You were born to pitch

baby pitching

Pitching is one of those things that some of us love and and some of us hate. But, we all know it is a necessary part of startups and economic life in general. Here’s something many people don’t know – everyone is good at pitching, everyone is doing it everyday, and in fact, it was the very first thing we did the moment we were born. Yep, the first thing you did as a human being was pitch. Here’s how it went:

You were born into the world scared and alone as you exited the womb. You desperately wanted to stay alive, and immediately went into pitch mode. You cried for your mother to hold you, cuddle and warm you, to provide your first taste of breast milk. You put on your most adorable sad face, and used the only assets you had at your disposal – facial expressions and noise. You didn’t even have any words, but you made an immediate connection through passion and fear and hope – you connected. And it worked – you are here.

It goes further than that. You probably pitched a few times already today – proposing what to have for dinner, which movie to watch with your partner, or what to do on the weekend. You may have pitched to a work colleague on which place to get a coffee in the morning or what time to go and why. Proposing ideas, suggesting activities, it’s all a manner of pitching. And once we start to pay attention to the fact we are constantly pitching, then we can start to understand our own technique and bring it into the more formal circumstances. The best type of pitching we can do, is to bring our casual daily approach – the same approach that helped us survive in life up until now – into our business life. We need to take our natural style into those formal pitch moments. When we do this we become more endearing, believable and affable. The trick is that we need to be our natural selves. We need to embrace our natural style and personality – that same one that helped you make friends.

If you want to learn to pitch, then the best thing you can do is pay attention to the pitches you’re already doing. Take note of yourself and then take your existing informal method  to places where it matters formally. You’re already a gun pitcher, you just need bring your subconscious behaviour to a conscious level.

Soundbites full of goodness

moveable type

Yesterday I met a fellow called Joseph Gagnon. We were both doing a talk at the same gathering. Before either of us went up on stage we really connected philosophically. You know, that echo chamber of existing beliefs the world is quickly becoming…. well, this was one of those moments. So, when he told his story I scribbled a heap of his soundbites down, knowing they’d be enjoyed on this blog too. He also stimulated some of my own thoughts which I’ve mashed in among these. There’s no particular order, other than the order of goodness they deliver. Enjoy.

– How do you know if someone really cares about you? Here’s two things they often do: (1) Think about you when you are not there. (2) They help you before they help themselves.

– Things just work today. Complete functionality is just a cost of entry. How things connect is far more important, even with cars. We no longer look under the bonnet, but we look for connectivity.

– Why is texting and Instant Messaging so powerful? It’s both synchronous and asynchronous. It’s developing it’s own dialect of which we are the authors. It blends immediacy and even emotions :-). It’s verbal, auditory, visual and pithy…. and yet it can say so much so very quickly.

– While we all aim to sell something, the number of people who actually use it is far more important than the number of people just buying it.

– The role of the teacher is changing, but has to change more. It’s not about instruction or even facilitation. It’s really about dream making. If they don’t help with that, then why bother learning what they are teaching?

– Voice mail is dying. People don’t want to leave them, and people don’t want to retrieve them. While you’d think a voice recording is superior to an IM, our humanity senses the moment is less authentic and there’s a mismatch between the dialect and the delivery tool.

– The moment customers are after is a moment when the only response they can give a company is, “Wow, I can do that?” This is a moment most front line staff and CEO’s know how to deliver, but don’t have the authority or the courage to make happen. Fear is the main driving corporate emotion. The fear response is: It might not scale, it might have a short term cost impact.

– When presenting our personal stories are more powerful than those of some external success story. We know that matter to us more. And our experience is probably more like theirs. The probability of connection and inspiration transfer is far higher.

New Book – The Great Fragmentation – out now. 

Welcome to the culture of Extremistan

Jet pack flying

Famed author and modern day renaissance man Nassim Taleb talks about Extremistan. While his analysis refers to black swan events, randomness and outliers in the economic world, it seems as though pop culture is on a similar trajectory.

Tattoos used to be an extreme thing in themselves. Now real tattoo people have to differentiate through full body cover and face tattoos. Extreme Sports used to mean things beyond golf, football and athletics like motocross. Now they look more like base jumping, jetpack flying and cave diving. Game Shows used to be about trivia and family fun guessing answers to win cars. Now they involve near death experiences on tropical islands to win millions of dollars and potential reality stardom. Travel Stories used to be interesting enough when someone visited far flung Asia or eastern Europe. Now hardcore globe trotters visit Afghanistan and Honduras to ensure their story gathers more kudos.

I’m sure you can think of another zillion examples of the progression towards our culture of extremistan. It is a clear reminder we are in a world which is so connected and immediate that most things have already been seen and done. What used to be unusual is just the new normal. There’s very little scarcity when it comes to ‘things and activities’. And because one of the only things that is scarce these days is attention, many people are literally risking their lives to get it. This tells us much about the human condition. We crave attention. But attention is really just a proxy for something much more human. We want to be recognised and acknowledged, and maybe deep down we just want to feel loved.

What an opportunity. To pay attention to everyone, and not just those who will go to the extreme to get it. Genuinely caring about people and making them feel your love might be the best low cost strategy we can find these days.

New Book – The Great Fragmentation – out now!

How the technology works is irrelevant

Screen Shot 2015-02-24 at 8.42.07 am

There are very few people in the world who know how the thing in the picture above actually works. Yet, there are also very few people in the developed world who have not been a major beneficiary, and even a driver of this complex technology. There is not generally a fear of the technology that makes cars do what they do. Instead we embrace the benefits they deliver and use them in every way we can. They changed where we live, how we travel, our leisure patterns, the structure of living spaces and cities, they changed the world more than anything that came before them. They totally transformed our culture.

And it is happening again. A new set of tech tools are providing both fear and opportunity. I wasn’t around when cars became common place, but I imagine there was as much fear of the unknown then, as there is now. There was probably talk of jobs evaporating and the end of economics as we know it. And yet, it was the bellwhether for the greatest period of prosperity in human history. While it’s impossible to know how most anything works these days (division of labour), it’s very easy get behind the power technology provides to win in business. In fact, it’s probably easier to win because fear of the technology is holding so many people back. We don’t need to know how something works, we just need to know that it does. And once we embrace that fact, it will reshape our perspective and quite possibly our fortune.

The culture of the power flip

upside down house Many of the economic ideologies we learned in business school are turning upside down. What once worked, now doesn’t. What was expensive, is now cheap. What was impossible, is now humdrum. But unless we stop, consider and look, we just might miss some of these changes in what is true. Capital used to be expensive, and labour used to be cheap. Now it’s moving in the opposite direction. We used to think that the accumulation of capital was the key to success. But we forget it was a substitute to try and uncover intrinsic value. Thankfully we are starting to remember money is a tool, and not an end. Creativity used to be chosen by gatekeepers, now it’s chosen by us through sharing. We got tricked into believing that we should leave creative pursuits to others in the media, in the movies, and to the rock bands with recording contracts. To those who got picked. But now we know that was just because they owned expensive tools and could afford to buy our attention. We’ve now proved there is no monopoly on art, we’re all artists. Technology used to be expensive, and walled behind industrial barriers. We could only experiment with it while ensconced in corporate quarters building things for them as employees. Now we have NASA in our Pocket, maker spaces and collaborative tools to make better tech than those who gave us the tools to do it. The best tech now comes from hacking entrepreneurs because it’s accessible to all now, at disposable price points. The challenge most established businesses face isn’t technology, or ideas but belief systems. They develop a culture that makes them fall in love with what made them successful. It’s why big business is being disrupted after years of relative stability. Sometimes the most important thing ‘Big Co’ can do is forget what they know, and maybe even burn the map that got them to their current destination. New Book – The Great Fragmentation – out now!

Future Lab – Q & A

Future Lab

I was recently asked by the super clever Future Lab team of LS:N Global to do an interview on a few topics including: The New Australian Consumer, Crowd Finishing or Pre- Hacking (a theme in my book) The Sharing Economy (A former startup I had was early in this space), Reverse Retail, and Innovation via Skunk Works.

While writing up some thoughts in my note pad, I thought it would make a good blog entry. And then I wrote ‘blog this’ on the first page of my notes. And that is exactly what I have done – literally. It will take some interpretation (hand writing, typos, order) as it is just a mind stream of half sentences, but often the unfinished nature of things is what makes them valuable.

Screen Shot 2015-02-13 at 8.29.36 pmq2Screen Shot 2015-02-13 at 8.29.49 pmScreen Shot 2015-02-13 at 8.30.28 pm

Screen Shot 2015-02-13 at 8.30.10 pmq1

 New Book – The Great Fragmentation – out now!

The Financial Wealth Ratio

old money mansion

When it comes to money there is a simple ratio which tells us the real story of how wealthy we are. Here it is:

Financial Wealth = Passive Income / Earned Income.

We should be aiming for a number which is greater than 1: The reason this is such an important formula is that it takes into account the most important and scare resource – time. While it includes money, it goes beyond it. It infers that earning money from control and ownership of assets is far superior to earning money through labour – regardless of how big the earned portion of our income may be. Passive income does not require our time to be earned.

So what things are included in Passive Income? They include but are not limited to Shares (Dividends), Property (Rents), Licensing Rights (Royalties)… the assets we’ve acquired or built which put money into our pockets. What it is not, is the net value of those assets, just what they generate in real returns – actual cashflow.  Much like a salary is a ‘real’ return on our labour.  And while trading large capital assets may generate actual cash returns, that return is singular and only available at the point of transaction. Unless we happen to be in the business of trading assets, it doesn’t provide a true month to month reflection on our cash position. Passive income is about earnings and probability of those earnings to be maintained over time.

Why Passive is more important than Earned: Speaking of probability, another reason passive income is so vital is that it has a high probability of increasing. Rents and corporate earnings in most developed economies increase at around 10% per annum. Wages on the other hand increase annually at less than 3% per annum. Passive income also removes the power of others. When we earn wages, we are at the whim of the work environment, the company, our boss, the economy, technological upheaval, and all other manner of things which make having a job inferior. Earned income is riskier than than passive income because it generally is not something we control. Sure we can influence it by becoming more skilled and valuable to the marketplace, but we can never have total decision authority like we can with allocating our money to a portfolio. Word of warning – passive income, doesn’t mean it shouldn’t be actively managed, or that we don’t need to earn money to acquire it – it takes effort, but builds independence. In other words a passive attitude doesn’t build passive income, quite the opposite.

As mentioned in an earlier post about building financial wealth passive income is the money we earn when we are not in the room. This is actually more important than total income is. Firstly, passive income usually grows over time. Rents go up, anyone who has rented a house knows this pattern. In good companies earnings increase over time. Secondly, passive income is important, because it should be regarded as bonus money. We can manage to live on the earned portion of our income. We know this is true because most people start with zero passive income – unless you’re a trust fund baby. The passive portion becomes it’s own eco system of building more of itself – think compound interest. More on this later.

A story about the Stars: Not those in the sky, but rock stars, sport stars and movie stars. There is no shortage of stories about these people going broke. Bankrupt after earning zillions of dollars. In fact this statistics is very telling: By the time they are retired for 2 years, 78% of NFL players are bankrupt or under severe financial stress. This documentary – ESPN 30 for 30 Broke is worth watching on the topic. How is this even possible? The reason rock stars and sports stars go broke is because they have a poor ratio. Pure and simple. They earn big, have bad spending habits and don’t create a good financial wealth ratio while they have the chance. It should be easier for them than anyone, and most don’t take their opportunity. They don’t de-risk their future.

A story about the Rich: Look at any rich (financially rich) people you know, famous, or even that local business person you admire and you’ll see a good ratio. They own properties, have equity stakes in successful businesses and make the majority of their money from the passive side, not the earned. Even most employees who get rich – think CEO’s – become so from share options more than they do from pure wages. The pattern is clear.

How to hack your ratio: The trick is to move money from the earned income denominator to the passive income nominator. Until at some point there is more passive than earned income resulting in a ratio of 1 or greater. So long as we keep our spending in check, once we earn more money passively than actively, work becomes a choice for both type and frequency. Another hack for building this equation in your favour is ensuring your earned income and passive income are in the same realm or industry. This usually gives you an advantage in your passive income building as your skill base moves you up the learning curve of both sides of the wealth equation. This strategy often results in bigger returns both earned and passive as they interact interdependently. Stick what you know, and leverage knowledge advantage to beat the averages.

Know your ratio: We should know your position, your ratio. You should have a plan to increase the passive portion. The problem is that most people go through life aiming to increase the earned portion more than they do the passive portion. This ends up as a micro version of the rock star problem. The life style spending increases with the income. Knowing your ratio allows you to aim and game the system. To set targets for increasing the passive side. If your ratio is 5% this year, then aim to acquire investments to make it 10% next year.

Other advantages with the Wealth Equation: In most economies the taxation system gives large advantages to passive income. Often dividends are fully franked (the tax is already paid for you). You can offset your earned income with the expenses associated with generating your passive income. You don’t have to pay tax as you earn this money (PAYE), and can earn interest on the returns before it gets taxed. As well as many other structural benefits, such as paying lower corporate tax rates (30% company vs 45% top rate for a mere human) via holding the passive income assets in a private company.

How to build Passive Income: Save at least 10% of what you earn and invest it. The two simplest places to invest would be residential property and index shares. Invest the return on investment from the passive income into more passive income generating assets – never spend any of it. If we can manage to do this, then as soon as our ratio is 1. Work becomes a choice not a necessity.

To do: Add improve your wealth ratio to your goals list for 2015.

New book – The Great Fragmentation – out now!