“Setting out on an ocean voyage, with water in gourds and pounded tubers tied up in leaves, he would point his canoe into the right slant of wind, and then along a path between a rising star and an opposite, setting one. With his departure star astern and his destination star ahead, he could keep to his course.

By day he was guided by the rising and setting sun but also by the ocean herself, the mother of life. He could read how far he was from shore, and its direction, by the feel of the swell against the hull. He could detect shallower water by colour, and see the light of invisible lagoons reflected in the undersides of clouds. Sweeter-tasting fish meant rivers in the offing; groups of birds, homing in the evening, showed him where land lay.”

— The Economist, July 24th to 30th, 2010

In 1976, Mau Piailug, a Micronesian man from Satawal Atoll, sailed from Hawaii to Tahiti without a compass sextant or charts. The last palu (“initiated navigator”) of his kind, he passed away on July 12th at the age of 78.

I really don’t like Drupal. I’ve been told that “it can do anything”. I think that’s its downfall.

Most of the Drupal setups that I’ve used haven’t anticipated all of my use cases. In every case, I’ve had to go back to the developers and ask for additional functionality to be added. Of course, it can be done, but only days later, and that’s not a realistic timeline for anything in 2010.

In contrast, WordPress is fairly rigid. Every install looks the same. It wasn’t intended to do everything. Because it operates within several constraints, it has forced developers to be more creative with their solutions. And users have had to conform to the framework, so it becomes more familiar to more people faster. Because of it’s limitations (and the forced adaptations of the WordPress community) it has many more resources — plugins, themes, code snippets — available to it.

Choosing between the two? Go with WordPress.

The really good manager does not wake up in the morning and say, ‘This is the day that I’m going to cut costs,’ any more than he wakes up and decides to practice breathing.

– Warren Buffett

Everything with money is either an investment or the sacrifice of one. This seems simple enough, but the more you think about it, the more shocking is it’s impact.

What It Means For Business

In short, all any business is about is creating positive returns on shareholder equity that are greater than the combined impact of inflation and taxes.

Whether publicly traded or not, any business that fails to do this is going to erode shareholder confidence — even in small business — and encourage the owners to invest their money elsewhere. “Sustainable business”, 1%FTP and all the feel-good karma can’t escape the fact that if companies like Massive Mouse and Patagonia don’t perform, then:

1. I would rather start a donut shop; and
2. Even Yvon Chouinard would rather start a donut shop… because no amount of karma is gonna pay for those fishing trips.

Also relevant is that any gain, regardless of size, operates by the same principle whether in 10s of dollars or 10s of billions. What makes larger numbers more exciting is their relationship to our individual cost of living. And the only way to get to larger numbers is to have the smaller numbers perform until they’re large. If “I only made X%” repeatedly results in those gains being spent on coffee and ice cream, then the compounding — that could make a small number a big one — is lost. The opportunity costs of that coffee and ice cream — and especially of that new car — are huge.

In addition to positive returns on shareholder equity, the goal of business, work and investment is the same: to create livable cash flow. Jobs are interim solutions for small portfolios that cannot grow themselves and support their beneficiary at the same time. Jobs create livable cash flow for the beneficiary and hopefully also accelerate the portfolio’s growth through additional investment. Once the portfolio is big enough to both grow itself and maintain it’s beneficiary… well then, we can get some serious, personally-important shit done. (Some people may say “retire” but I’d rather French kiss a shotgun than do what most people mean by retire — i.e. kill time until we die. “Financial independence” is a much more palatable term.)

The Opportunity Cost

So, in mathematical terms, how important is it to save, invest and pinch pennies? What is the opportunity cost of every dollar we spend today?

If we spend a dollar today, then how many future dollars are we spending if we assume that the other option is to put that dollar into an S&P 500 Index and it would perform as it has historically? To make it easier (perhaps more painful), what was the opportunity cost of every dollar we spent in 2002 over the following five years?

If invested in an S&P 500 Index fund, $1 at the end of 2002 would have been worth:

1) $1.29 at the end of 2003 (28.7% annual growth rate);
2) $1.43 at the end of 2004 (10.9% compound annual growth rate)
3) $1.50 at the end of 2005 (4.9% CAGR)
4) $1.74 at the end of 2006 (15.8% CAGR)
5) $1.83 at the end of 2007 (5.5% CAGR)

So every dollar we spent in 2002 was the equivalent of spending $1.83 of our 2007 dollars. (Bull years for the market to be sure, but the principle is the same regardless of the degree of gain.) Suddenly the dollars at the shopping mall and the coffee shop take on a whole new value…

“They say that bad things remain in your memory longer than good things, a thought originated by people who live monotonous, uniform lives. They do remember more of the bad because their ‘good’ is so uniform, so mundane, and so dull that they can’t remember it. Any unpleasantry, even the smallest, is a deviation from the flat, eventless line of their lives, and is therefore remembered.

But if the line is interrupted, if it oscillates in peaks and valleys, if happiness is difficult, obtained in battle and adversity, if a majority of valleys crowd at the base of a single, large peak, then the peak itself looks better and its memory is retained more firmly.”

— Vladimir Shatayev, Degrees of Difficulty

“I never thought I would be way happier when I had 2X instead of X. You ought to have a good time all the time as you go along. If you say, ‘I don’t really like this job, but in three years it’ll lead to this,’ forget it. Find one you like right now.”

— Warren Buffett, from a 1991 speech to undergrad students at Notre Dame

It is extraordinary to me that the idea of buying dollar bills for 40 cents takes immediately with people or it doesn’t take at all. It’s like an inoculation.

If it doesn’t grab a person right away, I find that you can talk to him for years and show him records, and it doesn’t make any difference. They just don’t seem able to grasp the concept, simple as it is.

I’ve never seen anyone who became a gradual convert over a ten-year period to this approach. It doesn’t seem to be a matter of IQ or academic training. It’s instant recognition or it’s nothing.

– Warren Buffett, from his 1984 speech “The Superinvestors of Graham & Doddsville“

In my last post, I talked about the significant advantages that come from leveraging SMS, email, blogs and Twitter for greater productivity ad effectiveness. No doubt some readers may be wondering, “if the most productive kinds of communication are asynchronous, won’t that erode corporate culture?”

Corporate culture is important. It’s the foundation for any business; more important than skills or experience. A good culture will lead to good business and vice versa. But it’s a mistake to think that working verbally has any positive impact on the business and it’s culture.

Improvements in corporate culture come from two sources, and neither of them have anything to do with boardroom tables or water-cooler chit-chat.

First, do your job superbly well. Become a crucial member of the team by exceeding the need. In contrast, if you constantly let your team down, even if you tell great jokes, they won’t want to hang out with you for long.

Second, have a meeting. But don’t pretend it’s about work. Go for lunch or spend the day rock climbing. Jump out of airplanes together. Whatever, just have fun. Spend time meeting the way meetings were designed: important to corporate culture and honestly unproductive.

What most people think of as lonely people hiding behind computer screens will soon be a new world order. And it’ll soon be a powerful business advantage in all industries, not just among web professionals. Or it will be a huge disadvantage if you’re a late-adopter.

The texting teens, tweeting twits and pimply-faced nerd stereotypes will soon be upgraded to mansion-owners and Ferrari-drivers when more of those same folks become Presidents, PhDs and CEOs. And those that still use fax machines are going to be left in the dust.

The “nerds” — a positive term, I think, for a group of which I hope to become a member — are winning because of three distinct advantages: asynchronous communication; the productive, personal nature of text; and most importantly, knowing when to use what.

Asynchronous Communication

A hour-long meeting with three people is one hour long. But it costs three person-hours. And because it’s face to face, our socialization compels us to hi-how-are-you niceties that produce nothing. Personal agendas redirect meetings, and needs-to-be-heard about something irrelevant waste more time still. So let’s bump up the cost of that hour-long meeting to, realistically, nine person-hours. Still wanna get together?

But anyone who has genuine control over their time, their email and their keyboard is kicking ass in a serious way just by successfully using asynchronous communication — essentially leaving messages for people to reply to when it’s convenient and most productive for them. It’s not only productive, it’s a hell of a lot more respectful than knocking on someone’s door and knocking them out of their “zone”.

As a result, nerds aren’t having one meeting after another, but 10s and hundreds of meetings at a time. And rather than wasting nine person-hours, they’re wrapping things up in nine minutes. Total. All communicating participants combined.

Text is Productive, Text is Personal

People transitioning from socialized methods of communication into text-based email will over-use “hi” and “regards”, etc. But once a relationship has truly become close, personal and productive, that waste is gone. Emails are without niceties and include only actionable information. The true test of a good work relationship can be measured by how much you don’t say.

On the other hand, things like blogs and Twitter are also text-based, but you get to know someone in ways that you wouldn’t otherwise be able to, even if you had lunch with them every day for a week.

Spend an hour with me and you’ll know very little. Spend an hour reading this blog and you’ll learn much more.

Knowing When to Use What

People that rely entirely on face-to-face (or voice-to-voice) communication are at a distinct disadvantage in the speed of their work and the success of their career. Talking is simply too slow. And if you’re competing with 100,000,000 nerds typing at 60 wpm — and, like it or not, you are competing with them and you will be more and more — it’s not difficult to figure out who’s going to win, improve, succeed, and get the job done.

So… please use:

• Email for productive exchanges of information, NOT for hi-how-are-you or to broadcast your first trip to Asia;
• Intranets for inside-company messages and announcements;
• Project management programs for, well, project management;
• Wikis for broad, collaborative efforts;
• Twitter as a personal or corporate mini-blog or customer support venue;
• Blogs for personal or corporate commentary, description and announcements;
• Phone when all else fails, or if the email would be too long, or if you’re just “meeting” someone for the first time, or if — what is unfortunately the case with most phone callers — you have no idea what this article is talking about.