of work within all of the business units. And since the financial analysts were not always busy with the monthly reports, they also generated additional activities for the businesses that they thought were value-added. When the CEO retired, her successor decided that these detailed operational reports were unnecessary since each business unit already reported its key numbers — and the big review meetings never resulted in substantial decisions anyway. In other words, he quickly determined that this form of operational roll-up was not critical to the company's success and it was eliminated (along with the small army of financial analysts and the additional work they spawned).

All of us have a tendency to take on additional work, lose focus, and feel overloaded — whether we work in the C-suite, at a desk, or on a shop floor. The key is not to repeat that pattern by adding more work. Instead, take an inventory of everything you're trying to do, pick out the few things that will make the most difference (to your job, your career, or your life), and put everything else at the bottom of the pile or eliminate it altogether. Prioritize, prioritize, prioritize — and you may find that you'll get more done by doing less. If a highly complex company like Maersk can do it, why can't you?

Why Bankers Need to Be Put Into Little Boxes

Why Bankers Need to Be Put Into Little Boxes
Justin Fox


There's a beguiling little moment in the financial-crisis documentary Inside Job where hedge fund billionaire George Soros describes the principles of oil tanker design. If a tanker consisted of one big tank of oil, the sloshing liquid would soon capsize the vessel, Soros explains. So tankers are comprised of lots of smaller, separate tanks, which keeps the sloshing in check and the ships afloat.

Financial markets are like that, Soros goes on. If they're compartmentalized, the risk of crisis is much lower than if all sorts of financial products and institutions are allowed to mix together in a giant sloshfest.

It's a nice analogy. That doesn't mean it perfectly describes the workings of financial markets (it's an analogy), but it certainly gets at some aspects not hinted at in the general equilibrium model that long dominated financial economics — in which more "complete" and intertwined financial markets are supposed to lead to better economic outcomes. To mainstream economists the Glass-Steagall Act that separated the banking and securities industries looked like a competition-restricting, innovation-damping anachronism. To those knowledgeable about oil tankers, its repeal in 1999 must have been far more disturbing.

The tanker analogy kept coming back to me as I read this week through the collected works of Robert G. Wilmers, also known as his annual messages to the shareholders of Buffalo-based M&T Bank Corp., where he is CEO. Wilmers' most recent letter includes a long discourse on regulatory reform that has already been recommended by Warren Buffett at Berkshire Hathaway's annual meeting and lauded in Joe Nocera's New York Times column. It is good, and it piqued my interest in what Wilmers had been writing over the course of the financial crisis.

Clearly, the man has come to see the good side of being compartmentalized. Here he is in early 2009, explaining the bad parts of M&T's staggeringly good (for a bank in the middle of a global financial crisis) 2008 earnings report:
[T]he specific drags on our 2008 earnings ... largely represented departures from our traditional community banking model, a model based on lending in the markets where we live and work to people and enterprises whom we know. In contrast, the investments which proved problematic shared the following characteristics: they were transactional in nature, outside our market footprint, far from our branches and not associated with deposits.

Why did M&T make such out-of-character investments? From the same letter:
[N]o company operates in a vacuum. The once outsized profits of those financial services firms taking what turned out to be foolish levels of risk led to pressure on their competitors, including us. That we resisted the temptation to the extent that we did is a source of at least some consolation for me.
Wilmer hoped that lawmakers and regulators would see this, and take action to fence in the border-blurring, regulation-avoiding "shadow banking system" of derivatives and securitizations and special purpose vehicles that was at the heart of the financial crisis, restoring the primacy of actual banks that took deposits and made loans. His frustration, as expressed in his latest letter, is that something more like the opposite has happened.

The six biggest "banks" (Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley — although Wells looks more like a traditional bank than the others), Wilmers writes, make most of their money trading securities and derivatives, and are now able to do so with close-to-explicit government backing as too-big-to-fail institutions. Meanwhile, the rest of the country's banks, which make most of their money from banking, have a load of new consumer-protection rules to contend with, plus continued competition from the surviving parts of the shadow banking system. So basically (and I'm still paraphrasing Wilmers here), we've taken the part of the financial system that caused the crisis and put it back on its feet so it can go back to paying people staggering amounts of money for work of possibly negative economic value, while adding more burdens to the part of the financial system that didn't cause the crisis.
The inability to differentiate between Wall Street and Main Street by Washington, as well as by the public at large, has hurt the image of Main Street banks and increased their cost of operations. One has to question whether we haven't created the makings of the next financial crisis or, indeed, disrupted the balance in our society between rich and poor.
The funny thing is, in any other business, such talk would come across as whiny special pleading. Aggressive businesspeople who break down barriers between sectors are praised and their big financial rewards seen as just, while incumbents who lose out to the barrier busters are believed to have gotten what's coming to them. But M&T is actually doing really well — taking advantage of its relative health to make big acquisitions. And as the Panic of 2008 showed, the financial sector is different. It is at this point inextricably entwined with government, for one thing, so lawmakers and regulators are helping decide its winners and losers whether they mean to or not. And in an era when innovation is (rightly) celebrated, it is a sector where traditions — and compartments — serve a clear purpose.

http://blogs.hbr.org/fox/2011/06/why-bankers-need-to-be-put-int.html

Nine Things Successful People Do Differently

Nine Things Successful People Do Differently
8:58 AM Friday February 25, 2011
by Heidi Grant Halvorson

Why have you been so successful in reaching some of your goals, but not others? If you aren't sure, you are far from alone in your confusion. It turns out that even brilliant, highly accomplished people are pretty lousy when it comes to understanding why they succeed or fail. The intuitive answer — that you are born predisposed to certain talents and lacking in others — is really just one small piece of the puzzle. In fact, decades of research on achievement suggests that successful people reach their goals not simply because of who they are, but more often because of what they do.

1. Get specific. When you set yourself a goal, try to be as specific as possible. "Lose 5 pounds" is a better goal than "lose some weight," because it gives you a clear idea of what success looks like. Knowing exactly what you want to achieve keeps you motivated until you get there. Also, think about the specific actions that need to be taken to reach your goal. Just promising you'll "eat less" or "sleep more" is too vague — be clear and precise. "I'll be in bed by 10pm on weeknights" leaves no room for doubt about what you need to do, and whether or not you've actually done it.

2. Seize the moment to act on your goals. Given how busy most of us are, and how many goals we are juggling at once, it's not surprising that we routinely miss opportunities to act on a goal because we simply fail to notice them. Did you really have no time to work out today? No chance at any point to return that phone call? Achieving your goal means grabbing hold of these opportunities before they slip through your fingers.

To seize the moment, decide when and where you will take each action you want to take, in advance. Again, be as specific as possible (e.g., "If it's Monday, Wednesday, or Friday, I'll work out for 30 minutes before work.") Studies show that this kind of planning will help your brain to detect and seize the opportunity when it arises, increasing your chances of success by roughly 300%.

3. Know exactly how far you have left to go. Achieving any goal also requires honest and regular monitoring of your progress — if not by others, then by you yourself. If you don't know how well you are doing, you can't adjust your behavior or your strategies accordingly. Check your progress frequently — weekly, or even daily, depending on the goal.

4. Be a realistic optimist. When you are setting a goal, by all means engage in lots of positive thinking about how likely you are to achieve it. Believing in your ability to succeed is enormously helpful for creating and sustaining your motivation. But whatever you do, don't underestimate how difficult it will be to reach your goal. Most goals worth achieving require time, planning, effort, and persistence. Studies show that thinking things will come to you easily and effortlessly leaves you ill-prepared for the journey ahead, and significantly increases the odds of failure.

5. Focus on getting better, rather than being good. Believing you have the ability to reach your goals is important, but so is believing you can get the ability. Many of us believe that our intelligence, our personality, and our physical aptitudes are fixed — that no matter what we do, we won't improve. As a result, we focus on goals that are all about proving ourselves, rather than developing and acquiring new skills.

Fortunately, decades of research suggest that the belief in fixed ability is completely wrong — abilities of all kinds are profoundly malleable. Embracing the fact that you can change will allow you to make better choices, and reach your fullest potential. People whose goals are about getting better, rather than being good, take difficulty in stride, and appreciate the journey as much as the destination.

6. Have grit. Grit is a willingness to commit to long-term goals, and to persist in the face of difficulty. Studies show that gritty people obtain more education in their lifetime, and earn higher college GPAs. Grit predicts which cadets will stick out their first grueling year at West Point. In fact, grit even predicts which round contestants will make it to at the Scripps National Spelling Bee.

The good news is, if you aren't particularly gritty now, there is something you can do about it. People who lack grit more often than not believe that they just don't have the innate abilities successful people have. If that describes your own thinking .... well, there's no way to put this nicely: you are wrong. As I mentioned earlier, effort, planning, persistence, and good strategies are what it really takes to succeed. Embracing this knowledge will not only help you see yourself and your goals more accurately, but also do wonders for your grit.

7. Build your willpower muscle. Your self-control "muscle" is just like the other muscles in your body — when it doesn't get much exercise, it becomes weaker over time. But when you give it regular workouts by putting it to good use, it will grow stronger and stronger, and better able to help you successfully reach your goals.

To build willpower, take on a challenge that requires you to do something you'd honestly rather not do. Give up high-fat snacks, do 100 sit-ups a day, stand up straight when you catch yourself slouching, try to learn a new skill. When you find yourself wanting to give in, give up, or just not bother — don't. Start with just one activity, and make a plan for how you will deal with troubles when they occur ("If I have a craving for a snack, I will eat one piece of fresh or three pieces of dried fruit.") It will be hard in the beginning, but it will get easier, and that's the whole point. As your strength grows, you can take on more challenges and step-up your self-control workout.

8. Don't tempt fate. No matter how strong your willpower muscle becomes, it's important to always respect the fact that it is limited, and if you overtax it you will temporarily run out of steam. Don't try to take on two challenging tasks at once, if you can help it (like quitting smoking and dieting at the same time). And don't put yourself in harm's way — many people are overly-confident in their ability to resist temptation, and as a result they put themselves in situations where temptations abound. Successful people know not to make reaching a goal harder than it already is.

9. Focus on what you will do, not what you won't do. Do you want to successfully lose weight, quit smoking, or put a lid on your bad temper? Then plan how you will replace bad habits with good ones, rather than focusing only on the bad habits themselves. Research on thought suppression (e.g., "Don't think about white bears!") has shown that trying to avoid a thought makes it even more active in your mind. The same holds true when it comes to behavior — by trying not to engage in a bad habit, our habits get strengthened rather than broken.
If you want change your ways, ask yourself, What will I do instead? For example, if you are trying to gain control of your temper and stop flying off the handle, you might make a plan like "If I am starting to feel angry, then I will take three deep breaths to calm down." By using deep breathing as a replacement for giving in to your anger, your bad habit will get worn away over time until it disappears completely.

It is my hope that, after reading about the nine things successful people do differently, you have gained some insight into all the things you have been doing right all along. Even more important, I hope are able to identify the mistakes that have derailed you, and use that knowledge to your advantage from now on. Remember, you don't need to become a different person to become a more successful one. It's never what you are, but what you do.

Heidi Grant Halvorson, Ph.D. is a motivational psychologist, and author of the new book Succeed: How We Can Reach Our Goals (Hudson Street Press, 2011). She is also an expert blogger on motivation and leadership for Fast Company and Psychology Today. Her personal blog, The Science of Success, can be found at www.heidigranthalvorson.com. Follow her on Twitter @hghalvorson

100 rules for being an entrepreneur

If you Google “entrepreneur” you get a lot of mindless cliches like “Think Big!” For me, being an “entrepreneur” doesn’t mean starting the next “Faceook”. Or even starting any business at all. It means finding the challenges you have in your ife, and determining creative ways to overcome those challenges. However, in this post I focus mostly on the issues that come up when you first start your company. These rules also apply if you are taking an entrepreneurial stance within a much larger company (which all employees should do).



(this is BS)
For me, I’ve started several businesses. As I’ve described in the rest of this blog, some have succeeded, many have failed. I’m invested in about 13 private companies. I’ve advised probably another 50 private companies. Along the way I’ve compiled a list of rules that have helped me deal with every aspect of being an entrepreneur in business and some in life.

[Btw, Claudia thinks I shouldn’t put this post up. This is going to be a chapter in a book I am self-publishing in a week or so: “How to be the Luckiest Man Alive”. But I’m trying to price the book for free on Kindle so why not? Plus, once I write something, I can’t help myself. I have to put it up.]

Here’s the real rules:

A) It’s not fun. I’m not going to explain why it’s not fun. These are rules. Not theories. I don’t need to prove them. But there’s a strong chance you can hate yourself throughout the process of being an entrepreneur. Keep sharp objects and pills away during your worst moments. And you will have them. If you are an entrepreneur and agree with me, please note this in the comments below.

B) Try not to hire people. You’ll have to hire people to expand your business. But it’s a good discipline to really question if you need each and every hire.

C) Get a customer. This seems obvious. But it’s not. Get a customer before you start your business, if you can. (see, “the Easiest Way to Succeed as an Entrepreneur”)

CA) Follow me on Twitter.

D) If you are offering a service, call it a product. Oracle did it. They claimed they had a database. But if you “bought” their database they would send in a team of consultants to help you “install” the database to fit your needs. In other words, for the first several years of their existence, they claimed to have a product but they really were a consulting company. Don’t forget this story. Products are valued higher than services.

E) It’s OK to fail. Start over. Hopefully before you run out of money. Hopefully before you take in investor money. Or, don’t worry about it. Come up with new ideas. Start over.

F) Be profitable. Try to be profitable immediately. This seems obvious but it isn’t. Try not to raise money. That money is expensive.

G) When raising money: if it’s not easy then your idea is probably incapable of raising money. If its easy, then take as much as possible. If its TOO easy, then sell your company (unless you are Twitter, etc).


(if its too easy, sell your company)
H) The same goes for selling your company. If it’s not easy, then you need to build more. Then sell. To sell your company, start getting in front of your acquirers a year in advance. Send them monthly updates describing your progress. Then, when they need a company like yours, your company is the first one that comes to mind.

I) Competition is good. It turns you into a killer. It helps you judge progress. It shows that other people value the space you are in. Your competitors are also your potential acquirors.

J) Don’t use a PR firm. Except maybe as a secretary. You are the PR for your company. You are your companys brand. You personally.

K) Communicate with everyone. Employees. Customers. Investors. All the time. Every day.

L) Do everything for your customers. This is very important. Get them girlfriends or boyfriends. Speak at their charities. Visit their parents for Thanksgiving. Help them find other firms to meet their needs. Even introduce them to your competitors if you think a competitor can help them or if you think you are about to be fired. Always think first, “What’s going to make my customer happy?”

M) Your customer is not a company. There’s a human there. What will make my human customer happy? Make him laugh. You want your customer to be happy.

N) Show up. Go to breakfast/lunch/dinner with customers. Treat.

O) History. Know the history of your customers in every way. Company history, personal history, marketing history, investing history, etc.

P) Micro-manage software development. Nobody knows your product better than you do. If you aren’t a technical person, learn how to be very specific in your product specification so that your programmers can’t say: “well you didn’t say that!”

Q) Hire local. You need to be able to see and talk to your programmers. Don’t outsource to India. I love India. But I won’t hire programmers from there while I’m living in the US.

R) Sleep. Don’t buy into the 20 hours a day entrepreneur myth. You need to sleep 8 hours a day to have a focused mind.

S) Exercise. Same as above. If you are unhealthy, your product will be unhealthy.

T) Emotionally Fit. DON’T have dating problems and software development problems at the same time. VCs will smell this all over you.

U) Pray. You need to. Be grateful where you are. And pray for success. You deserve it. Pray for the success of your customers. Heck, pray for the success of your competitors. The better they do, it means the market is getting bigger. And if one of them breaks out, they can buy you.

V) Buy your employees gifts. Massages. Tickets. Whatever. I always imagined that at the end of each day my young, lesbian employees (for some reason, most employees at my first company were lesbian) would be calling their parents and their mom and dad would ask them: “Hi honey! How was your day today?” And I wanted them to be able to say: “It was the best!” Invite customers to masseuse day.



W) Treat your employees like they are your children. They need boundaries. They need to be told “no!” sometimes. And sometimes you need to hit them in the face (ha ha, just kidding). But within boundaries, let them play.

X) Don’t be greedy pricing your product. If your product is good and you price it cheap, people will buy. Then you can price upgrades, future products, and future services more expensive. Which goes along with the next rule.

Y) Distribution is everything. Branding is everything. Get your name out there, whatever it takes. The best distribution is of course word of mouth, which is why your initial pricing doesn’t matter.

YA) Follow me on Twitter.

Z) Don’t kill yourself. It’s not worth it. Your employees need you. Your children or future children need you. It seems odd to include this in a post about entrepreneurship but we’re also taking about keeping it real. Most books or “rules” for entrepreneurs talk about things like “think big”, “go after your dreams”. But often dreams turn into nightmares. I’ll repeat it again. Don’t kill yourself. Call me if things get too stressful. Or more importantly, make sure you take proper medication

AA) Give employees structure. Let each employee know how his or her path to success can be achieved. All of them will either leave you or replace you eventually. That’s OK. Give them the guidelines how that might happen. Tell them how they can get rich by working for you.

BB) Fire employees immediately. If an employee gets “the disease” he needs to be fired. If they ask for more money all the time. If they bad mouth you to other employees. If you even think they are talking behind your back, fire them. The disease has no cure. And it’s very contagious. Show no mercy. Show the employee the door. There are no second chances because the disease is incurable.

CC) Make friends with your landlord. If you ever have to sell your company, believe it or not, you are going to need his signature (because there’s going to be a new lease owner)

DD) Only move offices if you are so packed in that employees are sharing desks and there’s no room for people to walk.

EE) Have killer parties. But use your personal money. Not company money. Invite employees, customers, and investors. It’s not the worst thing in the world to also invite off duty prostitutes or models.

FF) If an employee comes to you crying, close the door or take him or her out of the building. Sit with him until it stops. Listen to what he has to say. If someone is crying then there’s been a major communication breakdown somewhere in the company. Listen to what it is and fix it. Don’t get angry at the culprit’s. Just fix the problem.


(you don't want your employees to be sad.)
GG) At Christmas, donate money to every customer’s favorite charity. But not for investors or employees.

HH) Have lunch with your competitors. Listen and try not to talk. One competitor (Bill Markel from Interactive once told me a story about how the CEO of Toys R Us returned his call. He was telling me this because I never returned Bill’s calls. Ok, Bill, lesson noted.

II) Ask advice a lot. Ask your customers advice on how you can be introduced into other parts of their company. Then they will help you. Because of the next rule…

JJ) Hire your customers. Or not. But always leave open the possibility. Let it always dangle in the air between you and them. They can get rich with you. Maybe. Possibly. If they play along. So play.

KK) On any demo or delivery, do one extra surprise thing that was not expected. Always add bells and whistles that the customer didn’t pay for.

LL) Understand the demographic changes that are changing the world. Where are marketing dollars flowing and can you be in the middle. What services do aging baby boomers need? Is the world running out of clean water? Are newspapers going to survive? Etc. Etc. Read every day to understand what is going on.

LLa) Don’t go to a lot of parties or “meetups” with other entrepreneurs. Work instead while they are partying.

MM) But, going along with the above rule, don’t listen to the doom and gloomers that are hogging the TV screen trying to tell you the world is over. They just want you to be scared so they can scoop up all the money.

NN) You have no more free time. In your free time you are thinking of new ideas for customers, new ideas for services to offer, new products.

OO) You have no more free time, part 2. In your free time, think of ideas for potential customers. Then send them emails: “I have 10 ideas for you. Would really like to show them to you. I think you will be blown away. Here’s five of them right now.”

OOa) Depressions, recessions, don’t matter. There’s $15 trillion in the economy. You’re allowed a piece of it:



PP) Talk. Tell everyone you ever knew what your company does. Your friends will help you find clients.

QQ) Always take someone with you to a meeting. You’re bad at following up. Because you have no free time. So, if you have another employee. Let them follow up. Plus, they will like to spend time with the boss. You’re going to be a mentor.

RR) If you are consumer focused: your advertisers are your customers. But always be thinking of new services for your consumers. Each new service has to make their life better. People’s lives are better if: they become healthier, richer, or have more sex. “Health” can be broadly defined.

SS) If your customers are advertisers: find sponsorship opportunities for them that drive customers straight into their arms. These are the most lucrative ad deals (see rule above). Ad inventory is a horrible business model. Sponsorships are better. Then you are talking to your customer.

TT) No friction. The harder it is for a consumer to sign up, the less consumers you will have. No confirmation emails, sign up forms, etc. The easier the better.

TTA) No fiction, part 2. If you are making a website, have as much content as you can on the front page. You don’t want people to have to click to a second or third page if you can avoid it. Stuff that first page with content. You aren’t Google. (And, 10 Unusual Things You Didn’t Know About Google)

UU) No friction, part 3. Say “yes” to any opportunity that gets you in a room with a big decision maker. Doesn’t matter if it costs you money.

VV) Sell your company two years before you sell it. Get in the offices of the potential buyers of your company and start updating them on your progress every month. Ask their advice on a regular basis in the guise of just an “industry catch-up”

WW) If you sell your company for stock, sell the stock as soon as you can. If you are selling your company for stock it means:

a. The market is such that lots of companies are being sold for stock.
b. AND, companies are using stock to buy other companies because they value their stock less than they value cash.
c. WHICH MEANS, that when everyone’s lockup period ends, EVERYONE will be selling stock across the country. So sell yours first.
XX) Ideas are worthless. If you have an idea worth pursuing, then just make it. You can build any website for cheap. Hire a programmer and make a demo. Get at least one person to sign up and use your service. If you want to make Facebook pages for plumbers, find one plumber who will give you $10 to make his Facebook page. Just do it.

YY) Don’t use a PR firm, part II. Set up a blog. Tell your personal stories (see “33 tips to being a better writer” ). Let the customer know you are human, approachable, and have a real vision as to why they need to use you. Become the voice for your industry, the advocate for your products. If you make skin care products, tell your customers every day how they can be even more beautiful than they currently are and have more sex than they are currently getting. Blog your way to PR success. Be honest and bloody.

ZZ) Don’t save the world. If your product sounds too good to be true, then you are a liar.

ZZa) Your company is always for sale.



AAA) Frame the first check. I’m staring at mine right now.

BBB) No free time, part 3. Pick a random customer. Find five ideas for them that have nothing to do with your business. Call them and say, “I’ve been thinking about you. Have you tried this?”

CCC) No resale deals. Nobody cares about reselling your service. Those are always bad deals.

DDD) Your lawyer or accountant is not going to introduce you to any of their other clients. Those meetings are always a waste of time.

EEE) Celebrate every success. Your employees need it. They need a massage also. Get a professional masseuse in every Friday afternoon. Nobody leaves a job where there is a masseuse.

FFF) Sell your first company. Don’t take any chances. You don’t need to be Mark Zuckerberg. Sell your first company as quick as you can. You now have money in the bank and a notch on your belt. Make a billion on your next company.

GGG) Pay your employees before you pay yourself.

HHH) Give equity to get the first customer. If you have no product yet and no money, then give equity to a good partner in exchange for them being a paying customer. Note: don’t blindly give equity. If you develop a product that someone asked for, don’t give them equity. Sell it to them. But if you want to get a big distribution partner whose funds can keep you going forever, then give equity to nail the deal.

III) Don’t worry about anyone stealing your ideas. Ideas are worthless anyway. It’s OK to steal something that’s worthless.

IIIA) Follow me on twitter.

Questions from Readers

Question: You say no free time but you also say keep emotionally fit, physically fit, etc. How do I do this if I’m constantly thinking of ideas for old and potential customers?

Answer: It’s not easy or everyone would be rich.

Question: if I get really stressed about clients paying, how do I get sleep at night?

Answer: medication

Question: how do I cold-call clients?

Answer: email them. Email 40 of them. It’s OK if only 1 answers. Email 40 a day but make sure you have something of value to offer.

Question: how can I find cheap programmers or designers?

Answer: if you don’t know any and you want to be cheap: use scriptlance.com, elance.com, or craigslist. But don’t hire them if they are from another country. You need to communicate with them even if it costs more money.

Question: should I hire programmers?

Answer: first…freelance. Then hire.

Question: what if I build my product but I’m not getting customers?

Answer: develop a service loosely based on your product and offer that to customers. But I hope you didn’t make a product without talking to customers to begin with?

Question: I have the best idea in the world, but for it to work it requires a lot of people to already be using it. Like Twitter.

Answer: if you’re not baked into the Silicon Valley ecosystem, then find distribution and offer equity if you have to. Zuckerberg had Harvard. MySpace had the fans of all the local bands they set up with MySpace pages. I (in my own small way) had Thestreet.com when I set up Stockpickr.com. I also had 10 paying clients when i did my first successful business fulltime.

Question: I just lost my biggest customer and now I have to fire people. I’ve never done this before. How do I do it?

Answer: one on meetings. Be Kind. State the facts. Say you have to let people go and that everyone is hurting but you want to keep in touch because they are a great employee. It was an honor to work with them and when business comes back you hope you can convince them come back. Then ask them if they have any questions. Your reputation and the reputation of your company are on the line here. You want to be a good guy. But you want them out of your office within 15 minutes. It’s a termination, not a negotiation. This is one reason why it’s good to start with freelancers.

Question: I have a great idea. How do I attract VCs?

Answer: build the product. Get a customer. Get money from customer. Get more customers. Build more services in the product. Get VC. Chances are by this point, the VCs are calling you.

Question: I want to build a business day trading.

Answer: bad idea

Question: I want to start a business but don’t know what my passion is:

Answer: skip to the post: “How to be the luckiest person alive”. Do the Daily Practice. Within six months your life will be completely different.

Question: I want to leave my job but I’m scared.

Answer: same as above question. The Daily Practice turns you into a healthy Idea Machine. Plus luck will flow in from every direction.

Final rule: Things change. Every day. The title of this post, for instance, says “100 Rules”. But I gave about 70 rules (including the Q&A). Things change midway through. Be ready for it every day. In fact, every day figure out what you can change just slightly to shake things up and improve your product and company.

Throughout the rest of this blog I have examples, ideas, rules, etc. In fact, it adds up to a lot more than 100 rules. Many of the rules above are repeated in other posts ahead but use this post as a cheat sheet. If you can think of more rules for me, add them to the comments. I’ll try and put them in the upcoming book.

Alignment!

Long-term brands and relationships are built on alignment. Here are a few examples ("I" is the royal I, not me in particular):

A perfect relationship: I want your company to help me, and your company wants to help me. We're both focused on helping the same person.

The Walmart relationship: I want the cheapest possible prices and Walmart wants to (actually works hard to) give me the cheapest possible prices. That's why there's little pushback about customer service or employee respect... the goals are aligned.

The Apple relationship: I want Apple to be cool. Apple wants to be cool. That's why there's little pushback on pricing or obsolence or disappointing developers.

The demagogue politician relationship: I will feel more powerful if you get elected and get your way. You will feel more powerful if you get elected and get your way.

The search engine relationship (when it's working): I want to find what I'm looking for. You want me to find what I'm looking for, regardless of the short-term income possibilities.

The Mercedes (formerly Cadillac) relationship: I want a prestige product that reliably delivers an expensive label that's unattainable to many. They want to reliably and consistently charge a lot for a car that sends a message to everyone else.

The farmer's market relationship: I want to eat sustainable foods that make me feel good. You want to grow sustainable foods that make me feel good.

Compare these to the ultimately doomed relationships (if not doomed, then tense) in which goals don't align, relationships where the brand took advantage of an opening but then grows out of the initial deal and wants to change it:

The Dell relationship: I want a cheap, boring, reliable computer. You want to make more profit.

The hip designer relationship: I want the new thing no one else has yet. You want to be around for years.

The search engine relationship (when it doesn't work): I want to find what I'm looking for. You want to distract me and take money to send me places I actually don't want to go.

The reluctant purchaser relationship: I don't want to waste money on something I didn't know I wanted. You want to make a commission.

The troll relationship: I want to laugh at a buffoon who doesn't realize he's making a fool of himself. You want to be respected by the mainstream.

The young actor relationship: I want the fresh-faced young movie star. You want a career that lasts more than a year.

The typical media relationship: I want to see the shows, you want to interrupt with ads.

Alignment isn't something you say. It's something you do. Alignment is demonstrated when you make the tough calls, when you see if the thing that matters the most to you is also the thing that matters the most to the other person.

The tension that comes from misalignment can work for a while, but it's when alignment kicks in that the enterprise really scales.

Are Hindus More Sinned Against than Sinning?

The two principal objectives of corporate management are growth and profits. The organizational structure of the Church is often cited as a typical management case study, the other universal application being the armed forces. Just as in corporate management, the harvesting of souls is run like a business with the twin objectives of growth and profits, each feeding the other. The dwindling numbers of Church-goers in the West following secularization of societies is naturally a cause for concern for the top management. (The word secularization has an altogether different connotation in contemporary India which simply means adopting an anti-Hindu intellectual stance!) The remedial strategy adopted by the top management ironically

The background

For nearly two thousand years the Abrahamic faiths have been seeking to extend the hegemony - odd as it may sound, of their respective philosophies - by proselytizing people for love or for money and quite often by the sword. They have been vying for space in Europe and West Asia, which was the cause for intense strife known in the past as crusades. Their onslaughts in Africa and the rest of the world have often resulted in bloody demographic decimation and genocide of the infidel.

The persecution of Jews in various countries of Europe including in non-religious communist nations ironically by those who profess to be followers of the prince of peace has been well documented. The creation of Israel as a culmination of their persecution by one of the crusading faiths has only extrapolated into the twentieth century the strife between them; the other bitterly complaining it as a sleight-of-the-hand awarding of land belonging it.

Their campaigning for hegemony in South Asia has been equally bloody. Hitler's genocide of six million Jews in six years appears minuscule compared to the genocide of eight hundred million Hindus by Islamic invaders in five centuries between the tenth and the fourteenth.

The approach of Christians in India has been much more subtle although proselytizing campaigns with the Bible in one hand and the sword in the other have not been unknown. The campaigns of Francis Xavier (Sainted later) in Goa and Robert Clive in the rest of India may be cited as examples of this approach.

Health, education and exploitation of the weaknesses of the Hindu faith such as the caste system are subtle vehicles that the clever Christian proselytizers have employed to achieve their objectives. The naïve under-privileged or the tribal populations in the far reaches of India have never been told that there are as many distinctions, denominations and hierarchical rungs and under-privileged in the Christian world, only they had a different nomenclature.

The two principal objectives of corporate management are growth and profits. The organizational structure of the Church is often cited as a typical management case study, the other universal application being the armed forces. Just as in corporate management, the harvesting of souls is run like a business with the twin objectives of growth and profits, each feeding the other. The dwindling numbers of Church-goers in the West following secularization of societies is naturally a cause for concern for the top management. (The word secularization has an altogether different connotation in contemporary India which simply means adopting an anti-Hindu intellectual stance!) The remedial strategy adopted by the top management ironically is akin to Hitler's Lebensraum concept but by more subtle means.

The current strife in context!

As is their wont the secular exponents found in the recent Hindu-Christian violence in Orissa and Karnataka grist to their anti-Hindu mill. The violence in Orissa followed the brutal murder of a revered Hindu pontiff Swami Lakshmananda Saraswathi who happened to be the state vice president of the Viswa Hindu Parishat. He was murdered along with four other inmates of his Ashram including a woman devotee.

In the zeitgeist of Indian secular ethos Hindus are expendable. Swamijis and office bearers of Hindu organizations like the Bajrang Dal, the RSS and the VHP are even more equal - in being expendable! The Hindus should shrug off violence against them so that exponents of the Indian brand of secularism can praise the resilience of Indian secularism and syncretism.

This was the norm till the Bombay train blasts of July 11, 2006 in which two hundred and thirteen people were killed and more than 700 injured.

The city reportedly went about its business the next day in cynical disregard for the dead, and the secular exponents were all praise for Bombayites' resilience in the face of grave danger. The first lead in a secular newspaper the next day was that the serial bomb blasts were the handiwork of Hindu organizations!

The refrain of - the resilience of Indian secularism - continued till Delhi was bombed in 2008. The bombings of Jaipur, Bengaluru and Ahmedabad were explained away as an expression of Muslim anger against the BJP as these states were ruled by the party. The secular alibis for the mass murders included social alienation, exclusion from main stream society, poverty, poor representation in government jobs and anger against Ayodhya and Gujarat riots that followed the savage burning of fifty nine Karsevaks in February 2002.

With its eyes firmly locked on secular vote banks, the congress government did its bit to fuel disinformation by constituting the Justice Rajinder Sachar committee to prepare a report, ostensibly on the social, economic and educational status of the Muslim community in India. The other members of the committee include Mr. Sayyid Hamid, Dr. T.K. Ooman, Mr. M.A. Basith, Dr. Akhtar Majeed, Dr. Abu Saleh Shariff and Dr. Rakesh Basant with Dr. Syed Zafar Mahmood, a civil servant, appointed by the prime minister as Officer on Special Duty (OSD) to assist the commission.

The committee's job was all the more easier as it was given the theories; it was only expected to go out and find facts to fit into them! Lo and presto, it did it and how? Try as you might, you can not accuse the committee of objectivity or doing anything right either by commission or omission. The committee's report, to borrow from information technology jargon, was doomed to be GIGO (garbage in, garbage out) right from inception. The committee set out with faulty assumptions, faulty data collection, faulty analysis and of course ended up in arriving at faulty conclusions.

The following may be summed up as the report's errors of commission and omission. The report did not take into account the bulk of educated employed Muslims that migrated to Pakistan when the country was partitioned. It did not take into account the numbers of Muslims engaged in trades and other professions. It excluded the scheduled castes and scheduled tribes from corresponding Hindu figures thus annulling any equity in its comparisons. Last but not least it excluded educated / well off Muslims from comparisons.

The committee ignored the fact that the country did provide fair and equitable opportunities to all and those Muslims who availed of them did prosper - in filmdom, in industry, in government / university jobs or in politics. If you go by the findings of the report, Asghar Ali Enginner, A. G. Noorani, Azim Premji, Syed Shabuddin, the Khan trio and other Muslim celebrities of Bollywood and a host of other Muslims in high places (Sayyid Hamid, T.K. Ooman, M.A. Basith, Akhtar Majeed, Abu Saleh Shariff and Syed Zafar Mahmood included) - all need reservations in government jobs!

The National Sample Survey Organization (NSSO) has concluded that the findings of the Sachar committee were manipulated.

For a detailed analysis of the issue see "The Sachar report: A flawed number game" by Nitish Sengupta (The Asian Age, 16.10.2008).

When it was found that highly educated and well-paid professionals too took part in the terror attacks the groundswell of public opinion forced the secular exponents to change their refrain but only just. Forced on the back foot they had to a do balancing act by finding villains in the majority religion to appease their minority vote banks. Therefore the bogey of the Bajrang Dal was raised with a pliant media orchestrating it as the root cause of anarchy.

Returning to the main story, the strife between the Kandhas a Scheduled Tribe (ST) and the Panas a Scheduled Caste (SC) is not new. Under the Indian constitution, the STs can enjoy reservation benefits even after conversion to Christianity, whereas the SCs lose them if they convert. It is this legal loophole that is a godsend for the proselytizers. The statistics speak for themselves: the Christian population of Kandhamal district in 1961 was 2%, 6% in 1971 and 27% in 2001.

The proselytizers were only trying to extend their successes from the north eastern states: for example, in the last century they were able to convert 100% of the Nagas (in Nagaland) and 80% of the Mizos (in Mizoram).

According to Francois Gautier, "In Tripura, there were no Christians at the time of independence. There are 1, 20,000 today, a 90 per cent increase since 1991. The figures are even more striking in Arunachal Pradesh, where there were only 1,710 Christians in 1961, but 1.2 million today, as well as 780 churches! In Andhra Pradesh, churches are coming up every day in far-flung villages and there was even an attempt to set up one near Tirupati."

There were clashes between the converted Kandhas and the unconverted Panas even as far back as 1992, when the VHP did not exist in Orissa and the Bajrang Dal was yet to be borne.

Swami Laksmananda a Vedic scholar has been running schools and colleges, for the unconverted Panas. However both the converted Kandhas and the unconverted Panas were thronging to his satsangs and discourses in great numbers. This is the fly in the proselytizers' ointment. They wanted to do away with him and according to a recent report of the region's inspector general of police ? 'a religious group' - recruited the Maoists to do the hatchet job. Is it difficult to imagine who the unnamed religious group was? India's secular media blotted out these facts but went to town with the violence that followed the brutal killings, painting it as the handiwork of Hindu organizations.

For a detailed analysis of the issue see "Kandhamal and Bengaluru" by S. Gurumurthy (The New Indian Express, 11.09.2008).

The happenings in Mangalore Karnataka were again true to form: a neo-convert pastor in Andhra Pradesh wanted to be lauded for being more loyal than the King. His pamphlet, the product of a prostituted, putrefied and suppurating mind portrayed Hindu gods and goddesses in the most obnoxious manner possible accusing them of incest, debauchery and worse.

A Kannada translation of this rag entitled "Satya Darshini" was published by the Newlife Church and disseminated in Karnataka. Here are a few excerpts from it:

"Urvashi - the daughter of Lord Vishnu - is a prostitute. Vashistha is the son of this prostitute. He in turn married his own Mother. Such a degraded person is the Guru of the Hindu God Rama." (p. 48).

"When Krishna himself is wallowing in darkness of hell, how can he enlighten others? Since Krishna himself is a shady character, there is a need for us to liberate his misled followers." (p. 50).

"It was Brahma himself who kidnapped Sita." (p. 39)

"Since Brahma, Vishnu and Shiva were themselves victims of lust, it is a sin to consider them as Gods." (p. 39)

"When the Trinity of Hinduism (Brahma, Vishnu and Shiva) are consumed by lust and anger, how can they liberate others? The projection of them as Gods is nothing but a joke." (p. 39)

"God, please liberate the sinful people of India who are worshipping False Gods." (p. 39)

This was the background for the Bajrang Dal activists' protests in Mangalore. They were protesting mainly against Newlife prayer houses but as they could not distinguish one denomination from the other, it appears, they protested against a catholic church too.

For a detailed analysis of the issue see "What made Hindus angry in Karnataka" by Francois Gautier (The New Indian Express, 06.10.2008).

More sinned against than sinning?

While the print and electronic media aired exaggerated reports of these incidents the violence unleashed by the Christian groups against the police during their demonstrations were airbrushed.

The Archbishop of Bangalore chose to berate the Chief Minister of the state in the full glare of media cameras, when the CM sought to meet with him and commiserate with him for the violent protests. The secular exponents did not utter a word of reproof against such a blatant insult meted out to the democratically elected leader of a state.

Consider the secular exponents' quiescence vis-à-vis Muslim protests against the cartoons that appeared in a Danish newspaper and the furore against granting political asylum to Taleema Nasreen.

Consider also the secular exponents' quiescence when Christian groups protested against the screening of the movie Da Vinci Code eventually forcing some secular state governments to ban it, even though it was freely exhibited in many Christian nations including Italy, next door to the Vatican.

For the record, this article does not support either the Danish cartoonist or the Bangladeshi writer or the American novelist inasmuch as they hurt the religious sentiments of Muslims or Christians.

The quintessence of Indian secularism as it is in vogue appears to be not in separating the state and religion as the word originally connoted but in opposing Hinduism, its philosophy and social mores. On the other hand a pilgrimage to Azamgarh to commiserate with the families of those arrested for acts of war on the Indian nation and seeking a ban of the Bajrang Dal was seen as an avowal of their secular credentials by some!

The mantra of Indian secular exponents who would rather wear secularism on their sleeve is to oppose any opposition of Hindu organisations - which for them come under the collective moniker of the Sangh Parivar. Therefore if Hindu organisations protest against aggressive efforts to proselytize, then the secular exponents must rush to the defence of the proselytizers. Indian secular exponents dotingly refer to members of the Sangh Parivar as goons. For them, there are no goons in other religions and that is a fact. Every time there is a reference to religious fundamentalism in other religions the spectre of Hindu fundamentalism had to be invoked, in the name of balance!

The Easiest Way to Succeed as an Entrepreneur

The Easiest Way to Succeed as an Entrepreneur


I was the worst pizza delivery guy. Fraternity guys would chase after me as I was peeling out of their driveways after a delivery. Why? The sauce and cheese fell all to one side. I couldn’t help it. I also never got tips. Wende, my partner in our restaurant delivery business, always got tips. But she was beautiful, blonde, great smile, had personality, etc. And I secretly loved her. I couldn’t compete. I always hoped I would deliver to a frat party where all the girls were running around naked. But that never happened.



We also started a debit card for college kids. From the first day we were open for business we had college kids signing up for our card (there were no credit cards for kids then). And anyone who had our debit card could order food from the 20 or so restaurants in town and we’d deliver, but with a 25% markup.

I loved delivering food because it gave me twenty, or even forty minute breaks from my girlfriend. We were having troubles at the time. I’d sometimes stop the car between deliveries and just read. I was a screwed up 19 year old then. Now I’m only a mildly-screwed up 43 year old.

I’ve had seven startups since then. And some profitable exits. And another 20 or so that I’ve funded.

When I think “entrepreneur” I think Mark Cuban or Larry Page or Steve Jobs. I don’t usually think of myself. In part because I feel shame that after all of these startups I don’t have a billion dollars. Many startups fail. But I’ve had a few successes as well. Successes in a startup makes you feel immortal.

I was going to make this post: “the 12 rules to being a good entrepreneur” and I outlined the 12 rules that have consistently worked for me. But rule #1 is taking up 1500 words already. Tim Sykes tells me I need to break these posts up more. So this one rule is going to take up the whole post. But, for me, this is the most important rule.

The MOST IMPORTANT RULE: Have a customer before you start your business. This is a corollary of the phrase, “ideas are a dime a dozen”.

There is another corollary: lazy is best. If you have to work for two years before one dollar of revenue comes into business then thats too much work. I’m lazy so I like money coming in with as little work as possible. Mark Zuckerberg, of course, is different. He put in years of work before dollar one of revenue came in. But we’re different people.





In about twenty minutes I’m going to go to the local café here, The Foundry, and bring a pad, order a coffee and muffin, and write down ideas for businesses. Then I’ll probably throw the piece of paper out. Because ideas are useless. They are just practice to keep your idea muscle in shape.

FAKE RULE: People say, “Execution is important”. That’s not really true either. Execution is useless. It’s a commodity. The only thing that’s important is money. You get money by having a customer. You get a customer by satisfying a need that’s so important to them they would be willing to pay for it. If you have a customer that’s willing to pay you money, then execution becomes a lot easier. Life as an entrepreneur is hard. Why make it harder for yourself?

I like stability as much as I like taking risks. So for me, I need a customer. It’s a matter of how much risk you want to take. In an earlier post I suggest reasons why people need to quit their jobs and jump into the abyss. If a customer happens to be waiting for you in the abyss then you won’t be lonely there. Loneliness is bad for a startup.

Example: How Stockpickr Started

Tom Clarke, the CEO of thestreet.com called me up in mid 2006. He wanted to meet and brainstorm ideas with me. So I had about two weeks to prepare. I called up a development firm in India. MySpace had just been acquired by NewsCorp so I sketched out what I considered the “MySpace of Finance”. I threw in every idea from my own trading.

In other words, I wanted to create a site that I would use as a professional trader and so I knew other traders would benefit from it. And, I had a theory about making a quality financial site that basically had no news in it. I’m going to be blunt: 99% of financial news is useless and misinformed and misleading, if not outright lying. My ideas for the site were purely based on my own ten years experience as a professional trader. In fact, I had just turned down working for a multi-billion dollar hedge fund based on a specific strategy I had. Instead, I implemented that strategy within stockpickr.com.

Within a week, for free (because I told the company in India that I would be building the site with them if they sent back good screenshots, which was true), the company sent me back screenshots. I met with Tom and told him, “I’m almost done with the site. Here it is.” (I exaggerated) And I showed him the screenshots. I had set up meetings with Yahoo and AOL as well to discuss them so it wasn’t a stretch to say, “I’m also talking to Yahoo and AOL.” Nobody wants to be the first customer, so you have to create the aura of many customers.

And so he said, “why are you talking with them? You’ve been with us forever. Lets do this together.” So we negotiated right there. I said, “great, how about you guys take 10% of the company and put all your extra ads on all of our pages and let me link from every article back to Stockpickr.com (the name of the company).”

He said, “I thought we were partners. Lets do it 50-50.” So right away, I had given up 50% of the company. Most people I spoke to thought this was a horrible idea. In fact, one of my employees quit because I did this: but giving 50% of your company away is often better than giving 10% of your company away. When you give 50% of the company away, your partner is obligated to follow through and be a real partner. He can never forget about you. Its also always a good thing when the most popular person in financial media, Jim Cramer, was also a 50% partner in my business since he was the founder of thestreet.com. If you can get the top person in your field to take equity, you’re golden from day one. Again, its all about making life easy. With family responsibilities, health, life in general, why make things even harder for yourself?

Its like that saying when you owe the bank a million, they own you. When you owe the bank a billion, you own them. Three years later I watched another company thestreet.com only took 10% of almost disappear because Thestreet.com was not obligated to follow through.

So, at that point, without even having a site finished (or even started): I knew I had three things going for me:

A) I was going to get traffic. I could write three or four articles a day and link each one back to stockpickr all over the article. The street.com got 100mm pageviews a month so I knew I would get some percentage of that.

B) I was going to make money. If I got even 3 million pageviews a month and the average CPM of thestreet.com (according to their SEC filings) was $17, I would make about $50 thousand a month with expenses nearing zero. What if I put 3 ads a page on the site? Then I would make even more. Slap a 40x multiple on a growing company and before I even started I had real value.

C) Profitability and growth from day one meant I could put the company up for sale almost immediately. But that’s another story.

With my first successful company, Reset, I had about 10 paying customers before I finally made the jump to running the company fulltime: HBO, Interscope, BMG, New Line Cinema, and Warner Brothers were all paying customers before I jumped ship from HBO to run Reset fulltime.


(the Wu-Tang Clan was a paying customer)
When I started my fund of hedge funds I didn’t put one dime into the expense of setting it up until I had the first $20 million commitment. $20 million with a 1.5% management fee meant an instant $300 thousand in revenues, plus extra money for legal fees, etc. Enough to pay a salary or two. It took a year of cultivating my network before I had that commitment, but it worked.

This is just me, personally. Some people don’t mind starting a company without any customers. I’m too conservative for this. I’m happy to even give up equity to get that first customer. 50% of a profitable company is better than 100% of a company that will probably quickly go out of business.

How do you get that first customer?

- Who? List the 20 CEOs or high level executives you would like to meet. If you have a rolodex, great. If you don’t, then you might have to write to 40 people. This is why its important to Exploit your Employer and use some of the other ideas mentioned throughout this blog. But its ok if your rolodex is cold. Many successful businesses I’ve been involved with started with cold emails.

- Ideas. Develop 20 ideas for each person. Get your idea muscle in shape first.

- Communicate. Write them all, giving at least 10 of the ideas, in detail, and how you would implement them. Sometimes you have to dig for their email address. Like I did here.

- Meet. All this does is get you the meeting. Once you’re in the door, the conversation can go anywhere. Of the 20 people you write, rule of the universe is you’ll get six meetings.

- Ask. In the meetings ask the question, “what one product can I build for you that you will definitely buy?” Remember, execution is a commodity. Because of globalization you can build anything for cheap. I built the first working version of Stockpickr.com for $3000 in Bangalore. Throw in another $150 from a design made in Siberia. You need zero skillset for that. Just a good idea muscle, an ability to sell, and modest ability to manage a project.

- Never say No. Never. If someone says, “can you do this?” Yes. “But can you do this?” Yes. Can you do it for this? Yes.

- Follow up every day. Nice to meet you. Here’s my sketch of what you want. Is this right? Should I start today?

- Equity. If necessary, give up equity for that first customer. Or first two customers.

- Done. If more than one CEO wants the same product or service, and the price is right, then now you have a business. Build the product, sell it, and you’re in shape.

- Repeat. You’re not really “Done”. Every day you have to go back and see if your customer is achieving more success BECAUSE of your products. If he is, then ask him what else he needs and then build it. If he isn’t, then ask him what else he needs and builds it. Your easiest new sales will be with your old customers.

This has worked for me on three different occasions. And each time resulted in great profits for me. By the way, this technique has also worked for people who have contacted me with their own ideas.

Listen. You’ve been hypnotized. You’ve been told you need a corporate job. You need a college degree. You need stability. You need the white picket fence. You need the IRA and the health insurance. Snap your fingers in front of your face. The American Religion is a myth, just like the movie, Thor, is based on a myth. Stability is only in your mind. There’s $15 trillion dollars in our economy, recession or no recession. Its falling like snow. Reach out with your tongue and taste it.

—-

What do you do after you make a ZILLION dollars?

What do you do after you make a ZILLION dollars?


In the dot-com boom I made a little bit of money and then proceeded to make every mistake possible with that money. It was like reading a Stephen King horror story written in blood across your bank statement. Several years later, I included the story in the intro to one of my books and gave the book to a potential investor. He read the intro and said, “I can’t invest in you. You’re a functional idiot.” And yet, I’ve seen the pattern repeated so many times with so many people can I at least enjoy the company of other idiots?

So to help out others who will pocket some of the $600bb in quantitative easing, I have a few simple tips for greatly improving the chances of success if you have sudden fortune thrust upon you, either through your hard work or simply by chance.

1.) The One-Year Rule. Don’t change your lifestyle at all for at least one year.

No new house or apartment. Don’t buy a fancy car. Don’t buy expensive artwork. This is not to say these things are bad. It’s just that you need to let the new wealth marinate your soul a little bit.

Get comfortable with it before you try on new clothes that might not fit yet. Once you buy some massively expensive toys or homes, it changes your whole perspective and might make you much more foolish than you were when you were first climbing the ladder of success.

Remember: One year.

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2.) The No-Friends Rule. Don’t lend money to old friends. Don’t be so quick to make new friends. Once you make money, everyone will approach you about new investments you can make. Or people will want to borrow money from you.

Don’t do either.

It’s very hard, of course, to deny a friend who says, “listen, I just need to borrow $100,000 for 90 days.” Or “I have a great new start-up that looks like Twitter but better. I’m just raising $500,000 and I left $300,000 for you to come into the round.”

But here’s what you can say, “I’d love to do it. It sounds great. Right now everything is tied up with my financial adviser and you can talk to him. I have to go by what he says because of all the legal stuff I don’t understand.” And then get some guy to pretend to be your financial adviser who can get you off the hook by denying your friend.

I know, it’s dishonest and devious. But it’s necessary in you want to keep your friends. Particularly in Year One (see previous rule).

3.) Don’t Invest. What’s the rush? You just made your money. Put it in a savings account for one year at least. Or under your mattress. No stocks. No paintings. No private investments. Try not to start a business again so quickly.

A friend of mine recently won $3 million in a poker tournament after being broke for many years (all his life). Right away he wanted to buy a hotel.

Don’t do it.

This was right before the entire housing crisis and recession that followed. Thank God he took my advice. If you feel absolutely compelled to do some investing then follow the next rule.

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4.) The 2% Rule. If you really feel that Google is going to $5,000 per share and you have to buy some stock at $500, don’t put more than 2% of your money into it. Then, if it all goes to hell, you’ve only lost 2% of your money (or more likely, 1%, since Google will probably never go down more than 50%).

This is hard for entrepreneurs who come into sudden wealth because they are used to making their money by having most of their net worth tied up in one investment (their business).

But this is probably the most important rule on the list.

5.) The Good Health Rule. Believe it or not, your health is now at risk if you just came into sudden wealth.

A friend of mine had a very stressful business in the online gambling space. He was worried the Feds were going to outlaw him and arrest him. He was broke and the business was always in a state of running out of money.

High, high, stress.

I thought he was going to have a stroke or a heart attack but he always stayed in great health. Then he sold his business and made about $50 million. Three months later he was on a ski slope in Aspen, enjoying the fruits of his labor, when he suddenly had a major heart attack and only survived because of immediate medical care. He was essentially dead for five minutes on the operating table.

Your body, in a high adrenalin situation, will postpone punishing you until the situation is over. But don’t think when the stress is over that your body will forget. It doesn’t.

You must focus on health after achieving sudden wealth.

6.) Try Not To Burn Out. Your business was brutal. I know. I’ve been there. Clients and customers are sometimes hard to deal with. And now you might have employers who just bought your company that you have to report to.

But don’t burn out just yet. You need to be responsible and show the people around you that they all made the right decision in trusting you, in buying your business, in buying your goods and services, in working for you, etc. You have few chances in life to demonstrate that you’re made of the right stuff and this is one of them.

And what to do if you lose it all? Don’t worry.

There’s no such thing as luck. In the chess-playing world there’s a saying: “Only the good players are lucky.” That applies to business as well. People can say you were lucky. But the truth is you’ll be able to do it again and again, no matter how deeply you fall.

Trust in this and follow these rules and sudden wealth will become permanent wealth