The most expensive lottery ticket in the world

From Felix Salmon:

Founding a Silicon Valley startup, then, is a deeply irrational thing to do: it’s a decision to throw away a large chunk of your precious youth at a venture which is almost certain to fail. Meanwhile, the Silicon Valley ecosystem as a whole will happily eat you up, consuming your desperate and massively underpaid labor, and converting it into a few obscenely large paychecks for a handful of extraordinarily lucky individuals. On its face, the winners, here, are the people with the big successful exits. But after reading No Exit, a different conclusion presents itself. The real winners are the happy and well-paid engineers, enjoying their lives and their youth while working for great companies like Google. In the world of startups, the only winning move is not to play.

That’s fine for Griffin

More than once, for some reason, people have asked me for advice on a variety of subjects: life, business, technology, etc… When I try and answer them as best as I can, I’m honest for what works for me. Not necessarily what works for everyone, all the time.

Yet, oddly enough, when presented with recommendations for how to approach and solve problems, people tend to rebuff some things as fine for me, but it’s not scalable to everyone in the whole wide world. “What if everyone saved their money? The economy would collapse!”

That’s bullshit

Sure, a ton of people can get smart, save their money, run their own businesses & lose weight. But most people won’t. Your goal in your own life is to do the very best for you and the people you care about. Everyone else can take care of themselves. After all, you shouldn’t expect other people to have your best interests in mind. As the saying goes “no one cares more about your money than you.”

Lack of Engineering Talent

My wife is on the alumni board of a fairly large university. Several times a year, we get invited to attend a dinner with the higher ups in the university where they discuss university updates. Filled with lecturers, deans, VPs and other state & local VIPs, it’s a pretty standard gathering of higher education people. At this years dinner, the president of the university was discussing the brand new data center. Proud of the fact that it’s the schools first LEED Platinum certified building, she wanted to call out the person responsible for the initiative. This is how she announced them:

“My resident computer geek”

I talk to a lot of people about the state of the technology industry, especially with regards to job opportunities. Whenever I point to the wealth of technical job openings that remain unfilled, people always ask “why is there such a lack of tech people?”. The reason I give surprised many and gets dismissed. It’s this:

It’s still not cool to be involved with computers.

Despite all the recent fame & success of technology / internet entrepreneurs, people still think of techies as the taped glasses & pocket protector wearing geeks from the movies. It’s very hard to imagine why the “D&D playing virgins, living in their parents basement” historical stereotype persists. Yet, here we are.

“My resident computer geek”

Its difficult to find a faster growing sector of the economy with higher earning potential than computers. Yet despite the existence of demand, the year over year growth of the sector, the massive unemployment rates of certain generations and the high earning potential of a computer based job, the supply is actually going down.

To explain this some people point to the relative newness of technology professions as a leading indicator. The narrative goes that we’ll see younger generations see the demand, flock to it, then start to fill it. This might have been true in the 80′s, 90′s or early 00′s. But we’re squarely in the 3rd decade (at least) of computers underpinning most of our daily lives. If timing was an issue, we would have seen an influx of grads after the mid-80′s, late 90′s or mid 00′s. Yet, enrollment is down in almost every single STEM major around the country. The rise in use of non-US talent is at an all time high as companies go to Central & South America, Europe & Asia for talent.

Note: I know that higher ed is not the only source of talent and training, but it’s a big one.

Something deeper is going on that is steering people away from the sector.

“My resident computer geek”

This wasn’t some football throwing jock, stuffing kids into garbage cans. This was the female president of a major university. If anyone should be sensitive throwing around pejorative names, it should be her. The dismissive remarks seem to ignore just how quickly tech savvy people are lapping non-tech savvy people in terms of knowledge, business acumen, social mobility and plain economic power. To dismiss that section of the population is dangerous at best and ignorant at worst.

Among the other members introduced that night were lit professors, authors, pharmacists and CEOs. How many of those people do you think were reduced to a unflattering stereotype? She could have easily used stereotypes such as bookworms, alcoholics, med school dropouts and crooks to describe the other members mentioned above. But she didn’t.

“My resident computer geek”

After her speech, at the end of the dinner, she had a new recruitment video cued up to show everyone. As we sat watching, the video froze and stopped playing. Everyone in the room sat there, with no idea what to do. The person running the laptop could do nothing but click play / pause a few times before the president declared “we’re having technical difficulties”.

If only there was a computer geek around to help.

You’re probably half-assing your startup idea

I finally finished reading Paul Grahams prose on how to get startup ideas. The whole essay is incredible. I did want to call out a few critical nuggets that he touches on that I especially liked:

The verb you want to be using with respect to startup ideas is not “think up” but “notice”

And

When you have an idea for a startup, ask yourself: who wants this right now? Who wants this so much that they’ll use it even when it’s a crappy version one made by a two-person startup they’ve never heard of? If you can’t answer that, the idea is probably bad. [3]

In all honesty, this is enough to make you stop and nod your head ‘Yes!’. After 4 years running two startup groups here in Chicago, I got tired of saying this exact phrase. If you want to start a company, find someone already solving a problem they have, but doing it poorly. That’s really it. Of course, never confuse simple with easy.

Otherwise, you have to convince them that a) they have the problem, b) they should spend money to solve it and c) you’re the one to solve it. That’s a tough thing to do.

How about the incumbents you’re trying to displace?

When startups consume incumbents, they usually start by serving some small but important market that the big players ignore. It’s particularly good if there’s an admixture of disdain in the big players’ attitude, because that often misleads them.

Make no mistake, someone is making money “solving” the problem you’re trying to solve with your startup. This isn’t kindergarden. You’re trying to take money that would otherwise go to them. They’re not gonna like that. You have to move quick, fight dirty & scrappy and use your quickness to your advantage. It’s up to you to figure out exactly how to do that, otherwise, you’re screwed. Don’t whine if you can’t understand why you just can’t catch a break. Nobody is owed a business model.

Lastly, on idea sexiness:

In fact, one strategy I recommend to people who need a new idea is not merely to turn off their schlep and unsexy filters, but to seek out ideas that are unsexy or involve schleps. Don’t try to start Twitter. Those ideas are so rare that you can’t find them by looking for them. Make something unsexy that people will pay you for.

There are so many ideas out there just waiting to be implemented. The problem is that they’re not sexy enough. They’re not going to make the WSJ or NYT. They are micro-opportunties & little buckets of gold just waiting for someone to pickup and run with. Find your flywheel

The “Jobs Creation” Fallacy

Felix Salmon chimes in on the Startup Act 3.0 in his latest post. The focus is on the so called immigrant-entrepreneur visa:

One is the immigrant-entrepreneur visa; the second is the idea of giving green cards to up to 50,000 foreign students who graduate from an American university with an advanced degree in science, technology, engineering, or mathematics — so long as they remain in that field for five consecutive years.

This is a very very very good thing. Our bleed to other countries in technical fields is quickly turning into a hemorrhage. However, he also makes a assumption that trips up most people: the lure of Job Creation.

And of course — by definition — it would create jobs. The Kauffman foundation’s math is solid, here: they conservatively estimate job creation at somewhere between 500,000 and 1.6 million new jobs after ten years, and possibly substantially more. (Those estimates don’t include jobs created by the new firms after they’ve left the program, for instance.)

Now, some of these entrepreneurs will start companies in the classics: education, healthcare, manufacturing, etc.. However, the majority will be tech related startups. And here’s the rub: the required employees of tech startups are not the ones sitting around unemployed. There’s a major shortage in knowledge workers of all kinds, from engineers on down. So simply creating more available jobs is not actually going to help out of work people get work. They already have work.

This visa does nothing to stimulate the creation of supply for these jobs, only demand. In a way, this will actually hurt the economy a bit because you’re adding to the price war going on for technical workers. This drives prices up to levels only large companies can afford, pushing out the smaller, scrappy entrepreneurs. The rich get richer.

If the government really wants to stimulate job creation, in addition to the above visa, they should work on increasing supply. But how? Simple: subsidize the education ( college or otherwise ) of anyone getting a degree / certification in a field that’s among the highest demand for the past 3-5 years. Computer Science, Electrical Engineering, Software Development, etc..

With the sky rocketing costs of tuition, people are facing the choice of education or no education. By offering them alternative situation ( Major in communications and take out loans or Major in Technical Writing and go for free ) you’re also reducing the debt load of an entire generation of teenagers who would otherwise die in debt.

A week with my new favorite watch by @Hodinkee

NOMOS Zurich

This watch is the type of watch that should be worn by a man who travels the world and thinks nothing of it; a man who is at home in Zurich, Hong Kong, Chicago, and Santiago, and knows the best places to eat in each without having to use his iPhone. It was made for the type of person who reads Monocle Magazine not to impress people on the train, but who genuinely cares about stalwarts of sustainable design in an obscure Scandinavian city. This watch is for a man who appreciates that fact that this watch features an in-house manufacture movement with hand-finishing, but doesn’t need everyone around him to know how much he paid for it. The NOMOS is a watch for a man who knew exactly who Nick Horween was before he saw that this watch came on Horween leather.

Banksy distills our upcoming revolution

This profile of Banksy outlines why he might just be remembered as one of the most influential people of the 21st century.

On indie artists:

While he may shelter behind a concealed identity, he advocates a direct connection between an artist and his constituency. “There’s a whole new audience out there, and it’s never been easier to sell [one’s art],” Banksy has maintained. “You don’t have to go to college, drag ’round a portfolio, mail off transparencies to snooty galleries or sleep with someone powerful, all you need now is a few ideas and a broadband connection. This is the first time the essentially bourgeois world of art has belonged to the people. We need to make it count.”

We may very well look back at Banksy as the catalyst for the upcoming indiepocalypse

On capitalism:

I love the way capitalism finds a place—even for its enemies. It’s definitely boom time in the discontent industry. I mean how many cakes does Michael Moore get through?”

Finally, a bit of sarcasim:

“Hollywood,” he once said, “is a town where they honor their heroes by writing their names on the pavement to be walked on by fat people and peed on by dogs. It seemed like a great place to come and be ambitious.”

Boeing, TPS & Outsourcing

Boeing, TPS & Outsourcing

However key elements of the Toyota outsourcing model were not
implemented at Boeing. Toyota maintains tight control over the overall
design and engineering of its vehicles and only outsources to
suppliers who have proven their ability to deliver with the required
timeliness, quality, cost reduction and continuous innovation. As
Toyota works closely with its suppliers and responds to supplier
concerns with integrity and mutual respect, it has established an
impressive level of professional trust and an overriding preoccupation
with product quality. But besides that, totally the same.