Category Archives: Business

Robert Day made a $200 million gift to Claremont a couple months ago — a landmark in higher ed donations. Now, he’s involved in an insider trading scandal.

An old post on The Economist blog asks, What’s wrong with insider trading?

Rather than simply forbidding trading on insider information, why not legalise this so called ‘market abuse’, and use it to improve the flow of information to the market?

As mentioned in the article, the Nobel Prize-winning economist Milton Friedman himself noted that "You want more insider trading, not less". Friedman argued that it will give people most likely to have knowledge about deficiencies of the company an incentive to make such deficiencies known. In other words, trading based on private information might benefit investors, as it stimulates a quicker absorption of new information into the markets, making them more efficient.

It is clear that insider trading continues despite vigorous enforcement of the existing regulations. This is because of the difficulties in detecting and prosecuting it. Further regulations will only add unnecessary complexity to market participants and eventually bind the already limited resources of enforcement agencies, which could be used more usefully.

(hat tip: Claremont Conservative)

The most emailed business article on the New York Times web site today is titled "Eureka! It Really Takes Years of Hard Work." It might sound eerily familiar to loyal readers of this blog.

Excerpt from the NYT article:

As humans, we want to believe that creativity and innovation come in flashes of pure brilliance, with great thunderclaps and echoing ahas. Innovators and other creative types, we believe, stand apart from the crowd, wielding secrets and magical talents beyond the rest of us.

Balderdash. Epiphany has little to do with either creativity or innovation. Instead, innovation is a slow process of accretion, building small insight upon interesting fact upon tried-and-true process. Just as an oyster wraps layer upon layer of nacre atop an offending piece of sand, ultimately yielding a pearl, innovation percolates within hard work over time.

Compare that to this excerpt from my blog post last March:

…The myth of creativity is that it all happens in one, giant "Eureka!" moment.

You know the image: The idea comes to mind and you freeze. Its brilliance strikes you. It’s going to change the world! Tears start streaming down your face….I’ve got it! you say to yourself.

Yeah, right.

This myth makes some people think they aren’t capable of creativity because they never have earth shattering bursts of inspiration.

 

In fact, I would argue most eureka moments happen iteratively; that is, one small creative burst leads to another which leads to another and slowly you start to piece together a meaningful idea. A complete idea is a mosaic of bits and pieces — it’s not a brilliant painting done in one hour.

I was actually quoted in the NYT in September on this topic in an article on the risk of long-term plans:

“Yes, the light bulb goes off,” Mr. Casnocha said. “But it goes off several times, and changes color each time.”

A fascinating article by Clive Thompson in Fast Company reveals the interesting work of Duncan Watts:

In the past few years, Watts–a network-theory scientist who recently took a sabbatical from Columbia University and is now working for Yahoo (NASDAQ:YHOO) –has performed a series of controversial, barn-burning experiments challenging the whole Influentials thesis. He has analyzed email patterns and found that highly connected people are not, in fact, crucial social hubs. He has written computer models of rumor spreading and found that your average slob is just as likely as a well-connected person to start a huge new trend. And last year, Watts demonstrated that even the breakout success of a hot new pop band might be nearly random. Any attempt to engineer success through Influentials, he argues, is almost certainly doomed to failure….

"If society is ready to embrace a trend, almost anyone can start one–and if it isn’t, then almost no one can," Watts concludes. To succeed with a new product, it’s less a matter of finding the perfect hipster to infect and more a matter of gauging the public’s mood. Sure, there’ll always be a first mover in a trend. But since she generally stumbles into that role by chance, she is, in Watts’s terminology, an "accidental Influential."

Perhaps the problem with viral marketing is that the disease metaphor is misleading. Watts thinks trends are more like forest fires: There are thousands a year, but only a few become roaring monsters. That’s because in those rare situations, the landscape was ripe: sparse rain, dry woods, badly equipped fire departments. If these conditions exist, any old match will do. "And nobody," Watts says wryly, "will go around talking about the exceptional properties of the spark that started the fire."

(hat tip Tyler Cowen)

And then tell ’em what you told them. That’s a presentation / public speaking golden rule.

The easy way to incorporate this principle into persuasive speaking is to be very explicit about all the stages of your presentation and then announce when you’re in each stage.

Here’s one reason why. While listening to someone speak the other day, I zoned out. I disengaged. When I was ready to re-engage in her talk, I didn’t know where she was — I had no guidepost — and so it was harder to know how and when to start focusing again. So, I stayed “checked-out” for the rest of her speech. My take-away: A great way to keep the attention of your audience over a longer talk is to break your speech into chunks and announce when you’re entering a new chunk, which is like offering a life raft to someone who wants to re-enter the concentration zone at the beginning of a thought, rather than in the meandering middle.

I love reading Tom Peters’ stuff — always full of inspiration, memorable quotes, fun facts. In a recent blog post, he links to a new PowerPoint he did called "Tom Peters on Implementation".

There’s this great line:

Your calendar never lies. All we have is our time. The way we spend our time is our priorities, is our "strategy." Your calendar knows what you really care about. Do you?

Bingo. Can’t think of a better way to figure out what someone cares about then having access to their daily calendar.