Steve Jobs on “Why Companies Fail”

Tuesday, November 27, 2018

Sao Paulo.- I’m in Brazil, catching up on email before I get to work – and I came across a video by Steve Jobs that Sean MacIntyre sent me. (See the link to the video, below.) It’s very good. And Jobs was fundamentally right.

I’ve never thought of it in quite this way, but I’ve always had a gut feeling that product development should lead the business.

When you are just starting out, you have to focus on sales and marketing. That’s because until you’ve been in business for years, you don’t actually know enough about the kind of products your market really wants.

Jobs understood this. In launching his business, he was all about discovering what the market really wanted in terms of customer experience. He said so on many occasions. But as the business grows beyond the point where it is selling hundreds of millions of dollars of product each year, there is a natural tendency for the marketers to take over.

And that can be dangerous – even destructive.

Everything ultimately depends on customer experience. And customer experience is 50% the experience of buying the product and 50% the experience of using it.

The way I have dealt with this has been to preach what I call “incremental augmentation.” It is essentially a refutation of the old adage: If it ain’t broken, don’t fix it.

For me, a healthy business is one whose products are forever improving. And a smart founder/CEO is one that is never satisfied with yesterday’s product.

Jobs’ video provides a deeper insight into why that is smart.

One of the reasons I decided to rewrite Ready, Fire, Aim– my most popular business book – is because, since it was published,  I’ve had many new ideas about why some entrepreneurial businesses are incredibly successful, and some fail miserably.

I’ve posted the introduction and part of the first chapter of my rewrite here on this blog, and I’ll be posting the rest as I get each section finished. One subject that I’m quite sure I will include is the challenge of reining in a big and fast-growing company when its leaders are all very adept at creating profitable growth.

Take a look at what Jobs has to say about this https://www.youtube.com/watch?v=fuZ6ypueK8M

Thanksgiving Morning in Nicaragua

Thursday, November 22, 2018

This year’s to Macy’s Thanksgiving Day Parade featured a musical vignette from Prom, a new Broadway play that opened to great reviews. My niece, Izzy McCalla has a leading role in it. They were scheduled to be on TV at 8:15. At 8:00 we turned on the TV in the den of our house here, but we couldn’t locate it. So we rushed down to the clubhouse, begged the workers to turn on the bar TV and then Number Three Son Michael frantically searched through their larger selection of channels looking for the international channel that would be carrying it.
At 8:14 he was still searching. Everyone — including from Helen my mother in law to Francis my grandson — was yelling at him. “Hurry!”
Then, at 8:15 exactly, the image of Izzy and her costar appeared on screen. We had found it at the very moment it began….!
So we saw the whole thing, thanking our lucky stars and bragging to the restaurant workers ….Esa es nuestra prima! Esa es nuestra sobrina!

 

It’s Thanksgiving – a Good Time to Count Your Many Blessings

Nicaragua

Your wealth:

You haven’t hit the Forbes list of wealthiest humans, but you have enough money to put clothes on your back, a roof over your head, and food in your stomach. “The Pilgrims made seven times more graves than huts,” H.U. Westermayer reminds us. “No Americans have been more impoverished than these, who, nevertheless, set aside a day of thanksgiving.”

However meager your financial assets are now, they greatly exceed those of the great majority of the world’s population. So be thankful for that.

Your health:

You have aches. You have pains. You may have illness and infirmity. But if there are times during the day when you can enjoy yourself by yourself or with other people… you have something to be thankful for.

Your wisdom:

There are so many mysteries, so many unanswered questions. You know only a fraction of what you’d like to know, but you understand the most important things. You realize that of the gifts of life, three are most important.

* Consciousness: the greatest natural gift — your innate and inalienable (see Today’s Word, below) ability to experience the world around you, to notice and to appreciate a million possible things.

* Connections: the limitless possibilities you have to have good and loving moments with your family, your friends, and with virtually everyone you have the chance to speak to every day.

* Creativity: the potential of your imagination — the capacity to do what you want with your mind, which is, after all, where your life is located.

Be thankful for that.

Your work:

For many, work is a chore. But it doesn’t have to be that way for you. You have the ability to find work you love, or love the work you do. It’s about freedom — the freedom to desist from seeing yourself as a victim and to take responsibility for your future, regardless of whatever disadvantages you have now or obstacles that lie before you.

Be thankful for that, too.

Oxygen:

Each breath is another gift.

Be thankful.

I’m back at Rancho Santana for Thanksgiving week…

Tuesday, November 20, 2018

Nicaragua – It’s a beautiful time to be here. The ocean is steel blue and the hills are myriads of green. Because of the recent political troubles, I was initially reluctant to bring the extended family. But day-by-day, homeowners are returning, feeling more assured that it is safe.

It took nearly 20 years after the Sandinista revolution of 1978-79 before gringos were willing to venture down here and buy property. It had been peaceful for more than 10 years at that time. But word traveled slowly back then.

Today, thanks to Facebook and Instagram, news – good and bad – travels at the speed of light. And that is why the resort is nearly half-filled already. If things continue to stay quiet, it’s possible that the resort will be back to full bookings by the middle of next year.

This morning, we stopped by FunLimon, our family’s community center, to watch Rancho Santana’s baseball team compete in the regional playoffs. As you can see from the photos below, the parking lot and the bleachers were overflowing. Despite the tension that still exists from the government’s lethal crackdown on protesters, people are trying to get back to the luxury of living in this beautiful place.

 

The One and Only Secret to a Successful Marriage?

Saturday, November 17, 2018

Delray Beach, FL.- Andy and I were in our late 20s and beginning our careers in journalism. Elka was in her late 30s, working part-time as an accountant for our small publishing company.

She was beautiful and elegant and spoke with an East European accent that was hard enough to mean business but musical enough to make everything she said sound like it was being channeled from above.

We knew that she and her husband were struggling financially. Yet, though she occasionally mentioned their problems, it was always with a smile. She had nothing but good things to say about her personal life. We never heard her complain.

We were crazily infatuated with her.

One day, and I can’t remember how the conversation took this direction, Andy and I were telling her how much we admired her. We were especially impressed, we said, that despite their many challenges, she and her husband seemed to have such a happy marriage.

“Please share your secrets,” we begged.

“There is only one,” she said.

We leaned in.

“The man must love the woman more than the woman loves the man.”

Because it was Elka, I wanted to believe it. But my rational brain knew it was fundamentally romantic nonsense. Good and long-lasting marriages are based on more practical things like compromise, communication, and reasonable expectations.

Still, in the 40 years that have gone by since Elka told us her “secret,” I have not been able to forget it.

Since then, I have read dozens of books on marriage and observed a hundred marital relationships – friends and colleagues and family members. And although I’ve seen plenty of evidence to support the rational view, I’ve also noticed that in many of the best long-term marriages, Elka’s simple maxim proved true.

More on Micro-Cultures, Financial Success, and the “Nature vs. Nurture” Question

Friday, November 9, 2018

Delray Beach, Florida.- On October 18, I posted an essay www.markford.net/success-in-life-its-all-about-micro-culture about the relationship between success in life and something I call “micro-culture.”

The main points I made in that essay:

* What matters most in human development is not one’s macro-culture but one’s micro-culture. Let’s call that the 40 or 50 people that surround you from birth to age, say, 16.

* Let’s make it 49 people, bringing in the social biological concept of the 7-person limit of influence. (7 x 7 = 49)

* Micro-cultures that value hard work, intelligence/education, and financial success produce financially successful adults. Micro-cultures that lack these values produce adults that struggle or fail financially.

Since then, I’ve had some further thoughts:

* Culture is not just about values but also about expectation. It’s not just that certain micro-cultures value hard work, intelligence/education, and financial success, it’s that their members are expected to live those values.

* Another factor in determining success is an individual one. I call it self-sorting (for lack of a better word). The idea is that within any environment – academic, social, or business – people tend to sort themselves along a line from the back end to the front end. This is their pecking-order comfort zone. They do this regardless of how active or competitive the environment is.

* I am not sure whether one’s pecking-order comfort zone is solely determined by individual circumstance or whether it may be one of the values of the micro-culture. I’ve got to do a bit of research on that. But it’s possible that it is a cultural value. And if it is, that’s interesting, right?

I’m still working on this. But the more I think about it, the more I think it is the seed of an idea that I should develop into a monograph. Maybe even a book.

Hmmm. Stay tuned…

A “Simple Question” With a “That Depends” Answer

Monday, November 5, 2018

Delray Beach, Florida.- “I have a simple question,” RS wrote. “How can you calculate the odds for losing your money before you start a business or invest your capital? I’ve read what you said about it, but I can’t figure out how to do it! (I can, though, tell you that the odds to roll a 6:6 with two dice is 2.77%.)”

I like the critique implicit in RS’s question. The answer is that you cannot mathematically calculate the odds of losing money in a business. But you can figure out if the odds are in your favor.

I told him to start with this:

* Have you ever started the same or a very similar business before?

* If not, have you worked as a senior person in the same or a very similar business?

If the answer is no to either question, the odds are against you.

If I feel the odds are against me, the only way I will invest in a new business is if I can do a series of marketing tests to identify its optimal selling proposition within a timeframe and a budget that I can afford.

That will be different for everyone. For me, the timeframe would normally be up to but not more than 2 years. And the dollar limit would be $50,000 to $100,000.

Life Is Good… How Did I Get So Lucky?

Saturday, November 3, 2018

New York City.- I’m at Club Macanudo on 63rd Street, in between Park and Madison in NYC. It’s a stately, turn-of-last century townhouse, not unlike Agora’s offices in Baltimore.

The doorman greets me as I enter… like I’m a regular customer. I consider sitting at the oak and glass bar, but it looks a bit busy. So I advance to one of the cigar rooms, past a dining room where men and women are enjoying steak dinners.

I sit down in one of the comfortable leather chairs and order a Smoke & Fire cocktail. “I don’t need the cigar menu,” I tell the server. “I’ve brought something special of my own.”

The lighting is soft. The air is surprisingly fresh, despite the fact that there are about 30 men in the room and they are all smoking. They are mostly middle-aged, but there are some youngsters and a smattering of older men like me. Everyone seems unusually relaxed. No one is working. No one is on the phone. They are smoking and drinking and conversing. I feel like I belong. I’m not an intruder. I’m not an imposter. I’ve earned this.

And there’s more…

Tomorrow morning at 8:30 I will have a private Brazilian Jiu Jitsu (BJJ) lesson from Marcel Garcia, one the world’s most celebrated world champions. I’m pretty excited about it. It’s not easy to get a roll with MG. I’ve known his head instructor, Paul Shreiner, for a couple of years. He hooked me up. I can’t wait to tell one of my BJJ buddies back in Delray Beach about this experience.

I’ll be back at the hotel by 10:30 and I’ll get in an hour or two of writing before K returns from her morning walk. We’ll spend the afternoon at the Met and visiting a midtown art dealer I’ve worked with in the past. He has a 1905 Andre Derain landscape that I’ve been jealously following for nearly 15 years. Maybe tomorrow will be the day I own it. Dinner will be at a favorite restaurant in Brooklyn Heights with Number One Son and Daughter-in-Law and their twin girls.

Wow! How did I get so lucky?

I remember what my partner said to a young man who came up to him at a business event and introduced himself. “I so admire everything you’ve achieved in your life,” the young man said. “Someday, if I’m lucky…”

Smiling, my partner interrupted him. “You get to work at 7 a.m. and go back home at 7 p.m.,” he said. “You do that six or seven days a week for 40 years and the luck takes care of itself.”

Show Me Your Freak Card

Tuesday, October 30, 2018

Delray Beach.- I liked him the minute he introduced himself. Poised, intelligent, and energetic, he wanted to interview me for his podcast. We did a short, extemporaneous bit on entrepreneurship. Afterwards, I sat down with him for a chat.

We talked about his career. He started from scratch, prompted, he told me, by reading Ready, Fire, Aim. (He could recite passages from chapters I’d forgotten that I’d written. I was flattered.) Little by little, he built a company that was now making nearly $20 million a year. I was impressed.

Then he told me a story about how, when he was starting out and still living at home and working for his father, he had tried to create a competing business by stealing his dad’s employees.

“But he found out what I was doing and put a stop to it,” he said.

I looked at him skeptically. He wasn’t joking, although he seemed to think I would find the anecdote amusing.

Because he was otherwise likable and even admirable, I decided to hook him up with our global CEO. Before making the introduction, I briefed her on his many positive qualities. But I also told her what he had told me about trying to knock off his dad’s business.

“That freaked me out,” I said.

“Good!” she replied. “That means you know what his ‘freak card’ is. Everyone has one.… well, most people do. It’s a personality quirk that could eventually freak up the relationship. And when someone shows you their freak card early on, you know what you are up against… and you can assess whether or not you can handle them.”

I thought about that. I thought about all the business relationships I’ve had. Most were good to very good. And most of my counterparts in those relationships were people with quirks. Their quirks were more often comical than annoying (as I presume my quirks were to them). But the bad relationships? Those guys? Their quirks were serious. And damaging. I do wish I’d gotten a look at their freak card a lot sooner.

The Perfect Partnership Formula

Saturday, October 27, 2018

Delray Beach, FL– Talk about teamwork… In 1995, a young man named Howard Marks got together with another young man, Bruce Karsh, and the two of them built a $100 billion asset management firm from scratch.

Tim Ferriss asked Marks: “So what was the secret to your partnership?”

Marks had an interesting answer, one that made a lot of sense to me. He said that the best partnerships are those in which “the partners have the same values but complementary skills.”

In their case, they had the same idea of the sort of business culture they wanted to create and they had the same ideas about how to treat clients. But they differed in skill sets. Karsh was a slow thinker, Marks said. And he was a fast thinker.

The combination of intuitive and analytical thinking, Marks said, made their decision making stronger.

But, he added, it “couldn’t have been done without trust and humility.” You need to trust that your partner has the firm’s best interests at heart and you have to trust his judgment. “You also have to understand the limits of your own capabilities. You have to accept the fact that you may be wrong about almost anything.”

I’ve often said that you can’t entirely trust what successful CEOs say about what did. You’ve got to wonder whether they’re telling you the truth or a burnished version of it.

Still, the Marks/Karsh formula rings true for me. I’ve had many successful partnerships in my business career and a few that went bad. Those that failed did so precisely because somewhere along the line we realized we had different values: different ideas about product quality, treating employees, and making deals.

And the successful ones were all unequal partnerships – unequal in terms of our talents and knowledge and skills, so that the sum of our two heads were better than two.

If you are in a partnership now or thinking about getting into one, it might serve you to think about whether you do, indeed, have similar values and different talents and skills.