America’s Dying Shopping Malls Have Billions in Debt Coming Due

Thursday, June 23rd, 2016

America’s dying shopping malls have billions in debt coming due:

About $47.5 billion of loans backed by retail properties are set to mature over the next 18 months, data from Bank of America Merrill Lynch show.

[...]

Green Street estimates that several hundred malls could shut down over the next decade, with properties reliant on Macy’s, JC Penney and Sears at the most risk. Sales at department stores, once the engines that powered shopping centers across the U.S., have declined almost 20 percent since 2006, according to the firm. About 800 department stores would need to shut down to restore balance between sales and profitability, Green Street said in an April report.

Larry Page’s Secret Flying Car Factories

Thursday, June 9th, 2016

We were promised flying cars, and Larry Page is funding two companies to make that promise come true:

The Zee.Aero headquarters, located at 2700?Broderick Way, is a 30,000-square-foot, two-story white building with an ugly, blocky design and an industrial feel. Page initially restricted the Zee.Aero crew to the first floor, retaining the second floor for a man cave worthy of a multibillionaire: bedroom, bathroom, expensive paintings, a treadmill-like climbing wall, and one of SpaceX’s first rocket engines—a gift from his pal Musk. As part of the secrecy, Zee.Aero employees didn’t refer to Page by name; he was known as GUS, the guy upstairs. Soon enough, they needed the upstairs space, too, and engineers looked on in awe as GUS’s paintings, exercise gear, and rocket engine were hauled away.

Zee.Aero now employs close to 150 people. Its operations have expanded to an airport hangar in Hollister, about a 70-minute drive south from Mountain View, where a pair of prototype aircraft takes regular test flights. The company also has a manufacturing facility on NASA’s Ames Research Center campus at the edge of Mountain View. Page has spent more than $100 million on Zee.Aero, say two of the people familiar with the company, and he’s not done yet. Last year a second Page-backed flying-car startup, Kitty Hawk, began operations and registered its headquarters to a two-story office building on the end of a tree-lined cul-de-sac about a half-mile away from Zee’s offices. Kitty Hawk’s staffers, sequestered from the Zee.Aero team, are working on a competing design. Its president, according to 2015 business filings, was Sebastian Thrun, th­e godfather of Google’s self-driving car program and the founder of research division Google?X. Page and Google declined to speak about Zee.Aero or Kitty Hawk, as did Thrun.

AmazonBasics

Monday, June 6th, 2016

Amazon is using insights from its store to build a private-label juggernaut that now includes more than 3,000 products — from apparel to laptop stands:

At first, AmazonBasics — launched in 2009 — focused on batteries, recordable DVDs and such. Then for several years, the house brand “slept quietly as it retained data about other sellers’ successes,” according to the report. But in the past couple of years, AmazonBasics has stepped up the pace, rolling out a range of products that seem perfectly tailored to customer demand.

“When we saw AmazonBasics products as bestsellers in several categories, our stomachs dropped and [we] started thinking, ‘we need to learn from them,”’ the report’s authors said. AmazonBasics now has more than 900 products, including 284 launched last year alone, according to Skubana.

[...]

Initially, Amazon partnered with traditional chains such as Gap, Nordstrom and Eddie Bauer but retailers decided to pursue their own Web stores. Now, a shopper searching Amazon for a “women’s v-neck sweater” will find a black cashmere number from Lark & Ro, which also sells dresses and swimwear.

Lark & Ro is one of seven apparel brands trademarked by Amazon. Besides women’s clothes, the company also sells men’s dress shoes from Franklin & Freeman and suits from Franklin Tailored. Scout + Ro makes kids’ clothes. Altogether, Amazon’s apparel brands sell 1,800-plus products, according to Edward Yruma, a retail analyst at KeyBanc Capital Markets.

While Amazon’s apparel brands remain relatively obscure, the online behemoth has a huge advantage over better-known labels. Shoppers increasingly start on Amazon.com to search for products, bypassing Google and traditional chains’ websites. In a survey of 2,000 U.S. consumers conducted by digital marketing firm BloomReach, 44 percent said they go directly to Amazon.

So not only can Amazon track what shoppers are buying; it can also tell what merchandise they’re searching for but can’t find, says Rachel Greer, who worked on the private label team until 2014. Then, she says, “Amazon can just make it themselves.”

Old Music Outsold New Music

Thursday, June 2nd, 2016

The simultaneous advent of streaming music and the vinyl renaissance has led to some very interesting recording industry statistics over the past few months:

Last month, the RIAA reported that vinyl revenues outpaced sales from streaming services, despite actual streams vastly outnumbering physical vinyl sold. Now, Nielsen has released data revealing that, for the first time ever, old music (the “catalog,” defined as music more than 18 months old) outsold new releases in 2015.

Hat tip to Tyler Cowen, who also notes this factoid: Pink Floyd’s Dark Side of the Moon was the third-best-selling vinyl record of 2015.

The Munger Operating System

Saturday, May 28th, 2016

In 2007, Charlie Munger gave the commencement address at USC Law School and effectively spelled out the Munger Operating System:

  • To get what you want, deserve what you want. Trust, success, and admiration are earned.
  • Learn to love and admire the right people, live or dead.
  • Acquiring wisdom is a moral duty as well as a practical one.
  • Learn to fluency the big multidisciplinary ideas of the world and use them regularly.
  • Learn to think through problems backwards as well as forward.
  • Be reliable. Unreliability can cancel out the other virtues.
  • Avoid intense ideologies. Always consider the other side as carefully as your own.
  • Get rid of self-serving bias, envy, resentment, and self-pity.
  • At the same time, allow for the self-serving bias in others who haven’t removed it.
  • Avoid being part of a system with perverse incentives.
  • Work with and under people you admire, and avoid the inverse when at all possible.
  • Learn to maintain your objectivity, especially when it’s hardest.
  • Concentrate experience and power into the hands of the right people – the wise learning machines.
  • You’ll be most successful where you’re most intensely interested.
  • Learn the all-important concept of assiduity: Sit down and do it until it’s done.
  • Use setbacks in life as an opportunity to become a bigger and better person. Don’t wallow.
  • The highest reach of civilization is a seamless system of trust among all parties concerned.

The Tim Ferriss Effect

Friday, May 13th, 2016

Ryan Holiday discusses the “Tim Ferriss Effect”:

In publishing circles, something called the “Tim Ferriss Effect” has been known for some time. The concept refers to the power of a single author and his blog to drive the sales — in some cases in the tens of thousands — for books he chooses to recommend to his army of fans. I, myself, happen to have been a beneficiary of this effect on a number of occasions. In fact, I felt it before I was even an author. A simple article I wrote on Tim’s site in 2009 prompted the first inquiry I ever received from a book publisher.

Over the last few years, we’ve seen the decline of what most people used to refer to as “blogs.” Most companies have shut down their blogs, some popular bloggers have closed up shop. But somehow, the Tim Ferriss Effect not only still exists — it’s become something bigger than I think anyone could have imagined.

I’m not an impartial observer of this phenomenon. Tim is someone I have worked with and a friend (he’s even published my books — one of which he turned into a runaway hit that changed my life and another one on the way soon). Even so, I’ve been continually shocked with his ability to predict trends and master new technologies. Many of us have friends that start podcasts — not very often do those shows turn around and do 70 million downloads. Plenty of us agree to appear on our friends’ podcasts — what’s unusual is recording the episode and then getting emails from NFL coaches, A-list actors and multi-platinum music titans because they “heard you on the podcast recently.” As one of the first guests on The Tim Ferriss Show, it’s been strange and humbling to watch myself get utterly eclipsed by every subsequent guest over the last two years — from Arnold Schwarzenegger to Sophia Amoruso to Jamie Foxx — and listen to each one, riveted, just like every other fan.

It’s like being friends with Oprah from when she had a small morning show in Chicago. And that’s really what Tim’s podcast has become. He’s the Oprah of Audio. Is there a more fitting moniker for someone whose show can sell 50,000 copies of a book or drive a product out of stock at Whole Foods nationwide? I don’t think so.

Which is why I wanted to interview Tim to get him to explain how exactly the hell this all happened. How does one create one of the biggest podcasts in the world with essentially no advertising or promotion? How does one expertly interview huge stars, introverted authors and enigmatic artists with compelling ease? How does one build a potential $2-4M a year business — as he recently described it in an article — but decide not to fully monetize it because he doesn’t want to exploit his fans?

I had so many questions and thankfully, he had plenty of answers.

Why are you excited about podcasts? Are they the future of media?

I love podcasting because it’s a mass-audience format that offers 100 percent creative control with low production cost. My last few books and TV show were created alongside a lot of committees and corporate complexity, which exhausted me. This is a return to basics — focus on content, period. No internal debates, no design by consensus, none of that. The CPMs ($20-80 CPM) and rewards for experimenting have also never been greater.

Politics-ridden publisher models are antiquated and reflect an old paradigm of pushing content via distribution oligopolies (e.g. the first 20 feet of a retailer effectively being owned by Coca-Cola, Simon & Schuster, etc.). I know startups that have had to sell to larger companies simply to increase distribution footprint. In podcasting, it’s totally different: you pull people into your content. The quality attracts audience, SEO, and more audience; this is a sharp contrast to distribution forcing audiences to consume only a handful of options (e.g. old network TV).

Starting around 2008, I began experiencing the power of podcasts as a guest. People like Joe Rogan, Marc Maron, and Chris Hardwick (Nerdist) produced ripple effects that blew my mind. This inspired me to try it myself on the other side of the table.

I think podcasting — or audio more broadly — is one element in the future of media. Unlike video or print, audio is a natural secondary activity. Audio can be consumed while you commute, cook, exercise, walk the dog, etc. The more smart phones and broadband blanket the globe, the more powerful audio will become.

Last but not least, good long-form content will be around forever, so it’s part of the future. Despite the masses of people trying to emulate BuzzFeed, and despite the chorus of “long-form content is dead” or “long-form content can’t be monetized,” I see exactly the opposite. The Kindle has made it possible for people to impulsively buy two to 10 times the number of books they did in 2000. My techie friends in SF and NYC binge watch hour-long TV series on Netflix more than ever.

Long-form content isn’t dead; it’s simply uncrowded and neglected. I double down when formats are out of favor.

You’ve said you started your show as a six episode experiment with Kevin Rose, but clearly it’s grown into something much bigger than that. What do you see it becoming now that you’re on the verge of hitting 100M downloads?

I’d like it to become a clearinghouse for thought leaders who want to go deep, or set the record straight, or leave an interview they’d want their kids to remember them by. Sadly, two-minute TV interviews and other sound-bite media just don’t allow smart people to be smart.

I want to showcase intelligence and record a legacy-worthy interview. In brief, this is the response that I’d love every guest to have:

For guest selection, I’ll continue to mix super celebrities (e.g. Arnold Schwarzenegger, Jamie Foxx, Edward Norton) with world-class experts who don’t normally do interviews (e.g. Chess prodigy Josh Waitzkin, master interviewer Cal Fussman, tech investor/founder Naval Ravikant).

From an audience perspective, I’d like The Tim Ferriss Show to become the default “second activity” for many tens of millions. I want a few months of listening to my podcast during commutes, cooking, dog walking, etc. to trump a full-time year at any MBA program in the country.

One of things that I think has driven quality in the podcast market is that they’re listened to by subscribers. Most blog posts are competing on social media for attention, whereas podcast episodes are about delivering value to loyal listeners. You seem to have doubled down on podcasts as well as on email as a way to communicate with your army of fans, why was that? How has it worked?

E-mail and the podcast are my two highest priorities at the moment, and they work in tandem. Let’s touch on e-mail first.

Unlike, say, Facebook or Twitter, I own this communication directly and it’s less subject to the whims of algorithm changes (e.g. “Oops! Now you only reach 20 percent of your audience.”). Some people insist that email is dead for younger generations, and they’re right… until those young people get jobs. E-mail will stick around for a while, despite our attempts to kill it. It’s still the most reliable broadcast delivery mechanism.

The podcast, much like e-mail, is a free subscription. Although people can choose to listen a la carte, the subscription is most desireable.

At the risk of stating the obvious: subscribers subscribe to things as a habit. I use the podcast to promote my newsletter (specifically, 5-Bullet Friday) and I use email to increase the podcast listenership. The goal is subscription in both cases, but I’m not adding a new behavior. This has a much lower CPA than shotgunning on Twitter, for instance.

This pairing of email and podcast has been a revelation. The podcast is already typically a top-25 podcast on iTunes overall, and I expect to double its size in the next six to 12 months. Having a fast-growing alternate subscription (5-Bullet Friday) is critical to this. It’s 100% necessary but not sufficient. PR, paid acquisition, and many other elements round out the execution. Some (e.g. paid acquisition) are directly useful for audience growth, whereas others (e.g. PR features in name-brand outlets) is a powerful indirect contributor that makes high-profile guest recruitment easier.

At the same time, something that folks like Gretchen Rubin and others have pointed out, it’s hard for a one hour audio file in iTunes to go viral or get shared the way a blog post can. How have you managed to promote and grow your show so quickly given that reality?

Longer shows can absolutely go viral. We just need to define terms and ask a few additional questions. It’s easy to chase “viral” without stopping to ask: What is the goal? What are we measuring? Why do those metrics matter?

For instance — What communities, demographics, or psychographics are you targeting, and what is the measurable objective? For me, it’ll be specific for each episode or post. Hypothetically: I want evergreen content that will hit 1,000,000 downloads by X date, spread like wildfire in the spec-ops communities (because I have future goals involving that world), and continue to get at least 100,000 downloads a week for 3 months. I can look at historical data and reverse engineer an outcome like this.

If you’re chasing the phantom of “favorites” or “shares,” etc., it might impress a boss who loves vanity metrics, but I personally track fan acquisition in new verticals, predictable revenue (MRR) growth, and a few other things that move needles I care about.

The virality profile — or kinetics of contagion — are different for long-form content than for a 60-second YouTube video or 300-word “11 reasons your dog hates you”-type list. As with real viruses like influenza and ebola, the onset, duration, means of transmission, persistence, etc. vary widely.

For long-form examples, look at Serial, or even my episodes with relative non-celebs (compared to, say, Edward Norton) like Seth Godin and Derek Sivers. These shows take longer to initially spread, as they rely on 90- to 180-minute content versus 30 seconds or name recognition, but they have far greater permanence than the shorter content, in my experience.

Spread can be increased by creating assets like extensive show notes with links, highlighting short audio sections via Overcast for rushed people (see “If you only have a few minutes…” here), and crafting related blog posts that link to multiple episodes (e.g. The Unusual Books That Shaped Billionaires, Mega-Bestselling Authors, and Other Prodigies). I have perhaps a dozen more tricks that enhance “transmission” of long-form viruses.

Keep in mind that I’ve tried very short content. My “how to peel hard-boiled eggs without peeling them” YouTube video has 7M+ views, and it’s far less valuable to me than a good, in-depth podcast with even 500,000 listens. The former is a drive-by viewing; you’re one more shout in the noise. The latter can turn casual listeners into long-term listeners and devotees. I can’t out BuzzFeed BuzzFeed, and that would be the wrong goal for me.

Mass “virality” is overrated for a minimalist outfit like mine. Would you rather have 100,000 people in the US, selected at random, consume your content once and know your name, or the entire audience at TED and Davos listen to your podcast at least once a month? I’ll take the latter every time.

When in doubt, read Kevin Kelly’s “1,000 True Fans” and niche down. If you want to be widely known later, focus narrowly first.

Even though episodes might have trouble spreading, some of these bigger shows like yours have the power to send an immense amount of traffic or interest to a guest or a product. What’s been the most powerful example of that on your show? Have you seen the “Tim Ferriss Effect” work in audio as well as it has on your blog?

It’s exceeded all expectations. I didn’t expect audio to be as powerful as it is. Text, after all, has plenty of direct links. And no one will listen to a 2-3-hour podcast, right? Well, let’s consider some history.

The “Tim Ferriss Effect” from the blog (it can outsell CNN TV spotlights, major op-eds, etc.) took a long time to establish, perhaps 4-5 years.

The podcast hit the “sell out” impact in less than 12 months. Just a few example that come to mind: It has helped launch a book to #1 New York Times bestseller (e.g. SEAL Jocko Willink episode), it can outsell full-page features and ads in the NYT or Esquire (e.g. sponsor Mizzen+Main), it can take used book prices to nearly $1,000 on Amazon (e.g. billionaire Chris Sacca episode), and — my fave hilarious example — my episode with Dom D’Agostino sold out Wild Planet sardines in Whole Foods around the country (one typical tweet). This is fun for guests, too. One A-list actor told me the impact matched a big studio movie launch. Eric Weinstein, a well-known Silicon Valley mathematician-investor, mentioned his favorite movie was Kung-Fu Panda in our conversation, and the writer reached out to him that same week on Twitter. It’s wild.

My theory is that more media — and busy people, in general — listen to the podcast as a second activity (e.g. during commutes) than would consume my usual five- to 20-page blog posts. It’s a blast to see text pieces in the NYT and WSJ that mention the podcast and its guests, or to get contacted by CNN after an episode on psychedelic research, which turned (in that case) into a huge nationwide TV segment, which then helped me fuel research at Johns Hopkins.

As a follower of your site, I notice you tend to write less now. You’ve done short episodes that I imagine in the past would have been blog posts. Do you think podcasts are a replacement for blogs?

No, I think they’re complementary. Either can lead to the other. These days, I’m writing fewer posts but ensuring they’re comprehensive (e.g. my “startup vacation” post, podcast business post), which gives them evergreen staying power. I’m focusing on audio largely because I’m enjoying it and fans are asking for more.

One of the things that struck me after appearing on your show was the people I heard from. It wasn’t so much the quantity — though it was a lot — but much more the quality. I heard from NFL coaches, managers for some of the world’s biggest bands, authors, even people I know really well but didn’t peg as podcast listeners talked to me about it. The only similar experience for me was when I did a big NPR show. Is it just that smart people listen to podcasts?

This happens to nearly every guest, and there could be a few explanations.

First, both NPR and I take our time. I don’t dumb things down, and I go as long and as deep as necessary to uncover good stories and tactics listeners can use. Smart content, which I try and create, attracts smart people.

Second, at least 50% of the celebs, power brokers, and experts who’ve appeared on the podcast were regular listeners of the podcast first. In other words, the type of people who appear on The Tim Ferriss Show also listen to it…just multiplied thousands of times over.

That begs the question — why? It was partly luck and partly by design. The 4-Hour Workweek first became popular among tech startup founders and investors in Silicon Valley and NYC, and they were the tipping point, sending it to #1 NY Times and keeping it on the NYT business bestseller list for more than 4 years straight, unbroken. These readers were also kind enough to rebroadcast my work into every imaginable industry and subculture. Subsequently, I realized this could be done deliberately in different worlds to create an interwoven network of thought leaders. If The 4-Hour Workweek immersed me primarily into the business and travel worlds, then the content of The 4-Hour Body spread me into the highest levels of sports, nutrition, and military (as they obsess over training). The 4-Hour Chef did the same for culinary, but also for media and publishing due to the buzz and controversy surrounding Amazon Publishing, the launch of which was announced in the NYT with the acquisition of my book.

This combination of good luck and planning has led me to the most incredible audience I’ve ever been exposed to. I learn 10x more from them each week than I put out.

Marc Maron and Simmons have both had Obama on. Who is your dream guest for the show? You’ve had some amazing ones, obviously, but if you could get anyone on the show, who would it be?

This one is easy — Oprah.

I’ve followed her since high school, and she’s been a force for good for decades. She’s stayed that course, even when it’s been incredibly difficult. Not many people can walk that walk when their feet are to the fire.

To have tea with her and really connect would be a dream come true.

I’m not in a rush to pitch her, and I’m happy to let the universe decide timing, but it could happen. I’ve been fortunate to interview some wonderful people who know her, including Jamie Foxx, Tony Robbins, and others.

If you had to give one piece of advice to someone asking themselves: “Should I start a podcast?” what would it be?

Do it, but commit to doing SIX episodes.

Even if they’re short and you never publish them, this volume is enough to learn lessons that transfer elsewhere else. It’s a minimalist experiment for improving overall thinking: improving your ability to ask questions, fixing verbal tics (e.g. “ummm” “ahhhh”), getting better at listening without interrupting, learning to sit with silence until someone else continues, etc. Even if your format isn’t interviewing, perhaps like Hardcore History (my fave), you’ll improve your ability to craft good narratives, tell stories, and be a better human. We are hardwired to be story-telling and question-asking machines; you might as well be good at it.

One to two episodes isn’t enough to hit the hockey stick in the learning curve, so commit to six.

Just be forewarned: you’ll likely hate listening to yourself. I was mortified. I’m very insecure about my own voice, but over a few episodes, you learn to curse, exhale, smile, and say “What the hell…let’s try it again.” This is what we want — by facing your own rough edges, you polish them or eventually accept them.

Rule No. 1: Relax. No one’s going to die. Just get a little better each time.

Rule No. 2: Keep it simple. This applies to format, gear, editing, everything. Constantly ask yourself “What would this look like if it were easy?”

Rule No. 3: Be yourself — weirdness, warts, and all. In podcasting, this is a huge competitive advantage… and a huge relief. Have fun with it.

Kay’s Other People’s Money

Sunday, May 1st, 2016

John Kay’s Other People’s Money argues that the growth in the size of the financial system hasn’t been matched by improvements in the allocation of capital:

He proposes that financial services are not as profitable as some headline numbers would suggest. And he suggests that the replacement of those who are good at meeting clients on the 19th hole with those who were good at solving complex mathematical problems was not always a good thing — sometimes clever people are the problem, particularly in a complex environment.

On that last point:

The organisational sociologist Charles Perrow has studied the robustness and resilience of engineering systems in different contexts, such as nuclear power stations and marine accidents. Robustness and resilience require that individual components of the system are designed to high standards.… More significantly, resilience of individual components is not always necessary, and never sufficient, to achieve system stability. Failures in complex systems are inevitable, and no one can ever be confident of anticipating the full variety of interactions that will be involved.

Engineers responsible for interactively complex systems have learned that stability and resilience requires conscious and systematic simplification, modularity, which enables failures to be contained, and redundancy, which allows failed elements to be by-passed. None of these features — simplification, modularity, redundancy — characterised the financial system as it had developed in 2008. On the contrary, financialisation had greatly increased complexity, interaction and interdependence. Redundancy — as, for example, in holding capital above the regulatory minimum — was everywhere regarded as an indicator of inefficiency, not of strength.

The Last Days of Target Canada

Friday, April 29th, 2016

Target Canada failed big:

Roughly two years from that date, Target Canada filed for creditor protection, marking the end of its first international foray and one of the most confounding sagas in Canadian corporate history. The debacle cost the parent company billions of dollars, sullied its reputation and put roughly 17,600 people out of work. Target’s arrival was highly anticipated by consumers and feared by rival retailers. The chain, whose roots stretch back to 1902, had perfected its retail strategy and grown into a US$70-billion titan in its home country. Target was a careful, analytical and efficient organization with a highly admired corporate culture. The corporation’s entry into Canada was uncharacteristically bold—not just for Target, but for any retailer. Under Steinhafel, the company paid $1.8 billion for the leases to the entire Zellers chain in 2011 and formulated a plan to open 124 locations by the end of 2013. Not only that, but the chain expected to be profitable within its first year of operations.

(Hat tip to David Foster.)

Lawyers and Salesmen

Thursday, April 28th, 2016

One of the things the Z Man has learned in life is that the salesmen for a company will be the most honest with you about their company:

That’s not to imply that salesmen are all honest in their sales pitch. That’s not what I mean. I’m talking about life inside the company. Ask a sales guy, who is not selling you something, about his boss and his co-workers and he’ll usually give you the unvarnished truth. Often, they are the guys who know the flaws best, because they have to work around them to make deals.

That’s the thing with sales people.  They work for themselves, even though they take a salary and are employees. Some portion of their pay, maybe the bulk of it, is derived from their performance as a salesman. All sales people have quotas and have to produce. Otherwise, they get fired. There’s no hiding in the bureaucracy for them. That means self-deception is not of any use to them. They have to know the defects of their firm and its products in order to mitigate them in front of clients.

The weird thing about salesmen is they never assume they are the cleverest guy in the room. Paranoia is a healthy trait in sales, as there are a million little things that can scuttle a deal. Working from the assumption that there could very well be someone in the room who knows something you don’t is a good way to avoid surprises. You ask more questions and you listen better. If you’re walking around thinking you are Wile E. Coyote, a safe could fall on your head.

I used to fish with a guy who made his living selling cars. He got into it as a way to pay for college. He would sell cars on the weekend and at night, while going to school during the day. When he finished college, he found that he could make a better living selling cars than anything else so he kept selling cars. Eventually he settled into selling BMW’s and Mercedes. He was able to make a nice, middle-class living at it, without too much stress.

Making small talk one day I mentioned something about lawyers and he laughed and told me that lawyers are his best clients, followed by stock brokers. I naturally assumed it was because they made a lot of money and had expensive tastes. That was not it at all. He told me that overselling a lawyer was one of the easiest things to do in car sales. They walk around thinking they know everything and so they fall for every car sales trick in the book.

So, where’s he going with this?

I’ve been thinking about this watching the political ructions. Donald Trump is a salesman and a very good one so he is doing extremely well as a novice politician, because politics is about sales. His competitors are mostly lawyers, who never took him seriously, because they are lawyers and smart. Everyone knows this so surely the smart lawyers will have no problem with the sales guy and his cheap theatrics.

The commentariat is similarly full of lawyers and people who went to law school.

[...]

Now, the guys in the sales department have a different experience. They also have high verbal skills, but they spend their days losing many more deals than they win. They face the reality of their limitations every day. They also know that if they don’t sell, they don’t eat. There’s no failing up in their business. It’s why the sales guys can feast on lawyers. They have no illusions about themselves.

It’s another reason to wonder if the recipe for the managerial state contains ingredients that poison the stew. Failing up is a feature of the managerial class. They go from one failure to the next, rarely ever answering for their blunders. The economic team that advised Obama on the stimulus, for example, landed cushy positions in the academy. Tim Geithner is making millions influence peddling for Wall Street. This despite being 100% wrong about in their predictions.

A system based on mediocrities walking around convinced they are the smartest people in the room will inevitably become unstable.

Take the First Fall

Thursday, April 21st, 2016

When was the last time your feedback improved someone else’s life?

The problem is that we forget we’re giving feedback to a fellow human being, not an advice-taking robot. Even when we’re well-intentioned, the message gets lost in the transmission. It’s like the old saying “What counts is not what’s said, but what’s heard.” We respond emotionally to criticism, even if it’s just implied criticism. (Are you sure you still fit into that dress?) This makes it difficult to help others improve. In other words, we fail to understand and appreciate human nature.

According to Roger Fisher and Alan Sharp’s Getting It Done: How to Lead When You’re Not in Charge, there are three different kinds of feedback:

  • Appreciation
  • Advice
  • Evaluation

Their advice is not to mix the three:

  1. Express Appreciation to Motivate
  2. Offer Advice to Improve Performance
  3. Evaluate Only When Needed
  4. Take the First Fall

Manly Courage in the Face of Physical Danger

Thursday, April 14th, 2016

Tom Wolfe’s The Right Stuff describes some of Jocko Willink’s (@jockowillink) appeal as a business consultant:

America seemed to be full of businessmen like [Ed Cole, the president of Chevrolet] who exercised considerable power and were strong leaders but who had never exercised power and leadership in its primal form: manly courage in the face of physical danger. When they met someone who had it, they wanted to establish a relationship with that righteous stuff.

Me trooper

Monday, April 11th, 2016

When I see a new gadget, I generally say, “Me want it, but me wait,” but a good ad might push me over the edge — and some good behind the scenes bits might push me even harder:

The Art Of The Deal

Monday, March 28th, 2016

Scott Alexander started Trump: The Art of the Deal with the question: what exactly do real estate developers do?

They don’t design buildings; they hire an architect for that part. They don’t construct the buildings; they hire a construction company for that part. They don’t manage the buildings; they hire a management company for that part. They’re not even the capitalist who funds the whole thing; they get a loan from a bank for that. So what do they do? Why don’t you or I take out a $100 million loan from a bank, hire a company to build a $100 million skyscraper, and then rent it out for somewhat more than $100 million and become rich?

As best I can tell, the developer’s job is coordination. This often means blatant lies. The usual process goes like this: the bank would be happy to lend you the money as long as you have guaranteed renters. The renters would be happy to sign up as long as you show them a design. The architect would be happy to design the building as long as you tell them what the government’s allowing. The government would be happy to give you your permit as long as you have a construction company lined up. And the construction company would be happy to sign on with you as long as you have the money from the bank in your pocket. Or some kind of complicated multi-step catch-22 like that. The solution — or at least Trump’s solution — is to tell everybody that all the other players have agreed and the deal is completely done except for their signature. The trick is to lie to the right people in the right order, so that by the time somebody checks to see whether they’ve been conned, you actually do have the signatures you told them that you had. The whole thing sounds very stressful.

The developer’s other job is dealing with regulations. The way Trump tells it, there are so many regulations on development in New York City in particular and America in general that erecting anything larger than a folding chair requires the full resources of a multibillion dollar company and half the law firms in Manhattan. Once the government grants approval it’s likely to add on new conditions when you’re halfway done building the skyscraper, insist on bizarre provisions that gain it nothing but completely ruin your chance of making a profit, or just stonewall you for the heck of it if you didn’t donate to the right people’s campaigns last year. Reading about the system makes me both grateful and astonished that any structures have ever been erected in the United States at all, and somewhat worried that if anything ever happens to Donald Trump and a few of his close friends, the country will lose the ability to legally construct artificial shelter and we will all have to go back to living in caves.

Battle Leadership

Saturday, February 27th, 2016

In his fourth podcast, Jocko Willink (@jockowillink) shares some stories from Battle Leadership:

Battle Leadership Page 11
Battle Leadership Page 12

Jocko Podcast

Thursday, February 25th, 2016

I enjoyed Jocko Willink’s (@jockowillink) interviews with Tim Ferriss and Joe Rogan, and I found that he took their advice and started his own podcast.

The first episode is clearly a learning experience. The second covers David Hackworth’s About Face. The third touches on H.J. Poole‘s The Last Hundred Yards.