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Posted on April 25, 2019 @ 09:12:00 AM by Paul Meagher
Normally, I simply buy books because I want to read the books. I've never really thought about buying a book as a financial investment. I recently purchased a book for my wife's birthday that I knew she would like but it was no longer in print and copies were hard to come by. I did manage to secure a copy for $120 on Amazon but after the expected delivery date arrived and there was no book I contacted the seller who quickly accepted the fact that it was lost and offered to source another one or refund me. I was refunded the next day with an explanation that they couldn't source another one. I suspect the book seller realized s/he could get more for the book and played a little charade with me that it somehow got lost in transit. No tracking numbers were ever issued. When I initially purchased the book on Amazon, the price for the book immediately jumped to around $200 because that was the price the other sellers were offering for their copies. Some sellers listed as high as around $500. I did eventually source another copy of the book for around my original price. Now I cannot find any copies on Amazon which makes me wonder what price I might be able to put on it as an Amazon seller if I wanted to sell.
The co-author of the book, Timothy Asch, was trained in photography by Ansel Adams and includes beautiful black and white photos of what local life was like in 1952.
Timothy Asch later became a leading visual anthropologist and preferred to use film more in his later documentation of other cultures. I learned over the weekend from one of the people he took photos of that there were only made 500 copies made of the book I purchased. So the value of the book is attributable to its rarity, the reputation of the author, and unique content it contains that university departments and local residents would be eager to have.
Another book that I wanted to purchase at one time was an autobiography by Permaculture founder Bill Mollison.
Again I suspect there is only a limited number of copies of this book. Bill Mollison founded the publishing company Tagari which does not sell this book anymore. The rarity of the book coupled with the number of admirers of his work means you can ask a high price for this book.
If I decided to get into book investing in a more serious way one strategy I might use would be to corner the market on a book. If there was a book that I thought was rare and desirable with only a limited number of copies available for sale I might buy all the available copies within a price range so that I can exert more control over the price and availability. I have no experience in deploying this strategy so can't tell you whether it would be successful or not.
Like any investing you have to be good at valuation and not let your biases get in the way. It would require more research into the fine points of book investing on my part before I went from reading books to investing in them. There are lots of people who make money selling used books and this is probably only one of many strategies they might use.
Posted on November 22, 2017 @ 09:20:00 PM by Paul Meagher
I was listening on the radio to a couple of female entrepreneurs talk about running their restaurant. The interviewer
asked them what they were reading hoping to get some good motivational or business recommendations. One of them
responded by saying she was reading the building code.
As a restaurant owner she was probably not required to read the building code but it likely comes in handy
if you are planning any renovations or additions.
Sometimes what you have to read to get ahead is not particularly pleasant stuff to read, but it could be very beneficial if you can persist at trying to absorb it. For me, reading the building code is a metaphor for all
that unpleasant but useful reading that could help your business survive and thrive.
There is no rule that says that what you read always has to be pleasant or that what is pleasant to read is what you should be reading. If you are wasting too much time on book keeping and accounting, maybe you need
to spend some time reading about basic book keeping and accounting. Or, maybe you have to read municipal council minutes because you heard they are planning a project that might impact you. Or how about a legal text on the laws relevant to your business.
So the next time you think about what book you should be reading next, don't just think of all that NY times best-seller stuff that is interesting but not useful. Perhaps you might also be inspired by this blog to read your local or national building codes or literature of similar gravitas.
I started reading from begining to end which I will continue to do, but I also started jumping around to the pictures and then reading all the yellow highlighted sections in the book that denote important topics. One such highlighted topic that I want to comment on is given below:
A Plan for a Beginning Farmer
In the first year don't tackle every crop in the seed catalog. Pick just a few. Starting out, I would seed mixed salad greens and a hardy spinach variety, such as Gazelle, as soon as the ground is workable, and
every week until temperatures linger consistently above 72 F to 75 F. Greens are a sure sell in most markets. Then I would seed
determinate red tomatoes in time to set out after the last frost in your area, or a few weeks earlier if you have a greenhouse or
tunnel. BHN 589 is a dependable variety. In the fall, when nights start to cool to below 68 F, I would seed greens again. If you
can master greens and tomatoes in year one, you are off to a good start. Other easy crops for the first year include radish,
sugar snap peas, head lettuce, romaine, kale, and green beans. If you want to try starting a CSA, take on 10 customers and keep
your season to 12 weeks. Keeping it simple will more likely result in success, and that will build confidence. ~p. 5
This plan is very interesting to me for a variety of reasons, some
of which are listed below.
Planning that gets to this stage of simplicity and clarity offers useful guidance. The objective of business planning is not complexity, but simplicity of process and purpose.
The planning horizon implicit in this plan could be 2 years. That plan would involve using the first year of operation to gain skills and sufficient success and confidence that you are ready to scale up the next year. What isn't mentioned here is that Ben decided to go whole hog and used some angel money (from his family) in the first year to build up infrastructure for the second year so he was ready to scale to a full income level then. Trying to get infrastructure such as water lines, formed beds, greens houses, cooling areas, washing stations in place can be more difficult to do when you are also scaling up your farming orders (e.g., more CSA clients, restaurants, farmers markets). Ben Hartmann, like farming innovator Jean-Martin Fortier, focused in their first year on getting infrastructure in place while downgrading the importance of making a full-income from production in that year. Some income is necessary, however, to accelerate your learning and to validate the enterprise.
The plan can also be implemented as a multi-year plan. You can keep your day job and start commercial farming as a side business. You might not be as ready to scale up in year 2 if you are taking this approach but you may be under no pressure to do so. If you have income from a job you like you can scale up the farming enterprise at whatever pace works for you.
I focused on a two year planning horizon in the title because that seems to me an important planning horizon for any type of business that involves building infrastructure before you can scale to a full-income level of revenue. I thought this plan for a beginning farmer is worth reflecting on as it makes clear some of the issues involved in 1, 2 and 3+ year plans and what you might be doing in each of those years in anticipation of scaling up to the next level.
Posted on October 24, 2017 @ 09:02:00 AM by Paul Meagher
One of the first essays I had to write in my intro philosophy class was to choose a theory of the good life and argue for why it was the right way to live.
Some of our choices included hedonism, stoicism, epicurianism, utilitarianism and other options that I can't remember. I do remember selecting epicurianism as the best route to the good life. I gave some serious thought to hedonism and stoicism as well.
I'm mentioning this because I recently purchased a book that is currently being recommended on David
Holmgren's site called The Art of Frugal Hedonism. It is a modern spin on how to live the good life. Frugal Hedonism seems to me very similiar to my concept of epicurianism minus the high cost of entry.
The book consists of 50 short chapters with ideas and strategies you can use to become a frugal hedonist. This approach to living has the benefit of being sustainable and enjoyable at the same time.
Many startups are no stranger to frugal living. Frugal living extends the runway for your business and the length of that runway is often directly related to how frugal you can be while the startup is not generating enough income to live the high life. Be careful about wishing for the high life too soon, because you may not experience the same level of enjoyment from a simple beer with friends, walking or biking to wherever you have to go, or a cheap night with friends. It doesn't take much to make you happy when you are used to just getting by as frugally as you can.
David Holmgren is on record as pursuing a life of voluntary frugality so part of the reason he is recommending the book is probably because it aligns in part with his own approach, and perhaps explains the many unrecognized benefits of this lifestyle beyond simply being a sustainable way to live.
For many, the good life is a house, two cars, and all the consumerist items that the catalogs say we need in order to live the good life. There is little evidence that people are happier compared to people who get by on less but have more time, more interests, more friends and other things of equal or more value than money. Getting off the treadmill and consuming less is likely to lead to more enjoyment with life than trying to keep up with the Jones.
Does this mean that entrepreneurs must give up their pursuit of money because it is an overly consumptive way to live? If it is only about making money so you can get all the toys, then frugal hedonism would predict that you will not be happy - you will adapt to ever higher levels of consumerism to try to achieve a disappearing rainbow of enjoyment. If you recognize that money is just the way we keep score but is not the end goal of living, then I think you have a better chance of leading the good life which could be inspired by frugal hedonism.
Frugal hedonism carries the hopeful message that leading a sustainable existence might also be the surest route to the good life. Whether this is true or not is a question worthy of thinking about and this book is a guide to the options, strategies, and joys associated with living a less consumerist existence. And when you do make a choice to consume, you might be more mindful of why you are consuming and what it means to you.
Posted on October 18, 2017 @ 10:14:00 AM by Paul Meagher
Eric Ries wrote what is probably the most popular book ever on starting a business called The Lean Startup (2011). It is therefore worth mentioning when he publishes any new book on startups. I pre-ordered and received my copy of The Startup Way (2017) yesterday.
According to Eric, this book is 5 years in the making. He argues that many of the same lean startup principles (plus some new ones) apply at the enterprise level, to non profits and to government agencies that want to remain innovative and relevant.
I have not yet read beyond the first chapter of the book but what is particularly interesting to me is the issue of whether companies have to manage things differently at different stages of growth to keep on growing or whether similar management principles apply. In my last blog Scale and Complexity I suggested that different principles might apply to manage complexity as a company scales (based on the work by Verne Harnish); however, Eric appears to be making the provocative claim that many of the same lean management principles apply at all scales and for very different types of organizations (i.e., for profit, non profit, government). Eric argues for a unified theory of entrepreneurship that potentially applies at all stages of company growth if the company wants to keep growing. Obviously management of a company earning > 50 million is different in some respects from management in a company earning < 1 million, but what each company might have to do in order to manage ongoing growth and innovation might be similar in many respects. This is one of the issues that interests me and what I will be attending to as I continue reading this book.
For now, however, I just wanted to draw your attention to this book because it looks like it will be another very popular addition to the startup literature. The book launch appears to have been scheduled to coincide with the launch of Eric's new startup The Long-Term Stock Exchange that will be interesting to follow as well.
So far I'm learning about how the number of patents filed scales with city population size (superlinear - more patents in more populated cities), how the amount of infrastructure (e.g., length of roads, water pipes, electrical cables, gas stations, etc...) scales with city population size (sublinear - less infrastructure per person in more populated cities), how per capita Gross Domestic Product (GDP) scales with city population size (superliner - more GDP per person in more populated cities) and many other interesting scaling relationships. The book tries to give a more fundamental account for why such scaling relationships exist; an account that draws upon research in complexity theory. The book is very readable so far and there appears be virtually no math equations on display but appreciating this book will require you to master some basic mathematical concepts like what a linear, logarithmic, exponential, and power law relationship is. If you are rusty on these important mathematical concepts then reading the book to brush up on this stuff would be one reason to read it because he explains them well in the context of lots of examples and interesting discussion. Ultimately, where Geoffrey wants to get to is a "science of cities" that might consist of a fundamental theory that organizes alot of this scaling data.
I'm not that far into the book yet to give any final review.
Verne argues that companies need to "conquer complexity" (p. 24) in order to scale up and that "complexity generates three fundamental barriers to scaling up a venture" (p. 25):
Leadership: The inability to staffgrow enough leaders throughout the organization who have the capabilities to delegate and predict.
Scalable Infrastructure: The lack of systems and structures (physical and organizational) to handle the complexities in communication and decisions that come with growth.
Marketing: The failure to scaleup an effective marketing function to both attract new relationships (customers, talent, etc.) to the business and address the increased competitive pressures (and eroded margins) as you scale.
Verne argues that you have to keep solving these same problems, often in different ways, at different levels of growth (e.g., < $1 million, > $ 1 million, > $10 million, > $50 million) if you want to keep on growing.
I am looking forward to reading what Geoffrey West has to say about scaling up and the "science of cities" and how that might relate to what Verne Harnish, Toby Hemenway (The Permaculture City, 2015), and Richard T.T. Forman (Urban Ecology: Science of Cities, 2014) have to say about these topics.
Another person who is busy scaling up is the Sweden-based farming entepreneur Richard Perkins who shares alot of useful information in his YouTube channel. He has a recent two part video series on how he intends to use lean thinking to help him double revenue while also reducing his workload. I think they offer a useful case study on the type of planning one might engage in to "conquer complexity" to enable more growth and more free time.
The book is named after a diagram that Kate originally developed in a policy document she wrote for Oxfam. She argues that the proper task for a new economics is to develop policies and ideas that ensure that we stay within the light green middle layer of the doughnut by avoiding overshoot and shortfalls.
The diagram is meant to replace the limited goal of increasing Gross Domestic Product (GDP) that most economists are obsessed with. Kate wants to replace the goal of increasing GDP with a broader picture of the many other aspects of our existence that we need to manage better. Kate argues that economics needs new foundational diagrams and pictures and the doughnut diagram is the foundational one for a new economics.
The subtitle of the book is "Seven Ways to Think Like a 21st-Century Economist" and there are seven chapters devoted to the different ways of thinking. The table of contents is reproduced below because it offers a nice brief summary of the 7 ways of thinking that a 21st century economist must master:
Change the Goal from GDP to the Doughnut
See the Big Picture from self-contained market to embedded economy
Nurture Human Nature from rational economic man to social adaptable humans
Get Savvy with Systems from mechanical equilibrium to dynamic complexity
Design to Distribute from 'growth will even it up again' to distributive by design
Create to Regenerate from 'growth will clean it up again' to regenerative by design
Be Agnostic about Growth from growth addicted to growth agnostic
The book does not offer a simple set of solutions to the problems depicted in the doughnut diagram. Rather it encourages us to adopt a different mindset about these problems so that we might find new and better solutions to these problems. Kate discusses interesting recent research, ideas and examples in support of each way of thinking along with ample links to more research you can do on your own if you are so inclined. The seven ways of thinking are not independent of each other and are most powerful when combined to formulate a solution.
This is probably not a book to read if you are looking for a business book that encourages you to make more money or grow your business. There are enough of those books anyway. While that is not Kate's goal in writing the book, the problems she cites are not going away and the power of current economic thinking to solve them are counterproductive in so far is they mostly focus on ever increasing growth as the solution (which is causing many of the problems). I believe there are significant opportunities to create new businesses that arise from thinking like a 21st century economist. The book offers lots of useful ideas and examples to get you started.
She offers an interesting new take on how economics should be structured to remain relevant and useful. I hope to blog about the new economics that Kate envisions but before that I intend to explore some
relevant background material that I will share with you in this blog.
Kate's critique of economics as currently taught and practiced builds upon the shoulders of giants, and one of the main giants is Donella Meadows who is pictured with the Limits to Growth all-star modelling team.
A new economics might also consist of material contained in the free online textbook called The Economy. It will be useful to compare some of what Kate says to what it presented in this site as the core of what should be taught in economics.
The book won the 1986 award for the Most Outstanding Book in the Social and Behavioral Sciences by the American Association of Publishers and NY Times notable paperback in 1989.
In this book Beniger argues that:
... society is currently experiencing a revolutionary transformation on a global scale. Unlike most of the other writers, however, I do not conclude that the crest of change is either recent, current, or imminent. Instead, I trace the causes of change back to the middle and late nineteenth century, to a set of problems - in effect a crisis of control - generated by the industrial revolution in manufacturing and transportation. The response to this crisis, at least in the technological innovation and restructuring of the economy, occurred most rapidly around the turn of the century and amounted to nothing less, I argue, than a revolution in societal control. ~ p. 6
So part of his argument is that a control revolution hit us around the turn of the 19th century (1870 to 1930) with the development of a host control technologies like telegraphs, railroads, bureaucracy, primitive computing, electricity, etc... The revolution however is by no means over - it is neither "recent, current, or imminent" - which I take to mean it is ongoing - it keeps (r)evolving. When Beniger wrote the book sometime before 1986, control technologies associated with new computing and networking hardware/software (aka "information technology") was becoming pervasive and was causing another "revolutionary transformation on a global scale".
One industry where the evolution of control technologies is having a profound effect is agriculture. Many current developments in control technologies are discussed in the recent book Precision Agriculture Technology For Crop Farming (2016) edited by Qin Zhang.
In the first chapter, "A History of Precision Agriculture", David Franzen and David Mulla itemize some of the innovations that had to happen before we could get to the stage of commercially available precision agriculture. These innovations include the development of a Global Satellite Positioning (GPS) network, advances in computing power for mapping, variable rate spreaders to control how much nutrient is provided in a specific area, robotics so that tractors can drive themselves, drones so that mapping can be combined with ariel sensing, developments in sensing technology for all agriculturally important soil characteristics, and the list goes on. There are no signs that precision agriculture will be a fad and there is evidence that it is being adopted faster in some areas like tractor driving before other areas like nutrient management.
It seems that Beniger's book is a good lens for understanding our current state of technological innovation and what might be expected in the future. Alot of innovation is associated with improving control, distributing control, localizing control, centralizing control, and sharing control so the control perspective might be used to evaluate the potential impact of new innovations on society (economically, environmentally, socially).
Recent advances in Artificial Intelligence (AI) are spawning a new revolution in societal control. To understand these issues the control perspective that Beniger offers is useful.
I do recommend reading this book as background reading to the Lean Startup (published 2 years later). In Plan B the importance of testing "Leap of Faith" assumptions are mentioned frequently along with dashboards, the importance of experimentation, steering and pivoting your business to Plan B, and other themes that you will find in the Lean Startup.
The title of the book is based on the observation that between 60 to 66 percent of funded startups stated that they had to abandon their original
plan, Plan A, and that it was Plan B (or C or D, etc..) that actually ended up working for them. The book is about how to achieve a better business
model. The term "lean" is not used in this book which was Eric's contribution to finding better business models - how to do it without so much waste or muda.
There are two things I have come away with from the book so far - the importance of searching for analogs and antilogs of your business model, and the 5 types of models that comprise a business model. These will be discussed in turn.
Analogs and Antilogs
An analog is a predecessor company that does something you want to emulate. An antilog is a predecessor company that does something you want to do differently. You arrive at a business model by discovering a unique set of such analogs and antilogs that represent your vision for the company. This perspective on business model development is based on the idea that we shouldn't expect to completely re-invent the wheel when it comes to business models. Investors reviewing the startups business model will naturally compare the business to other businesses in an effort to understand their business model. We are just being more proactive as a startup in acknowledging these analogs and antilogs so we can share them with investors and can identify where the leaps of faith in our business model lie (i.e., no predecessors for that part of the business model).
My initial feeling is that this process of searching for analogs and antilogs is similar to case-based reasoning (PDF link) and this literature might help formalize how business model learning and inference takes place.
Mimicry is also something humans are good at and it starts at a young age. Here is a baby expressing analogs and antilogs to Beyoncé's moves and music :-)
5 Types Of Models
Another take-away from this book is that idea that a business model actually refers to 5 different types of models. Directly from the book (p. 9) these models are:
Your revenue model: Who will buy? How often? How soon? At what cost? How much money will you receive each time a customer busys? And how often will they send another check? This set of questions will not result in one, tidy number. It will produce many elements that should be supported by an analog or, if not, become a leap of faith and properly considered.
Your gross margin model: How much of your revenue will be left after you had paid the direct of costs of what you have sold?
Your operating model: Other than the cost of the goods or services you have sold, what else must you spend money on to support the sale?
Your working capital model: How early can you encouragte your customers to pay? Do you have to tie up money in lots of inventory waiting for customers to buy? Can you pay your suppliers later, after the customer has paid?
Your investment model: How much cash must you spend up front before enough customers give you enough business to cover your operating costs?
If you want to "break through to a better business model" then you wouldn't just create one big model called the business model, instead you might create 5 sub-models to represent different critical aspects of your business.
Where things can get interesting is when you combine the notion of analogs/antilogs with these 5 types of models. What predecessors have a revenue model that I want to emulate, and what predecessors have a revenue model that I want to avoid using? Ditto for your gross margin model, operating model, working capital model, and investment model. So analogs and antilogs can be found at the big picture level or at the level of these more detailed types of models. The book goes into alot of detail on analogs and antilogs used in the business models of 20 different companies. For more info, you may find this review of the book helpful.
Often when a startup develops a business model they find that they don't have an analog or antilog they can use as a reference point. This marks a point where the business model expresses a "leap of faith" and it is at these points that the model has to be immediately stress tested with experiments and metrics. We will discuss the concept of "leaps of faith" more when I discuss the Eric's Leap chapter, but it is worth noting how the concept arises in Plan B (i.e., when you lack an analog or antilog for some part of your business model).
The author, David Flemming, died in 2010. He had been working on this book for 30 years without officially publishing it. That task was taken on by his protégé Sean Chamberlin and he has done a superb job producing a high quality book from his writings.
I have a strong bias to read books beginning-to-end but a dictionary format does not promote that sort of reading. There are about 15 pages of orientation material at the beginning that you should read. In these pages David offers 3 ways to navigate the book:
He has a 2 page Guide to Lean Logic organized by 14 main questions it addresses and under those 14 questions he lists all the relevant entries.
He has a 6 page introductory essay outlining some of the main themes of his work with links to entries you can go to in order to dive deeper.
He has a large list of Ways to Cheat in an Argument. Many of these "cheats" are discussed in more detail as entries in the book. The word "Logic" is used in the book title so this method of indexing might interest those wanting to hone critical thinking skills.
I would hazard the guess that many people will just dive into the book reading entries that look most interesting to them. An entry often suggests other related entries you can look at. He uses the device of an asterisk * next to terms with a corresponding dictionary entry. I found myself navigating the book by checking out related entries much like hyperlink clicking (see quote below for an example of the use of asterisks). The book makes for a good coffee table book, a good book to take to a coffee shop, or a bathroom reader.
Before the book was published it was called Lean Economy for a long time. David eventually changed the title to Lean Logic. The book dedicates many entries to understanding aspects of the lean economy concept. One gets the impression that a very well read and deep thinker is addressing each topic. David was a Schumacher College professor that studied economics and history among other many other topics.
I particularly enjoy the caliber of writing and thinking skill on display in David's writing. Here is an example of his writing/thinking skill in an entry on Local Currency in a sub-section called "time banking".
Time banks are an asset in places with a comparatively high rate of unemployment and only a modest inventory of skills, and which are not well enough connected to provide a natural source of information about their needs, *skills, and availabilities. This is the kind of local knowledge which was formerly supplied by the hubs of *social capital, such as a church, chapel, pubs, working men's clubs, local shots, schools, *festivals and events. In a sense, the laborious brokerage of time banking which requires time to be recorded and credited can be seen as the scaffolding of a heroic attempt to rebuild community with information flows and a *culture of reciprocal obligation. It brings in people who would otherwise be socially excluded. Communities whose inheritance of social capital remains intact do not need that scaffolding; the informational links of awareness and obligation are already in place. But where that rare ideal is not present, time banks meet a need. ~ p. 298-299
A final reason I would advise you to read this book is if you want to learn more about "lean" ideas and techniques. David not only address "logic" issues in this book by discussing logical "cheats", he also usefully extends the scope of "lean" ideas into discussions of the economy, food systems, health, materials, transport and many other topics. The lean economy is made up of subsystems that each have be run in a lean manner in order to have a lean economy. I suspect that the book will help to advance lean thinking into new areas and make us think about what it means to be "lean" in these new domains of lean thinking. David's concept of a "lean economy" is provocative and will, I predict, eventually enter into mainstream debate as an alternative view of how economies might operate either by choice or by necessity.
This review is still quite superficial in its treatment of David's ideas. I hope in some future blogs to delve more deeply into his lean economics ideas. I've read enough to know, however, that this is a book worth recommending (and I'm not alone).
This book was on various best sellers lists for a long time when it was released and deservedly so as it offers many useful insights for understanding the progress of humans (Homo sapiens) from our hunter gatherer days to the present. Without an historical perspective we can take for granted how money, credit, and capitalism helped to solve major problems that temporarily held Sapiens back.
Before the invention of money, for example, it was difficult to trade with neighboring humans. In the absence of money we are required to
barter with our neighbors to obtain goods that are difficult or impossible to get through our own labor. It can be difficult to know how many units of what you have is required to obtain a certain number of units of what another person might have. Perhaps you have nothing that the other person wants. Then what? While bartering is arguably a good way to build community, if we were limited to that method of exchange then our communities would be smaller, less complex, and less dynamic than communities that use money for exchange. There is a reason we don't barter much anymore and it isn't simply because we don't live in tight-knit communities. It is because there are limitations to bartering that money solves.
While there are technical mechanisms regulating money in an economy, the most important mechanism regulating money is mutual trust. According to Yuval:
Trust is the raw material from which all types of money are minted. When a wealthy farmer sold his possessions for a sack of cowry shells and travelled with them to another province, he trusted that upon reaching his destination other people would be willing to sell him rice, houses and fields in exchange for the shells. Money is accordingly a system of mutual trust, and not just any system of mutual trust: money is the most universal and most efficient system of mutual trust ever devised. ~ p. 180
Another financial invention that was important in shaping modern economies is credit. Prior to easy-to-obtain credit it was difficult for any government or business to get any project off the ground. Governments could raise taxes, raid, and plunder to raise capital but that was not as efficient as getting a loan to finance your plans. Yuval documents how the ascendancy of England and the Netherlands in defending themselves and expanding their territories was in large part due to the development of institutions capable of offering credit on good terms to the governments and businesses in those regions. Countries without easy access to reasonable credit found it hard to assemble armies and finance new business. Without access to credit it is difficult to change your station in life as obtaining credit depends more strictly upon being born into wealth.
It took awhile after money and credit were invented for capitalism to be invented. Some link it to around the time of Adam Smith and his formalization of the idea that economic growth can keep going indefinately if money earned as profit from production is reinvested into more production.
All this depends upon the rich using their profits to open new factories and hire new employees, rather than wasting them on non-productive activities. Smith therefore repeated like a mantra the maxim that 'When profits increase, the landlord or the weaver will employ more assistants' and not 'When profits increase, Scrooge will hoard his money in a chest and take it out only to count his coins.' A crucial part of the modern capitalist economy was the emergence of a new ethic, according to which profits ought to be reinvested in production. This brings about more profits, which are again reinvested in production, which brings more profits, et cetera ad infinitum. Investments that can be made in many ways: enlarging the factory, conducting scientific research, developing new products. Yet all these investments must somehow increase production and translate into larger profits. In the new capitalist creed, the first and most sacred commandment is: 'The profits of production must be reinvested into increasing production'.
That's why capitalism is called 'capitalism'. Capitalism distinguishes 'capital' from mere 'wealth'. Capital consists of money, goods and resources that are invested into production. Wealth, on the other had, is buried in the ground or wasted on unproductive activities. A pharaoh who pours resources into a non-productive pyramid is not a capitalist. A pirate who loots a Spanish treasure fleet and buries a chest full of glittering coin on the beach of some Caribbean island is not a capitalist. But a hard-working factory hand who reinvests part of his income in the stock market is. ~ p. 312
Money, credit and capitalism are often viewed as the root of all evil. What I learned from Yuval is to view these inventions in historical context and the evolutionary problems these inventions helped to solve. I don't aim to be a cheerleader for money, credit and capitalism but I do think that when we criticize one or more of these ideas, we may take for granted the socio-economic problems they helped to solve (i.e., exchange of goods, project financing, economic growth).
Part of my motivation for finishing this book now is because Yuval recently came out with another book Homo Deus: A Brief History of Tomorrow (2016). It also has positive reviews and I hope to start reading this one when it arrives in the mail next week.
The book has great reviews and Angela is a recipient of the prestigeous McArther Fellowship, often referred to as the "genius grant". The book discusses the relative importance of talent versus grit in achieving success. Talent as measured by SAT scores, or other means, only correlates with success if accompanied by grit (passion and perserverance) and you can achieve success even if you don't exhibit alot of talent but have grit. The book advises that you not be so impressed by raw talent because that raw talent may not lead anywhere without grit. The book is a useful examination of what grit is, how it is measured, and what it correlates with.
Angela did a recent talk at Google to promote her book and you might want to watch it if you are unsure whether you want to read the book.
I'm only a couple of chapters into the book so far so can't provide a full review here, just a recommendation based on what I've read so far and the buzz that is accompanying the book launch (e.g., Google usually only invites higher profile book authors to present and the views on her talk so far are higher than most Google Talks). Given the relationship between grit and success, I think most entrepreneurs might want to examine this relationship in more depth for motivation and insight into the "science of success".
Posted on April 26, 2016 @ 06:55:00 AM by Paul Meagher
Today I will continue my 1 month old tradition of reporting the books that I purchase each month to add to my home library. I usually purchase around 4 books a month. Because I have purchased them, they would appear to have my endorsement, however, I haven't fully read any of them. Without further ado, here is my April 2016 book order.
I borrowed this book from the local library and decided I would need a copy to finish reading it and as a reference for ideas related to Antifragility. There are many valuable ideas for startups and investor in this book which I hope to blog about at some future date.
I picked this up because of the testimonials from Howard Stern, Walter Issacson, Arianna Huffington, Al Gore, Larry Ellison, Ashton Kutcher, Michael Dell, etc.., and because it looked like a good resource to learn about some of the health advances that are happening. The first few pages on parabiosis sucked me in as well. It now makes me think about vampirism as science fiction rather than fantasy.
I purchased this book in part because I really liked Philip Tetlock's Superforcasters book and wanted to read more good discussion on uncertainty and prediction. I also purchased this book because I have read some of Andy Clark's previous books. He is an eloquent, clear, and leading thinker on issues at the frontiers of cognitive science and the philosophy of mind. Here is a sample paragraph I read this morning:
Brains like ours, this picture suggests, are predictive engines, constantly trying to guess at the structure and shape of the incoming sensory array. Such brains are incessantly pro-active, restlessly seeking to generate the sensory data for themselves using the incoming signal (in a surprising inversion of much traditional wisdom) mostly as a means of checking and correcting their best top-down guessing. Crucially, however, the shape and flow of all that inner guessing is flexibly modulated by changing estimations of the relative uncertainty of (hence our confidence in) different aspects of the incoming signal. The upshot is a dynamic, self-organizing system in which the inner (and outer) flow of information is constantly reconfigured according to the demands of the task and the changing details of the internal (interoceptively sensed) and external context. (~ p. 3)
I purchased this book as a mother's day gift for my wife. My wife is a vegan and likes recipe books so I figured this would be a good match. It is a top rated vegan cookbook on Amazon. The food photos look delicious. Makes me wonder why there are not more vegan restaurants. The fact that vegans cook under the constraint of not including certain food groups does not mean that they don't have alot of tastes and textures still at their disposal to produce delicious meals. It is a different palette of flavors, textures and colors to work from. The Thug Kitchen Cookbook is another popular vegan recipe book with lots of profanity to accompany the recipes.
Posted on March 25, 2016 @ 09:42:00 AM by Paul Meagher
I'm closely monitoring my book buying habits to see how my 2016 book expense forecast will fare. Tracking and managing my 2016 book expense budget is easier if I batch order my books each month rather than buying them impulsively. I just put in my book order for March and decided to blog about them.
Three of the books I ordered are books I borrowed from a public or university library and have now decided that I want a personal copy to refer to and mark up if necessary. The Risk Savvy book mentioned below is a new one that I haven't read before and was not available for borrowing. It is relevant to my current interests in heuristics, risk, and decision making.
The 4 books I ordered and the rationale I used for each purchase are given below.
1) The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses (2011) by Eric Ries.
I read this influential book on entrepreurship and refer to Lean Startup Theory often in my blogs or my thinking. This seemed like an
essential reference to have in my library.
2) Artificial Intelligence: A Modern Approach (3Rd Ed., 2015) by Stuart J. Russell and Peter Norvig.
This is the standard classroom text for learning AI. I read sections of the second edition and a paperback edition of the third edition was available for around $40 with shipping. The price has been going up lately so decided to pull the trigger. Good reference book to have in my library for formal approaches to cognitive science topics like planning, problem solving, reasoning, and decision making.
3) Risk Savvy: How to Make Good Decisions (2015) by Gerd Gigerenzer.
I've read research papers and books by Gerd Gigerenzer in the past. He is a leading researcher on the use of heuristics in reasoning. I'm very interested in heuristic reasoning and especially coming from a viewpoint where the heuristics are regarded as adaptive rather than a flawed form of reasoning (which alot of currently popular books in behavioral economics often portray it as). Also interested to explore the role of risk in decision making coming from a source that has done alot of research on decision making.
4) Gathering Moss: A Natural and Cultural History of Mosses (2003) by Robin Wall Kimmerer.
I got about half way through this book before I had to return it back to the library. The science writing is some of the best I've ever encountered and it is filled with wisdom about life and the science of mosses. She discusses her own research on mosses which exhibits both ingenuity and funny observations and experiences. I want to read the last half of the book so I can learn more about moss varieties and ecology and to have names for some of the moss varieties I encounter.
Here is a 2 minute long video of a Moss Heaven spot that I like to visit on my walks. Footage taken in the fall after deciduous leaves & needles were shed from trees. The white moss (Cladonia rangiferina) at the first of the video is actually not a moss but a lichen. I took the video to document 4 different types of mosses that I thought were present here. The humidity from the stream below makes this an ideal environment for mosses to thrive. The air quality here is also good (more oxygenated and more negative ions because of the stream turbulence below) which is why the white moss (or reindeer lichen) grow here. Reindeer lichen is considered a biological indicator of good air quality.
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