The Go-Giver is a short story (120 pages) on the secrets to success in business and in life.  It’s written in the familiar form of a parable like the One-Minute Manager and the E-Myth.

If you like business books, it’s definitely a worthwhile read.  The Go-Giver does an excellent job of explaining that which we intrinsically know, but don’t often think about.  The big “Trade Secret?” Giving.

It seems counter-intuitive, but every great company achieved success by giving customers tremendous value.  For Ford, it was affordable and reliable personal transportation.  For Amazon, it was a convenient and easy way to shop from home.  For Apple, it was 10,000 songs in your pocket.

When you focus on creating value, the money follows.  These companies aren’t hurting for profit.  Consider RetailMeNot, the greatest affiliate success story in history.  They compile coupon information from thousands of online stores, give it away to customers for free, and happen to be insanely profitable.

Lots of good stuff:

“Ultimately, the world treats you more or less the way you expect to be treated.”

The Five Laws of Stratospheric Success:

1. The Law of Value: Your true worth is determined by how much more you give in value than you take in payment. It’s not about losing money or even having the lowest prices. Louis Vuitton can sell $1000 handbags because their customers get even more value from owning them.
2. The Law of Compensation: Your income is determined by how many people you serve and how well you serve them.  How can you scale your value?
3. The Law of Influence: Your influence is determined by how abundantly you place other people’s interests first.
4. The Law of Authenticity: The most valuable gift you have to offer is yourself.
5. The Law of Receptivity: The key to effective giving is to stay open to receiving.  Because there are two parties to every transaction.

So, what can you give?

-Nick

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It’s hard to believe it’s been 3 years since I quit my job.  In that time, I’ve a lot of fun and a lot of stress.  There have been times when I’ve made a lot of money and times when lost a lot of money.  I’ve made some smart moves and some big mistakes.  But I’m still here, and I think that counts as a victory.

Life has definitely not been how I imagined it would be, but I was due for a reality check.  There’s no such thing as “business as usual.”  Overall, I’ve received an education in business more intense and more personal than any b-school could offer.

Now I’m facing a major fork in the road, and I’m not sure which path to take.

-Nick

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Yes.

There has been a lot of discussion lately on the rising cost of tuition and the piles of student debt that is crushing recent graduates, but the fact remains higher education is an excellent investment.

It will remain so until employers stop valuing college degrees.  And I don’t see that happening anytime soon.  You can watch as many Khan Academy videos as you like, but no employer will treat that education — however excellent it may be — as the equivalent of a 4-year degree (at least yet).

Some facts:

• The average student debt is $24,000.
• Over a lifetime, the average college graduate with a bachelor’s degree will earn nearly $1 million more than their counterparts with only a high school education.
• The unemployment rate among college graduates is 4.5%, which compares very favorably to high school graduates (9.7%) and those with no high school diploma (14.6%).

I guarantee you Bill Gates and Mark Zuckerberg are the exceptions to the rule.  If you want to work for a living, college is clearly the way to go.

Now is your high-priced liberal arts education worth it?  Probably not.  You can hang out in the Quad discussing gender roles in the 12th century French feudal system until the cows come home, but unless your dream job involves working at Medieval Times, it may not be the best use of your time or tuition dollars.

In the marketplace for workers, employers value education.  But more than that, they value skills.  They’re asking, “How will this candidate help my company?”  For many positions, a college degree is simply part of the screening process.  But it’s only the price of entry; it may get you in the door but after that you’re on your own.

Every now and then you hear stories about people suing their schools because they couldn’t find a job.  Take a little personal responsibility.  It’s not the school’s fault employers don’t see you as a valuable worker.  Imagine how much less valuable you’d be without your education (see numbers above).  And now you’ll forever be known as the person who sued their school, and who’s going to want to hire that baggage?

To be sure, the education system is broken.  The idea of an ivy-walled university as a repository for knowledge is 1000 years old.  The world is a very different place but education is making changes as the market forces it to. (A little too slowly for some.)

Tuition hikes are here to stay, as long as people keep paying.  It’s supply and demand.  Instead of saying education is overpriced today, maybe it was just under-priced before, relative to it’s value in society.  As the price of school draws closer to it’s value and perhaps beyond, that’s when you’ll see sweeping changes in both education and company’s hiring preferences.

-Nick

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Team Dunder Mifflin took home the Spring title in the co-ed San Ramon league this week.  After a nail-biter in the semi-finals, the bats came alive for a blowout in the championship game.

The season had more than it’s fair share of drama and hospital visits.  Aside from my shoulder dislocation, our manager suffered a broken leg defending third base the following week.  Dangerous game.  He was on hand to witness our victory:

Champions!

We’ve come a long way from our first season in Hayward.  Now to repeat.

-Nick

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Potential is widely regarded as a positive trait.  We say things like sports prospects have superstar potential, or young students are really showing a lot of potential.  But what does potential really mean?

“Potential means you haven’t done anything yet.” –Bill Parcells

To be sure, having potential is preferable to not having it, but it still requires some additional force to create action.

Consider a car parked on the street.  Even though it is fully stopped, we say it has potential energy.  In the car’s case, an internal force — it’s engine — can propel it forward, turning it’s potential energy into real energy.

But what if the engine’s broken?  Then it needs a push.

What potential plans and dreams do you have that need either some motivation from within or a push from outside to get started?

-Nick

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I had a hypothesis that text messaging is a huge cash cow for mobile phone carriers; a high-value product with virtually no variable expense.  So I did some homework and found out I was right, and it was even worse than I imagined.

Text Message Pricing

On Verizon, text message pricing is as follows:

$0.20 per text — pay as you go ($0.25 for a picture message)

$5 for 250 texts –$0.02 per text  (immediate red flag, the price just dropped 90%!!)

$10 for 500 texts — $0.02 per text … ok no price break there

$20 for 5000 texts — $0.004 per text (4/10ths of a cent)

Also note: the $10 and $20 plans include unlimited Verizon-to-Verizon texting, but for our purposes we’ll just ignore that.  Basically it’s a shrewd marketing move.  Jack up the price of the a la carte texting to make the still-expensive-for-what-you-get plans look like a better deal.

Let’s also assume that Verizon plans on making money even if customers maximize their plan usage.  That means Verizon’s marginal cost of delivering a single text message is less than 4/10ths of a cent.  That’s a good starting point, but I wonder how much less their cost really is?

Bits and Bytes

SMS text messages use 7-bit characters and have a maximum length of 160 characters, making the maximum data size of each SMS 1120 bits, or 140 bytes.  If an average mp3 song from iTunes is 4 MB, a text message is 0.0001335 MB.  Almost nothing.

So now we’re down to less than 4/10ths of a cent for 0.0001335 MB, or roughly $30 per MB.  How does that compare with the current data plans offered by wireless providers?

AT&T sells:

• A 200 MB monthly plan for $15 — 200x the data for half the price!
• A 2 GB monthly plan for $25 — 2000x the data for still 17% less!

Now I’m not a cell phone engineer, nor do I play one on TV, but let’s assume that the systems used to transmit wireless data (load web pages, download music, stream online videos) are the same systems used to transmit text messages.  Seems reasonable.  If that is the case (and assuming AT&T still plans to make money on their 2 GB plan), they are openly admitting that their cost to transmit a text message is less than $0.0000016.

2 GB = 2147483648 bytes

Divided by 140 bytes per SMS = 15339169 texts

$25 monthly cost / 15339169 texts = $0.0000016

Let’s go back to Verizon.  Assuming they have a similar cost structure to  AT&T, their net cost to deliver your 5000 monthly texts is just $0.008, total.  For which they’ll gladly charge you $20 — giving themselves a minimum 99.96% profit margin.  Nice!

Text Message Industry

A well-deserved kudos to the cell phone industry for turning SMS messages into an amazingly profitable business.  Worldwide, there are 2.4 billion texters sending approx. 550 billion texts per month.  The average global cost of these messages is $0.11, which would make texting a $700 billion a year industry, at virtually no cost to the mobile providers!

Granted, they made big investments in infrastructure to build out their networks, but still.  And I have no problem with these companies making money, in fact, it’s outstanding.  As long as customers continue to value the service even at the super-high prices, why not?  But there seems to be a growing sentiment that the pricing and costs may not be aligned; In 2009, Senate hearings took place over antitrust and collusion concerns.

Alternatives

I think the honeymoon may be over for wireless providers and their text message price gouging.  Any business with those kinds of margins just begs to be undercut, and several alternatives are already available.

• Sprint includes unlimited texting in their data plan, without charging extra.
• Metro PCS and other low-cost providers include unlimited text and data for even less.
• Google Voice and Textfree apps can be set up to send and receive free text messages.

-Nick

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I read a really interesting article in Inc. magazine this week on business in Norway.  The gist of it is that Norway — land of Vikings, fjords, and ridiculously high taxes — is beating America at it’s own game.  Norway has more entrepreneurs per capita than the US, and their economy grew nearly 3% during the recession, despite operating under the supposedly business-stifling grasp of socialism.

Consider this:

• Norway has 3.5% unemployment, despite very generous unemployment benefits that you’d think might discourage active job-hunting.  Our unemployment rate is almost triple that: 9%.
• Norway has almost no poverty.  In contrast, over 14% of Americans, or more than 40 million people, live below the poverty line.
• According to the Gallup global happiness survey, Norwegians are the 3rd happiest people on the planet.  Their fellow Northern European socialists in Finland, Denmark, Sweden, and The Netherlands round out the top 5.  America was 14th, below Brazil, Panama, Israel, and even Canada.
• Norway has a GDP per capita of $84,500, vs. $47,100 for the U.S.  In basic terms, this means that Norwegians, on average, are 79% more productive economically than we are.
• The murder rate in America is 700% higher than in Norway.
• Norway’s government is a net creditor of debt, whereas each American household owes $4000 a year just in interest on our national debt.
• Norway holds the largest capital reserves per capita of any country, while America owes trillions of dollars, much of it to China.
• In 2010, Norway was ranked the 5th most peaceful country in the world.  The U.S. was 85th.
• Also in 2010, Norway was ranked the most democratic country in the world.  The U.S. was 17th.
• 8.3% of Norwegians are obese, compared with 30.6% of Americans.
• Life expectancy in Norway is 80.7 years, compared with 78.4 years in the U.S.

Are those crazy socialists are on to something?  At the very least, I think Norway has shown us that high taxes don’t necessarily spell Armageddon like our politicians (on both sides of the aisle) would have us believe.  The average Norwegian is better off than the average American in just about every measurable way, even after their high tax bill.  After taxes, the average Norwegian has a higher standard of living, is better educated, and is healthier and happier than the average American.

The difference is in America, we don’t want — or plan — to be average.  And even with all our poor, fat, uneducated, and unhappy people, we still lead the league in millionaires.

But those taxes.  Just how high are we talking?  Think in the range of 40-50% for income taxes and 25% for sales taxes.  Unthinkable.  Unsustainable.  Crazy.  How and why do they put up with this madness?

Refer to the results above.  There are a handful of Norwegian would-be-tea-partiers, but the sentiment isn’t nearly as inflammatory.  Rather than being cast as an unfair burden being wasted by a byzantine bureaucracy, taxes in Norway are largely seen as a purchase in exchange for goods and services, and as an investment in the future.

Lesson to Uncle Sam: put on your selling shoes and pitch the real value you provide.  Or if what you’re providing is not valuable, how about stop providing it.  Just like shopping, people gladly pay for things they value.  It’s hard to imagine a place where people happily pay half their wages to the government, but apparently it exists up near the Arctic Circle.  There’s got to be a political takeaway in there somewhere.

Here are some other interesting facts about Norway:

• Norway has a population of 5 million, making it one 60th the size of America.  For the sake of comparison, 15 million live in Greater Los Angeles.  Norway also doesn’t attract anywhere near the immigration America does.  For these reasons alone, it would be difficult (understatement of the year) to implement similar social policies here.
• There is no privacy.  Everyone’s tax return is posted online.  This discourages extravagant lifestyles and is very egalitarian, but would never fly here.
• The cost of living is significantly higher than in the U.S.  Apparently a beer in Oslo can cost $15.  Yikes!
• Norwegians are very rational and secular.  Only 2% of Norwegians attend church each week, and 3/4ths do not believe in “a personal god.”

See?  Godless commies.

-Nick

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After finishing the fall season 10-0, we were crowned the champs of the Pleasanton Sunday Men’s softball league.  We played a lot of tight ballgames, but always found a way to pull it out in the end.  Because of a couple rainouts and the Thanksgiving holiday weekend, the playoffs ended up getting canceled, but they gave us these sweet-ass sweatshirts for winning the regular season.

They’re not as prestigious as the elusive UW IMA champion shirts, but having never won one of those, I’m pretty happy with it.

I’ve been playing with this team for a few seasons.  Just a random bunch of guys.  We didn’t win a lot of games the first couple years, but have made steady improvement through some roster changes.  By that I mean they keep weeding out the sucky players and replacing them with all-stars.  I used to be middle-of-the-road talent-wise on the team, but now I’m the guy in right field batting last.  Hopefully they’ll have me back next spring!

-Nick

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This was a big deal for me.  Afterwards I told Bryn it ranked up there with summit-ing Mt. Rainier, earning valedictorian, and quitting my job in terms of accomplishments I’m proud of.

Here’s the story.

On Monday we babysat our neighbors, Isabel (6 years), Zoe (4 years), and Gianna (20 months).   We’ve watched the older two a few times, but this was the first time with all three.  And I was flying solo for the first hour until Auntie Bryn got home!

Gianna was hysterical instantly after mom and dad left.  The screaming and the crying! Isabel was an amazing big sister and tried everything to comfort her and cheer her up, but she was inconsolable.  Nothing worked, not even Mochi, who she loves.  At this point, I’m quickly realizing I haven’t been endowed with the patience necessary for parenthood.

Finally, after half an hour or 45 minutes (felt like hours) of helplessness, I pick her up, expecting the screaming to amplify.  Gianna has only recently warmed up to me, but it’s hit and miss.  Given her current state, I wasn’t optimistic.  This was a last resort I was sure would backfire.  But then a miracle happened.

Silence.

Isabel says, “Wow you did it.”

I was just as surprised as she was, and Gia was fine the rest of the night.  So here’s to one of life’s little victories.

-Nick

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This is the story of my recent up, down, up, and up adventure with Hotwire.com.

Since my half marathon race started at like 5:40 in the morning, we thought it would be a good idea to stay in the city the night before.  I found the area close to the starting line and booked a hotel on Hotwire.  Success!  It was literally a block away from the start.  This was in January, six months before the race.

A couple weeks before the race, I receive a voicemail saying the hotel is oversold, and that they bumped us to another hotel downtown.  In this case, I believe “oversold” was their code for realizing there was a marathon starting outside their back door, and the rooms were suddenly much more valuable than what they sold one to me for back in January.  I bet everyone who booked far in advance and got a good deal got bumped.

So at this point I’m pretty bummed, since I’d planned on being able to just roll out of bed and walk to the starting line.  I call up Hotwire to complain and they say there’s nothing they can do, but offer $25 HotDollars (their equivalent of store credit) in return for my inconvenience if I call back after my stay at the other hotel.  I’m also a little nervous since they refuse to provide any official-looking itinerary in writing noting the hotel change.

The new hotel though, is awesome.  The Inn at Union Square, highly recommended (as confirmed by most people on TripAdvisor).  OK, maybe getting bumped wasn’t so bad after all.

Either way, I call Hotwire up again this week, asking to collect the $25 HotDollar credit I was promised.  To my surprise and delight, Hotwire credits me $115 HotDollars, the full value of the stay!  Definitely above and beyond what was necessary or even expected, but I’m pretty excited to have a free night in the bank and to say nice things about Hotwire whenever given the chance.

Great recovery from a disappointing situation!

-Nick

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