In Internet World the customers see further, but they are all looking out from the same tall hilltop. In Offline World individual customers are standing on different, lower, hilltops. They may not see as far individually, but more of the ground is visible to someone. In Internet World, a lot of the ground cannot be seen by anyone because they are all standing on the same big hilltop.

I wish I followed the math better. Interesting stuff in the comments, too.

It’s just so damn easy to look upon someone else and jealously think, “Wow, he sure got lucky.” Real people did not have great opportunities fall in their lap. Mostly, crappy opportunities come along, and in the meantime, you make the best of them.

—Po Bronson [via powazek]

This makes the third Michael Lewis book I’ve read (see also my take on Moneyball and The Blind Side from last fall). It’s another good one. Liar’s Poker is Lewis’ first book. He writes about his years on Wall Street working with the Salomon Brothers investment firm during the heady 1980s. It’s a biography of the company’s internal breakdown and the revolutions that swept through the investment banking industry (like mortgage-backed securities and junk bonds) that made some people piles and piles of money.

Lewis’ writing is good and often funny:

The greatest of absurdity of the college investment banking interview was the people the investment banks sent to conduct them. Many of them hadn’t worked on Wall Street for more than a year, but they had acquired Wall Street personas. One of their favorites words was professional. Sitting stiffly, shaking firmly, speaking crisply, and sipping a glass of ice water are professional. Laughing and scratching your armpits are not…

I did not learn much from my stack of Wall Street rejection letters except that investment bankers were not in the market for either honesty or my services (not that the two were otherwise related). Set questions were posed to which set answers were expected. A successful undergraduate investment banking interview sounded like a monastic chant.

Lewis manages to get in to Salomon Brothers through some lucky connections, makes it through the months of lectures and hazing of the training program, and finally gets to the trading floor that’s dominated by a law-of-the-jungle ethos. Some of the best parts are these antics among the workers. People throwing phones at trainees, office pranks, verbal abuse, gluttony (“We’d order four hundred dollars of Mexican food,” says a former trader. “You can’t buy four hundred dollars of Mexican food. But we’d try—guacamole in five-gallon drums, for a start.”). It’s wonderfully disturbing.

If you are a self-possessed man with a healthy sense of detachment from your bank account and someone writes you a check for tens of millions of dollars, you probably behave as if you have won a sweepstakes, kicking your feet in the air and laughing yourself to sleep at night at the miracle of your good fortune. But if your sense of self-worth is morbidly wrapped up in your financial success, you probably believe you deserve everything you get. You take it as a reflection of something grand inside you. You acquire gravitas and project it like a cologne.

Lewis nails both the bizarre sociology inside the firm and the broader industry shifts. A lot of the stuff about mortgage bonds and junk bonds gives a good background on what’s happening on the market right now. Definitely worth reading.

—

1. Plenty of reasons I really liked stock work (lots of trade-offs, but still noteworthy): I got to work alone, but plenty of joking and yelling back and forth. I could yell or sing when I wanted. I got to walk around. There were very few irate customers at 3am, unlike a Saturday afternoon bagging groceries. There’s also a good bit of healthy destruction involved (wielding a box cutter, breaking down cardboard, tossing damaged product out in the aisles, etc.). And on most nights, things looked perfect when I’d leave in the early morning. I love that severe contrast. Make an absolute mess when I’m working, and then polish it to something where no one can tell it was any different.

Dan Roam does a pretty good job with this one: The Back of the Napkin: Solving Problems and Selling Ideas with Pictures. One of Roam’s main arguments (sometimes belabored) is that we were all comfortable drawing when we were in kindergarten. Somehow we got frigid. We play visually dumb. We don’t need to.

Visual thinking is neglected, but luckily we’re hard-wired for it. When we see things, we instinctively begin to sort out the essentials and answer a few questions. We can’t help it:

• who/what?
• how much/many?
• when?
• where?
• how?
• why?

Visual thinking borrows from that natural process a bit more intentionally. It starts with looking (collecting & screening data), seeing (selecting & grouping), then imagining (reconfiguring, manipulating, analogizing), and finally showing (cleaning up, putting it all together). And, hey, what do you know… according to Roam’s <6><6> model, the ways we see things and the questions we need to answer match up directly with the tools we have to show things:

• who/what? = portraits
• how much/many? = charts
• when? = timelines
• where? = maps
• how? = flowcharts
• why? = multi-variable plots

That’s one of the basic insights that’s really nice to be reminded of. We have specific tools to answer specific questions. Roam also has the SQVID, a framework that helps you figure out how to present the information in the most appropriate way for the intended audience, tracing your way through 5 choices:

Simple vs. elaborate
Quality vs. quantity
Vision vs. execution
Individual attributes vs. comparison
Delta (change) vs. status quo

And when you cross-reference the SQVID with the <6><6> model, you get a codex that guides you to whatever pictures you need to make for the problems you need to solve. The acronyms and frameworks sound a bit confusing outside of the book, but Roam ties it together pretty nicely with lots of visuals throughout. And it’s actually kind of… practical. That doesn’t mean that the products of visual thinking are guaranteed to be easy or simple, no more than writing or talking about the ideas would be:

One of the most important virtues of visual thinking is its ability to clarify things so that the complex can be better understood, but that does not mean that all good visual thinking is about simplification. The real goal of visual thinking is to make the complex understandable by making it visible—not by making it simple.

An obvious weakness for the book: it’s really hard to learn something like this from a book. You can learn about it. But it’s one of those things that you have to DO, and more examples are always helpful. The long case study that takes up the last 40% of the book lets you see the different frameworks in action, but it’s also kind of boring to read about the same fictional software company and its fictional competitors and fictional customers for 100 pages. I imagine this was a tough part of the book to write as well.

I’d still recommend it. Heaven knows it’s refreshingly different from most of the other books in the business section, and there’s some real meat in there.

For one year I worked at a regular nine to five job, and I remember well the strange, cozy feeling that comes over one during meetings. I was very aware, because of the novelty, that I was being paid for programming. It seemed just amazing, as if there was a machine on my desk that spat out a dollar bill every two minutes no matter what I did. Even while I was in the bathroom! But because the imaginary machine was always running, I felt I always ought to be working. And so meetings felt wonderfully relaxing. They counted as work, just like programming, but they were so much easier. All you had to do was sit and look attentive.

Meetings are like an opiate with a network effect.

Much of the ‚Äújobs of the future‚Äù rhetoric surrounding the eagerness to end shop class and get every warm body into college, thence into a cubicle, implicitly assumes that we are heading to a ‚Äúpost-industrial‚Äù economy in which everyone will deal only in abstractions. Yet trafficking in abstractions is not the same as thinking. White collar professions, too, are subject to routinization and degradation, proceeding by the same process as befell manual fabrication a hundred years ago: the cognitive elements of the job are appropriated from professionals, instantiated in a system or process, and then handed back to a new class of worker—clerks—who replace the professionals. If genuine knowledge work is not growing but actually shrinking, because it is coming to be concentrated in an ever-smaller elite, this has implications for the vocational advice that students ought to receive…

The trades are then a natural home for anyone who would live by his own powers, free not only of deadening abstraction, but also of the insidious hopes and rising insecurities that seem to be endemic in our current economic life. This is the stoic ideal.

But it’s not at all hard to cherry-pick some good stuff, and Drucker is full of good ideas. Here’s one line in particular that I’d really like to bust out in a meeting: “What would it take for us to seriously consider this idea?”

There’s another interesting bit about specializing in what you’re good in, “core competencies” if you must. The analogy is to distinguish between your “front room” and “back room”. The last line is great:

The first step in structuring a collaboration is to identify your company’s ‘front room,’ which Peter defiined as your strengths, or the activity that is most important for you to do—that which stirs your passion and shows off your excellence. Everything else is your backroom, and it can be almost everything. One of Peter’s famous quotes is, ‘the only thing you have to do is marketing and innovation.’

If you’re sufficiently focused, “the only thing you have to do is marketing and innovation.” What a great goal.

The last little tidbit I really liked is about management style, bureaucracy, and decision-making. Again, the last line is fantastic:

It is part of our basic strategy to maintain the kind of working atmosphere that is attractive to the high-talent people we need to serve our clients well. Such an approach should include a philosophy of relying on autonomy and responsible self-government by the individual just as far as we can. Operationally, this means that the burden of proof should always rest with the proponent of centralized control and bureaucratic rules.

Update: Oh, and one more line that I twittered the other day: “It is good to do one thing right. Don’t do too much.”

The premise is that the Information Age was led by left-brained, linear-thinkers. Now, as we enter the Conceptual Age, the balance is shifting such that right-directed, sympathetic, synthetic thinkers are more and more valuable.

To survive in this age, individuals and organizations must examine what they’re doing to earn a living and ask themselves three questions:

1. Can someone overseas do it cheaper?
2. Can a computers do it faster?
3. Is what I’m offering in demand in an age of abundance?

Luckily the book isn’t about outsourcing paranoia, but about some soft skills and sensibilities you’ll need: Design, Story, Symphony, Empathy, Play, and Meaning. The book is heavy on the anecdote, and generally light-hearted, but not particularly gripping. Like some other pop-business books I’ve read like The Long Tail and The Tipping Point, I think it would have been great as a long essay. As a book it feels a bit thin. I’ve heard excellent things about Pink’s other book Free Agent Nation, so maybe that’s worth a look.

By the by, the publishers of The Surrogates, Top Shelf Productions, is having a nice little seasonal sale until the end of this month.

I don’t mean that to sound flip, because I think these all occupy an interesting middle ground. The ideas aren’t quite as heady and broad as, let us say, praxeology (brilliant though it is). But they’re a step up from the mundanities of something like Six Sigma. For the most part, the far ends of that bell curve can be safely ignored, unless it happens to be your pet interest. But if you’re paying attention, strong arguments in that middle ground can force a conversation. That is what great memepreneurs do well.

Tim brings out a political example to contrast bad memes with fruitful memes. “Bush is stupid” vs. ‚ÄúBush pursues dangerous ideas—expensive dangerous ideas.‚Äù The latter is more effective because it comes across as not a simple couched argument or opinion, but an invitation to explore. Provocative, sure. Good memes usually are. But more than that, it’s actually a functional starting point. The best memes are forward-looking.¹ That’s one reason I always liked political theory more than any other field of political science. I get to escape those messy details of policy and history and think about what could be.

I’ll let Tim close it out:

We need better memes in the world to counter all the stupid ones that drive so much of our behavior. I would say “that drive so much of our thinking,” but in fact the purpose of many of these memes is to relieve us from thinking, so that we reflexively reach for the products we’ve had marketed to us, or reflexively reach for the attitudes that favor certain special interests within the society. (Note that these special interests can be political, commercial, religious, or what have you. I take the broad view here.) But those of us who are awake to these tendencies can work to shape them in other, better directions.

—
1. Bureaucrats and pundits are not. Though I’m willfully ignorant talking-head culture, I’ve seen enough to convince me that they tend to be far more concerned with digging up old grievances and winning now than actually caring about the future. It’s the nature of the gig. See “Property Rights and Time Preference” [pdf]

“They can independently master their disc and shuttle straight to their service provider, with no studio interns to smuggle a pre-master or studio reps to swipe a final copy.

Furthermore, fans get the music on Radiohead‚Äôs terms—not some nth generation digital-to-analog-to-digital transfer encoded to an MP3, but a direct-from-source version engineered to the band‚Äôs specifications.

It is, in a sense, the best possible leak.”

So after wrapping up Michael Lewis‘ The Blind Side, this weekend I finished his earlier book, Moneyball: The Art of Winning an Unfair Game. The question at hand: “What is the most efficient way to spend money on baseball players?”

The central character is the hands-on Oakland A’s General Manager Billy Beane. His story—that of the gifted athlete adored by scouts who crumbles in the majors—sours him on old-school baseball scouting and management. Beane discards baseball’s long heritage of subjectivity and gut instinct (e.g. “the good face“), and tries the objective, stat-crunching approach.

Winding in and out of this story, Lewis explores the work of baseball writer Bill James, the roots of the Society for American Baseball Research, and touches on sabermetrics. If anything, I wish there were more numbers in this book. I would have loved to dig in to some tables and really follow the statistical arguments. But at its heart, Lewis’ book is not a peer-reviewed research article, but a story. A pretty good one.

And as a tangential bonus, Lewis gives an little off-hand bit of writing wisdom:
“If you write well enough about a single subject, even a subject seemingly as trivial as baseball statistics, you needn’t write about anything else.”

Despite the hokey title, 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich seems to be pretty well grounded. It isn’t so much about the nuts and bolts of financial managment—you won’t find a lot of financial info about IRAs or 529 plans or whatever. It’s more about what author Tim Ferriss calls lifestyle design. Here’s how it boils down:

Find ways to minimize interruptions and maximize time for what you want.
Don’t stay in a crappy job.
Don’t wait to retire—take mini-retirements along the way.
Start a business selling products online.
Outsource or automate most of the business.
Use currency arbitrage to live well elsewhere.

The business side all sounds easy enough—and he lays out the steps pretty clearly—but as with most of these schemes, the magic doesn’t happen until you… y’know… actually do the work. The sections on respecting and maximizing your productive time are solid, though. Those are the parts that got me the most excited, and probably the most worth re-visiting.

If I have one reservation, it’s Ferriss’ nonchalance about lying. It has to be at least a half-dozen times that he suggests prevaricating to some degree, whether it’s used to avoid interruptions, to work from home or elsewhere, or to take some other step towards the long-term goal in lifestyle design. I don’t mean to taint his character—I don’t think he’s dishonest—but to someone like me who prefers to just shoot straight, it seems like careless advice.