Entrepreneur, programmer, avid student of life. I make useful things, and share what I learn.

Some things I've learned this year that turned my world upside-down and I'm still trying to wrap my head around

Some things I've learned this year that turned my world upside-down and I'm still trying to wrap my head around:

Unlimited servers with unlimited space and unlimited bandwidth : for 10 cents an hour - only when you need it, and not when you don't.

It used to be, when I decided that I wanted to do a whole new project that needed a new server, that I would...

  • Buy all the parts online (1 hour + $3000)
  • Assemble it when it arrives (1-2 hours)
  • Install Linux on it (1 hour)
  • Install it in our server rack, assign an IP address, and make sure it's live. (1 hour)
... then that server would be there forever, until I decided to repurpose it, upgrade it, or abandon it. If it got overloaded, I would need to spend another $3000 and another 4 hours to set up a 2nd server.

But now, thanks to Amazon EC2 and S3, I type a few commands on my laptop, and somewhere in Seattle a powerful server jumps to life one minute later, just for me. I can play with it for as long as I'd like, then shut it down or replace it with something else anytime I want.

This changes everything! I'll never need to buy or set up another webserver again. The first time I saw it work, my mouth hung open, and I couldn't stop laughing for a couple minutes.

It's a total base philosophy switch from needing to own something to just having it appear when you need it, and not when you don't.

(Imagine if any guitar you ever wanted could appear in your hands, in your home studio, for just the few hours you needed it to record, for 10 cents an hour.)

Letting Google be the mailserver for my own domain, for free.
I've spent so many hours setting up Qmail, tweaking it, upgrading spam filters, and all that fun stuff. But Google lets you use their mailservers for free, even for your own domain. (No “@gmail.com” needed. No need to use their webmail. Just set them as your POP and SMTP server in your mail program.) Their spam filters are amazing. The only downside is you can only send 1000 emails a day through their server, so it wouldn't work for CD Baby, but the huge upside is their permanent archive of incoming and outgoing email.
A business doesn't need employees.

Own your own small business? Read The Obsolete Employee (but only after you read E-Myth Revisited).

Currently providing a service to an employer? Read some Tom Peters, who suggests you think of yourself as a 1-person company (“Me, Inc.”), whose current biggest client is your employer, but hone your service so that it can be hired by other clients as well.

Put these two together, and you have a world of service-providers and clients, with everyone as their own boss. The whole concept of employee mainly came from the factory age, but there are less reasons these days for the traditional employee-employer relationship.

From a small business point of view, I'm better off hiring independent specialists to do what needs to be done, and not need someone to be doing that in my office, 40 hours a week, from 9am to 5pm, Monday through Friday, etc.

(Note how similar this is to using Amazon's servers instead of needing to own your own.)

Diverse independent groups of people are smarter than any one person.

The Wisdom of Crowds and Wikinomics blow apart the notion of experts, proving that a diverse collection of independent outside opinions will almost always be smarter than any expert. And no matter what your organization (whether you're Google or Sony), the brains and labor outside your organization is always better than anything you've got in-house. So learn to open up your organization to outside contributions.

I could talk for hours about how this changed everything for me, and I'm looking forward to trying some hands-on examples of this myself over the next few years.

The Smartest Investment Book You’ll Ever Read applies this same truism to investing, showing that active financial managers (aka “experts”) on average perform worse than the market average. (In November 2000, Fortune magazine released the “top picks” from its panelists of “top” stock analysts. Those picks ended up under-performing the market average by 400%! He gives many of these examples, and encourages you to ignore ALL experts, and only invest in broad indexes of the entire market. In other words : trust the wisdom of crowds.)

Music subscription service devices

The Sansa Connect changed the way I think about music. (More recent recommendation: the Ibiza Rhapsody).

No computer needed. It connects by wifi directly to Rhapsody, which has almost everything you'd ever want to hear, available any time you want to hear it, without needing to buy.

Go to Pitchfork, look at their top-rated albums, and download them all from Rhapsody to your device to listen to any time over the next few weeks. Doesn't cost you anything, so there's no risk.

Tell it to play you a radio station. Hear something you like? Click [GET THIS SONG] or [GET THIS ALBUM] or [MAKE A MIX LIKE THIS SONG].

I got turned on to more music from my little Sansa Connect than I have by any other means in years. I have a massive music collection but I haven't accessed it in months, since anything I want to hear is available instantly any time I want to hear it. Why maintain my huge collection anymore?

The 4-Hour Workweek
Let go of 80% of your actions, to concentrate on the most effective 20%. Shorten the deadlines for getting all actions done. Go on a low-information diet, realizing you don't need to know all that stuff you spend hours a day ingesting. Have remote assistants take care of everything that can be done by anyone else. And voila : you have the 4-Hour Workweek. Again : I could talk for hours about how this changed everything for me, so I'll stop here and talk about that stuff in future posts.
We are happier with restrictions, and trusting others' experiences.

A combination of Stumbling on Happiness and Paradox of Choice. We're bad at predicting how we'll feel about something in the future, so we're better off trusting other people's experiences.

People are surprisingly similar in much of their experiences, even though they think they're more unique. (90% of motorists consider themselves to be better-than-average drivers.)

With more choices, we may make better decisions, but we feel worse about them. (Note how this ties into the Wisdom of Crowds, above : others, collectively, know better than you do.)

I've started trusting the collective reviews from Amazon and Rotten Tomatoes. And I've intentionally decided to limit my options in other ways I'll describe soon, trusting (from others' experience) that will make me happier.

Each one of these things probably deserves its own longer article here, but I just wanted to list them in one place, because it's amazing how differently I see the world now than I did even one year ago.

I'm sure there are more I'll think of after posting this, but in the meantime, I'd love to hear any of yours:

Any things you've learned recently that “change everything” for you?

http://www.flickr.com/photos/christophergarrison/404672060/

Comments

  1. Adam (2008-05-06) #

    Derek, great post. You're right, there's a lot in there to digest. I've got a bunch of open tabs now...

    And I've been meaning to get to reading "The 4 hour work week". Time to pull it off the shelf.

  2. Peter Blue (2008-05-06) #

    Great post Derek!

    Oh man! Looks as if reality is always one step ahead. How to go on a low information diet when I have the feeling that there is so much to learn in this fast changing world? For a few months now I've been very active in learning and understanding what's going on in the music and media world. I want to be able to make the best decisions in order to promote / sell / share my music.

    But while I'm still working on getting new fans and mailing list subscriptions I get the feeling that I'm miles behind what's happening.

    For me the question is:"What can I do with all the information?"

    I'd like to know others have to say, how they deal with it.

  3. Vincent (2008-05-07) #

    One thing I learned in the past few months that seems really obvious but is not so easy to follow:

    Don't worry about things you can't control.

  4. Wolfgang (2008-05-07) #

    Great post, some great links - thanks.

    But I don't give Google my mails. I know the service is great, but when I read the contract I make with Google using their services I get scared.

    I give Google all that informations who help me to run and expand my business.

    I use Google reader to promote my network to gain more audience. I use the Google search engine too for same reason. But most of the other services - no. I don't wanna have my personal life become an algorithmn.

    thanks for your blog.

    greetings wolfgang

  5. Julian Moore (2008-05-07) #

    Vincent - that should be number one on anyone's list

    I'll get to writing a boring and lengthy comment, but thought I'd share this with you first - www.reqall.com

    This saves time. Period. It's like having your own automated secretary. I set it up, and then pulled the RSS into my Google Calendar. I can now phone up and tell my 'secretary' what I'm doing, and then the text versions appear where appropriate.

    This is a beta but I love where it's going.

  6. Chi-chi Ekweozor (2008-05-07) #

    Great stuff, Derek!

    Checked out Reqall, Julian, pretty impressive...

    The good thing is that even with limitless music distribution, there’s still a real need to connect with the artists behind good music.

    The next few years will be good for musicians that recognize that:

    - a solid touring fan base

    - smart social networking

    - clever hyper-cyber- digital distribution

    - plus the odd brand endorsement

    leave major record label deals in the dust…

  7. cliff (2008-05-07) #

    still working on wraping my mind around your post and how it applies to me

  8. Dr. Zoltan! (2008-05-07) #

    I think these new "We Don't Need Employees Anymore" principles are being sold to the little people under a false pretense of freedom and personal empowerment. Capitalism is a great idea when you are starting a lemonade stand, but this impersonal, generic, mass-robotic fascism is what manifests. It goes along with freedom of speech: is anyone saying anything important, anyway? This new hipster art-school economy is for rich kids and corporations to play with, while the rest do not have that privilege -- they are too busy working at Wal-Mart or 7-Eleven. So long as there are too many people that do not use their own minds, there will be employees.

    -Dr. Zoltan!

  9. Vilgiate (2008-05-07) #

    Your insight is very thought provoking.

    What I learned over the last year has been I don't need to be an master over or of anything. I spent too many years trying, in vain, to be "the authority" on a specific subject only to consistently be surprised by a development or tidbit of cutting edge information that shook my internal grid of "being the preeminent authority on x" .

    I have surrounded my self with smart people who have great intuitive skills coupled with wisdom and understanding. I lean on them frequently when making decisions and evaluating my options. Like the old-school "men at the gates" these sages frequently help me shape my vision and form actionable plans that have lead to greater success in significantly compressed timelines.

    On the e-myth... I read that when it first came out and it did change my paradigm for starting businesses. I am an inventor and idea guy who partners with innovative marketing guys and solid business men to turn my IP into profitable (employee-less ) businesses. In this journey I have found that certain skill sets I possess have allowed me to help formulate vision and direction for others... win win all around.

    I really appreciate what you do Derek, and have really enjoyed watching your journey from a far. Your blog makes visceral participation in your pioneering effort a real blast.

  10. Steve Kusaba (2008-05-07) #

    The example of investing in indexes is misleading. A book that I strongly recommend to everyone that is the single most useful book for understanding our modern world, which if used properly can make you money, is The Black Swan by Nassim Taleb. He debunks the theory of experts as a generic concept applicable to all things and shows how in fields like investing the so called experts are incorrectly given the trust of the public. He shows the how the Black-Scholes model for options pricing was absurd because it was built around Gaussian logic and did not properly understand the concept of scalability. (Fields such as grain inspector, chess player and many other down to earth gravity driven areas are prone to have experts that are better than a consortium of outsiders. For instance, if you asked Kasparov, Anand, Topalov, Karpov, etc about chess you would have more accuracy than you would from a million oursiders)

    It is VERY important to understand that index investing is a very bad idea from many angles. (Also, SOME experts in investing will easily slaughter indexes consistently like George Soros, Alan Farley etc. as well as many unknown but very skillfull traders.) Indexes are bad because they are very mediocre in their returns and if you adjust for real inflation (not core inflation which is the governments lie because it leaves out most things that go up such as food and energy and then is hedonically adjusted after that. They pay cost of living adjustments to entitlement programs so they have a vested interest in lying about these things as well as employment and GDP data) the indexes are always very pathetic. Good investing takes work and understanding but if you get the sector right and buy during pullbacks when it is out of favor (energy, precious metals for instance) you will do very good even if you are beginning as long as you constantly work to improve.

    So the idea of "expert" is very detail dependent.

  11. Dr. Zoltan! (2008-05-08) #

    I have thought about this topic some more and here is what bothers me: let us (perhaps) exaggerate and say you are generating millions of dollars a month doing nothing. You have a hundred writers each working for $2 an hour, writing blogs for you. You are selling tons of generic utilitarian products on multiple websites that look like they are being squatted on, shipped from an order fulfillment warehouse somewhere in North Dakota, everything is outsourced, Your Man In Caspiar is shopping on eBay for the best price on purple suitcases for you... you have all the free time in the world: NOW what? Other than making money and freeing up your time, why are you here? To be a transparent profit machine that moves widgets around the universe while you hang out in random cities? Is there a serious motivation behind all of the addictive entrepreneurship? Does it fertilize some huge, important goal, passion, or artistic pursuit? Now that you can do anything, what do you do? An important long-term question, I think.

    The "e-Myth Myth" seems to only solve a symptom of a broken equation. It will be interesting to see where all of this goes.

  12. Steve Kusaba (2008-05-08) #

    Dr. Zoltan,

    This system looks like a win win for all. The businessman helps others get what they want, he gets money while freeing his time to do other productive good things. Sounds like a great deal to me!

  13. Luc Normand (2008-05-08) #

    Life will bring you back a full circle to the decision you chose not to make. It will do this in excruciatingly slow fashion so that, as it comes toward you over the horizon, you will have an eternity to see it coming. You'll hear your own voice chanting "I told you so" over and over again. Neglect to make enough of these decisions and it will drive you insane.

    Regret the choices you made not the ones you didn't. Trust your gut, carve your own path, be confident in the direction you so blindly choose, and most importantly, expect no one to be supportive. You'll have far fewer regrets.

  14. Neil Rosengarden (2008-05-11) #

    I just got back from NYC (and boy, are my arms tired!)

    I sang two songs TV track style, which means that the lead vocal was filled in in real time by me sitting there on the couch. One of my best positions, by the way...

    Next week or so, Paul Sladkus says, it will be on the internet on:

    Goodnewsbroadcast.com

    One can do a search for me! My name is Neil Rosengarden. The first song that I'll be singing is called Peace Will Come. It's within a talk show type format. I pretended that I was on a talk show, talking. It was great fun!

    and owe it all to Barry Gruber who paid for the plane ticket and my snazzy hotel. There was a pool!!! My back was smiling all the way.... The hotel and the plane was for real. I made it back home, I'm happy to report...

  15. prosansa (2008-05-14) #

    Good post! Thanks. Sansa player changed my attitude to music too. same emothions!

  16. Trance (2008-06-01) #

    Excellent thoughts, as usual. My problem (if you could call it that) is that Rhapsody is a US-only service. :( I'm Canadian, eh. So, I'll check out Napster, et al for options we have.

Your thoughts? Please leave a reply: