When Breath Becomes Air: I had heard this one makes you cry. And it absolutely does. Just a really beautifully told story about the healing profession and its limits. It’s told by a neurosurgery resident, who, in his thirties is just about to begin his life’s work as a fully fledged doctor when he is diagnosed with cancer. He has amazing insight to the work of doctors, particularly those who have such a profound impact on their patients’ lives. The thing that really got me, though, was hearing his wife and his daughter talk about him. Just when parts of your world go grey, like losing the ability to taste food, others become really beautiful, like the fact that his wife was making him special breakfast sandwiches and that he associated them so personally with her. Marriage is more than sandwiches, but damn if it’s not the little things you miss when you lose someone. I don’t know how to do this book justice. Just go read it.
Range by David Epstein (finished): Epstein makes the case that generalists are able to solve certain kinds of problems better than specialists. Specialists tend to have more predictable paths through life, with great expertise in a narrow area. Generalists, by contrast, have experience from many different areas that often offer a crucial insight to a difficult problem. The book is full of stories like that. I recommend this interview between David Epstein and Patrick O’Shaughnessy to see if this is the kind of thing that would be interesting to you. This ties in with a concept Scott Adams calls “the talent stack,” where you are average at a few things that combine into a really unique and powerful skillset.
Stocks for the Long Run: My big question was whether equity markets produce similar returns in different countries (particularly after reading The Accidental Superpower, which has a somewhat pessimistic take on the rest of the world’s prospects), and whether performance endures across radically changing international environments (pre vs post-WWII, especially). My conclusion is that you can’t predict which countries will do better or worse than average, but that returns for all countries tend cluster reasonably closely around an average of 8-10%. The exceptions are communist revolutions when all stocks go to zero and the government seizes your property (supposedly for your own good), and national collapse. Oddly, stocks might do better than cash in some of the worst environments, such as hyper inflation in post WWI Germany, and even military defeat. In any case, the benefits of capitalism are not unique to the US. Anywhere you go in the world, you will find some enterprising individuals who can create and sell products for less than the cost of producing them. And seemingly, the profit margins a great business mind can create are not necessarily higher in one country than another. So diversify, avoid having all your eggs in a basket that goes to zero, and trust that it will all work out over the long run. My one complaint, too much text, not enough charts and tables.
Atlas Shrugged by Ayn Rand – To quote that guy from Brokeback Mountain, “I wish I knew how to quit you.” It’s a super long read, and probably could have gotten edited down into a tighter, better story. But at the same time, the writing itself is elegant and thought provoking. I don’t really have the timeframe to evaluate how different today is from any time in the past (though I do see a generational shift that I don’t like), so I don’t know how much to read into it when I hear ideas expressed earnestly in real life that could have come from the lips of one of the antagonists of this story. She taps into the nastiness of jealousy masquerading as justice.
The Coaching Habit: Great read. Really helpful in asking better questions. Usually, when people come to you for help, the best thing to do is shut up for a while, listen, and ask questions to get to the heart of the issue. It is tempting, and usually a mistake, to jump in with your opinion too early. Wait as long as possible before answering with anything other than a question. Good summary of the key points here, though I think the book still holds up even with the summary being available (which isn’t something you can often say) https://readingraphics.com/book-summary-the-coaching-habit/
Simple Wealth Inevitable Wealth: Basically, this book is Chicken Soup for the Investment Advisor’s Soul. This is a good read, and led me to be a lot less concerned with individual stocks (relative to other sources of value-add). Lots of people in the investing industry hit this point eventually, but this is the one that did it for me. It’s not that I don’t want to own individual stocks, or think that I can’t approximate the performance of an index fund on my own (or that I don’t think it’s possible for other people to do so systematically over long periods). More that it’s just not worth my own time, stress, and attention. I have bigger fish to fry than that for now. This goes in well with the theme of these past couple months, in which I’ve pared away a lot of other dead weight in other areas of my life to focus on what most needs my attention. Investment “alpha” or “volatility-adjusted-outperformance” is worth a lot less to myself and to my potential clients than a growing list of other things I can do. Not a priority, for now.
The Everything Store by Brad Stone: Normal people don’t create companies like Amazon (valued in the hundreds of billions of dollars). On one hand, you have to admire Bezos and his incredible vision combined with his ability execute relentlessly on it. Relentlessly. That’s a word that comes up throughout the book, and it got me thinking. A lot of successful people are called assholes, pretty consistently. Which makes sense because I don’t think you really do anything of significance if you are hung up on being universally liked. Moreover, I think only someone who is willing to be an asshole (when the time is right) can get this kind of thing done. Imagine how much slower and unaccountable Amazon would be if Bezos waited to create a consensus on every issue before proceeding. No, he is a leader, and he has done his job very well. The leader’s job is not to be liked, the leader’s job is drive the organization hard in the right direction. People who aren’t bought in, or who aren’t performing up to what is needed SHOULD be let go or forced out, lest they jeopardize the endeavor for everyone who is doing what they are supposed to. Moreover, I think that the bolder you ambition, and the more quickly you wish to accomplish it, the harsher you might need to be (as long as you know in the back of your mind that every organization has a breaking point). Judging from the book, that’s a point Bezos has stepped across multiple times. That’s not bad though. In fact, that’s normal if what you’re trying to do is grow a company’s valuation from $0 to $1Trillion in fewer than 25 years. I mean, if that’s someone’s goal, are you really going to criticize them for being impatient? Another note, I think this book illustrates how a person accumulates power and wealth in our society. By giving value to others, by doing what is new and difficult, by assembling a team and infrastructure to help do more of that, and by making a long series of mostly-right strategic decisions along the way. People who complain about Bezos having money are usually ignoring what it takes to get there (and how many people fail due to not proving incapable of handling that responsibility). Most likely you, if put in charge of Amazon today, would ruin the company within 5 years. Virtually no one else on earth is qualified to be Amazon’s leader and biggest shareholder other than Jeff Bezos. Stick that in your socialist pipe and smoke it. One last thing, though, which I thought was fascinating, since I want to end these notes on a more human thought. Imagine leaving your wife and kid, to learn 50 years later that your son had become the richest man in the world. No contact, no news during all that time. You even forgot your son’s new adoptive name. That’s the experience of Jeff Bezos’ biological father. What do you feel in that moment when you find out? Regret? Relief that your son turned out okay? Do you want to talk to him? Why? What about? How do you reach out so that it doesn’t sound like you’re just now interested in him because he’s spectacularly rich and famous? Does he even have time for you now? There’s a lot to learn from Bezos, but he’s such an extreme character that it seems hard to apply much of his journey to your own life. But Bezos’ dad? I think there’s something big to learn there, a lesson that everyone can absorb about expressing your love, and being there for someone before you lose the chance.
Hard-boiled Wonderland and the End of the World by Haruki Murakami: I’ve said it about another one of Murakami’s works, but I love how much more vivid my dreams get when I read his books before bed. This one wasn’t as good as the first one I read though (Windup Bird Chronicle). He switches back and forth between two worlds every other chapter, which kept me from finding a good rhythm with it. Maybe that doesn’t bother other people as much. On a positive note, I feel like I always get more in touch with myself when I read his works. Like, I can feel this tiny dot of what really matters, and who I really am as a person, stripped of ego. That’s a beautiful thing and I’m glad he writes. So far, I’ve noticed that his protagonists are smart and thoughtful, but lack a sense of clear direction in the world. But they aren’t insecure about it, and they aren’t struggling with what the world thinks of them. They just “are” in the present moment. Not triumphant or ambitious, or self-conscious but reflective and concerned with what feels right. And they find their way there with some help from their guides. Having gotten a better grasp of “The Hero’s Journey,” I feel like I can pull more out of these books. And oddly, I think they’ve shown me how much more life mirrors The Hero’s Journey than I thought.
1Q84 by Haruki Murakami – This year, I heard Joseph Campbell’s advice that if a book really resonates with you, you should read everything else the author has written. His claim was that you’ll get a lot more out of the books, and be more likely to spot trends, techniques, and get a sense of what the author does. I’ve decided to keep reading Murakami books until I get burned out, or life gets in the way. About 1Q84: This is another Murakami book with 2 threads wrapped around each other, featuring young people with a special and underrated talent, who learn to use this talent to support themselves while pursuing a desire for a more meaningful existence, ultimately growing into a new and fully-realized self. That’s a trend I’ve noticed with his writing. Specifically, 1Q84 is more surreal and fantastical than the other two books I’ve read of his (Windup Bird and Hard-Boiled Wonderland). The writing (as always) is beautiful and just flows wonderfully. I want to be able to write like he does. What a gift! He must have taken years and years to develop that. Tens of thousands of hours. It made me want to try writing something of fiction (vs nonfiction explanations, evaluations, and philosophy) where that kind of beauty can come out more.
Behavioral Investment Counseling by Nick Murray: (finished), really good insights and perspective from someone who’s been in the financial planning business for a long time. Takeaways: never engage in anything less than a long-term view that gives retirees income that grows faster than purchasing power. Don’t dignify requests for a “market call” with a response. 84% of people with over $5MM net worth (excluding their home) started with nothing, and compare their current situation to where they started. Business owners especially relate strongly to exactly where I am today, because it mirrors a defining transition moment in their lives.
Millionaire Next Door: In progress. It has some good wisdom for minding your lifestyle, living frugally, and the long term wealth building that happens when you live within your means. It has some interesting advice on how to do that. The concept of buying a car that offers the best “price per pound” was particularly memorable. Though I’m not sure whether math works out in terms of lifetime ownership costs, weighed against fuel economy, the broader point, of buying quality goods makes sense.
Snowcrash by Neal Stevenson – Reading this, I felt like I was only ever seeing one fragment of the story at a time, until they all came together in the last 100 pages. That might sound amazing, but it felt kind of frustrating, felt lost. What kept me going was the punchy, original writing style. Preposterously overwritten but fun and vivid. Like the textual equivalent of Calvin’s “Tracer Bullet” cartoons within Calvin and Hobbes. Stevenson makes some entertainingly reckless predictions about the corporatization of the world, and the creation of vast worlds and avatars on the internet. Fascinating to think he wrote this in the late 80’s and early 90s’s. I honestly thought it was written around 2010 or so, but he wrote it back in the days when the internet was basically just email. It could have been written yesterday and been as relevant, so it could very well become a classic. Earlier, I noted that it comes off as a little far-fetched (people won’t lose all appreciation for everything that isn’t fast-food and ultra-materialistic, probably), but then the other day I went into a domino’s to pick up a pizza, and felt like I’d been thrust back into the world of the book. It was such a surreal experience. Also, interesting to think about ideas in terms of a self-replicating virus, which can direct behavior. So much of our lives are run by scripts, and his characters see the world around them as one which is pretty mechanical in nature. Its inhabitants are indifferent to anything else but what’s going on in their lives, which is a funny but probably fair take on our species. Stylistically, I give it five stars. Fun for his writing and the sheer oddity of his world. The story, though, is a lot less compelling. I finished the book feeling like I missed a lot of what it had to offer.
The Accidental Superpower by Peter Zeihan – I picked this up after listening to Zeihan’s interview on Patrick O’Shaughnessy’s podcast. Just fascinating! The central theme is that the world of post-1945 has been largely enabled by America’s pronouncement at Bretton Woods that it would protect global free trade for all countries that didn’t join the Soviet Union. America was in a position to make (and keep) this promise (and it still will be for many years to come) largely because of its geography which endows it with cheap shipping, abundant harvests, and insulation from global strife. Meanwhile, most other countries are poorly situated for when America realizes it can meet most of its needs internally and scales back its promises to preserve the global order. The podcast with O’Shaughnessy is a good starting point: http://investorfieldguide.com/zeihan/
The Tao Jones Averages: Parts of it were a little outdated. For instance, I don’t know how much the “left brain = analytical, right brain = intuitive” stuff holds up to scrutiny. However, I think the gist of it is that we miss opportunities when we make decisions that need to be justified on a strictly linear, logical, objective, and explainable basis. As so often happens in all areas of life, by the time the data arrives, the opportunity has disappeared. Sometime you have to take the leap. You open yourself to the work being done by your subconscious mind, and you might find that you are led to some very interesting, unpredictable, and profitable places. For instance, if there’s a product you know, and it seems cheap relative to its quality, that’s information you can use. That company can, after all, raise prices and cause every extra dollar of revenue to flow straight to the bottom line. Warren Buffett has remarked that this is his favorite type of investment. Likewise, you might look around the world, and creatively imagine the way the world might look in 5 years. Data might inform your hunches, but all the deep-thinking is done by you. And the most important part is done without a spreadsheet. Such hunches are a little emphemeral. I bought Nike shares because one day while I was running in a pair of Nike shoes I thought, “isn’t it amazing that I can buy the feeling of being faster and fitter? These are excellent shoes, but it’s the swoosh that makes me feel swift!” You realize things about the quality of a brand, the gut-feel you have with a business…sometimes you notice that you haven’t seen anyone carrying a McDonald’s bag for a while, and you ask yourself questions about it until you come to some better understanding, and you use THAT understanding (not what analysts have told you about same-store sales) to make a decision.
Win Bigly by Scott Adams: (finished!) Really fun, and it actually made me feel more comfortable with the idea of Trump in the White House. For one, Adams does a good job dispelling the notion that Trump is the next Hitler. Generally speaking, 70 year olds do not wake up one day and decide to be Hitler. Too, the notion that Trump is utterly incompetent may be overblown. He is a “Master Persuader,” and is also more skilled at finding good risk-reward opportunities than you might think. He’s outrageous, but by design. His antics have long been used to drive publicity for the Trump brand, and that hasn’t really changed.
All that said, it isn’t that political of a book. The biggest value is that it helped me question my assumptions about how people think. In fact, it challenged my understanding of how I think. You’d think you’d know the contents of your own brain, but what often happens is that we make up stories to explain the emotional impulses that arise in our brains. Frequently, when faced with limited data, we are unable to admit “I don’t know,” and use the (irrelevant) information available to make our judgments.
The 2016 election (and Trump in general) make for really interesting case studies. As Adams others have noted, in Trump, you see what you want to see. This hurt Clinton’s campaign, because they couldn’t conceive of how anyone would see things any differently from how they did. Moreover, characterizing your opponent as “the next Hitler” is reckless, particularly in our world of echo-chambers. Why? Because you are giving people moral license to commit violence against anyone they disagree with. Wouldn’t you have the obligation to kill Hitler or Goebbels if you could, or at least attack their most vocal supporters? So a not-insubstantial number of people became so certain of their own righteousness that it became (and remains, in their minds) acceptable to attack their fellow citizens. Fuck that. On that note, a word of caution: Emotions run high around elections, and you will probably lose touch with the more mundane, accurate view of reality. And however upset you get, you won’t change the outcome in a positive way, and you might end up doing damage to your own life. Worse, however upset you are, there is probably someone who is 2-3x more upset. These people may be out in public on election night. If you thought New Years Eve was a dangerous night to drive, you should try New Years Eve levels of drinking, combined with furor. The best thing to do is to avoid it (including avoiding contact with your more reactive friends and family until they’ve had time to calm down). People can be just as destructive when they are manic as when they feel betrayed. So I’d recommend staying home, enjoying a nice book, and a glass of scotch to toast our boring, slow-moving system that somehow manages to endure these psychos year after year.
Lastly, Adams has an interesting take on voting (or not voting). When you vote, you essentially join a team, and it becomes very difficult to unplug yourself from the team’s thinking. You can’t regain your old worldview. You see this among comedians and actors who are particular fans of one candidate or party; they just aren’t that funny or relatable. For me, given all the emotional turmoil of voting, and the resultant “doom-or-gloom” thinking that persists for weeks afterward, I think I might stop voting too. Just as Adams needs to maintain objectivity to write relevant and entertaining content, I need to remain detached and objective to do my best work for clients. My job is basically to be a long-term realist (in a situation when the long term is actually pretty optimistic).
The Core by Peter V Brett: Great end to the 5-part series. I’d give it an 8/10. Would recommend to anyone who likes reading fantasy.
The Game of Numbers: Prospecting for Professional Advisors by Nick Murray: This is one of the few books worth keeping and rereading frequently. Prospecting seems to have a slimy reputation, and maybe that’s merited. Yet, prospecting is the real work of a financial advisor. You’d think it’s about managing money, or avoiding financial catastrophe, or somehow working face to face with the client.And those things are undeniably important once you’ve created that relationship. But all the knowledge in the world is useless if you can’t get people to trust you enough to take action. Too, out country is filled with probably 100 million or more people who are unserved by any kind of financial advice. It’s not about competing with other advisors half as much as it is about reaching the people who haven’t been reached yet and bringing them into the fold. Even the most basic level of expertise will let you do a lot of good for these people. Lastly, he points out the very thing that led me to financial planning away from medicine: a doctor cannot “save” a life, they can only forestall death. Once their health problems have been resolved, a patient will go back to whatever their life was like before their ailment struck. In many cases, that’s a tremendous blessing as there are few things that impact your quality of life as much as bad health. Yet, the best that doctors can offer is a return to the status quo. Read that last sentence again. That is the discouraging thought that turned me away from medicine, particularly because many patients don’t have a great quality of life prior to coming in. They aren’t moving towards their goals, they aren’t building their resources and capabilities, and they have no prospect of leveling up their lives. They are existing, but not growing. And certainly not dreaming. Financial planning, meanwhile, is predicated on growth. On giving people what they need to have really exceptional lives in line with their wildest dreams. It can give focus, meaning, security, abundance, and freedom! And it gives all these things in a positive, transcendent sense, not merely by removing obstacles. It’s not about the money, it’s about the better life you can have because of the money. So that’s what I’m selling. An improved state of existence. Another note from the book: when you are operating at capacity, there are only so many people you can help (somewhere between 100 and 200 households). Murray talks about building an ark to travel to the promised land, while pointing out that there are only so many seats on that ark. And that the ark is an enclosed space, where you are stuck in close proximity with your passengers. So as much as they are evaluating you, you are evaluating them.
The 5 Love Languages: Everyone should read this, even if they just skim it. It’s about why it often feels like the love dies after the wedding, and what you can do to make the relationship stay good. Specifically, it does so by exploring the different ways love is expressed and appreciated. He breaks it into 5 distinct languages (physical touch, gifts, words of affirmation, acts of service, and quality time), which aren’t necessarily mutually exclusive, but most people theoretically have one that dwarfs the others. I don’t know if it’s always that clear cut, but reading this book and talking to Michelle, I definitely think that some activities have a much higher payoff than others. Using myself as an example, a language that speaks loudly for me is “words of affirmation.” Receiving a single compliment or getting any little encouraging note makes my entire day. I feel loved when that happens. Conversely, the absence of those things feels like people don’t believe in me, and that feels really discouraging. Worse, I don’t feel supported or appreciated. And, while kind of melodramatic, an absence of nice words starts to feel like, “why bother, just crawl into a hole and die, no one likes what you’re doing.” The impacts of physical touch, or acts of service, by contrast are just not as noticeable. Here’s how real it is: if Michelle spent 2 hours cleaning my car out, I would find that less emotionally impactful than her saying, “hey, I know you’re tired and you’re working hard, but I am really proud of you and I think what you’re doing is a good idea.” The trick to love languages is that not everyone speaks the same languages naturally. Saying those words might not occur to Michelle the way that doing me a nice favor might, or the way it might strike her to give me a backrub. Likewise, all the nice things I could ever say would probably mean less to her than my sitting with her, listening wholeheartedly, and giving her a footrub. Since the recipient can’t really choose what thrills them, it is up to the giver to figure out how to package their love in a way that can be appreciated most (just as in business).
Moment of Lift by Melinda Gates – There are many, many examples of situations around the world where the capabilities of women are stifled, and this is especially pronounced in poorer countries. But that’s not what made this book interesting. What Melinda Gates talks about that sticks with me is the mindset of her organization as it approaches making a difference in radically different environments. Specifically, she is aware of how many failures have resulted from aid organizations swooping in from on high, proclaiming the best way to do things, and leaving a mess in their wake. I noticed that even in her own stories, she is not the star of the show; she is a learner and a helper. This seems pretty essential, since she makes clear that the causes of poverty (and the plight of oppressed women) are often intertwined with cultural norms that are difficult to change, particularly from the outside. Yet, there are many instances where a nudge from the outside, or supporting a courageous local group can lead to profound changes culturally and economically. Finishing the book, my first thought was, “I should write a check to the Gates Foundation!” I like their humble approach and feel like they have the right attitude about how to really improve lives in a lasting way. Wouldn’t it be incredible if someone born in rural India had the same opportunities as someone born to a middle class family in Portland? What if we could double the productivity (and income!) of the poorest 10% of the world’s population? Wouldn’t that expand opportunities and quality of life for everyone around the world? My next thought, though, was a little discouraging. And it was this, “Bill Gates is the guy who, for much of my life, was famous moreso for being rich than for creating Microsoft. Likewise Warren Buffett. And both these men have dedicated something like 99% of their fortunes to the Bill and Melinda Gates foundation. So is money what they really need?” Moreover, I don’t have capacity to take on any long-term project with the organization. So what I’d like to do is use my website and podcast to figure out what they need, and share that with the people in my life, so that if someone in my network has the capacity and the willingness to make a bigger commitment to the Gates Foundation, I can still do some good through them.
Good to Great by Jim Collins: I have a few issues with the methodology of his study, so I’m not entirely sure that every company they got was genuinely a great company, and I think they likely overlooked many great companies. They screened for great companies by identifying those with stock price performance that far outstripped the S&P500 index, as well as the industry they belonged to (such as automakers, medical equipment, railroads, etc). All that said, I think Collins probably got a few things really right, and I do think these lessons can be applied fruitfully by business leaders and entrepreneurs.
One of the most memorable and widely referenced concepts is “getting the right people on the bus.” There are a million ways this can play out to make the company more successful, but here are a couple. First, you need to run the organization for the benefit of the best, hardest working, most competent people. If you do so, they will stay. If you do not explicitly prioritize them, they will get frustrated and leave. Why is that? Because work only gets done by great people. Mediocre people take up space, cost money, and don’t produce. This frustrates the great people, who are doing 10x the amount of work of a mediocre person, but are still “valued” by the company as roughly equal in value to their underperforming peers. Solution: fire all the mediocre people, or better, move them to positions where they can excel. Sometimes you just need the right fit for someone, but other times, you’ll find that the right fit doesn’t exist in your organization and that the best way to accelerate someone’s career development is to push them to find opportunities outside the company.
The Stockdale Paradox. This comes from the story of James Stockdale, a Vietnam prisoner of war. He observed that those fellow prisoners who were least likely to survive were also the most hopeful. Hope can only be sustained for so long before it is beaten out of us by an unrelenting situation. And if there is nothing left underneath to keep us going, the only thing left to do is die. Meaning, by contrast, can be found in even the most hopeless situation, where it gives strength through a reason to carry on. (side note – this mirrors what Victor Frankl shared about his experience as a Jewish prisoner in Auschwitz. Hope leads to despair, to death. Meaning endures.) Great leadership is honest about the facts. Difficult facts, confronted head on, lead to greater strength and capability.
Burn the ships behind you. This has been done by a number of great generals throughout history, as well as by a number of great CEOs. Probably, there have also been a number of incompetent idiots who took on too big of a challenge, without evaluating their situation objectively, and who cut off their only escape route. These idiots failed and/or died. The idea, though, is that you are entering a situation where failure probably leads to death either way. Maybe your company’s old way of doing things is no longer economically viable, maybe a military defeat would cause the death of 90% of your army by the time you get back to the boats. In some situations, the safest move is to bet it all. Losing almost everything isn’t much better than losing everything. Too, keeping that option available may impair your ability to achieve victory. So long as people think another option exists, they will continue to redirect time, energy, attention, and other resources away from what matters most. If you take that other option away, they have no choice but to commit all their efforts where you want them committed.
How to make sure you’re taking good care of your customers, from Graniterock’s Short Pay exercise. I’ve rarely seen a technique with so many different ways to win, and very few ways to lose. In fact, even when you lose, you win. Here’s what it is: You give customers full discretion over whether, and how much to pay on their invoice. It is not a refund policy. Instead, the customer circles those items on the invoice where they are dissatisfied, or felt they did not receive the full benefit of the service, preferably with a short note. They deduct these items, or a percentage of these items from the total, then return the invoice with a check for the amount remaining. How ballsy is that? It’s as if you’re handing the customer a loaded gun, helping them hold it against your head, and saying, “feel free to shot me, if you like.”
You’re probably imagining one of a few, vivid ways this could hurt the business. But let me direct your attention to what’s happening over the long term. First, you’re getting the most granular feedback money can buy. In fact that’s literally what you’re doing: buying complaints. Because of that, you know exactly where you (your business operations, your product, etc are falling short). Second, falling short in any of these areas is so immediately painful that it cannot be ignored. You and your employees can shrug off a complaint or a dissatisfied customer. But you cannot shrug off foregone revenue and cash flows (especially if you end up taking a loss on the project as a result!). The issue immediately gets flagged and handed to someone who has every reason in the world to fix the problem such that it never happens again.
But, you’re thinking, what about the people who will abuse this system? Some people will never be happy, no matter how hard we try; they’ll say anything to save a buck! That’s true. Everyone has bad clients: people who take more than their fair share of your time, money, patience, and emotional well-being. The difference is, not everyone can identify these clients. And even if they can, many business owners are willing to tolerate these bad relationships for the sake of the revenue they bring in. What the Short Pay exercise does, though, is make it impossible to justify that relationship, at least in its current, abusive form. It highlights the opportunity costs of serving that bad client, and it does so with the razzle dazzle of a 4th of July Parade (complete with flyover by the Blue Angels). Whether or not you let that bad client nickel-and-dime you, they will be a thorn in your side. They will squeeze your margins wherever they can, they will fight every charge and price increase, they will complain most loudly, and they will make you so upset that you can hardly sleep at night. And the worst part is, every bit of attention and resources they take from you, is attention and resources you can (AND SHOULD) be investing in your business, taking care of your best clients and trying to find others like them. Your best clients are fair, honest, and helpful. They might even care about you on a personal level, and want to help you out. They’re so happy with what you’re doing that they’ll tell their friends about you (and heads up, their friends are probably also GREAT CLIENTS; awesome people don’t hang out with shitty people).
Over the short term, this is a painful and expensive process. But over the long-term, it leads to a better quality business with more accountability at every level. It leads to better relationships, and highlights the best of your existing relationships. BUT WAIT THERE’S MORE! Because you’re doing better work, for people who appreciate you most, you can’t help but be more profitable, and you can’t help but grow faster than you were before. You’ll dial in exactly who your ideal customers are and what exactly they need done to feel thrilled with the value you’ve given them. Your client attrition will trend downwards, and your referrals will trend up! That’s the power of getting the truth from your clients.
Trillion Dollar Coach: Could skip it. I was hoping it’d have some specific insights about what made Bill Campbell such a great coach, but all it really had were a bunch of “Bill was so great, he could….” “this one time Bill walked into a meeting, said 2 sentences and completely changed our minds.” How? How did he do it? What was his thought process? What was the groundwork he laid so that he could do that. It’s like going to a basketball clinic and spending the whole day in the bleachers listening to guys talk about how great Michael Jordan is. “This one time, he dunked from the free throw line!” Yeah, how about some tips on my free throws?
Fanatical Prospecting by Jeb Blount: Really interesting, really useful. Gets your head straight about how to make sales, how to treat it as a professional would, and how to grow your business. I’m in an interesting situation because I’m not just looking for clients, I’m looking for great clients. This is because I have capacity for at most 100 clients at a time, and the relationship tends to be long-lived. I’m prospecting, not just to drive business and make a sale, but to sift through enough people that I find a collection of those I genuinely enjoy working with.
Tao of Pooh by Benjamin Hoff: Really enjoyed it. It’s a surprisingly good introduction to elegant Taoist principles. I think a lot of people get stuck in their own heads, both generally and with regard to philosophical ideas. Taoism suggests there is a balance to all things, a virtue to inaction, a strength through submission.
Tao te Ching by Lao Tzu: Worth owning. I think a lot of times we struggle too hard to get what we want, and find that our efforts only move us further from what we really wanted. With this struggle comes inauthenticity, disappointment, and exhaustion. By treating life as a dance, which flows between multiple states, you can be more productive and peaceful. When you are in harmony with the world, results and action spring forth from you, moving you in the direction of what is right.
Kind of wonder how it translates between Chinese and English. The footnotes say that many of the symbols can mean multiple things, and that they’re deliberately positioned to contain many meanings simultaneously. The fact that they’ve been converted into a linear, English sentence means you have to reconstruct the meaning yourself, reading and rereading it until you get an interpretation that holds true across all the lines in a stanza.
Small Giants by Bo Burlingham: Worth a read, not worth owning. Helpful for values-based business creation. What impact do I want to have on the world? What will I do, and what will I not to in pursuit of that? Who do I want to be? These are essential questions to consider and to answer if you want to create a great business. With a specified identity and goal, you can be exceptional. If you have no such identity, how do you make decisions that harmonize with each other?
The book also features a collection of business owners whose primary goal was not profit for profit’s sake, but profit in the pursuit of a higher goal. Worth noting, some of the businesses were unprofitable by design (beyond paying the owner a salary). While that may seem commendable to some, these businesses ran into a lot of trouble and eventually went through bankruptcy. They sacrificed profitability for the sake of the workers, and collapsed.
Conversely, there is a story of a business that sacrificed it’s values for higher revenues. It ran into trouble too, because it was suddenly playing a game it wasn’t suited for. Previously, the company was designed to make high margin, high quality parts, and actively turned away business that would compromise its gross margins. When new leadership took over, they lost track of the company’s identity and ran the company into the ground by not saying no to an opportunity that expanded revenues, but didn’t ultimately expand profits. In fact, they committed so much capital to building out that low-margin capacity that they ran the company into bankruptcy.
Long story short, business is hard. Even harder when you don’t have a compass, and harder still when you don’t emphasize profits.
Harry Potter 2,4,7: Listened to the audiobooks by Jim Dale. They are not just enjoyable, but deeper than you’d think. Having listened to nearly every one of Jordan Peterson’s lectures, I feel I’ve discovered a better understanding of storytelling and story structure. There’s just so much more to notice in these books when you read them through this lens, and I think that depth is a big part of their success.
For instance, I noticed that Fred and George Weasley (pranksters and eventual business tycoons, owning a Joke/Novelty Shop) aren’t just the comic relief, they’re the embodiment of what happens when you treat life as a game. You can have tremendous success, of course. But you might also end up dead. That just one of them dies, drives home this dynamic, I think.
What I talk about when I talk about running by Haruki Murakami: Running and writing are both endurance sports. The grind of each is very similar.
How We Got to Now by Steven Johnson: Walks through 6 innovations we take for granted that have shaped our world. Super interesting, I love this sort of thing. It’s sort of a “history of technology” thing, that filled in a couple spots in my mental map of how the world works and “How We Got to Now.”
Evidently, whale oil was quite the innovation of its day (being preferable in quality to tallow candles ( made from smokey animal fat), and preferable in price to beeswax candles. This is the arch of capitalism and innovation that people don’t seem to grasp. Our system makes things cheaper and vastly more abundant. Formerly, a couple hours of artificial light cost roughly a couple hours of extra work (which people couldn’t do because they had no light to do it by). But artificial light has gotten cheaper and cheaper over time to today where we basically take it for granted. Our electric bill is not so much the lighting bill as it is the washer and drier and appliance bill. That’s how cheap (basically free) light is. This was such an innovation that between 1700 and 1850, people harvested roughly 300,000 whales from the ocean. I didn’t even know there were that many whales in the first place. Setting aside your sense of environmental conscience, consider how hard it would be, logistically, to hunt whales today, and then imagine how hard it would be in wooden ships, with sails, and without sonar. Kerosene turned out to be an innovation that saved thousands of whales, not due to environmental consciousness, but due to price. Yes, at one point, fossil fuels were the best thing to ever happen to whales.
The Power of Positive Thinking by Norman Vincent Peale: It works to an extent, but I don’t think your thoughts literally alter the world. I just think they shape your reality. If you set goals, for instance, you’ll discover ways of achieving them, but it’s unproductive to obsess about your thoughts, “am I going to make something bad happen by worrying about it?” No! Think it through, do what you can, and move on! The real power of positive thinking, as I see it (and maybe this is what he is talking about anyway) is that it improves your approach. That means better creativity and ability to see solutions, more enjoyable interactions with people who can help you, and the physical energy to get things done.
Kafka on the Shore by Haruki Murakami: Not bad, but not great either. Kind of a typical Murakami novel. I’m chasing an old high at this point.
The E-Myth Enterprise by Michael Gerber: There were a couple useful things here. One shift in my thinking: a great business is not about great people, it’s about making people great. That means systems, training, resources….anything that lets people do a great job, without requiring them to be a genius at the role. Think of telling a crew of 5 random people that they have to sell 1000 items in one day, from a menu of 30 items over which they have no say, and make a profit doing it. Most would fail. Heck, most restaurants fail even with total control of the process and venue from top to bottom. Yet McDonald’s is insanely profitable. Why? Brand (which is it’s own process) and processes.
The Speed of Trust: In progress. I’m really finding it useful. The biggest thing is the time you free up by trusting people to do the right thing. Admittedly, you sometimes get burned, but it’s worth the time and energy you no longer have to devote to butt-covering, and nagging. Trust has many components and many benefits. It’s well worth adhering to this way of living.
How to Retire Happy, Wild, & Free: I’ve gotten a lot of recommendations from other advisors to check this out, but it’s kind of in the “no shit,” category for me. Basically, design your life in such a way that you have something to retire to, not just retire from. This is a conclusion I arrived at early in life (shortly after college), and while it’s nice to have it validated, it’s kind of stunning that it isn’t an obvious way for an advisor to be really useful to their clients. Just by getting people thinking about the life they want, such as through a couple exercises I like to use on people, you can hugely expand the range of good possibilities for them.
Firestarter by Stephen King: Enjoyable read, pretty exciting and fun. There’s a reason this guy is such a successful author.
Why Nations Fail (didn’t read)
Hero of a Thousand Faces (didn’t read)
How Much is Enough (didn’t read)
Elon Musk Biography (didn’t read)
The Non Designers Design Book by Robin Williams (didn’t read)
Life Planning For You: How to Design and Deliver the Life of Your Dreams by George Kinder (didn’t read)
Transforming Suffering Into Wisdom: Mindfulness and the Art of Inner Listening by George Kinder (didn’t read)
Devil Take the Hindmost (didn’t read)
The Great Depression: A Diary (didn’t read)
Neuromancer (didn’t read)
The Fountainhead by Ayn Rand (didn’t read)
Heartbreaking Work of Staggering Genius (didn’t read)