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Month: April 2016

Smart bets in a networked age: knowing who and what to ignore

Smart bets in a networked age: knowing who and what to ignore

smart bets

A major theme of my weekly articles is that discovering the best collaboration opportunities is harder in a networked age than in the past. This is relevant because successful collaborations are the key to achieving most things we want in life. From information, to customers, to jobs, to romantic partners, everything we want is “behind” someone. Someone has to provide the information we need, or pay for our product/service, or look to hire someone like us, or choose us as their partner. In exchange, we give them our time and attention, or deliver our product/service, or work for them, or give them our love. Society runs on person-to-person interactions, even when mediated by technology.

The hard part of a successful collaboration is never about what we can do, but with whom and how. Sure, we have access to unlimited information, and we can connect with anyone in the world, and we can publish our thoughts immediately for free. However, that means that we must work hard in deciphering what we should and shouldn’t pay attention to, who we should and shouldn’t work with, and what we should say and where.

The trade-off for ease of access and abundant information is a higher risk of making suboptimal decisions. When there are unlimited options, it’s easier to miss the right target. If we lived forever, this wouldn’t be a problem. We would be able to try everything, or wait forever before making any decision. But time is limited. If we want to have an increasingly accurate sense of the world’s good and bad collaboration opportunities, there’s a limit to how much bad information we can absorb. Both action and inaction are risky, so we must be smart with our bets and learn from them.

A good initial way to get smarter is learning to identify bad risks: what not to read, who not to work with, who not to date. This process requires lifelong experimentation, but as Nassim Taleb said: “the learning of life is about what to avoid.”

The world doesn’t want you to succeed

Collaboration has become harder in a networked age because it’s harder to know what or who we should ignore. Since everyone has their own agenda, this means more agendas competing for our attention and with easier access to us than ever. Dan Ariely, the famous behavioral psychologist from Duke university says:

“The world is not acting in our long-term benefit. Imagine you walk down the street and every store is trying to get your money right now; in your pocket you have a phone and every app wants to control your attention right now. Most of the entities in our lives really want us to make mistakes in their favor. So the world is making things very, very difficult.”

Couple that with the fact that now we have almost full control of our online presence, and it’s very easy to fall prey to someone else’s agenda that goes against our best interest. It’s hard to know who’s lying or exaggerating on their own company website, social media profile, or blog.

There are exceptions and some people do pay for their lies (e.g.: the Jonah Lehrercase), but most people and organizations are free to say whatever they want with little fear of getting caught and suffering any consequences. For example, writer Dan Lyons recently published an op-ed for the New York Times about the working culture of the tech/startup world, and mischaracterized the best-selling book The Alliance as a way to reinforce his point on tech workers having no job security. Here’s an excerpt from the authors’ response to Lyons trying to correct the record:

“At the heart of our framework is the importance of building high-trust relationships. In The Alliance, we write, “Our goal is to provide a framework for moving from a transactional to a relational approach…By building a mutually beneficial alliance rather than simply exchanging money for time, employer and employee can invest in the relationship and take the risks necessary to pursue bigger payoffs.” Here’s how Dan describes our framework: “In [the author’s] view, a job is a transaction, one in which an employee provides a service, gets paid, and moves on.” It makes you wonder whether he actually read our book!”

I have read The Alliance and personally applied its framework with wonderful results, and I see two possibilities that can explain Lyons’ interpretation of The Alliance: either he didn’t read the book, or he read it but decided to ignore the facts in order to stick to his desired narrative.

Will there be any consequences to his unethical journalism? Will anyone care? Or is the damage already done, and the inaccurate information already cemented in his readers’ minds?

The online world is dominated by urgency and abundance. There’s a lot coming and we hurry to stay up to speed. This makes it difficult and annoying to fact check. We don’t have enough mental bandwidth to worry about accuracy or retractions. This is why I believe that a skill we all need to develop now is knowing how to detect the lies and exaggerations through all the deceiving bios, testimonials, brand associations, numbers of followers, and other narratives. The smart use of our limited time, money and attention is at stake.

“I learned because I live in the world”

“I learned because I live in the world”

sinekfull

Here is Simon Sinek’s answer when they asked him how did he learn so much about leadership and management:

“I live in the world. I’m subject to these things. I want to live in a world in which I get to wake up every single morning inspired to go to work, to feel safe while I’m there and go home fulfilled at the end of the day. I want to live in a world where the vast majority of people feel the same way. It’s not that I have a particular hankering for leadership or management, but I guess my interests wafted in that direction simply because of the vision I’m trying to build.”

I’ve been telling people that where we are headed, what we want to build, is a more valuable “credential” that than what you’ve done in the past. It will make more people want to collaborate with us. Now I wonder if it’s not also the best way to build expertise, creating a self-reinforcing cycle of building and learning in the real world.

Four ways humans are better than machines

Four ways humans are better than machines

4 ways

Simon says…

Simon Sinek changed the world. If you haven’t seen his famous TEDx talk “How great leaders inspire action”, do so now. He delivered a necessary, simple, powerful message at the right time, in the right channel, and in the right format, which is why his ideas had a massive impact in the startup world. His assessment of what makes people buy or follow was rooted in a long journey of trying to understand people. As someone that has been doing sales his entire life, I can testify to the effectiveness of his philosophy.

If we look at the evolution of mission statements from both organizations and individuals, one could argue that people like Sinek helped more businesses grow their sales with human-centered ideas such as the importance of communicating our purpose and engaging with people’s emotions, than many CRMs, apps, and other technologies with a similar goal.

Simon Sinek does not code, or engineer, or biohack for a living. He gets paid to understand people.

Travel is an art, not an algorithm

Airbnb, the home-rental platform, is one of the fastest growing companies of the last decade. It’s currently valued at $25 billion, with +60 million users active in +34,000 cities. It may surprise some to know that when its CEO, Brian Chesky, wanted advice and ideas on what the direction of Airbnb should be, he didn’t go to a programmer or an engineer. He reached out to Alain de Botton, philosopher and author of The Art of Travel, among many other wonderful books. Chesky appreciated Alain’s efforts on deciphering what people look for when they travel, so he wanted to get his suggestions on what Airbnb should deliver to its customers.

His co-founder, Joe Gebbia, recently spoke at TED and explained that Airbnb succeeded because they “designed for trust,” and ponders towards the end of his talk “What else can we design for trust?” While knowing how to design technology for trust requires understanding of the technology, the answer to Gebbia’s question requires understanding of humanity. Like the one Alain de Botton has been pursuing his entire life.

Community as a priority

Instagram, the photo-sharing platform had only 13 employees when it was acquired by Facebook for $1 billion in 2012. This is one of the biggest social networks in the world, which means that they must have been making technology their priority since day one, right? Wrong. They succeeded because their priority was to understand their community and its preferences in order to serve them better, which is why the company’s first non-founding employee, Josh Riedel, was neither an engineer nor a designer, but a community manager.

The need to build and manage communities is not going away anytime soon. As Sangeet Paul Choudary explains in his book Platform Scale: “A community isn’t simply a more participative audience.” The challenge to understand what each community needs to grow and thrive represents a major career opportunity for those interested in working with people.

Free to play, pay to be cool

Riot Games is the company behind the online videogame League of Legends, which is the number one “free to play” game in the world. But if it’s free to play, how did it earn $1.6 billion in revenues last year? It allows people to pay for what Riot’s co-founder Marc Merrill calls “the coolness factor”:

“People told us when we started that if you don’t charge up front, or if you’re not selling extra power or stats, it won’t work,” Merrill says. “But that fails to account for the coolness factor. If you’re really into cars, you don’t mind spending $50,000 to soup up your Honda. That’s the player we’re tapping into.”

Trusting that people would pay so much money for coolness in a free-to-play videogame required a counter-intuitive and deep understanding of what motivates gamers. Furthermore, to imagine and create coolness that people would pay for, required creativity.

Creativity and deep understanding of motivation are skills reserved for humans. The mantra for Riot is that “revenue is second, the player experience first.” There’s a huge opportunity for humans to keep tapping into their creativity and understanding of people to design more profitable experiences.


With these examples I do not want to diminish the impact, expansion or importance of technology. Technology advances daily and quickly, we should be aware of it, and master different technologies to different degrees so we can navigate the future.

However, I’m not concerned about us forgetting about technology. Because of its novelty nature, the media and many “experts” make their living by telling us about every single “innovation,” alarming us in the process, regardless of the likelihood of that invention actually changing how we live or work in any significant way or fast enough to matter.

I am concerned, though, on us forgetting or underestimating the amount of work it takes to understand what people want, how they want it, and why they want it. I worry that we stop appreciating the things we are bound to do better than machines for any foreseeable future. I worry that we stop imagining the best ways to complement each other.

Quotes March 2016

Quotes March 2016

“In a curious way, age is simpler than youth, for it has so many fewer options.” – Stanley Kunitz

“Being a professional is doing the things you love to do, on the days you don’t feel like doing them.” – Julius Erving

“Nothing is more important to my success than controlling my schedule. I’m most creative from five to nine A. M. If I had a boss or co-workers, they would ruin my best hours one way or another.” – Scott Adams

“If you believe intelligence is a fixed quantity, then every educational and professional encounter becomes a measure of how much you have. If you believe intelligence is something you can increase, then the same encounters become opportunities for growth. In one view, intelligence is something you demonstrate; in the other, it’s something you develop.” – Dan Pink

“We are no longer in the business of building software. We are increasingly moving into the business of enabling efficient social and business interactions, mediated by software.” – Sangeet Paul Choudary

“True ambition can lie in learning how to minimise stress and divert energy to properly important projects.” – Alain de Botton

“Am I accusing users of social networks of reducing themselves in order to be able to use the services? Well, yes, I am.” – Jaron Lanier

What is your 10x career strategy?

What is your 10x career strategy?

x10

I often tell people that if your business idea is not 1) creating a new market, or 2) 10x better than the alternative, you’re better off not doing it. Continue selling your skills instead while you keep learning, saving, and brainstorming/exploring new opportunities. Daniel Kahneman explains in “Thinking, Fast and Slow” that, given the same qualifications, people achieve higher average returns by selling their skills to employers than by setting out on their own. Alas, entrepreneurs are like drivers: 90% believe they are better than average, and that the odds don’t apply to them.

Side note: Don’t follow this advice if you’re starting a project for personal motives (learn new skills, meet new people, test your entrepreneurial fortitude, discover problems you care about, etc.). In such cases, the definition of success is subjective, not measured in market share, dollars, or pace of growth. You may even get lucky and still develop a profitable business, so keep running personal experiments because there’s little to lose.

The trap that gets most entrepreneurs is not that their idea is horrible, but that it’s decent. The most dangerous ideas are the ones that look good on paper and in the founders’ fantasy world of linear thinking and rational consumers. It’s easy to make the entrepreneurial mistake of finding something that is marginally better than the status quo in some aspects and believe it’s a great idea, while ignoring the other aspects that, combined, explain the consumers’ (seemingly irrational) current behavior. I’ve made this mistake multiple times.

When something is only marginally better than what people are doing, you’re jumping into a highly stressful and competitive market with a high risk of failure, or worse, mediocrity, because people don’t change their behavior for “marginally better.”

“Must have” versus “nice to have”

Jun Loayza, good friend and seasoned entrepreneur, told me once that he tries to avoid falling for the “nice to have” trap, and build “must have” products or services only.

A “must have” product/service is something that, once you understand how it works and what it will do for you, you pay to get it. You don’t simply “want it;” you make the necessary arrangements to get it as soon as possible. You understand how it’s an improvement of your life, therefore, you believe it would be stupid not to buy it.

A “must have” is a product or service that either creates a new market, or is 10x better than the alternative.

Uber is 10x better than taxis. For many travelers, Airbnb is 10x better than hotels and hostels. As long as there’s decent internet connection, Skype is 10x better than phone service. Netflix is 10x better than video rental. Book in a Box is 10x better than traditional publishing for busy wannabe authors. For regular people, Strikingly (and similar services) is 10x better than hiring a programmer and designer to create a new website.

On the other hand, a “nice to have” offer is a siren song; it sounds great, it looks great, people will tell you it’s great, and they fantasize with the idea of buying it and using it one day… And yet not enough buyers come. The fact that an idea can provide some value does not mean that it provides enough value for people to change their behavior to get it. Regardless of what they say, when it’s time to make the investment/sacrifice, people choose to stay in the status quo.

Look at traditional education. There’s been an explosion of new offers in education, both online and offline, but the system remains strong. Most people still choose to go to college and pursue MBAs, no matter the cost, than learn and craft their skills, credentials and networks via alternative programs. There are a few exceptions, but overall, most of these offers are “nice to haves”. Massive open online courses (“MOOCs”) are free but still have a 98% dropout rate. The explosion of independent “bootcamps” fail to deliver psychological benefits of college such as belonging, reputation or clarity. These products and services underestimate people’s inclination to the routine, the familiar and the culturally accepted, and therefore struggle to become a necessity instead of a luxury.

Side note: This doesn’t mean you shouldn’t build anything that doesn’t have the potential to become a multi-billion dollar monopoly. There’s nothing wrong with a small business, but 1) you still need to figure out what behavior you’re trying to change in the small group of people you want to serve, 2) there’s an usually unspoken toll to one’s wellbeing, relationships and finances when running a business in a crowded market, and 3) you may be able to make more money, work less hours, and be happier/healthier selling your skills to someone else.

For users/consumers, the question is never “is there any good to this?” but rather “is this the best thing for me?” As in life, decisions come to opportunity cost, not net value. I contend that to change behavior and overcome opportunity cost of any established consumer behavior, you need to offer something 10x more valuable than whatever people are already doing.

Is collaboration the new and only career multiplier?

In his best-selling book “The End of Certainty”, Simon Dudley exemplifies the importance of doing things 10x better with the story of how Netflix took over Blockbuster’s market by doing something radically different (10x better) than Blockbuster, which tried the old approach 10% better. Simon concludes:

“If challenged to be 10% better, any business can say, “I can probably squeeze 10% more out of my business by simply driving a little harder. I’ll make it slightly more efficient. I’ll make my sales people work slightly harder. I’ll make my marketing budget go a little further. I’ll push on my advertising agencies.

Looking for 10X better results can produce much better results within organizations because you actually have to think differently rather than become a slightly more efficient version of what you do today. […] In today’s world, where the rate of change is increasing at an exponential rate, the whole idea of keeping up by simply sweating the business for another 10% has become a losing strategy. If you’re not looking for dramatically different ways of doing your business, then you’re probably in a position where somebody else will replace you.”

So, what does this have to do with your career?

My thesis, which I’m still developing, is that to grow and remain relevant today we must dramatically reshape how we think about our jobs and careers, and just like businesses, look to create and serve untapped markets or become 10x better than the competition in the professional market we are in.

What’s more important, I believe, is that the only way to achieve this in a networked age is to understand and leverage the new dynamics of collaboration and information flow between people. I see huge potential in the idea of redefining ourselves as “information and collaboration agents”, instead of “reactive task accomplishers”, because that’s where software is becoming 10x better than humans.

Side note: It’s basically impossible to do something 10x better than existing software, because 1) software integrates new data immediately, meaning that it learns very fast, and 2) it taps into massive amounts of data coming from the behavior of thousands or millions of people. The opportunity, however, is that software is destined to run behind people’s imagination. Artificial intelligence is unable to imagine, and all value creation requires imagination first. As long as there are problems to be solved, there’s value to be created by humans before software can take over.

It’s ironic that, in a world where many things change faster than ever, it’s those that become experts on the things that don’t change–people, physics, chemistry, math–and understand how to adapt their value offered to the new formats who will thrive. The more complex and noisy the world gets, the higher the risk to misunderstand what people want, and therefore, to work on the wrong thing. For every business and every person in the world, there’s an increasing need to make sense of what’s going on, because most current institutions (education, media, governments, religion, online networks) are doing a horrible job at it.

Tyler Cowen famously said that “average is over.” My corollary is that “marginally better than average is risky.” Be unique or 10x better, or get ready to struggle like most businesses marginally better than the status quo.

The future of jobs?

If you want evidence that leveraging collaboration and information is already a trend, look at the way many recent multi-million dollar businesses create and deliver their value. Sangeet Paul Choudary, CEO of Platform Thinking Labs, explains in his book “Platform Scale” why a business that tries to understand and leverage human relationships is the best kind of business to build in our current technological context:

“It isn’t software itself that is eating the world. It is the ability of software to orchestrate people and resources, make intelligent decisions, and enable a connected global workforce to create value that is the real force driving disruption today. Uber orchestrates the physical movement of cars and travelers connected to the Internet, with its algorithms making intelligent decisions. Facebook intelligently identifies the content that is most relevant to a particular user, while Reddit organizes users around the world toward an editorial function. Airbnb isn’t merely an app or a website; it is a central market-making mechanism that allows the creation of an alternate market for accommodations. Likewise, Amazon has done much to change power structures in the publishing and retail industries.

We are no longer in the business of building software. We are increasingly moving into the business of enabling efficient social and business interactions, mediated by software.”

Enabling interactions. That is the future of jobs, I think, although we have only seen the tip of the iceberg of what “enabling interactions” might mean. I have mostly questions as to how things will play out, many of which I will explore through future newsletters. But as long as we keep thinking about our careers in terms of “delivering imagination,” I’m optimistic.

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