Book Worm

As an investor, you need to know what makes a business great and this book offers an intensely personal and practical framework to think about the culture of a company. Tony Hsieh’s book is filled with great stories, insights, and tips you can put to use in your business and in your life.

In most companies, employee compensation is a major line item under the costs head. So, it’s a common practice to hire best employees at the lowest cost possible and then retain them as long as possible. But there’s one company which gives its new employees an option to quit the job within the first week and pays them US$ 3,000 bonus for doing so. It’s a strange practice, isn’t it? Hiring a new employee comes with its own cost, and most new employees aren’t very productive for first few days because they are still getting acquainted with the new environment and perhaps learning new skills. So why would a company let go of employees who haven’t contributed anything and have incurred a cost for the company?

There’s is a strong reason behind this “Zappos Offer,” claims Tony Hsieh, founder of Zappos – an online shoe company. Zappos is an extraordinary business story – building a US$ 1 billion online business selling shoes in less than a decade. In a world crowded by thousands of mom and pop e-commerce companies, what makes Zappos special is its unique culture and its unconventional ways of doing business. In 2009, Jeff Bezos (Amazon) acquired it for US$ 1.2 billion on the condition that Zappos will continue to operate as it is without any change. That’s quite similar to what Warren Buffett does when he acquires a company for Berkshire Hathaway.

[Read more…] about BookWorm: Delivering Happiness

Human dishonesty needs to be investigated using the lens of behavioural biases. For most people, honest behaviour is less of a rational choice and more a function of psychological and environmental forces. Ariely argues that the factors driving dishonesty could be as simple as conflict of interest or even tiredness.

Convenience can sometimes backfire. With auto-locking doors it often does. Usually, I share a spare key with my friend but the last time my house door slammed shut behind me, my friend wasn’t available and I had to call a locksmith to open the door. I thought he would bring a large toolkit of sophisticated instruments and perhaps take his sweet time to open the door. To my surprise, all it took him was a thick piece of plastic sheet to pick the lock in 15 seconds.

“If it’s so easy to hack this lock then I should get a better and safer lock. Isn’t it?” I asked the locksmith.

“Sir, there’s hardly any lock that an expert locksmith can’t open.” He told me.

So why should anyone bother locking their doors? The surprising answer to that question is – “Locks are on doors only to keep the honest people honest.” This shocking sentence has a lot of wisdom in it. What if I told you that one percent of people will always be honest and never steal. Another one percent will always be dishonest and always try to pick your lock and steal. And the rest will be honest as long as the conditions are right – but if they are tempted enough, they’ll be dishonest too.

[Read more…] about BookWorm: The Honest Truth About Dishonesty

Business and life lessons from a musician who accidentally became an entrepreneur when he found himself running a multi-million dollars business.

Derek Sivers was a full-time musician in 1998 making a comfortable living. One day he decided to sell his music CDs online and found that there was no way for a small-time musician to sell online. So, he learnt to program and built a website to sell his CDs. Very soon his friends started requesting him to list their CDs on the website. That’s how CD Baby was born and 10 years later it was doing $100 million in sales. In 2008 Sivers sold CDBaby.com and gave away the proceeds ($22 million) to a charitable trust.

Sivers never wanted to start a business and when he was running CD Baby, he intentionally wanted to restrict the growth so that he could run it the way he wanted. Ironically, those self-imposed constraints became the trigger for CD Baby’s growth.

Selling my friends’ CDs was starting to take up a lot of my time. I realized I had accidentally started a business. But I didn’t want to start a business! I was already living my dream life as a full-time musician. I didn’t want anything to distract me from that. So, I thought that by taking an unrealistically utopian approach, I could keep the business from growing too much. Instead of trying to make it big, I was going to make it small. It was the opposite of ambition, so I had to think in a way that was the opposite of ambitious.

“The key point is that I wasn’t trying to make a big business. I was just daydreaming about how one little thing would look in a perfect world. When you make a business, you get to make a little universe where you control all the laws. This is your utopia. When you make it a dream come true for yourself, it’ll be a dream come true for someone else, too.

Sivers is the best example of what they call ‘an accidental entrepreneur’ and  Anything You Want is the account of his entrepreneurial journey and the lessons he learnt. I found that a lot of these lessons can be extended for investing success too.

So here are my favourite ideas from the book.

If It’s Not a Hit, Switch

Einstein once said, “The definition of insanity is doing the same thing over and over again and expecting different results.”
[Read more…] about BookWorm: Anything You Want

Phil Knight’s candid and riveting memoir of how he built Nike from scratch. Knight shares the inside story of the company’s early days as a fearless start-up and its evolution into one of the world’s most iconic, game-changing, and profitable brands.

It was 2005 when I bought my first pair of Nike. I wore them to work, for running, for outings and almost everywhere. I waited five years for those pairs to get torn so that I could buy new ones. They never did. Sturdy brats! I eventually donated them to make way for the new ones – another Nike – and since then I have never used any other brand.

I am sure millions trust Nike for its comfort, sturdiness, innovative designs, and cutting edge technology. Nike’s reputation is simply unparalleled. Its trademark – the swoosh – is more than a logo. It’s one of the few icons instantly recognized in every corner of the world.

However, I never knew that Nike was the brainchild of one man, himself an athlete. He borrowed fifty dollars from his father and launched a company with one simple mission: import high-quality, low-cost running shoes from Japan.

The man was Phil Knight. And  Shoe Dog is Knight’s candid and riveting memoir. He shares the inside story of Nike’s early days as a fearless start-up and its evolution into one of the world’s most iconic, game-changing, and profitable brands. Shoe Dog is nothing less than a business thriller and perhaps the best business book that I have ever read.

[Read more…] about BookWorm: Shoe Dog

The traditional way of learning history in the classroom has always focused on memorising the dates and events. Yuval Harari’s book will change that forever. Sapiens provides a sweeping history of human race from 40,000 feet. Harari’s observations and insights aren’t merely interesting but highly provocative because they will challenge your deepest and dearest assumptions about this world.

The gentleman who taught us history course in school had a strong baritone voice which was in stark contrast to his fragile-looking structure. The only reason I remember him even today is because his voice still echoes in my head. The endless lectures where he would dictate the historical events and we would ferociously note down every single word. I am sure he knew his subject well but never bothered to convince us why studying history was important.

It wasn’t until 2015 that I learned the importance of history. And the credit goes to Yuval Noah Harari, who not only made a dry subject very interesting with his unique style of humour and penetrating observation but also because he presents convincing arguments about why one should study history. In his book Sapiens, he writes –

Unlike physics or economics, history is not a means for making predictions. We study history not to know the future but to widen our horizons, to understand that our present situation is neither natural nor inevitable, and that we consequently have many more possibilities before us than we imagine. For example, studying how Europeans came to dominate Africans enables us to realise that there is nothing natural or inevitable about the racial hierarchy, and that the world might well be arranged differently.

Sapiens was the best book that I read in 2015. And I am not alone in declaring it as the most important book that every knowledge seeker should read. Mark Zuckerberg, Barack Obama, and Bill Gates have openly and strongly recommended Yuval’s book.

I guarantee that once you read the book, your worldview about the past, present and future will change dramatically. It’s such a rich book that I had to literally stop at every page and marvel at Harari’s jaw-dropping insights.
[Read more…] about BookWorm: Sapiens