In his essay Before the Startup, YCombinator’s founder Paul Graham explains that because startups are counterintuitive, you can’t always trust your instincts when starting a startup. Then he gives a list of 5 things you can do to prepare yourself for the task.
For example, where to get ideas for a startup? Not by making an effort to think of startup ideas, but by (1) learning a lot about things that matter, then (2) work on problems that interest you (3) with people you like and respect.
Short PBSvideo on creativity. The creative process is relevant not only to artists but to anyone who must solve complex problems.
Julie Burstein explains her view on the creative process and negative capability at the beginning of the video:
[Creativity implies] the ability to stay in a space where you don’t exactly know what’s going to happen next. Willing to chase down ideas, and also willing to understand that not all of them will lead somewhere. But knowing that the experience of pursuing an idea will influence the next step.
Each creative person develops his or her own set of tools. The creative impulse is one piece of the process. But at a certain point you have to sit down and do the work. Understanding how to work is a key part to bringing your creativity to a point where you can share it to other people.
“Inspiration is for Amateurs. I just get to work.” (Chuck Close)
Shortly after Apple’s iPhone 6/6+ launch on September 9, IDG announced that the print edition of Macworld is shutting down. Jason Snell, Macworld’s lead editor for more than ten years and who has worked in Macworld for more than seventeen, writes in Goodby, Macworld:
Over the last decade we all made an enormous effort to transform Macworld editorial from a magazine mentality to a web site mentality. And honestly, it worked: By the end, the magazine was essentially a curated collection of the best stories from the website, cut down and copy edited and with nice photographs. The economics of the business just didn’t make it possible to continue.
I wonder if magazines from other industries will follow the same path. Most magazines now offer access to their digital counterpart when subscribing to the print edition. I find that even when subscribed to the print edition of some business magazines, most of the time I read the articles online.
The news have been reporting on the dispute between Amazon and Hachette. Neither company has disclosed the details of the dispute, but the argument is understood to be about e-book pricing.
Amazon argues that e-books should sell at a lower price because of the lower costs of the e-book value chain. Also, according to Amazon, e-books are highly price elastic. (If an e-book priced at $14.99 sells 100 copies, lowering its price to $9.99 will increase sales numbers to 174 copies.) Therefore, with some exceptions, Amazon position is that e-books should cost no more than $9.991.
Hachette’s argument is that book publishing is more than just printing books. Publishers make author discovery possible, have editorial teams that make sure that books meet quality standards, and do a significant marketing effort in promoting their authors and books.
Is this dispute important?
The outcome of this dispute will be important for the publishing ecosystem. Hachette is one of the Big Five3 publishing houses. This renegotiation is the first in a series, part of the settlement reached between the big five publishing houses with the US Department of Justice in 20122 under suspicion of colluding prices. Negotiations with other big publishers will follow.
Because of the volume of books affected, the result will set a precedence on how e-books are priced in the whole industry. The Big Five publish most of the books published in the world.
Another factor is that online outlets have become critical for publishers. In 2013, 41% of books purchases were made through and online retailer, while bookstore chains accounted for 22%. Amazon, the biggest online book vendor, sells 65% of all new print and digital books4.
If Amazon wins, most e-books will sell at $9.99. As the revenues from e-books become more important for publishers, they will be forced to rethink their business models.
Book quality won’t be affected
As a reader, I value a book’s quality over a cheaper price. One could think that Hachette’s position will lead to books with better content. But book pricing doesn’t work that way, and money is rarely the prime motivation for writers.
From a monetary point of view, book writing and publishing is a winner takes it all kind of market. Lots of books are written and published each year, but only a small percentage provide their authors or publishers with significant income.
Seth Godin says that a book gives you leverage to spread an idea, but if you are doing it for the money, most of the time you’re going to be disappointed5.
During the last decade, the publishing industry went through an important consolidation process. Big publishing houses bought small imprints and publishers, or merged among themselves to form bigger companies. As of today, the industry is dominated by five companies, often referred to as the Big Five. In no particular order, they are:
— Penguin Random House, owned 51% by Bertelsmann and 49% by Pearson. Bertelsmann is a giant media company with revenues around $20 billion. Penguin itself has revenues of $3.9 billion, around 10,000 employees, 250 imprints, and publishes 25% of the world’s English-language books.
— Hachette, owned by Lagardère Publishing – the biggest publisher in France and the second biggest in the UK. It is the world’s second largest trade publisher overall. Lagardère Publishing is itself part of Lagardère Group, a giant worldwide media company – magazines, radio, television, online, digital, and books – with annual revenue of approximately $10bn dollars. (cfr David Gaughran, Amazon v Hachette: Don’t Believe The Spin.)
— HarperCollins, subsidiary of NewsCorp.
— Macmillan, corporate parent of the Georg von Holtzbrinck Publishing Group, which has 50% ownership of Die Zeit.
— Simon & Schuster, property of CBS Corp., owner of the most watched network in the US with revenues over $14bn. ↩
The good news I can tell you is that to be a great investor you don’t have to have a terrific IQ.
If you’ve got 160 IQ, sell 30 points to somebody else because you won’t need it in investing. What you do need is the right temperament. You need to be able to detach yourself from the views of others or the opinions of others.
You need to be able to look at the facts about a business, about an industry, and evaluate a business unaffected by what other people think. That is very difficult for most people.
Most people have, sometimes, a herd mentality which can, under certain circumstances, develop into delusional behavior. You saw that in the Internet craze and so on. I’m sure everybody in this room has the intelligence to do extremely well in investments.
The ones that have the edge are the ones who really have the temperament to look at a business, look at an industry and not care what the person next to them thinks about it, not care what they read about it in the newspaper, not care what they hear about it on the television, not listen to people who say, “This is going to happen,” or, “That’s going to happen.”
You have to come to your own conclusions, and you have to do it based on facts that are available. If you don’t have enough facts to reach a conclusion, you forget it. You go on to the next one. You have to also have the willingness to walk away from things that other people think are very simple.
Some weeks ago, we needed to hire a designer —not a web designer— for a job. We had a list of names with good references and recomendations from other people. As expected, we searched for them on Google.
Surprisingly, from a total of ten, only two had a web page. For others, Google search results revealed little more than their personal Facebook page. In one case, you could see some cute pictures of her family’s vacation to Disney World, but no information on how to contact them professionally. Another one LinkedIn’s profile was almost empty.
If you run a personal business or are a freelancer, here is a list of basic things you should do if you take it seriously:
(Disclaimer: none of the following are affiliate links, and I am not related to any of the companies although I use some of the services mentioned.)
1. Get a domain name for your business
Domains are cheap ($15/year for a .com domain). If you are a freelancer, see if it makes sense to register your own name.
If you live in Perú (where I live), .pe domain names are registered by punto.pe. They are not cheap (around $44/year, compared to around $15/year for a .com domain), but they are the only registrars in Peru.
The upside with a .pe domain is that you can probably find many more names available than .com domains.
2. Consider having a webpage
You need a webpage to put information about your business, your background, and your portfolio of clients if it is relevant to your business. What you do, why you do, how you do it… This is what people wil find when they google for your business, for services related to it, or for your name.
Like your mail, this webpage must be under your business domain name, not under a free service like tumblr or the free tier of Wordpress.
Some people ask me if I know a ‘programmer’ who can help them build their website, and a good hosting service. Don’t do this. Webpages for small to medium businesses is a problem has already been already solved by companies like SquareSpace.
For $96 a year, SquareSpace offers a simple interface for building a professional-looking webpage, with most of the funcionality you would expect. If this is over your budget, then at least create a Facebook Page sepparated from your personal profile. Unless you are freelancing, have a LinkedIn Page exclusively for your business.
3. Use an email address under your business domain
Get an email for your business domain name and use it in your business cards and everywhere business related. That is, don’t print firstname.lastname@example.org, but use email@example.com, or firstname.lastname@example.org.
Google used to offer up to 10 mails for free for custom domains via Google Apps. They don’t anymore. But there are alternatives. Some registrars like hover.com offer a ‘forward only’ email address for domains registered with them for a small fee. (That is, all mail that arrives to email@example.com is automatically forwarded to firstname.lastname@example.org.)
If you are willing to pay for a professional mail service, you can pay $5/month for Google Apps for email and other services. A good alternative is fastmail.fm.
You should answer mail sent to your business address within one business day.
Having a professional-looking presence on the Internet has become very affordable. If you have an excellent product or service, there is no excuse for giving a poor first impression to your customers.
Professionals, unlike amateurs, spend their time carefully. They prioritize because they know they can’t put their best effort on everything. Businesses put it like this: focus on the 20% that makes 80% of your profit.
If you are serious about your work, track how you spend your time, at least for a week. Review your data, identify your leaks, and then decide what you are not going to do.
I don’t know the key to success, but the key to failure is trying to please everybody1. Deciding what you won’t do is the hardest part, because it not only implies saying no to yourself, but to other people’s expectations.