• Can you name 10 companies you’d like to work for?

    What if you were able to walk into an interview and explain persuasively why you’d like to work at that company?

    What if you were able to be very knowledgeable in showing that you were familiar with their history and their current initiatives, that you already knew more than a dozen of your future colleagues, and that you were ready to roll up your sleeves and start helping out right away?

    Don’t you think you’d have a leg up on the competition? Read more

  • Leonardo da Vinci’s resume

    Buon giorno,

    Before he was famous, before he painted the Mona Lisa and the Last Supper, before he invented the helicopter, before he drew the most famous image of man, before he was all of these things, Leonardo da Vinci was an armorer, a weapons guy, a maker of things that go “boom”.

    And, like you, he had to put together a resume to get his next gig. So in 1482, at the age of 30, he wrote out a letter and a list of his capabilities and sent it off to Ludovico il Moro, Duke of Milan. Read more

  • Long before Google, the Soviets also had 20% time

    There is a remarkable overlap between the ideals of the 1936 Soviet constitution  and Google’s employee benefits.  Both provide the right to productive work, rest, and leisure; health protection; care for your old age and during sickness; housing, education, and cultural benefits.  That one of those entities became a world-straddling superpower with an enormous impact on global culture, economic development, and thought, and the other folded up shop on Christmas Day 1991, is a testimony to the difference between Reward and Punishment as motivating principles of human achievement.

    Interestingly, the Soviets even had “20% time”, the innovation that Google has made famous in our own era.

    The Soviets wanted to create the “новый советский человек”, or New Soviet Man, who would transcend limits, achieve heightened consciousness, attain a new plane of human development, yadda yadda.

    Inevitably, these types of experiments in forced utopianism devolve into a cult-like messing around with your food, sleep, and time-keeping: it makes it easier for the unenlightened noobs to get with the program if physiological exhaustion curtails critical thinking.

    So it wasn’t much more than a decade after the Revolution that the Soviets experimented with altered bio-rhythms and heightened capital equipment utilization by introducing the five-day week, as seen in this 1930 calendar:

    The immediate purpose behind the short-week calendar was enabling “continuous production” in which factories stayed open 365 days throughout the year.  Not closing for the weekends meant no wasteful idle time for the machinery. And more stuff produced meant more record statistics for the apparatchiks to hail.

    To accommodate the all-too-frail human flesh required to operate that continuously-producing equipment, the Soviets created the five-color-encoded calendar above.  Under this calendar, 20% of the workforce had any given day off , depending, of course, on which color they’d been assigned.

    Predictably, the whole thing didn’t work.  Human beings don’t perform highly under conditions of forced labor, forced productivity, or forced relaxation.  The Soviets fiddled around with the five-day calendar from 1929 to 1931, at which point a six-day continuous week was introduced, until finally scrapping the whole thing in 1940.

    Instructively, the same workforce that failed to do much of anything during the forced-production-1930s became the actual engine behind the defeat of Hitler in the 1940s because their motivations became, well… their motivations: their own love of country and hatred of the enemy.

    It is also, I think, why Google’s benefits (and 20% time), superficially similar to the Soviets’, nonetheless produce an entirely different outcome.  Humans motivated by their own desire to contribute, to create, to “organize the world’s information and make it universally accessible and useful” and to use to their own talents borne, developed, and mastered, to do so, will create beautiful, useful, delightful products for the rest of us.

    Among free people, Reward will always, always defeat Punishment.


  • Bad news, you just got one year’s severance

    Sometimes bad news comes in the prettiest packages. One of the most common I see in the careers business is the generous severance payout. What seems like a gift from the highest graces too often turns out to be bad tidings in disguise.

    The “severance vacation” — that fool’s gold of “time off” that turns a few well-deserved weeks into several empty seasons — has led too many professionals, executives, and high-performers to mistakenly act against their own best interests. Read more

  • New York City Mayor-to-be urges boycott of McDonald’s because… McDonald’s cause street violence?

    Tag this one with “local government” and “you’re doing it wrong”…

    If you’re an enterprising local politician, looking to step up to the Mayor’s sash, how to handle a neighborhood that’s rough enough for the local McDonald’s to regularly witness violence just outside — and sometimes inside — its doors?  Especially if you’ve discovered that the violence in the neighborhood had gotten bad enough for the store owner to hire security to protect her McNugget-guzzling patrons Wednesday through Sunday night?

    You’d beef up the cops, right? Try to tamp down on the rowdies and show a little police presence to keep things quiet, no?  And you’d probably help the local neighborhood organize itself against violence, right?

    Naw… just kidding.  This is New York City!

    So the answer is, no, if you’re Christine Quinn, front-runner in the polls to be New York City’s next bürgermeister, you march in the streets and lead a boycott against…


    Quoth she:

    We’re asking folks in the neighborhood not to support this McDonald’s until this McDonald’s supports the neighborhood. The first thing this McDonald’s needs to do is engage better security through the paid detail option that our police department offers.”

    This is plain dumb.

    The McDonald’s owner pays taxes to the city; her employees pay taxes to the city; her customers pay an 8.875% sales tax and 4.5% of that goes to the city.  The purpose of those taxes includes providing local police to keep the neighborhood safe.

    Asking for special money or additional fees from violent areas makes costs go up in districts where it’s already a challenge to do business.  Demanding those monies, at the threat of public harassment from your elected officials, would seem to be more in line with Seinfeld’s Bizarro-land than Bloomberg’s New York. But there it is.

    It bears repeating that McDonald’s restaurants do not create violence.  The McDonald’s corporation, and its franchisees, do nothing to promote or foster violence.  It ought to be obvious that there is no correlation between the placement of a McDonald’s and violence of this nature. McDonald’s don’t serve fisticuffs with their french fries or sucker punches with their shakes.

    As a matter of fact, there are thousands upon thousands of McDonald’s across the country that open for business each and every day, serve hundreds of customers, and then close for the night without playing host to a street brawl.  Amazing, but true.

    The chain’s generally pacific tendencies and avowed policy of not-being-violent even empowered the New York Times’ Thomas Friedman to famously, if slightly inaccurately, laud the McMuffin macher’s role in soothing global tensions.

    The problem, in fact, is that the neighborhood is a night-life and street-life mecca.  There are forty bars within three blocks of the McDonald’s.  It’s at the edge of a major University and is two blocks away from Greenwich Village’s largest subway hub encompassing the A-B-C-D-E-F-V interchange.

    More than forty bars (red dots) populate the McDonald’s (green “A”) neighborhood.

    The cops in our neck of the woods concur:

    “Sixth Precinct Lieutenant Maresca agreed that Village nightlife creates crime and quality-of-life issues.

    “[The Village] is a nightlife destination, and we run into a lot of issues,” he said. “Unfortunately, with the volume of people we get here, it’s tough. It’s tough on the residents, and I understand that. And we can’t have a cop every place we want the police officers to be.”

    Maresca said the precinct has 18 officers in its “cabaret unit,” four of whom patrol Bleecker, MacDougal and West 3rd streets in the central Village… In the 1990s, the Village had a much larger cabaret unit, of 75 to 80 officers on weekends, Maresca said.”

    No, rather obviously to anyone other than a New York mayoral candidate, the problem is not McDonald’s; it’s not the McDonald’s owner; and it’s not the McDonald’s customers, menu, or decor.  It’s the local area.

    This stretch was once rough, was largely tamed in the 90s, and is now seeing a resurgence in crime as resources are devoted elsewhere.

    When I first came to New York twenty years ago, I witnessed a deadly assault at three o’clock in the afternoon at, as it happens, this very same McDonald’s.  Four guys came in, grabbed a guy, took him outside and stabbed him with a broken 40-oz. bottle. And then stabbed him again and again until he lay bleeding across the sidewalk in front of the store.  I stood, 21 years old and horrified beyond tears, at about the same viewing angle as you see in the video.

    I ran back in to tell the cashier to call 911.  She asked “Is he dead yet?” and didn’t move towards the phone or seem too interested in getting involved.  So I went back outside to drop a quarter in the payphones to call the police.

    I also decided to move to San Diego.

    It will be a shame if our next twenty years in New York City are about retreating from safe streets and safe citizens. If Christine Quinn intends to make her Mayor’s race about boycotting and browbeating small business owners instead of policing better, it will take us back to a time of the bad old days that none of us really want to remember.

    Trust me, we don’t.


  • Frank Zappa on A/B testing the 1960s music industry

    Frank Zappa reveals that the 60s were actually… a grand time for A/B experiments in musical taste:

    Zappa’s point that willful ignorance and a decent humility enable creativity rings true.   The young know-it-alls “are more conservative and dangerous to the art form” than the cigar-chompers who possess an openness, curiosity, and nonchalance that comes from experience and competence.  Zappa, still young in the interview, presumes their openness comes from mere ignorance, rather than a lifetime of calculated commercial instincts, but the end result is the same.

    Interestingly, Bill Gurley’s post this week on “Why Youth Has An Advantage In Innovation & Why You Want To Be A Learn-It-All” would seem to be making the opposite argument:

    “The point Billy [Beane] raised regarding the fleeting value of experience is also important to consider. As the world becomes more and more aware of a trick or a skill, the value of that experience begins to decay. If word travels fast, the value of the skill diminishes quickly.”

    So experience that relies on predicting the future as a function of the past won’t succeed.  It can’t.

    But I think Zappa and Gurley are actually making the same point here.  People who rely on a closed belief or a received wisdom about what works and what won’t, can’t be successful in creating the future. The important characteristic, rather, regardless of age, is the desire to be a “learn-it-all” and to have the thirst for the new / the birth of the cool, and not an out-sourced reliance on the tried and true.

  • NASA channels van Gogh: The Perpetual Ocean

    This is a gorgeous representation of the globe’s ocean currents via NASA, channeling their inner van Gogh:

    The model simulates surface flows for artistic purposes:

    “This visualization shows ocean surface currents around the world during the period from June 2005 through Decmeber 2007. The visualization does not include a narration or annotations; the goal was to use ocean flow data to create a simple, visceral experience.”

    If that was their goal, they have succeeded! via @flowingdata




  • Why didn’t she hire you?

    Over the past month, I’ve “interviewed” the fictional hiring manager Betty Boss to give you an insight into what is actually happening on the other side of the interview table.

    First, she answered “why I didn’t hire you” in Parts One and Two; and then “why I did hire you” in Parts Three and Four.  It’s important for you to realize that the people on the other side are just doing their job, and, like you, they have too many e-mails in their inbox, voicemail messages to return, and kids’ soccer games to attend.  So they’re going to try and figure out a way to streamline their work while still getting a great hire.  If you help them do that, you’ll be better positioned to get hired.  If you don’t, you’ll be relegated to the trash or the unanswered pile.

    Many commenters find “Betty’s” viewpoint harsh, or unyielding, or unfriendly.  That could be true, but it’s a pretty accurate reflection of what’s going on “inside the mind” of a hiring manager or HR person in 2012.  You can wish that corporations spent more on HR people so that they could really take the time to understand the “true you”, invested in training bosses to interview like clever detectives, and over-hired in all areas of their business having to do with recruiting so that hiring managers and HR people wouldn’t be so harried.  But if you’ve been reading the headlines these past few years, you know that’s not going to happen.  The best you can do is to be aware of the limitations of our current system, and learn how to play them to your advantage.

    As I mentioned in the “interview” there are things you can change, and things you can’t, and like the Serenity Prayer, it’s probably best for you to abide the immutable, and put your focus on those things within your control:

    Betty’s reasoning for not hiring you were…
    I never saw your resume,
    Your resume didn’t grab me,
    The interview was a nice chat,
    You never said you wanted this job,
    I heard back from somebody else first,
    I’m looking to build out the team with a variety of perspectives,
    I’m looking for somebody with a different industry background,
    We haven’t had success with profiles similar to yours in our organization,
    I’m looking for somebody with more / less experience.

    Those in bold you can control; those in italics, you can’t.  I hope you’ll enjoy my, er… “Betty’s”, advice in one, two, three, four parts on tackling these, and make good use of it on your job search…

  • Why I hired you, Part Two

    Over the past three weeks we’ve covered why you didn’t get the job, and what you can do about the reasons that are within your control.

    In this last week on this topic, we’ll address all of those things that are out of your control, and what to do about those. If I could put a subtitle on this newsletter, it would be “Listening is the most important interview skill“. Read more

  • Is a Reggie Jackson worth $56?

    For men of a certain age, a fantasy likely sprung into your little mind thirty, forty, or fifty years ago, that eventually, one day, your baseball card collection would be worth something. Shoeboxes were enlisted in the preservation effort and carefully stowed away under beds, in closets, up in attics, there to wait until some sensible female relation, or just plain sense, exiled them to the dump, a garage sale, or the storage shed.

    My 1977 “Burger King” Yankees baseball card collection goes for $300 on eBay.  I haven’t seen it in a decade, but I’m certain that when I dig it out of storage, I’ll fulfill every American boy’s dream of actually going and selling my baseball card collection for a poor financial return given the holding period and the performance of the relevant indexes.  It’s as American as apple pie.

    But the question is why do collectibles have value? Why do my Burger King Yankees cards go for $300?  Why is the Reggie Jackson in this seris now worth $56?  If the value of an asset is the value today of all the dollars you’ll expect from that asset over the years ahead, why do collectibles have any value at all?

    They can’t be consumed, don’t produce anything, cost money to store, have zero nominal returns and therefore negative real returns*, and are remarkably fragmented, sporadic, illiquid marketplaces.  With those investment characteristics, you might expect that their value would trend towards zero. So why does a zero-return market for collectibles exist?

    Considering three possible explanations, they each come up short: intrinsic non-financial return, money flows, and signalling.

    There are intrinsic rewards to owning collectibles.  There is the enjoyment derived from time spent with expert people, the stories swapped with comrades-in-collecting, the luscious meetings in soft rooms at the dealer’s townhouse, and the experience of deference before the auction block. It could be that perks, privileges, and honors drive the collectibles market.

    As one paper on Chinese stamp collecting asserts, it is these intrinsic rewards, the psychological and social return to owning collectibles, that provide a meaningful portion of the return to collectibles ownership.  The lower financial return becomes, in effect, a price paid by the buyer for the psychological benefits of collectible ownership.  Other academics agree and describe these lower returns:

    “On the one hand, collectibles should provide a high rate of return to compensate the owner for the objects’ relative illiquidity, high holding costs, and variability of return, including the possibility that a once-popular item might fall into disfavor. On the other hand, collectibles could provide a low rate of return because the non-pecuniary returns from their ownership will mean that investors require lower financial rewards; for example, you get to hang your Picasso on your living room wall and show it off to your friends.

    Because of the nonpecuniary—perhaps even non-rational—rewards from owning
    collectibles, there is reason to think it may be possible to make extraordinary profits in
    this area. Collectibles are estranged from cost fundamentals, since production concerns are irrelevant once you are in the resale market, and the numbers of buyers and
    sellers involved may be relatively low.

    These results imply that the non-pecuniary return to at least some forms of collectibles may in many cases be substantial; indeed, one can approximate the non-pecuniary returns by subtracting the return on equity or debt from the pecuniary rate of return on the object at hand.”+

    But this explanation is not persuasive.  Many assets purchased for financial reasons also meet deep human emotional needs.  Housing is the most obvious.  A US government bond offers peace of mind along with its coupons.  At the other end of the risk spectrum, start-up investing provides fantastically interesting cocktail party chatter along with highly variable outcomes.

    In any event, as a collectible provides the same non-pecuniary characteristics to its past, present, and future owners, the non-financial, intrinsic rewards are priced into the asset.   Negative real returns can’t be the result of non-financial pay-offs.

    There are macro-economic considerations in growing economies.  As incomes increase, cash seeks new diversions.  Expenditures on sports teams, pets, entertainment, vacations, hobbies and healthcare all increase with GDP per capita.  The satiated wealthy and the satisfactorily affluent will find ways to use uncommitted mental bandwidth to expend ready money.  Idle hands are the devil’s workshop and the dealer’s meal ticket.

    With rising productivity, lower relative expenditures on staples absorb less of an increased income. Money earned needs to go someplace, and whether it is the rare fountain pen or pursuing Fountain-of-Youth medical cures, people dedicate an increasing portion of their income to pursuits trivial and profound.

    But the availability of discretionary money flow does not explain why dollars flow to non-productive collectibles assets instead of real estate, capital equipment, or consumables such as automotive, clothing, and iPads. Competitive investment dispersion across asset classes ought to reduce money flows into collectibles until real returns rise, but they do not.

    Perhaps collecting serves as an effective social signal.  The movie character displaying his art collection is never the rude hayseed or rough bumpkin.  Collecting activity signals elevated intellect, status, taste, or ability.  Even the Soviet calculator collection or the world’s largest collection of Charlie’s Angels memorabilia signal attractive characteristics of vision, determination, and an ability of a certain type.

    Yet it’s difficult to see the efficacy of such signalling expenditures, as most observers won’t share the collector’s aesthetic appreciation – de gustibus non est disputandum.  Further, an entire luxury goods industry exists to provide readily-purchasable tokens of wealth and taste and itself expends significant dollars to ensure that audiences receive the intended messages regarding the owner’s sophistication, discernment, and desirability.  The collectibles industry would seem to be a weak competitive threat as purveyor of social signals.

    With three unsatisfactory answers, how then can we explain the negative real returns to collectibles?  The rational buyer isn’t buying collectible assets for a financial return, to park idle money, or for social signalling.  What then does she hope to buy for her purchase price?

    More on that tomorrow.


    * Wine being the exception on consumable collectibles. Baumol (1986) found an annual compounded rate of return of 0.55 percent for art for the period 1652 to 1961.  Meta-analyses such as Burton & Jacobsen find instances of positive return, but do not systemically call into question Baumol’s findings.

    + Burton & Jacobsen (1999)