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“If you do things that are safe but feel risky, you gain a significant advantage in the marketplace.”
The modern educational system is built on the back of this premise—creating normal, common workers. In 1900, factory workers were in demand and being trained to be common or normal was valuable.
Goldratt’s theory explains that any system with a goal has one limit, and worrying about anything other than that limit is a waste of resources.
Goldratt’s framework: What’s the system? What’s the current limit? What’s the obvious way to improve the limit?
We aren’t going through a global recession—we’re transitioning between two distinct economic periods.
If you push harder and harder on a shorter and shorter lever, you still won’t get better results.
In Medieval Europe, Catholic law prohibited usury, the lending of money at interest. This meant a lot of Jews ended up becoming bankers, as Catholics were effectively forbidden from the job.
Despite owning an enormous amount of land, Friedrich lacked the capital to re-arm Prussia.
The Rothschilds would loan Germany the money, but only if Friedrich, the king, submitted to a parliamentary form of government in which power was more evenly distributed and corruption more difficult. Nathan wanted to make sure he got his money back, and Parliaments have a lot harder time building palaces for themselves than kings.
A banker dictated terms to a king. What Napoleon failed to do with an army of hundreds of thousands, a banker did with a letter.
controlled the scarce resource and so they gained power.
We’re at a transition point from knowledge to entrepreneurial work. The individuals who will gain the most from the transition are those that invest early and heavily in Entrepreneurship just as the Rothschilds benefited from investing early and heavily in capital, and IBM benefited from investing early and heavily in knowledge.
A tradition borrowed from Stoicism, negative visualization is the practice of imagining the worst possible outcome as a way to help ourselves make difficult decisions.
we frequently avoid making choices not because the outcome is bad, but simply because it’s unknown.
The hurt from that kind of interaction is something that humans evolved as a defense mechanism when we lived in small societies. If you lived in a tribe of fifty people and a girl rejects you, then it really did hurt. You had to see her every day. Your status was lowered in the tribe for the rest of your life; you might never find a mate, reproduce, and pass on your genes.
The ratio of loss aversion has been measured at between 1.5 and 2.5, meaning people typically want to see a 150–250% expected return to make the bet.
Rent to Own: The Sharing Economy
Resource Sharing
AirBnB has created more inventory (extra rooms to stay in) without creating more supply (building hotels).
Instead of having to buy expensive equipment or sign long-term contracts, entrepreneurs can buy month-to-month access to different services that they need.
Dramatic reduction in risk and cost—you’re often paying just 1% of the cost to get started compared to ten years ago.
Dramatic increase in potential—because you can only buy as much as you need, you can buy best-in-class software.
the first cloud computing company, Loudcloud,
Marketplaces and Contractors: Plug and Play Team Members and Project Partners
Dramatic reduction in cost and risk—less expensive and easier to find, lower risk
Dramatic increase in potential—find the best qualified person in the world
Self-Education:
In a world with the internet, where information is rapidly approaching free, it’s hard to rationalize spending money paying for access to general knowledge when you can get the same knowledge for free.
Dramatic reduction in cost and risk—cheaper and easier to get the knowledge you need
Dramatic increase in potential—learn from the most qualified people on Earth
Now you can source on Alibaba, a Chinese site where factories list all the products they manufacture.
Dramatic reduction in cost and risk—cheaper and easier to find a factory, develop a prototype, and get it manufactured.
Dramatic increase in potential—find the best factory in the world for your product.
The internet has made distribution and the ability to reach people possible now in industries where it wasn’t even a pipe dream before.
Let’s Players play video games and offer commentary to prospective gamers. PewDiePie, a Swedish Let’s Player, has generated $12 million dollars from his videos.
The Oculus Rift Virtual Reality headset first sent its market feelers out through Let’s Players, who tested out games with the headset.
By working with a single type of client instead of a single geographical area, he gained a lot of efficiencies that he could pass on in value to the clients both in terms of reduced costs and improved results.
Because he understands the industry, getting clients is easier; they have a smaller group to work with; and word of mouth is more effective. Marketing is easier because other dentists easily identify with existing client case studies.
AirBnB was built on the back of Craigslist.
These are all opportunities where jobs are going to be replaced by software, and you don’t want to be the one with the job—you want to be the one who owns the software.
There was a 61-year tenure for an average firm in 1958 on the S&P 500; it narrowed to 25 years in 1980—to 18 years now. At the current churn rate, 75% of the S&P 500 will be replaced by 2027.
Not bad? :) Haven't you heard about the inflation, have you?
