Making money is exactly like war. 

It is a very competitive environment. The winner of a war is the side with the best information, knowledge and understanding of the terrain they’re on and the opposition they’re facing. 

Just as in a war, your business needs “intel” in order to succeed and make money. You need to know everything you can about: 

The Buyers 
The Sellers 
The Products 
The Services 
The Competition 
The Supply Chain 
The Distribution Channel 
The Methods others used to win 
The Methods others used that failed 
The financial methods used as leverage to grow faster 
The most efficient ways to buy, sell, create, outsource and network

We will all have failures along the way. It’s failing fast, learning from that failure, and getting back in the game that makes the difference between winners and losers.

Get Rich Click! by Marc Ostrofsky

Love this quote from the Mark Cuban book;

I had to kick myself in the ass and recommit to getting up early, staying up late and consuming everything I possibly could to get an edge. I had to commit to making the effort to be as productive as I possibly could. It meant making sure that every hour of the day that I could contact a customer was selling time, and when customers were sleeping, 

I was doing things that prepared me to make more sales and to make my company better. And finally, I had to make sure I wasn’t lying to myself about how hard I was working. It would have been easy to judge effort by how many hours a day passed while I was at work. That’s the worst way to measure effort. Effort is measured by setting goals and getting results. What did I need to do to close this account? What did I need to do to win this segment of business? What did I need to do to understand this technology or that business better than anyone? What did I need to do to find an edge? Where does that edge come from, and how was I going to get there? The one requirement for success in our business lives is effort. Either you make the commitment to get results or you don’t.
How to Win at the Sport of Business: If I Can Do It, You Can Do It by Mark Cuban 

“We all are learning, modifying, or destroying ideas all the time. Rapid destruction of your ideas when the time is right is one of the most valuable qualities you can acquire. You must force yourself to consider arguments on the other side.

— Charles T. Munger” 

A Few Tips on Negotiating ( from How to be Rich by Felix Dennis)

Remember that few of us are any good at detailed negotiations. That includes your opponent, by the way. • If you are a poor negotiator, like me, then set a limit on what you will pay or accept and on any conditions attached. Do not deviate. Your first thought is your best thought. 

• Most negotiations are unnecessary. Don’t enter into them. Remember that “the fortress that parleys is already half taken.” Save serious negotiations for serious occasions. • Do your homework. And do it rigorously. What you don’t know or haven’t bothered to find out can kill you in any type of serious negotiation. • Despite my jungle book examples above, the devil really is in the detail in serious negotiations. Get all the professional help you can trust. But do not surrender control of the negotiations or the agenda to such professionals. They are not the ones who will have to live with the consequences—you are. Professional advisors are there to explain and advise, not to decide. • If your advisors are leading you down a path you don’t approve of during your negotiations, call a “time-out” and tell them privately that if they continue along that route you will get yourself some new advisors. The world is full of them. • Never fall in love with the deal. A deal is just a deal. There will always be other deals and other opportunities. 

• Avoid auctions in business like the plague—unless you are selling something, that is. You will nearly always pay more than is wise if you are the “winner” of an auction process. • The negotiator opposite you is not your new best friend. He is not your partner. He is not your confidant. You have no obligation, outside of ordinary courtesy, to please him or satisfy his demands. He is the enemy. If you do not understand that real winners and real losers emerge from serious negotiations, then you will be robbed, whatever the circumstances. 

• Take no notice of management manuals that tell you to leave passion and emotion out of the negotiating room. If you are emotional or passionate about something, then let it show. But leaven emotion with courtesy, and, if possible, with wit. If you’re not the witty type, then flattery and self-deprecation are good substitutes. • Listen when engaged in serious negotiations. Then listen some more. You are in no hurry. Nobody ever got poor listening. Also, use silence as a weapon. Silences are disconcerting. People tend to fill silences with jabber, often weakening their bargaining position as they do so. 

• Choose a rogue element to your advantage and bring it into the negotiation at a late stage. You’ll be amazed at how often this tactic produces results. • The British created the largest geophysical empire in the world with one tactic: divide and rule. It always works. It never fails if you can get to exploit it. Get to know the other side. There may be slight differences in the individual approaches of their senior managers and, possibly, in their goals. Drive a wedge and keep hammering. • Permit no such weaknesses in your own camp. I have often banned senior executives from taking part in negotiations simply to avoid this trap. Better you are in there on your own, outgunned, outflanked and outmaneuvered, than to have two or three of you silently squabbling. 

• Everyone thinks they are a great negotiator, but most of us simply are not. If it’s your company, then, for better or worse, you are the final arbiter. That remains true whether you are a good negotiator or a bad one. • If you suspect you perform badly on such occasions, do not attend, even if you are the 100 percent owner. Get someone else to do it after setting out your response to every conceivable option that might arise. This tactic can be devastating to the other side, and Peter, Bob and I have used it on many occasions in the past. You have to trust your nominee completely, though.

 • Above all, establish where the balance of weakness lies in any serious negotiation. Most strengths are self-evident.

Richard Branson and Seth Godin on risk

Sometimes you read something and it is immediately true for you. I have been thinking about risk, and I know how discussions about risk get complicated quickly, with talks about probabilities, downside protection, hedging, but those are only tools.
The truth is that you need to understand that risk is necessary and inevitable. That to take action is less risky than to take no action. Reading two books, Poke by Seth Godin and Losing My Virginity by Richard Branson (Funny I didn’t get the irony of reading these two books together until just now) are not about risk but both had very clear examples of how to think about risk, and they showed me that how I viewed risk is completely wrong.

Richard Branson is all risk. In his book, he told a story about a quiet day at home, and one afternoon a man came and knocked on his door. Richard answered the door, and there was a stranger there, an inventor who was working on a flying machine, a kind of personal aircraft, like an auto-gyro, and the man was there because he knew Branson loved to fly, and he thought that Branson might be interested in investing in his invention.

Richard listened, asked questions, and wanted to see it. The inventor had it in his car. Richard looked at it, and asked the man to pull the machine out. Richard wanted to try it on, and did. Branson wanted to run the motor, not fly it as it had never been flown, but to just start it up and see what it does. Branson started the machine, and the craft suddenly surged and took off and Branson went with it. He became airborne while his family watched him fly wildly above, as he had no idea how to actually fly the machine, it was all new to him, but he managed to keep it airborne and he finally landed roughly in a field. The next day the inventor took it up alone to do what Branson did, and crashed and died.

Richard Branson met a strange man at his front door, he let him in and listened to him, he put on the device he had never seen before, he flew the craft, and then landed it, all without knowing how it works. Branson not only understands that risk is making things happen, he understands that once in motion, you find a way. Seth Godin’s book Poke, which I will go over more in depth later had a brilliant metaphor for risk.

Seth believes that those who take action will define the world and that action will be the key differentiator in the future work force. Everyone has skills, everyone is good, everyone has quality, but only a few have the initiative to take action, and those are the people who will succeed. In his book, he tells a parable on risk and living cautiously. Seth tells of a boulder in a river, which is stopped where it is at, and the river in which it sits is continually charging forward, beating endlessly on the stable rock which is sturdy, it is always there. Imagine the beating the rock takes as debris and water constantly pound the rock, endlessly. The chaos of river, the constant change, is forever beating on the stoic rock, over and over again. Now imagine a stick or log floating in the same river, and the stick goes with the currents of the river, and it is constantly charging, it is constantly moving, sometimes fast, sometimes slow, but it rides in the same chaotic river that the boulder sits in, yet for the stick, the water for the most part is peaceful. The water around the stick is calm and there is no battering or pounding, just peace and simple floating.  That is the goal.

To take no risk is to be constantly pounded by the changing world, to take no risk, is the riskiest thing you can do.
By taking risk, by choosing, you manage your way down the river of constant change, choosing paths as you go, as the options change and you ride the ebbs and flows.

Action is calmer and more peaceful than no action.
D

Richard Branson - Losing My Virginity - notes

            What does Richard Branson think money is for?

            Money's sole purpose is to make things happen.

            "Later, it became apparent to me that businesses could be a creative enterprise in itself. If you publish a magazine, you're trying to create something that will last and serve some useful purpose. Above all, you want to create something you are proud of.

            That has always been my philosophy of business. I can honestly say that I have never gone into any business purely to make money. If that is the sole motive, then I believe you are better off not doing it. A business has to be involving, it has to be fun. and it has to exercise your creative instincts."

After reading about Branson's battle with British Airways, I am believing that perhaps those that have large wealth are really just people who went into a competition that is incredibly difficult, one they shouldn't win, one that is almost impossible, and then just be tenacious enough, stubborn enough, to not stop when others have quit.

People take music far more seriously than may other things in life. It is part of how they define themselves.

How to find opportunities? Look for a way around the system - that is where the money is. If you believe in an idea, you do what it takes to make it happen. An idea with no action remains just that.

To be profitable, to make money, the skill is not in the selling, it is in the buying. You buy the right thing at the right price, you win.

For retail property always look for the cheaper end of a high end street, and watch the invisible lines.

He keeps his notes in a simple school spiral notebook where he writes down his ideas, peoples comments, and his schedule.

He believes in long term objectives - he always wants capital growth, not dividends.

He believes that it is only the bold move that will get you anywhere. You need to be a risk taker, and the art of risk is to protect the downside. Learn all you can about risk, how it works, then you relate to it. Instead of a long list of fears, it all comes down to whether it will work or not. Then what?


Branson makes decisions on people and businesses in thirty seconds, counting on intuition more than numbers. For success he usually tracks two simple numbers, for example the price of fuel and the number of passengers for Virgin Airlines.

            "Every successful business man has failed at some ventures, and  most entrepreneurs who have run their own companies have been declared bankrupt at least once."

Whenever one of his businesses have positive cash flow, he looks for something else to do or buy.

Richard Branson takes the skills learned at one industry and applies them at another. He adds element after element, business add-on after business add-on. Virgin is a collection of small companies that are a collection of solutions to problems Branson had. He will take an idea and once it works take that idea to another industry. He has a weakness for vertical integration.

Second choice mans nothing, you ant to be the first choice, always.

Make your copyrights as long a possible. Once you have a great product, you have to protect its reputation with vigilance.

One of my favorite lines, I want to be one of the great amateurs of all time.

Richard Branson's Condensed Business Wisdom

• Business is not about profit, it is about cash flow.
• Business is not simple.
• To be successful you have to do something and be out there, and you have to hit the ground running.
• You need a great team.
• Luck is always a good thing, don't count on it, but use it when it happens.
• Survival is the key priority.
• In the beginning every deal is make or break, be aggressive.
• Some of the best ideas come out of nowhere and you have to keep an open mind and a keen eye for them.
• Even when money is tight, you need to keep the big picture  in mind. YOu will get lost in the details.
• Be curious about ideas and life
• Test assumptions, always.
• Each plan is really three things; find the right people, use the brand name, protect the downside.
• His business thrives on mavericks
• When he sees people getting a bad deal - he see business opportunity.
• The best solution to financing is a 50/50 partnership with someone. When something goes wrong, as it always does sooner or later, both partners have an equal incentive to fix it.
• It is ultimately about service, value for the money, and simple products.
• He never has a rigid idea of what business is.
• Always the personal touch, a phone call or meeting.
• He asks everyone he meets for an idea on how to be better. Everyone.

Setting up your own business that cannibalizes your market is better than someone else doing it to you.

He keeps his business units small. If they get too big, he breaks them up. That way they stay fast and responsive. Small also means if something goes wrong with a unit, it doesn't take down the whole business.

When he picks a business he simply thinks, is it something he would want?

Branson loves risk. My favorite story is one where a man comes to his house and knocks on Branson's front door. He is an inventor, and he has just created a flying machine that you strap on, and he has never flown it, but if Branson would invest, he could fine tune and make it work. Branson listened. He strapped it on, turned it on, accidently launched himself up into the air, now the machine had never flown. He had no idea how to steer or land, and finally landed the craft. He liked it, and the inventor the next day, took the unit up like Branson and dies trying to land.

Would you risk your life on a strange machine you can't fly from a person you don't know?

Branson would.

D

The only organization capable of unprejudiced growth, or unguided learning, is a network. All other topologies limit what can happen.

A network swarm is all edges and therefore open ended any way you come at it. Indeed, the network is the least structured organization that can be said to have any structure at all. It is capable of infinite rearrangements, and of growing in any direction without altering the basic shape of the thing, which is really no outward shape at all. Craig Reynolds, the synthetic flocking inventor, points out the remarkable ability of networks to absorb the new without disruption: "There is no evidence that the complexity of natural flocks is bounded in any way. Flocks do not become 'full' or 'overloaded' as new birds join. When herring migrate toward their spawning grounds, they run in schools extending as long as 17 miles and containing millions of fish." How big a telephone network could we make? How many nodes can one even theoretically add to a network and still have it work? The question has hardly even been asked.

There are a variety of swarm topologies, but the only organization that holds a genuine plurality of shapes is the grand mesh. In fact, a plurality of truly divergent components can only remain coherent in a network. No other arrangement -- chain, pyramid, tree, circle, hub -- can contain true diversity working as a whole. This is why the network is nearly synonymous with democracy or the market.

A dynamic network is one of the few structures that incorporates the dimension of time. It honors internal change. We should expect to see networks wherever we see constant irregular change, and we do.

A distributed, decentralized network is more a process than a thing. In the logic of the Net there is a shift from nouns to verbs. Economists now reckon that commercial products are best treated as though they were services. It's not what you sell a customer, its what you do for them. It's not what something is, it's what it is connected to, what it does. Flows become more important than resources. Behavior counts.

Network logic is counterintuitive. Say you need to lay a telephone cable that will connect a bunch of cities; let's make that three for illustration: Kansas City, San Diego, and Seattle. The total length of the lines connecting those three cities is 3,000 miles. Common sense says that if you add a fourth city to your telephone network, the total length of your cable will have to increase. But that's not how network logic works. By adding a fourth city as a hub (let's make that Salt Lake City) and running the lines from each of the three cities through Salt Lake City, we can decrease the total mileage of cable to 2,850 or 5 percent less than the original 3,000 miles. Therefore the total unraveled length of a network can be shortened by adding nodes to it! Yet there is a limit to this effect. Frank Hwang and Ding Zhu Du, working at Bell Laboratories in 1990, proved that the best savings a system might enjoy from introducing new points into a network would peak at about 13 percent. More is different.

On the other hand, in 1968 Dietrich Braess, a German operations researcher, discovered that adding routes to an already congested network will only slow it down. Now called Braess's Paradox, scientists have found many examples of how adding capacity to a crowded network reduces its overall production. In the late 1960s the city planners of Stuttgart tried to ease downtown traffic by adding a street. When they did, traffic got worse; then they blocked it off and traffic improved. In 1992, New York City closed congested 42nd Street on Earth Day, fearing the worst, but traffic actually improved that day.

Then again, in 1990, three scientists working on networks of brain neurons reported that increasing the gain -- the responsivity -- of individual neurons did not increase their individual signal detection performance, but it did increase the performance of the whole network to detect signals.

Nets have their own logic, one that is out-of-kilter to our expectations. And this logic will quickly mold the culture of humans living in a networked world. What we get from heavy-duty communication networks, and the networks of parallel computing, and the networks of distributed appliances and distributed being is Network Culture.

Alan Kay, a visionary who had much to do with inventing personal computers, says that the personally owned book was one of the chief shapers of the Renaissance notion of the individual, and that pervasively networked computers will be the main shaper of humans in the future. It's not just individual books we are leaving behind, either. Global opinion polling in real-time 24 hours a day, seven days a week, ubiquitous telephones, asynchronous e-mail, 500 TV channels, video on demand: all these add up to the matrix for a glorious network culture, a remarkable hivelike being.


Kevin Kelly - Out of Control

 The Mesh Notes Part Two -   check out website - http://meshing.it/ 

Cradle to Cradle - all products need to be designed so that they can be reused or reclaimed.

5 vectors make the mesh viable;

the economic crisis has created distrust of companies, the crisis has made people reconsider what is valuable to them, climate change is increasing the cost of business, greater populations and urban density favor mesh, information networks have matured.

you can create a flash brand that is finely tuned to a particular community at the key time it is needed.

It is no longer critical to think what is next, instead think what is first (important)

5 types of risk due to climate change:
regulatory risk
physical ( weather)
reputational
competitive
litigious

value unused = waste = food for a startup

7 keys to building trust in the mesh:
say what you do and manage expectations
use trials and tests ( Think Tim Ferriss tests)
do what you say ( credibility)
delight customers ( think zappos)
embrace social networks ( ex. Kevin Rose)
value transparency but protect privacy ( Facebook's issues)
deal with negative feedback quickly and skillfully

advertising is less effective than word of mouth

Mesh businesses are information companies

Mesh ecosystem;
1. nature is not only integrated, it abhors vacuums and it identify and then fills niches quickly
2. nature is resilient and adaptive
3. in nature waste is food

Think how Virgin creates a business after a business to see what sticks and what does not

niches occur when customers are restless about current choices.

open architecture can drive hyper innovation

customers like transparent

4 questions to ask yourself;
1. how could a physical asset be managed using technology that allows the entrepreneur to offer and track the asset.
2. what would you need to know about the customer that you wouldn't need to know if you sold outright
3. what kind of promise of service does it take to thrive and what can you do to reduce customer risk.
4. what are you passionate about? ( not sure this is necessary, passion can breed blindness to market viability.)

Define. Refine. Scale

2 key markets right now for platforms are retiring Boomers and young people.

 The Mesh - by Lisa Gansky ( Notes Part 1)

Characteristics of a mesh business;

1. the core offering is something that can be shared, within a community, market, or value chain.
2. Advanced web and mobile data networks are used to track goods and aggregate usage, customer, and product information.
3. The focus is on shareable physical goods, including materials used, which makes local delivery of services and products, and their money, valuable and relevant.
4. Offers, news, and recommendations are transmitted largely through word of mouth, and augmented by social services networks.

A mesh describes a type of network that allows any node to link in any direction with any other nodes in the system. Every part is connected to every other part, and they move in tandem.

Mesh businesses profit by streamlining access to physical goods and services. They are easy to start. They leverage available information infrastructure, they employ horizontal business to business services ( Fed Ex, Paypal). Mesh businesses all rely on the basic premise that when information about goods is shared, the value of the goods increases, for the business, for the individual, and for the community.

Mesh businesses are well positioned to constantly improve their customers experience by refining the overall experience and give long term savings - think items seldom used, high priced, high insurance ( cars, RV's, tools)

learn - test - play - engage - repeat

produce beta editions and modify in response

The challenge is to leverage an infrastructure for real time personalization

Mesh businesses are taking what we have learned collectively about what works in the web businesses and they are applying it to the sharing of physical products.

Mesh requires durable, flexible, reparable, and sustainable.

The era of disposal products is gone. Things need to be built to last, the goal is to create products and then spread the cost of the life of them over several transactions and over many people.

The mesh encourages open and agreed upon design standards.

In the MBA program all we ever heard was shareholder value.

You must always maximize shareholder value, over and over, which is important, very very important, but we often forget that the shareholders are also members of our communities. Maybe it comes down to the definition of value, money is one, but another is sustainability, and the most crucial value is community, businesses should never forget they are part of communities.

It is all connected, and no business operates in a vacuum.

Some wise words from a businessman, Yvon Chouinard, who does it right.
D

I live for the moment. I'm basically a Buddhist-type person. I'm just here right now, and I don't think about what's going to happen a hundred years from now. I try to concentrate on what's going on right now.

But I’m really trying to run this company like it is going to be here a hundred years from now. That's what's important.
....................
I had always tried to live my life fairly simply and by 1991, knowing what I knew about the state of the environment, I had begun to eat lower on the food chain and reduce my consumption of material goods. Doing risk sports had taught me another important lesson: never exceed your limits. You push the envelope and you live for those moments when you’re right on the edge, but you don’t go over. You have to be true to yourself; you have to know your strengths and limitations and live within your means. The same is true for a business. The sooner a company tries to be what it is not, the sooner it tries to “have it all,” the sooner it will die.

..................


Growth isn't central at all, because I'm trying to run this company as if it's going to be here a hundred years from now. And if you take where we are today and add 15% growth, like public companies need to have for their stock to stay up in value, I'd be a multi-trillion-dollar company in 40 years. Which is impossible, of course.

So all of these companies that are going for the big growth, if it continues for any length of time, will outlast their resources and outlast their customers and go belly-up. And that's why these huge companies have massive layoffs all the time.



Since I'm trying to run this company like it's going to be around a hundred years from now, we have to limit our growth and keep it to what we call "natural growth." In other words, I don't advertise on billboards in inner cities so that kids buy our black down jackets instead of The North Face's. In fact, we hardly advertise at all.

We grow by letting the customer tell us. So when the customer tells us that they're frustrated, that they just got their catalogue and we're already out of a product they wanted, then it tells me that we're not making enough. We let the customer tell us instead of creating an artificial demand for our products. Any time you're making products that people don't need, you're at the mercy of the economy, you're at the mercy of whatever is going on. So we tried to avoid that situation.



Yvon Chouinard