The Best Books I Read in 2023

I skipped this last year for some reason. But I’m back with the best books I read in 2023. Some business, history, longevity, investing, and a little golf. View past lists (2017 through 2021) here. Enjoy!

1/ Killers of the Flower Moon: The Osage Murders and the Birth of the FBI by David Grann. In the late 1920s, the Osage Indians in Oklahoma were the richest people in the United States. This wonderful book chronicles terrible crimes committed against various tribes and the formation of the FBI that ultimately solved and exposed the atrocities. You forget that the FBI (and police departments in general) are a 19th and 20th-century phenomenon. Apparently, they just made this book into a movie. Looking forward to it.

2/ Going Infinite: The Rise and Fall of a New Tycoon by Michael Lewis. The story of Sam Bankman Fried and the collapse of FTX. I knew most of the story before reading this one so I didn’t learn all that much but Michael Lewis is just so good. More people would read if more authors wrote like him.

3/ Greatest Game Ever Played, The: Harry Vardon, Francis Ouimet, and the Birth of Modern Golf by Mark Frost. I’ve been meaning to read this one for a long time. The story of a young caddie who wins the US Open in Brookline, Massachusetts, against all odds. Tremendous read.

4/ Outlive: The Science and Art of Longevity by Peter Attia MD. Sort of a bible for those interested in longevity (we all should be!). He dives deep into what he calls the Four Horsemen, or chronic diseases of aging: heart disease, cancer, neurodegenerative disease, and type 2 diabetes. Fun fact: for every human over the age of 100, there are about nine billionaires.

5/ The Intelligent Investor: The Definitive Book on Value Investing by Ben Graham. I read this because I saw that Warren Buffett said that chapters 8 and 20 are the “bedrock of my investing activities for the last 60 years.” The whole thing is good. Lots of fundamental truths investors need to know.

6/ The Little Book of Valuation: How to Value a Company, Pick a Stock and Profit by Aswath Damodaran. A great primer on how to value companies. It's sort of a textbook, but it doesn’t go too deep and is a relatively easy read on the fundamentals of companies at the earliest stages to post-IPO.

7/ When Money Destroys Nations: How Hyperinflation Ruined Zimbabwe, How Ordinary People Survived, and Warnings for Nations that Print Money by Phillip Haslam. An excellent history of the inflation crisis in Zimbabwe where the government was forced to raise interest rates to over 5000% to bring it under control. So many factors contributed to this crisis, not the least of which was the terrible wars in Zimbabwe that took so many men out of the workforce and forced the government to provide enormous amounts of government assistance, contributing to massive increases in prices.

8/ A New World Begins: The History of the French Revolution by Jeremy D. Popkic. I guess I never studied the French Revolution in school because this was mostly new content for me. Just a fascinating time in history and such an important step forward for liberal democracy across the world.

9/ The Managerial Revolution: What is Happening in the World by James Burnham. A fascinating and important book written in 1941 on the shaping of society that has turned out to be very true. Burnham argues that capitalism is dead and that it has been replaced not by socialism but by a new economic system called managerialism — rule by administrators in business and government.

10/ Principles: Life and Work by Ray Dalio. Really solid insights and perspectives from the founder and CEO of Bridgewater Associates. He talks a lot about truth-seeking, which is so critical to be successful in business. He pushes the reader to be “radically open-minded” and have a genuine worry that their ego might be getting in the way of seeing the world as it is and making the optimal decision. Great read.

The 10 Best Books I Read In 2021

2021 was another year that was largely dominated by COVID, which meant lots of time to read some great books. I continued my near-obsession with books about Navy SEALs and books on surviving in the ocean. Not sure what that's about. Anyway, here’s this year’s list. Find past lists here.

1/ The Company: A Short History of a Revolutionary Idea by John Micklethwait and Adrian Wooldridge. This is a great book on the history of the corporation. It tells the story of how and why humans formed LLCs and joint-stock companies from ancient Mesopotamia to the multi-national corporations of the 1980s and 1990s. In short, without these structures, we'd have very few of the innovations we enjoy today. Entrepreneurs need legal protection to be able to take risks and innovate. This is a brilliant summary of the history of how we organized ourselves around these ideas. I only wish it was longer and went a bit deeper.

2/ A Speck in the Sea: A Story of Survival and Rescue by John Aldridge and Anthony Sosinski. I'm not sure what it is about these survival stories, but I love them for some reason, and this one was great. It tells the story of a fisherman thrown off a boat in the middle of the Long Island Sound in the middle of the night while his friend was sound asleep below deck and the subsequent search-and-rescue mission. It's a well-written, enjoyable read. I can't imagine what he went endured out there alone at night in the middle of the ocean in complete silence. 

"You forget that you hear waves only when they ride up on the shore; in the middle of the ocean you hear nothing. The silence is deafening."

3/ The Art of Impossible: A Peak Performance Primer by Steven Kotler. I really enjoy Kotler's books. Really interesting, motivating, and data-driven research on human performance and people accomplishing things they never thought they could through what he calls a quartet of skills — motivation, learning, creativity, and flow. The book talks a lot about meaning and purpose at work, which is so important for leaders to remember. From the book:

Once people feel fairly compensated for their time—meaning once that number starts to creep over $75,000 a year—big raises and annual bonuses won't actually improve their productivity or performance. After that basic-needs line is crossed, employees want intrinsic rewards. They want to be in control of their own time (autonomy), they want to work on projects that interest them (curiosity/passion), and they want to work on projects that matter (meaning and purpose). 

4/ Finding Ultra: Rejecting Middle Age, Becoming One of the World's Fittest Men, and Discovering Myself by Rich Roll. I've been listening to Roll's podcast for a while now and finally got around to reading his memoir. A well-written account of his transformation from an out-of-shape 40-something to an ultra-endurance athlete living a plant-based lifestyle. 

5/ Shoe Dog: A Memoir by the Creator of Nike by Phil Knight. I've been meaning to read this for a few years now, but I didn't expect how great it would be. Awesome book. A really enjoyable story, even if you're not interested in shoes or business.  

6/ Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail by Ray Dalio. In this dense and somewhat disturbing book, Dalio studies the repeating patterns of the major underlying shifts in wealth and power over the last 500 years. A very, very important book for investors to internalize to have a point of view on how things might play out in America and other highly developed countries over the next couple of decades. From the book:

”I've learned that one's ability to anticipate and deal well with the future depends on one's understanding of the cause/effect relationships that make things change, and one's ability to understand these cause/effect relationships comes from studying how they have changed in the past."

7/ The Attributes: 25 Hidden Drivers of Optimal Performance by Rich Diviney. Diviney is a former Navy SEAL commander that argues in this book that we need to evaluate people on attributes rather than skills or experience. Things like grit, drive, teamability, mental acuity, and leadership. I've become really interested in Navy SEAL training and how they weed out candidates. This book gives a glimpse into how it works. SEAL's go through a training period called 'Hell Week' where they weed out the majority of candidates. They keep recruits awake for most of the week. They'll make them carry huge logs across a wet sandy beach for hours in the middle of the night and then tell them that they can rest once they're done with the log training. But then they change their mind and tell them to do a 2-mile swim in the cold ocean in the pitch dark. I'm fascinated by the type of person that doesn't just quit but instead wades into the water to complete the swim. What do those people have in common? The book doesn't fully answer that question, but it does give some great insight into what separates the highest performers from the rest of the pack.

8/ The Death and Life of Great American Cities by Jane Jacobs. This is a very dense and masterful deep dive into the ingredients involved in successful urban planning. As someone that has lived in big cities for the last 20+ years, I found myself nodding in agreement at the endless insights inside this book. Really well done.

9/ How Innovation Works by Matt Ridley. This is a book about the conditions that drive innovation, from antibiotics to automobiles. He argues that innovation doesn't come from top-down, corporate or government programs. Instead, it comes bottom-up via entrepreneurial capitalism through relentless tinkering and iteration. An easy read with countless useful examples. 

10/ Angel Investing: The Guide to Making Money and Having Fun Investing in Startups by David S. Rose and Reid Hoffman. This is the bible on individual investing in startups. A really comprehensive guide that covers every topic you need to know related to this extremely risky investment category. Written in 2014, the book is somewhat dated given the madness surrounding venture investing over the last few years, but all the fundamentals are covered with some great frameworks on how to manage risk.

Finally, I didn't read a lot of fiction last year, but I did get around to reading Angela's Ashes by Frank McCourt. Obviously not the most uplifting book, to say the least, but the writing is just phenomenal. Highly recommended.

Hope you enjoy some of these.

Best Books For New Sales Leaders

The other day a friend of mine asked me what books an individual contributor that just took a sales management job should read. Here's what I told him:

For tactical management, I’d have to recommend the Effective Executive by Peter Drucker. I try to read it every few years.

For higher-level leadership concepts, I’d recommend Leadership and the Art of Self Deception: Getting Out of the Box by the Arbinger Institute. 

For culture, read What You Do Is Who You Are: How to Create Your Business Culture by Ben Horowitz.

And for tactical sales process and leadership, definitely read The Sales Acceleration Formula: Using Data, Technology, and Inbound Selling to go from $0 to $100 Million by Mark Roberge. 

The 10 Best Books I Read In 2020

2020 was a year to remember for a lot of reasons…but that's a topic for another day. Today I'm talking about the best books I read last year.

I read some great books on business, history, self-development, healthcare, politics and lots of other topics. I also developed a minor obsession with Navy SEALs and how they train and as a result ended up reading a bunch of books about their training and missions. I find this community to be fascinating. Their dedication to something larger than themselves and to their self-improvement and being the best in the world is just incredible. While obviously very, very, very different, I do think that much of the way they go about their training is applicable to the startup world. I'll try to write a post on what I mean by that at some point.

Anyway, here are the best books I read in 2020. You can find past lists here.

1/ The Almanack of Naval Ravikant: A Guide to Wealth and Happiness by Eric Jorgensen. I wrote a short post on this the other day. Naval is the founder of Angellist and is just an incredibly insightful person. I couldn't put it down and probably made more notes and highlights than any book I've read. From the book:

"When you’re young, you have time. You have health, but you have no money. When you’re middle-aged, you have money and you have health, but you have no time. When you’re old, you have money and you have time, but you have no health. So the trifecta is trying to get all three at once."

2/ SEAL of Honor: Operation Red Wings and the Life of LT. Michael P. Murphy by Gary Williams. Michael Murphy grew up on Long Island dreaming of being a Navy Seal, and he became one of the best. He died in an operation in Afghanistan that was depicted in the movie Lone Survivor. Such a pleasure to read about this incredible person. This quote from the SEAL ethos really underscores the amazing commitment these guys make to our country:

”I will never quit. I persevere and thrive on adversity. My Nation expects me to be physically harder and mentally stronger than my enemies. If knocked down, I will get back up, every time. I will draw on every remaining ounce of strength to protect my teammates and accomplish our mission. I am never out of the fight. We demand discipline. We expect innovation. The lives of my teammates and the success of our mission depend on me—my technical skill, tactical proficiency, and attention to detail. My training is never complete. We train for war and fight to win. I stand ready to bring the full spectrum of combat power to bear in order to achieve my mission and the goals established by my country. Execution of my duties will be swift and violent when required yet guided by the very principles that I serve to defend. Brave men have fought and died building the proud tradition and feared reputation that I am bound to uphold. In the worst of conditions, the legacy of my teammates steadies my resolve and silently guides my every deed. I will not fail.”

3/ 438 Days: An Incredible True Story of Survival at Sea by Jonathan Franklin. This book was just nuts. I loved it. It's about a really cool guy that leaves the coast of Mexico for a two-day fishing trip and survives 14 months lost at sea and travels more than 9,000 miles before being rescued. Obviously, this is an amazing story of survival, but the writing is magnificent. You really end up feeling like you know this guy.

4/ 10% Happier: How I Tamed the Voice in My Head, Reduced Stress Without Losing My Edge by Dan Harris. I've believed for a while now that people will soon think of meditation the way they think of having a gym membership. We've known that we need to take care of our bodies for a long time. Now we're realizing we have to do the same thing for our minds. I started listening to Dan's podcast (also called 10% Happier) a year or so ago and I knew I needed to check out his book as well. It feels like meditation is taking over the world these days. For those of you that are new to it, this is a great way to get started. Dan is definitely the kind of guy that would think meditation is a silly waste of time. But he became obsessed with it. This book tells you why and how much it can do for our mental health.

5/ Invent and Wander: The Collected Writings of Jeff Bezos by Walter Isaacson & Jeff Bezos. I continue to be immensely interested in anything written by Jeff Bezos. He gets a lot of criticism these days but the money machine that he has built is unbelievable. There are some great insights in this one. Including the fact that the idea for Amazon Prime came from a junior software engineer. A great, quick read.

6/ The Operator: Firing the Shots that Killed Osama bin Laden and My Years as a SEAL Team Warrior by Robert O'Neill. This is the biography of a kid that grew up in Montana not knowing how to swim who broke up with his girlfriend, got angry, and decided to join the Nacy SEALs. Years later, he became one of the most decorated combat veterans in the United States and found himself standing face-to-face with Osama Bin Laden and his wife in the middle of the night at a house in Pakistan. This book is extremely well written and easy to read and really helps you understand how this warrior found himself in this spot.

7/ The Upside of Stress: Why Stress Is Good for You, and How to Get Good at It by Kelly McGonigal. This book was recommended to me by several people and I finally got around to reading it. It piles on top of some of the books I've read by Jim Loeher, who consulted for a company I worked with a while back, who thinks about stress as a muscle that you need to build. Just like your bicep, you need to strain it and then rest, and then do it again with more weight. Stress is similar. If managed well, it's a great thing for your health. This book helps you understand how to think and manage it that way.

8/ Leadership and Self-Deception: Getting Out of the Box by the Arbinger Institute. This one is kind of a clunky read. It's set in the form of a guy starting a new job and having conversations with his new boss and several other people in his new organization. But the lessons are wonderful. To lead well, we need to get out of our box and get inside of the context of the people we work with. This is extremely difficult to do but this book makes clear why it's so enormously crucial. From the book:

”When we find ourselves in situations of disagreement or conflict (which may have as its roots self-deception) we encounter the other person’s “box.” Each person then provokes the other and like a well-choreographed dance, we have the “dance of the boxes.” Each helps to create the very problems they blame the other for and justifies a reason for staying in the box.

It works something like this: let’s assume that you were just promoted to a manager’s position and assigned to lead a cross-functional team. You believe that a manager’s role is to achieve results and that it’s important to build a cohesive and trusting team environment. It’s your intention to do so. It’s now six months into your role as manager and things have not worked out as you envisioned. Team members are not collaborating, schedules are not being met and trust is low. If you were acting from within the box, seeing your team through the filter of self-deception, you would most likely see them as the problem and try to change their behavior. This is a common in-the-box problem-solving approach.

It’s important to note that being in the box does not mean that the team’s behavior does not need to improve. Remember though, when we’re in the box it’s a distorted view of other’s in which we place blame on them or circumstances to justify our self-deceit.”

We have to get out of the box!

9/ Blue Mind: The Surprising Science That Shows How Being Near, In, On, or Under Water Can Make You Happier, Healthier, More Connected, and Better at What You Do by Celine Cousteau. I've had an obsession with the ocean since I was a kid. Swimming in the ocean is a magical experience for me. I've always known there was some deep reason why. Blue Mind unpacks our obsession with being near the water. A great one for the beach.

10/ What I Talk About When I Talk About Running: A Memoir by Haruki Marakami. This is a fascinating memoir from an accomplished writer about his journey to prepare for the New York Marathon and the overlap he finds between writing and running. This is a fun, introspective read that I highly recommend.

I mostly read nonfiction, but I always like to end with a fiction recommendation. So I'll recommend Severance by Ling Ma. A fascinating, sort of apocalyptic book, about a woman who continues to show up at her Manhattan publishing job even as a plague takes over the city. Not typically my style, but a great one nonetheless.

I hope you enjoy some of these.

The 10 Best Books I Read In 2019

My wife and I celebrated our honeymoon in the winter of 2019 on the beaches of Thailand. That gave me lots of extra reading time. In 2019, I read some great books on business, history, religion, and lots of books on leadership. I even found a couple of fiction books that I loved. Below is a list of the top 10 books I read in 2019. See past lists here.

1/ Blitzscaling: The Lightning-Fast Path to Building Massively Valuable Companies by Reid Hoffman. An excellent book with practical advice that tells it like it is. Startups are beginning to get a reputation as glamourous. They aren't. They are really, really hard. Hoffman — an early employee at PayPal and the founder of LinkedIn — describes it this way:

"Starting a company is like jumping off a cliff and assembling an airplane on the way down; being resource-efficient lets you "glide" to minimize the rate of descent, giving you the time to learn things about your market, technology, and team before you hit the ground."

Blitzscaling is a great book, especially for those joining a startup for the first time. 

2/ The Tyranny of Metrics by Jerry Muller. I'm a big fan of metrics. I generally like to use them as the foundation of the work that I do. "If you can't measure it, you can't manage it," the old saying goes. This book is a quick read and gives several real-life examples of the danger of relying on metrics when the people that are reporting them are under lots of pressure. As an example, some cities will tout reduction in certain types of crimes due to pressure from the public. But when you dig deeper, you find that they're merely reclassifying crimes to lesser charges. This book is an entertaining reminder to be very careful about reacting too quickly to metrics. 

3/ Debt - The First 5,000 Years by David Graeber. Debt is a dense and long book that chronicles the history of debt going back 5,000 years before currencies, or even barter were established. It's incredibly instructive on how global markets came to be and what we can learn from the mistakes our ancestors made — highly recommended.

4/ What You Do Is Who You Are: How to Create Your Business Culture by Ben Horowitz. Horowitz's first book — The Hard Thing About Hard Things — will become a management classic. And this one might as well. Horowitz uses some great analogies to talk about modern-day management — including the Japanese samurais, the leader of a prison gang, and the slave revolt in Haiti during the 18th century. The bottom line is that you can put your company values on your website, and you can talk about them all the time, but if you don't practice what you preach, it doesn't matter. Culture is the output of a company's actions. Culture is about what you are, not what you want to be.

5/ Can't Hurt Me: Master Your Mind and Defy the Odds by David Goggins. This is an autobiography by David Goggins, who is the epitome of someone going from a horrible childhood with unspeakable physical and mental abuse and transforming his life into immense success. Goggins is a former Navy SEAL turned motivational speaker. The thing I like most about this book and that he transformed his life simply by changing his attitude, owning his inner voice, and taking full ownership and accountability for his actions and choices. An extremely intense and inspiring book.

6/ Reboot: Leadership and the Art of Growing Up by Jerry Colonna. I've been following Jerry's Reboot podcast for years. He's an executive coach and expert on getting the most out of leaders. This one gets pretty deep but it's one of the best books on leadership I've read in years. It forces you to look deeply at yourself and understanding how you became who you are. This is the starting point to the journey of becoming a better leader. I expect to come back to this one every now and then.

7/ VC: An American History by Tom Nicholas. VC is a great book on the history of the venture capital industry. From the whaling ships of the 1800s to modern-day Silicon Valley, this book covers everything. A great, comprehensive overview of this increasingly important asset class. 

8/ Decisive: How to Make Better Choices in Life and Work by Chip Heath. I think this is a must-read for managers. This book dives deep into the fundamental errors that humans apply to decision making. Confirmation bias, short-term emotion, overconfidence, reliance on our frame of reference can lead to disastrously bad decisions. Heath goes deep on all of these flaws to help at least make leaders aware of the potential mistakes we make.

9/ Regional Advantage: Culture and Competition in Silicon Valley and Route 128 by AnnLee Saxenian. This book discusses the battle between the tech ecosystems of Silicon Valley and Eastern Massachusetts during the 70s, 80s, and 90s. I'm biased because I grew up in the middle of this battle and found it fascinating. But the broader lessons from this book will be interesting to any follower of technology and culture. I wrote a blog post earlier this year expanding on some of my thoughts on this topic.

10/ The TB12 Method: How to Achieve a Lifetime of Sustained Peak Performance by Tom Brady. I was stunned by how much I liked this book. It's really well written, and Brady's approach to health, longevity, and habits is enormously inspiring. The book doesn't tell us all that much that we don't already know (sleep and hydration are immensely important), but seeing the details of the lifestyle of an incredibly committed and disciplined athlete is something we can all take something from.

Finally, a couple of fiction recommendations. The first is from my cousin Tom. I love all of his books, and his most recent one, The Perfect Liar, was as good as it gets. The second one that I absolutely loved was Goodnight Stranger by Miciah Bay Gault. 

I hope you enjoy some or all of these.

How Silicon Valley Became Silicon Valley (And Why Boston Came In Second)

When I was a kid growing up in central Massachusetts, I remember that a bunch of my friends' parents worked for super high growth tech companies like Digital Equipment Corporation (DEC), Data General, and Prime. While some people reading this may not have heard these names, these companies were behemoths. In the late eighties DEC alone was one of the largest companies in the world and employed more than 120,000 people. These companies were booming at the time in an area known as the “Route 128 Corridor”. Route 128 is a highway that runs south to north about 10 miles to the west of Boston. The area was a hub for technology companies — mostly focused on semiconductors, microprocessors, and minicomputers. It seemed like almost all my friends' parents worked at one of these companies or a company that provided support to these companies.

I also remember the bust that came in the early nineties when many of these companies downsized and thousands of people lost their jobs. It was a rough time for many people in the area.

What I didn't know at the time was that there were a set of competitors based in Santa Clara County, California, in the area now known as Silicon Valley, viciously competing with the Route 128 companies. Companies like Hewlett Packard, Intel, and Apple.

Most people now know that the Silicon Valley companies came out on top and that the tech scene in the area outpaced eastern Massachusetts significantly. Massachusetts remains one of the top 3 tech hubs in the U.S., dominates biotechnology, and is well on its way to becoming the country’s Digital tech hub. But outside of healthcare, the Silicon Valley area is far ahead and sees about 3x the number of startups and venture funding than the entire state of Massachusetts.

That said, back in the mid-1980s, you would've had no idea which region was going to come out on top. It could’ve gone either way.

AnnaLee Saxenian wrote a phenomenal book about all of this titled, Regional Advantage: Culture and Competition in Silicon Valley and Route 128 that examines the differences between the two regions.

Having lived in and worked in both areas, here are some of the key differences between the regions that I think allowed Silicon Valley to outperform. Certainly some of the takeaways are isolated to these regions at that point in time. But as lots of cities across the country try to increase the number of tech startups launched in their communities, many of the lessons from the battle between Silicon Valley and Route 128 can be applied by policymakers and tech leaders today.

Cultural differences

Massachusetts had a much more traditional, risk-averse approach compared to the Valley. A big reason for this comes from the parochial and puritanical cultural history of Massachusetts. But, more practically, it also comes from the fact that most people that worked in Silicon Valley weren’t from California. They were from the east coast or the midwest. You can’t underestimate the impact this has on a region. People aren’t spending time with their high school friends or church friends or summer camp friends. They’re spending time with the people they work with. And what do they talk and think about during that social time? Work. They’re bound together by their work. And they're much less worried about trying something new and failing at it because their friends and family back home may not even know about it. An executive that worked on both coasts described it this way in the book:

“On the East Coast, everybody’s family goes back generations. Roots and stability are far more important out here. If you fail in Silicon Valley, your family won’t know and your neighbors won’t care. Out here, everybody would be worried. It’s hard to face your grandparents after you’ve failed.” —William Foster, Stratus Computer

This meant that people in the Valley were much more willing to take risks, start companies and jump from job to job. As they jumped from job to job and made friends with people at work, they created networks centered around their work across several companies in the region. It was common for an engineer to quit their job on a Thursday and show up at another startup on Monday. These new experiences led to more friendships and led to a ton of collaboration between companies and an openness to sharing with one another for the greater good. It was common for Silicon Valley competitors to call one another for help with technical problems. This kind of collaboration created a rising tide for everyone in the area. The power of this kind of environment is enormous.

By contrast, in Massachusetts, most of the people working in tech were from New England. From the book:

”The social world of most New England engineers, by contrast, centered on the extended family, the church, local schools, tennis clubs, and other civic and neighborhood institutions. Their experiences did little to cultivate the strong regional or industry-based loyalties that unified the members of Silicon Valley’s technical community. Most were from New England, many had attended local educational institutions, and their identities were already defined by familial and ethnic ties.”

There was a separation between work and social life for Route 128 workers. For workers in the Valley, it was much more of a grey area. Workers in Route 128 tech often went right home after work and immersed themselves in their local towns, where they had ties that went back generations. Workers in the Valley didn’t have these ties. Instead of driving several miles back to their town, they were more likely to go out to dinner or to a bar in the area to talk about technologies and markets.

Job hopping

As mentioned above, workers in the Valley would jump from job to job growing their network and gaining new experiences. Route 128 had a much different culture where loyalty was highly valued and if you left you could never come back. Workers often stayed at their jobs for 10+ years. This was unheard of in the Valley. Workers felt that they were working for the Valley — the community — rather than for an individual firm. If they decided they wanted to come back they were often welcomed with open arms. As I've written in the past, this impact is felt today as California has banned the use of employee non-compete agreements while Massachusetts has allowed them to persist.

Collaboration with universities

Stanford actively promoted startups by offering professors up to help with product development and created several funding mechanisms for new ideas. MIT took a far more conservative approach and was very reluctant to invest dollars or time into things that were too risky. This created artificial walls between the best tech companies and the best technical research. Many of the east coast companies claimed they had better working relationships with Stanford and Berkeley than they did with MIT and Harvard.

Dependence on government contracts

Because of its proximity to Washington, Route 128 companies had lots of reliance on government contracts that had long term obligations that restricted innovation. It also (appropriately) led to a secretive culture that stalled collaboration with associations, competitors, partners, and other organizations in the local ecosystem. By contrast, by the early seventies, Silicon Valley companies were receiving far more financing from venture capital investors than they were from government contracts. The east coast's dependence on government contracts made widespread collaboration nearly impossible.

Geography

Silicon Valley companies started around Stanford and expanded to cities like Mountain View and Santa Clara but couldn’t go too far as they were locked in by the Santa Cruz mountains to the west and the San Francisco Bay to the east. This led to a very dense community of tech companies. By contrast, the Route 128 companies were spread far and wide. DEC, the largest of the companies in the eighties, was based in Maynard, with more than 20 miles of forest separating them from the hub of Route 128.

Organizational structure

Related to the dependency on defense contracts and its proximity to established political and financial institutions, Massachusetts companies were more formal and created organizational structures that had a strong resemblance to the military. This kind of organizational design can slow innovation as the lower rungs of the ladder are less reluctant to offer new ideas and there's far less cross-functional learning. Executives had their own parking spaces and executive dining rooms. Stock options were only offered to those at the highest levels of the organization. This even applied to work attire — the uniform for 128 companies was a jacket and a tie, in the Valley it was jeans and a t-shirt.

Today, something like 75% of all venture capital funding goes to three states -- Massachusetts, California and New York. As governments and entrepreneurs across the country try to expand the number of tech companies that emerge and grow in their communities, it’s important to remember that ecosystems create a lot more jobs than companies. The key is less about funding and micro-incentives and more about creating the complicated environment that allows an entire ecosystem to thrive.

The 10 Best Books I Read In 2018

I’ve started writing year-end book lists rather than summer reading lists. See past lists here.

I recently heard someone say that they only read books that are more than ten years old. His thinking is that if the book is still getting good reviews after all that time then it must be really good. I think I like that idea. A lot of newer books that get good reviews don’t end up standing the test of time. This past year I read a lot of new books. I’m going to change that in 2019.

Here are the best books I read in 2018, in order:

1. Atomic Habits by James Clear. I’m such a believer in the power of habits. Motivating yourself every day is just too damn hard. This book offers a very actionable guide for creating them. A fast read with great advice that you can put into action right away.

2. Empires of Light: Edison, Tesla, Westinghouse, and the Race to Electrify the World by Jill Jonnes. Business history is my favorite book genre. This one gives the reader all the detail on these three amazing entrepreneurs and the competitive dynamics they faced in trying to commercialize electricity and light. Not much has fundamentally changed in entrepreneurship since the 1800s. Success in new ventures requires the ability for the founder to see the crazy big opportunity that most can’t see. Most people thought electric lights would only be used to replace gas street lamps. These three saw so much more than that.

3. Bad Blood: Secrets and Lies in a Silicon Valley Startup by John Carreyrou. The story of the rise and fall of Theranos. Even if you don’t care about tech or healthcare or startups this one is just a great read. It reads like a great fiction novel. Carreyrou was the Wall Street Journal reporter that exposed what was really happening within the company and this book lays out all the troubling detail.

4. Tribe of Mentors: Short Life Advice from the Best in the World by Tim Ferris. This is one of the best books I’ve ever read. The only reason it isn’t first on the list is because it isn’t really a book; it’s a series of short interviews with dozens of world-class performers (writers, entrepreneurs, athletes, etc.). It talks about their habits, morning routines, secrets to success and other philosophies on life. I made more highlights in this book than any book I’ve ever read. After reading nearly 600 pages of interviews with high performing individuals, if I had to summarize their secrets to success I’d say it’s two things: they read a lot and they meditate daily.

5. The High Growth Handbook by Elad Gil. Gil has been through it all at several high growth startups (Airbnb, Twitter, Google, and others). This book is basically a technical handbook on growing a startup. It offers extremely practical and actionable advice and gets really, really specific. I’d call this a must read for any first-time founder.

6. The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor by David S. Landes. The title says it all. A fascinating and detailed look at the way societies have evolved and why some have done so well while others have struggled (hint: it’s mostly about climate). Despite the heavy topic, Landes keeps this one pretty readable.

7. Tribe: On Homecoming and Belonging by Sebastian Junger. I think I’ve read everything Junger has written since the Perfect Storm (one of my absolute favorites). He’s such a great writer. Tribe is a quick read and covers the topic of PTSD for veterans returning from war and the irony that so many troops are happier at war than they are when they return home. The reason is that war-time creates such strong bonds between platoons regardless of race or ideology or other individual traits. It creates enormously strong ties and loyalty and there’s a strong human desire to belong to a tribe. All that seems to fall apart when troops return home. A troubling but really interesting topic.

8. Shackleton's Way: Leadership Lessons from the Great Antarctic Explorer by Margot Morrell. This is a classic leadership book that I can’t believe I hadn’t heard of it until someone recommended it to me a few months ago. The book chronicles Sir Ernest Shackleton’s leadership of his crew through a failed 1914 Antarctic expedition. Shackleton’s boat got stuck in ice and sank in the middle of the Antarctic and he and his crew survived for two years before being rescued. The story itself is amazing but Morrell lays out really interesting and classic leadership lessons from Shackleton along the way.

9. This Is Marketing: You Can’t Be Seen Until You Learn To See by Seth Godin. I’m pretty sure I’ve read all of Seth books and I rarely miss his daily blog posts. Seth’s books are always a little idealistic and aspirational and this one is no different. This one is sort of a summary of most of Seth thoughts on marketing. If you haven’t read anything by Seth this one would be a good place to start, though I think Permission Marketing should be required reading for business school students and is one of the best business books ever written. So read that one too.

10. Behind the Cloud: The Untold Story of How Salesforce.com Went from Idea to Billion Dollar Company and Revolutionized an Industry by Marc Benioff. The story of how Benioff flipped the enterprise software business on its head. This is a great read for anyone that works in enterprise software. Someone recently made the point that every 1% of Salesforce.com’s market cap represents a unicorn. I think this company is going to be really interesting to watch over the next several years. There are literally hundreds of startups trying to unbundle this massive CRM. Benioff is an outstanding salesman and a great leader and for anyone that works in enterprise software this one is definitely worth reading.

Going All In On Content

Several weeks ago I spoke to a partner at Andreessen Horowitz (also known as a16z), the prominent, Silicon Valley venture capital firm.

He explained to me that his firm takes more of a "marketing" as opposed to a "sales" approach in attracting entrepreneurs to their funds. For people that know the firm, this may seem obvious.

When I started working in tech, the best venture capital firms did not take this approach. Their investments were driven by rooms full of young associates cold calling entrepreneurs to find the best companies. a16z has taken a different approach and has focused on getting entrepreneurs to come to them.

The way that they’ve accomplished this is through the production of great content — blogs, social media, podcasts, videos, etc.

The quality of their content is phenomenal. The a16z podcast has been a favorite of mine for years. One of their founders, Ben Horowitz, has written a best selling book, The Hard Thing About Hard Things, that has become an indispensable guide for people starting a company. They’ve also recruited partners that were great at producing content long before they joined the firm. Chris Dixon, now a partner at the firm, was a major inspiration for me to start writing this blog. He no longer blogs independently but you can find his archives here. I also followed Benedict Evans closely long before he joined the firm back when he was a mobile analyst in Europe and writing great stuff about tech. Now he's a partner at a16z. He’s arguably become the new Mary Meeker of tech with his annual State Of Innovation Talk.

a16z made a brilliant move by recruiting these two guys. I'm sure they're great investors in their own right, but I know for a fact that they're incredible content producers.

Case in point: when my company started talking to a16z about taking an investment from them I was very excited; not because I knew the firm well, but because I had an extremely high opinion of them that was driven by their content before ever actually meeting or speaking with anyone from the firm. That is the definition of great content marketing. High quality content that doesn’t ask the consumer for anything, but passively improves the perception of the company or product.

I just started reading Seth Godin’s new book, This is Marketing, and in it he reminds us of the right way to do marketing:

“The other kind of marketing, the effective kind, is about understanding our customers’ worldview and desires so we can connect with them. It’s focused on being missed when you’re gone, on bringing more than people expect to those who trust us. It seeks volunteers, not victims.”

Seth has been saying this in one way or another for almost 20 years (at least since writing the Purple Cow) and it’s a great way to think about content production. If a16z’s content went away, a lot of people would miss it. That’s a great standard.

Most marketers are producing some form of content these days. But very few are going all in. At last check, a16z sees about 2,000 qualified inbound pitches per year, only to make 20-40 investments. So going all in is clearly working for them.

Marketers don’t necessarily need to hire the top thought leaders in their space to create content. But it’s worth thinking about what going all in would mean for your brand and asking yourself if anyone would miss you if you were gone.

The 10 Best Books I Read In 2017

For some reason I've stopped posting my summer reading lists on this blog. So instead I thought I'd start posting a top 10 list at the end of the year. As I typically like to do I read a lot of business books, history books and biographies. I also read a couple good fiction books but none that make the top 10. Here's the 10 best from 2017, in order:

1. America's Bitter Pill: Money, Politics, Back-Room Deals, and the Fight to Fix Our Broken Healthcare System by Steven Brill. This is a phenomenal chronicle of how the Affordable Care Act came into law. An in-depth summary of the issues in American healthcare and the troubling challenges that come with passing an important piece of legislation in today's environment.  
2. Smarter Faster Better: The Secrets of Being Productive in Life and Business by Charles Duhigg. This is written by the same guy that wrote the Power of Habit, also a great book. This is sort of a business/self-help book but one of the few with actionable, useful insights to transform busy work into productive work. Probably a bit too long due to all the examples, but this one was worth the time.
3. Hacking Growth: How Today's Fastest-Growing Companies Drive Breakout Success by Sean Ellis. This should be required reading for those of us focused on growing early-stage companies. Very focused on consumer businesses but the book is filled with really refreshing "out of the box" thinking that is so important in a high growth company.
4. Dreamland: The True Tale of America's Opiate Epidemic by Sam Quinones. Probably the best-written book on this list, this tells the depressing story of the formation of the opiate epidemic in America. This should be mandatory reading for any politician interesting in fixing this crisis. There is so much context in here that needs to be understood before anyone can think about effective solutions.
5. Why Buddhism Is True: The Science and Philosophy of Enlightenment by Robert Wright. No, I'm not a Buddhist but I've been fascinated by pieces of it for a few years now and I wanted to dig into it a little deeper. This is also a wonderfully written book that gives a great summary and strong defense of the religion's truths. 
6. Extreme Ownership: How U.S. Navy SEALs Lead and Win by Jocko Willink and Leif Babin. Written by two former Navy SEALs that saw enormous amounts of brutal conflict in Iraq and Afghanistan, the book takes the lessons of being successful in war to being successful in business. And these two guys are just incredible human beings. They make a strong case for getting up at 4:30am each morning. Yes, "business is war" is definitely an old euphemism but this book is on point. And it is true that much of what we do in business translates to the battlefield. Jocko also has a podcast that continues the story that's worth adding to your list. 
7. Leonardo da Vinci by Walter Isaacson. da Vinci didn't just paint the two most famous paintings in history he also obsessively studied anatomy, fossils, birds, the heart, flying machines, botany, geology, and weaponry. This is another book that was somewhat too long but understanding more about this man was enormously inspiring.
8. Grit: The Power of Passion and Perseverance by Angela Duckworth. I had read so much about this book prior to reading this book that I really didn't need to read it. But the concept is great. The strong evidence of the fact that grit is the most important trait for one to have is fascinating and inspiring. A good one for parents.
9. The Effective Executive by Peter Drucker. I've read this at least three times and it's always worth it. Timeline insights from the management guru.
10. Thomas Jefferson: The Art of Power by Jon Meachem. I saw Meachem speak earlier in the year and took a look at what he's written. For some reason, I continue to find early American history to be incredibly interesting. This is really a big history book about the formation of the United States. Extremely well written, an in-depth history book. A good one for the beach.

I hope you like some of these recommendations. Happy New Year!

Some Summer Reading - 2015

As this amazing summer comes to an end, I thought I'd capture some quick thoughts on some of the books I read over the past few months. I tried to read more history books than business books this year and I found a couple pretty good ones. The list is in no particular order and you can find last summer's post here.

The Wright Brothers by David McCullough.

A phenomenal book about two of America's most accomplished entrepreneurs. It was incredibly eye-opening to read how hard it was for them to build their product and, once they had a successful prototype, how hard it was to actually sell it. It's not clear which part was more difficult. Like most radical innovations, the masses thought their ideas were crazy. Their first planes were sold to clients in Europe because they couldn't find any buyers in the U.S. that were interested in the product. I'm a big fan of McCullough and this is one of his best.

The 4-Hour Workweek by Tim Ferris.

I'm surprised it took me so long to get around to reading this one. This book is full of productivity tips and a really compelling perspective on how to get more from your energy. From only checking your email to once a day to outsourcing most of your personal life, a lot of the tactics he uses aren't for everyone. But his perspective is great and there are a few good tips in here that will work for everyone.

King of Capital by John E. Morris.

This is the biography of Stephen Schwarzman, the founder of the Blackstone Group -- the massive private equity group. This is one of the best books I've read in a long time. The private equity business has always fascinated me and this is a deep dive into how it works and how the best of the best were able to sell it as an asset class. Buying a public company by borrowing money where the only collateral on the loan is the company that's being bought is mind-boggling to me. And this is great deep dive into the personalities of the founders and early employees that gives great insight on how they got these deals done. A great read for deal makers.

Money Master the Game by Tony Robbins.

A colleague recommended this book to me and, given all that has been written about personal finance, I was shocked that I found this book so informative. Lots of solid and practical advice. Robbins spends a ton of time on mutual fund management fees and makes the case that everyone needs to immediately check the management fees that they're paying on their retirement accounts. He points out that they're a total waste of money because less than 1% of managed mutual funds will beat the S&P over a 10 year period. You must move your retirement to an index fund with lower management fees. Over time, these fees will have a compounding negative impact on our portfolio and can cost you literally millions of dollars. Most of us know a lot of the stuff in here but definitely worth reading if you need to brush up on personal finance.

The Johnstown Flood by David McCullough. This book details the tragedy that occurred after a dam that was holding water in a lake at the top of a small mountain broke and poured water into the small valley town of Johnstown, Pennsylvania. The water that poured into the small valley was the equivalent of the amount of water that flows down Niagra Falls for 36 minutes. An incredible tragedy. The writing is great but the story drags a bit and I wish he gave a bit more perspective on the larger impact of the flood.

Dead Wake by Erik Larson.

Dead Wake is the story of the Lusitiania, the sister ship to the Titanic that was sunk by a torpedo fired by a German submarine as it traveled from New York to England. Many believe that this was the key event that brought the United States into World War I. This was hands down the best book I read this summer. It gives incredible detail on some of the individuals involved, including American, German and English political leadership and the captains of both the Lusitania and the submarine that fired the torpedo. It also gives great historical context on what was happening around the world at the time. Like most great non-fiction, this one feels like you're reading fiction for most of the time. Highly recommended.

Ready, Fire, Aim by Michael Masterson. This is a book written by a self-made billionaire that details some of the basic lessons needed to build or grow a business. His message is basically that sales and marketing are the only things that matter at the beginning and gives tips on how to get started. There isn't a ton in here that's terribly new but for entrepreneurs or business-people that aren't used to engaging in sales and marketing activities it might be worth skimming.

Pitching Innovation: Short & Simple

I've never been a big fan of the psychology of sales. I've always felt that if you're challenging a buyer, providing insights, selling efficiently and helping them understand a problem, the psychological side will sort itself out. But the fact is there's absolutely a psychological impact that comes with your approach (hopefully a positive one).

I thought about all of this a few weeks ago while sitting on a plane reading Pitch Anything by Oren Klaff. Early on in the book he talks about the evolution of the human brain. There are three fundamental layers of the brain that have been built on top of one another as the human species has evolved. We started with the 'crocodile brain' and then added the mid-brain and then added the neocortex part of the brain.

The first and most fundamental part of our brain is the crocodile brain. This is basically the thing that keeps us alive. We use it to recognize danger and threats. It's an extremely simple part of our brain. It can't think critically and it can't reason. Its only purpose is to protect us.

When you walk into a room to pitch something this is the part of the brain that your buyer is using. The buyer's crocodile brain is on high alert. The buyer is asking themselves questions like: Is this person going to hurt me? Is this person trying to fool me?  Is buying this product going to get me fired? Should I trust this person?

In that first interaction, these are the things that the buyer cares about. That's their focus.

The problem for you as a seller is that when you're pitching, you're not using your crocodile brain. You're using your neocortex brain -- the most sophisticated part of your brain. You're thinking critically. You're giving insights. You're talking about details. You're probably showing detailed charts and graphs. You're probing, engaging and being thoughtful.

But the crocodile part of the brain doesn't understand the neocortex part of the brain. So you're completely missing the mark. You're speaking different languages. You might as well be speaking German to someone that only speaks English. Being smart, in this case, is actually hurting you.

As I said, I don't like diving into the psychology of sales, but there are some good lessons in here.

This insight is a great reminder that when you're meeting someone for the first time, talk to their crocodile brain. Keep it short, simple, concise and clear and don't try to do too much. Save the fancy charts and data tables for next time. Nobody is going to seriously engage with you until you have credibility and some level of trust. That's the goal of the first meeting: build credibility and trust. And try to get to the next step of your education process. But forget about complex models and detailed financial analysis. They won't listen to it, they won't digest it and they definitely won't believe it. Save all of that for the next meeting, after you've satisfied their crocodile brain.

Also, on the topic of keeping your presentation short, Klaff points out that in 1953 when James Watson and Francis Crick introduced the double-helix DNA structure (e.g. the secret of life), the presentation that earned them the Nobel Prize, was five minutes long. That's right, the most important scientific discovery of our time was pitched in five minutes.

Regardless of what you're selling, something tells me that in your next meeting you don't need to be pitching for the full hour.

Do What Computers Can't

I read Peter Thiel's new book, Zero To One, the other night. I highly recommend it. It's a quick read (about 240 pages) and is full of great insights on startups and growth. He talks about the fears that the public has over technology. At one time, everyone was afraid that globalization was going to take all of America's jobs because there'd be someone overseas that would do our jobs cheaper than we would. Instead, American jobs have simply transformed. While's there's always some short term pain caused by a transforming economy, unemployment isn't all that much different than it was 20 years ago. The new fear is that software and technology will take all of our jobs. Thiel points out that this is a myth as well. See this excerpt:

Now think about the prospect of competition from computers instead of competition from human workers. On the supply side, computers are far more different from people than any two people are different from each other: men and machines are good at fundamentally different things. People have intentionality—we form plans and make decisions in complicated situations. We’re less good at making sense of enormous amounts of data. Computers are exactly the opposite: they excel at efficient data processing, but they struggle to make basic judgments that would be simple for any human. To understand the scale of this variance, consider another of Google’s computer-for-human substitution projects. In 2012, one of their supercomputers made headlines when, after scanning 10 million thumbnails of YouTube videos, it learned to identify a cat with 75% accuracy. That seems impressive—until you remember that an average four-year-old can do it flawlessly. When a cheap laptop beats the smartest mathematicians at some tasks but even a supercomputer with 16,000 CPUs can’t beat a child at others, you can tell that humans and computers are not just more or less powerful than each other—they’re categorically different.

I love this. There are things that humans can't do as well as computers and things that computers can't do as well as humans. There is now and will always be a ton of opportunity to do things that computers can't.

Some Summer Reading

I've been meaning to write a couple of book reviews but haven't found the time so I decided to write a quick line or two about some of the books I've read over the last few months. I enjoyed a lot of them -- I hope you will too.

To Sell Is Human by Daniel Pink. This is a really, really good sales book that argues quite persuasively that we are all salespeople; that the most important thing that each of us does -- regardless of whether or not we're in sales -- is sell. And that the jobs of the future (mostly focused around education and healthcare) are going to be all about "moving people", e.g. selling people.  He gives really useful strategies for getting better at influencing and moving the people around us.

Where Does It Hurt? by Jonathan Bush. If you have any interest whatsoever in healthcare, disruption and where things are heading you should absolutely read this book. Bush is the CEO of Athena Health, an innovative healthcare software company, and while you may not agree with a lot of what he says the book is incredibly informative and important. I would expect to see a lot more books like this coming in the future. This is probably the most digestible and useful book I've ever read on healthcare.

Lead with a Story by Paul Smith. This is a book that teaches you how to incorporate the use of stories into your business life to help influence and inspire. Most of the lessons are somewhat intuitive and there are too many examples and I'd bet most of us do these things naturally, but the book is a good reminder that stories and analogies are a useful asset.

Amazing Things Will Happen by C.C. Chapman. I've been following C.C.'s blog and Twitter feed for a long time now. A speaker, marketing consultant and fellow Bentley grad, he is a really interesting guy. If you're interested in how to manage and improve your personal brand, don't bother taking a seminar or reading a book, just follow C.C. He is a brilliant at it. As for the book, it's basically a series of short blog posts, each discussing a life lesson that he's picked up over the years. Some of them are intuitive, but they're great reminders. It's also fairly short and can be read on a plane ride -- which is the way all business books should be.

Body of Work by Pamela Slim. This is a really good and important book about how the way that we define a "career" is changing. We're becoming our own brands and our own companies. Start-up jobs, volunteer work, content creation, freelance work and side projects are becoming the new normal for lots of people. This book does a great job of explaining this new reality and how you can succeed in it.

The Art of Learning by Josh Waitzkin. This is a true story about how Waitzkin went from being one the best chess players in the world to becoming one of the best martial artists in the world. He documents and dives deep into the learning process and how we can control it and speed it up to become an expert and master in any field. Highly recommended.

The Hard Things About Hard Things by Ben Horowitz. This about Ben's startup experience. I'd highly recommend this book to any founder or potential founder. It chronicles the pain, the failures, the impossible decisions and the successes of a fast-paced startup. Painful to read at times, but a great book.

Cubed: A Secret History of the Workplace by Nikil Saval. If you're sitting in a cubicle right now and wondering how you got there, this book has the answer. A really interesting summary of work in the United States and how we went from the farms to the cubes. It gets a little dry and I wish it was a bit shorter and punchier but if you're like me and you find this stuff interesting it's worth the read.

Capital In the 21st Century by Thomas Piketty. If you haven't heard of this one you've been living under a rock. Long, complex and controversial this is a magnificent summary of the economy and the steady increase in the wealth gap in the United States. If you're not super interested in economics you might pass on this one and read some of the commentary around it -- this book is being debated everywhere.

The Power of Habit by Charles Duhigg. This is a eye opening book about habits and how they dictate our behavior. I've always believed that creating habits is one of the secrets of high performance. It's too hard to try to motivate yourself to go to the gym everyday. It has to be a habit (just like brushing your teeth). The Power of Habit validates this and teaches you to control your habits and perform at a higher level.

Finally, if you're looking for a light, easy reading thriller that's great for the beach pick-up Those that Wish Me Dead by Michael Koryta. I spent last weekend on the beach in Cape Cod and and I literally couldn't put it down.

The Contrast Principle

Another tidbit from To Sell Is Human by Daniel Pink (the book I wrote about the other day) is the notion of the 'Contrast Principle'. Pink tells the story of when two ad executives were walking through Central Park and came upon a blind man begging for money holding a sign that read, "I'm blind."

They found that the man had only collected a few coins.

One of the ad executives decided to help. He asked the man if he could make a small change to his sign.  The man complied and the exec added four simple words to the sign.

Immediately, the execs noticed that people began to give the blind man more and more money. This continued throughout the day and the blind man had his most profitable day ever.

The four words that the exec added to the sign? "It's spring time and...".

"It's spring time and I'm blind."

By contrasting the experience of the person walking by with the experience of the blind man asking for change, the sign was able to give people better perspective on the blind man's situation.

Who knows if this story is true. But the point is a great one. Providing buyers with a contrast is critical. For innovation sales to work, there has to be a significant contrast between what exists now and what will exist in the future. The buyer must fully understand the current state.

Humans notice the difference between things, we don't notice absolutes.

Sales 3.0 & 'Problem Finding'

I've been reading To Sell Is Human by Daniel Pink, a great book that argues quite persuasively that we are all salespeople; that the most important thing that each of us does every day -- regardless of whether or not we're in sales -- is to sell. Selling your family, your friends, your colleagues, your customers, your boss. And he argues that most of the jobs of the future (mostly focused around education and healthcare) are going to be all about "moving people", e.g. selling people. Pink also puts a fine point on what I wrote about the other day where I compared Sales 1.0 and Sales 3.0. He notes that today's sales environment is more about “problem finding” than “problem solving”. He uses the example of someone purchasing a vacuum cleaner.

A guy might say, "I need a new vacuum cleaner". So the problem, is: he needs a new vacuum cleaner. It used to be that to solve this problem he would drive down to a a store and talk to a vacuum cleaner salesperson who would explain the options, features and pricing. This salesperson no longer exists -- or if they do, they're not that valuable anymore. Information on vacuum cleaners is easy to find on the internet. You can educate yourself on everything you need to know about buying a vacuum cleaner while sitting on your couch. The information is now a commodity. So the “problem solver" type of seller is going away. We don't need salespeople to solve the "I need a new vacuum cleaner" problem anymore.

But suppose that this guy’s problem isn’t that he needs a new vacuum cleaner. What if the screens in his house are letting too much dust into the house? Or what if his carpets are of poor quality and are attracting too much dust and replacing them would solve his problem?

This is what sales 3.0 does. It gives buyers insights (that's where the value is). But not insights on how to solve the problem, but what their problem actually is. Remember, information on the solution, in most cases, is now a relative commodity.

I love the vacuum cleaner analogy.

Sales 3.0 is about helping buyers understand their true problem.

Related to this, this is why RFPs (request for proposals) are now so backwards. Large enterprises don't need to execute an RFP to figure out what feature set will solve their problem at the lowest cost, they need advisers (sellers) to help them figure out what their problem is.

As more and more salespeople adopt the sales 3.0 approach, I think we’ll start to see the perception of salespeople begin to improve. If sellers are sincerely trying to provide buyers with insights on their business and helping them think through their problem, buyers won't avoid salespeople, they'll seek them out.

5 Reasons Blogs Are Better Than Books

Scott Young had a good post the other day asking the question, “are blogs better than books for mastering complex ideas?” I’ve written in the past that most top selling business books are a waste of time and could be summed up in a couple of blog posts. Most business books start with a good idea but are executed terribly. They’re too long. They’re repetitive. They have too many redundant examples.

The reason for this is simple: the most effective way for a business writer to monetize an idea is to put it in a 300 page book and get it published -- regardless of whether or not that idea warrants 300 pages.

But the problem is you don’t need 300 pages to communicate most ideas. You really only need 1 to 3 pages.

With that in mind, here are five reasons that business blogs are better than business books:

1. Blogs allow you to read about an idea every day or every week in short bursts, instead of in one, single commitment, so it continues to be top of mind. A much better way to learn.
2. Because blogs enable real-time communities you can see the challenges with the idea and see it continuously evolve and improve.
3. You can participate in conversations about the idea with people that care about it. Again, a better way to learn.
4. Blog posts tend to be sharper and a bit more opinionated or controversial than business books. When you’re trying to sell your product to millions of people you sort of have to find a middle ground that most people will like. Bloggers generally don’t do this – blog post are shorter and sharper.
   
5. Most people don’t read blogs – and they certainly don’t participate in the communities. You have an advantage over most people who just consume the initial idea and don’t iterate or engage.

I’m not saying I’m going to stop reading business books – I’m usually reading a couple at a time -- but I'm finding that more and more of the good stuff I read is in my blog feed and not my Kindle.

B2B Pricing & Malcolm Gladwell's New Book

Last Sunday night on a late plane ride back to New York I finished reading Malcolm Gladwell’s new book, David and Goliath. It’s not his best work, but it's still thought provoking and worth the time.

The cliff notes version of the book is that it turns out that David wasn't such an underdog after all. He was actually at a huge advantage in his battle with Goliath because he was able to change the rules of the game. Lots of underdogs win by changing the rules of the game so that they become the favorite. To prove his point, Gladwell discusses the civil rights movement, World War II, middle school basketball and many other examples. It's an interesting concept and a pretty good read.

Anyway, as part of his argument, he spends a lot of time talking about the difference between linear curves and U-curves. He argues that there are some things that correlate and may seem like they should sit on a linear curve, but in reality they sit on a U-curve.

Perhaps the most interesting and classic example that Gladwell uses is the correlation between class size and test scores. You might think that the class size/test score graph would be linear -- as class size increases (the X-axis), test scores go down (the Y-axis). That's the conventional thinking.

But it turns out that's not true. The reality is that when class size gets really small, studies have shown that test scores actually begin to decrease again. When there isn’t a range of opinions and when the teacher is too focused on one student, the quality of education goes down. Students benefit from the energy and discussion that comes with having lots of other students in the class. So the correlation between test scores and class size really looks more like a U-curve. Test scores are optimal when the class is around 25 students. Too big is bad and too small is bad.

This is also true of crime and punishment. Many believe that as the severity of punishment increases, the amount of crime goes down. But studies have found that there’s a U-curve effect here as well. As punishment becomes more and more severe for smaller crimes, citizens begin to believe that the system isn't fair. That it’s us against them. And they commit more crimes as a result. So you obviously don't want punishment to be too lenient, but you also don't want it to be too strict. Like a lot of things, eliminating crime isn't simple. It isn't linear.

The corollary back to the story of David and Goliath is that you can't improve education simply by adding more teachers and reducing class size and you can't reduce crime by simply making punishment more severe. With complex problems, brute force doesn't always win.

With the U-curve in mind, I've been thinking a bit about price increases and how they impact client relationships. Traditionally, companies like to have modest annual price increases of, say, 2% to 5% per year. Companies like these small increases because they reduce the risk of putting a large strain on their client relationships or losing clients all together. And generally, due to inflation and other factors, clients usually find these increases acceptable.

But as you begin to raise the annual price increase more and more you'll generally see clients resist more and more; 2% is acceptable,15% is not. Like the examples above, on the surface, it seems that the correlation between price increases and client resistance should be graphed on a linear curve. As the price goes up (the Y-axis), so does resistance from clients (the X-axis). Keep your price increases low and your clients will be happy.

But I don't think this is true either. As price increases, client resistance certainly increases, but only to a certain degree. At some point, say 10% and up, in order for the increase to make sense there has to be a substantial and fundamental product change. A 20% increase isn't caused by inflation, increased labor costs, or a greedy salesperson. The increase is happening because there's a substantial change in the product and the product's value. As a result, clients should be much more accepting of this change and client resistance will start to go back down -- creating a U-curve. If the increase is sold and communicated properly, clients will begin to recognize that they're buying a much different product, or at least a much more valuable one. They'll understand that the rules have changed. In fact, I'd argue that at some point most clients would welcome these large but less frequent increases more than they would the small, annoying increases that don't show a corresponding increase in product value.

Increasing price is a requirement of any sustainable long term B2B relationship. And like most things, it's not simple. It's not linear. So when considering a strategic approach to pricing, companies should consider the U-curve and not rely on small, inflation-based annual increases that barely impact revenue. They should cancel those increases. That energy is better spent finding ways to change the rules -- to completely rethink product function, value and positioning. To make a splash. To delight rather than satisfy.

In short, the lesson of the U-curve is actually pretty simple. Don't avoid client resistance by keeping price increases small, modest and frequent; get clients behind them by making them big, bold and rare.

Influence: The Psychology Of Persuasion

I just finished reading Influence, by Robert Cialdini. The book is about persuasion and examines the psychology of why people say "yes". I've never been a fan of the psychology of sales (I don't like the notion of tricking someone into buying something) but the book definitely gets you thinking. It basically walks through 6 "principles of influence". The principles are: reciprocity, scarcity, consistency, consensus, authority and liking.

The book describes each principle and gives several examples of them in action. I've included some of the more interesting examples below.

The book describes a study where people go to homes and ask if they can place a small sign in the owner's front yard promoting a charity of some kind. Then, a few weeks later, the same people come back and ask if they can put a much, much larger sign in the front yard. They find that the people that said yes to the small sign are far, far more likely to say yes to the larger sign than the average person. This is the notion of consistency -- once you know you're the kind of person that puts a sign on your front yard, you become much more likely to do so when the stakes are raised. There are some obvious applications of this in sales (e.g. small deals that turn into large deals over time).

Another study found that when you call a potential voter and ask them if they're going to vote and they say "yes", they're far more likely to actually go out and vote than they would've been had they not taken the call (again, people like to appear consistent)

Several studies have found that we are far more likely to help people that dress like us.

In one controversial Ohio political election a few years ago, a man given little chance of winning the state attorney-general race swept to victory when, shortly before the election, he changed his name to Brown—a family name of much Ohio political tradition.

Salespeople in men's suits stores will always show the customer the most expensive suit first. Because when it comes time to buy a sweater or a pair of shoes, these look very expensive when contrasted wiht the expensive suit. It turns out that when a man enters a clothing store with the express purpose of purchasing a suit, he will almost always pay more for whatever accessories he buys if he buys them after the suit purchase than before.

This principle is applied in this excerpt from the book which is a letter from a college student to her parents.

Dear Mother and Dad:

Since I left for college I have been remiss in writing and I am sorry for my thoughtlessness in not having written before. I will bring you up to date now, but before you read on, please sit down. You are not to read any further unless you are sitting down, okay? Well, then, I am getting along pretty well now.

The skull fracture and the concussion I got when I jumped out the window of my dormitory when it caught on fire shortly after my arrival here is pretty well healed now. I only spent two weeks in the hospital and now I can see almost normally and only get those sick headaches once a day. Fortunately, the fire in the dormitory, and my jump, was witnessed by an attendant at the gas station near the dorm, and he was the one who called the Fire Department and the ambulance. He also visited me in the hospital and since I had nowhere to live because of the burntout dormitory, he was kind enough to invite me to share his apartment with him. It’s really a basement room, but it’s kind of cute.

He is a very fine boy and we have fallen deeply in love and are planning to get married. We haven’t got the exact date yet, but it will be before my pregnancy begins to show. Yes, Mother and Dad, I am pregnant. I know how much you are looking forward to being grandparents and I know you will welcome the baby and give it the same love and devotion and tender care you gave me when I was a child.

The reason for the delay in our marriage is that my boyfriend has a minor infection which prevents us from passing our pre-marital blood tests and I carelessly caught it from him.

Now that I have brought you up to date, I want to tell you that there was no dormitory fire, I did not have a concussion or skull fracture, I was not in the hospital, I am not pregnant, I am not engaged, I am not infected, and there is no boyfriend. However, I am getting a “D” in American History, and an “F” in Chemistry and I want you to see those marks in their proper perspective.

Your loving daughter, Sharon

There are lots of funny and interesting examples like this throughout the book.

Influence is pretty good and definitely worth the read if you have an interest in this topic. But like most business books it's way too long. So if you only have moderate interest in this topic, I'd try to find a cliff notes version.

Boomerang

I recently read Michael Lewis' new book, Boomerang.  It's a fascinating book about the recent European Debt Crisis.  Like most of Lewis' books (especially The Big Short, that chronicles the U.S. financial crisis) he's able to take a fairly mundane topic, roll it up into a few hundred pages and make it a page turner.

The book dives into the crises that occurred in the last few years in three countries: Iceland, Greece and Ireland.

It's a fascinating and very well written book.  It gives the inside story on the political, economic and cultural circumstances that led to the unlikely collapse of three different economies.  If you're interested in European economics, politics or culture, I can assure you that you that you'll enjoy reading Boomerang.

Dethroning The King

I recently finished reading, Dethroning the King: The Hostile Takeover Of Anheuser-Busch, An American Icon.

The book, written by Financial Times columnist Julie Macintosh, gives the reader an astonishingly detailed look inside the takeover of Anheuser-Busch by InBev, a Belgian company run by Brazilians. Because the transaction occurred smack dab in the middle of the housing crisis in 2008, many didn't pay attention at the time.

If you like business history and have an interest in the mechanics of enormous organizations and enormous transactions, you'll love Dethroning the King.