Thursday, October 12, 2017

Grinding It Out: The Making of of McDonald's by Ray Kroc with Robert Anderson

This is an old book which is first published in 1977 and that was before I was even born!!! Nobody though can argue that the lessons and wisdoms by Ray Kroc is out of place in the modern world. In fact, the book is an apt reminder that we need to put in hard work and persistence in all our ventures as the title of the book "Grinding it out" suggests. We can certainly agree that it seems that everyone is only interested in quick ventures and the old fashion way of working hard and "grinding it out" seems to be out-of-fashion. Ray Kroc is certainly inspiring as he starts working on his McDonald ventures at the age of 52 where most of us are probably planning for our retirement. Well, he certainly did not retire at age 55 or 60 and in fact continued working actively (not just as a figurehead) until he died of heart failure on January 14, 1984 at age 82. Reading this book is so easy (in fact, I completed it in Senai Airport while waiting for my flight home) and just by reading his book you can feel the passion and energy of the man who brought us perhaps the most recognizable restaurant chain in the world and also a place which most of us have fond memories of. And by coincidence that I have just completed reading the book on Google prior to this, I find that the success of both organizations can be attributed to one single powerful factor: The power of open collaboration. Both Google and McDonald are receptive to ideas from its users/advertisers (Google) and customers/franchisees (McDonald) and it is through such exponential source of ideas and acting on those feedbacks which enabled both companies to grow exponentially. This book is certainly one of the must-read books which a father passes to his son to learn important life lessons as well.

The following are some excerpts from the book which I hope you will find useful (Words in blue are mine):
1) A little bit of luck helps, yes, but the key element, which too many in our affluent society have forgotten, is still hard work - grinding it out.
2) "As long as you're green you're growing, as soon as you're ripe you start to rot."
3) But you have to take risks, and in some cases you must go for broke. If you believe in something, you've got to be in it to the ends of your toes. Taking reasonable risks is part of the challenge. It's the fun." (You got to have such spirit if you wish to be an entrepreneur)
4) A good executive does not like mistakes. He will allow his subordinates an honest mistake once in a while, but he will never condone or forgive dishonesty.
5) But perfection is very difficult to achieve, and perfection was what I wanted in McDonald's. Everything else was secondary for me.
6) I believe that if you hire a man to do a job, you ought to get out of the way and let him do it.
7) A well-run restaurant is like a winning baseball team, it makes the most of every crew member's talent and takes advantage of every split-second opportunity to speed up service.
8) You must perfect every fundamental of your business if you expect it to perform well.
9) He has a narrow vision that allows him to see income only in terms of cash in his register. Income for me can appear in other ways; one of the nicest of them is a satisfied smile on the face of a customer. That's worth a lot, because it means that he's coming back, and he'll probably bring a friend. A child who loves our TV commercials and brings her grandparents to a McDonald's gives us two more customers. This is a direct benefit generated by advertising dollars. But the begrudger has a hard time appreciating this - he wants to have his cake and eat it too. (Remember to always think long-term)
10) The begrudger regards competition with envy. He wants to learn their secrets and, if possible, undermine them. He'll often go out of his way to give the competition a bad name. (Don't be a begrudger!!!)
11) My way of fighting the competition is the positive approach. Stress your own strengths, emphasize quality, service, cleanliness, and value, and the competition will wear itself out trying to keep up.
12) "Listen, Harry, you don't know me, so I am going to forgive you for that," I said. "But let's get this straight, once and for all. I want nothing from you but a good product. Don't wine me, don't dine me, don't buy me any Christmas presents. If there are any cost breaks, pass them on to the operators of McDonald's stores."
13) I maintained that authority should go with a job. Some wrong decisions may be made as a result, but that's the only way you can encourage strong people to grow in an organization. Sit on them and they will be stifled. The best ones go elsewhere.
14) I believe that less is more in the case of corporate management; for its size, McDonald's today is the most unstructured corporation I know, and I don't think you could find a happier, more secure, harder working group of executives anywhere.
15) There is a cross you must bear if you intend to be head of a big corporation: you lose a lot of your friends on the way up. It's lonely on top.
16) "Hell's bells, when times are bad is when you want to build!" I screamed. "Why wait for things to pick up so everything will cost you more? If a location is good enough to buy, we want to build on it right away and be in there before the competition. Pump some money and activity into a town, and they'll remember you for it." (If you are confident in your product and have carried out the necessary homework, one should be brave when others are fearful. Sounds familiar?)
17) "Nothing recedes like success. Don't let it happen to us or you."
18) I believe that if you think small, you'll stay small. (Remember to think big! And put actions into the thinking otherwise thinking big alone is also known as day dreaming!)
19) But of course, where McDonald's is concerned, I favor the high side. Fred Turner does, too, and I like his thinking on it, which is that business will expand to tax the facilities provided. In other words, if you have a few extra feet of griddle and an extra fry station, or if you install one more cash register than existing business requires, you'll be challenged to put them to use.
20) There is a common fallacy that money will solve problems. It won't. Money creates problems, and the more you have, the bigger the problems, not the least of which is how to spend it wisely.
21) "I believe that if two executives think the same, one of them is superfluous." (Don't get yes-men in your team)
22) ...... getting out of the kitchen if you can't stand the heat. (Quote from President Harry Truman on pros and cons of every profession. Complaining about it won't help one bit!)
23) "Press On: Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent."

24) You have to learn to know the joy of "working and being let work."

25) Achievement must be made against the possibility of failure, against he risk of defeat. It is no achievement to walk a tightrope laid flat on the floor. Where there is no risk, there can be no pride in achievement and, consequently, no happiness. The only way we can advance is by going forward, individually and collectively, in the spirit of the pioneer. We must take the risks involved in our free enterprise system. This is the only way in the world to economic freedom. There is no other way.

I just Googled it and found that at the end of 2016, there are actually 36,899 McDonald's in the world! At the time of writing the book, there are about 4,177 stores at the end of 1976 and Ray Kroc was thinking of 10,000 even then. I guess even he may be surprised how much it has grown since then but this is testament to the organization which he has left behind that it has continued to grow at such phenomenal rate even when he is no longer around. The legacy which he left behind affects the entire world and we possibly will never see another Ray Kroc in our lifetime and for that, we have to appreciate the tenacity and foresight of the man who gave us the golden arch restaurant.

Monday, October 9, 2017

Google - How Google Works

After a two years hiatus welcoming and taking care of my two little precious ones, it is good to kick-start back the blog with an excellent book by Eric Schmidt & Jonathan Rosenberg (with Alan Eagle) titled "Google - How Google Works". I guess this book is important especially after becoming a father as Google has practically changed our way of life and that includes the relationship between parents and their children. I guess our children would no longer look at parents as their primary source of information and Google is certainly part of our everyday live. Google has practically transformed how we use information and as such, this book gives us an insight on how it has become one of the major disruptor (for the better, in my opinion) and most valuable company in the world.
As usual, the following are some of the excerpts (words in blue are my own opinion) from the book which I hope you will find useful:
1) .....the founders ran it on a few simple principles, first and foremost of which was to focus on the user. They believed that if they created great services, they could figure out the money stuff later. If all they did was create the world's best search engine, they would be very successful.
2) way to achieve that excellence was not via a prescribed business plan, but rather by hiring the very best engineers we could and then getting out of the way. (I guess this is important in the new way information is made accessible to almost anyone. With the speed of innovation that is happening, the winner would be those that can adapt and innovate the fastest and as such, a company should cultivate a culture of constantly adapting and evolving. By hiring the best and let the best mind work with a high degree of autonomy are important in the knowledge economy because let's face it, the older executives can't keep up with the fast changes that are happening in terms of technology innovation, popular culture, consumer tastes, new ways of working, etc.)
3) .....most knowledge workers in traditional environments develop deep technical expertise but little breadth, or broad management expertise but no technical depth. (The challenge now is to be adaptable. This is why it is important to get a solid technical education as this needs many years of formal education while management expertise can be developed from working experience as long as the technical person approaches work with an open mind and accepts challenges. One of the challenges faced by technically inclined worker is the inability to work well in a team, i.e. lack of social skills and this aspect needs to be emphasized in science and technology education)
4) .....multidimensional, usually combining technical depth with business savvy and creative flair..............a "smart creative", and they are the key to achieving success in the Internet Century.
5) Not every smart creative has all of these characteristics, in fact very few of them do. But they all must possess business savvy, technical knowledge, creative energy, and a hands-on approach to getting things done. Those are the fundamentals.
6) (On managing smart creative) It is also why they are uniquely difficult to manage, especially under old models, because no matter how hard you try, you can't tell people like that how to think. If you can't tell someone how to think, then you have to learn to manage the environment where they think. And make it a place where they want to come every day.
7) .....when starting a new company or initiative, culture is the most important thing to consider. (And you must live it too! What kind of culture you envisage for your company? Is it a highly systematic organization with fixed working hours? If that is the culture, you must also follow the culture. If you envisage a flexible and creative working environment where opinions from all levels of the organization are welcomed, you must be willing to listen and consider all opinions and to take all the opinions seriously and act on the good ones)
8) So ask the team: What do we care about? What do we believe? Who do we want to be? How do we want our company to act and make decisions? Then write down their responses.
9) The difference, though, between successful companies and unsuccessful ones is whether employees believe the words.
10) Offices should be designed to maximize energy and interactions, not for isolation and status. Smart creatives thrive on interacting with each other. The mixture you get when you cram them together is combustible, so a top priority must be to keep them crowded.
11) For a meritocracy to work, it needs to engender a culture where there is an "obligation to dissent".
12) ....."it doesn't matter who you are, just what you do." (On meritocracy in Google)
13) And whenever possible, avoid secret organizational documents.
14) Debbie Biondolillo, Apple's former head of human resources, who said, "Your title makes you a manager. Your people make you a leader."
15) You want to invest in the people who are going to do what they think is right, whether or not you give them permission. You'll find that those people will usually be your best smart creatives.
16) When a CEO looks around her staff meeting, a good rule of thumb is that at least 50 percent of the people at the table should be experts in the company's products and services and responsible for the product development. This will help ensure that the leadership team maintains focus on product excellence. Operational components like finance, sales, and legal are obviously critical to a company's success, but they should not dominate the conversation.
17) And generally, in our experience, once a knave, always a knave. (Tom Peters: "There is no such thing as a minor lapse of integrity.") (Google's stand on the standard they aim to set for their employees)
18) But as long as their contributions match their outlandish egos, divas should be tolerated and even protected. Great people are often unusual and difficult, and some of those quirks can be quite off-putting.
19) Marrisa Mayer, who became one of Silicon Valley's most famous working mothers not long after she took over as Yahoo's CEO in 2012, says that burnout isn't caused by working too hard, but by resentment at having to give up what really matters to you.
20) A stagnant, overly "corporate" culture is anathema to the average smart creative.
21) When Israeli tank commanders head into combat, they don't yell "Charge!" Rather, they rally their troops by shouting "Ah'cha'rye," which translates from Hebrew as "Follow me."
22) Leadership requires passion. If you don't have it, get out now.
23) .....a venture capitalist will always follow the maxim of investing in the team, not the plan.
24) .....foundational blueprint for how to create an Internet Century success story: Bet on technical insights that help solve a big problem in a novel way, optimize for scale, not for revenue, and let great products grow the market for everyone.
25) Giving the customer what he wants is less important than giving him what he doesn't yet know he wants.
26) When customers have low barriers to exit, you have to work to keep them.
27) Larry again: "Obviously we think about competition to some extent. But I feel my job is mostly getting people not to think about our competition. In general I think there's a tendency for people to think about the things that exist. Our job is to think of the thing you haven't thought of yet that you really need. And by definition, if our competitors knew that thing, they wouldn't tell it to us or anybody else."
28) Be proud of your competitors. Just don't follow them.
29) For a manager, the right answer to the question "What is the single most important thing you do at work?" is hiring.
30) The higher up you go in most organizations, the more detached the executives get from the hiring process. The inverse should be true.
31) A workforce of great people not only does great work, it attracts more great people.
32) When people are talking about their professional experience, they know the right answers to these questions - most people don't like a loner in the work environment. But when you get people talking about their passions, the guard usually comes down and you gain more insight into their personalities. (On hiring questions)
33) Henry Ford said that "anyone who stops learning is old, whether at twenty or eighty. Anyone who keeps learning stays young. The greatest thing in life is to keep your mind young."
34) You must work with people you don't like, because a workforce comprised of people who are all "best office buddies" can be homogeneous, and homogeneity in an organization breeds failure. A multiplicity of viewpoints - aka diversity - is your best defense against myopia.
35) Expanding the aperture brings risks. It leads to some failures, and the start-up costs for hiring a brilliant, inexperienced person are higher than those of hiring a less-brilliant, experienced one. The hiring manager may not want to bear the costs, but such concerns need to be set aside for the greater good. Hiring brilliant generalists is far better for the company.
36) When you completely delegate recruiting, quality degrades.
37) CEOs, professors, and venture capitalists always (correctly) preach the primacy of people when it comes to success,......
38) Committees should have enough members to allow a good range of viewpoints, but should be small enough to allow an efficient process; four or five is a pretty good number. The best composition promotes a wide variety of perspectives, so aim for diversity: in seniority, in skills and strengths (since people will often favor people cut in their own mold), and in background.
39) Some managers want absolute control over building their teams. When we instituted the committee system, some people hated it and even threatened to leave. That's OK. If someone cares that much about having absolute control over their team, perhaps you don't want them around. Dictatorial tendencies rarely contain themselves to just one aspect of work.
40) The urgency of the role isn't sufficiently important to compromise quality in hiring.
41) Top performers get paid well in athletics, and they should be in business too. If you want better performance from the best, celebrate and reward it disproportionately.
42) Pay outrageously good people outrageously well, regardless of their title of tenure. What counts is their impact.
43) ..... getting great work out of the best performers outweighs any team problems from perceived unfairness.
44) Do the best thing for the person and make the organization adjust. (On accommodating smart creatives)
45) Because people seldom leave over compensation, the first step to keeping them is to listen. They want to be heard, to be relevant and valued.
46) The first thing you should do when a valuable employee tells you he is leaving is try to change his mind. The second is congratulate him on the new job and welcome him to your company's alumni network.
47) When people are right out of school, they tend to prioritize company first, then job, then industry. But at this point in their career that is exactly the wrong order. The right industry is paramount, because while you will likely switch companies several times in your career, it is much harder to switch industries.
48) The answer lies in understanding that when it comes to making decisions, you can't just focus on making the right one. The process by which you reach the decision, the timing when you reach it, and the way it is implemented are just as important as the decision itself. Blow any of these, and the outcome will likely be negative.
49) "Visual reasoning usually works more effectively when relevant information is shown side by side. Often, the more intense the detail, the greater the clarity and understanding." (Tips on effective presentations)
50) If you are in charge, do not state your position at the outset of the process. The job is to make sure everyone's voice is heard, regardless of their functional role, which is harder to achieve when the top do puts a stake in the ground. (This is very important if you want constructive opinions from your team instead of having yes men agreeing to your decisions which is useless aside from inflating your own ego)
51) The job of the decision-maker, then, is to get the timing just right. Exhibit a bias for action, to cut off debate and analysis that is no longer valuable, and start moving the team to rally around the decision. But don't be a slave to a sense of urgency. Maintain flexibility until the last possible moment.
52) So a key skill to develop as the CEO or senior leader in a company is to know which decisions to make and which to let run their course without you.
53) There is a mistake technical and scientific people make. We think that if we have made a clever and thoughtful argument, based on data and smart analysis, then people will change their minds. This isn't true. If you want to change people's behavior, you need to touch their hearts, not just win the argument.
54) (Rules for meetings):
a) Meetings should have a single decision-maker/owner.
b) The decision-maker should be hands-on.
c) Even if a meeting is not a decision-making meeting - for example it's designed to share information or brainstorm solutions - it should have a clear owner.
d) Meetings are not like government agencies - they should be easy to kill.
e) Meetings should be manageable in size.
f) Attendance at meetings is not a badge of importance.
g) Timekeeping matters.
h) If you attend a meeting, attend the meeting.
55) You have to focus on your core business. You have to love it.
56) Bill Gates in 1999: "Power comes not from knowledge kept but from knowledge shared. A company's values and reward system should reflect that idea." Leadership's purpose is to optimize the flow of information throughout the company, all the time, every day.
57) One of Eric's most basic rules is sort of a golden rule for management: Make sure you would work for yourself.
58) The best tool we have found for this is the self-review: At least once per year, write a review of your own performance, then read it and see if you would work for you. And then, share it with the people who do in fact work for you. (May be difficult to get honest feedback in Asian companies but at least the first part would help in our review of our own performance)
59) An important first step in managing a successful partnership is to acknowledge those differences and assume that they are here to stay.
60) Champion racecar driver Mario Andretti: "If everything seems under control, you're just not going fast enough." (A little bit of stress never kills! In fact, my CEO always quote a study on animals which showed that animals without stress die faster!)
61) And don't forget to make people smile. Praise is underused and underappreciated as a management tool. When it is deserved, don't hold back.
62) As business managers, we like to manage things. Want something done? Then put someone in charge of it. But innovation stubbornly resists traditional, MBA-style management tactics. Unlike most other things in business, it cannot be owned, mandated, or scheduled.
63) Google knows that in the Internet Century user trust is just as important as dollars, euros, pounds, yen, or any other currency. Product excellence is the only way for a company to be consistently successful, so our prime directive when it comes to product strategy is to focus on the user.........
64) ..... Steve Jobs maxim that "you have to be run by ideas, not hierarchy."
65) Voltaire wrote, " The perfect is the enemy of the good." Steve Jobs told the Macintosh team that "real artists ship". New ideas are never perfect right out of the chute, and you don't have time to wait until they get there. Create a product, ship it, see how it does, design and implement improvements, and push it back out. Ship and iterate. The companies that are the fastest at this process will win. (Don't interpret the message wrongly. It is not an excuse to ship out lousy products or services. Just don't aim for perfection as nothing is perfect in this world!)
66) To innovate, you must learn to fail well. Learn from your mistakes.........
67) And don't stigmatize the team that failed: Make sure they land good internal jobs.
68) Management's job is not to mitigate risks or prevent failures, but to create an environment resilient enough to take on those risks and tolerate the inevitable missteps.
69) As Dilbert cartoonist Scott Adams says, "It helps to see failure as a road and not a wall. Mulla Nasrudin, the thirteenth-century wise fool of Sufi lore, seconds the notion: "Good judgment comes from experience: experience comes from bad judgment."
In summary, there is so much to learn from Google and I am sure Google will be studied for a long time in management courses. The recurring theme from the book is certainly the positivity surrounding the company and how it embraces innovation. For innovation to thrive, brave and open-minded management is a must and the last excerpts quoting Dilbert cartoonist and Mulla Nasrudin would serve any CEOs well in their quest to build great and sustainable company.
Good luck and all the best!



Sunday, August 9, 2015

Antifragile - Things That Gain from Disorder by Nassim Nicholas Taleb

Nassim Nicholas Taleb's (Author of The Black Swan) work is always thought provoking and not your normal mainstream stuff such as how to get rich quick, how to be happy, bla bla bla. His works often lead us to ask more questions and challenge the so-called conventional wisdom. This is why he is one of my favourite author and one will always look at the world differently after reading his book. In his latest work, as the title suggests, it is about things that gain from volatility, disorder or chaos and he has made it clear that it is not robust. Robust simply means that it can withstand volatility, disorder or chaos, whereas antifragile (a term coined by Nassim) is about things that GAIN from volatility, disorder or chaos. Sounds interesting? It also made an argument about the intervention from policy makers and politicians in an attempt to regulate the economy which usually results in making the conditions worse. In the book, Nassim highlights it is important to be antifragile in order to benefit from disorder rather than be fragile, i.e. appears to be beneficial in the short-term but is unable to withstand disorder and collapse at the first instance of volatility. For example, it is fragile if you are making small gain in the share market, say for 3 years and the moment a financial crisis such as what occurred in 2008 appears, you lose your entire fortune and even maybe more.

I don't think I am doing the book a favour by summarising its contents here but as what Nassim himself said in the book, every sentence in the book was a derivation, an application, or an interpretation of the short maxim: Everything gains or loses from volatility. Fragility is what loses from volatility and uncertainty. The followings are some excerpts from the book which I am sharing (words in blue are mine):

1) Some things benefit from shocks; they thrive and grow when exposed to volatility, randomness, disorder, and stressors and love adventure, risk, and uncertainty. Yet, in spite of the ubiquity of the phenomenon, there is no word for the exact opposite of fragile. Let us call it antifragile.

2) And we can almost always detect antifragility (and fragility) using a simple test of asymmetry: anything that has more upside than downside from random events (or certain shocks) is antifragile; the reverse is fragile.

3) .....depriving systems of stressors, vital stressors, is not necessarily a good thing, and can be downright harmful. (The point here is a little bit of stress or harm to our body, life, etc. is not a bad thing as it build up resistance)

4) How do you innovate? First, try to get in trouble. I mean serious, but not terminal, trouble.

5) It is quite perplexing that those from whom we have benefited the most aren't those who have tried to help us (say with "advise") but rather those who have actively tried - but eventually failed - to harm us.

6) In a natural environment, people die without aging - or after a very short period of aging. For instance, some markers, such as blood pressure, that tend to worsen over time for moderns do not change over the life of hunter-gatherers until the very end. (Here, the author is trying to point out that symptoms of aging such as high blood pressure is a result of modern lifestyle)

7) For an illustration of how families of organisms like harm in order to evolve (again, up to a point), though not the organism themselves, consider the phenomenon of antibiotic resistance. The harder you try to harm bacteria, the stronger the survivors will be - unless you can manage to eradicate them completely. The same with cancer therapy: quite often cancer cells that manage to survive the toxicity of chemotherapy and radiation reproduce faster and take over the void made by the weaker cells.

8) You may never know what type of person someone is unless they are given opportunities to violate moral or ethical codes.

9) He who has never sinned is less reliable than he who has only sinned once. And someone who has made plenty of errors - though never the same error more than once - is more reliable than someone who has never made any. (Would you trust someone who has never made any error? That person is most likely to be a person who never make big decisions and avoid decision making just to make himself look good)

10) Variations also act as purges. Small forest fires periodically cleanse the system of the most flammable material, so this does not have the opportunity to accumulate. Systematically preventing forest fires from taking place "to be safe" makes the big one much worse. For similar reasons, stability is not good for the economy: firms become very weak during long periods of steady prosperity devoid of setbacks, and hidden vulnerabilities accumulate silently under the surface - so delaying crises is not a very good idea. (I guess the same applies to exposing children to germs and small illnesses. Parents should not be over-protective which may end up making their children "fragile")
11) In business and economic decision making, reliance on data causes severe side effects - data is now plentiful thanks to connectivity, and the proportion of spuriousness in the data increases as one gets more immersed in it. A very rarely discussed property of data: it is toxic in large quantities - even in moderate quantities. (Remember the saying: Too much of a good thing is BAD!)
12) ..... statement by the financier Warren Buffet that he tries to invest in businesses that are "so wonderful that an idiot can run them. Because sooner or later, one will."
13) Success brings an asymmetry: you now have a lot more to lose than to gain. You are hence fragile. (This sometimes explain why big corporations loses their competitive edge to smaller, more nimble competitors - partly it is due to smaller companies taking bigger risk and sometimes, the risk pays off)
14) When you become rich, the pain of losing your fortune exceeds the emotional gain of getting additional wealth, so you start living under continuous emotional threat. (There is optimum amount for everything. Moderation is key - even for money)
15) An intelligent life is all about such emotional positioning to eliminate the sting of harm, which as we saw is done by mentally writing off belongings so one does not feel any pain from losses. The volatility of the world no longer affects you negatively.
16) The fragility that comes from path dependence is often ignored by businessmen who, trained in static thinking, tend to believe that generating profits is their principal mission, with survival and risk control something to perhaps consider - they miss the strong logical precedence of survival over success. To make profits and buy a BMW, it would be a good idea to, first, survive.
17) ..... if something is fragile, its risk of breaking makes anything you do to improve it or make it "efficient" inconsequential unless you first reduce that risk of breaking.
18) Georges Simenon, one of the most prolific writers of the twentieth century, only wrote sixty days a year, with three hundred days spent "doing nothing." He published more than two hundred novels. (Focus is very important. Do not equate busyness with productivity -
19) The strength of the computer entrepreneur Steve Jobs was precisely in distrusting market research and focus groups - those based on asking people what they want - and following his own imagination. His modus was that people don't know what they want until you provide them with it.
20) ..... halo effect, the mistake of thinking that skills in, say, skiing translate unfailingly into skills in managing a pottery workshop or a bank department, or that a good chess player would be a good strategist in real life. (For successful people, don't be too confident or cocky on your own ability!)
21) People with too much smoke and complicated tricks and methods in their brains start missing elementary, very elementary things. Persons in the real world can't afford to miss these things; otherwise they crash the plane.
22) ...... less is more in action: the more studies, the less obvious elementary but fundamental things become; activity, on the other hand, strips things to their simplest possible model.
23) The sociologist of science Steve Shapin, who spent time in California observing venture capitalists, reports that investors tend to back entrepreneurs, not ideas. Decisions are largely a matter of opinion strengthened with "who you know" and "who said what," as, to use the venture capitalist's lingo, you bet on the jockey, not the horse.
24) Let me stop to issue rules based on the chapter so far. (i) Look for optionality; in fact, rank things according to optionality, (ii) preferably with open-ended, not closed-ended payoffs; (iii) Do not invest in business plans but in people, so look for someone capable of changing six or seven times over his career, or more (an idea that is part of the modus operandi of the venture capitalist Marc Andreessen); one gets immunity from the backfit narratives of the business plan by investing in people. It is simply more robust to do so; (iv) Make sure you are barbelled, whatever that means in your business.
25) You select people on their ability to hang around, as a filter, and studious people were not good at hanging around: they needed to have a clear task.
26) But there is something central in following one's own direction in the selection of readings: what I was given to study in school I have forgotten; what I decided to read on my own, I still remember. (The same applies to profession? You are likely to excel in the profession which you chose rather than forced to?)
27) ..... if you can say something straightforward in a complicated manner with complex theorems, even if there is no large gain in rigor from these complicated equations, people take the idea very seriously.
28) Someone with a linear payoff needs to be right more than 50 percent of the time. Someone with a convex payoff, much less. The hidden benefit of antifragility is that you can guess worse than random and still end up outperforming. Here lies the power of optionality - your function of something is very convex, so you can be wrong and still do fine - the more uncertainty, the better.
29) ..... if you have favourable asymmetries, or positive convexity, options being a special case, then in the long run you will do reasonably well, outperforming the average in the presence of uncertainty. The more uncertainty, the more role for optionality to kick in, and the more you will outperform. This property is very central to life.
30) ..... charlatans are recognizable in that they will give you positive advice, and only positive advice, exploiting our gullibility and sucker-proneness for recipes that hit you in a flash as just obvious, then evaporate later as you forget them. (Beware of seminar where they teach you how to get rich quick!)
31) Yet in practice it is the negative that's used by the pros, those selected by evolution: chess grandmasters usually win by not losing; people become rich by not going bust (particularly when others do); religions are mostly about interdicts; the learning of life is about what to avoid.
32) ..... we know a lot more what is wrong than what is right, or, phrased according to the fragile/robust classification, negative knowledge (what is wrong, what does not work) is more robust to error than positive knowledge (what is right, what works).

33) Rephrasing it again: since one small observation can disprove a statement, while millions can hardly confirm it, disconfirmation is more rigorous than confirmation.

34) For the Arab scholar and religious leader Ali Bin Abi-Taleb (no relation), keeping one's distance from an ignorant person is equivalent to keeping company with a wise man.

35) ..... Steve Jobs: "People think focus means saying yes to the thing you've got to focus on. But that's not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I'm actually as proud of the things we haven't done as the things I have done. Innovation is saying no to 1,000 things."

36) We are built to be dupes for theories.

37) An attribution problem arises when the person imputes his positive results to his own skills and his failures to luck.

38) As in anything with words, it is not the victory of the most correct, but that of the most charming - or the one who can produce the most academic-sounding material.

39) Factum tacendo, crimen facias acrius: For Publilius Syrus, he who does not stop a crime is an accomplice.

40) So opinion makers who were so proudly and professionally providing idle babble will eventually appear to win an argument, since they are the ones writing, and suckers who got in trouble from reading them will again look to them for future guidance, and will again get in trouble.

41) Never ask anyone for their opinion, forecast, or recommendation. Just ask them what they have - or don't have - in their portfolio.

42) Look at it again, the way we looked at entrepreneurs. They are usually wrong and make "mistakes" - plenty of mistakes. They are convex. So what counts is the payoff from success.

43) Take this simple heuristic - does the scientific researcher whose ideas are applicable to the real world apply his ideas to his daily life? If so, take him seriously. Otherwise, ignore him.

44) Anything one needs to market heavily is necessarily either an inferior product or an evil one. (Good to remember this. Example includes Coke, McDonald, cigarettes, etc.)

45) ..... I wonder why people don't realize that, by definition, what is being marketed is necessarily inferior, otherwise it would not be advertised.

46) ..... marketing beyond conveying information is insecurity.

This latest book by Nassim Nicholas Taleb somewhat reinforces his earlier idea of Black Swan event and how fragile we can be to such extreme event. We can be making money from the stock markets and financial crisis can wipe out our entire gain and more. This is why Nassim Nicholas Taleb advocates that we should instead be antifragile and seek to benefit from the volatility. This strategy, while it does make sense, is not easy to execute. We will need to be patience and to go against the current (that includes our friends and family members) is not easy as we will somewhat seem to be "crazy" or "stupid" for quite a long time before being proven right (if ever we live long enough to be proven right and not ends up being an outcast before that happens). In investment, we also need to have substantial reserves before our "bet" comes true because it is difficult to time the event. As such, it is important to understand the idea presented by Nassim and adjust it to real life situation. In summary, this is an excellent book and it would be "crazy" not to read it unless you believe in the adage: Ignorance is bliss!