Daily Intent

Santa Barbara, CA
Yesterday, 10 entrepreneurs and myself were fortunate to spend 2 hours learning from an expert in “compounding creativity”.

Wayne Rosing is an executive outlier; it’s even fitting to call him an executive outlaw.

He is a man that wants world perspective changing results.  He thrives on grandiose ideas.  And he has the intelligence and unconventional managing know how to get it done.

It all started in the 70’s working on the frontier of personal computing stations.  During this era, time card computing was the norm.  You’d pay expensive rates to use a large computer machine.  You had to be fortunate enough to live close to one.  You had to wait your turn.  The computer was inhibiting and accessible to very few.  He believed there must be a better way.  And the better way was through personal workstations.

While at Apple, he worked on a project called “Lisa”.  From this project came many foundational blocks for the Macintosh computer.  A mouse, a computer screen, and a keyboard.

He then moved on to Sun Microsystems helping create the foundation for Java and servers connecting many personal workstations, both were creative solutions to the rapidly growing computer industry.

After a brief retirement (retirement is overrated), and an extremely successful stint at a lesser known company, he was one of 60 plus engineers interviewed for the vice president of engineering job at Google.

At the time, there were 60 - 70 engineers on staff.  Google was a risk, and they were paying less than going Silicon Valley rates for talent.   Even though they had over $30m in venture funding they were “froogle”.

He believed in their culture and understood how to leverage it.  He got hired.

Wayne’s goal was to grow this base to 1000 engineers in five years. 

To do so he would implement an approach that challenged the board member’s belief system.  The board members wanted a tie wearing, stiff engineer.  They wanted a man of order and strict guidelines.  If they were to be 1000 engineers large, they needed a hard handed leader.

What Mr. Rosing, disguised in casual attire, brought them was a genius in compounding creativity.  It all starts with who you hire.  He hired only the “insanely brilliant”.  He hired social personalities.  He wanted the best and brightest, but ones that could work on team projects.

He convinced these talents that Google was worth their time.  He got them to buy into the mission of organizing the world’s information.  They could have influence in their position.  Their ideas would have impact.

Then he provided the environment for these groups, no larger than eight, to thrive.  They would quickly create projects, power forward, complete the mission, them dissemble the team leaving the members open to form with others on other projects.  Think of a flock of birds coming together them separating, repeatedly forming a beautiful sight.

He implemented the 20% rule for which Google is known.  20% of their time would be spent on a personal interest project outside their main project in efforts to better Google’s reach.  Often these projects were placed on Google Labs for the world to determine if the project was worth their resources.  Gmail came out of this along with many others.        

His approach was to provide the most fertile environment for ideas to grow and compound off themselves.  Thus, he was more of a guide than a manager.

To further paint the picture of his management style, when brought forth a pair of arguing employees, he would give them the option of having their fate settled over a coin toss or they could work it out and come to an agreement.  66% of the time they worked it out.

Google is now a huge success, changing the way we all see and interactive with information.

His next conquest is in the astronomy field.  Las Cumbres Observatory.  He once again has hired the best and the brightest.  They are sociable beings.  And they have bought into the mission of revolutionizing the understanding of the universe via a global network of telescopes.  He is managing them with the same style as he did at Google, an executive outlaw.  Only this time 80% of their work is personal projects.  Scientific understandings are changing because of their work.

The creativity is compounding.
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PLAN
Catalyst for Thought.  MINDS executive lunch.  Next up, May 27th, Yulun Wang - Founder and President of InTouch Health and past founder of Computer Motion.  Both companies are leading the medical industry into the 21st Century.  Register at www.CatalystforThought.org to ensure you receive the registration emails.
Team in Training.  Bachelor and Bacherlorette Auction.  May 13th.  Canary Hotel.  Plan on bringing all your wealthy single friends.  We’ll “auct”-ually have a great time.
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LEARN
Buzzword: Garbatrage
“An increase in price and trading volume in a particular sector of the economy that occurs as a result of a recent takeover, which initiates a change in sentiment toward the sector.

Garbatrage is also known as “rumortrage”.  Garbatrage is usually used to refer to firms that are not directly related to the takeover. Speculators feel that the initial takeover is a precursor to more takeovers within the sector. Proponents of behavioral finance theory would view this psychological impact as evidence supporting their theory. “  -Investopedia.com

  Six Points to Ponder:

   1. 7-11.  The Dow surpassed 11,000 this week.  13 months ago it was below 7,000.  A 60% gain.  This week The Dow: up slightly, 11,009. The S&P 500: nearly flat, 1192.  The Nasdaq: up, 2480.  Oil: Down $3.  $83/bbl.
   2. Tortoise Progress.  Fed Chairman, Ben Bernanke, once again reiterated the slow and steady progress of the American economy.  Limited inflation.  Slow Growth.  There are no signs yet to reason for increasing rates.  Retail up 1.6%.
   3. Profiteering, 30%.  Google, Intel, AMD, JP Morgan, and UPS all reported strong profits to blast off earnings season.  
   4. Down Payments, 30%.  China, in efforts to cool down its real estate asset bubble, increased the minimum down payment on home purchases to 30%.
   5. Beef, 30%.  The price of beef is up over 30% from its lows putting pressure on restaurant chains to make a decision, raise prices and eat their own beef or find savings else where: wheat, chicken and cheese costs.
   6. Kobe Beef.  Sitting out a few games to regain his health before playoff time, there is no doubt Kobe will have beef with all contenders.  Mickelson is Magic at the Masters.  “Gold jacket.  Green jacket.  Who gives a …” -Happy Gilmore.

Positives:

    * It appears, in my limited knowledge, that the big, strong companies are doing as expected during a recessionary economy.  They are growing bigger and stronger.  They are expanding into new markets.  They are gobbling up market share and they are now beginning to spit out big profits.  All names listed above posted over 33% profits.  Google mentioned their profits stemmed from the larger markets getting back into ad-search marketing with renewed focus and breadth.  As a result, Google benefited.  $5Bn in profits.
    * Breaking through the 11,000 barrier exemplifies investors confidence in long term sustainability and progress.  The markets are almost always ahead of the current state of affairs.  The retail sales figures were strong.  The validity isn’t in question, but the foundation for why people are spending is.  Many believe the excess retail spending is a direct result from people either not paying their mortgage or no longer having a mortgage to pay.  The forgiveness of debt or lack there of in paying their debt frees up excess funds for smaller, daily purchases.  Might it be best to proceed forward with the “optimistic with a raincoat” mentality?
    * Earth Day is this weekend.  Given the reality of beef productions intense strain on the environment via CO2 output and deforestation, higher beef prices will be applauded.  Higher prices will suppress demand.  Suppressed demand will lower the environmental impact over time.  One main for the higher prices is because of heavy rains this year.  They have created “ideal pastures, which should cause producers to hold onto their cows longer to fatten the animals unless buyers pay a premium.”
    * China is now taking steps to moderate excessive growth.  China believes the best solution to tempering growth in the real estate industry is via down payment and liquidity requirements rather than via increased interest rates.  They increased down payment requirements to 30% for homes over 90 square meters and to 50% for second homes.  This is a different view than the United States where our leaders see interest rates as the reigns attached to the horse.  For economists, this will be a nice case study to see which is best in each culture and economic regime.
    * Saturday and Sunday the NBA Playoffs kickoff.  Kobe vs. Durant.  King James vs. D.Rose.  D.Wade vs. Pierce.

Negatives:

    * Jobless claims were up along with lawsuits and corruption.  Unemployment continues to be a driving force holding back the economy.  Goldman Sachs and HP are in hot water as the government continues forward with probing and lawsuits.  A few bad apples’ actions and briberies may end up leading to large dollar amount losses to each company.
    * Thailand is looking to oust their prime minister.  Kyrgyzstan just recently ousted their leader.  People have lost their lives over both occurrences.
    * US military efforts are struggling in Afghanistan because of a heightened number of civilian casualties.  There is no justice in these instances.

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FEAT
If you have an example of accomplishing a feat never thought possible, please submit a short paragraph about it.  I’d like this section to continue encouraging us all to expand our breadth and depth of life experiences, accomplishments and understandings of oneself.  Be safe.  But be adventurous.
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GET INVOLVED
Local:

Earth Day. 40th Anniversary.
Where: Alameda Park.  1400 Santa Barbara St.
When: Saturday, April 17th.  11am - 7pm
Cost: Free.
Why:  Learn ideas on how to live a more sustainable life.  Start at home as the theme this year is “Bringing it Home”.
For other fun ideas, go to www.lovemikana.com

Live and Be Well,

Jeff Bochsler