Eric Nehrlich, Unrepentant Generalist

I watched the season premiere of Battlestar Galactica this morning. This wouldn’t be surprising except that I don’t get the Sci-Fi channel, which broadcasts that show on Friday evenings. I watched it over at hulu.com, the video site started by NBC (which owns the Sci-Fi channel) after they pulled their content from iTunes last summer.

What’s interesting is that NBC lost money from me in this process. I had been paying $2 an episode to watch Battlestar Galactica last year on iTunes. On hulu.com, I watched it for free, except for a total of two minutes of advertisements, clumsily sprinkled throughout the episode. I can’t imagine that the advertising revenue they are getting is worth more than the cut of the $2 they got from iTunes. So how does this make sense? It doesn’t to me. And there are a few other questions about television that don’t make sense to me either.

Why doesn’t HBO have an online portal where I can see their shows? I want to see the final season of The Wire. I don’t even get basic cable, so it would cost me $40/month to get the “standard cable” package, and then another $15/month to get HBO on top of that. It doesn’t make sense for me when I just want to watch one show. I went to iTunes but The Wire was not available there, even though I would have gladly paid $2 an episode. Heck, I would have paid $5 an episode which is comparable to their DVD pricing of $50 for a season); after all, I pay $10 for a two hour movie, and an episode of The Wire is much better than most movies. But HBO had no way for me to give them money in exchange for watching a specific show as it is released (I have to wait for the DVD).

Why do all broadcast networks have an online video on demand service now? I love it as a consumer. If I forget to tape a show, or if two shows I want to watch are on simultaneously, I can just go to the network’s site a day later and watch the show I missed. Most sites even store four episodes so that I can catch up on a series if I lost track for a few weeks. NBC has the entire run of Friday Night Lights online to try to build viewership. While it’s tremendously convenient, I don’t know how it makes sense economically (NBC doesn’t even put advertising in their online episodes).

I suppose one possibility is that the networks are using online rebroadcast of their content as a way of gaining access to a highly profitable market segment, which would be people like me that have broadband video connections and the tech savvy to even want to watch a TV show online. The problem I see with this explanation is that they don’t have any way of targeting me currently. I don’t login to hulu.com or to the network sites. So unless they start delivering advertising interspersed with the show, they’re not making money, and given typical online advertising rates, I don’t know if they’d be profitable even then.

I have been waiting for years for the “a la carte” option of television to become a possibility, where I can pay for just the content that I want to see and nothing else. I wanted this as a cable subscriber - I hated paying for the entire cable package when I really wanted just four channels. I want this as somebody who follows specific shows - I got into television as a result of becoming a Buffy fanboy, and still have an instinctive revulsion for the idea of flopping on the couch and “seeing what’s on”. The funny thing is that I would be willing to pay more to get what I specifically wanted - while the cable company charges $40/month for 40 or 50 channels, I would pay $10/month happily for the 4 channels I actually wanted. I know the economics don’t work that way (the channels I want cost more because they are higher profile) but I hate the idea of paying for something I’m not using.

I was excited by the advent of iTunes video, as it seemed like I could finally pay for only what I wanted. I’ve been following The Shield and Battlestar Galactica on iTunes because those are shows on cable channels I don’t get. I would have happily paid for The Wire if given the option. But with various content producers like NBC pulling their content from iTunes so that they can go their own way, it does not appear as if iTunes will be the “a la carte” solution I had hoped.

I wonder how much of my disappointment is because I’m decidedly atypical in my television consumption. I used to use a VCR and now use a DVR to ensure that I only watch shows that I want to watch. So I record shows, and play them back at times convenient to me, generally skipping the commercials. I’m a nightmare for the traditional television advertising model in the sense that I both time-shift and skip commercials. My viewing habits ensure that I am an advertising money-loser, so the “a la carte” solution would seem to be the only way to make money from me.

But I’m guessing most people aren’t like me when it comes to television (the Nielsen ratings back up that assertion). Most people come home from work, flip on the TV and watch whatever’s on. They surf through the channels available to them, rather than focus on specific shows. And when they do focus on specific shows, they don’t set their Tivo - they make sure they’re home to watch it. A digital analogy would be that I’m one of the minority that uses an RSS reader to follow blogs, where most people just go to a site when surfing to see if there’s new content.

Beyond the “a la carte” subscription model, there are a few other possibilities for how television gets made in the future. One possibility is a donation culture, where customers donate money to get the next book or record produced. I’m not sure that scales to the amount of money necessary to get a television episode produced, though.

Another intriguing possibility that may be what the networks are thinking is using content as a loss leader. ValleyWag had a recent article suggesting that “Recorded music is no longer a product, but advertising”, where artists should give their music away as advertising for things they can actually sell, like t-shirts and concert tickets. Perhaps television episodes could now be used to increase the power of the brand, with the actual money being made from DVD sales and other merchandising. Again, this seems unlikely with the much greater money necessary to make television than music.

Another possibility that occurred to me after posting is that networks may still consider the TV show aired in its normal time slot as the franchise. The video on demand on their sites and sites like hulu.com are merely designed as ways to bolster the original broadcast. This way, if I miss an episode, I can catch up and not feel like I missed a key plot point. Or I can watch a few episodes online and start watching a show that I might not have otherwise (this is how I started watching Friday Night Lights). The network assumes that I will then start watching the broadcast version so they can get their advertising revenue that way. But this assumption is headed towards breakdown as people become more comfortable with technology options like DVRs and video over the internet, which is inevitable as the net generation grows older.

I don’t really have answers. I’m not sure I’m even asking the right questions. But it’s an interesting topic, and I wanted to write about it while the hulu.com/iTunes discrepancy was still fresh in my brain.

Amazon link

I love being part of teams. When I’m on a good team, I work harder, I get more done, and I enjoy the activity more. My biggest career achievement thus far was achieved as part of a tight interdisciplinary team. And yet I’ve often been part of teams that never jell, and are ultimately more frustrating than inspiring. What are the qualities that make a team work, and what can prevent good teams from forming? That’s what Katzenbach (whose work I previously enjoyed in Real Change Leaders) and Smith investigate in The Wisdom of Teams.

The book is filled with inspiring stories of teams that came together under dire circumstances and achieved amazing things. Katzenbach and Smith use these stories as a way of organizing their observations about how to create high-performance teams, from details of how to get people to exchange an individual focus for a team focus, to the characteristics of good team leaders, to how to get a team unstuck from obstacles. But let’s start with determining what a team is.

The authors define a team as “a small number of people with complementary skills who are committed to a common purpose, performance goals, and approach for which they hold themselves mutually accountable.” These are the key components to creating what they call a “real” team, as opposed to a group of individuals who are working together. They studied teams in dozens of organizations and determined these were the common elements among the teams that were highly successful. So let’s take a closer look at these characteristics.

• Small number - Smaller groups have fewer logistical issues with meeting often enough for them to form a real team. In a small group, each person’s contributions and responsibilities are clear, whereas larger groups have a more difficult time organically determining those responsibilities.
• Complementary skills - The members of the team have to have all of the necessary skills for them to achieve their goal. This requirement is somewhat less important than the others, as the authors observe that real teams give their members the incentive to go learn the skills they need for the team to be successful.
• Common purpose - Everybody on the team has to believe in a common goal. Teams in the process formation often require a great deal of communication and negotiation to agree on their common goal, but until the overall purpose is clear, the team can not move forward.
• Performance goals - The team must translate the common purpose into specific and measurable short-term goals. These goals give the team a chance to bind together in the pursuit of the goals, and create situations where all team members must contribute in order to achieve the goals. The goals also provide chances to celebrate small wins along the way towards the larger purpose.
• Common approach - How does the team accomplish its goals? Who takes care of necessary logistics? The answers to these questions must be articulated for the team to continue moving towards its larger purpose, and not get mired in process and procedure.
• Mutual accountability - This is the big one in my opinion. Teams have to feel accountable for their results as a team, not as a group of individuals. The idea that the team can fail but that an individual team member has succeeded is incompatible with a real team. But when a team really believes in its purpose and performance goals, it will often hold itself to standards far beyond what the organization is expecting of it.

The CellKey team which I enjoyed so much had all of the characteristics of a “real team”. We were 12 people, each with different skills, who were trying to build this completely new instrument. MDS Sciex gave us short-term performance goals in the form of “phase-gates” where we had to prove the viability of our research in order to continue moving forward with product development, but we held ourselves mutually accountable to a higher standard than Sciex did. And we achieved more than I would ever have thought possible when we originally started experimenting with cells in a back room at Signature.

One surprising lesson from this book is that an emphasis on teams does not create teams. No amount of team-building exercises or team initiatives will create teams… unless there is a focus on strong performance. The first “uncommonsense finding” in the prologue states that “Companies with strong performance standards seem to spawn more “real teams” than companies that promote teams per se”. When the stakes are high and things absolutely have to get done, the normal way of doing things breaks down as being too slow to change and react, so teams emerge as the method to reach those performance goals.

This observation reminds me of a paper on innovation that Scott Berkun recommended, which said that the way to spur innovation was to set a goal that was impossible to achieve by normal methods. People don’t think of new ways of doing things unless they are forced to by circumstance - why take the risk of trying something new when the old way will work? Similarly, organizations will cling to hierarchy and bureaucracy unless they absolutely have to achieve more than they have been; teams emerge to save the day.

I have to admit that I’m not entirely convinced that teams can be manufactured by applying the principles described in this book. As the Peopleware authors observe, team building is more about removing the obstacles to the team forming. I think that the observations of Katzenbach and Smith fall into a similar category - these are necessary but not sufficient conditions for a team to emerge. I suspect that you could do everything mentioned in this book and still not have a team form because of a personality conflict or some other detail.

I recommend the book as a good way to reflect on how high-performance teams can be cultivated within an organization. It’s also fun to read about teams that conquer all the obstacles before them - the epilogue tells the story of the “Killer Bees”, a basketball team in Bridgehampton that competes for the state championship every year despite a male student body of less than 20. But they work hard, they play as a team, and with an entire town rooting for them, they somehow overcome the odds to succeed. Stories like that continue to inspire long after the book is done (which isn’t surprising, since it fits all of the Made to Stick rules of being simple, unexpected, concrete, credible, emotional and in the form of a story) and only add to the enjoyment of the book. Thumbs up.

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higher standard than Sciex: At the end of one phase-gate, we were asked to rate ourselves on how we were doing, and we all rated ourselves poorly. Our project manager was surprised by this as we had achieved all the goals for that particular phase-gate, but we were comparing ourselves to where we needed to be to launch the product. I discussed this before as a symptom of big vs. small companies, but it’s not surprising that it’s relevant to team building as teams are essential to small company performance.

Official book site, including the full text in PDF format
Amazon link

Solove is an associate professor of law at the George Washington University Law School who blogs at Concurring Opinions. Being involved in the blogosphere has given him a unique perspective on how new social technologies are pushing the boundaries of what existing law covers. This book, subtitled “gossip, rumor, and privacy on the internet”, is his exploration of some of those issues.

It was interesting reading this book immediately after Here Comes Everybody, in that Shirky’s book explores the capabilities that new social technologies are enabling, whereas Solove’s book explores the accompanying risks and consequences. Shirky tells us about all the great ways in which we can collaborate to create new content and publish it worldwide. Solove reminds us that when we can publish, so can everybody else, which means that your reputation can be destroyed with a few clicks from a malicious source.

The book starts with the story of the “dog poop girl”. A Korean teenage girl was on the subway when her dog pooped. She was asked to clean it up, but refused. Twenty years ago, people in the subway car would have cursed her under their breath, but the incident would have been forgotten within a few days. What happened instead was that somebody snapped her picture with their cell phone, and posted the incident to a popular Korean blog. The picture and post went viral, crossed into the mainstream Korean media, and she became infamous throughout the country, harassed wherever she went and forced to drop out of university because of the shame.

The following paragraph from the book is the central issue that faces us:

There’s a paradox at the heart of reputation - despite the fact we talk about reputation as earned and the product of our behavior and character, it is something given to us by others in the community. Reputation is a core component of our identity - it reflects who we are and shapes how we interact with others - yet it is not solely our own creation… Our reputation depends upon how other people judge and evaluate us, and this puts us at the mercy of others. Our good reputation can quickly be lost, with deleterious consequences to our friendships, family, jobs, and financial well-being. We must all cope with the fragility of reputation, the delicate porcelain vessel that carries our ability to function in society.”

Solove titles one of his chapters “The Digital Scarlet Letter” to indicate how we can be branded with shameful behavior online. If we do something that somebody else thinks is inappropriate, they can call us out in a blog post, and our indiscretion will be forever archived and searchable from Google. And if the story is entertaining enough to get passed around (as did Aleksey Vayner’s ludicrous video CV), then your story will become a punchline to people who would otherwise have never heard of you, an aspect of your past that you can never escape. Solove tells us of a world where we can never live down our past indiscretions, where every mistake we have ever made can be magnified and used to shame us.

Some might say that people like the “dog poop girl” deserve to be shamed, that if they behave that way in public, it is appropriate to shame them in public as well. But who gets to decide what behavior is shameworthy? Should the person get a chance to explain their behavior? And is it fair to punish them with the irretrievable loss of their reputation without some sort of due process?

When the means of publication were valuable and restricted to only a few outlets, we could assume that information published about others was likely to be true, as the punishment for libel was the loss of the right to publish, and newsworthy, as it wouldn’t be worth publishing otherwise. Those assumptions do not hold true with free and easy Internet publishing. There is no incentive to check for truth, and any perceived slight can be published without rebuttal.

Solove brings up excellent questions about reputation and privacy in the Internet age, but I was disappointed in his proposed solutions. It’s not surprising that this lawyer proposes law as the appropriate response, but Solove did not convince me. He suggests that we need more torts for loss of reputation, and for breach of confidentiality. He does note that informal mediation and arbitration should be the first steps in redressing a perceived wrong, and that lawsuits should be the last resort. But given the glacial speed at which legal precedents evolve, I’m nervous about using it as the stick by which we create the social norms that guide us through this world of new social technologies.

I think that our best bet is to wait for social norms to evolve, rather than depending on the clumsy tool of the law to preemptively shape those norms. I think that our expectations have not caught up to the technology capabilities yet - we don’t have an intuitive sense that our words, published on a blog intended for just our friends and family, can suddenly go viral and be read by millions, many of whom have no idea of the context in which those words were written. We haven’t developed the skills to read virtual cues, or the ability to articulate those virtual cues in a way that makes it clear to our social brains what the appropriate behavior is. Most people now understand that private email should not be forwarded to a list of thousands. We need similar norms to develop around our publications and public actions - just because something is not inside our own homes does not mean that it is meant to be broadcast worldwide. The transparent society may be coming, but we’re not quite there yet.

I highly recommend this book as a thoughtful exploration of some of the troubling issues associated with the rise of new social technologies. While I don’t agree with Solove’s conclusions about how to address those issues, I appreciate his asking of the questions, and I will be curious to see how our society answers those questions.

Thanks to danah boyd who recommended this book last month.

[Disclaimer: I received a free advance copy of this book for review, but would happily have bought this book from Amazon.]

I have been a fan of Clay Shirky since I first found his work. Several early posts on this blog were commentary on his articles covering topics such as process, situated software, and the semantic web. As a faculty member of the ITP program at NYU, he writes incisively about the impact of new social technologies on the communications of many to many, the title of the group blog where he posts. So I was thrilled when he mentioned that he had written a book. And after blasting through the book over the weekend, my expectations have been exceeded.

Shirky starts off with the story of a lost phone. The phone was left in a taxi in New York, but eventually ended up in the hands of a teenage girl. When asked politely to return the phone to its owner, the girl responded with taunts; after all, what could the owner do? A friend of the owner started a web page to tell the story of the lost phone. Since the phone’s data was mirrored on the cell phone website, he posted pictures that the girl had taken with the phone as well as the email address she was using from the phone. The story went viral, and thousands of people started emailing with advice, including members of the New York Police Department, and eventually the girl was found and arrested for holding stolen property.

How did this coalition of people come into existence? How could this story of a lost phone reach thousands of people and convince many of them to help find the phone? Shirky provides a guide as to how and why the world has changed in response to evolving social technologies such that the lost phone could be found in a way that would be unthinkable even ten years ago.

Shirky sets the stage by discussing the work of Ronald Coase, who wondered why companies existed. Free markets suffice to connect buyers to sellers, so why were markets unable to connect individual workers together to make products? He suggested that transaction costs explained this inconsistency. Transaction costs are the externalities associated with a market transaction, the time spent finding the appropriate people and “making and enforcing agreements among the participating parties”. If the transaction costs are high to find coworkers (as anybody who has spent time interviewing potential employees will attest), then companies make sense so that the transaction cost is a one-time cost of hiring rather than having to find coworkers for each new project.

Shirky posits that in such a world, there exists a Coasean floor, below which there are types of interactions that are impossible because the transaction costs are too high. Such activities “are valuable to someone but too expensive to be taken on in any institutional way, because the basic and unsheddable costs of being an institution in the first place make those activities not worth pursuing”. Shirky uses the example of the Coney Island Mermaid Parade. Hundreds of people take pictures of the parade each year and share them with friends and family, but had no way to share them with each other. In 2005, Flickr appeared and now it’s trivial to find pictures of the Mermaid Parade taken by dozens of people. A company would never find it profitable to organize this sharing of pictures, but Flickr enabled it by letting people organize themselves, an activity that would previously have been below the Coasean floor.

These newly possible activities are moving us towards the collapse of social structures created by technology limitations. Shirky compares this process to how the invention of the printing press impacted scribes. Suddenly, their expertise in reading and writing went from essential to meaningless. Shirky suggests that those associated with controlling the means to media production are headed for a similar fall. Twenty years ago, achieving an audience of more than a few dozen people required signing a deal with a publishing house, getting on TV, working at a newspaper, etc. With the global audience of the Web, everybody is a publisher, and the concept of a professional publisher or journalist or broadcaster is disappearing.

This collapse of institutions comes at a price, as it has become increasingly difficult to find the “good” stuff. Under the previous regime, quality was implied by publication, as the costs of publication meant that institutions would filter material before publishing it. With publishing costs dropping to zero, anything can be published, so we must find ways to filter for quality after publication. We are quickly developing the tools to handle this filtering, starting with Google, whose PageRank algorithm rewards pages that are linked to by others, and continuing with our communities, where we check out links that our friends email to us or post on their blogs, but we are still learning to live in this paradigm.

These new social tools are enabling new social patterns. Shirky suggests that group activities are being enabled at three levels:

• Sharing, with tools like Flickr and del.icio.us allowing us to share things with others
• Collaboration, with a primary example being Wikipedia or Linux
• Collective action, where a group of people forms to pursue a larger purpose, and uses social tools ranging from web pages to discussion groups to email lists to enable them to stay connected with each other and stay unified.

The rest of the book is filled with wonderful examples of each of these activities, such as Egyptian activists using Twitter to keep each other updated of their activities and confrontations with authority, or Belarussian protestors using LiveJournal to organize flash mobs.

I started to write up all the bits that I liked, but realized that I was just repeating everything in the book, so you should just buy the book and read it yourself. To whet your appetite, I’ll include his practical advice on how to form a sustainable social group:

Every story in this book relies on a successful fusion of a plausible promise, an effective tool, and an acceptable bargain with the users. The promise is the basic “why” for anyone to join or contribute to a group. The tool helps with the “how” - how will the difficulties of coordination be overcome, or at least be held to manageable levels? And the bargain sets the rules of the road: if you are interested in the promise and adopt the tools, what can you expect, and what will be expected of you?”

Shirky’s book is a terrific introduction to the world of social technology, with an overview of both the social and the technological and how they are interacting with each other to form new mashups. I highly recommend it to anybody who has the faintest interest in how new tools are giving us more power by multiplying the number of ways in which we can interact with each other.

P.S. Some quotes I particularly liked:

• “Communications tools don’t get socially interesting until they get technologically boring.” (with the example that people my age know that the fax machine predates the Web, but have no idea about the ordering of radio compared to the telephone since both of those technologies preceded us. Similarly, teens today have always lived in a world with always-on Internet access, so the Internet is not technology to them, it’s just the world.)
• “Cities exist because people like to be near other people, and it is this fact, rather than the mere trading of information, that creates social capital. (Anyone who predicts the death of cities has already met their spouse.)”
• “The groups now adopting social tools form the experimental wing of political philosophy, a place where hard questions of group governance are being worked out.”

P.P.S. If you prefer to watch rather than read, check out Clay Shirky’s Long Now talk, where he covers some of the same material. In particular, he discusses the power of tagging to organize the world’s information without anybody actually taking responsibility for the organization.

Amazon link

The idea that we can work less and free up time to pursue our own dreams is highly attractive for most people and this book is a guidebook on how to do it. The methods that Ferriss recommends to achieve that lifestyle provoked both admiration and disgust from people I know who read it, and I’ll get more into that below. Let’s start with what Ferriss says before getting into reactions.

Ferriss recommends a four step process to changing your life, which he abbreviates DEAL:

• Define - Figure out what you want to do. Honestly answer the question of what you would do if you had unlimited money and time. Travel the world? Learn a new language? Become a world-class expert in tango? Then sit down and figure out what it would take to actually do those dreams - Ferriss points out that it’s not as much as you think. For instance, he spent approximately $1500 a month to stay in Argentina and take private Spanish lessons and private tango lessons for several months before entering a tango competition - most of us spend more than that on our mortgages and/or rent. Don’t delay your dreams for a long-off retirement - start doing them today.
• Eliminate - Eliminate anything from your life that doesn’t contribute to you achieving your dreams. Ruthlessly apply the Pareto Principle that 80% of the benefits come from 20% of the work. If you’re an entrepreneur, concentrate on your cash cow clients, and get rid of the small clients and the complainers. Deal with all the important things that you are avoiding doing by engaging in time-wasting activities like meetings and email and surfing the web. Get rid of stuff that you own that ties you down and keeps you from being mobile.
• Automate - Start a business that you can reap the benefits of without being in the critical path (he calls these muses). He recommends selling things like training CDs or DVDs in an area where you are perceived as an expert (see below for how to achieve that). Hire a virtual assistant from India at $10/hour to do paperwork and answer email. Set up the purchasing system on the web so it automatically forwards orders to the warehouse which ships the materials. Take yourself out of the equation completely.
• Liberate - Adopt a completely mobile lifestyle. Once the business has been automated, you should only need to check in once a week via email to make a few decisions. Only pick up the phone for a few hours each week, and train all your people that you are only reachable during that time - they’ll start to take initiative and solve problems themselves. At that point, you’re ready to embrace the lifestyle defined in step 1 and pursue your dreams.

The process makes sense. And I think it would work if followed. So why not follow it?

Ferriss is exploiting the existing system, something he takes great glee in doing. He brags about winning a world championship in a martial art by figuring out that weigh-ins were the day before, so he dropped 20 pounds of water weight for the weigh-in, rehydrated before the match, and took advantage of a loophole in the rules that awarded a TKO for pushing his opponents out of the ring by using his longer reach. For selling a training CD, he describes the process of becoming perceived as an expert:

• Join the industry association of the field
• Read the top three books in the field, as recommended by that association
• Summarize the books into one page of talking points each
• Contact a local university, and offer to give a talk, leveraging your association membership.
• Contact two local companies, and offer to give a talk, leveraging your association membership and the fact that you’ve spoken at “University X”.
• Put yourself on a media expert website and cite your association, the talk at “University X”, and talks at “Company X” and “Company Y”.
• Total time to achieve media experthood in your chosen field: Four weeks

I admire his chutzpah and his ingenuity in figuring out how to live life on his terms, but I still don’t completely subscribe to his ideas.

Everything he’s doing is within the rules as they currently exist, but that just perpetuates the system. He’s playing the game as it’s given, rather than trying to improve the game (it reminds me of the difference between finite and infinite games). Maybe changing the system isn’t possible and the best we can do is to exploit it to our advantage. I’m not ready to do that yet, and I will continue trying to live my life “as if” things could be different. Maybe in a couple more years I’ll be ready to concede and I’ll just want to cash out as he did.

I still recommend reading the book, although I’d borrow it from a friend or the library. It’s a quick read, and it’s definitely a strong meme going around my generation, so it’s good to be able to participate in the conversation. There are several good lifestyle suggestions in the book, especially in clearly defining one’s own goals, and eliminating behaviors that are not contributing to achieving those goals (tasks that would be valuable in one’s professional life as well as one’s personal life). I need to commit to some more specific goals, and start hacking my way towards them, and we’ll see if the ideas from the book can help me with that.

I bought my ticket back to California on Virgin America a few months ago and was really psyched about it. The cabin description sounded excellent, and the fact that they let me pay $25 up front to reserve a bulkhead seat with extra leg room was a big win. Here are some more impressions after flying with them.

The pre-flight safety speech was pretty funny - “If you are part of the 0.001 percent of the population who have never used a seat belt before…” If I flew them all the time, it would probably get old, but the variation on the standard speech (while still covering the same material) was nice.

The inflight entertainment system is excellent. I loved it.

• They had satellite TV to watch, plus two dozen TV shows available without commercials for immediate play - I watched a couple episodes of Dexter since I’d heard good things about the show.
• The music selection of MP3s was decent - I listened to tracks from a couple artists I’d heard about but didn’t know the music of.
• Decent movie selection (I chose The Bourne Ultimatum but there were several I would have been happy to watch). Movies were $8, but it was nice that I could watch it at my own pace without worrying about falling asleep or when it was starting or anything. I could just pause it, take a break, etc.
• Food at my convenience. It was so civilized that I could order the food I wanted when I wanted it. It was $10, but I ordered a sandwich and chips when I started watching my movie, and my meal showed up less than 10 minures into the movie. It felt almost like the Parkway theater.
• The games were pretty cheesy 2002 shareware games, and I didn’t try the “inflight chat” option.

Unfortunately, all of the goodwilll generated by the entertainment system was thrown away completely by the fact that the flight was delayed three and a half hours. It was scheduled to depart at 6:35pm, boarded after 9pm, and then sat on the runway and didn’t actually take off until after 10pm. We didn’t get in until close to 2am Pacific time, and then there was only one ground crew working so we had to wait 20 or 30 minutes for our bags. A friend of mine who had also had delay issues with Virgin America theorized that they get low runway priority since they are a new airline, and that makes sense but is unfortunate.

It actually made me think of the Peak book and its pyramids. No matter how much the inflight entertainment system delighted me, if my base pyramid needs of getting to where I’m trying to go in a timely fashion aren’t met, then I won’t be happy as a customer. So Virgin America has some work to do.

It’s not a good sign for the airline industry as a whole that I ended up thinking fondly of my Greyhound bus experience. The Greyhound may be crowded and slow and sometimes late, but I can literally just walk into the station and hop on a bus 5 minutes later which is wonderfully convenient. For this flight, I had to spend an hour commuting to the airport. Then I forgot to pull my laptop out of my bag before security, so I got pulled over and they had to do a full bag search. And then my flight was delayed hours. I’ll stick to the bus and train whenever possible, I think.

Amazon link

Subtitled “How Great Companies Get Their Mojo from Maslow”, this is a book applying the ideas of Maslow’s hierarchy of needs to running a business. Maslow’s hierarchy states that people have different needs, but they can’t even think about certain needs until more basic ones are considered. We have to have food and shelter and safety before we ever start thinking about friends and family. We have to have friends and family before we worry about fulfillment, etc.

Conley applied these ideas in running his hotel management company, Joie de Vivre. He says that everybody involved in a business, from employees and customers to investors, have a hierarchical set of needs. For employees, the baseline need is for good benefits, a fair salary and to be treated well. But that’s not enough to get employees to be loyal participants in the business. Once those basic needs are satisfied, they have social needs - they need recognition from their peers and from their management. If all of their basic and social needs are met, then they look for meaning in their job, where it’s not just a job, but a calling, sharing the company’s mission.

He goes through similar pyramids for customers and investors, and observes that only by reaching the top levels of each pyramid do you get fanatic employees, fanatically loyal customers (Apple), and fanatically loyal investors. And getting those fanatics is a great place for a business to be.

These ideas make a lot of sense to me. As I mentioned at Thanksgiving, I’m fortunate that I’m in a position where I can worry about that top level of the employee pyramid, where I’m looking for meaning in my work. It also helps explain why I’ve been dissatisfied at other jobs in the past, despite getting paid well and having autonomy - I either didn’t feel I was getting the recognition I deserved within the company, or I didn’t share in the company’s mission.

While there aren’t any radically new ideas here, this book presents a good framework to think about the issues associated with running a company. It’s not the answer, but I like the viewpoint it presents, and it’s one I’ve referred to several times since I started reading this book.

Amazon link

Subtitled “Evolution, Complexity, and the Radical Remaking of Economics”, this book is a weird mishmash of several subjects. It starts with a critique of neoclassical economics, moves on to a review of complexity theory and evolution, reframes economics as an evolutionary competition among business models, and then finishes by applying some of these ideas to business strategy, economics and politics. I applaud Beinhocker’s ambition, but the result is a disappointingly shallow book with only a tenuous thread connecting its different parts.

The strongest part of the book was the criticism of neoclassical economics. Beinhocker goes into the history of how economics developed over the course of the twentieth century, and how its practitioners yearned to turn economics into a real science. By co-opting the forms and equations of equilibrium physics, they were able to create mathematical models that bore some resemblance to the economies they were studying.

However, some of the assumptions that are necessary for neoclassical economics are patently unrealistic. For instance, the model of consumers as rational economic maximizing agents doesn’t make any sense when we consider our own purchasing decisions. Economists also assume that economic systems are in a state of constant equilibrium, and that all disruptions to that equilibrium settle immediately, hence the joke about the economist who didn’t pick up the $100 bill because if it was a real $100 bill, somebody else would have picked it up already.

Beinhocker explains how the equilbrium model that the economists were using slowly came to imprison them. Because they had some success with the equilibrium model, they trapped themselves because changing the equilibrium assumptions would mean giving up the advances they had made. Beinhocker uses the analogy of map-making - good maps “are approximate pictures of an underlying reality”. But economists were using a map not based in underlying reality, and it trapped them on a local maximum where any incremental step from where they stood was a step back. This book is Beinhocker’s attempt at a giant leap to a new model that can fit reality better.

Beinhocker stops there and takes a detour into complexity theory, starting with a Social Atom-esque description of a simple economy simulation using software agents. He has chapters about dynamics, agents, networks, emergence and evolution. Most of this section was a review for me as I’ve read books like Gleick’s Chaos, Waldrop’s Complexity, Ian Stewart’s Does God Play Dice?, Kelly’s Out of Control, Kauffman’s At Home in the Universe, Duncan’s Six Degrees, Johnson’s Emergence, Dawkins’s Selfish Gene, etc.

The next section is “How Evolution Creates Wealth”, where he posits that the economy is an evolutionary battleground between competing business models using unique combinations of “Physical Technology” and “Social Technology”. Biological evolution depends on initial differentiation (genetic drift), selection of positive traits, and replication (reproduction), to find good fits with the existing and ever-changing environment. Beinhocker’s theory is that the same factors are at work in the economy, as businesses try to adapt to a changing economic world, with the ones that adapt most successfully and achieve the best fit being copied. It’s a cute theory, but I felt that he was really stretching to try to make it work.

The last section had some interesting ideas as he used his model to suggest new business strategies, better ways of organizing businesses to achieve results, and some implications for finance and politics. I particularly liked the section where he says “Executing and adapting are the ultimate imperatives for any design in an evolutionary system”, as it echos the learn and latch theory that I posited last year. Some of his critiques of finance are pointed as well, in particular how the simplistic assumptions necessary to make current economic models work have deleterious effects on actual behavior.

I thought the book was a decent review of several different subjects, but it didn’t really give me new ideas to play with. Beinhocker’s “evolutionary economics” model is not sufficiently developed for me to be able to use it to think about the world yet, and it’s unclear whether it’s any more based in reality than neoclassical economics was. There are good bits of criticism throughout, but I wouldn’t recommend this book - The Social Atom is a much more compact and thought-provoking book tackling a similar topic.

Amazon link

Do you recognize any of these book covers? Then you know of Chip Kidd’s work.

I first became aware of Chip Kidd when I picked up a book with a striking cover at the library a few years ago. The book was The Cheese Monkeys, and I enjoyed the hilarious over-the-top antics of two art students and a wacky graphic design prof. The jacket copy informed me that Kidd was a leading book cover designer, and so I started keeping an eye out for his work.

Earlier this summer, I visited the Cooper-Hewitt National Design Museum, where they were having a “Design Triennial” to celebrate great design from the past three years. One of the displays was Chip Kidd’s book covers - he had published a retrospective of his work over the past twenty years. I flipped through the book and really liked it. I finally bought it last month when I had an Amazon gift certificate to use.

It’s great. 400 pages of beautiful images of book covers, with a paragraph of commentary from Kidd on each page explaining what he was trying to do. You can see the care and detail which Kidd puts into each and every one of the covers that he designs. I really liked that he includes preliminary sketches, first drafts, and failed attempts of certain covers. By seeing what didn’t work, the reader gets a much better sense of why the final cover does work. It was also great to see his designs for a collection of an author’s work in one place, so that the common design elements popped out.

He also includes great quotes from the authors that he has worked with expressing awe and admiration that Kidd can capture the souls of their books in a few well-designed graphic elements. One memorable account is from a first-time novelist who hated the cover designs that her publisher sent her. Her publisher said “Go to the book store, find a few covers that you like, get the designers’ names, and we’ll go hire one of them to design your cover.” She went to the store, picked four completely different covers so she could get a range of designers, and then found out that all four were designed by Kidd.

While I don’t have an instinct for graphic design myself, I really enjoyed reading about the process that Kidd uses to get his ideas. Sometimes it’s serendipity - while reading the book, he’ll come across an object at a rummage sale that suits the book’s content perfectly. Sometimes it’s hard work - several attempts before converging on one that everybody likes. He will do whatever suits the book’s content best - look at some of the different approaches he uses:

As my experience of finding The Cheese Monkeys demonstrated, a book often is judged by its cover, and can influence somebody to pick up a book they might not otherwise have. If you love books and are interested in graphic design, I’d recommend this book. Come flip through my copy if you’re curious.

Amazon link

This book is recommended by Joel (mentioned in his post on “Econ 101 Management”) so we read it recently in our book club at work.

The premise is that measuring employee performance is guaranteed to distort an organization’s desired results. This assertion contradicts management mantras everywhere, such as “You can’t improve what you can’t measure”. How can a manager know her employees are doing the right thing for the company unless she measures their performance?

Austin attacks this conventional wisdom by creating an economic model of how managers and employees will interact, and then exploring the consequences of that model. The model assumes a certain amount of intrinsic motivation - that the employee wants to do the right thing, but is only motivated to work so hard on their own. So the manager has to offer incentives to get the employee to work harder.

In the model, the employee has two dimensions along which their performance could be measured. If the manager offers incentives based on only one of the dimensions, that will distort the employee’s efforts. Austin uses the example of a job placement service which offered incentives based on the number of job applicants each employee interviewed. The inevitable result was that the employees spent all of their time interviewing applicants and none of their time calling companies to find jobs for those applicants. The goal of the organization was to connect applicants with jobs, but because of the distorted incentive system, it failed completely. Another example is from 21 Dog Years, where customer service representatives at Amazon were measured by how many phone calls they answered per hour. Mike Daisey hung up on every third caller and won a customer service award because he answered so many calls.

At this point, many managers are saying “That’s because the measurements were stupid - if I measure enough aspects of performance, then I can construct an appropriate incentive system.” The problem is that not only do managers have to measure all aspects of performance that contribute to company goals, they have to measure them all equally well. Otherwise, Austin’s model shows that the poorly measured aspects will get ignored in favor of the well measured aspects, and the same sorts of performance distortion occur.

Furthermore, measurement has a cost. An organization has to spend time and resources constructing measurement systems and reviewing the results. If an organization has to measure many aspects of performance to monitor employee performance, the cost of such measurement may outweigh the short-term benefit in increased employee performance.

Austin acknowledges the possibility that in a system with perfect knowledge of what an employee should be doing, such as an assembly line, it might be possible to perfectly measure performance along all relevant axes. But in a knowledge and service based economy, the measurement of performance is always going to be inexact. Because measuring performance directly is impossible, organizations use easier-to-measure proxies for performance. And because there is not a direct correlation between measurement and performance, distortions are introduced into the system.

Austin recommends managing by increasing the intrinsic motivation of the employee to do a good job. He makes the assumption that employees know the most about how to do their own job, so they are the only ones who can optimize their effort among the different aspects of their job. So a non-measuring manager needs to convince the employees to do their best “by example and through persuasion, and in clearly communicating direction to employees”.

The weakest part of the book is that Austin’s thesis rests on the model he constructed for how employees might behave in a measured environment. While the model is appealing, he provides very little data justifying the assumptions he builds into the model. For instance, he assumes that the employee knows better than the manager on how to optimize effort, but that assumption would not hold in a situation where a recent college graduate is being managed by a twenty year veteran. He also assumes employees want to do the right thing for the company/customer, which is not universally true in my experience. Austin is playing the same game as the managers he criticizes - he makes convenient assumptions and constructs a system that will work for those assumptions.

Despite having issues with his methodology, I agree with Austin’s recommendations for management. I hate being measured, as my rant about timesheets illustrated. Don’t revert to Taylorist management methods that treat the employee as an automaton that has to be bribed into doing the right thing. Hire skilled people who want to do a good job, point them in the right direction, and then clear obstacles from their path so they can get there.

I recommend the book as a thought-provoking read despite its weaknesses. Austin’s model is a good counterweight to the pithy aphorisms spouted by management consultants. His thought experiment provides ammunition for a more human-oriented style of management, where employees are treated as more than numbers in a spreadsheet.