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Resale value

It’s hopeful to believe that the NFT, baseball card or even car that we next purchase is going to go up in value.

It probably won’t.

The secret is to only acquire things where the resale value doesn’t matter to your overall satisfaction. That’s one reason there’s a huge difference between investing in stocks and owning a home.

Dawani’s Law

“The number of people who say that Moore’s Law can’t continue doubles every 24 months.”

Even if you don’t understand this at first, it’s worth a second to understand it.

Moore’s Law, now nearly sixty years old, describes a simple engineering fact that has changed the life of everyone on the planet. The number of transistors that can be put on a chip doubles every two years. This doesn’t sound like much, but if you double even a number as small as 2 thirty times, it increases to more than a billion.

If the price of a house followed Moore’s Law, you could buy a mansion for a few pennies. Moore’s law describes the tech path that gives us artificial intelligence, smart phones and the internet.

And ever since he described the law, experts have been pointing out that it won’t continue, it can’t continue and we’ve exhausted any chance for more progress.

Like most things, it probably won’t go on forever. But that doesn’t mean it’s done.

Perhaps our job is to create the conditions for things to get better, not to predict that they won’t.

HT to Jay.

The obligation of the honest skeptic

Objections are helpful. We object by holding back action or support because we question one or more pieces of data.

But the other half of this is the obligation: if the data ends up meeting the standard of proof we set for it, we have to change our minds and spend as much energy supporting the idea as we did opposing it.

The paradox of big

When the stakes are high, when it has to be a HIT, in all capital letters, we overinvest.

The big stars. The lack of creative risk. The inflated budget and the meetings overrun with meddlers.

After all, it’s big.

Our insistence that it be guaranteed to work almost ensures that it won’t.

Forcing something to be big makes it small.

Your autobiography

Even the longest biography is only 66 hours on audio. This means that the author has to leave out almost everything.

We write our own autobiography each day by deciding what to focus on, what to rehash, and what to worry about.

The same life story can be told in many ways, and the way we tell it changes who we are and who we become.

Who is editing your version?

Selling a company

Cars aren’t like companies. Most cars on the road will be sold, again and again, until they end up as parts. Companies usually start and end with their founders.

Sometimes, a small, stable company is sold to an individual operator, usually for a multiple of the expected annual profit. It’s an investment in future cash flows, but it can be fraught, because, unlike a car, you can’t take a company for a test drive, and they usually need more than a periodic tune-up and charging station visit.

The market for used companies isn’t as efficient or reliable as the one for used cars, as surprising as that might sound. The individual who seeks to buy and operate a used company is rare, and doesn’t often have access to significant capital.

The company sales we hear about tend to be more strategic, where the buyer believes that the purchased company offers synergy (1 + 1 = 3) with their existing businesses. Perhaps the buyer has a salesforce, investment capital, systems or structures that make the combination of the companies far more successful than they would be alone.

One way to look at this is the think of the assets you’ve built. They could include:

  • Patents, software and proprietary systems
  • Machinery, leases, inventory and other measurable assets
  • Brand reputation (including shelf space at retailers)
  • Permission assets (which prospects and customers want to hear from you)
  • Loyal, trained staff

More elusive than some of these are things like:

  • Reliable, turnkey business model with low drama
  • Network effect, proven and working
  • Forward momentum (the idea that tomorrow is almost always better than yesterday around here)
  • Competitive threat (most big acquirers are simply finding it easier to buy a competitor than compete with them)
  • Story to investors (if the dilution of acquiring a company is less than the stock price will rise, the acquisition is free. See Cisco’s history for details)
  • Defensive bolstering (when a big company’s competition enters a new field, buying a smaller entrant in that new field is one way to jumpstart the organization’s forward motion)

Some of these things can be predicted and patiently built. Others are easy to see after the fact, but they’re more opportunistic than intentional.

Perhaps the single best indicator of whether a company will be considered for a strategic acquisition is that it has investors and board members who have done this before. Because these acquisitions are rarely simply rational calculations on a spreadsheet, there is often a need for cultural fit and a shared reality distortion field to create the conditions for them to get put on the agenda.

“I’m not that smart”

Someone said that to me the other day and it was heartbreaking.

The number of tasks in our culture that require someone who was born with off-the-charts talent is small indeed.

Just about everything else we need people to do is the result of effort, practice and care. It’s true that variations of that work are easier for some folks, but no one finds all of it easy going.

The correct thing to say is, “I don’t care that much.” I don’t care enough to do the reading, to fail along the way, to show up, to make a promise, to learn as I go, to confront failure, to get better at the work.

All of that might be true.

But you’re almost certainly smart enough.

We forgot to choose

When abundance showed up, first in manufactured goods, then in information, it all seemed like a simple win. More of what we want, thanks.

But of course, more of too many things is too much.

We are leaving the age of information and entering the age of choice.

Not just choosing what we’ll consume, but who we will become. Who will we connect with, lead, trust, honor, dignify, isolate or believe?

And how will we choose to walk through the world and what will we leave behind…

“America’s favorite pie”

That’s what it said on the side of the tractor-trailer on the highway. Since 1924, they’re almost 100 years old.

But it’s unlikely that it’s everyone’s favorite.

Being everyone’s favorite is such an attractive goal, and almost impossible to achieve.

Ask someone about their favorite pie and they’ll talk about the one they ate as a kid, or one that a grandparent bakes, or perhaps, one from the bakery down the street.

To collate all of these favorites into one singular popularity contest is unlikely to yield much success.

It might be America’s most convenient pie, or the bestselling one. It might be the best value or the easiest to obtain. But none of those things mean “favorite.”

Often, when we set out to do our work, we focus on popularity and breadth at the expense of the magic and singular experience that could create a favorite. Something we’d miss if it weren’t there.

I wonder if seeking to be someone’s favorite is more satisfying than trying to be popular to everyone.

I’m sure that if you want to be the most popular, the way to do that is not to seek to be the favorite of everyone (unless that is a side effect of being popular.)

The small world questions

Without a doubt, the world has become more connected, noisier and more complex. But along the way, we’re still applying our instincts from a century ago, from a planet of villages and different expectations.

Rhetorical questions worth considering as we think about what’s normal. Where does here end and there begin? Is there a line between freedom and responsibility?

Is it okay to:

  • Drive at 80 mph in a school zone?
  • Smoke on an airplane?
  • Spam a list of email addresses?
  • Use a gas-powered leaf blower?
  • What if it’s against local regulations?
  • Shoplift?
  • Pirate an ebook?
  • Ride a scooter on the sidewalk?
  • Aggressively market addictive painkillers while concealing the dangers?
  • Send kids to a school where they don’t learn to read or write?
  • Dump garbage from your factory into the river? The atmosphere?
  • Play loud music at midnight in your apartment?
  • Not get a polio vaccine for kids?
  • Actively fund construction on a new coal plant?

No right answers, but urgent questions at scale.