Jonathan Ive: Being a designer means constantly looking at something and wondering why is it like that and not like this?
via youtube.com
20 Apr
2010
6 Apr
2010
Working on my Trends in Marketing & Advertising 2010 presentation for my team tomorrow
Sent from my iPhone
5 Apr
2010
Potential...
And isn't it even worse to write off a person or an organization merely because of what they are instead of what they might become?
31 Mar
2010
Some sensible thoughts on healthcare, financial reform, and politics...
I've blogged numerous times in the past on my frustrations with the expansion of government. This isn't a position I've taken based on ideology or just siding with a particular political party - it's conclusions I've come to after studying economics for a few years.
Today I encountered one of the most sensible approaches to healthcare, the financial collapse, and politics in general that I have seen in a very long time. This is an interview with Gary Becker, one of the founders of the University of Chicago school of Economics and a strong advocate for free-markets. Even if you are pro-government regulation, it is still worth a read - he does an outstanding job of discussing the pure economics behind what is going on today without any political ideologies mixing things up.
"The health-care legislation? It's a bad bill," Mr. Becker replies. "Health care in the United States is pretty good, but it does have a number of weaknesses. This bill doesn't address them. It adds taxation and regulation. It's going to increase health costs—not contain them."
Drafting a good bill would have been easy, he continues. Health savings accounts could have been expanded. Consumers could have been permitted to purchase insurance across state lines, which would have increased competition among insurers. The tax deductibility of health-care spending could have been extended from employers to individuals, giving the same tax treatment to all consumers. And incentives could have been put in place to prompt consumers to pay a larger portion of their health-care costs out of their own pockets.
"Here in the United States," Mr. Becker says, "we spend about 17% of our GDP on health care, but out-of-pocket expenses make up only about 12% of total health-care spending. In Switzerland, where they spend only 11% of GDP on health care, their out-of-pocket expenses equal about 31% of total spending. The difference between 12% and 31% is huge. Once people begin spending substantial sums from their own pockets, they become willing to shop around. Ordinary market incentives begin to operate. A good bill would have encouraged that."
Again, going back to Economics 101, the issue with health care today is that it's simply too expensive - not just for the consumer but for insurance companies as well. You can lower prices in two ways - decreasing demand or increasing supply. The current healthcare bill does neither of these, and as a matter of fact it increases demand in a time when the average physician income will most likely be going down, which will lead to decreases in supply of healthcare.
Capitalism has produced the highest standard of living in history, and yet markets are hard to appreciate? Mr. Becker explains: "People tend to impute good motives to government. And if you assume that government officials are well meaning, then you also tend to assume that government officials always act on behalf of the greater good. People understand that entrepreneurs and investors by contrast just try to make money, not act on behalf of the greater good. And they have trouble seeing how this pursuit of profits can lift the general standard of living. The idea is too counterintuitive. So we're always up against a kind of in-built suspicion of markets. There's always a temptation to believe that markets succeed by looting the unfortunate."
"During the financial crisis," he replies, "the government and markets—or rather, some aspects of markets—both failed."
The Federal Reserve, Mr. Becker explains, kept interest rates too low for too long. Freddie Mac and Fannie Mae made the mistake of participating in the market for subprime instruments. And as the crisis developed, regulators failed to respond. "The Fed and the Treasury didn't see the crisis coming until very late. The SEC didn't see it at all," he says.
"The markets made mistakes, too. And some of us who study the markets made mistakes. Some of my colleagues at Chicago probably overestimated the ability of the Fed to smooth disruptions. I didn't write much about the Fed, but if I had I would probably have overestimated the Fed myself. As the banks developed new instruments, economists paid too little attention to the systemic risks—the risks the instruments posed for the whole financial system—as opposed to the risks they posed for individual institutions.
Look at growth in developed countries since the Second World War," he continues. "Even after you take into account the various recessions, including this one, you still end up with a good record. So even if a recession as bad as this one were the price of free markets—and I don't believe that's the correct way of looking at it, because government actions contributed so greatly to the current problem—but even if a bad recession were the price, you'd still decide it was worth paying.
"Or look at developing countries," he says. "China, India, Brazil. A billion people have been lifted out of poverty since 1990 because their countries moved toward more market-based economies—a billion people. Nobody's arguing for taking that back."
This is a fascinating take that I've never even considered. Government officials don't always act in the greater good - but for whatever reason we are all socialized to believe they do. Now I'm not a pessimist, and I actually try to give the government the benefit of the doubt because over 250 years they've generally been successful. However, members of government often have different incentives then the "greater good."
At the same time - this disapproval of markets is unbelievable. Maybe it's just the people who don't get to share in the profits, but the numbers flat out show that free markets is the way to grow an economy. State run economies don't work. Maybe it's just how people are predictably irrational, but they're going against what's proven to work.
I appreciate Gary Becker's optimistic thoughts on free markets, and my only hope is that some political party (most likely Republicans, although I do not lean either way strongly) will stop operating on fear and trying to scare people into voting for them, and use sensible, proven approaches like this to market themselves in the 2012 election.
26 Mar
2010
Rockstar Environments
Rockstar environments develop out of trust, autonomy, and responsibility. They’re a result of giving people the privacy, workspace, and tools they deserve. Great environments show respect for the people who do the work and how they do it.
-Rework by 37signals
26 Mar
2010
When you don’t know what you believe...
When you don’t know what you believe, everything becomes and argument. Everything is debatable. But when you stand for something, decisions are obvious.
-Rework by 37Signals
24 Mar
2010
David Heinemeier Hansson (@dhh) is inspiring
An intense debate about business models, bubbles, capitalism, quality of life, market share vs. profit share, running a business vs. selling a business, and a variety of other related topics from episode 46 of This Week in Startups. This is really good stuff.
(There’s 47 minutes of material before the interview. The video above picks up where the interview starts. The interview is what’s really worth watching.)
via 37signals.com
@dhh makes so much sense - he makes an audacious claim and then explains it and it just clicks. This is very much worth the time it takes to watch.
24 Mar
2010
Pixar isn’t successful because their workers are deathly afraid of screwing up and getting fired.
He also spoke about management, and how as a manager of a creative company, things are chaotic and happen out-of-order. He can’t possibly know everything that’s happening within Pixar, so he relies on training good managers.
He believes in the old saying “It’s better to ask for forgiveness than to ask permission,” but his corollary is that it’s better to fix errors than it is to prevent them, something that he believes many mangers do not get. In fact, Pixar looked to Toyota’s manufacturing process for inspiration in terms of structure and bringing diverse skillsets together to create a strong company.
If you’re at all interested in managing organizations, Ed Catmull is the guy you should be listening to. Pixar is one of the finest organizations around.
Underlying Catmull’s point is that you can’t force your employees to be successful. Rules, regulations, requirements–all of those things will not make a great employee. Rather, you must inspire your employees to do well.
Pixar isn’t successful because their workers are deathly afraid of screwing up and getting fired. Pixar is successful because they have a clear and real mission–to create the best stories they possibly can, that only happen to be in the computer-animated film medium–and their workers believe in it wholeheartedly, and want to achieve it. That’s why Pixar’s films do so well, and that’s why they’re such good films.
Pixar is one of America’s finest companies because, from top to bottom, their overwhelming desire is to create something amazing.
via tightwind.net
Great excerpt - this is the way a business should be run. In the end, it all comes down to what 360 Leader taught us, that you need to get the right people on the bus and the wrong people off. With the right people on the bus you can trust that your organization will create amazing products and that the wrong people won't stop it from happening or settle for mediocrity.
24 Mar
2010
Serial Entrepreneurs
Do you think Steve Jobs wants to be a serial entrepreneur? Bill Gates? Warren Buffet? Larry Ellison? All these guys put big stakes in their life’s work. Companies that they built from scratch, that they’ll champion until they can champion them no more. Sure, they may have hobby companies on the side, but for each of them, there’s one defining business, one spectacular legacy to leave behind when they’re gone.
These are my business heroes. People so dedicated to their company and its impact on society that you couldn’t pay them any amount of riches to leave. People willing to build for decades.
via 37signals.com
Flys right in the face of the traditional work environment today.
The good question (for us non-entrepreneurs) is what is your company doing to make sure you stick around and help build an amazing company.
22 Mar
2010
Profits = Freedom @ 37signals
There are many reasons why someone would want to start a company. There’s the pursuit of wealth, glory, and fame, but above all, I believe most founders are searching for freedom. Freedom to run things the way they see fit, freedom to be the masters of their own domain.
But until you have profits, until you’re self-sustainable, you won’t truly have that freedom. As long as you’re beholden to other people’s money, you’re ultimately beholden to their approval.
Because we’re profitable, Jason and I get the freedom to do all sorts of “crazy” things:
- 37signals runs entirely without debt, which is apparently so uncommon that we had trouble getting net-30 terms from a vendor recently, because we couldn’t give four trade references for credit. Running a company without debt is like paying off your mortgage—liberating.
- We actually trust our employees. No expense reports, no counting vacation or sick days, no required location or work hours. We give everyone a credit card for expenses and tell them to spend it wisely. What really matters is turning out good work.
- We speak our minds — even when it’s inconvenient, controversial, or risking offense to some of our customers or partners. There’s none of the traditional self-censorship that quickly creeps in when you have to worry about what the big man thinks about your opinions.
It’s these supposedly crazy things that make me not want to give up 37signals for anything.
Now, all this is technically possible without the freedom of profitability, but it certainly wouldn’t be natural or common. Once you start thinking about how your decisions and actions might displease the men with the money, you invariably shy away from the most controversial (and best) ideas.
via 37signals.com
Is this possible at a large company? I really do wonder...
Marcelo Somers's Posterous
Hi, my name is Marcelo.
I'm fascinated by business and economics. I love to learn about why companies succeed and fail.
I do marketing and strategy for a large travel & technology company. My degree is in Finance.
This is my blog about business, economics, marketing, with some technology here and there.
