## 31 August 2005

### A Theoretical Question

On a scale of 1 (the world is populated only by members of the Bush family) to 100, how talented is Puerto Rico? More precisely, on a scale of 1 (see above) to 100, how talented are the people of the island of Puerto Rico?

The Jenius will further define the point to actual, demonstrable talent, not potential talent. Potential talent, like a politician's worth, is a theoretical concept and one must always allow for the possibility of existence up to the infinite. (Yes...sigh...even for a Fool.)

From a conversation with the all-too-often mentioned Kevin Shockey, The Jenius had this sense of trying to--in some fashion--provide a numerical construct for a basically immeasurable concept. But once the question was formulated, the number answer was clear: 25.

Taken in one way, one could assume that the number is in some way a percentage and that 25% of the roughly 4 million persons on the Island are "talented." Clearly, that ain't right (and yes, The Jenius is aware some of the 4 million are not strictly Puerto Rican. Point noted.) The problem, if there is one, lies in the slipperiness of defining "talent," but The Jenius posed the question and will answer it not based on any particular definition of talent, but on the concept of "talent in action". (Note: This entire premise is altogether too vague. Go with it, humor Me, let it take you where it may. The goal is a discussion, not a debate on semantics.)

So 25 it is. It could mean that of Our theoretical limit, 25 is the score similar to the point on a sloped line: of the total distance/height, We have reached point "25". Whether percentage or graphic, 25 is not anything to crow about. And it may seem to some of you to be a denial of what The Jenius has stated before via a vis Our Talent. Rest assured, it denies nothing stated here before. It merely reflects the notion that what We have is less than what We need/deserve, a consistent theme in these posts.

Whether you agree or not, The Jenius sees a problem with enormous upside: there is plenty of room for improvement. That verbal statement would elicit more nods than shakes of the head. To baldly state 25 when ego, pride, jingoism or a tendency to deny reality would mandate a number at least in the high 60s-low 70s is akin to a gentle, maybe even not-so-gentle slap in the Face of Us.

So be it. Although that was not The Jenius' intention, it could be taken that way. But think of the impact of a vaguely-posed question with a low number attached to it versus the hundreds--thousands--of words written here on the same subject. That a 25 could have caused a bigger stir in some people's minds as compared to reasoned, impassioned argument says something interesting about the way Our minds work. Or don't.

You might even want to ask your co-workers, friends, neigbors, children, parents, long-lost cousins twice-removed who live in a wooden shack and drive a late-model SUV this same question: On a scale of 1 (the pits) to 100, how talented are the people of the island of Puerto Rico?

The answers may or may not surprise you. But don't ask a Fool. He or she would immediately say a very high number (100, most likely) just to show their "Puerto Rican-ness". Answering a question you do not understand with a response you cannot defend even if your brain quadrupled in size and was connected to the Internet is simply a waste of time. Spare yourself. Spare Us. But ponder what this question could mean and what We can do about it. It may turn out to be more fundamental and crucial to Our Future than We can imagine.

The Jenius Has Spoken.

## 30 August 2005

### Above Average

Lucy: "What kind of world would this be if people settled for being average?!"

Linus: "What kind of world IS this anyway?"

Chalk up another one for the blanket-wielding savant. In a world where 83% of people surveyed consider themselves "above-average" drivers, something has gone terribly wrong. There's no way 83% can be above-average, and the evidence of our daily driving tends to indicate that 83% of drivers are idiots. But how many amongst Us would admit to being an "average" driver, or worse? C'mon, don't be shy! Anyone?

We say We seek excellence, but by and large We choose mediocrity instead. Instead of seeking out a path to Our Greatest Selves, We sit back in couch-potato stupor accepting the flavor-of-the-day... day after day after day.

As human beings, We are as ordinary as each other, and yet, at the same time, We are obviously and emphatically unique. Why choose to bury that uniqueness? Why take the very core of what makes each Life so valuable--it's essential distinctiveness--and smother it in conformity and banality. When We deny Our Best, We deny Our Most.

Seek excellence. Your Own standard of excellence, not the "standard" imposed by bleaters who wouldn't know excellence if it bit them in the hindquarters. Life is a unique gift that you can share with the world in a way no one else ever has or ever will. Give it Your Best and truly Live.

And do it for your own reasons in your own way, not Mine or anyone else's. It's your Life. It's now: choose.

The Jenius Has Spoken.

## 29 August 2005

### Techno Sapiens: Be Distinct

"If there is nothing very special about your work, no matter how hard you apply yourself you won't get noticed, and that increasingly means you won't get paid much either."---Michael Goldhaber, Wired Magazine

The Rule of Positioning: "If you can't describe your position in eight words or less, you don't have a position." - Jay Levinson and Seth Godin, Get What You Deserve!

Your grandfather's dream of a factory job for 40 years, with a small pension, Social Security and Medicare is gone.

Your parents' dream of 8-hours-a-day-for-30-years, with early retirement, a good pension, Social Security, Medicare, maybe a part-time job and good credit to make loans for travel and gifts is also gone.

The dream now is whatever you want to make of it, because your dream is your responsibility. Companies rise and fall and seldom give a rat's heinie about you and your dream. For every Enron and WorldCom out there shafting their employees there are "good" companies like General Motors and Boeing firing people by the thousands because they can no longer compete.

And though you can put your faith in the government and join the herd mentality of sheep, what are you doing with your one and only life? Only a handful of government workers really makes a difference. Most can be teleported to the dark side of the Moon during working hours and things would run (crawl) just as well. Is that your goal: to be a replaceable piece that cannot be dislodged? "Being a face" versus "Being a force"?

For the rest of Us, the times demand that We make Ourselves the best We can be. It means We make learning a daily--hourly--habit. It means We measure Our value by the value We add to the projects We initiate or participate in. It means We work on Ourselves as the absolute best investment We can make in Our individual and national Future and that We strive to become unique contributors.

To borrow from Tom Peters, it is no longer "Get better" versus "Get different". More than becoming better, becoming different is an increasingly vital key to success.

Look at the positioning statement for The Jenius: Creating and supporting transcendental change. Sets a high standard. Makes it public. Requires that The Jenius put his money where His mouth is. Every day in every project He works in or on. Can you name anyone else with that kind of positioning? Makes The Jenius distinct. An important point because, paraphrasing that Tom Peters gent again: Be Distinct or Become Extinct.

For the herd, drudgery and oblivion. For the rest of Us, adventure and a true chance to make a difference in Our world and everybody else's. It all starts with the choices to follow your dreams, constantly improve, become a distinctly valuable talent and seek the best projects in which to apply that value. The world awaits, with an almost empty playground, for the unique player you can be.

The Jenius Has Spoken.

## 26 August 2005

### Techno Sapiens: Renaissance Minds

If you haven't thought of making a career--a Life--outside of a cubicle/office or feel that underselling your freedom to a corporate or government overlord in the name of "security" is a good thing, drop by Creative Generalist. Suspend your irrational beliefs for a few minutes and explore a world where security comes from your own mind, its knowledge, imagination, talents and capacity to learn.

Renaissance Geeks

The absolutely qualified high school graduate who can compete for a good job in the 21st century will be a “renaissance geek,” the Region V director of the U.S. Small Business Administration, Patrick Rea, said June 14.

That graduate will have a lifelong love of learning, both formal and informal, where the jobs he fills will likely need to be “learned, unlearned and relearned,” Rea said.

Quoting Alvin Toffler, author of Future Shock and a self-described “futurist,” he said, “The illiterates of the 21st century will not be those who cannot read or write, but those who cannot learn, unlearn and relearn.” ...

(Rea's) presentation was based on “21st Century Jobs and Entrepreneurship in the Midwest: A Study Capturing the Future of the Heartland’s Economic Landscape,” which was recently completed by (the S.B.A.)

Okay, maybe you don't believe the government, even when it happens to stumble on the Truth. The breakneck pace of the economy is like a highly-desirable habitat, and on those terms, We can look back for a glimpse into the future:

"It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change." -Charles Darwin

Well, hell, Darwin's dead. How about someone who's alive and making a difference now? Please meet Richard Florida, author of The Rise of the Creative Class, a controversial book that puts a tangible framework on the synergy needed for economic development. However, his basic postulate is short and undeniable: "Human creativity is the ultimate economic resource."

Not "corporations," not "profits," not "pension plans that pay you a fraction of your worth in exchange for decades of your life as an indentured slave." Human creativity.

Now, of course, being an indentured slave is easy: you give up your will and your need to make decisions and simply follow orders. Your biggest effort of thought is trying to figure out how you're going to cheat the system. Imagination in the service of decreased moral and ethical behavior. No wonder The Fools are thriving.

But as a creative worker, as a lifelong student, as a value-adding producer, you have to make the effort to think, to learn, to explore and to act to make a difference. Merely existing is not enough. The indefatigable Tom Peters sums up what We need to do every day to make the most of Our value:

Guiding Tenets/Daily Fare
---Innovate!
---Re-imagine!
---Prepare!

Renaissance Minds are out to change the world, even if it's only the portion they live in. They are not waiting for government to "listen" or provide enslaving handouts, they are not sitting on their expanding asses behind mass-produced desks waiting for 12 and 5 to roll around and they are not bitching and moaning about "50 cents an hour and my birthday off" stupidities. They are definitely players on the global economic field, not simply spectators.

The Future, for each of Us, belongs to those who choose to be voracious learners, independent thinkers, imaginative solution providers and paragons of self-worth.

The Jenius Has Spoken.

## 25 August 2005

### Techno Sapiens: Choose To Excel

"Tell me, what is it you plan to do with your one wild and precious life?"--Mary Oliver

"Nobody can prevent you from choosing to be exceptional." --Mark Sanborn, The Fred Factor

We look at education as a way to certify We can get paid, instead of the never-ending building process it truly is.

We let society--usually our families--determine Our careers, muzzling Our desires under the fears they cower to.

We let The Fools strip away Our sense of nation, Our rightful claim to dignity, Our money and Our Future and allow these Fools to place absurdly narrow limits on Our development.

Why?

We can choose Our own education, without restrictions, aimed at developing Our skills instead of buckling under an unjustly-imposed "need" to be put in a box while still alive.

We can shun society's fears and accept that the only true path to developing Our fullest potential lies in acknowledging Our dreams as goals...and pursuing them relentlessly.

We can tear down The Fools' false walls of limitations as We tear them down from their gilded outhouses. Their time never was; their actions were never aimed at Our Future, only theirs.

Each of Us has a Life, a single moment in Time that will never be again. Why give it away to Fools, a box, a collection of fears, a paltry "reward" in exchange for a Life?

Look around you. Look at what accepting this "exchange" creates: mediocrity. The Fools wallow in the vaccuum mediocrity leaves, the collective yielding of will, hope and striving for excellence is the space The Fools need to harvest from Us to their piggish heart's content.

You have but a single Life. Don't give it up. Don't give away your irreplaceable Life for dirt clods. Nothing--nothing--can stand in the way of your excellence, if you choose to pursue it. But it won't happen by itself: you have to choose excellence. It is by far the harder road, but it is the only road that leads to Your--to Our--Best Future.

The Jenius Has Spoken.

## 24 August 2005

### Dinars For Dummies

The Jenius was going to let this one pass... Puerto Rico State Department officials are removed from their posts because of perceived ethical violations in the sale of Iraqui dinars for dollars. Apparently, Prudencio "Bill" Méndez, second-in-command at the State Department, was shilling the dinars for his son, James Méndez.

"Another Fool and his latrine soil," thought The Jenius. That two other Fools were also caught was simply a statistic. But the latrine soil hit The Jenius' fan when Jimmy-boy's company name was mentioned in the article: Internet Management Services.

Jimster, there's no accounting for taste or stupidity. You base your ""business"" (the doubled quotes are sarcasm, Jiminy; have someone explain it to you) on selling colorful pieces of "Iraqui" paper printed in England with the "promise" that someday, somehow, those little pieces of colored paper will be worth actual money. Investment experts are kind--or polite--enough to consider your offer "a high risk investment." The Jenius will save letters and call it crap.

However, as Hollywood, local TV and Fox News prove every day: crap sells. To the buyers of Jimmy-the-nonGreek's gamble, here's something to think about: What makes you think that Iraquis lack pride, dignity, honor, self-esteem and self-worth? The colorful bits of paper you are buying are NOT--let Me repeat--NOT the national currency of Iraq. It is worthless. To Iraquis, it is less than worthless: it is an insult. The moment a new Iraqui government is in place, they will replace the insult with their own currency. To Iraquis, currency printed by an invader--"invited" or not (and rest assured: definitely NOT invited) is, at best, toilet paper. You dummies for dinars, in your pathetic greed, are buying toilet paper from Puerto Rico's version of "Mr. Charmin".

The only way you could miss this point is if you simply cannot imagine having pride, dignity, honor, self-esteem and a sense of self-worth about your own nation. In that sense, James Méndez is simply bottom-feeding on pathetic souls.

There may be no crime in what Jim "Locate-A-Sucker" is doing. No legal crime. Morally and ethically, he is the equivalent of an open sewer on a buffet table. The saddest part is, there seems to be more of Us feeding from the sewer...

The Jenius Has Spoken.

## 23 August 2005

### Techno Sapiens: Do or Be

"To Be somebody or to Do something"
BOYD: The Fighter Pilot Who Changed the Art of War, by Robert Coram.

[Before The Jenius begins, kudos to Kevin Shockey and Myself for being selected to appear on Global Voices, sponsored by the Harvard Law Center.]

Colonel John Boyd was the fighter pilot credited with radically changing the way battles are fought. Although his war skills are not relevant here, his determination of the kind of people needed to get the job done is. Col. Boyd decided there are two kinds of people: those who do things and those who want to be something. The difference is vital to success.

"Do" people focus obsessively on "the work itself" and carry a "damn the torpedoes" attitude about everything else. "Be" people obsess on the politics, the rank, the title, the job description, the next promotion or assignment...essentially everything BUT the work itself.

Tom Peters, in his 1,400+ slide presentation, lists "My Kinda Folks," the people he just loves to work with and wants to see more of. Here's an excerpt of that list:

1) Intuitive (more than) Purely logical. (Routinely make strange connections)
2) Incredible passion for the work/Lingering idealism (though also cynical- a paradox)
3) Persistent/Relentless (to a fault)[TJ: Almost or often obsessive]
4) Like the long shots (Don Quixote-ish)
5) Stay on the case long after being ordered to drop it [TJ: See #3]
6) (Take on) cases no one else wants (hot potatoes, dead ends, political nightmares, "unimportant" victims)
7) Constant thorns in the side of bureaucracy!!!!!!!!!!!!!!!! [TJ: Give The Fools HELL!]
8) Repeatedly exiled to professional "Siberia" (so annoyingly good and so annoying per se that others try to do him terminal professional harm)
9) Little in the way of career prospects [TJ: As defined by "Be" pukes]
10) Work mostly solo (Secretive)[TJ: Greater sense of freedom, not fear]
11) "Work" "old pals network" to get info-leads beyond their charter
12) Master of the End Run! [TJ: Create new ways to get things done]
13) Often (are) their own worst enemies
14) Don't work out enough
15) Excessive work has estranged from family
16) More or less shabbily dressed [TJ: Appearance means nothing; results are what counts]
17) Drive shabby cars [TJ: See #16]
18) Not money/security oriented (can't help themselves, just gotta get involved) [TJ: Would actually PAY to get involved in cool/great/radical projects]
19) GET THE DAMN JOB DONE!(and don't expect/get much appreciation) [TJ: Don't deny this because it is the Truth]

You know if you are a "Do" person or a "Be" person. If you want to lie to yourself and say "I'm a 'Do'" when you cling to your cubicle, timeclock and little box in a Table of Organization, go ahead: you hurt no one but yourself. The true damage is done by "Wanna-Dos"--many of them Fools--who are "Be" people from scaly head to slimy toes who clog progress, impede creativity and act as life-sapping parasites to those of Us who Live to Do.

Oh yes, The Jenius is definitely a Do person. The question is: are you?

The Jenius Has Spoken.

## 22 August 2005

### Two Doers

You may have seen links there on the right to certain blogs. Check out T.I.P.S. and Portal al Exito. T.I.P.S. (which means "Tourism Is Profitable Service") is created by Diana Figueroa, and though it features the occasional interruption by The Jenius, the blog is essentially the vision and passion that Diana brings to improving customer service.

You may wonder why anyone would be passionate about customer service. Why not? If you have ever been on the receiving end of shoddy service, you know then how important it is for a business to provide good service. If your business doesn't feel passionate about customer service, then ask yourself "Why not?" If that's the case, you better hope none of your competitors is passionate about service because you may quickly find yourself becoming passionate about bankruptcy laws. And remember that in these global times, your competitors are down the street, across town and around the world.

Diana's aim is for Us to understand--to integrate into Our very fiber--the Truth that great customer service is vital for Our Success. Service has no language except that of understanding human needs. To become a global leader, and that is what We seek, service must become Our Focus. And Diana is leading the way to that Focus.

And why "Tourism"? Again, why not? It's a major industry here and it puts Us in touch not only with visitors from other shores, but with Our own people. By the millions in both cases. Go read T.I.P.S. Think about service. Add your voice to what Diana's doing.

Kevin Shockey gets mentioned here almost as much as The Jenius. He is smart, thoughtful, honest, talented, vulnerable and relentless. Despite setbacks and perspectives that often cause many others to throw up their hands in despair and quit, Kevin keeps moving forward, probing, searching, seeking. He is not a rah-rah kind of guy nor a basker in spotlight. He is the more subtle type of leader, the one who adds his words and deeds at the right time to create the desired effect.

A recent post in Portal al Exito mentions a dearth of doers here in Our Island. Kevin is right: We don't have enough Doers. He mentions wanting to attract a major blogger event to the Island, creating a Web 2.0 incubator and greater participation in Open Source Minds.

For both events, Kevin, count The Jenius in. And OSMers, of which Diana is also one, are proud to count you as one of Us. We just wish We had more Doers, too.

The Jenius knows more Doers; He is lucky that way. If He could know ten times more, Our Future would definitely be better. The Doer search is always active; it is the fundamental process of progress.

The Jenius Has Spoken

## 19 August 2005

### \$100,000 For An Idea

Here's a chance to get \$100,000 for an idea. Drop by The World of Difference and read the rules. It doesn't cost you anything, let's you test your concept(s) in a competitive forum and--fortunately--you have until September 6th to submit your proposal.

Why is that fortunate? Because the short deadline makes crafting and polishing an idea a matter of urgency. When you combine importance with urgency, you get action.

It's a matter of choice. One that could lead to \$100,000.

Here's the invitation:

Learn, grow, win \$100,000 in technology

If you are a small business and have great ideas on how to use information technology to jump ahead, you have landed in the perfect place!

The World of Difference Awards contest is a fantastic opportunity for your small business to discover the potential of technology and take a chance to win \$100,000 in hardware, software and services plus a trip to New York City!

Enter the contest

It's simple: if your business has fewer than 100 employees and had a revenue of less than \$50,000,000 in 2004, then it can qualify to enter the contest.

Tell us your Vision describing how \$100,000 in technology could improve the way you do business and explain how you would use the funds. If selected, you will advance to the next phase and get the chance to build your business case and continue competing for the grand prize.

And if you want The Jenius to help you, just ask. The help is offered at no cost. The reward, for both you and The Jenius, is the chance to make a difference.

The Jenius Has Spoken.

## 18 August 2005

### Economics & Prosperity III

The Jenius is more Randian Objectivist than a Libertarian when it comes to the role of government. (No, there are no other options.) Part III of the ongoing presentation of What Everyone Should Know About Economics and Prosperity, by The Fraser Institute, continues with the role government plays in aiding or barring economic progress.

The wealth and sheer abundance of practical information in this section forces Me to simply list the 10 major points and provide brief commentary. The Jenius urges you to also read the piece, here.

1. When Government Protects the Rights of Individuals and Supplies Goods that Cannot Be Provided Through Markets, It Helps Promote Economic Progress
The Fraser Institute calls the two governmental functions protective and productive. Using that simple scorecard, ask yourself if Our government protects us (with respect, not by treading on Our rights like bootjacked Huns) and if Our government is productive and promotes productivity.

2. Government is Not a Corrective Device
Quoting further: "PEOPLE OFTEN HAVE A TENDENCY TO THINK of government, particularly a democratically elected government, as a corrective device. They act as if government intervention will solve all types of problems (for example, poverty, inadequate health care, poor education, or the high cost of housing). This view is false. Government is not an entity that will always make decisions in the "public interest," however that nebulous term might be defined. Neither is it a corrective device available for use when market organization fails to achieve a desired outcome."

3. The Cost of Government is: (a) the Decline in Private Sector Output as the Result of Government's Use of Resources, (b) the Cost of Tax Compliance, and (c) the Unrealized Gains from Exchanges Squeezed Out by Government
Again, quoting further: "There are three types of costs incurred when governments provide goods and services. First, there is the loss of private sector output that could have been produced with the resources that are now employed producing the goods supplied by the government. The resources that go into police protection, highways, missiles, education, health care, or any other government "product" have alternative uses. If they were not tied up producing goods supplied through the public sector, they would be available to the private sector." This is EXACTLY why We should be ashamed and infuriated at the grotesquely swollen size of Our government.

4. Unless Restrained by Constitutional Rules, Special Interest Groups Will Use the Democratic Political Process to Fleece Taxpayers and Consumers
The Jenius struggles to avoid sarcasm... The solutions here are to either develop alternatives to government "largesse" (essentially, to act like an adult and not a whiny child) or form/join a special interest group and add your whiny voice to the din.

5. Unless Restrained by Constitutional Rules, Legislators Will Run Budget Deficits that are Often Harmful to the Economy
Legislators spend Our money to cater to Our votes. Think about that. Hard. Why should We put up with reckless splurging and theft of Our income while tolerating the Fools' uncontrolled piggish pandering, prancing and prating?

6. When Government Becomes Heavily Involved Attempting to Help Some People at the Expense of Others, Resources Will Move Away from Production and Toward Plunder. Economic Progress Will Be Retarded
Example: Our government.

7. The Cost of Government Income Transfers Will Be Far Greater Than the Net Gain to the Intended Beneficiaries
Two more quotes: "Income is not like "manna from heaven"...On the contrary, income is something that people produce and earn. It is earned by individuals who provide others with goods and services for which they are willing to pay." Moral: Stop paying people for doing nothing. Corollary: Reduce bloated government payrolls.

"If you subsidize something, you will get more of it. Anti-poverty transfers are no exception to this general rule. Transfers directed toward the poor encourage high-risk lifestyles (for example, the use of drugs, dropping out of school or the workforce, births by single mothers, marital dissolution, and abandonment of children by fathers). All of these choices tend to increase the number of people who are poor." Moral: Stop paying people to do nothing of value. Corollary: Teach what to do.

8. Government Central Planning of an Economy Merely Substitutes Politics for Markets; Such an Effort Will Waste Resources and Retard Economic Progress
Usually associated with communist regimes, "central planning" can emerge when (a) elected officials act without regard to constituencies, thus (b) catering to pressure groups and special interests creating (c) a parasitic body that grows to feed itself with greater abandon. The playing card of this gambit is the "Public Project"; amuse or enrage yourself counting how many times it's played.

9. Competition is Just as Important in Government as in Markets. Competition Among Government Units and Between Government Enterprises and Private Organizations Will Help Assure that Government is a Servant of the People
"Given the incentive structure within the public sector, it is vitally important that government enterprises face competitors. Prosperity will be enhanced if private firms are permitted to compete on a level playing field with government agencies and enterprises. For example, if governments operate vehicle maintenance departments, printing shops, food services, garbage collection services, street maintenance departments, schools, and similar agencies, private firms could be given an equal opportunity to compete with public enterprises. The competition would improve performance, reduce costs, and stimulate innovative behaviour in both sectors. As a result, consumers/taxpayers would get more for their money." Like my friend Roberto says: It's good business to replace the government. The Jenius adds: How can you lose against a one-digit IQ opponent? What are We waiting for?

10. Constitutional Rules that Bring the Political Process and Sound Economics into Harmony Will Promote Economic Progress
"THE INTELLECTUAL FOLLY OF OUR AGE is the view that democratic elections alone will establish an environment conducive to economic progress. Both history and political theory indicate that this view is false. If government is going to be a positive force for economic prosperity, the rules of the political game must be designed to bring the self-interest of voters, politicians, and bureaucrats into harmony with economic progress. This will require that the scope of government be limited and that government remain neutral among the various sub-groups of citizens.

When government is unconstrained - when everything is up for grabs within the political process - divisive and predatory activities will abound. Individuals will spend more time organizing and fighting over slices of the economic pie and less time producing "pie." As a result, output will be smaller than would otherwise be the case. Animosity, distrust, and even hatred among factions will grow, while production stagnates. Life in a highly politicized economy is not very pleasant."

And to punctuate: "While government plays an important role in maintaining the law and order that are essential to voluntary economic activities, it is limited government, not majority rule, that is the key to economic progress. The sooner we learn this important point, the more prosperous we will be."

The Jenius Has Quoted

## 17 August 2005

### Economics & Prosperity II

Continuing with excerpts from The Fraser Institute's What Everyone Should Know About Economics and Prosperity. This is from Part II, Seven Major Sources of Economic Progress:

2. Freedom of Exchange: Policies that Reduce the Volume of Exchange Retard Economic Progress

There are various ways that countries stifle exchange. First, many countries impose regulations that limit entry into various businesses and occupations. If you want to start a business or provide a service, you have to fill out forms, get permission from different bureaus, show that you are qualified, indicate that you have sufficient financing, and meet various other regulatory tests. Some officials may refuse your application unless you are willing to pay a bribe or make a contribution to their political coffers. Hernando De Soto, in his revealing book The Other Path, found that in Lima, Peru it took 289 days for five people working full-time to meet the regulations required to legally open a small business producing garments. Furthermore, along the way, ten bribes were solicited and on two occasions it was necessary to pay the bribes in order to get the permission to operate "legally"...Needless to say, policies of this type stifle business competition, encourage political corruption, and drive decent people into the underground (or what De Soto calls the "informal") economy.

You know where this is going... If The Jenius had changed "Lima, Peru" for "Anytown, Puerto Rico," and "garment factory" for practically any other type of business, over 95% of the local readers of that quote would have nodded and not considered it out of place. Without a doubt, the main elements of the De Soto description apply here: over-complication of regulations, possible corruption, tar-slow start-ups and a reliance on the "gray economy" that saps the power of Our monies.

The solution? How about more effective laws? How about higher ethics? How about clearer thinking? How about doing something--anything--that breaks the current insanity routine and aims at making something good happen? It doesn't take a Society to do that, it just takes an Individual. Any Individual. Hopefully, Every Individual.

The Jenius Has Spoken.

## 16 August 2005

### Economics & Prosperity I

Economics is often shrouded in fog, most of it because economists are using smoke and mirrors and some of it self-induced by people's misunderstanding of money, social exchanges and the concept of value.

There are, however, straightforward principles that serve as a bedrock for understanding economic principles. One of the best The Jenius has found is The Fraser Institute's What Everyone Should Know About Economics and Prosperity. In plain language, it sets forth basic definitions and relationships We should all keep in mind if We are to effect change in Our Future.

From Part I, Ten Key Elements of Economics, extracts of True Importance:

5. Increases in Real Income are Dependent Upon Increases in Real Output

A HIGHER INCOME AND STANDARD OF LIVING are dependent upon higher productivity and output. There is a direct relationship between a nation's per capita (per person) income and its per capita output. In essence, output and income are opposite sides of the same coin. Output is the value of the goods and services produced, as measured by the prices paid by purchasers. Income is the revenue paid to the people (including the entrepreneur's residual revenue), who supply the resources that generate the output. This too, must equal the sale price of the goods.

...Once the linkage between output and income is recognized, the real source of economic progress is clarified. We improve our standard of living (income) by figuring out how to produce more output (things that people value). Economic progress is dependent, for example, on our ability to build a better house, computer, or video camera with the same or a lesser amount of labour and other resources. Without increases in real output - that is, output adjusted for inflation - there can be no increases in income and no improvement in our living standards.

...Politicians often erroneously talk as if the creation of jobs is the source of economic progress. While campaigning, a recent political leader argued that his economic program had three pillars: "Jobs, jobs, and jobs." But focusing on jobs is a potential source of confusion. More employment will not promote economic progress, unless the employment expands output. We do not need more jobs, per se. Rather we need more productive workers, more productivity-enhancing machinery, and more efficient economic organization so we can produce more output per capita.

Some observers argue that technology adversely affects workers. In fact, just the opposite is true. Once you recognize that expansion in output is the source of higher wages, the positive impact of improvements in technology is apparent: better technology makes it possible for workers to produce more and thus to earn more.

...Sometimes specific jobs will be eliminated. Clearly modern technology has largely eliminated the jobs of elevator operators, blacksmiths, household workers, ditch diggers, and buggy manufacturers. These changes, however, merely release human resources so they can be used to expand output in other areas. Other tasks can now be accomplished with the newly released resources and, as a result, we are able to achieve a higher standard of living than would otherwise be the case.

Recognition of the link between output and income also makes it easier to see why minimum wage legislation and labour unions fail to increase the overall wages of workers. A higher minimum wage will price some low-skill workers out of the market. Therefore, their employment will decline, reducing total output. While some individual workers may be helped, overall per capita income will be lower because per capita output will be lower.

Similarly, labour unions may be able to reduce the competition from nonunion workers and thereby push up the wages of union members. But without commensurate increases in worker productivity, unions are unable to enhance the wages of all workers. If they could, the average wages in a highly unionized country like the United Kingdom would be higher than in the United States. But this is not what we observe. Wages in the U.K. are at least 40 percent lower than in the U.S., even though nearly half of the workforce is unionized in the United Kingdom compared to less than 20 percent in the United States.

Without high productivity per worker, there can be no high wages per worker. Similarly, without growth in the production of goods and services valued by consumers, there can be no growth in the real income of a nation. Production provides the source of income.

6. The Four Sources of Income Growth are:
(a) Improvements in Worker Skills,
(b) Capital Formation,
(d) Better Economic Organization

THE GOODS AND SERVICES THAT PROVIDE for our standard of living do not just happen. Their production requires work, investment, cooperation, machinery, brain power, and organization. There are four major sources of production and income growth.

First, improvements in the skills of workers will promote economic growth. Skilful workers are more productive. How do individuals improve their skills? Primarily they do so by investing in themselves - by developing their natural abilities. There are literally thousands of ways people can improve their skills, but most of them involve studying and practising. Thus, education, training, and experience are the primary ways people improve their skills.

Second, capital formation can also enhance the productivity of workers. Workers can produce more if they work with more and better machines. For example, a logger can produce more when working with a chain saw than with a hand-operated, cross-cut blade. Similarly, a transport worker can haul more with a truck than with a mule and wagon. Other things constant, investment in tools and machines can help us produce more in the future. But investment is not a free lunch. The resources used to produce tools, machines, and factories could also be used to produce food, clothing, automobiles, and other current consumption goods... Economics is about trade-offs. It does, however, indicate that people who save and invest more will be able to produce more in the future.

Third, an improvement in technology - our knowledge about how to transform resources into goods and services - will also permit us to achieve a larger future output. The use of brain power to discover economical new products and/or less costly methods of production is a powerful source of economic progress...

Finally, improvements in economic organization can also promote economic growth. Of the four sources of growth, this one is probably the most often overlooked. The legal system of a country influences the degree of economic cooperation...

Effective economic organization will facilitate social cooperation and channel resources toward the production of goods that people value. Conversely, economic organization that protects wasteful practices and fails to reward the creation of wealth will retard economic progress.

Much to think about. More will presented.

The Jenius Has Quoted.

## 15 August 2005

### 9 Reasons; 1 Choice

Like passing to the hot hand, The Jenius goes back to Dave Pollard's How to Save the World blog. In this case, Nine Reasons We Don't Do What We Should. Although the list has extensive commentary (as does the entire post), The Jenius will focus only on the list's items:

Fear
Lack of Self-Confidence
Lack of Knowledge
Trying to Do Too Much Alone
Trying to Do Too Much
Loss of Self
Lack of Energy
Lack of Reward
It Can't Be Done

The list is targeted at the individual, but it also applies at the level of society, specifically Our Society.

Fear: We are risk-averse.

Lack of Self-Confidence: We focus on style (music, sports) rather than substance (education, technology).

Lack of Knowledge: We are insular and know little about the rest of the world.

Trying to Do Too Much Alone: We criticize Cubans for coming here, helping each other and becoming successful. There's strength in unity...but We don't seem to know that.

Trying to Do Too Much: We are overwhelmed by what "We don't have" rather than focusing on "what We do."

Loss of Self: We never had a "self", which comes from deep knowledge and respect for Our history and culture. That comes from the educational system, so We're screwed.

Lack of Energy: We like to take it easy; all humans do. We just make a fetish of short-cuts, where short-term gain becomes long-term loss

Lack of Reward: We think "reward" is external, ignoring that true rewards are internal. See "Loss of Self."

It Can't Be Done: Almost always modified to "It Can't Be Done Here," for whatever fatuous "reasons" Fools and their followers can spew.

The Jenius is not down on Puerto Rico; anything but. However, not seeing what ails Us undermines any true search for solutions. None of the items listed above is impossible to overcome, but maybe it would be easier to tackle what faces Us if We take another perspective.

According to leadership gurus, there are really only two reasons people don't do big things: Lack of Knowledge and/or Lack of Commitment. On that basis, the challenge is certainly easier. What We don't know how to do, We can learn or find who knows. As for Commitment, well, that's not as easy. It requires vision and courage, often linked to leadership. But understand: leadership is an individual choice. We can't decide for anyone but Ourself. The sum total of these individual choices based on vision and courage will--must--eventually change Us as a whole.

The Jenius Has Spoken.

## 12 August 2005

### Initiative to Innovation

Kevin Shockey's post talks about an all-too-human response to being exposed to energy-inspiring ideas, a type of "Saturday high that fades by Monday." In this case, even a Tom Peters fan can be swept away by the potential only to feel the energy draining in the black holes and sump pumps that surround Us.

With no slight to Kevin, let's analyze this reaction:

1) Without a doubt, Tom is right about emphasizing dreaming, creating, non-comformity, education, risk-taking, revolution, excellence, challenge, opportunity, personal choice and confronting chaos. That he couches his views in what critics call "over-exuberance" is a triviality. Peters is right and whether you like or hate his style, the concepts he presents are worth everybody's attention.

2) Encountering great ideas, versions of Truth, is exhilarating and empowering. Most people understand the Truth when they meet it, but fail to enact the crucial final step, which is to take the initiative and act on Truth. This enormous responsibility is what causes some people to flee from these ideas: it overwhelms their power of personal choice. For most people, accepting Truths is easy; internalizing those Truths and keeping them vibrant is not. Like a candle's flame in a storm, one must both protect and advance the Truth against the harshness of daily struggles.

3) Humans are social creatures for whom isolation is pain. Being a keeper of Truth and trying to espouse it in the face of criticism, ignorance, intolerance, rejection or--worst of all--indifference, requires a level of determination and persistence, a bedrock of belief and yes, faith, that takes this isolation, this hollow pain, and turns it into Action. When based on ego, pride and intellectual honesty, action becomes the expression of craftsmen and craftswomen, true creators; when based on the id, vanity and self-righteousness, action becomes the flailing of fanatics and terrorists.

What Peters is asking of Us, what Kevin and The Jenius are striving for, is Innovation. As much as We may believe in the goal, as much as We may want to achieve it, the process is slow, chaotic and sometimes tortuous.

And yet We go on. There is no other choice.

From the Fast Company blog comes this insightful post on taking the initiative and sustaining it. Written by Jim Canterucci, it provides a useful blueprint for those moments when Truth meets negativity:

Without harnessing the power of initiative, the wheel of innovation comes to a screeching halt. We all have a desire to "make a difference" or to make improvements in our lives, but for a variety of reasons, many people face challenges in regard to taking initiative in one form or another. Fortunately, there are many things you can do to enhance your power of initiative, and the payoffs are huge.

1. Give Yourself Permission to Decide for Yourself
Waiting for others to join you in your initiative can slow the wheels of innovation and drag out the process.

2. Make Choices and Act on Them
Keep in mind that you don't have to come up with the best possible decision, you just have to come up with one way that will work.

3. Don't Wait to Be Inspired; Get Inspired!
Take responsibility for feeding positive input into your mental process.

Practice increasing your initiative by stepping up to the plate and volunteering to lead projects.

Make a firm commitment to yourself that you will keep your promises, no matter what.

It isn't easy. It never is. That's what separates Us from "them."

The Jenius Has Spoken.

## 11 August 2005

### Tom Peters Trio

"In a global economy, the government cannot give anybody a guaranteed success story, but you can give people the tools to make the most of their own lives."
From Phillip Bobbitt, The Shield of Achilles

"The future belongs to...small populations...who build empires of the mind...and who ignore the temptation of--or do not have the option of--exploiting natural resources."
Juan Enriquez, As The Future Catches You

"Let's compete---by training the best workers, investing in R&D, erecting the best infrastructure and building an education system that graduates students who rank with the world's best. Our goal is to be competitive with the best so we both win and create jobs."
Intel CEO Craig Barrett, quoted in Time, 1 March 2004

These quotes came from an extraordinary set of slides created by Tom Peters, an astounding collection of 1,440 (and counting) snippets of ideas, concepts, facts, intuition, opinion and insight that has to be read to be believed. It's a collection no knowledge worker should be without, found here.

Giving people tools to create their own success...

Empires of the mind, not of natural resources...

Compete with the best to gain and create jobs...

The Jenius can and does lay claim to having stated these ideas before: here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here...

The Jenius Has Spoken.

## 10 August 2005

### Legal Loopiness

San Juan Star, Monday, August 8th, Business Monday Section, page B-5, somewhere in the middle of Column Two is a statement that The Jenius believes just reeks of stupidity. The topic is unionization, with special emphasis on unionizing public workers. Leonardo Delgado, legal counsel to the local Teamsters and the local Trucker's Union was referring to the difficulty in unionizing pharmaceutical workers: "...Plus, chemists and biologists don't have much of a labor conscience. It was not something that was planted in them in college."

The Jenius can only hope that the law profession is not proud of this specimen.

Let Me start by stating: "Smart, talented and capable people don't need unions." Lest you start crowing, Legal Leo, you belong to a union, only you call it "Colegio de Abogados." (Here's a definition to help you see the truth.)

Second of all, there is no such thing as "a labor conscience." This is cheap sophistry that The Jenius is sure you copied from someone else. One can and often is conscious of labor issues, but to equate such awareness to being a moral/ethical requirement is the recourse of a shallow mind. Saying that these people lack what is obviously a false "trait" is your problem, not that of chemists, biologists and other such professionals.

Second, a conscience is not "planted": it emerges and is molded as part of growth and maturity. It is the product of teachings, experiences, decisions and conclusions that must be voluntarily internalized, not "planted." It seems to Me that having a conscience would disqualify a person from going to law school, so The Jenius will forgive your ignorance on this point.

In third place, you state that college is where your so-called "labor conscience" is "planted". (The Jenius hesitates to ask what farm you attended for "higher education"...) Is that the function college has in your legaloid mind? That of "planting" false and useless concepts in young minds? That the miseducation of the "laboring" class so as to be easily manipulated by drudges in and around unions is a primary activity at the university level? Again, it seems to Me you have confused law school with reality.

Unions had their place in the general labor force, but laws have caught up and even surpassed what unions sought for decades. They are still needed where inequalities exist (Wal-Mart, anyone?) but by and large, unions now serve largely as cash cows for parasitic "leadership." And many of their advisors.

Highly-educated and highly-talented people don't need unions: they have the intellectual wherewithal to write their own tickets and make their own way through the world. It takes brains and ego to make a career in sciences, medicine, math and a myriad of other fields, a lethal combination to "unionizers" who prey on ignorance and fear. And if the need arises to band together against a common foe, rest assured these same educated and talented people will do so. But in their own way, on their own terms. That's not a hollow "labor conscience": that's true conscience.

Next time, counselor, try picking on somebody your own size. The Jenius hears that Aedes aegypti are looking to band together to fight these new-fangled insecticides...

The Jenius Has Spoken.

## 09 August 2005

### Tom Peters Rules

A friend called me up about yesterday's post and said to The Jenius: "You were pushing it a little."

No. I. Wasn't. I said so and told the person--someone I respect--that the only effective message was one that "went too far." She disagreed, but that's why We are friends.

Then, about an hour ago, The Jenius came across a manifesto by Tom Peters, the business guru of business gurus, called "Tomato Toma(h)to." You can find this amazing idea piece at Change This.

Here are excerpts from Tom's "dream" that he had settled for the sops "They" sell:

They say I demand too much.
I say they accept mediocrity and continuous improvement too readily.

They say "We can't handle this much change."
I say "Your job and career are in jeopardy; what other options do you have?"

They say the Web is a "useful tool."
I say the Web changes everything. Now.

They say "We need an Initiative."
I say "We need a Dream. And Dreamers."

They say "We need more steady, loyal employees."
I say "WE NEED MORE FREAKS WHO ROUTINELY TELL THOSE 'IN CHARGE' TO TAKE A FLYING LEAP...BEFORE IT'S TOO LATE."

They say "We like people who, with steely determination, say. "I can make it better."
I say "I love people who, with a certain maniacal gleam in their eye, even a giggle, say, 'I can turn the world upside-down. Watch me!'"

They say "Sure, we need CHANGE."
I say we need "REVOLUTION NOW."

They say "We need GOOD PEOPLE."
I say "We need QUIRKY TALENT."

They say "CONGLOMERATE & IMITATE!"
I say "CREATE & INNOVATE!"

They say "Market share."
I say "Market CREATION."

They say "Integrity is important."
I say "Tell the Unvarnished Truth, All the Time...or take a Long Hike."

They say they need a "vision" born of McKinsey.
I say we need a "Grandiose Dream" born of a Passionate & Intemperate Belief that the world can be a different, better place."

They say they want recruits with "spotless records."
I say "The Spots are what matter most."

They say "no child left behind."
I say "education" is leaving ALL our children behind as it is totally misaligned to deal with tomorrow's (this afternoon's) uncertain, ambiguous, creativity-driven economy.

They say "Order is the necessary precursor to measured, sustainable success."
I say "Dis-order is the precursor to Opportunistic Sorties, Market Creation, Quantum Leaps and Entrepreneurial Adventure."

They say "Employees need Well-Defined Structure."
I say "Talent should be encouraged to embark on Quests to the Unknownn."

They say lifetime employment was a boon.
I say lifetime employment was Indentured Servitude, modern-day Slavery.

They say "safety net."
I say "I am my own safety net; give me the 'Ownership Society'."

They say "Continuous Improvement."
I say "Bold Leaps."

I say "Radical change takes a minute." (See AA.)

They say "We can't all be Revolutionaries."
I say "Why not?"

They say this just a Rant.
I say this is Reality.

They say "The man is not nice."
I say "The times are not forgiving."

You've come this far, so download the entire manifesto here. It should be sent to every adult in Our Industry, so please do what you can to spread it around.

"They"--The Fools--have never been and never will be worthy of Our Time. The governor, senators, representatives, department secretaries, mayors and practically the entire government of Our Island is a vast pile of fertilizer. The Internet Society, Center for New Economy, Retailers Union (Detallistas), Chamber of Commerce, Puerto Rico Manufacturing Association and their brethren-in-inanity are "led" by feeble-minded worshippers of the past. They are lumps where We need Leaders.

The time for Us to lead came years ago. We are not--not--too late. We can and We MUST catapult Our Island into its brightest, boldest Future ever. The Fools, those wretched crumbling idiots, will never get Us there. Dump them. By the time "They" notice, We'll have Our Future well in hand.

Tom Peters is a Universe above The Jenius in terms of business thought and influence. Maybe you can ignore My words: Only a Fool would ignore his.

The Jenius Has Spoken.

## 08 August 2005

### Acevedo's "Angst"

"...the only one here who has risked everything is the Governor; it's time for the people to start taking a little risk."

The quote above is from the governor of Our Fair Island. (No, I won't capitalize it.) There are so many things wrong with the above statement that dissecting it is like rearranging vomit. But if all the governor can produce is upchuck, then that's what We have to work with.

First of all, the quote above is taken from an interview Aníbal Acevedo Vilá had with El Nuevo Día, a paper founded on the support of statehood for Puerto Rico (and thus in opposition to the governor's party.) The cover photo shows a hands-outstretched, shoulder-shrug, chin-tucked-in governor in what anybody would recognize is a "What can I do?" gesture. Quite fitting, for the answer has been obvious for some time.

First of all, "governor", ditch the third person. You're neither talented nor eccentric enough to pull it off.

Second, you've been in office--let's see--seven months. Seven whole months! What the hell is this "everything" you claim to have risked? You have been in office less than 18% of your expected term and you have already "risked it all"? So according to you, you have nothing left for the next 41 months of your existence as governor, right? THIS is supposed to help your (pathetic) case?

Fourth, The Jenius will grant you these points:

1) You face a legislature caught between a nincompoop and a maniac. You couldn't have anticipated it, but with any sense of political savvy, you could have turned it in your favor. Neither you nor your "advisors" have been able to do so. Set an example and save us some money: fire them.

2) It's true you inherited an office ravaged by nearly eight years of demostrable corruption at the highest levels followed by four years of the most inept gubernatorial period in Our history. But instead of being prepared with Plans A, B, C and even down to Z, you waffle, wiggle, whine and wait. That all adds up to "weak."

3) It's also true that Our People are amongst the most risk-averse in the Western Hemisphere. The Jenius would add that many, especially those on the government teat, are amongst the most spoiled as well. The attitude is to expect everything on a silver platter and without making much of an effort to even reach for the damn thing. But you knew that going in, so rather than present a government-reduction plan that could control the risk and serve as a positive first step, you fling the half-assed idea at the masses and expect--no, beg!-- for them to step up and "do the right thing." There's a good word for that kind of "planning": stupid.

[What would have been better? Reducing middle management across the board. By attacking the fat cat layers that clog every department and agency, like the 17 Supervisory levels in Education, you would (a) attack higher salaries that are wasted, (b) reduce the empty-headed fat, not the working muscle and (c) placed the legislature as the enemy of the people because their knee-jerk reaction would be to protect those jobs, an easy position to attack as The People's Governor. Too late now, whine-boy.]

4) It seems obvious you've already given up hope for re-election in 2008. You have no solutions, can't sell the obvious (reduced government spending) and have the charisma and leadership skills of tapioca. This Island needs--deserves--much, much more. Here's an idea: talk to a random selection of professionals in their 20s and 30s. Ask them what would make this Island turn around and head for a prominent position at the global level. Take their best ideas and present them to your advisors (because you're too wimpy to fire them.) Take everything your advisors hate...and do it.

Yes, The Jenius is saying "Take a risk. Not in Puerto Rico, but for Puerto Rico." It's not like you have anything...else...to lose, right? (See quote above, guv...)

The Jenius Has Spoken.

## 05 August 2005

### Entrepreneurial Peak-Time

Both Kevin Shockey and The Jenius found this very--very--interesting post at the quirky and possibly "left behind" Bnoopy entrepreneurial blog.

The entire post is reproduced here, with Jenius comments afterwards:

It’s a great time to be an entrepreneur

There’s never been a better time to be an entrepreneur because it’s never been cheaper to be one. Here’s one example.

Excite.com took \$3,000,000 to get from idea to launch. JotSpot took \$100,000.

Why on earth is there a 30X difference? There’s probably a lot of reasons, but here are my top four. I’m interested in hearing about what other people think are factors as well.

Hardware is 100X cheaper
In the 10 years between Excite and JotSpot, hardware has literally become 100X cheaper. It’s two factors – Moore’s law and the rise of Linux as an operating system designed to run on generic hardware. Back in the Excite days, we had to buy proprietary Sun hardware and Sun hard drive arrays. Believe me, none of it was cheap.

Today, we buy generic Intel boxes provided by one of a million different suppliers.

Infrastructure software is free
Back in 1993 we had to buy and continue to pay for maintenance on everything we needed just to build our service -- operating systems, compilers, web servers, application servers, databases. You name it. If it was infrastructure, we paid for it. And, not only was it costly, the need to negotiate licenses took time and energy. I remember having a deadline at Excite that required me to buy a Sun compiler through their Japanese office because it was the only office open at the time (probably midnight) and we needed that compiler NOW.

Compare that to today. Free, open source infrastructure is the norm. Get it anytime and anywhere. At JotSpot, and startups everywhere you see Linux, Tomcat, Apache, MySQL, etc. No license cost, no maintenance.

Startups today have unprecedented access to global labor markets. Back in 1993, IBM had access to technical people in India, but little Excite.com did not. Today, with rent-a-coder, elance.com and just plain email, we have access to a world-wide talent pool of experts on a temporary or permanent basis.

SEM changes everything
Ten years ago to reach the market, we had to do expensive distribution deals. We advertised on television and radio and print. We spent a crap-load of money. There’s an old adage in television advertising “I know half my money is wasted. Trouble is, I don’t know what half”. That was us.

It’s an obvious statement to say that search engine marketing changes everything. But the real revolution is the ability to affordably reach small markets. You can know what works and what doesn’t. And, search not only allows niche marketing, it’s global popularity allows mass marketing as well (if you can buy enough keywords).

So What?
It’s nice that it’s cheaper, but what does it mean to entrepreneuring?

More people can and will be entrepreneurs than ever before: A lot more people can raise \$100,000 than raise \$3,000,000.

Funding sources explode which enables more entrepreneurs
The sources of funding capable of writing \$100,000 checks are a lot more plentiful than those capable of writing \$3,000,000 checks. It’s a great time to be an angel investor because there are real possibilities of substantial company progress on so little money.

More bootstrapping to profitability
With costs so low, I think you’ll see many more companies raise angel money and take it all the way to profitability.

Higher valuations for VCs.
And, for those that do raise venture capital, I think it means better valuations because you can get far more mature on your \$100,000 before you go for the bigger round.

All in all, it’s a great time to be an entrepreneur.

The post basically defines "lower entry barrier" across several aspects of launching a tech- or Internet-based business: cheaper hardware and software, larger talent pool and markets with reduced costs for accessing both and thus a greater potential for success with a smaller investment.

Now The Jenius asks "Is there anything here that We can't take advantage of?"

Then let's get to it.

The Jenius Has Spoken.

## 04 August 2005

### Start-Up Wisdom

"You need three things to create a successful startup: to start with good people, to make something customers actually want, and to spend as little money as possible. Most startups that fail do it because they fail at one of these. A startup that does all three will probably succeed.

And that's kind of exciting, when you think about it, because all three are doable. Hard, but doable. And since a startup that succeeds ordinarily makes its founders rich, that implies getting rich is doable too. Hard, but doable.

If there is one message I'd like to get across about startups, that's it. There is no magically difficult step that requires brilliance to solve."

Paul Graham, noted entrepreneur, business thought leader and writer, delivered those words at a speech to the Harvard Computer Society. Although the essay is not intended to be a complete guide to starting any sort of business, it is packed with the simple Truths that are undistinguishable from Wisdom. Examples:

"... you don't need a brilliant idea to start a startup around. The way a startup makes money is to offer people better technology than they have now. But what people have now is often so bad that it doesn't take brilliance to do better."

"An idea for a startup, however, is only a beginning... Ideas for startups are worth something, certainly, but the trouble is, they're not transferrable. They're not something you could hand to someone else to execute. Their value is mainly as starting points: as questions for the people who had them to continue thinking about.

"What matters is not ideas, but the people who have them. Good people can fix bad ideas, but good ideas can't save bad people."

"What do I mean by good people? One of the best tricks I learned during our startup was a rule for deciding who to hire. Could you describe the person as an animal? It might be hard to translate that into another language, but I think everyone in the US knows what it means. It means someone who takes their work a little too seriously; someone who does what they do so well that they pass right through professional and cross over into obsessive. If you think about people you know, you'll find the animal test is easy to apply. Call the person's image to mind and imagine the sentence "so-and-so is an animal." If you laugh, they're not. You don't need or perhaps even want this quality in big companies, but you need it in a startup."

"Ideally you want between two and four founders. It would be hard to start with just one. One person would find the moral weight of starting a company hard to bear. Even Bill Gates, who seems to be able to bear a good deal of moral weight, had to have a co-founder. But you don't want so many founders that the company starts to look like a group photo. Partly because you don't need a lot of people at first, but mainly because the more founders you have, the worse disagreements you'll have. When there are just two or three founders, you know you have to resolve disputes immediately or perish. If there are seven or eight, disagreements can linger and harden into factions. You don't want mere voting; you need unanimity."

"In a technology startup, which most startups are, the founders should include technical people. Do the founders of a startup have to include business people? That depends. There is one reason you might want to include business people in a startup, though: because you have to have at least one person willing and able to focus on what customers want. If you can't understand users, however, you should either learn how or find a co-founder who can. That is the single most important issue for technology startups, and the rock that sinks more of them than anything else."

"In nearly every failed startup, the real problem was that customers didn't want the product. For most, the cause of death is listed as "ran out of funding," but that's only the immediate cause. Why couldn't they get more funding? Probably because the product was a dog, or never seemed likely to be done, or both."

"The only way to make something customers want is to get a prototype in front of them and refine it based on their reactions."

" It's worth trying very, very hard to make technology easy to use. A 10% improvement in ease of use doesn't just increase your sales 10%. It's more likely to double your sales."

"...design your product to please users first, and then think about how to make money from it. If you don't put users first, you leave a gap for competitors who do."

"Financially, a startup is like a pass/fail course. The way to get rich from a startup is to maximize the company's chances of succeeding, not to maximize the amount of stock you retain. So if you can trade stock for something that improves your odds, it's probably a smart move."

"Once you've got a company set up, it may seem presumptuous to go knocking on the doors of rich people and asking them to invest tens of thousands of dollars in something that is really just a bunch of guys with some ideas. But when you look at it from the rich people's point of view, the picture is more encouraging. Most rich people are looking for good investments. If you really think you have a chance of succeeding, you're doing them a favor by letting them invest. Mixed with any annoyance they might feel about being approached will be the thought: are these guys the next Google?"

"Basically, a VC is a source of money. I'd be inclined to go with whoever offered the most money the soonest with the least strings attached. You may wonder how much to tell VCs. And you should, because some of them may one day be funding your competitors. I think the best plan is not to be overtly secretive, but not to tell them everything either. After all, as most VCs say, they're more interested in the people than the ideas. The main reason they want to talk about your idea is to judge you, not the idea. So as long as you seem like you know what you're doing, you can probably keep a few things back from them."

"Talk to as many VCs as you can, even if you don't want their money, because a) they may be on the board of someone who will buy you, and b) if you seem impressive, they'll be discouraged from investing in your competitors. The most efficient way to reach VCs, especially if you only want them to know about you and don't want their money, is at the conferences that are occasionally organized for startups to present to them."

"When and if you get an infusion of real money from investors, what should you do with it? Not spend it, that's what. In nearly every startup that fails, the proximate cause is running out of money. Usually there is something deeper wrong. But even a proximate cause of death is worth trying hard to avoid."

"There is nothing more valuable, in the early stages of a startup, than smart users. If you listen to them, they'll tell you exactly how to make a winning product. And not only will they give you this advice for free, they'll pay you."

"The slower you burn through your funding, the more time you have to learn."

"When you get a couple million dollars from a VC firm, you tend to feel rich. It's important to realize you're not. A rich company is one with large revenues. This money isn't revenue. It's money investors have given you in the hope you'll be able to generate revenues. So despite those millions in the bank, you're still poor."

"When you're looking for space for a startup, don't feel that it has to look professional. Professional means doing good work, not elevators and glass walls. I'd advise most startups to avoid corporate space at first and just rent an apartment. You want to live at the office in a startup, so why not have a place designed to be lived in as your office? Besides being cheaper and better to work in, apartments tend to be in better locations than office buildings. And for a startup location is very important. The key to productivity is for people to come back to work after dinner. Those hours after the phone stops ringing are by far the best for getting work done. Great things happen when a group of employees go out to dinner together, talk over ideas, and then come back to their offices to implement them. So you want to be in a place where there are a lot of restaurants around, not some dreary office park that's a wasteland after 6:00 PM. Once a company shifts over into the model where everyone drives home to the suburbs for dinner, however late, you've lost something extraordinarily valuable. God help you if you actually start in that mode."

"The most important way to not spend money is by not hiring people. I may be an extremist, but I think hiring people is the worst thing a company can do. To start with, people are a recurring expense, which is the worst kind. They also tend to cause you to grow out of your space, and perhaps even move to the sort of uncool office building that will make your software worse. But worst of all, they slow you down: instead of sticking your head in someone's office and checking out an idea with them, eight people have to have a meeting about it. So the fewer people you can hire, the better."

"Do you actually want to start a startup? What it amounts to, economically, is compressing your working life into the smallest possible space. Instead of working at an ordinary rate for 40 years, you work like hell for four. And maybe end up with nothing-- though in that case it probably won't take four years."

"If you want to do it, do it. Starting a startup is not the great mystery it seems from outside. It's not something you have to know about "business" to do. Build something users love, and spend less than you make. How hard is that?"

The essay is long, but well worth reading. Find it here. Read it. Learn from it.

The Jenius Has Quoted.

## 03 August 2005

### Entrepreneurial Basics

"The single most important criteria for a good early-stage deal is the quality of the CEO and the team. Investing in technologies or "market opportunities" without a good CEO is a key to disaster. Having said that, you need core skills/assets, uniqueness, a real market opportunity and a business plan that makes sense. Finally, the valuation has to make sense."

This quote is from Joi Ito, one of the many bright and incisive voices on and off the Internet. He has seen the entrepreneurial process from both sides, as business developer and as funder. What he says above is the very basic blueprint needed to create successful start-up businesses:

---High-quality CEO and team: Many entrepreneurs believe that VC firms and investors invest in ideas and markets. If you don't believe The Jenius, believe Joi: it's the people that matter most. And although experience matters, the willingness to align the idea to the needed experience is just as valuable. Nobody expects you to know everything, so you have to be savvy enough to locate the resources you need to bolster your weak points.

---Core skills and assets: This is basically an offshoot of having a good team, for a good team will include all the core skills and many of the assets you need to be a success. In essence, if you have been working in daddy's garment company all your life, don't expect investors to give you big checks for launching an Internet business in another industry. Play to your strengths, identify the basics, get them on board with your idea and secure as many assets as possible.

---Uniqueness: Every entrepreneur believes his/her idea is unique. "Unique" is very hard to do if all you're doing is a "me too" idea. It's easier to find uniqueness in the angle of attack than in the concept itself, to focus on your specific improvement rather than on the general category. Don't pitch an eBay clone as "Like eBay, but better!" Nobody will believe you. Instead, pitch it with your improvement squarely in the spotlight. Uniqueness doesn't come from wild creativity: it comes from focused strategy.

---A real market opportunity: This criteria often requires you to drag a horse to water and make it drink. The biggest market opportunities are beyond the vision and imagination of most people; that's why they are real opportunities. Many entrepreneurs slack off in this criteria, believing that "the market's obvious" or "everyone will want it." Here's a tip: words mean less than numbers and numbers mean less than experience. If you can't get numbers--and you often can't--create experiences, ways to show investors how powerful your idea really is. Prototypes, samples, run-throughs, simulations, whatever it takes to give the investor the feeling of how big the business opportunity really is. Is this hard work? That's why you're an entrepreneur...or aren't.

---A business plan that makes sense: My friend Roberto Filomeno and I reviewed over 400 business plans for investors. We used different styles: he started from the back, with the numbers; The Jenius started from the front, with the Executive Summary. Usually We'd look at each other and either nod or shake Our heads at the same time. We only disagreed once (and he was right, not Me.) From words to numbers, a business plan has to answer every question clearly, thoughtfully and honestly. It has to tell the story of your idea and how it will grow. It has to fire the imagination and be as realistic as an earthquake. It has to inspire and create trust. From concept to team to operations to marketing to exit strategy, a business plan reflects the entrepreneur and his/her team only to the extent they choose. A fund-worthy image requires a fund-worthy effort.

Now having said all that, is there anything on that list that We--Puerto Ricans of the dawn of the 21st century--cannot do?

The world offers opportunities every second. There's money galore for ideas that take advantage of global opportunities. What are We waiting for?

The Jenius Has Spoken.

## 02 August 2005

### Project Teams Now

Let’s get back to brass tacks re: Internet industry in Puerto Rico.

Last week, my friend Kevin and I were discussing recent events when he suddenly asked The Jenius “Where can we get a million dollars?” My reply was a waffle, to which he clarified “We could use it to fund ten projects, at \$100,000 each, to create new companies that would revolutionize local business.”

The Jenius agreed instantly and pointed out that the concept of “project teams,” mentioned earlier in this blog, was built along similar lines: local companies, using local resources to attack global markets. The only way to revolutionize local business is to make it clear that We can not only compete at a global scale, We have the resources at hand to dominate in global markets.

Kevin elaborated the concept to include a very heavy review session per project, to ensure that the concept is as strong as it can be and that the “seed” money would have the greatest impact. Nothing new there, really, for this “Special Fund” would be basically acting as a hands-on venture capital firm. The difference here is that the whole 10 project portfolio would be launched within a year.

Most VC funds in Puerto Rico are of the “home runs only” variety, essentially would-be “cherry pickers” looking to make big bucks with every project. It doesn’t work that way, for investing in new companies is a numbers game. For every 10 projects, you can expect (on average) 3 wipeouts, 6 average successes and 1 megawinner. No, the optimal strategy isn’t to “find” the megawinner; the optimal strategy is to fund 10 top-notch ideas and use the successes (and even the failures) to create the environment for a megawinner. One hears of legendary VC firms that launched Amazon, Dell, eBay and scores others, but one doesn’t hear of the hundreds of projects these same firms have backed that don’t streak across the economic landscape as blazing comets.

Over a period of almost three years, The Jenius evaluated over 2,100 business plans for a VC firm in New England. Of these, 11 were directly evaluated and 6 were funded. End result: five average successes, one wipeout. Net gain to the VC firm: 54%. Yes, one megawinner alone could have returned triple-digits, but the return averaged 18% a year, which is adequate. (The Jenius had the “slush pile.” From the “top prospects,” almost 800 projects were read, 91 presented and 61 were funded. The return there was well over 41% a year, but failures outnumbered megawinners 2.5 to 1.) The moral of this story is that doing the search-to-fund work is where the dividends are generated, not in the “lottery pick” method We currently employ.

Of course, now We have to find a million dollars. The Jenius has a suggestion: It might be easier to find 10-20 good ideas first, come together to polish them and then use the final group to seek funds. Great ideas presented well can find money anywhere, but the present environment of “weak ideas presented weakly” won’t find money anywhere except through political leverage in the local government. (The Fools know nothing about anything.)

So now, what constitutes a great idea for revolutionizing local business? It must meet the following three criteria:

1) It must propose a product or service that meets needs of consumers outside of Puerto Rico. Seems obvious? A recent article about Guayacán’s EnterPRize competition indicated that quite a few of the ideas presented were for local franchises and business expansions in Puerto Rico. Their target market of projects is different than what's proposed for this Special Fund, but even so, how can a business idea revolutionize local business if its target is limited only to the local market? That would lead to Red Ocean results (fighting for the same pie) instead of Blue Ocean results (creating a bigger pie.)

2) It must use local personnel and/or companies in its initial stages. Two reasons for this: establishing a power base and speed-to-market. Unless We develop Our own economic muscles, We will fall further behind. And when the project team has both talent and close access to more, the process of a launching moves faster. You doubt that? Then tell me why Silicon Valley rules and so many other places want to emulate it?

3) It must be built to last, not to be sold. Yeah, the dot-com dream was to build a company in 2-3 years and then sell it for megamillions. But look closer and you will see that the real success stories are the companies that ignored the short-term and focused on the long-term. In addition, a power base is not something you build then give away. For Puerto Rico to become a true global player, it will need 6-7 big homegrown successes. It might take a few more, but it certainly won’t take less. Look at it this way: six or seven megawinners are not that hard to create, not with the talent base We have here.

If We choose to do it.

The Jenius Has Spoken.