Review: The Goal

 The Goal has "required reading for Amazon employees" all over the cover, and was assigned reading for work. It's basically a business process book written in the form of a novel, which I find strange and quite distracting, but since I was getting paid to read it I plowed through and read it anyway.

The POV character is a plant manager for a manufacturer of widgets (it's never even discussed what the widgets are, what they do, and who the customers are --- it's quite clear that this is a business book for managers who should be able to manage anything and don't care about the technical details). The plant is in trouble, always late for delivering goods for customers, and is in danger of being shut down.

The POV character recalls a physics instructor who's become a big name business consultant, and calls him for help. The consultant then guides the POV character through what's obviously Toyota's JIT manufacturing system, identifying the bottlenecks in the production process and then re-orienting the plant in favor of maximizing throughput on the bottlenecks regardless of other artificial metrics such as efficiency on non-bottlenecked machines and processes. Various problems are overcome, some of which are buffering the bottlenecked processes, reducing batch sizes, and thereby reducing latency from order to delivery, which then enables more sales to be made.

Then the author takes everything one more level up in abstraction and designates a process for this type of analysis: (1) identify the goal (2) identify the bottlenecks (3) re-orient everything around the bottlenecks (4) increase capacity around the bottlenecks (5) re-evaluate.

In between all this, the POV character has to overcome his wife leaving him because he spends so much time at work, and goes through epiphany after epiphany over how his egghead acquaintance who's a management consult is so useful.

Maybe the kind of people who don't read real novels but love lean manufacturing think this is a great book. Me, I think the book could have been much better if it had been a history of Toyota's development of the lean manufacturing (JIT) system.

Review: Principles

 I was assigned Principles as part of an onboarding reading. I'd never heard of Ray Dalio or Bridgewater Associates before, and I was dubious about yet another business book. But I gave it a shot anyway.

The first 2/3rds of the book were irritating. I generally agreed with Dalio that the most important thing in the world was to face reality, and that you need to iterate constantly towards your understanding of reality and to challenge your view. But I got very annoyed by his choice of words. For instance, he used "evolve" when he meant "improvement." This is a pet peeve of mine, since evolution doesn't actually have any direction or aim. I was also very annoyed by various statements about how the system he found himself in was a good one. I certainly don't think that viruses or mosquitoes do any good. We just have to live with them. I suppose if you become mega rich like Ray Dalio did, you can't help but believe that the universe you live in must be the best of all possible worlds, even if objective reality of the majority of people living around you says otherwise.

The last 3rd of the book ("Work Principles") were however a treasure trove of great ideas and deep insight. For instance, here's a brilliant section on why you need to talk to your skip-level reports, a major mistake many directors (new and experienced) make:

Probe to the level below the people who report to you. You can’t understand how the person who reports to you manages others unless you know their direct reports and can observe how they behave. f. Have the people who report to the people who report to you feel free to escalate their problems to you. This is a great and useful form of upward accountability. g. Don’t assume that people’s answers are correct. People’s answers could be erroneous theories or spin, so you need to occasionally double-check them, especially when they sound questionable. Some managers are reluctant to do this, feeling it is the equivalent of saying they don’t trust their people. These managers need to understand that this process is how trust is earned or lost. Your people will learn to be much more accurate in what they tell you if they understand this (page 459)

Here's another one about how to properly run a post-mortem:

 Avoid the anonymous “we” and “they,” because they mask personal responsibility. Things don’t just happen by themselves—they happen because specific people did or didn’t do specific things. Don’t undermine personal accountability with vagueness. Instead of the passive generalization or the royal “we,” attribute specific actions to specific people: “Harry didn’t handle this well.” Also avoid “We should . . .” or “We are . . .” and so on. Since individuals are the most important building blocks of any organization and since individuals are responsible for the ways things are done, mistakes must be connected to those individuals by name. Someone created the procedure that went wrong or made the faulty decision. Glossing over that can only slow progress toward improvement. (Page 479)

 Use “public hangings” to deter bad behavior. No matter how carefully you design your controls and how rigorously you enforce them, malicious and grossly negligent people will sometimes find a way around them. So when you catch someone violating your rules and controls, make sure that everybody sees the consequences. (Page 514)

The book has a ton of common sense, and ultimately, if I'd summarize the theme of the book, it's that the management team need to approach an organization the way an engineer approaches code:

 Great managers are not philosophers, entertainers, doers, or artists. They are engineers. They see their organizations as machines and work assiduously to maintain and improve them. They create process-flow diagrams to show how the machine works and to evaluate its design. They build metrics to light up how well each of the individual parts of the machine (most importantly, the people) and the machine as a whole are working. And they tinker constantly with its designs and its people to make both better. They don’t do this randomly. They do it systematically, always keeping the cause-and-effect relationships in mind. (Page 451)

You will note that many management books aspire to inculcate this sort of thinking. One good one, for instance, is the Fifth Discipline. I loved the Beer Game as described in that book, because it made a big deal out of how long feedback cycles derail non-systematic thinking. But the rest of the book didn't cover the practical details of how to build a learning organization, whereas Dalio's book does.

Dalio claims that one key approach that makes Bridgewater different, is that it makes its potential employees take a personality test. The resultant attributes are placed together with your track record to create a personnel summary (I imagine this to be something like a D&D character sheet). Then, when you need a team to do X, instead of randomly grabbing people who happen to be available, you can search through your employee database to find the best matches in terms of personality and track record, much like a team of D&D players might say, "We need a cleric, a bard, 2 fighters, and a wizard."

There's also an emphasis on "believability weighted decisions." The idea is that when making a decision, you want the people with the highest believability about that domain. Dalio claims that the believability is based on 2 principles: (1) having done the task (or similar tasks) at least 3 times before, and (2) being able to explain how and why the decision should be made. This is a nice balance between the dummy "democratic voting approach" or the even more dummy "I'm your boss so I'm going to call this shot for you" approach.

I tried the personality test, and got some results. Unfortunately, it still reads a little bit like a horoscope to me --- too generic and not generally all that interesting.

Nevertheless, I really thought the last 3rd of this book more than paid for itself in time spent reading it. It's in a far better class than books like Beyond Entrepreneurship or The Making of a Manager. Your time will be much better spent reading this book instead of any of those.

Highly recommended.

Review: The Messy Middle

 The Messy Middle is a book about entrepreneurship. Rather than being one about raising money, etc., it's almost entirely about the development of a startup past the initial stages but before being fully successful as an independent entity or being sold. The author started Behance, which was bought by Adobe, and sprinkles his narrative with anecdotes and stories from both his time managing Behance and as a transformative middle manager at Adobe.

The book covers many topics, but the management sections are interesting. In one particular case, he compares a well functioning team to that of a human body system, and describes a well-jelled team as having a healthy immune system, which would wholesale reject any transplant of a foreign entity (such as an new leader being injected into the mix). He describes the manager's role there as helping to suppress the immune system so that the new transplant can contribute. I will note that like many managers, at no point does he consider promoting someone from inside. (And in this particular case, he had been long time friends with the new manager and had faith that it would work out without tearing the team apart)

I switched from the audio book to kindle format in the middle of this book, but there were many anecdotes in this book that were geared entirely towards the product manager, rather than the engineering leader. One thing that particularly stands out is the fact that he considers the most important piece to be self-motivation, mentioning that startups are usually so hard that if you can't motivate yourself you absolutely will not finish.

There are huge sections about motivating yourself, optimizing processes, and right at the end a few notes about getting advice from third parties before any kind of sale happens. It's definitely good stuff and worth your time to read. There's the usual amount of self-aggrandization from any successful entrepreneur, but also enough useful stuff that I wouldn't consider it a problem.

Review: Noise - A Flaw in Human Judgement

 Noise is a book about human judgement. The book's unique perspective about judgement is that judgement is an attempt to use the human mind as an instrument. Of course, the human mind is unreliable. Your judgement is not just biased as a result of your lived experience, but also inconsistent --- your decisions about important things (e.g., judges sentencing someone) could be affected by the weather, your internal state of hunger, and and whether or not you just had a spat with your spouse:

Eliminating bias from a set of judgments will not eliminate all error. The errors that remain when bias is removed are not shared. They are the unwanted divergence of judgments, the unreliability of the measuring instrument we apply to reality. They are noise. Noise is variability in judgments that should be identical. (Kindle loc 5183)

 The early part of the book establishes several things:

• Many simple algorithms outperform expert humans (e.g. mechanical diagnostic rules outperform many doctors) purely because they're consistent
• Machine learning algorithms do even better, but not by a lot
• Humans are unforgiving of algorithms once they've seen that it makes a mistake (this is why self-driving cars don't merely have to match the standard of driving that humans achieved to be accepted --- they have to outperform humans in nearly all situations)
• It's sexy to have an anti-bias program, but unsexy to talk about noise. But from the point of view of judgement errors, they have the same impact, and it's easier to fix noise than to fix bias

people are willing to give an algorithm a chance but stop trusting it as soon as they see that it makes mistakes. On one level, this reaction seems sensible: why bother with an algorithm you can’t trust? As humans, we are keenly aware that we make mistakes, but that is a privilege we are not prepared to share. We expect machines to be perfect. If this expectation is violated, we discard them. Because of this intuitive expectation, however, people are likely to distrust algorithms and keep using their judgment, even when this choice produces demonstrably inferior results. This attitude is deeply rooted and unlikely to change until near-perfect predictive accuracy can be achieved. Fortunately, much of what makes rules and algorithms better can be replicated in human judgment.(kindle loc 1917)

One interesting thing is that there are people who exhibit less noise than others. This was covered by Philip Tetlock in his research on political experts and predictions. The super-forecasters have one particular characteristic that's important:

 To be actively open-minded is to actively search for information that contradicts your preexisting hypotheses. Such information includes the dissenting opinions of others and the careful weighing of new evidence against old beliefs. Actively open-minded people agree with statements like this: “Allowing oneself to be convinced by an opposing argument is a sign of good character.” They disagree with the proposition that “changing your mind is a sign of weakness” or that “intuition is the best guide in making decisions.” In other words, while the cognitive reflection and need for cognition scores measure the propensity to engage in slow and careful thinking, actively open-minded thinking goes beyond that. It is the humility of those who are constantly aware that their judgment is a work in progress and who yearn to be corrected. We will see in chapter 21 that this thinking style characterizes the very best forecasters, who constantly change their minds and revise their beliefs in response to new information. Interestingly, there is some evidence that actively open-minded thinking is a teachable skill. (location 3300)

(Incidentally, if you read that description of an actively open-minded person carefully, you'll note that there's one profession where that trait is not only encouraged, but it is essential: scientists!) 

The second half of the book discusses how to get rid of noise, or at least, reduce it. Much like "how to lose weight," you may find that you already know most of the techniques, and are already using it in some arenas (such as hiring and interviewing):

1. Structure your decisions. By splitting off the decision into multiple facets, deciding on criteria and rating each facet separately, you prevent the halo effect of one particularly outstanding facet overshadow your ability to independently assess your other facets. (when interviewing candidates, you get each person interviewing those candidates to focus on a different facet to assess)
2. Humans are better at ranking decisions than at absolute comparisons. It is far better to have a few instances for people to compare against, than to try to construct a scale that everyone agrees on. For instance, you might think that on a scale of 1 to 10, a 10 means "in the top 10%", but someone else might never give a 10, because to her, a 10 means "perfect", and nothing is ever perfect. But given a list of examples, it's probably easier for two people to agree that X is a better engineer than Y, who is in turn better than Z.
3. When it comes to group decisions, ensure that there is independence between people who are assessing the decision. Rather than doing a round-table discussion, make everyone write down what their assessment, and show aggregate/anonymized sentiment charts before starting the discussion. This will allow contrarian folks to see that the "groupthink" sentiment might not be as dominant as it seems from a purely verbal discussion, and prevents corrupting later speakers with the opinions of the early speakers.
4. When you don't have a group to make a decision, take advantage of the inconsistency of your own judgement by separating the facets and making assessments at different times, writing them down, and integrating your judgement on different days. This gives you a chance to average out the noise in your judgement.
5. Appoint a bias observer with a checklist to look for fallacies in decision making. (There's a sample checklist in the book)
6. Treat a one-time decision as though it's a recurring decision that's made once. It's worth the effort to break it down and structure it as though it's going to happen again.
7. When picking a team to make decisions, it's better to pick a team with a diverse set of skills than to rank order who are great decision makers and just pick the top N.

Did I just summarize the book so you don't have to read it? No. Much of the book discusses the complexity involved in the above rules. For instance, in rule 2, they discuss:

Many executives object to the notion that nearly all employees can meet expectations. If so, they argue, the expectations must be too low, perhaps because of a culture of complacency. Admittedly this interpretation may be valid, but it is also possible that most employees really do meet high expectations. Indeed, this is exactly what we would expect to find in a high-performance organization. You would not sneer at the leniency of the National Aeronautics and Space Administration’s performance management procedures if you heard that all the astronauts on a successful space mission have fully met expectations. (kindle loc 4192)

 a system that depends on relative evaluations is appropriate only if an organization cares about relative performance. For example, relative ratings might make sense when, regardless of people’s absolute performance, only a fixed percentage of them can be promoted—think of colonels being evaluated for promotion to general. But forcing a relative ranking on what purports to measure an absolute level of performance, as many companies do, is illogical. And mandating that a set percentage of employees be rated as failing to meet (absolute) expectations is not just cruel; it is absurd. It would be foolish to say that 10% of an elite unit of the army must be graded “unsatisfactory.” (kindle loc 4196)

In discussing having a decision/bias observer, they note:

 A decision observer is not an easy role to play, and no doubt, in some organizations it is not realistic. Detecting biases is useless if the ultimate decision makers are not committed to fighting them. Indeed, the decision makers must be the ones who initiate the process of decision observation and who support the role of the decision observer. We certainly do not recommend that you make yourself a self-appointed decision observer. You will neither win friends nor influence people. (kindle loc 3400)

 The authors observe that performance systems at most companies not just suck, but are actively counter-productive:

if you do measure performance, your performance ratings have probably been pervaded by system noise and, for that reason, they might be essentially useless and quite possibly counterproductive. Reducing this noise is a challenge that cannot be solved by simple technological fixes. It requires clear thinking about the judgments that raters are expected to make. Most likely, you will find that you can improve judgments by clarifying the rating scale and training people to use it consistently. This noise-reduction strategy is applicable in many other fields. Speaking of Defining the Scale “We spend a lot of time on our performance ratings, and yet the results are one-quarter performance and three-quarters system noise.” “We tried 360-degree feedback and forced ranking to address this problem, but we may have made things worse.” “If there is so much level noise, it is because different raters have completely different ideas of what ‘good’ or ‘great’ means. They will only agree if we give them concrete cases as anchors on the rating scale.” (kindle loc 4257)

Do I have criticisms of this book? Yes. It's frequently repetitive, and the authors clearly stitched together the book by writing various sections separately. As a result, one section of the book will repeat items from a previous section of the book. By the time you've finished the book, you'll feel as though a dead horse has been both beaten and flogged.

But this is such an important topic, and has such wide applicability (Which candidate do we hire? Which employee should we promote? Which job offer should you take? Which graduate school do you attend? Which car do you buy?) , and current practices so poor (think about how infrequently we structure even major decisions like an acquisition) that the book is very valuable in forcing you to slow down and think hard about how the process of making decisions. The culture today prizes intuition, and the book points out that trying to take out intuition will lead to a backlash and might not be desirable anyway, but instead, the correct approach should be to delay the use of intuition until it's been fully informed through a valid process. Only then can intuition lead to your best available decision. The book points out that the process need not be slow, and provides many case studies on how it can be used.

That makes this book important and valuable reading, both in business and in personal life. Highly recommended.

Post-COVID home and office design

 Recently someone showed me a group photo from a Pokemon GoFest. My immediate reaction was visceral: this looks way too dangerous during COVID19 times --- too crowded, too many people in a small space, never mind that it was outdoors. Before this year, there was hope that with a vaccine and good public health measures we could return to post-COVID19 times, but now it's looking more and more like COVID19 will be endemic.

In the short-term regardless, remote-work has become the norm, but I think that architects and office designers are still behind the curve on designing for a post-pandemic world. I'll start with the home. Prior to the pandemic, great halls were the fashion for home design. In a post-pandemic world where work-from-home is the norm, the great hall is the biggest waste of space you can imagine. Consider:

• Tall ceilings amplifies noise and creates echo-y environments, meaning that the space cannot be used for more than one zoom call at a time
• The open space does not provide isolation, whether you're doing home work, writing code, or even writing a report.
• The big empty space  does not afford power sockets which are still necessary for power or large monitors, even if your wi-fi coverage was fast enough or you had a mesh router.
• Finally, any one cooking or eating in the great hall will disturb anyone who's trying to work.

It is far better in the post-COVID environment to have a lot of small enclosable spaces than to have one big space, and home designs in the past 10 years have not caught up to that reality, and many home buyers have fallen prey to fashion rather than the practicalities of working from home.

Going to the office, the situation is even worse. Office designs in the past 10-15 years have been constrained by the costs in high rent areas such as Silicon Valley and the need to pack as many people as possible in a work environment. All the space recommendations of Peopleware for knowledge workers (engineers, artists, etc) have been deprecated in favor of open-floor plans with no walls or doors. There is no way any high end creative technical talent will put up with that sort of environment in a COVID-endemic environment. So you get announcements like DropBox moving out of their offices in favor of pre-reserved collaborative spaces.

I think for very small teams (3-4 people) it's possible to do long term remote work. But if you have a true multi-disciplinary development, you'll soon outstrip the capabilities of Zoom. Even the best remote work environments cannot beat standing together in front of a white board for impromptu design discussions. And for the most collaborative creative teamwork (think video games, or storyboarding a Pixar movie), you will require in person work. Despite my best efforts I have to constantly push people to jump into zoom calls instead of slacking at each other in a slack channel: the bandwidth provided by even an imperfect Zoom call with a shared screen far outstrips most people's ability to express themselves in the written medium!

A big company like Google/Facebook/Dropbox will probably not miss the creativity hit from daily collaborative work (though I'd argue that they do, but just as described in Peopleware, there's no way to measure the business loss from creative ideas not being put into practice, they don't know what they're missing), but if you're a startup (or in a creative endeavor like Pixar or Naughty Dog), you cannot afford to lose this, and if you visit offices like Pixar's, you'll discover that they never adopted the mass open-space fashion of Silicon Valley. (Peopleware cites examples of "skunkworks" projects where the managers successfully placed their teams in non-traditional offices precisely to maximize team work --- the only reason any startup can perform a large company is that they have focus and team work in ways that big companies cannot do) I suspect that the more creative the work, and the more multi-disciplinary the work, the more likely it is that it will benefit from in-person collaboration and team work. Hence, you might want your accounting department to be entirely remote (nobody wants creative accounting), and payroll processing maintenance and programming could probably be done remotely, but putting together a movie, high quality video game, or solving new technical problems might benefit from in person collaboration.

Unlike pre-COVID days, however, you can no longer mandate that your talent walk in the office every day. You have to make them want to do so. A lot of this is building teams where people are eager to collaborate and see each other in person, but making the office a more desirable workspace than most people's homes (which are, as described above, not configured for decent individual creative work, let alone collaborative work) is a good first step.

Those recommendations from Peopleware include:

• At least 100 square feet of private work space per person, with a door you can close for privacy and/or noise isolation. (Sorry, head phones do not cut it!)
• Collaborative work environments that are well ventilated, preferably with windows
• A gradation of private to collaborative to public workspace

Ironically, the pre-built spaces that have these characteristics turn out to be single-family homes built in the 1950s, with low ceilings, individual rooms, and a shared living room work environment. They sometimes even have kitchens big enough for a team to make and eat a meal together. It probably isn't a surprise that many successful startups had houses as office space rather than an actual office building.

If I were to design an office for the future, I would create a hub and spoke design, with large teams divided into smaller teams, each with a collaboration area, and bigger collaboration areas for cross team communications, brain storming, or design. Instead of the monolithic cafetarias of the past, you would construct smaller dining areas that let teams dine together without putting huge numbers of people together to spread disease.

It's fashionable to denigrate offices in favor of remote work now, but I suspect that the future success stories will come out of in person collaboration for the spark and serendipity that cannot occur through scheduled zoom calls. It will take real courage (not the Apple kind) to build these workspaces of the future that cannot look anything like the sardine-packed workplaces of the past, but the ones who succeed will discover that it is well worth the effort, and the reduced cost of offices in the future will be but one component of that.

Additional Reading

Has the Pandemic transformed the Office Forever? (The author seems afraid to draw any conclusions in this article, but it does a good job discussing trends prior to the pandemic)

Welcome to the Post-Pandemic dream home

Review: How will you measure your life?

I picked up How Will You Measure Your Life expecting the usual business school professor memoir of self-congratulation and lots of business anecdotes. I was surprised to discover that it was a parenting book! Yes, there are business anecdotes and semi-case studies, but the majority of the book is about prioritization, namely how not to neglect the long term important stuff even though it's the short term stuff that provides positive feedback and reinforcement. For instance, I've definitely got friends who fit into this description:

For those of my classmates who inadvertently invested in lives of hollow unhappiness, I can’t help but believe that their troubles stemmed from incorrectly allocating resources. To a person, they were well-intended; they wanted to provide for their families and offer their children the best possible opportunities in life. But they somehow spent their resources on paths and byways that dead-ended in places that they had not imagined. They prioritized things that gave them immediate returns—such as a promotion, a raise, or a bonus—rather than the things that require long-term work, the things that you won’t see a return on for decades, like raising good children. And when those immediate returns were delivered, they used them to finance a high-flying lifestyle for themselves and their families: better cars, better houses, and better vacations. The problem is, lifestyle demands can quickly lock in place the personal resource allocation process. “I can’t devote less time to my job because I won’t get that promotion—and I need that promotion …” (Kindle Loc 880)

 And of course, I'm always surprised by the number of people who like to outsource important parenting functions:

One of the most common versions of this mistake that high-potential young professionals make is believing that investments in life can be sequenced. The logic is, for example, “I can invest in my career during the early years when our children are small and parenting isn’t as critical. When our children are a bit older and begin to be interested in things that adults are interested in, then I can lift my foot off my career accelerator. That’s when I’ll focus on my family.” Guess what. By that time the game is already over. An investment in a child needs to have been made long before then, to provide him with the tools he needs to survive life’s challenges—even earlier than you might realize. (Kindle loc 1101)

 There's wonderful insight even into why what we do never seem to satisfy our spouses:

We project what we want and assume that it’s also what our spouse wants. Scott probably wished he had helping hands to get through his tough day at work, so that’s what he offered Barbara when he got home. It’s so easy to mean well but get it wrong. A husband may be convinced that he is the selfless one, and also convinced that his wife is being self-centered because she doesn’t even notice everything he is giving her—and vice versa. This is exactly the interaction between the customers and the marketers of so many companies, too. Yes, we can do all kinds of things for our spouse, but if we are not focused on the jobs she most needs doing, we will reap frustration and confusion in our search for happiness in that relationship. (Kindle loc 1364)

 Much of the book's notes go from child development to self-esteem development, and discusses how certain business case studies (such as Dell outsourcing production of components and eventually the whole machine to Asus until Dell could no longer compete) apply to the raising of children.

in outsourcing much of the work that formerly filled our homes, we have created a void in our children’s lives that often gets filled with activities in which we are not involved. And as a result, when our children are ready to learn, it is often people whom we do not know or respect who are going to be there...if your children gain their priorities and values from other people … whose children are they? Yes, they are still your children—but you see what I’m getting at. The risk is not that every moment spent with another adult will be indelibly transferring inferior values. Nor is this about making the argument that you need to protect your children from the “big bad world”—that you must spend every waking moment with them. You shouldn’t. Balance is important, and there are valuable lessons your children will gain from facing the challenges that life will throw at them on their own. Rather, the point is that even if you’re doing it with the best of intentions, if you find yourself heading down a path of outsourcing more and more of your role as a parent, you will lose more and more of the precious opportunities to help your kids develop their values—which may be the most important capability of all. (Kindle Loc 1646-1654)

 The book encourages you to let your children fail and suffer the consequences early, rather than setting them up to become fragile successful kids by overcompensating for them:

The braver decision for parents may be to give that child a more difficult, but also more valuable, course in life. Allow the child to see the consequences of neglecting an important assignment. Either he will have to stay up late on his own to pull it off, or he will see what happens when he fails to complete it. And yes, that child might get a bad grade. That might be even more painful for the parent to witness than the child. But that child will likely not feel good about what he allowed to happen, which is the first lesson in the course on taking responsibility for yourself...Our default instincts are so often just to support our children in a difficult moment. But if our children don’t face difficult challenges, and sometimes fail along the way, they will not build the resilience they will need throughout their lives. People who hit their first significant career roadblock after years of nonstop achievement often fall apart. (Kindle loc 1855)

There's even a great section about hiring executives, describing a common mistake among startups, which is to hire managers who've successfully run big company organizations with lots of support, rather than hiring managers who've built organizations handson from a small base, even if the resulting organization wasn't as large as the more conventional manager.

I enjoyed the book, highlighting section after section, and thinking about the strong parenting advice in this book. Recommended.

A Man for All Markets

A Man for All Markets is Ed Thorp's autobiography. It's a great book about how Thorp went from being a mathematician to being the first person to systematize and develop a system for beating blackjack, and then created the modern hedge fund. It's filled with great anecdotes:

We had been told that slide rules would be allowed for the first time this year but that they weren’t necessary. As an afterthought I brought along a ten-cent toy slide rule—all I felt I could afford—thinking I could always do a quick rough check of my calculations if I had any extra time. As I worked through the test I knew every answer. But then the last section of the test was distributed. This part of the exam required many more calculations than I could do by hand in the time allowed. My cheap tiny slide rule was worthless. Out came the full-sized well-machined slide rules all around me. Surprise! Slide rules were not merely optional—they were necessary for anyone who wanted to win. There was no credit given for showing the correct method, only credit for a numerical answer, to a specified level of “slide rule accuracy.” I was sickened by the realization I would likely not place high enough to get the scholarship I needed and unhappy with myself for not preparing by purchasing a hard-to-afford top-of-the-line slide rule. It seemed so unfair to convert a test about chemistry into one about slide rule arithmetic. Be that as it may, I set to calculating by hand as quickly as I could. In the end, I was only able to complete 873 of the entire exam’s 1,000 points’ worth of questions, so this was the most I could possibly score. I knew the top winner typically got 925 to 935, so I had no chance at first place. When my father picked me up I was forcing myself not to cry and could barely talk. In class Mr. Stump could see that I was chastened and obviously had done badly. We didn’t talk about it. I wrote the episode off to my own naïveté. But I did go out and buy the best slide rule I could afford. A couple of weeks after the test, Mr. Stump called me aside to tell me the results. My score was 869 points out of the 873 points I had answered. First place was far ahead at about 930, but second and third place were just a few points ahead of my fourth-place finish. With a good slide rule I could have been first. (Kindle Loc 716)

 And once again, Thorp emphasizes how important public universities like UC Berkeley is to the poor and under-privileged:

The scoring pattern of the chemistry exam was repeated, only this time I was first with 931 points. The second-place winner was fifty or sixty points behind. Surpassing the smug and privileged, I had first pick of the scholarships that were offered, wavering between Caltech and UC–Berkeley. Caltech, my first choice, offered full tuition, but I did not have an extra $2,000 per year for the dormitories and expenses. Pasadena was expensive and I knew of no place nearby within my budget. I simply couldn’t afford Caltech. My UC–Berkeley scholarship, the largest they then gave, was for $300 a year. Tuition, which was $70 a year, was covered separately for me by a scholarship for children of World War I veterans. Berkeley also had low-cost room and board just off campus. Cheaper yet was the Student Cooperative Housing Association, with room and board for $35 per month and four hours of work a week. When I picked Berkeley, I consoled myself with the hope that at least there would be plenty of girls and my social life might bloom. (Kindle Loc 831)

My kindle highlights page from the book is chock full of great stories:

 Most people I’ve met haven’t thought through the comparative values to them of time, money, and health. Think of the single worker who spends two hours commuting forty miles from hot and smoggy Riverside, California, to a $25-an-hour job in balmy Newport Beach. If the worker moves from his $1,200-a-month apartment in Riverside to a comparable $2,500-a-month apartment in Newport Beach, his rent increases by $1,300 a month but he avoids forty hours of commuting. If his time is worth $25 per hour he would save $1,000 ($25 × 40) each month. Add to that the cost of driving his car an extra sixteen hundred miles. If his economical car costs him 50 cents a mile or $800 a month to operate, living in Newport Beach and saving forty hours’ driving time each month makes him $500 better off ($1,000 + $800 − $1,300). In effect he earned just $12.50 per hour during his commute. Does our worker figure this out? I suspect he does not, because the extra $1,300 a month in rent he would pay in Newport Beach is a clearly visible cost that is painfully and regularly inflicted, whereas the cost of his car is less evident and can be put out of mind. (Kindle Loc 4724)

 What's amazing to me is that Thorp, unlike many of his cohorts who made tons of money at Wall Street, decided to fold up his company (which had been brought down not by poor investments, but by poor ethical decisions on the part of one of his partners):

Vivian and I would make the most of the one thing we could never have enough of—time together. Success on Wall Street was getting the most money. Success for us was having the best life. (Kindle Loc 3647)

Clearly, this is a man who's thought through everything, and made good decisions at every step of the way. I hope to get Bowen to read this book one day, because I think that not only does it explain why it's great to be good at math and thinking, but also that many of the most important decisions aren't just about probability and money, but about choosing the right people to partner with.

Recommended!

How Alexa captured me as a customer and dragged me into the post smartphone era

I can clearly remember when I knew I'd been captured by Garmin as a customer: it was when I bought their stupendously expensive Smart Scale, which I still use every day. I had a similar epiphany last week, when I started using Alexa on my Moto X4 instead of Google Assistant.

Here's what happened. During Prime Day, I snagged an Audible membership for about $5/month for 3 months. I used it to buy several audio books, all of which were quite long. Google Assistant can start Audible, but for whatever reason it's unable to tell it to resume playing the last book I was listening to. Alexa on the Moto X4, however, not only can do that, but can also fetch the book I want to listen to by title and resume at the last known point. I took a look at the app and to my surprise, what the Alexa app on Android phone doesn't do is to start Audible and start the book, but instead, directly streams the audio from Amazon's server by itself without starting that app! Not only does this mean I don't need to have the Audible app (I do anyway so that I can cache books on the SD card), the latency is also much lower than having Google Assistant start the Google Music app and have it start playing. I haven't tried, but I'm pretty sure the Alexa app also streams music directly without starting the Amazon music app.

I shouldn't have been surprised, but because of my history working for Google and using Google products, I knew that in a million years, no Google product manager would take this approach. I systematically broke down how I ended up with no less than 3 Alexa products in regular use: the Fire TV Cube, the Echo Dot, and now my Moto X4. The Echo Dot was the easiest to explain: it was so Bowen could listen to audio books (again, from Audible).

The Fire TV Cube turned out to be a great entertainment center control device, and now replaces our Logitech Harmony Smart Control Hub, which I sold. Google doesn't have an equivalent unit, because to have one would be to acknowledge that other devices exist outside the Google eco-system, which apparently is a no-no, leading to the elimination of the headphone jack/audio output port from not just Google's phones, but also the Google Home smart speaker series of devices. Which meant that the nice speakers in the living room are now "owned" by Alexa, and so my wife added an Amazon Music subscription, even though all my personal music was sync'd to Google Music. Doubling down on higher end audio, Amazon is even launching an amplifier that supports Alexa.

Similarly, I ended up using Amazon Photos for RAW photo backup, because it was already folded into the Amazon Prime subscription, which bundled in TV shows for the kids that are turning out to be very good. And because of that Prime subscription (as well as the huge collection of books on Amazon), we now have 2 Fire HD8 tablets that the kids use as general purpose Android tablets as well as just video streaming.

I scratched my head as to how Amazon ended up with me as a loyal customer despite my background, and I realized that this was where Amazon's product design/product managers trumped Google's superior engineering. Sure, Alexa is not bilingual, while Google Home/Voice Assistant is. But since all that speech recognition is done in the cloud anyway, I'm comfortable waiting for Amazon to implement it eventually (or if it doesn't, we've learned to live with the limitations). But not having a device that can hook up to our entertainment system meant that Google Home speakers was never in the running for the living room. You can't upgrade hardware that doesn't have the proper I/O channels, while you can easily upgrade software in the cloud!

Similarly, not having a decent e-book reader meant that the default e-book reader of choice was always the Amazon Kindle, which has superb integration for my favorite book vendor of choice, the local library. And ever since Google abandoned the low end Nexus 7 tablets in pursuit of Apple-like prices (and presumably profit-margins) for Android tablets, that meant that the tablets would default to Amazon's ecosystem as well, since no one else is selling decent tablets at $50 each.

What would I do if I was a Google product manager trying to counter this onslaught? There are probably some things Google will never do, like produce a decent e-reader, so that's probably out. But bringing back a decent low-end Android tablet is probably something Google can do, since it has done so in the past. I'd bundle Google's services: Google shopping express, Youtube Red (or whatever it's called), Google Drive storage/Google Docs should all be bundled in together in one price. Put out a Fire TV Cube equivalent with sufficient control for other devices in the living room (an I/R blaster is enough) Even all that might not be enough, but at least it would make it feel like Google is trying. As it is, it definitely feels like Google doesn't have a coherent, integrated strategy where everything fits together, while Amazon does (and at a very high value to price ratio!). Google's strategy feels like a company that's chasing after Apple's customers, but with none of the integration, social prestige, and marketing prowess that Apple puts into its efforts.

Review: Eccentric Orbits

I picked up Eccentric Orbits after learning that there was a book about the Iridium satellite system. I'd always thought that the system had been decommissioned and was no longer used, but it turns out that Iridium is alive and well, and has even launched a second generation set of satellites.

The interesting thing about Iridium is that it truly is a "world phone", as in, it would work anywhere in the world. The conception behind is improbably and only a company the size of Motorola could have done it --- launching 66 satellites into low earth orbit and designing and building a system where satellites could pass connections to each other in real time while routing calls to an Earth gateway station. It is even today an astonishing bit of engineering in an age where big companies seemed content to do unambitious stuff like continually launching new messaging apps and copies of each other's phones.

Unfortunately, the book spends preciously little time on the engineering of the system. It mostly focuses on Dan Colussy, who basically organized a buyout deal for Iridium after Motorola gave up on it and was about to de-orbit the satellites. That story is interesting: Motorola could have run the system at a reasonable profit, but chose not to. The lack of vision by Chris Galvin (who's clearly the villain of the book) fore-shadows the ultimate destruction of Motorola until its repeated sale to Google and Lenovo.

But there's only so much stomach I can have for stories about financial desperation, of chasing after Arab sheikhs with retinues whose jobs depend on showing how important they are. After the nth iteration of such stories I simply started skimming the book. I didn't get the feeling I missed much even right at the end, where the author simply skimmed on current applications of the Iridium Satellite system, Iridium NEXT, and the analysis of how nobody cared enough about Iridium despite it's obvious benefits.

Here's what I got out of the book from a marketing point of view:

• Iridium was flawed in that it required a clear line of sight to the sky. It wouldn't work inside buildings, so despite being a truly world phone, it's market was pretty restricted to outdoors people. Soldiers, hikers, sailors, maritime applications were the only major markets willing to pay for a phone with such restrictions.
• The low bandwidth meant that once the mobile internet took off, there was no chance of Iridium getting mass market appeal.
• The handsets were huge and expensive. They did get smaller, but never got very much cheaper.
• All the other technology solutions being investigated by Google and Facebook (balloons, etc) were investigated by the Iridium researchers. All of them had crippling flaws which was why Iridium is still the go-to- system today for the military and maritime applications.

All in all, the book's barely worth a read unless you're Dan Colussy or much more of a financial nerd than I am.

Review: The Fifth Discipline

The Fifth Discipline is Peter Senge's management book about building learning organizations. I first read it in the 1990s, and recently read the new edition again. Re-reading it again nearly 20 years later is definitely an experience that's different from the first time.

As a writer, The Fifth Discipline is verbose, meanders all over the place, repeats itself frequently, and name-drops obscure people that you'd never have heard of. These properties makes it a difficult and frequently frustrating read.

As a manager, however, the fifth discipline encodes some ideas about leadership that I've found nowhere else, and hammers home certain ideas in ways that not only make sense, but have you excited about putting them in place.

The central premise of the book is that human organizations are dynamic living systems which have non-linear behavior in response to events and change. This includes several properties that make leadership challenging:

• Many incentive systems improve performance in the short term but decrease performance over the long term.
• Many feedback cycles are extremely long, far beyond what humans were evolved to deal with, and exacerbate human tendencies to either blame individuals for poor performance or put in place patch after patch to try to solve problems rather than deal with an integrative approach to problem solving. In particular, who you hire, who you fire, and who you promote has performance impact on your organization measured in years, making it difficult to get better because the feedback cycle takes so long.
• Most long term solutions and systems approach to problem solving are counter-intuitive and difficult to sell to short-term oriented business cultures. 

The tool that the book uses to illustrate this is the Beer Game, developed at MIT's Sloan school of management. The structure of the game ensures that very similar outcome happens despite having  explained the rules to very smart people and having very smart people play them. The game illustrates that given a poorly structure system and organization in place, it doesn't matter who's playing the game---it's very difficult to do a good job. In fact, the wider economy exhibits this behavior in the form of bubbles of various forms.

You can see many examples of this kind of organizational pitfalls in many Silicon Valley tech companies:

• Conventional wisdom is that whenever you promote a great engineer into being a manager you lose a great engineer and get a lousy manager. Companies frequently therefore hire managers from the outside. In the short term this solves the above problem. In the long term, however, outside managers frequently dilute the culture, and more perniciously, by not having a culture of promoting from within, in the long term you get demoralized employees and end up with retention problems.
• I can think of one case where a great engineer was promoted into a lead. This person only worked at night and never met her team-mates. She was, however, very productive (since she never actually spent any time on leadership). This led to a promotion since leads weren't evaluated on leadership. Other leads in the department took note, however, and soon leadership was devalued as everyone followed her lead. The company would end up with a culture where leads would grab all the great work for themselves, since promotions depended not on ensuring that your team was successful, but on individual performance.

The book not only illustrates the approach (called "Systems Thinking"), but in one of the appendices has a complete catalog of corporate dysfunction patterns, with diagrams of feedback cycles, diagnoses, and solutions. So if you're in a hurry, just read "The Beer Game" chapter, the section on "Systems Thinking", and then flip straight over to Appendix 2. Everything else can be treated as fluff.

Recommended.

Price Drop: How to Interview A Financial Advisor

It's been a year since the launch of How to Interview A Financial Advisor. The book's about matched my expectations, but it's the only one of my books that's really written for a general audience, and could potentially reach more people.

Effective today, I've reduced the price of the Kindle edition to $4.99, and the paperback to $11.99. Note that for the next few days, Amazon's running a promotion where you get to take 25% off any printed books by entering BOOKDEAL25 when you checkout, and the paperback qualifies.

I've also enrolled the book into Kindle Select, which means that it's also available to borrow if you have a Kindle Unlimited acccount or are a Prime member. This should further reduce the barrier to anyone wanting to read the book.

Happy Holidays!

Startup Engineering Management Gets a 2nd Edition

Startup Engineering Management has been doing so well that I added what I learned over the last few years to it and gave it a 2nd Edition. It's a book that's attracted a surprising following, indicating that there's interest in the no-nonsense, non-political approach to management that I espouse for startups.

This new edition includes a whole new chapter on process analysis, sections on justifying hardware selection based on the great reception my Wharton talk got, and also a foreword by Harper Reed, who endorsed the book early in its life.

Along with the new edition, the price has gone up from $21.95 to $24.95 for the digital edition, and the paper version has also risen to match the price with An Engineer's Guide to Silicon Valley Startup. If you've bought Startup Engineering Management in digital edition since April 23rd, 2014, you've already received a free upgrade to the 2nd Edition in the mail.

If you bought a digital copy earlier, the upgrade price is $5, and what you need to do is e-mail me the original receipt from Paypal or Google checkout. Once I've verified the purchase, you'll get an invoice via paypal and an upgrade. Thank you all for your support!

Why it now makes sense to build your own PC

I've always been tempted to build my own PC. I'm no stranger to the tools, since my internship at Geoworks effectively required me to take apart and put together the machine I was given at work. But until recently it made no sense. Machines were increasing in performance significantly, so every 2-3 years it made sense to get a new machine. When you're getting new machines that frequently, it doesn't make sense to build your own, since the beige box vendors can get you much lower prices, and the cost of your time to swap motherboards, CPU sockets, etc., in and out would swamp the ability to bring over your hard drives, etc. Given Moore's law, every 2-3 years you'd have to buy all new hardware anyway!

I recently took a look to see if it was worth replacing my 5 year old desktop. To my surprise, the answer was "no." Looking at the CPU benchmarks, it looks like a "modern" i7-4770 would clock in at less than twice the performance of my 5 year old i7-920. In the old days, 5 years would have been enough to get at least a quadrupling of performance. Not even getting a doubling in 5 years would have been unthinkable. Part of it is that Intel's no longer getting any competition from AMD. Part of it is because getting up past about 4GHz would overheat a PC, so the easy way out of just merely increasing clock speed is out. Increasing the number of cores have already hit diminishing returns as far as most PC users are concerned (I'm an exception: I regularly process video).

The flip side of this is that the base operating system hasn't been using more hardware resources recently. Windows 8 is actually less resource hungry than Windows 7, which would have been unthinkable in the old days. Thanks to Microsoft's desire to compete in the tablets space with Apple and Google, Windows 8 actually runs decently on a tablet with just 2GB of RAM. This gave me the courage to replace my wife's 4-year old X201 with a Microsoft Surface Pro with half the RAM. My wife didn't even notice the missing RAM, despite running the resource hungry Android Studio, which is enough to spin my desktop PC's fan up.

This has several implications for users and developers:

1. Rather than buy a mid-range machine and planning to replace it every few years, it might be cheaper to build a high end machine and upgrade components. Given that CPUs and motherboards are no longer going to have to be trashed every few years, you might as well get a chassis that supports easy hard drive and SSD replacements/expansions, and GPU upgrades, if you will run GPU-intensive activities.
2. I/O standards do make a big difference, but any PC with a free slot will let you upgrade to USB 3 and other standards, so again, expand-ability might be more important than "planning to throw it away."
3. An adequately high end machine will probably last a good 10 years in this environment (i.e., a i7 4770k wouldn't be obsolete for 10 years), which means that it makes sense to put money into a high quality power supply, since the higher quality power supply would provide cost savings when you plan to run a machine for that long. This is in contrast to the "buy-and-replace" strategy, where spending $20 more on a better power supply wouldn't pay for itself in power savings.
4. This also seems to be applying to laptops, though laptops do benefit from the power efficiency gains of the latest processors, so if battery life matters to you, an upgrade every 4-5 years might make sense. The way most people seem to use laptops (constantly plugged in and never actually used as a mobile device), I think most people should replace laptops every 10 years, getting new batteries every 3-4 years or so, assuming that their device supports it.

I never thought I'd see the day when PCs would be expected to last as long as cars, but then again, I never thought I'd see the day when Microsoft would roll out huge new products and initiatives and everybody would just yawn. But yeah, my next PC is going to be something I build from the case in, and I'd be planning for it to last a good 10 years, something I did not expect when buying my previous desktop. I would have taken a completely different approach otherwise.

Why I can't help PMs, Sales People, or Marketing folks negotiate

Occasionally, I'll get a sales person, product manager or program manager, or even a marketing person ask me to help negotiate their compensation package. With one exception, I invariably turn all of them down. The reason is this: negotiate is a core skill for product managers, program managers or sales people, while the core skill for engineers is being able to design and code, with negotiation being secondary. In fact, one of the ways an engineering manager adds value to an engineering team is negotiating on their behalf with other engineers and with product management and/or UI designers.

If you look at how we train engineers, it's pretty clear that negotiation is out of the picture. Engineering exams aren't graded on style, readability, or collaboration. They're graded on correctness of solution, ability to apply principles and data structures to new areas, and of course, whether or not your project works. What negotiation there is in the engineering curriculum is informal: you might be asked to work in teams to turn in your homework (as a former instructor, I can say with confidence that this is usually so that we only have CLASS_SIZE/N papers/projects to grade, rather than CLASS_SIZE). As a result, engineers are singularly unprepared to negotiate their compensation in a way that sales people, PMs, or marketing types are not.

There's also a fairly subtle effect going on when engineers negotiate their compensation package. Most engineers are in a position to find a new job only because they're unhappy with their old one. Why are they unhappy? Usually it's because the old position did not make full use of their abilities: either they've been stuck in a junior position for years (I've heard horror stories about engineers at Google being stuck at SWE 3 for 5 years, despite performing way better than their grade), or because they've not been given raises, or both. In these cases, usually the managers have consciously or unconsciously beaten down their egos and repeated told the engineers that they're not worth much in the market. One of the things I do is to get such engineers to interview and receive multiple offers. The change is almost immediately visible in such candidates: they gain confidence as they realize that they are valuable employees, and this has an effect when they negotiate. The extra confidence enables them to negotiate and get better deals from their employers. Sales people, product managers or program managers, for whatever reason, seem to be immune to such beat-downs, retaining a healthy ego even when consistently denied promotions.

My negotiation service is unique because it's an irrational thing to do. The real money in compensation negotiation is on the other side of the table. Recruiters and head hunters get 30% of your salary (i.e., your entire engineering salary for a year * 0.3) for getting you to join their client companies. That's why there's no competition for what I do. There's no engineer who'd be willing to match what corporations pay in order to get a better deal.

Review: Aggressive Tax Avoidance For Real Estate Investors, 19th Edition

While I'm not quite an accidental landlord, since we got married we've had a rental property to manage. There are all sorts of issues with landlording, and I've covered many of the short-term solutions in a previous post. Aggressive Tax Avoidance for Real Estate Investors deals with longer term issues. Logistically, you can buy this version of the book from John T Reed's website, or you can buy a used 18th edition from Amazon. While there's unlikely to be much difference in content between the two editions, if you're running a rental business properly, there's no reason to cheap out since the book is tax deductible for your business.

A good measure of a specialist non-fiction book like this is the ROI. Within the first 3rd of the book I'd discovered that there was a certain approach that I'd not used because I'd succumbed to an old-wives tale and it would have saved 10X the price of the book. Live and learn.

The most useful part of the book is John T Reed's aggressiveness in approaching IRS issues. Basically, he tells you not to be afraid of tax courts, how to do research on tax issues, and how to fight the IRS in tax court if it comes down to it. This sounds really aggressive and it is. If you're renting out a room in your house, you're probably better off not being this aggressive, but if you have significant income from rental or run a multi-family rental property unit you want to take this approach as more conservative approaches would cost you significant amounts of money. John T Reed doesn't just assume this, but walks you through the Net Present Value/Expected Value Decision Tree for most of the approaches he espouses in this book. This is a very rational (one might say hyper-rational) approach to tax strategy and decision making as a landlord (or any other business owner), but you have to be capable of taking the mindset that Reed espouses. If you're easily stressed by the thought of an IRS audit, this is not the book for you, though you might want the managers you hire to read it and use it!

Reed not only walks through all the different types of tax courts, and the probability of the tax payer succeeding in winning the cases at the various courts, he also provides the probability of an audit, depending on the type of rental property you have and how much revenue and income you're generating. If you own any rental property, this type of information is invaluable and is worth the price of admission alone.

As a stalwart member of the 1%, Reed is definitely anti-Obama and anti-Democratic, and doesn't hesitate to write political comments throughout the book. I found this irritating, but tolerable given the usefulness of the information he provides.Then at the end of the book I came across something which just made me chuckle:

When you work at a job, you earn taxable income. Part of which, the government is entitled to confiscate. But if you work at increasing net worth---and refrain from selling the asset whose value you are increasing---the government has no right to confiscate any of the gain... It seems to me that if the taxes on work are too high---and they are---then you ought not to work for a living... (Page 180)

Sounds like a prescription for raising capital gains taxes and dividend taxes and reducing income taxes to me!

Anyway, if you own rental property that's more than just a room in your house, you need to buy this book. It will save you multiple times the cost of the book. If you run a business, you need this book just to understand the approach to taxes and how to do the NPV decision tree. Highly Recommended.

Price Reduction: Independent Cycle Touring

Spring is here, and if you're planning a bike tour, now's the time to do it. I've reduced the price of the PDF copy of Independent Cycle Touring to $4.95, which is 50% off it's previous price. It is no secret that of all my books, this is the one that has sold the worst, but took the most time and effort to write. Nevertheless, it's also one of the books that I'm proudest of, and the information in it is timeless, for as long as cycling touring is practiced. If you've not tried the book, at $4.95, you cannot go wrong.

I went through the book this morning looking to see if there was an easy way to convert it into a Kindle book. The truth is, it's way too graphics heavy to do well as a Kindle book, and I would feel terrible doing an automatic conversion: the results would be truly horrendous. So buy this book on PDF or on Paper. That' the way it was designed, and that's the way it should be read. I know that makes me a holdout, but when you see the book you'll understand why.

Update: The print copy of the book has been price reduced to $25.16

Review: The Rise of Superman

The Rise of Superman is ostensibly Steven Kotler's book about Flow, as experienced through extreme athletes. In reality, it seems to be Kotler's attempt to break into the corporate consultancy/sponsorship world, using pseudo-scientific words (such as his organization's name: The Flow Genome Project) to try to get corporations to buy into his brand of "mindfulness extreme" as the next big competitive advantage.

The way you can tell Kostler's a poseur is that he uses terms like "source code" inappropriately through the book, as though trying to show that he has some deep insight that he is uniquely qualified to tell. No engineer or computer scientist worth his salt would use the words "source code" the way he does, and on closer inspection, it appears that Kostler did a "search-and-replace" for "source" with "source code" throughout the text.

I'm not dismissing Flow or Mindfulness in any way. Nearly every unimpoverished human has experienced flow at one point or another in his life. I've threaded harrowing descents down Italian mountains with inches to spare between my handlebars and a pick up truck coming up on a narrow winding road, and piloted boats out of ports with sidewinds where mistakes would mean disaster, but I don't claim to have any deep insight to flow that are inaccessible to others. More prosaically, nearly every video gamer that has played a perfect level of Tetris or say, Naughty Dog's sublime Among Thieves has experienced flow, since of all the genres of media, video games are the best at eliciting and enabling flow.

Kotler, however, is after the multi-billion dollar corporate contract, so writing about how video game companies engineer flow into their games wouldn't be interesting. Instead, what he has to do is to flatter corporate head-honchos into thinking that they can be compared with such luminaries as Shane McConkey, who pioneered extreme skiing. The reality is, most corporate VPs or CEOs (Richard Branson and Gary Erikson excepted) couldn't do an independent cycle tour in the alps without a supporting entourage, let alone do any of the death defying stunts described in this book. Even the late Galen Rowell would have been happy to tell you that a National Geographic expedition is anything but flow-inducing, with 300 porters toting huge amounts of camera equipment and film.

Now the stories in this book are  interesting, and are the saving grace of the book. Since I'm not a big fan of Surfing, snow sports, or BASE jumping, this was my introduction to athletes such as Laird Hamilton, Shane McConkey or J. T. Holmes. Of course, note that McConkey died trying to do one of those death-defying stunts, as did several of the athletes described in this book. Any sane person would say, "Yeah, this shows that no amount of flow-hacking can eliminate the laws of physics and probablity", but of course, Kostler merely claims that McConkey's survival for so long doing so many insane stunts shows that Flow enables you to be a superman.

Kotler's attempts, then, to link the extreme athlete's in-the-moment flow to the businessman's startup, or investment, or management of a meeting, is laughable in the face of all this. Certainly, nobody's life is at risk when attempting a corporate takeover (though several livelihoods are, the members of the 1% who do this aren't risking anything except next year's bonus, if that), or investing in a startup, or doing the next performance review. As my college class mate Jonathan Blow said, "anyone conflating the risk of business with the actual risk a rescue worker has to take is either stupid or wants to take your money by flattering or impressing you."

All in all, the book is worth reading for the stories of the extreme athletes in it. That's the only reason to read it. All the other business mumbo jumbo needs to be ignored. And for heavens sake don't give Kotler any business if you can help it. Check the book out from the library or borrow it if you're an Amazon prime member. Do not buy!

Review: The Everything Store

The Everything Store is a history of Amazon from inception to circa 2012. Of all the tech companies that affect our lives, Amazon is the least sexy to the business press. There's nothing more boring than retail, and it's easy to categorize Amazon as a simple retailer. The truth is, there's nothing simple about what Amazon does. I remember first ordering books over the internet from a bookstore that is now defunct. When I called them up to ask about my order, the woman said, "Oh, it's so nice to talk to you! So you're the guy who's been ordering these great books that I wished everyone would read." Further discussions led to my realization that she and her husband were basically doing all the shipping themselves, and were too overwhelmed with orders to do anything interesting with the website like setting up a review system, etc. When Amazon launched I ordered books from them instead (largely because of the large discounts they offered), I was impressed immediately by how complete their review system was.

Fast forward to just a few years ago, and it's astounding to see what Amazon has done with their razor-thing profit margins that Apple, Google, and Netflix would all sniff at. Amazon has dominated cloud services to the point where Google is an also ran with AppEngine and Google Compute Engine. Amazon has effectively outflanked Apple with the Kindle and continues to dominate ebooks even despite Apple's attempt to raise prices for consumers by entering the market. And I'm not a Netflix subscriber, but as an Amazon Prime customer, my son watches Blue's Clues and Curious George in addition to getting his diapers delivered by Amazon. My wife and I once calculated that the savings from buying diapers alone from Amazon as opposed to Babies R Us more than paid for Amazon Prime.

The book does a fantastic job of describing Jeff Bezo's background and how he came to start Amazon. We get interesting insight into several business decisions, including how Amazon negotiated to buy Diapers.com, and what happened back then. There's also some details about the launch of EC2 and S3, and Stone does a great job of debunking the myth that Amazon launched those cloud services because of excess capacity. And here's information I head from a former Amazon employee that's also in this book: that Amazon initially launched it's cloud services at a loss. "Fat Profits only attract competitors," is a classic Bezos quote.

Lest you think the book paints a rosy picture of Amazon, there's a lot of the ugly exposed as well, which is something that I don't see in books about Apple or Google, for instance. Stone does not shy away from the stories of burnout, the executive politics, mis-steps, and ruthless competition that Amazon imposed on others in the industry. It's quite clear that Amazon is willing to take deep losses in order to hurt competition, but that ruthlessness is tempered by one thing: Amazon's never willing to hurt the competition without also helping its customers, and Amazon is willing to work hard to understand its customers in a way that other successful companies don't.

All in all, this book is well balanced, and does not go overboard in worshiping Jeff Bezos or treating Amazon as a company free of blemishes. In a world filled with books written by sycophants such as Steve Levy, that's a rare thing and worth a read. Recommended.

Retrospective: How Nintendo lost me as a customer

Golden Abyss got me to start playing Drake's Deception on the PS3, which is pretty remarkable. (I'm certainly enjoying the game and how pretty it is) Looking back at the review of the Nintendo Wii that I wrote in 2007, this is quite a reversal of the turn of events that I expected. The Nintendo Wii is gathering dust, while the PS3 sees almost daily use, if not as a game machine, as a portal for Amazon instant video, blu ray player at times, and YouTube living room, where it serves as a better Google TV than the various Google TV demos I've tried over the years. I haven't even considered a Chromecast because the PS3 has been working so well.

How did this happen? I think the biggest deal was the advent of HDTV. With a big 1080p screen in the living room, the Nintendo Wii's graphics looked old. For a while, it still saw plenty of use as an avenue for Rock Band, but even then, the jaggies started looking more and more glaring compared to the PS3's 720p output for games and 1080p output for movies. For games where a motion controller was preferred, I ended up with a Playstation Move instead.

For the next generation of consoles, the difference is even bigger. Both the XBox One and the Playstation 4 will play Blu-rays and DVDs, while the Wii U, despite having a disc reader, won't even play DVDs. From a performance point of view, the Wii U is so much less powerful than either of the bigger consoles that it's likely to only get games that are coming out for the previous generation of consoles.

But by far the most important reason is the games. While it seems as though I've become an Uncharted addict, I noticed that I never did finish a single Wii game that had a "finish". To be fair, the Wii has many games that don't end. For me, that means that I'd rather pick up a PS 4 when the next Uncharted game comes out rather than getting another Nintendo console that gathers dust.

How to Interview A Financial Advisor now out in paperback

My latest book, How to Interview a Financial Advisor is now out in paperback. For this book, I'm enrolling in the Matchbook program, which means that for $2.99, you can get the digital copy of the book as well as the paperback if you buy the paperback. I loved the Matchbook program, and I was happy to sign up this bookf or it, both as an experiment and also because I feel it's a great way to provide a discount: buy a copy for your friend, and keep a copy for yourself!