Friday Book Review! Play Bigger

readinglist_playbiggerWhat do Uber and Birdseye frozen foods have in common? They are what the authors of a new book, Play Bigger, call category kings. Category kings are unique companies that revolutionize industries by inventing entirely new categories — and then dominating that category. Play Bigger is written by Al Ramadan, Dave Peterson and Christopher Lochhead, three Silicon Valley entrepreneurs who co-founded a consultancy focused on designing category king companies — the name of the book is the name of their consultancy; a fourth co-author is long-time technology journalist Kevin Maney. The authors begin by defining the term “category.” A great category, they write, “solves a problem people didn’t know they had, or solves an obvious problem no one thought could be solved.”

On a visit to the Arctic, Clarence Birdseye, who created the frozen food category, watched the Inuit catch a fish and throw it on the ice, where it would instantly flash freeze. Birdseye’s reaction was not, “Finally, the solution to the problem of frozen food!” — for the simple reason that frozen food was not a concept and, therefore, not a problem. The founders of Uber, on the other hand, realized that their concept would solve a problem familiar to nearly anyone who has been near a city: the often frustrating experience of trying to hail a cab. It was an obvious problem but not one that people thought could be solved.

Finding the Missing

A vision for a new category, write the authors, often emerges from what they call a “missing” — the recognition by entrepreneurs that there is something missing in the market and that their solution can fill the gap. Marc Benioff realized that the cloud offered a way to provide CRM solutions without the expense and hassle of software. Leaving Oracle, he founded a new company called Salesforce.com, which would become the king of the cloud-based salesforce automation. An inventive idea, however, is just a small initial step in the category king strategy. The authors tell the story of a company called Jawbone. Among its inventions was a small headset that connected wirelessly to cell phones — just as states were passing no-hands regulations for drivers. However…(click to continue reading this review)

 

Friday Book Review! Invisible Influence by Jonah Berger

 

invisible-influence-9781476759692_hrWho Makes Our Decisions?

In a provocative new book called Invisible Influence, Wharton professor Jonah Berger explains that we are not the independent thinkers making well-informed decisions and choices that we might think we are. The reason is that many of our decisions and choices are made based on what others are doing. This is called social influence, and in Invisible Influence, Berger demonstrates, through scores of stories and academic research, the power of others on our decisions.

What Makes a Hit

For example, Berger describes an experiment by Princeton sociologist Matthew Salganik based on a website where people could download free music (actual but obscure music that no one knew). Salganik provided a list of songs to choose from, and included in the list how many other people had downloaded the song. Eventually certain songs began to attract more and more downloads, while other songs elicited much less interest. Over time, the chasm between the popular and unpopular songs grew wider and wider. Most people were attracted to the songs that most people had already downloaded.

However, the most surprising stage of Salganik’s experiment was yet to come. Salganik, writes Berger, decided to create eight different websites but with exactly the same list of songs and the same rules. Only the listeners were different. Over time, the same chasm between popular and unpopular songs appeared. The popular and unpopular songs, however, were different for each of the eight websites. Salganik thus demonstrated that if any song started to gain momentum, the mimicry gene kicked in: People decided that was the song they liked best. (Quality plays a role, but smaller than we might think).

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Friday Book Review! Chaos Monkeys by Antonio Garcia Martinez

160627143727-chaos-monkeys-book-780x439A Visit to the Entrepreneurial Zoo

In 2007, digital advertising veteran Antonio García Martínez left Goldman Sachs for the startup world, joining one ad tech startup before launching his own startup, which he would eventually sell to Twitter for $10 million.

Martínez describes his adventures in Silicon Valley in colorful (and sometimes lurid) detail in a new book entitled Chaos Monkeys. The term refers to software invented by Netflix that tests a product’s or website’s robustness. A chaos monkey, as Martínez explains, is the digital equivalent of a “chimpanzee rampaging through a data center,” destroying the place by randomly yanking cables or smashing boxes. Symbolically, he writes, “technology entrepreneurs are society’s chaos monkeys, pulling the plug on everything from taxi medallions (Uber) to traditional hotels (Airbnb) to dating (Tinder)… Silicon Valley is the zoo where the chaos monkeys are kept, and their numbers only grow in time… The question for society is whether it can survive these entrepreneurial chaos monkeys intact, and at what human cost.”

Taken out of the book’s context, these paragraphs may position Martínez as a concerned observer of the zoo. In truth, however, Martínez was a joyous participant in the zoo’s antics, describing a place where extremes — in money, risks and sex — are celebrated. It is also a place where business is combat and few rules of traditional business seem to apply.

Martínez’s fascinating description of the sale of his ad tech startup to Twitter, which includes a chapter appropriately titled “Acquisition Chicken,” offers a case in point. In the early discussions, Martínez and his two co-founders reject Twitter’s offer of $5 million, a sum that in Silicon Valley is equivalent to a low-ball offer. As Martínez explains, given that “the market price for acquired engineers in the Valley then was anywhere from half a million to $2 million each… $5 million for three hires plus intellectual property Twitter might use… was way too cheap. We hadn’t risked everything from our finances to our sanity for just over a million each that would take four years to earn.”

Martínez decides to dangle the company in front of Yahoo, which passes on the company. However, they are interested in poaching Martínez, who must then decide whether to abandon his fellow entrepreneurs. This type of situation, he writes, is typical for the Valley.

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Friday Book Review! Pre-Suasion by Robert Cialdini

pre-suasion_cialdini_book-209x300In 1984, a book by unknown psychologist Robert Cialdini purported to show the world the best way to influence people. Influence would become an international best-seller and help introduce the concept of social psychological analysis to a skeptical world.

In Pre-Suasion, his first solo work since 1984, Cialdini adds a new take to the art of influence. “Pre-Suasion,” as he calls it, is the ability to do or say that one thing at just the right time before attempting to influence someone.

For example, Cialdini tells the story of Jim, a fire-alarm system salesman who consistently sold significantly more of his company’s expensive systems than any other salesman. When Cialdini accompanied Jim, he saw only one thing that Jim did differently from the rest: While the prospects were filling out a fire-alarm test, he would invariably say that he had forgotten something in the car and ask if he could go get it. Because the prospects were in the middle of the test, this involved letting himself back in the house, sometimes with the help of a borrowed key.

How was this planned forgetfulness helping Jim sell his alarm systems? The reason, according to Cialdini, is that letting someone enter the house on his own, with or without a key, is a sign of trust; subconsciously, Jim’s little (slightly unethical) charade made him much more trustworthy to the prospects, who were thus more inclined to believe his argument that they should have the system. Jim had instinctively discovered the power of pre-suasion.

As Cialdini explains, there is a moment in time just before the attempt to influence (e.g., a sales pitch or a speech) called a “privileged moment”; during this window of opportunity, influencers should get the people they are trying to focus on something that will help the influencer’s cause.

Here’s a simple (and actual) example from a research test. The researchers stopped people in a mall and asked them to fill out a survey. Only 29 percent agreed to participate. The researchers then started stopping people and asking, “Do you consider yourself helpful?” Invariably, most of those people (77.3 percent) responded yes and filled out the survey. The response rate went from under 30 percent to more than 77 percent … just because of one simple question.

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Friday Book Review! Scrappy by Terri Sjodin

Image result for scrappy sjodin“Scrappiness” is a term that is easier to recognize in action than to define. To describe someone as scrappy is to describe a person who fights against the odds and manages to come out victorious against opponents or obstacles that are much “bigger” in some way than he or she might be. Terri Sjodin’s latest book, Scrappy, is filled with stories of such battles, as she explains to her readers exactly how and why being scrappy works.

For Sjodin, scrappiness is a combination of three elements: attitude, strategy and execution. The first required step to being scrappy is attitude: a mindset in which people recognize the bruises and pitfalls that might lie ahead, but decide to go for it anyway. For example, Sjodin tells the inspiring story of health club owner Susan Sly, who was struck by a diagnosis of multiple-sclerosis, a husband who leaves three days after the diagnosis and the loss of the health club due to unpaid taxes. Despite her illness, the single mother fought back and became one of the most successful sales producers for the Bally Fitness chain.

Successful scrappiness is about attitude, explains Sjodin, but it’s also about having the right strategy. In the second section of her book, Sjodin describes how to develop a strategy that is bold and somewhat risky without being reckless. Brian Palmer, president of National Speakers Bureau, was trying to land the business of an executive vice president at a large financial-services company who was unmoved by his approaches.

Finally, a mutual friend shared a conversation that she had with the EVP, who told her, half-seriously, “Brian Palmer doesn’t suck up enough!” Palmer decided to send a newly bought dustbuster to the prospect, explaining that he didn’t mind sucking up, but if he was not available, his dustbuster would take care of the sucking up. The move might have fallen flat but didn’t: The EVP loved the humor (and gumption), and Palmer started getting speaking gigs for his speakers.

According to Sjodin, scrappiness can range from big, bold moves to small gestures. To be scrappy is to have creative, often (but not always) humorous approaches to a problem, combined with a certain fearlessness. For example, rather than turning to online dating sites, 36-year-old serial entrepreneur Jennifer Matthey Riker decided to try a different tack: She took a part-time job (which she did not need) in the men’s department at a local Nordstrom’s. One day, she locked eyes with a man cutting through the store, and the two have now been married 13 years and have two children.

Once you “decide to go” and have developed a strategy to achieve what you want, the final step is to execute the plan, Sjodin writes. One of the important decisions is to determine when to launch. Timing can often make the difference between success and failure.

Another recommendation of Sjodin’s is to…(click here to continue reading)

Friday Book Review! Grit by Angela Duckworth

gritThe Power of Passion & Perseverance

Angela Duckworth, a professor of psychology at the University of Pennsylvania, won a 2013 MacArthur Fellowship, an award so prestigious that it is also known as the “genius grant.” As Duckworth explains in the foreword to her latest book, Grit, the award of the grant reminded her that throughout her childhood, her scientist father would despair that she was no “genius” — in other words, that she just wasn’t smart enough or didn’t have a great-enough talent in anything.

And he was right. As Duckworth explains in her book, genius or talent didn’t win her the coveted MacArthur Fellowship: It was grit. According to Duckworth, grit is the combination of unbridled passion and unrelenting perseverance — a combination, she writes, that will overcome innate talent or hard work or high IQ or any of the other assumed key success factors for individuals. Duckworth first demonstrated the power of grit at West Point, where she sought to answer a question that had eluded a number of psychologists for decades: Why did so many new cadets drop out in the first training program of their West Point careers? Only a tiny portion of candidates make it through the admission gauntlet into West Point — and only if they receive a high-enough Whole Candidate Score, which carefully measures the likelihood that candidates have the mental and physical capabilities to make it at West Point. Thus, most should be in a position to survive the brutal seven-week training course known as “Beast Barracks.” Yet, many didn’t — and surprisingly their scores on the Whole Candidate Score bore no correlation to whether or not they dropped out.

In July 2004, Duckworth had new cadets take her Grit Scale, which was…(click here to continue reading)

Friday Book Review! The Network Imperative by Jerry Wind, Megan Beck, Barry Libert

The Network Imperative

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Not too many years ago, the idea of a hotel chain that didn’t own a single building or an international taxi service that didn’t own any cars might have seemed ludicrous. Today, of course, we know there are international companies worth billions of dollars in market value whose business model depends on customers connecting with independent suppliers of the service — not on the ownership of physical assets. In The Network Imperative, authors Barry Libert, Megan Beck and Jerry Wind describe the scalable, networking-based business model that is revolutionizing industries. Ebay, Uber, TripAdvisor and even Visa are examples of companies built on a network business model. One could argue that network firms are specific to certain industries. The authors disagree. “Be aware,” they write. “Investor capital, customer revenue and affinity, top talent and market buzz are shifting away from established firms toward network organizations.” According to their research, “digital networks are entering almost every industry, even some of the most mundane.”

High Performance

A quick comparison by the authors of market values between traditional and what they call “network firms” is revealing. For example, Hertz boasts a $7 billion market capitalization; Uber’s valuation is listed at more than $70 billion. Other business-performance measures also highlight the value of network firms. For example…(click here to read the full review)

Friday Book Review! Sprint By Jake Knapp, John Zeratsky, Braden Kowitz

Image result for sprint by jake knappIn a new book, Sprint, Google veteran Jake Knapp and his Google Ventures co-authors John Zeratsky and Braden Kowitz insist that it is possible to focus on a problem, consider different solutions, choose one, prototype the solution and test it on customers in just five days.

The “sprint” process, as it is called, has been applied hundreds of times for companies in which Google’s venture-capital arm has invested. Sprint offers a detailed step-by-step guide to successful sprints.

Monday, When It All Begins

On Monday, for example, the sprint team — a small group with a multifunctional background — will map out the problem and choose a target on which to focus. The first step is to set the long-term goal. This is followed by listing “sprint questions” that question assumptions and lay out obstacles in the form of questions.

The next step is mapping. The key to successful mapping, according to the authors, is to keep it simple. The map, created on a white board, is customer-centric: the key customers are listed along the left margin, with the rest of the space dedicated to a drawing that recreates the customer experience from beginning to end (arrows are valuable here). The next step, “ask the experts,” consists of interviews with people who have the knowledge to provide ideas to the problems first laid out in the sprint questions and highlighted by the map.

Sprint is filled with snappy little brainstorming techniques, and one of them appears in the “ask the experts” portion of the process: the HMW note. The members of the sprint team use post-it notes to ask “How Might We” questions of the expert that address the unknowns or concerns that have arisen. Expect the map to be redrawn as the experts reveal unexpected problems or offer unexpected solutions.

Monday ends with “choosing the target.” The map has been redrawn (and is by now plastered with HMW sticky notes), and now the team chooses one particular aspect of the customer experience on which to focus.

The authors break down the rest of the days in the same clear, step-by-step manner. They give the order in which the major tasks for each day must be accomplished, offer tools and methodologies to help accomplish the tasks, and offer real examples throughout from their clients.

Friday Book Review! Smarter, Faster, Better by Charles Duhigg

Image result for smarter faster betterNew York Times reporter Charles Duhigg, overwhelmed by deadlines and commitments, sought advice from a friend of a friend: Atul Gawande, best-selling author, surgeon, Harvard professor, advisor to the World Health Organization and entrepreneur. Duhigg wanted to know how he could be as productive as Gawande.

Duhigg defines productivity as “attempts to figure out the best uses of our energy, intellect and time as we try to seize the most meaningful rewards with the least wasted effort … It’s about getting things done without sacrificing everything we care about along the way.” Gawande replied that he was “running flat out with my various commitments,” confirming to Duhigg that even the most productive people in the world became overbooked. He later discovered, however, that Gawande did not have time for him just then because he was going to a rock concert with his children followed by a mini-vacation with his wife. “There were people out there who knew how to be more productive,” Duhigg writes. “I just had to convince them to share their secrets with me.”

The result of this quest is Duhigg’s newest book, Smarter Faster Better. In this fascinating book, Duhigg uses wide-ranging illustrative narratives backed by scientific studies. The Story of Two Planes In his chapter on how to focus better, for example, Duhigg tells the stories of two flight emergencies. In the first case, the pilots became overwhelmed by sudden alarms (after hours of autopilot flying), and instead of seeing the big picture and making the simple correction required (slightly lowering the nose of the plane), they focused intently on the wrong indicators in front of them. The nose of the plane kept pointing further upwards until the plane stalled and fell in the ocean, killing all 229 aboard.

The pilots, explain Duhigg, had fallen victim to “cognitive tunneling,” which occurs when a suddenly overwhelmed brain compensates by focusing exclusively on whatever stimuli is in front of it, in this case irrelevant gauges and printouts. In the second narrative of the chapter, an engine explodes, severely damaging one of the wings. The damage was so extensive that the pilot could have been easily overwhelmed by all that was going wrong. Yet, by imagining that he was flying a simple Cessna instead of a giant, highly complex Airbus 340, the pilot focused on what he had to do to turn the plane around and land it safely. It was the most damaged Airbus 340 ever to land safely. The key was the “mental model” that the pilot had created in his head by telling himself a story: that he was landing a Cessna. To continue reading, click here.

Friday Book Review! The Third Wave by Steve Case

Image result for third wave steve caseIf the title of AOL founder Steve Case’s book, The Third Wave, sounds eerily familiar, it is no accident. Case remembers reading futurist Alvin Toffler’s book of the same name in college and wanted to be part of Toffler’s “electronic global village.” And he was. The term AOL seems very oldschool today — and Case explains what happened further in the book — but there was a time when the company he founded, based on the concept of provided services via the Internet, was a pillar of the information age — or more specifically what he calls the “First Wave” of the information age.

The First Wave of the Internet, writes Case, “was about building the infrastructure and foundation for an online world.” It was led by companies such as Cisco, Sprint, HP, Sun Microsystems, Microsoft, Apple, IBM and AOL, who created the hardware, software and networks that connected people to the Internet and to each other. Once everyone was online, the Second Wave kicked in. We are still in this Second Wave, the era of the information age, when companies, Case explains, built “on top” of the Internet. Think Google, eBay, Amazon, Twitter and even the iPhone.

We are, however, on the cusp of a Third Wave of the Internet, writes Case, in which the Internet becomes a “ubiquitous force in the world” connected to everything we do. The Internet will be part and parcel of all the facets of our lives, including our healthcare and education systems, and even what we eat. As Case puts it eloquently, the Third Wave “is the era in which products will require the Internet, even if the Internet doesn’t define them. It is the era when the term “Internet-enabled” will start to sound as ludicrous as the term “electricity-enabled,” as if either were notable differentiators.”

First-Wave Issues Society often advances in linear fashion so that the present era moves forward from the past, and the future moves forward from the present. In some ways, however, the Third Wave represents a return to the world of the First Wave — not in outcomes but in means. In other words, success in the Third Wave will depend in large part on the success factors of the First Wave, including a heavy reliance on collaboration and partnership, careful attention to policy and the courage to scale high barriers to entry. Building the infrastructure in the First Wave was capital-intensive, and the same investment partnerships will be required to redraw a nation’s healthcare system or other components of our society.

The Second Wave was different; it was the era when billion dollar companies could be built by a few tech-savvy friends with a computer and a good idea (example: make it easier to search the Internet). The barriers to entry were low, as were the required upfront investment. There still may be some best-selling apps on the horizon, but good luck launching another Twitter or Facebook from your dorm room. One of the domains in which Third-Wave entrepreneurs must be fluent, Case writes, is in government policy.

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