Archive for January, 2013

Quotes For Entrepreneurs–January 2013

Written by Sean Murphy. Posted in Quotes, skmurphy

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“People who sacrifice to achieve their goals slowly while maintaining their responsibilities are less impressive at first glance, but more impressive after more thought.”
John D. Cook in “Extreme Change is Easier

See also “Change or Die

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“Focus on understanding why the system is doing what it’s doing, rather than why it’s not doing what you wanted it to.”
John Guttag

h/t Jon Udell in “Computational Thinking and Life Skills

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“To remind a man of the good turns you have done him is very much like  a reproach.”
Demosthenes

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“History is not another name for the past. It is the name for stories about the past.”
Alan John Percivale Taylor

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“If something cannot go on forever, it will stop.”
Stein’s Law (Herbert Stein)

Used as opening quote for “Stein’s Law.

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“Pay attention to your enemies, for they are the first to discover your mistakes.”
Antisthenes

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“Creativity is the defeat of habit by originality.”
Arthur Koestler

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“At least at first, the new thing is rarely as good as the old thing was.  If you need the alternative to be better than the status quo from the  very start, you’ll never begin.”
Seth Godin in “Tribes

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“When the oak is felled the whole forest echoes with its fall, but a hundred acorns are sown in silence by an unnoticed breeze.”
Thomas Carlyle

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“It is an inherent property of intelligence that it can jump out of a task which it is performing and survey what it has done…”
Douglas Hofstadter

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“The map appears more real to us than the land.”
D. H. Lawrence

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“The frontiers of the future will be the ruins of the unsustainable.”
Bruce Sterling

This version of the quote is due to a July 2012 talk “What Will Matter in the Future” by Stowe Boyd, I like it but further research shows that what Sterling said, at least initially, was probably  ”The ruins of the unsustainable are the 21st century’s frontier.” This has been quoted in various forms:

  • In a comment (#9) by Sterling in Jan-2009 as a part of his “State of the World 2009″ he says (bold added):

    In my futurist book TOMORROW NOW I was speculating that there might be a post-national global new order arising in cities. Cities as laboratories of the post-Westphalian order. [...] Let’s just predict that in 2009 we’re gonna see a whole lot of contemporary urbanism going on. Digital cities. Cities There For You to Use. Software for cities. Googleable cities. Cities with green power campaigns. Location-aware cities. Urban co-ops. “Informal housing.” “Architecture fiction.” The ruins of the unsustainable as the new frontier.

  • In May of 2008 Sterling wrote a post “The Post American World”  including a line “The ruins of the unsustainable are the 21st century’s frontier.”
  • Cited in Jan 2008 by Alex Steffen in the “Ruins of the Unsustainable” as a fall 2007 comment by Sterling as “The ruins of the unsustainable are the 21st century’s frontier.”
  • Used in 2006 as a title by Sterling for two posts in his “Beyond the Beyond” blog at Wired

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“Wisdom is having things right in your life
and knowing why.”
William Edgar Stafford

These are the first two lines of  ”The Little Ways That Encourage Good Fortune” from his “Stories That Could Be True: New and Collected Poems (1977).” The full poem is used as the opening quotation for “The Lucky And The Wise

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“The most useful piece of learning for the uses of life is to unlearn what is untrue.”
Antisthenes

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“It’s hard to detect good luck–it looks so much like something you’ve earned.”
Frank A. Clark

Used as the closing quote for “The Lucky And The Wise

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“Technology is the name we have for stuff that doesn’t work yet.”
Danny Hillis

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“I had been given a map which failed to show many things I could see right in front of my eyes.”
E. F. Schumacher

A different flavor of  the Map-Territory relation than Alfred Korzybski‘s ”The map is not the territory” or this D.H. Lawrence’s “The map appears more real to us than the land.” Here is a longer excerpt from the opening paragraphs E. F Schumacher’s  ”A Guide for the Perplexed.”

On a visit to Leningrad some years ago I consulted a map to find out where I was, but I could not make it out. From where I stood, I could see several enormous churches, yet there was not trace of them on my  map. When finally an interpreter came to help me, he said: “We don’t show churches on our maps.” Contradicting him I pointed to one that was very clearly marked. “That is a museum,” he said, ” not what we  call a ‘living church.’ It is only the ‘living churches’ that we don’t show.”

It then occurred to me that this was not the first time I had been given a map which failed to show many things I could see right in front of my eyes.

I used this as the closing quote for “Ebb and Flow

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“I’m not delusional, I am an entrepreneur.”
Hugh MacLeod in “I’m not delusional, I am an entrepreneur.

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“I have gradually come to appreciate that the really important predictions are about the present. What is happening right now, and what is its significance?”
Robert Lucky

Here is a longer excerpt for more context from his “The Epheremal Now” essay (bold added).

I confess that I used to be a futurist. I would predict things, and people would sometimes pay attention as if I really knew something about what would happen in technology. I was seldom right. But in the futurism business you’re rarely found out, because by the time the future arrives, people have forgotten your misguided predictions. Still, I gave up on futurism. [...] However, through the years I have gradually come to appreciate that the really important predictions are about the present. What is happening right now, and what is its significance? The Internet’s progression from static to streaming—and solitary to social—has not only made predicting the present possible, it has redefined the whole concept of what we mean by ”right now.”

These are two different questions, one related to situational awareness and one to sensemaking. Both are critical to understanding, anticipating, and acting correctly. All of Lucky’s essays from IEEE Spectrum are collected at “IEEE Reflections columns by Robert Lucky

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Two Sides of a River
Nasrudin was sitting on a river bank.
Someone shouted to him from the opposite side: “Hey, how do I get across?”
“You are across,” Nasrudin shouted back.

Idries Shah in “The Subtleties of the Inimitable Nasrudin” [Octagon Press]

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“It’s not so much knowing when to speak, as when to pause.”
Jack Benny

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“Don’t confuse having a solution with knowing what the problem is.”
Torbjörn Gyllebring @drunkcod

Ebb and Flow

Written by Sean Murphy. Posted in Silicon Valley, skmurphy

Smith: What do you see in your future?
Stafford: We’ll go back West and I’ll keep on writing poems. I keep following this sort of hidden river of my life, you know, whatever the topic or impulse which comes, I follow it along trustingly. And I don’t have any sense of its coming to a kind of crescendo, or of its petering out either. It is just going steadily along. So I inhale and exhale. I experience, write poems, get now and then great feelings of being on the edge of writing something that reverberates through my own self and that’s very interesting. But I don’t have any big or sustained project or any ending revelation that I can tell you about.

From an Feb-6-1971 interview with William Stafford by Dave Smith in “Crazy Horse 7 (1971).

What if the right model for a successful business is not the crescendo (the “hockey stick”) but ebb and flow. I think it’s more important how you manage cutbacks and necessary expense reductions, the organized abandonment of products and business models that are obsolete, and the intelligent pruning of initiatives that either have not worked out or are not longer working. The VC ecosystem profit model is predicated on “the exit” or “the liquidity event.” The professional investor’s goal in an early stage firm is to make the ongoing management of the firm someone else’s problem.

What if successful firms look more like forests, where each tree is a different product and you have a mix of offerings at different stages in their lifecycle. I admire entrepreneurs who are not afraid of running out of new ideas, in the same way that William Stafford was not afraid of having his best days behind him. The alternative is to look for the one big idea that is the home run, and to guard it jealously like a precious gem. The problem is that when you guard your best ideas you don’t subject them to the scrutiny they need so that you can refine them and  you don’t seek advice and perspectives from prospects, potential partners, domain experts, and others that would allow you to improve them.

If you can look at your business as ebb and flow–in need of renewal even at the core and requiring constant exploration at the edges to find new opportunities–you may not tell the crescendo story that excites the professional investor, but you may have a much better map for how to prosper.

On a visit to Leningrad some years ago I consulted a map to find out where I was, but I could not make it out. From where I stood, I could see several enormous churches, yet there was not trace of them on my  map. When finally an interpreter came to help me, he said: “We don’t show churches on our maps.” Contradicting him I pointed to one that was very clearly marked. “That is a museum,” he said, ” not what we  call a ‘living church.’ It is only the ‘living churches’ that we don’t show.”

It then occurred to me that this was not the first time I had been given a map which failed to show many things I could see right in front of my eyes.

The opening paragraphs to E. F Schumacher’s  ”A Guide for the Perplexed.”

Engineering Your Sales Process Workshop Feb-8 Early Bird Closes This Weekend

Written by Sean Murphy. Posted in 2 Open for Business Stage, 3 Early Customer Stage, 4 Finding your Niche, 5 Scaling Up Stage, Events, Sales, skmurphy

Register Now Just a heads up that the early bird rates for our next “Engineering Your Sales Process®” Workshop close Sun-Jan-28.

This is the same workshop that Scott Sambucci and Sean Murphy offered at the Lean Startup Conference in December 2012 but we are limiting the attendance to 12 entrepreneurs to allow it to be even more interactive and in depth. Our focus is on entrepreneurs who are selling complex new products to businesses and face these challenges among others:

  • You can’t get potential customers to call back.
  • Prospects won’t make a decision.
  • Prospects like what they see in beta and ask for extensions but will not buy (yet).
  • Your deals stall.
  • Prospect stays with the status quo.

This interactive workshop will help you learn from these problems by using conscious planning and experimentation. Traditional sales training stresses “every no moves you closer to a yes.” Our approach to engineering your sales process says instead, “What looks like noise is often actually data.” Designing and debugging a repeatable sales process is key to a sustainable business, and we’ll address how to diagnose common problems to determine likely root causes. You will leave with a scientific approach to understanding your customers’ needs and their buying process so that you can scale your business in harmony with it.

ABOUT THE SPEAKERS:

Sean Murphy, CEO of SKMurphy, Inc. has taken an entrepreneurial approach to life since he could drive. He has served as an advisor to dozens of startups, helping them explore risk-reducing business options and build a scalable, repeatable sales process. SKMurphy, Inc. focuses on early customers and early revenue for software startups, helping engineers to understand business development. Their clients have offerings in electronic design automation, artificial intelligence, web-enabled collaboration, proteomics, text analytics, legal services automation, and medical services workflow.

Scott Sambucci is the Chief Sales Geek at SalesQualia, a company dedicated to improving sales performance. With more than 10 years in Silicon Valley and 15 years in sales, management, and entrepreneurial roles in the software and data industries, Scott merges the attributes of a successful salesperson and entrepreneur, putting his experience to work for SalesQualia clients every day. He’s lectured at numerous universities across the world, presented at TEDxHultBusinessSchool in San Francisco, and recently published  ”Startup Selling: How To Sell If You Really Really Have To And Don’t Know How.”

Register Now

The Lucky And The Wise

Written by Sean Murphy. Posted in Rules of Thumb, skmurphy

The Little Ways That Encourage Good Fortune

Wisdom is having things right in your life
and knowing why.
If you do not have things right in your life
you will be overwhelmed:
you may be heroic, but you will not be wise.
If you have things right in your life
but do not know why,
You are just lucky, and you will not move
in the little ways that encourage good fortune.

The saddest are those not right in their lives
who are acting to make things right for others:
they act only from the self–
and that self will never be right:
no luck, no help, no wisdom.

William Edgar Stafford

How can entrepreneurs move in the little ways that encourage good fortune? Here are my suggestions for judging your actions:

  • Is it kind?
  • Does it spring from empathy?
  • Does it demonstrate love for your spouse?
  • Will it maintain or improve your health?
  • Will it nurture your children?
  • Does it contribute to your community?

It can be hard to assess whose advice to take about your business.One reason for cultivating at least a kitchen cabinet of informal advisors if not a more formal advisory board is that a diversity of perspectives can normally provide more insights into opportunities, risks, and options for managing them. Advice from a lucky entrepreneur tends to be very specific and suggest a “copy exactly” model, a wise entrepreneur will offer principles and several alternatives with one or two approaches recommended as most likely to succeed or least risky.

“It’s hard to detect good luck–it looks so much like something you’ve earned.”
Frank A. Clark


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Bootstrapper Breakfast Comes to Tampa Thu-Jan-24

Written by Sean Murphy. Posted in Events, skmurphy

Come join other Tampa Bay area entrepreneurs who eat problems for breakfast.  At a Bootstrappers Breakfast® we have serious conversations about growing a business based on internal cashflow and organic profit: this is for founders who are actively bootstrapping a startup.

After Ramesh Sambasivan moved from Philadelphia to Tampa he missed the Bootstrapper Breakfasts and approached us to organize one. He is the cofounder iTradeFair.com, Inc., a SaaS company that delivers specialized virtual events and promotional tools. Earlier, Ramesh was a management consultant with PricewaterhouseCoopers delivering technology and business transformation projects for large corporations, and a Business Analyst at American Airlines. Ramesh has an MBA from Oklahoma State University, and is a certified cost accountant from the Institute of Cost and Works Accountants of India. He blogs at blog.sambasivan.com

If you are interested in attending a Bootstrapper Breakfast and there isn’t one in your area, consider volunteering to start one. Please contact us if you would like to learning more.

Tribes and Traction

Written by Sean Murphy. Posted in Community of Practice, skmurphy

Question: I’m reading Seth Godin’s Tribes book, what role do you think tribes play for startups? For context, we are in crunch time at my startup. We have a few part-time engineers and have soft-circled first half of angel round. Morale is still very high but have lots on our mind. I’m contemplating whether our energy is better spent “buckling down” and addressing our needs for people and investment, or a whether we should focus on catalyzing a community who share our passion to make tech better for relationships and community.

To answer your fundamental question: tribes are very important but you need to demonstrate enough external traction on a problem worthy of their attention to activate their involvement.

There are  two broad categories for indicators of startup health and progress: internal and external.

  • Internal indicators are things like lines of code written, specifications complete, website launched, morale..anything that does not require action on the part of someone outside the team.
  • External indicators are things like website visits, signups, funds raised, revenue from customers…things that require actions by prospects, customers, investors, partners and other outsiders.

Both categories can include “vanity metrics” that don’t address or substantiate your fundamental business model or value proposition. For example: investment does not substantiate your value proposition or business model.

What will success look like for your startup?

  • If you want to catalyze the creation of new technology products that facilitate networking and relationships that may be more of a social venture than a business venture.
  • If you want your team to be able to work full time on startup tasks you need to generate enough revenue to be able to pay them.
  • If you want to start an open source project that reduces the cost of critical infrastructure for communication and social connection then you would focus more on adoption.

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Openings for Mastermind Group

Written by Theresa Shafer. Posted in Events

We have openings for our Mastermind Groups geared for technical entrepreneurs.

for CEOs

Entrepreneurs who wanted to form an advisory board of peers with a deeper understanding of each other’s businesses and shared accountability.

for CTOs

We have found that the CTO has a unique role on a startup team: they are expected to be fully immersed in a product’s technical architecture and roadmap but are also expected to take part in closing business with major customers. Our Mastermind group is designed to provide an advisory board you can brainstorm and compare notes with. I will help to facilitate a single conversation among a small group of peers to discuss issues and challenges, encourage peer-to-peer critique and guidance on critical business issues. My belief is that the group will help you to rise above everyday operational challenges to periodically focus on strategic planning and long-term growth issues.

Entrepreneurs will have the opportunity to present their businesses issues, share referrals, and advise one another in a confidential, supportive environment during two meetings a month with eight qualified members.

Interested …  Check it out at an upcoming open house:

Time: Jan 23 6-8pm

Location: Pacific Business Centers (Board Room), 19925 Stevens Creek Blvd, Suite 100, Cupertino, CA 95014

There is no charge for this open house but if you decide to join a facilitated small group there is a small monthly subscription.

Register Now button

Register at http://www.meetup.com/BayAreaMastermind/events/83488092/

Where Do Lean Startup Methods Help Most?

Written by Sean Murphy. Posted in Customer Development, Events, skmurphy

The Lean Startup 2012 conference clarified where Lean Startup principles are especially applicable:

  • Emerging markets,
  • Industries that are being disrupted,
  • Companies that have fallen behind the innovation curve.

All of these situations are characterized by the need for exploration and discovery instead of continued execution of the current business model. Firms facing these situations need to treat product ideas and business strategies as hypotheses and run experiments in short iteration loops and small batches to validate or falsify them before committing to scale. They need to engage in serious conversations with prospects, observe the actual environment where the product will be used, and determine the value of an innovation by customer adoption and payment.

Emerging Markets

In emerging markets the “rules of thumb” have yet to be established. This requires startups to leave the BatCave and go and see the ground truth of their customer’s needs and constraints. Established firms have to be willing to revisit key aspects of their product offering and go to market strategy to align them with new market expectations and requirements. Established firms have to adjust internal incentive structures that reward more efficient execution of the current business model to prioritize exploration and experimentation. Startups attempting to scale based on their initial model or established firms scaling based on a model proven in another market  will likely either fail to gain traction or be significantly outperformed by firms who had the patience to validate the key assumptions in their model.

One example of embedding exploration of customer needs into a new service offering was provided by Adam Goldstein of Hipmunk. The Hipmunk team made a text chat option available on every page of their site, answering questions directly. This allowed their customers to ask for help or report a problem without leaving the current webpage. It was now very easy for their customers to provide feedback (and for the founders to engage in short conversations) compared to a standard feedback or submit a bug form; this approach also preserved the context of what the customer was trying to accomplish. The promise of an immediate response in a short text chat offered a much lower friction channel to the customer. Although it was less efficient for the founders, it gave them access to many insights about site features and drawbacks that they might have otherwise taken much longer to learn.

A second example of new market exploration was provided by Jocelyn Wyatt of IDEO.org, who shared her experiences in rapidly validating–or disproving in several cases–some key assumptions that her team made in approaching the challenge of improving sanitation in West Africa. They ultimately arrived at solution that married a disposal service with a home toilet, turning it into a portable septic tank that is emptied three times a week.

Disrupted Industries

Industries that are being disrupted where the established incumbents need to incorporate new business models and new technologies into what are proven but obsolete offerings. Some examples are:

  • Media
  • Product development / Outsourcing
  • Health care
  • Education
  • Government

Because these industries are undergoing restructuring, companies and organizations can no longer execute business plans developed and refined years ago. They must in fact go back to the customer development, running short term experiments and testing the impact. They need take a more exploratory or discovery-driven approach to planning their operating environment makes long term forecast problematic. They also need to take a wider view of potential competition: they are as likely to be challenged by competitors from adjacent markets or even some armed with technologies initially developed for entirely different industries.

Mark Graban‘s talk outlined a very interesting approach to patient centric hospital design, arguing that some hospitals were designed to impress visitors with a large atrium that does not contribute to care, or  in a parallelogram shaped buildings that is architecturally striking but creates triangular internal rooms that have very poor utility. By analyzing traffic patterns of doctors and nurses in existing hospitals and rapidly prototyping individual treatment rooms, new hospitals and care facilities can be built more rapidly, on a smaller footprint at lower cost and yet enable a better quality of care. In addition, a continuous improvement approach to refining treatment practices once the facility is finished allows the quality of care to continue to get better. He cited a hospital in Indiana that was able to effect more than 4,000 small improvements that in the aggregate eliminated millions of dollars in cost, cut treatment delays, and improved patient outcomes.

Boosting the Innovation Curve

A third category is companies that are not actively facing disruption but realize that they have fallen behind the innovation curve and want to improve before competitors or new entrants mount a successful assault. This normally involves the need to make a series of small improvements that can catalyze further change: a “small wins” approach

One example of a company embracing their need for game changing approaches was Intuit.  There was an extended conversation among senior managers and change agents that explored how they were moving from decisions based on politics and PowerPoint to decisions based on data and customer validation.

Kuty Shalev related how the Port Authority incorporated new technologies into track management without losing any of the affordances of current solutions. Many aspects of the day-to-day operation of the trains were already computerized, but they were relying on a whiteboard to help manage context and maintenance (a whiteboard that was erased every day so history and trends were lost) and cell phones to help facilitate troubleshooting. By adding tablets that could also take pictures and allow them to be marked up they preserved the critical strengths of the current system: wireless, beeperless, and functional even if Internet connectivity was lost. His firm assisted in the transformation by focusing on small changes quickly: making initial improvements visible within a week and deploying a new system in 90 days. By focusing on small wins and meeting in a small conference room he forced trade-offs to be made by only the most interested.

Lean Startup methods recognize that new markets in particular require a scientific approach of thoughtful experimentation and iteration–-also known as “trial and error”-–to determine what will work and what won’t. It takes an engineering approach to defining the “known unknowns” about your customer, your product, and your business model but still respects the value of entrepreneurial vision and insight in crafting new hypotheses. Lean Startup principles are especially applicable to emerging markets, industries that are being disrupted and companies that have fallen behind the innovation curve.

Related articles and blog posts:

Stein’s Law

Written by Sean Murphy. Posted in skmurphy

“If something cannot go on forever, it will stop.”
Stein’s Law (Herbert Stein)

Some excerpts from Choices for Deficit Reduction [Full Report PDF] released by Congressional Budget Office on November 8, 2012.

The United States is facing fundamental budgetary challenges. Federal debt held by the public exceeds 70 percent of the nation’s annual output (gross domestic product, or GDP)–a percentage not seen since 1950–and a continuation of current policies would boost the debt further [...] to 90 percent of GDP 10 years from now and continue to rise rapidly thereafter.

[...]

Federal debt cannot grow faster than the nation’s output indefinitely, and prolonged increases in debt relative to GDP can cause significant long-term damage to both the government’s finances and the broader economy. Higher debt leads to larger federal interest payments; making those payments would eventually require some combination of lower government spending and higher taxes.

This offers a context for planning and an opportunity for entrepreneurial thinking.

With the population aging and health care costs per person likely to keep growing faster than the economy, the United States cannot sustain the federal spending programs that are now in place with the federal taxes (as a share of GDP) that it has been accustomed to paying. To put the budget on a path that is more likely to be sustainable than if current policies were continued, lawmakers will need to adopt a combination of policies that require people to pay more for their government, accept less in government benefits and services, or both. However, making policy changes that are large enough to shrink the debt relative to the size of the economy–or even to keep the debt from growing–will be a formidable task.

[...]

In sum, a wide gap exists between the future cost of the services that the public has become accustomed to receiving from the federal government–especially in the form of benefits for older people–and the tax revenues that the public has been sending to the government to pay for those services.

If we rely on current technology and methods to supply those services we are no doubt in a lot of trouble. We will either need to cut our expectations and standard of living or increase or productivity and lower the effective cost of the services we expect.  Walter Russell Mead suggests as much in “The Real Problem is the Policy Deficit

[...] the need to move from a late stage industrial society to an early stage information society is the major task before the country today. Essentially, this involves reorienting our society to capture the benefits of the information revolution in ways that dramatically increase our productivity as a society. It involves coping with the continued decline of manufacturing employment, a shift away from lifetime employment in big box companies to more entrepreneurial and flexible economic relations, and the reconstruction of the learned professions (medicine, teaching, civil service, law and others) as the information revolution does to the learned guilds what the industrial revolution did to workers like the spinners and the weavers. This is a hugely complex transition and there aren’t many examples we can look to for ideas: the United States is on the cutting edge of a transformation that will ultimately affect the whole world.

I like his reframing the of challenges we face from healthcare costs, the demographic transition of the Baby Boomers, and the transition to an information economy from “dividing the pie” to the need for more innovation and entrepreneurship.

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