Enough by John C. Bogle

Is there no limit to what enough is in modern society? Capitalism is at play. Management earn obscene amounts of compensation. Greed can cause a system’s downfall. How long can materialism and greed last? I have been given enough, in more aspects than just financially. My great grandfather was incredibly thrifty. My family was fraught with financial difficulty. I had to work when I was young in order to feed the family. I learnt to accept responsibility when I was young. I did well in school and mum put in so much effort into investing in my education. My attitude in life has been influenced by my family. The first ‘diamond’ of my life was my admittance to the Blair Academy. My family was incredibly close-knitted and that helped a lot. Later, I got admitted to Princeton University on a full scholarship. Even then, I had to take up temporary jobs for me to get paid. However, my parent’s marriage fell apart after that. I discovered that the mutual fund was new at that time and wrote about it. Mr Morgan was the boss of Wellington Fund. When I was 35, he said I could take over the firm. After a disagreement with the other shareholders, I got fired. My business model was to manage our affairs internally and not require any external party to manage it. Vanguard would have to do everything in-house if it wanted to succeed. Before 1875, I founded the world’s first index mutual fund. The fund didn’t need to be managed as the returns would track a basket of stocks that were representative of an index. ‘If you build it, they will come.’ Thankfully, we got approval from the SEC too. A donated heart was one of my ‘diamonds’ too. This heart enabled me to live healthily. Be blessed by the number of diamonds you have. Humans are all too interested in short-term gains. Companies should recount their past values which enabled them to thrive. Virtue doesn’t come from money. It comes from doing good.

Some men wrest a living from nature and with their hands; this is called work. Some men wrest a living from those who wrest a living from nature and with their hands; this is called trade. Some men wrest a living from those who wrest a living from nature and with their hands; this is called finance. – Old Epigram from 19th Century Britain

There is a food chain and the investor is at the bottom of it. The financial system cannot be too costly. We are often trading paper and paying bankers too much. In addition, the financial system is fraught with complexity. Young graduates like to enter banking. We should strive to do good in our jobs. Never let money alter your conscience. Do not invest in products which require you to pay high management fees etc. Serving your client is the highest priority. The sub-prime crisis was an example of extreme greed. The finance sector takes up too much of the earnings of the S&P 500. Sometimes, the markets crash but those people in IB keep making money. The ex-CEOs of Citigroup and Merrill Lynch were paid very well just before the sub-prime crisis. They were not penalised heavily after that. However, bankers earned nothing as compared to the hedge fund managers. The hedge fund industry demands high management fees and investors can’t survive. The number of CFAs are increasing all the time. There is an inherent disconnect between cost and value in our financial system. Humans have abandoned the traditional standards of investing. The author looks up to people like Benjamin Graham and uses value-investing. Speculation is rife nowadays. The cumulative costs keep growing. Does the financial system create more value than cost? My fear is that the finance sector is getting too big and out of control. There needs to be a financial system reform. As public investors, we should demand more from our financial system.

The motivation of too many of those rushing into finance is more aligned with what they can get from society than what they can give back to it. – John C Bogle

Too Much Speculation, Not Enough Investment. Investing is about long-term ownership of the business. Speculation is just the opposite and is about short term gains. One of Keynes’ famous works is the ‘General Theory of Employment, Interest and Money’. In the long run, the stock price must be aligned with the business fundamentals. Speculators cannot capture the inherent value in a stock. Markets are volatile because of speculators. In the expectations market, prices are set based on the expectations of investors. These are not based on ‘real value’ per se. We live in an era of speculation. However, it is true that investors win and speculators lose in the long run. Stock markets have crashed, just like on Black Monday in 1987. Short term outcomes can’t be predicted accurately nowadays. There have been little cases of black swans in the long term market. The financial system is prone to innovation. Learn to emulate tortoises. Market timing is not sound. Market timing doesn’t work. It is difficult to make the right decision consistently on market timing. We need to improve the balance between entrepreneurial innovation and more traditional values. We cannot allow the whirlwind of speculation to continue unabated.

In investing, tortoises tend to win far more often than hares over the turns of the market cycle…Placing large bets on an unknown future is worse than gambling because at least in gambling you know the odds. Most of the decisions in life motivated by greed have unhappy outcomes. – Peter L. Bernstein

Too Much Complexity, Not Enough Simplicity. Simplicity has been the key to successful investing. Technology has complicated our lives. There are many middlemen in a CDO offering. Some banks are also not concerned with the creditworthiness of such offerings. The market has been flooded with interest rate swaps, credit default swaps etc. The value of the derivatives market is huge. ‘As long as the music is playing, you have to keep dancing.’ The Federal Government has also backed such offerings. It is better to buy an index fund as it has better returns. Innovations have hurt investors. The winners are usually the fund managers or distributors. Innovations like stock index fund, bond index fund have done investors well. ETFs are great. However, they are being traded too frequently, leading to speculation. Some ETFs also do not contain stocks that track the stock market index. There are many different types of funds nowadays, like market neutral, hedging, commodities, private equity etc. However, please examine the track record before buying. Commodities are purely speculative in nature. Fund expenses must be cut if investors are to gain. Fund failure rate is very high amongst idiosyncratic funds. Some funds are not concerned with shareholder performance. It is time to get down to basics. The author believes that the simple way is the best way. The mutual fund industry often fails to provide market-beating returns. The fund manager should serve investor’s interests.

Too Much Counting, Not Enough Trust. We often place too much emphasis on numbers and trust them. Then, we have optimistic views on the future because of them. Even numbers produced by the government can be questionable at times. We need to understand the sources of stock returns. Do not project future returns based on past historical rates. This causes the expected rate of return of investments to rise. The bubble of investor optimism will have to burst someday. It is smarter to set your expectations for future earnings on basis of current sources of returns. There is a bias towards optimism in the future. CEOs often paint too optimistic pictures for earnings and analysts tend to agree with them. The standard for analysts has changed from GAAP earnings to operating earnings. Pro-forma earnings also exclude all the one-time losses etc. Creative accounting is a big issue nowadays. Pension holders might lose money on their investments and this will have other repercussions as well. Businesses like to use M&A to create ‘value’. For each M&A deal, the bankers and lawyers earn huge sums of money. ‘Paper’ companies have acquired ‘rock’ companies that make. In Vanguard, we believe in organic growth, not forced growth. Nowadays, we do not know how to ask without any numbers and this is a scary fact. Trust is important.

The first step is to measure what can be easily measured. This is okay as far as it goes. The second step is to disregard that which cannot be measured, or give it an arbitrary quantitative value. This is artificial and misleading. The third step is to presume that what cannot be measured really is not very important. This is blindness. The fourth step is to say that what cannot be measured does not really exist. This is suicide. – Daniel Yankelovich

Modern capitalism has two parts: there’s business, and there’s finance. Business is renting you a car at the airport. Finance is something else. – Michael Kinsley

Too Much Business Conduct, Not Enough Professional Conduct. Professional associations are now run like business enterprises. However, professionals should be responsible and selfless in their service towards their clients. Times have changed nowadays. Professional conduct is less well regarded as in the past. Too many banks are seeking competitive advantages at the expense of their customers. The battle for professional independence is never won. Trust and be trusted. Capitalism has eroded as well and this is a big issue. Owners’ capitalism has been transformed to managers’ capitalism. Institutional investors are a big thing nowadays. Managers are not acting as they should for their principal. Beware of negligence and profusion have prevailed among corporate management. How much should the CEO be compensated? It is hard to determine how much value a CEO has added. Sometimes, their salary growth outstrips the corporate profit rate. There are accountability issues. Institutional money managers hold a lot of power. CEO stock based compensation should be based on intrinsic value and not actual stock price. The compensation consultant has also become more popular. Many CEOs are also paid according to how they fair in their peer group. A basic set of ethical principles is needed to guide the profession. Financial engineering is getting more and more popular. Capitalism must be fair, regulated and ethical.

Money management extracts value from the returns earned by our business enterprises, and in the process of maximizing its own commercial benefits, the industry seems to have lost its professional bearings. – John C Bogle

Too Much Salesmanship, Not Enough Stewardship. The industry is characterized by salesmanship too. Mutual fund size has grown by a tremendous rate recently. Fund investors start trading funds instead of simply holding them. The holding period for stocks has been cut from 6 years to 1 year. Fund costs have soared as well. The fund industry is more like a marketing industry now. Investment focus has been truncated. Some funds are only created because of the latest market fad. There is a need for reform. We need to cut down costs for investors. Serve the investor for a lifetime. There are too many choices of funds out there and this makes people confused. There is a need to have long term investment horizons. Serve the long term investors. We must all return to the index fund. Put fund investors in the driver’s seat. Shareholder education takes time. The industry should aim to be objective and unbiased. We need to have an industry that is of the shareholder, by the shareholder, and for the shareholder. We need a mutual fund industry with vision and values. We must build companies that stand for something. Stewardship will pay off. It is important to keep the faith every day.

Too Much Management, Not Enough Leadership. Our large corporations are over-managed but underled. Managing and leading are completely different. The leader is more original. The leader should be able to inspire. They should care about the deeper values of the organization. There are 10 rules for building a great organization. 1) Make caring the soul of the organization. 2) Forget about employees (call them crew members instead). 3) Set High Standards and Values – and Stick to Them. 4) Talk the Talk. Repeat the Values Endlessly. 5) Walk the Walk. Action Speaks Louder than Words. 6) Don’t over-manage. 7) Recognize Individual Achievement. 8) Loyalty is a Two-Way Street. 9) Lead and Manage for the Long-Term. 10) Press On, Regardless. A superior company thinks about its dream. It also applies unconventional thinking. We were based on value profit chain concepts. I built a company that would endure. Businesses should have purposes besides making money.

The institution must be the object of intense human care and cultivation. Even when it errs and stumbles, it must be cared for, and the burden must be borne by all who work for it, all who own it, all who are served by it, all who govern it. Every responsible person must care, and care deeply, about the institutions that touch his life. – Howard W. Johnson

Too Much Focus on Things, Not Enough Focus on Commitment. Where are the things by which one measures one’s life? Don’t let things measure the man instead. Life is never smooth and we might lose our wealth one day. However, your character is the one that will endure. Boldness and commitment is all important. Commit the most to make a second life. It is crucial to be committed to your family. Commitment to neighbours and the community is also important. We thrive as human beings and have faith in ourselves. Give credit to those who have helped you along the way. You didn’t succeed on your own. Be bold and summon your magic.

Too many 21st century values, not enough 18th century values. Do not move away from the truth. Facts are everywhere. The Age of Reason occurred in the 18th century. Many of the great leaders spoke about the period of Enlightenment. Benjamin Franklin was a great leader in the 18th century. Joseph Schumpeter also described what an entrepreneur ought to be. Entrepreneurs and capitalists are not the same. Have the will to conquer, and the joy of a good battle. Franklin invented many tools for the public’s benefit. There are other motives for business other than profit. A man should have a mind to improve, a heart to cultivate and a character to form. Keep striving to improve. Return stewardship to capitalism. Lead with purpose. Virtue is all important. Franklin listed 13 virtues. He started his day by asking ‘What good shall I do this day?’ and ended it with ‘What good have I done today?’ His energy and persistence helped him in his public life.

Knowledge is not the personal property of its discoverer, but the common property of all. As we enjoy great advantages from the inventions of others, we should be glad of an opportunity to serve others by any invention of ours, and this we should do freely and generously. – Benjamin Franklin

The real test for an honest and productive society is not what a society has achieved, but what it aims to achieve. It can put honest people on a pedestal even if they do not maximize their personal benefits and preferences…and discard and shun as models of failure dishonest people who achieve their highest ambitions by fraud and abuse of trust. – Tamar Frankel

Too Much ‘Success’, Not Enough Character. We often chase success but success continually eludes us. Is success all about achieving wealth and fame? Financial wealth is not a good measure of success. Fame is a flawed measure too. Fame is used for other purposes now. One can contribute to society in a great way but yet not be famous at all. Power should not be used capriciously and arbitrarily. Power should be used for a worthy cause. Have we been chasing the fake rabbit of success? Success isn’t about meeting other people’s expectations too. You should just base success on your own expectations and make the most of your talents. We should admire those people in professions where they can contribute to society, but not achieve any fame or recognition. Modern life has forced people to be competitive. Life demands much more of us nowadays. What are you competing for? Without character and courage, nothing else lasts. To hone character, one must undergo tribulations etc. Be yourself and strive to be better. With age, you should better understand where the rabbits are. Challenge yourself and strive to be better. Chase the real rabbits of your life.

Success can be measured in our contributions to building a better world, in helping our fellow man, and in raising children who themselves become loving human beings and good citizens. Success, in short, can be measured not in what we attain for ourselves, but in what we contribute to our society. – John C Bogle

I long to accomplish a great and noble task, but it is my chief duty to accomplish humble tasks as though they were great and noble. The world is moved along, not only by the mighty shoves of its heroes, but also by the aggregate of the tiny pushes of each honest worker. – Helen Keller

Highly educated young people are tutored, taught, and monitored in all aspects of their lives, except the most important, which is character-building. But without character and courage, nothing else lasts. – David Brooks

What’s Enough? What is the relationship between happiness and success? Success is not the key to happiness, happiness is the key to success. Humans are resilient. Money only provides a transitory form of happiness. Autonomy, social interaction and competence are all important. How much money do you need? I want to give something back to the less fortunate. For example, give back to your alma mater. I also offered scholarships to the Blair students. It has been a thrilling ride indeed. I was born to save rather than spend. Our shareholders also have received superior returns. I do not like extravagance. My retirement plan is the largest in the family balance sheet. Saving early and regularly is the key for wealth accumulation. Postpone your first payment for Social Security. Stick with low-fund fees. There are still many people living in poverty in the US. The income disparity is growing. You must remember that you are fortunate but not all fellow Americans are enjoying it. The domination of the US will not happen forever.




Utopia for Realists by Rutger Bregman (Part 2)

A Fifteen Hour Workweek. Leisure time is scarce in modern society, but why is that so? By 2030, Keynes predicted that mankind would have trouble filling up their spare time. Earlier, Benjamin Franklin predicted that we would work 4 hour days only. Employers were not keen to let their employees work for so short hours everyday. Henry Ford discovered that a shorter work week made employees more productive. In 1938, legislation to protect the 5 day workweek was passed. After WWII, leisure time continued to rise. It was predicted that machines would do all the work in future. Working would only be reserved for the elite. The spread of boredom might be a concern for Mankind. There was a concern that too much free time would bring about boredom and idleness. Are scientists prediction of what life would be like in 2062 come true? The irony is that in modern society, the working week is actually growing. It has to do with the feminist revolution. Parenting is a lot more time-intensive nowadays. The smartphone might even lead to the ordinary worker working even longer hours. Consumption has increased a lot more recently. Would our standard of living decrease if we work less? Productivity and long work hours do not go hand in hand. Even in the modern society, 40 hour workweeks might be too much. Research has shown that 6 hours per day is optimum. Working less solves the problem of stress and leads to increased levels of happiness. It might solve climate change and reduce the number of accidents too. It might address unemployment too. Paternity leave is extremely important nowadays. It might address the issue of aging population too. Nowadays, people tend to show off if they are busy. There is not enough paid work to go around. Is the strategy of shorter working hours what we all want? The answer is yes. The countries with the shortest workweeks have the largest number of volunteers and social capital. We all are capable of handling the good life.

It’s quite simple, really. Time is money. Economic growth can yield either more leisure or more consumption. – Rutger Bregman

It is worth noting, however, that the line between work and leisure has blurred in recent times. Work is now often perceived as a kind of hobby, or even as the very crux of our identity. – Rutger Bregman

There’s not a person on Earth who on their deathbed thinks, “Had I only put in a few more hours at the office or sat in front of the tube some more.” – Rutger Bregman

Work is the refuge of people who have nothing better to do. – Oscar Wilde

Why It Doesn’t Pay to Be a Banker. The trash workers went on strike. The streets were extremely stinky. It actually pays to strike. These are essential services which actually do much good to others. However, wall street traders don’t do much. These are the jobs that simply shift money around. Now, in modern society, more people are able to earn without contributing anything tangible to society. Ireland did okay without the bankers for 6 months. It did not have a debilitating impact on daily life. Creating complex financial products actually destroys wealth. Why are we working harder than ever before? Many people admit that they are doing bullshit jobs. Banking is very exclusive to the elite few. Some people feel that their job had no meaning and significance. This is a problem with the capitalist society. The modern society is concerned with nothing but profit. Now, it is all about milking the cash without innovation. Just imagine how society will be if we just focused on creating things of value. It does not mean that you earn much, it automatically means you are contributing to society. In modern times, more people have sought to move to banking. We need to tax higher earners even more. A teacher has a direct hand in shaping the future. We need to intervene at the classroom level. Which knowledge and skills do we want in our children in 2030? A shorter work week allows us to spend more time on ourselves. Society determines what has real value. After the strike, the garage collectors had a significant pay increase.

Making money without creating anything of value is anything but easy. It takes talent, ambition, and brains. And the banking world is brimming with clever minds. – Rutger Bregman

The goal of the future is full unemployment, so we can play. – Arthur C. Clarke

Race Against the Machine. Machines help to eliminate certain jobs. Robots should help to reduce the average number of working hours. People are educated, but your skills might be superfluous after a while. Moore realized the power of computers and that it would soon surpass humans. Machines help in the transportation sector, such as container shipping. The ratio of capital to labour is not constant. Technology has been advancing at an astounding rate. Who’s profiting from this? There are fewer winners as time passes. Inequality has been increasing in developed countries. Many jobs are at risk to be overtaken by machines. It will come in the next 20 years. That are some that argue that automation will create new jobs. Productivity is at record levels in the 2000s. Even the most modern of computers can defeat chess masters. Robots can hone our mental capacities. Automated cars might take over drivers on the roads soon. By 2029, it is predicted that computers will be as intelligent as people. There is no limit for machine computing power. In 1811, some men declared a war on machines, but the machines won. The whole point of robots is for them to do tasks that humans would rather not do themselves. How can we compete against the machine? It seems like there is limited hope and that inequality will continue to increase. Should we continue to focus on education? However, the low-hanging fruit has already been plucked. Maybe a solution is to bring a hammer. Humans still have the ultimate say as to how to shape our destiny. We need a massive redistribution of income.

The reality is that it takes fewer and fewer people to create a successful business, meaning that when a business succeeds, fewer and fewer people benefit. – Rutger Bregman

The factory of the future will have only two employees, a man and a dog. The man will be there to feed the dog. The dog will be there to keep the man from touching the equipment. – Popular joke among economists

Beyond the Gates of the Land of Plenty. Should we try to give everyone on Earth the joys of the Land of Plenty? We spend a lot of money on developmental aid. Nobody knows whether it has helped much or not. Sometimes, the usage can be different than what was intended. Is the remedy worse than the disease? The first form of aid happened in 1998. Studies have shown that providing free textbooks does not improve scores. We all should aim to take the guess work out of policy making. Is it better to give out free mosquito nets or to sell them? Even microcredit has not been proven effective at combating poverty and illness. Handing out cash is better. However, not everything is measurable. There are the 3 Is of development and they are ideology, ignorance and inertia. There needs to be strong measures against tax evasion especially in poor countries. Opening the gates is one way to give the poor a chance. After the war, countries protected their borders tightly. The world is wide open except for people. Opening borders to labour would boost wealth tremendously. The inhabitants of the Land of Plenty are filthy rich. We turn away refugees way too easily. Americans earn a lot more than their South American counterparts. Opening the borders is one of our best strategies against poverty. However, people often lament that by doing so, you will bringing terrorists in. The risk of terrorism is low. Immigration actually reduces in a decline of terrorist activities. They are not all criminals. There is practically zero correlation between ethnic background and crime. They will not undermine social cohesion too. Diversity cannot be used to blame cohesion in society. There is an argument that foreigner influx can help create more employment opportunities. Will cheap immigrant labor force wages down? A think tank has showed that immigration has virtually no effect on wages. It is not true that foreigners are too lazy to work. Immigrants actually take less advantage of public assistance. Governments can set criteria for them and make it harder for them to get PR. One way is to create language and culture tests. Open borders actually promote immigrant return. Opening the borders is not something we can do overnight. Just cracking the door around migration will help us tremendously.

How Ideas Change the World. There were some people who believed that the world would end on Dec 21, 1954. This was a prophecy that failed. Humans tend to suffer from cognitive dissonance, where people recalibrate reality rather than amend their worldview. Humans tend to stubborn. The more educated you are, the more unwilling you will be to change. Can new ideas like a universal basic income truly change the world? However, people’s ideas can indeed change over time. Sometimes, a single opposing voice can make all the difference. Had we invested too much in our old convictions? There is a lot we can learn from Friedrich Hayek and Milton Friedman. There are lessons we can learn from Neoliberalism. The world is getting richer and safer. It is okay to dream and keep plugging away.

People are most likely to change their opinions if you confront them with new and disagreeable facts as directly as possible. – Rutger Bregman

Utopia is on the horizon. I move two steps closer; it moves two steps further away. I walk another ten steps and the horizon runs ten steps further away. As much as I may walk, I’ll never reach it. So what’s the point of utopia? The point is this: to keep walking. – Eduardo Galeano


Utopia for Realists by Rutger Bregman (Part 1)

How We can Build The Ideal World

‘A map of the world that does not include Utopia is not worth even glancing at, for it leaves out the one country at which Humanity is always landing. And when Humanity lands there, it looks out, and, seeing a better country, sets sail. Progress is the realization of Utopias.’ Oscar Wilde

The Return of Utopia. In the past, the world was much worse than what it was today. Poverty rates have fallen and life expectancy has increased. The last 2 centuries have seen explosive growth, like nothing mankind has ever experienced. People are 250 times richer as compared to the Industrial Revolution. People used to dream of a brighter future. Modern world suffers from problems like obesity, pollution etc. Modern medicine has allowed those who have suffered to live again. Driverless cars are on our roads. Internet access and smartphones are getting more widespread. Vaccines are useful to prevent diseases and pre-mature death. In terms of literacy, humans are at our all-time high. Although everything seems good, we may lack a purpose in life. We live in a capitalist and consumer driven society. How can we improve our current state? A common utopia is one of blueprints, where dissension is not tolerated. Transgressions are not allowed and will be punished. Why are we working long hours than before even though we are richer now. To many, utopias turn out into dystopias and nightmares. We crave freedom, but it some ways, it is an empty freedom. We spend too much on health care. The advertisers and mass media benefit from over consumption. This is the dystopia we are living in. We are pampered too much. We believed in big dreams in the past but we know that reality is very different. We are becoming more anxious over time. We are becoming more and more alike. There are other ways to progress other than via capitalism. Our utopia will start small and grow from there. Even though things are well, we need to constantly improve.

And the ad industry encourages us to spend money we don’t have on junk we don’t need in order to impress people we can’t stand. – Rutger Bregman

If success is a choice, then so is failure. Lost your job? You should have worked harder. Sick? You must not be leading a healthy lifestyle. Unhappy? Take a pill. – Rutger Bregman

Why We Should Give Free Money to Everyone. Feeding the homeless might be cheaper than locking them in jail or providing social services. One other way is to give them money. This is ironic, but it might work. How they spend it is up to them. The fact is that most of them were actually prudent in their spending. Some even used the money for personal growth. Giving money to them might be the most efficient way to help them. Free money doesn’t make people lazy. This has been proved by different studies. This has been proved in Namibia and Malawi. This might be superior to spending money on food etc. You have the freedom to buy want you need. This was already mentioned in Thomas More in his book in 1516. The dream is for all to have a universal basic income for everyone. Canada experimented with this idea in the 1970s. Mincome, a city in Canada, worked well under this model. There is a fear that people would be lazy if they didn’t work. There is little evidence that people would be lazy if they had a basic sum of money each month. President Nixon pushed for it in the past, but it often got rejected by the Senate. Many years back, democracy seemed a utopia, but it has worked. The benefit of giving people a basic income is that the poor can take on jobs which can give them growth. This should be the aim of capitalism.

Poverty is fundamentally about a lack of cash. It’s not about stupidity. You can’t pull yourself up by your bootstraps if you have no boots. – Joseph Hanlon

There is overwhelming evidence to suggest that the vast majority of people actually want to work, whether they need to or not. In fact, not having a job makes us deeply unhappy. – Rutger Bregman

So we have inspectors of inspectors and people making instruments for inspectors to inspect inspectors. The true business of people should be to go back to school and think about whatever it was they were thinking about before somebody came along and told them they had to earn a living. – Richard Buckminster Fuller

The End of Poverty. A new casino opened in 1997. It was Harrah’s Cherokee. It was run by Cherokee Indians. Organized crime did not increase. Those kids who grew up in poverty tended to have behavioral problems. Which was the cause, and which was the effect? Costello’s subjects who were lifted out of poverty had much lesser behavioral problems. Money from the casino earnings were given to needy families. The tribe ended up thriving after the casino earnings. Genes can’t be undone. Poverty can. Why do the poor tend to make dumb decisions? Poverty is something the individual has to overcome on their own. In economics, always everything revolves around scarcity. Poor people find food scarce, so they need to find an incredible way to make ends meet and that is a good thing. You can’t take a break from poverty. It’s all about the context. You can’t take a break from poverty, unlike a situation where you are busy at work. We all need to increase our gross domestic mental bandwidth. Getting out of poverty is more important than education. One solution is to give needy students a hand with financial aid paperwork. Does money enable you to be happy and healthy? Inequality is a big issue in modern society. Relative poverty is very important because like to compare themselves with others. Social mobility goes up when inequality goes up. Even rich people might not feel good if the inequality in their country is too high. Providing free apartments are also useful, as it helps to get homeless people off the streets. Homelessness can certainly be solved. We need to address the root cause, not the symptom.

Scarcity consumes you. You’re less able to focus on other things that are also important to you. – Eldar Shafir

The effect of poverty lowers your IQ by around 13 or 14 points. That’s comparable to losing a night’s sleep or the long term effects of alcohol. – Eldar Shafir

If you’d like to have more money, time, friends, or food, you’re more likely to experience a sense of scarcity. And the things you want are determined to a large extent by what people around you have. – Rutger Bregman

Poverty is a great enemy to human happiness; it certainly destroys liberty, and it makes some virtues impracticable, and others extremely difficult. – Samuel Johnson

The Bizarre Tale of President Nixon and His Basic Income Bill. Historians have more to give us. We should look and learn from history as much as possible. We shall look at Richard Nixon. He was forced to resign after the Watergate scandal in 1974. There were many who opposed his plan of giving free money to everyone. Anderson managed to change Nixon’s mind. The Speenhamland system failed badly in the 19th century England. Why did the President switch his mind? However, his message of wanting to fight laziness among the poor caused people to turn against the idea of basic income. Speenhamland appeared to be successful initially. In the fact, people were convinced that population growth will exceed food production. However, it was a disaster because of a few reasons. Marx believed that a revolution was needed to bring people out of poverty, not a basic income. Modern historians have realized that the results from Speenhamland might not be reliably measured. The consensus that the poor were becoming more lazy might be untrue. The Royal Commission Report changed Nixon’s decision. The truth of population growth indefinitely might not hold true. In 1834, the Speenhamland system was dismantled. The idea of a self-regulating market that will liberate the poor was still a dream. There are some scholars who believe that Speenhamland was a success. Things could have been handled so much better. The idea of a welfare state was hit badly as a result of Speenhamland. People who are poor only thing about the here and now and not the future.

The gross national product…measures everything…except that which makes life worthwhile. – Robert F. Kennedy

New Figures for a New Era. The Japan earthquake on Mar 11, 2011 wrecked havoc on the Japanese economy. However, the economy recovered miraculously fast. It had a silver lining for GDP. Rebuilding has a huge impetus for the government. However, we shouldn’t welcome these disasters. GDP does not measure the intangible benefits to society. It does not measure things like community service, clean air etc. Also, things like domestic workers are not measured in the GDP. Denmark has tried to quantify the value of breastfeeding in its GDP. GDP does not measure advances in technology. The higher the social problems, the more it will contribute to GDP. In the past, banks took up a huge slice of GDP due to their risk taking culture. Are we placing too much emphasis on GDP? Almost all politicians believe that growth is good for employment and the economy. The idea of GDP was already mooted in the 1800s. Adam Smith believed that those who worked in services industry produced nothing at all. Alfred Marshall realized that it was not so much the nature of products that mattered, but the price. However, accurate calculations on GDP only existed in the 1900s. It was essentially invented by a Russian professor named Simon Kuznets in 1932. It would be an excellent yardstick for any country. The GDP could give an overall picture of the economy. Even today, many professors do not understand how GDP works. GDP measures all the activity within its borders (including by foreign enterprises). GDP was very useful after a war. There are many other useful statistics that can serve us better than GDP. Today, the economy is so much more complicated than just some production numbers. In Bhutan, a gross national happiness index was suggested. Two possible candidates might be the Genuine Progress Indicator (GPI) or the Index of Sustainable Economic Welfare (ISEW). The wealthier a country is, the more difficult it is to measure that wealth. In Europe, the governments subsidize domains where productivity can’t be leveraged. The cost of health care is bound to increase. We will need indications to track life, eg. Community service, social cohesion, jobs, knowledge etc. We need to rethink how we relook at growth?

Productivity is for robots. Humans excel at wasting time, experimenting, playing, creating, and exploring. – Kevin Kelly


Schiit Happened by Jason Stoddard and Mike Moffat (Part 3)

Finally, the $99 solution. Mike was the one who thought that $99 gear was possible. In the past, it certainly wasn’t possible. I had my doubts that we could do it. I was very thrilled that we managed to do it. Audio is a seasonal business, where demand is strong between October to March. Magni and Modi were products we didn’t announce beforehand. The good thing is that you won’t miss your deadline. However, without a deadline, you won’t work as hard. If there are delays, you may miss your first mover advantage. As a result, we could have chased our vendors harder. The metal delivery was late. We missed CanJam as a result. The boards were late too. Thankfully, we just needed to switch out the capacitors before we could fit them in the new chassis. On Dec 13, 2012, we announced Modi and Magni. They outstripped the sales of all our other products combined. Nobody expected that we could deliver it at that price point. I saw the headphone market growing. I wanted to release something of value, and Schiit managed to do that. First time users could have excellent sound with the Magni and the Modi. Magni was neutral and had a ton of power. Modi didn’t need drivers and works well. Of course, there are better amps and DACs out there, however, with the quality of music that most people are listening, this would suffice.

Making another pricey product – no matter how advanced and innovative – is cool and all, and makes for good ego fodder. But making a good, solid product that almost anyone can afford, that’s a whole another thing entirely. – Jason Stoddard

And that’s what I wanted to do – to set the value bar, and the barrier to entry, much, much higher. – Jason Stoddard

Twilight of the Gods – the Ragnarok Saga from 2009 Until Today. Ragnarok was a big saga since 2009 We shipped a powerful speaker amp. If you pre-announce something, you will be wise to stop talking about it. Do not confirm that it will be a cool product. Speakers are very large. They need much damping factor. Our second Ragnarok was much better. It was solid state and used DC servos. However, it would get hot and we needed to find a solution. There are 3 ways to get rid of DC on your outputs: coupling capacitors; DC servo; Trimpots. I wanted a microprocessor to run everything on the Ragnarok. I released info on the product even before it was released. Software has a lot of bugs too. We ran into a shit load of problems. However, one day, the Ragnarok just smoked. It was really bad. Ragnarok didn’t work well at an audio show. It was nowhere near ready. The thing kept burning up because of too much current. We kept trying to write code for the firmware to prevent this. However, even after the power right, it didn’t sound good. There are plenty of other sagas than those mentioned above. Making great products requires a hell lot of pain at times.

Blazing a new path isn’t to be taken lightly. You should take a long, hard look at your capabilities and resources, and plan for how it will impact everything you do. – Jason Stoddard

You’ll Never Do Any Upgrades Anyway. Some audiophiles didn’t think we would do upgrades for the Bitfrost. Audiophiles can be very difficult sometimes. Mike was at the cutting edge of audio when he was at Theta. There was no standalone DAC at his time. Digital audio is new too. Mike measured jitter too. Audio in the 2000s is changing, but at a slowing rate as compared to the 1980s and 1990s. Most DACs are delta-sigma D/A converters. USB is a lot more mature and it is improving. DSD is not that hot now. WiFi digital audio is there. Bluetooth digital audio is also up there too. We didn’t know when we could upgrade the Bifrost. Pick your upgrades carefully and keep them to a minimum. For DACs, the chip AK4399 is our favorite. When you have upgrades, everyone wants to have it NOW, without hesitation.

Worst. Customer. Ever. The customer is always right. Is the customer always God? You can’t do well in business if you don’t love your customers. Amazon’s rule of customer service is that if you have to contact them, they have failed. How can you architect customer service? The smaller your customer service team, the more consistent their replies and the better it is for you. Prohibit the ‘hard sell’. Ban discussion of other manufacturers’ products. Don’t do promo, points, or sales. Less discounts means less complexity. If you have sales, some people will think they would be screwed if they missed the sale. Audio is subjective. Always maintain a high standard of customer service. You can’t take a day to reply emails, that is too slow. Choose your contact options. Choosing your feedback channels are important. However, do not pick too many or you will be flooded. If customers call you, it is bad as it is time consuming to answer calls. If you hire an audio expert to answer calls, it is going to be expensive. A nasty customer we encountered was when his item was a little late. He went into absolute berserk mode. We refunded him in the end. Yet, he was still raging. Believe me, not every customer is worth having.

If you’re going to get into business selling product direct to customers, you need to know two things: 1) You’re gonna get some buttheads; 2) You’re not gonna make everyone happy. – Jason Stoddard

We bend over backwards for our customers. But we won’t be bent forwards. – Jason Stoddard

Put enough information up about the product so most people can make their own decisions, but when they contact us, make the answers fast and simple. – Jason Stoddard

Anyone who emails us before purchasing is 8 times more likely to return the order. 2+ emails takes it up to 30 times. But again, are these bad people? Not at all. Merely indecisive. – Jason Stoddard

But you should be aware that you are talking to humans that can – and do – bend over backwards. But if you come in hot, that willingness to bend over backwards diminishes. – Jason Stoddard

Death of a Product. This will definitely happen some day. Should you cannibalize? It is important to understand product life cycle. No product can stay relevant forever. If you don’t cannibalize yourself, someone else will. It is easier to follow someone else’s rules rather than make your own. It is not smart to assume that sales slow down, it is time to upgrade. We killed the Asgard after the Magni was introduced. Asgard didn’t have gain switching and preamp outputs. The Asgard 2 was introduced and it was much better. It was dead silent on low gain. We had an absolute winner and knew it would be terrific. However, when we produced the Asgard 2, it had a hum. We swapped them.

R&D Sometimes Means, “Try it, See If It Works”. R&D can be very focused. However, at times, it shouldn’t be. Playtime is important. Let your engineers have fun as it will pay-off. We managed to get cheap tubes off eBay and we started tweaking to see how we could fit them into our products. This was the road to Vali. They were much better than the other tubes out there and required little power. The problem with tubes is that tube microphonics might happen and it appears as a form of noise.

But I strongly believe that R&D shouldn’t always be so focused. There’s value in making sure your engineering staff has time to play with crazy ideas. – Jason Stoddard

Name Me One Non-standard Format That’s Succeeded, Ever, Or, A Trickster Cometh. DSD was out in 2013. DSD requires a new type of filtering, which would create noise. We were initially not keen as our products would need a lot of upgrades. We were afraid of missing out on sales if we didn’t jump on the bandwagon. It’s a special software that will go nowhere. Many customers inquired on when our products will support DSD. Reluctantly, I managed to convince Mike to think about it. Our sales kept increasing though. We suddenly wanted to make the least expensive DSD DAC on the market. This would help to drive adoption. It would also have an option for PCM, where we could run a PCM DAC through it. It would be like an add-on. We didn’t have DSD capable USB receivers. We managed to develop a prototype that could play native DSD, using a crystal semiconductor DAC. It worked fine with the AKM DAC. We tried to bring it to market, if it did, we would work on 2X solution. Loki was introduced, where people could add DSD to any DAC for $149. However, it was received as well as we thought. Mike has mentioned no more DSD development until something big happens. However, the public didn’t seem interested in DSD all that longer. There are plenty of DACs out there that support DSD, but where is the software. DSD recordings are expensive for artistes and is it unlikely there will be happy. Also, the improvement in sound quality is marginal and may not be detected.

No Sample Left Unchanged: Digital Today. Let’s talk business philosophies. A typical AV preamp must have a lot of features. There are many standards, such as Dolby Atmos. It is hard to support all these formats. We have to pay licensing fee to put the logos on the box. Should we be at the whim of the standard-setters, like surround-sound standards? Would customers be okay with a processor that sounded good that didn’t support Dolby Digital or DTS? Digital audio has made steady progression over the years. The multibit technology has been improving. Jitter numbers have been decreasing steadily. 1-bit sigma-delta modulation is cheap and has good measurements. The phone DAC ain’t too shabby either. Today, it is a largely sigma-delta world. Lobby for better recordings in the studios, which will help us. DAC mostly upsample and use asynchronous sample rate conversion, affecting the original samples. Samples which have passed a digital filter are not the same. Yggdrasil aims to address that. We have the solution to retain the original samples, without oversampling. The more bits, the less the quantization error. The best DACs around can do only 20 bits. To achieve 24 bit linearity hasn’t happened yet. We have plenty of music in PCM format.

And “32 bit?” LOLOLROFLCOPTER. There will never be any 32 bit music. Because physics. – Jason Stoddard

Black Friday. It is important for a company to define why you do certain stuff. One day, the metal maker delivered us black chassis and we decided to sell them. We would make it a one-time special. In Nov 13, we announced a limited run of black Schiit products. However, there was no big wave of orders for them. The issue is because price and quality matter more than cosmetic colours ultimately. What has this got to do with Black Friday? Many companies participate in Black Friday sales. We choose not to participate. It is great not to stand against a trend sometimes. We don’t do fancy chassis to increase the cost. We do direct distribution too and don’t have a dealer network. A lot of audio experts and engineers have praised our products for our sound quality.

As a start-up, always remember clamor doesn’t always equal the demand. – Jason Stoddard

Niche features or functionality can evoke a lot of passion – and, while that passion may translate into many emails, it may not translate into sales. – Jason Stoddard

You Want to Pay How Much? Or, How We Moved Again. We were thinking of moving office. Someone else wanted to move into the building and we had to go. Good performers expect to be paid well. They also value flexible work hours. For instance, you can work from home etc. Our assembly team usually works at night. There could be a lot of problems. The owners could realize their profits are small or non-existent. When they exit, you have to buy back their shares and value the company. You will have to pay lawyers too to step in. There are also tax implications of giving away shares. Do not insult the intelligence of your motivated and engaged staff. Don’t minimize their worth. Don’t insult their intelligence. Tell the truth and keep your promises. If you can’t pay as well as some other companies, tell them that they might receive more benefits in the future as the company grows. Always keep to your promises. If not, things will get ugly. Provide personal motivation. The key is to get smart, motivated people to start with. We don’t have a sales department. We spend 0.2% of revenue on marketing. Always remember that your people matter and that your customers matter too. Motivated employees take the initiative to do things. We moved into a huge 5300 feet space. We started looking like a real company. Rina would sublease the space upstairs. We didn’t spend a lot of money on renovating or sprucing up the place. However, we bought a fridge, racks, desks and test equipment etc.

Exactly 2 things motivate high-performing employees: money and freedom. – Jason Stoddard

How do you pay good salaries when you’re just starting up and money is tight? Great question. Tricky answers too. Because the first temptation usually is to give away a percentage of the business. Which is exactly the worst thing you can do. – Jason Stoddard

If you don’t literally want to create everything by hand, yourself, you need great employees. Repeat after me: Don’t minimize their worth. Don’t insult their intelligence. – Jason Stoddard

Start with a livable salary, and add bonuses that are based on visible personal or company metrics. Number of products shipped. Number of products built etc. – Jason Stoddard

Motivated employees do not think that having a lounge matters. They think it’s funny. They’re thrilled to help us grow. And growth doesn’t come from Hermann Miller chairs and Steelcase desks and faux-finish paint and $600 LED lamps. – Jason Stoddard

A Real Company? It is end of 2013 now. Finding a niche is important. Be memorable and understand that not everyone will love you. Niche is where we want to be. We do not want to be like Beats, Bose etc. You have to love audio to be in this business. We have a unique sound at a unique value. It is important to run from both conventional advertising and social media both. It is hard work, but it is fun. There will be problems but we crack our head and solve them. There is still much work for us ahead. Remember that it is always important to be unique. Simply throwing marketing money at problems won’t work. Stay where we are, and get better at it. Do listen to your customers for their input. Continue to challenge the established wisdom.


Schiit Happened by Jason Stoddard and Mike Moffat (Part 2)

Isn’t the Symbol for USB the long flat rectangle? We transited from a headphone amp to a DAC/amp company. We are like both a hardware and software company. The problem with hardware are manufacturing while software is about service. A restaurant has both of these problems. When you talk hardware, you are talking stock. You will need capital upfront and also the added costs of personnel, facility, testing, shipping etc. For software, it’s about the salaries for programming staff, admin costs etc. However, distribution is easy. However, you must make sure your software can work with the existing OS. It is an ongoing business, where you need to keep upgrading. There are too many things that can go wrong with a restaurant. With Bifrost, we are a software company. We wanted 24/192, which needed Windows support as driver installation was a must. Firmware is not expected to change much. Software usually requires constant upgrading. Try not to allow pre-orders as if you can’t deliver on time, Schiit happens. The Bitfrost shipped out late. It was a nightmare as we ran into problems, one after another.

Although I’m a foodie, I have exactly zero desire to ever open a restaurant. Why? Because restaurants combine the problems of manufacturing with the problems of service with an extra problem of the stock actually goes bad. No thanks. – Jason Stoddard

Technical Help via Time Warner, and the World’s Most Irritating Failure Mode. Tony was our second employee and our first technician. It was late 2011. We have 4 products, Asgard, Valhalla, Lyr, Bifrost. Mike recommended Tony. He was laid off. He was a fast learner. The problem with employees are that they only do things by the book, have a stunning lack of initiative, prima donna-it is. It would be better to ask why and how they did something, rather than what. Tony was a great employee. However, one day, he pointed out that the Lyr was popping. The problem only happened with the back chassis on. We used brute force to fix the problem. However, that was the only batch of equipment with that issue. We might never know what the problem is.

Because people can’t be distilled down to a 2 page resume and a 1 hour interview. There are a ton of candidates skilled in the art of looking good on paper. There are plenty who can be friendly, intelligent, and make all the right noises in response to the standard interview questions. – Jason Stoddard

Selecting people with potential and ambition beats experience every day. – Jason Stoddard

DAC in a Toilet Paper Roll. One day, Mike showed me a USB card, which had RCA jacks on it. It was a USB DAC. Although Mike wasn’t fond of USB, this was an excellent device. We could get the chassis cheap and sell it for USD 99. This is for people who really want portability. It would be simply plug and play. Modi and Magni showed up in Dec 2012. Developing simple products take a lot of time. Modi needed a new chassis design and had to be simple as possible. It required huge production time too. Most companies would have just iterated on existing products to milk the cash out of them. We’re not like that. We set a price target on the chassis. Assembly would be simple at all costs. In the end, we only used 7 screws instead of 16. Modi was built in a steel case. We chose to save our own money rather than borrow money to grow. It might not be the best, but that’s the direction we took. We decided on a Schiit stack, a little DAC that was less than $99 or less too.

Assembly time is a function of chassis design. The simpler the chassis, the lower the assembly time. – Jason Stoddard

Growth, Garage Style. We mostly worked from our garage too. I was a conservative businessman and did not take funding. People thought we were stupid. My plan was to grow organically. By being picky and conservative, we avoided the web bust and managed to thrive. Even in 2011, I didn’t lease office space. Understand what a lease means. Note the lack of any outs. Subleasing sucks as any issue with the property is your fault. You’ll have surprises, and they won’t be good. There’s less space than you think. If you don’t pay, the landlord will chase you to no ends. We ran out of stock very quickly, and that was good. We didn’t need a lot of space. Mike were planning Mjolnir and the Gungnir. These were balanced amp and DACs, higher end things. It was the start of 2012 now.

The lease doesn’t give two craps if your business is in the toilet, if your cash flow sucks, if your sales forecast was wrong, or if you’re late on your mortgage as well. Pay us. Every month. Until the end. – Jason Stoddard

Leasing a space is very much one of those invisible lines in business. Once you do it, you won’t go back. Nor will you back out. So you’d better be damn ready to do it. – Jason Stoddard

Resurrecting the Circlotron and Other Mid-Centuryisms. This chapter is highly technical. Designing a balanced amp was ambitious. Some people argue for single-ended while some prefer balanced. There are pros and cons to both, just like everything in life. Whys, wherefores and design goals. Every car has its disadvantages too, there is no perfect solution. There are trade-offs. Single ended has lower noise and easier to connect. However, high rail voltages are required for high power and balanced input is problematic. Balanced has 4 times the power for the same rail voltages. No us, balanced offers better sonic performance. First law of audio: you can never have too much power. Second law of audio: see the first law. More power usually means higher noise, greater need for protection and paralleled output devices. I have a soft spot for circlotron designs for amps. There were none in the market at the moment. Our company is contrarian and I liked it. Some of the designs include JLH, Lin/ Blameless, CFA/ Current Feedback, Supersymmetry, CSPP / Circlotron, Chip / Integrated. Circlotron uses only P channel, however, it requires a complex power supply. We focused on the high-voltage VFT front end and the MOSFET output. Class A amplifiers run on the time and never turn off. They are hot and big and heavy, and no more than 25% efficient. Class B isn’t used for audio, the output transistors turn off as soon as they cross zero, because they are completely unbiased. Class AB, with bias on the output transistors so they run Class A sometimes. This is the most popular audio output stage and more efficient, with good performance. Class D are switching or PWM amps. Class H are class AB with voltage rail switching. Mike challenged me to include single ended option in the amp too.

Today, orthodynamics are actually becoming more efficient, so the need for extreme power is abating. The headphone amp power war, which never really existed, will probably seem silly in a few years time. – Jason Stoddard

The Pinch-Off Problem. We were developing the Gungnir analog stage. We ran into problems of our prototype boards. We had a pinch-off problem. We chased down the source of the distortion. Swapping parts didn’t help. Analog isn’t the real story. It is important to segregate the analog and digital sections carefully. We needed to look at clock regeneration too. We use one stereo DAC per channel, giving balanced hardware. However, the components cost twice. Digital music has to be stored. There are different formats of music. Lossless audio preserves the original bits. These use the PCM (Pulse Code Modulation) format. DSD encodes using a pulse width modulated datastream (PWM). The DAC wants to see the bit clock, word clock and data. That means 3 or 4 BNC cables. However, nowadays, we only use 1 cable because the clocks are buried in the data. This is SPDIF. Optical is a flavor of SPDIF. However, it has its limitations and can sometimes can only accommodate up to 24/192. Coaxial is another flavor of SPDIF, however, it usually performs better than co-axial. USB is not a SPDIF, but a packet-based system. Bandwidth is no issue with USB 2.0 and up. There is a reception to process the signals. Some manufacturers choose to upsample everything to a specific data rate, this eliminates clock management. However, asynchronous sample rate conversion (ASRC) is not bitperfect. For a bitperfect DAC, clock management is needed. For digital filters, bit-perfect transfer dies. 99.9% of DACs use delta-sigma technology. It can support up to 24 bit or even 32 bit. However, it is not bit perfect either. Some DACs are analog also. Philosophy is the most important (why you do something). Without knowing your why, your company is rudderless. Therefore, there is a need to ask the why and there is a need to be very specific over your answer too. At Schiit, we want to make fun, affordable products that are as true to the musical source as possible. For delta-sigma, the best you can do is to reduce the jitter.

Every Road is a Dead End, Early Adventures with Magni. There is value in starting all over. There is a need to always be adaptable when coming up with new products. We wanted the amp to versatile for almost any headphone. We wanted an aggressive price point too. We planned a simple topology and a switching wall wart. We didn’t want Class A as there was too much heat for the chassis. The noisy power supply was killing my ideas. The Lin amp would work well with an AC supply. I turned to Alibaba for supplies. The AC wall warts were cheap enough. I played with many PC boards and found that they worked.

The HOA Problem. We were working on Magni, Modi, Gungir and Mjolnir. We were growing bigger now. HOA means Homeowners Association. The HOA prohibited operating a business out of your home. They would start complaining. We cracked 7 figures in sales. When you have your own business, you can’t say ‘That’s not my problem’. You have to deal with every problem. Everything becomes your problem when you start a business. It’s a ton of work, but it can be satisfying. We need to look to rent a space. I tried a space, however it was not meant for manufacturing due to zoning rights. Valencia, California is master-planned. It was zoned as a commercial space, not industrial. We are now in Valencia Industrial Center. However, I managed to convince the guy to let us look at his space.

We started this with $10k. 18 months later, we’re into 7 figures annually. In a garage. This isn’t interested to be bragging. This is intended to be inspiration for you. Starting your own business is absolutely doable – without taking loans, leasing tons of space etc. – Jason Stoddard

But don’t start a business because you think it’s going to be easy. Or because you think you’ll have more freedom. Because, if it’s your business, it’ll always be your problem. Until you decide to sell it and get out. And when you’re small, everything is your problem. – Jason Stoddard

You Catch a Cold, We Die: Bigger Products, Bigger Problems. It was the second quarter of 2012 now. Our supplier screwed up and couldn’t make the Gungnir and Mjolnir chassis. We had to learn to number the parts. We had to give specific revisions for the metal parts maker to edit our stuff. It is important to set up a parts numbering system that covers at least every custom part. You will also have to document your changes and revisions made. The chassis was too deep and they couldn’t bend it. Eventually, we settled on a three-piece chassis. Instead of pre-orders, we wanted to do an interest list instead. The metal was crap and the supplier disappointed us. They did a rush job but the quality was not good. The Mjolnir launch was delayed because of the metal supplier. Even with a big bugger between announcement and scheduled ship date, things still screwed up. We were not planning to do pre-announcements anymore.

When your vendors catch a cold, you get sick. When they have a problem, it’s your problem. Your customers don’t care about excuses or The Reality of Making Things Today. They want their stuff. When it was promised. Period. – Jason Stoddard

Introducing the Schiithole. We took a bit of risk in the commercial space. We got the space. In Feb 2012, we moved into the office. There are many hidden expenses in running a business which can bite you. DIY might be cheaper, but it is definitely different from production. When you run a business, there are expenses like liability insurance, facility lease, upkeep, equipment cost, bookkeeping, tax, sales or VAT. We needed to spend on renovating the new space. We were afraid that the city inspector might come. The place was incredibly dusty and messy. The place we leased was a Schiithole. Once you spend a lot on rental, it will kill you. You should only spend on the things you need. You need a functional space, effective places to work, equipment for your work, right connectivity for your business. Don’t buy high-end office chairs. Learn to pick the tolerable and cheapest chair. You must control your spending, or you won’t last long in business. Start-ups shouldn’t have private offices. I was burning out from doing 14 hour days. We needed to hire again.

The moment you build a palace is the moment you die. Now, it may take many years for that palace to kill you. You may end up with some very good years there. But the moment you start focusing on business wants, rather than needs, you’re dead. – Jason Stoddard

And that’s why we ended up with a space that was really nothing more than a large production floor, with no offices, in an ugly, run-down building. Because it had what we needed. And nothing we didn’t. And it was cheap. – Jason Stoddard

And I was quickly burning out from the long days. You can do 14-hour days for a while, but they’ll eventually kill you. – Jason Stoddard

‘I didn’t know people in the private sector were as lazy as incompetent as the people in schools’. We wanted to hire our first manager. Some level of management is necessary. You can’t do everything and you shouldn’t do everything. You can’t outsource everything enough. You still need to oversee some aspects to ensure things are going well. Hiring a manager will incur overheads. Why do companies have too much management? It is because of the 20/80 rule, where only 2 people are doing the work and the remaining 8 are hiding. Some people also think it ‘ain’t my job’. There is also a problem of title inflation. We needed to hire an operations manager. Rina’s own business was taking off and she had less time to focus on Schiit. Rina suggested Alex, Jen’s husband. I decided to give him a shot. He seemed smart enough. However, he worked in a school and I thought these people were lazy. Alex worked hard and suggested improvements and didn’t complain at all. He was the perfect candidate. Alex was an example of good management.

Management layers in a business is a necessary evil. Extra layers should be avoided at all cost. Like nuclear waste, you don’t want to get too much management on you. – Jason Stoddard

And that really is the challenge, more and more: not letting your company fall to the 20/80 rule, where a handful of good people do most of the work. Not letting the bozos on the bus. – Jason Stoddard

You can’t tread water. You can’t stand still. You have to sacrifice your babies. You need to look straight-on at cannibalizing your own products. You always have to be asking, “What can we do better, less expensively?” Even if it lays waste to your entire lineup. Because, you know what? If you don’t do it, someone else will. – Jason Stoddard

Getting Our Schiit Together. It was the summer of 2012. We now try to predict demand and buy ahead to meet it. The landlord wanted to spruce up the place. He suggested that I get the whole building. It was a reasonable and cheap price. I used to haggle in the past, but it has its disadvantages. To know whether someone is charging you fairly, you must know the general price of the product you’re looking for. You should do your research if you don’t know the general price. You should be aware of what is too good to be true. You have to be upfront too. I said yes to renting the whole building. The renovator hired by the landlord did a shit job. Finally, the space was ready and we were acting like a real company. Our space looked decent. Alex improved the business in the some aspects: 1) planning and scheduling; 2) facilities layout and production flow; 3) Shipping logistics and relationships; 4) General operations and vendor communication; 5) employee management, specifically hiring and training. However, on the planning front, we ran into some difficulties.

Dead Media Ain’t Dead: NYT Strikes. Learn to push the limits, common wisdom and experience. The Internet was a big push for Centric. We ignored much of the conventional press when we were at Schiit. We got money to do Adwords. Social media seemed like the leading edge of marketing. For an entertainment company, social marketing is definitely a must. However, if you are not, social marketing is dumb, with little returns. To capture your customers, you need a memorable brand and fast responses to queries. Invest in AdWords and constantly improve your product and not spend too much time on social media. If you are B2B, you need to focus even less on social media. You rather spend your money on advertising and PR. If you want social media, ask yourself, who’s going to create the content? Who’s going to respond to comments? Who’s going to decide what’s okay to say? Who’s going to measure and manage it all? Most of the content are posted by bots nowadays. It is more about crowd-sourced advertising. Paid advertising in big-name venues is here to stay. I said yes to the NYTimes, who wanted to review my product. After the article on NYT, customers posted a lot of newbie questions to us .It hit the print. Because of it, our Bifrost sold out and was on back-order. We had a huge backorder because of this news article. Old media isn’t dead, by any means. The mass media can be really powerful. The Magnis and Modis are targeted at first time audiophiles. One audio magazine gave a glowing review, but it didn’t bring much sales. Always stay open to traditional marketing.

Nobody is perfect. No matter how many degrees they have, no matter how high they scored on their IQ tests, no matter how many years of experience, no matter how many companies they’re launched. Period –  Jason Stoddard

And, while I’m absolutely for introducing everyone to great sound, we’re going to meet plenty of people who don’t care. And we have to be careful not to be tiresome proselytizers. – Jason Stoddard

Well, call me biased, call me old-fashioned, but I believe it will be done in only one way: with quality products made at a price that’s fair for its performance, construction, and looks. – Jason Stoddard


Schiit Happened by Jason Stoddard and Mike Moffat (Part 1)

Foreword – Christmas Presents Until the End of Time? We were wondering whether our products could sell. Schiit Audio is about following gut feelings and not following the herd. Firstly, the name of the company was impressive. They did a direct sales model with no outside funding. Everything is manufactured in the US. Jason is the co-founder of Schiit and Mike is the business partner. Mike has experience in entrepreneurship and in audio. I am a science fiction author and a veteran of the marketing wars at centric.com. The key to our success is that we picked the right niche. You don’t have to make everyone love you, you just need to make some people love you. Go direct in your distribution. If you want venture funding, this book ain’t for you. However, your one big idea might not get any funding and fail in the end. This book is for those without any venture funding.

Bottom line, there are plenty of billion-dollar ideas out there. Making one into a real company that succeeds isn’t just a lot of work. It’s about money, luck, connections, money, luck, money, and luck. And more luck. – Jason Stoddard

The Line is Down. Here’s an Undocumented Test Rig. Fix It. It was first day of work at Sumo in 1989. There were many resistors, capacitors on the workbench. I was asked to fix it. The MOSFET matcher was down and it was affecting production. There was no schematics also. Everyone was staring at me, waiting for me to complete it. I wanted to be in audio and I had a speaker company on the side. Business Lesson 1: Say you can do it. Then deliver – at all costs. I managed to fix is as the connection was faulty. In 2 years, I was promoted to be chief engineer in designing amplifiers. Once, their products was faulty as it might catch fire, I ordered them not to ship them as it would have safety implications. However, customers kept sending them back to us to service. Thus, this took up a lot of our time. Business lesson 2: Don’t ship stuff that blows up. Ever. Never sell anything you haven’t made yet. Don’t lose customer returns, or use them to fix other customer returns. Don’t try to go too broad. Business lesson 3: Don’t dwell on the negatives – learn from them. I believe in subjective-objectivism in audio. This means that measurements are important to some extent. Amps with similar specifications might not sound all the same. Business lesson 4: Don’t discount personal experience. Mike was working in Theta and their profit was at least 8 times of Sumo. Business lesson 5: Be open to meeting new people, and transformative ideas. I started moonlighting for Theta. We wanted to create an inexpensive DAC. We made the Cobalt 307, a combination of our expertise. It sold like hot cakes. Selling direct wasn’t feasible in 1993. Theta Gen 5 was the first discrete output DAC that was made by them. Business lesson 6: Take a chance, do crazy things… a lot of times it’s worth it. The magazines at that time only liked to feature expensive DACs and amps. Mike eventually went to start Angstrom, a company into Surround Sound.

Fifteen Years on the Marketing Front Lines. What has marketing got to do with engineering? I wanted to make audio stuff all along, but somehow I returned to marketing. I founded, Centric, which does marketing for tech companies. We certainly can’t afford those SuperBowl advertisements. Tech companies do not have huge marketing budgets. Advertising agencies primarily develop and place advertising. Interactive agencies can do the above but also some web and mobile development. There are also social and design agencies, PR agencies, marketing agencies. Why is marketing necessary, you may ask? I started Centric when I was 28. It was fun as Centric rode the dot com boom in the early 2000s and went into web development work too. The fact is that most companies are too terrified to be effective at marketing. Don’t be scared to stand out from your competitors. If you keep second guessing what your competitors do, you might think that you are not able to come up with anything better and do nothing instead. Don’t benchmark yourself into mediocrity. Most companies have no idea what to do in marketing. Marketing should make money and the effort should be focused on the most effective and measurable tactics. Fear is the mind-killer. Kill the fear before it spreads. It is not necessary to have the products with the best specifications. Marketing is important, but don’t do it blindly. Focus on the stuff that works only. Don’t simply believe everything an agency tells you. Forget about chasing new/ easy/ cheap. Your best bet is to stay online, measure, refine and do better. Microsocial almost always works, unless you’re a dick. Find the small passionate community that you are interested in. Measure everything you do. Your website and e-commerce system are the most important thing. Get featured on the press, online and offline. Online ads are tricky, but find those that you can track all the way to your sale. I am a published science fiction writer now after my wife pushed me to write books.

Pay lots of attention to microsocial, and be prepared to post, respond, meet new friends, piss some people off, delight some others, and become part of your specific niche. – Jason Stoddard

Who’s going to kick you in the can? When will you do your writing, or company-building, or adventuring, or whatever you want to do? – Jason Stoddard

From Death, Rebirth: Armageddon 2009. All Great Things Come to an End. Centric was in trouble. However, after Centric, we got Schiit. I started writing after Centric started to grow again after 2009. Writing means time without distractions. When I was at home, I paired a pair of tube amp with my AKG 701s and I listened to blissful music. Headphones didn’t need that much power and Class A was possible. I tried the Cobalt DAC too, and the music was a lot more detailed. Was it possible to manufacture something in the US? And how would you go about selling it? Selling direct cuts out the distributors/ dealers. 48% to 65% of the cost can be in distribution. The dealer route was old fashioned and it was easy to start an e-commerce site. Let’s make it work.

You Always Say You Have Schiit to Do, Why Don’t You Just Call It That? I was out of the audio game for so long. There were a lot of questions when we started Schiit. Thank goodness the cost of electronics came down in recent years. We wanted to start with 10k funding at the start. Google gives a lot of things away for free. Google is really an ad company. Only recently did we get into 3D CAD drawings. We designed our products in a cheap simple and minimalistic box. Amps need heatsinks, especially Class-A amps. Instead of a heatsink extrusion at the back of the amp, we used the chassis as a heatsink. In the end, we went for a fairly thick aluminum. How were we going to make the DAC inexpensive? We could have bought the machinery to make it ourselves, or contact with someone who can supply finished parts. However, the second option has its problems as the metal supplier might screw up. Furthermore, most of them did industrial instead of commercial products. My wife suggested that I call the company schiit. That name would certainly catch the attention of others. We wanted to be unforgettable. There, the name was born.

$800 in Screws? The failures of building prototypes never bothered me. We didn’t have all the parts we needed. We were reliant on a critical part from one company and that company screwed up. I wondered if people would think we were a joke? There will be days you feel like quitting. We would try hand-soldering ourselves. We would try doing it in our garage. We would start building inexpensive products first. My wife helped with the soldering too. We did a WordPress template to our own custom design. We linked it to an easy-to-integrate payment processor. Next, our website was up and we were thrilled. Selling online is getting easier by the day and is definitely worth trying. Now, let’s talk business. Business plans are a waste of time. This is because it often sounds too intimidating to start. Venture Capitalists also know that business plans are bullshit. Business is evolving too quickly that a business plan can seem obsolete very quickly. Learn to pay more attention to the market instead of your business plan instead. You can write a short business brief, which is okay. Just incorporate a corporation, not a partnership etc. You should do it because of limited liability. My partner and I decided that we would not draw salary for 2 years.

If you start a business, there will be doubts. Lots and lots of doubts – Jason Stoddard

Trust me, if you don’t have a working product that’s making money, you’re not getting capital even if your business plan was written by the clones of Hemingway and Rockefeller. – Jason Stoddard

What will this company do that no other can do? If others can do this, or are doing this, how are significantly better? Why would someone pay money for it? How will they find out about it? How much money do you need to start it –  Jason Stoddard

The First Order Is… For Something We’re Not Selling. You can pick the date to launch the product. When you launch something, you bare yourself to the public. You don’t know how the public will react to your product. It was June 15, 2010. Perfect the product before launching. Find your press contacts and get their emails. Write a short article to them. We got the audio sites to cover our product. Our products were well received and priced to be affordable. Jude from Head-Fi called us and had some questions for us. He was surprised how we managed to keep the costs down. Jude liked the Asgard. The orders kept coming in and we had to keep shipping. The Valhalla metal came in and we were in for a big shock.

Launching a product isn’t like live theater in one respect: at the theater, you’ve got a play date. The show’s gonna go on, whether you’re ready or not. It doesn’t matter if all the costumes were lost because a drunk truck driver them down a ravine. You need to get on stage and do something. – Jason Stoddard

Metal Debacle, Valhalla Style. I hated the chassis that was made. They were all unsellable, some were cracked and the supplier tried to fix it. Your metal vendor will screw up eventually. I couldn’t find a metal supplier on such short notice. We started looking for a new metal shop. We finally found one that was suitable, but we had to wait for their products. There are many ways to finish metal, graining, bead-blasting, etching etc. It is important to work with an inexpensive chassis. We were facing back-orders for the Valhalla. Thank goodness the metal was great. The quality of the metal was acceptable and we were lucky. Now, we received positive feedback on the Valhalla. We were invited by Jude to showcase at CanJam.

If you’re looking for a get-rich-quick, work-two-hours-a-week-from-home deal, making things ain’t for you. Stuff will go wrong. You will have to deal with it. – Jason Stoddard

Bringing a product to market is like screwing a gorilla. You aren’t done until the gorilla’s done. – Mike Moffat

We Screw Up Sennheiser and Insult Some Big Guys. Trade shows are very tiring and have long hours. Setting up is actually very tedious. Even in this Internet era, trade shows are popular and people still like to visit. If you sell via distribution channels, trade shows are good for you. If you sell direct, then no. What could possibly go wrong at CanJam? We were late. I shipped the amps we were supposed to bring. However, Sennheiser couldn’t find them. The audio industry has grown a lot recently. Rina finally got the amps and we were all set. We had our fair share of interesting visitors. Schiit had its set of loyal followers. The ‘Made in USA’ label seemed very attractive. There was an anonymous guy who appeared to be jealous that our products were so good but they were not made in China.

Powering Up: Lyr. Product roadmaps are important. It is a product life cycle in the market. How would one product fit with the other? Is it upstream or downstream? You would need to refresh the product line also. We wanted the Lyr. There are Class A, Class AB amps. Class As are usually big, hot and heavy. Class AB introduces non-linearities in the end. Class A and Class B are well understood, but something in between is not. We looked to the past for inspiration and kept tweaking things. We didn’t have the capabilities to hand-make the products anymore.

Engineering is a lot of heads-down work. There’s not a lot of heroics or drama. You know, like everything in real life. – Jason Stoddard

Our First Employee, Our First Board House. Having employees is a line crossed, and it’s hard to go back. You can have a successful business without employees. However, it limits your growth. You have to meet payroll and have additional responsibilities once you have an employee. Can you afford employees?  With employees, you have more admin costs. We modified our house and added storage space. After Lyr, we needed help. I had a friend who wanted to help. He was Eddie. We hired him. He was meticulous and was okay being made the number of pieces he made. We wanted him as a contractor and not an employee, as being a contractor would mean we didn’t have to give so many benefits. Eddie was happy to work for us. Eddie also tried to improve our processes. He was a great friend. We outsourced the making of PCB Boards and they were in terrific shape. There are some things which you don’t have to do yourself.

USB Sucks! Or, Mike Joins the 21st century. We are in early 2011 now. It was time to talk about Mike. Mike was the guy who invented the DAC. We eventually invented Bifrost. Mike’s idea for a DAC was the Yggdrasil, one that costs 10 times more than Asgard. Mike didn’t like USB ports. However, most people only use laptops as their audio source and would need it. USB 1.1 and 2.0 were about the same. Sometimes going the grain is not the best idea. Mike was eventually ok with the USB, but he wanted an upgradable system. Like, you can upgrade the DAC when the technology changes. We got Dave on board to work on Bitfrost. It was a modular DAC and we went with the AKM chip. We took a long time over the USB input. The different type of USB modes concern data rate, not audio. 1.1 can transmit data up to 12Mbps and transmit audio up to 24/96. 2.0 can transmit up to 480Mbps and transmit audio up to rates like 32/768. USB Audio Classes are standards used by the industry and are not USB modes. USB Audio Class 2 usually requires drivers. 24bit is 144db dynamic range and the limit of the Stanford analyzers. Toslink is better than USB. Bitfrost was a truly unique DAC to be invented. You should be aware of what your competitors are doing and improve from there. However, how do you know your ideas are better than prevailing wisdom and can be realistic to implement? There are pros to doing what others are doing. You get the product out faster. However, if you do that, you expect disappointment from customers. You will just be like everyone else, with no ideas of your own.

Schiit Goes Evil? We received an email and it caused us problems. Schiit hit the fan on Head-Fi. NwAvGuy accused us of building dangerous amplifiers. He said our products were misguided and sloppy. There was some turn-on transient problem with the Asguard. We defended our products on Head-Fi. There was a discrepancy in our DC offset. Later, we added a relay mute on our Lyr. Anyone who wanted to return our Asgard to us could do so and we would give a refund. I wanted to pull the plug on Schiit as we weren’t making much money. Mike said we would add the relay and kill the current run. For future Asgards, we would add the delay. The problem occurred because we relied on a memory of a measurement that was incorrect. NwAvGuy’s complaint forced us to improve as a company and improve our products. We welcome feedback like those by NwAvGuy. We learnt that we don’t have all the answers.

We have a “live and let live” attitude at Schiit. We don’t think we know it all, and we don’t believe that our answers are always the best ones. We know how much work it takes to bring something to market, and we salute every company out there. – Jason Stoddard

Because no business, no matter how great the engineers, no matter how skilled the production team is, no matter how solid the logistics guys are, no matter how enlightened the management is, is infallible. You screw up. Bad things happen. And you make them good. – Jason Stoddard


Do Over (Make Today the First Day of Your New Career) by Jon Acuff (Part 2)

Win the Way You Won Before. We have definitely picked up skills in the past. Ask yourself what skills did you learn in the past? It need not be work skills only. What were the circumstances that conspired in your favour? You might have an audience to drive your development of the skill. Sometimes, you could have been pressured by a tight deadline. Find a new crowd you share your skill with. You could devise a reward system once you have attained a particular skill. Set a countdown on your phone to motivate yourself to do something, it could be 60 minutes or something. Don’t be afraid to devise new methods in your pursuit of new skills. Learn the strategies employed in the past to help you improve and give yourself a better chance at success. Never reinvent the wheel and always learn from your past.

Kick-Start Your New Skills with Something Fun. You can learn by necessity or curiosity. Necessity are related to work skills. Curiosity is more borne out of desire. Both types of skills are important for us. A smarter approach is to start with something fun. Developing a curiosity skill is more fun and easier than a necessity skill. Keep it simple. You only need time and knowledge at the start. Time and knowledge are more accessible than money, time, gear. You can research about it for free on the Internet. You need to make time for learning your skill too. You must decide exactly when do you want to learn it. Macro means printing out next month’s calendar. You will realize that you have more time than you think. Fear likes to tell you that you don’t have enough time. Learn to utilize your time well and in a fruitful manner. The micro is exactly which days and how many hours you will use to hone your skill. What’s consuming your calendar daily? Start your day with what matters most and that will help you the most. Work on your skill before other things get in the way. Who will help you learn this new skill? Skills are no exception. It is more fun to learn with a friend. Someone should track your progress. This person should ask you for updates on a regular basis. Check in twice a week.

If you really want to learn something, you have to decide when you are going to do it. Otherwise, you dramatically reduce your odds of actually doing it. – Jon Acuff

Days are like snowballs rolling down a hill. I don’t care how perfectly you’ve planned it, something unexpected is going to get picked up as your day rolls down the slope. – Jon Acuff

An accountability partner you only contract when you are winning isn’t an accountability partner, it’s a cheerleader. – Jon Acuff

Learning a new skill doesn’t have to be miserable, especially if you start with something fun and easy. – Jon Acuff

Skills Get Sharp Slowly and Dull Quickly. Skills will go dull if not used frequently. If you are writer, you should write daily. Once you get lazy, it will be hard to kick-start the habit again. At that time, you need motivation from friends to kick you to start again. The hardest competition you’ll ever face. The key for sportsmen is to be disciplined and do the same time every day of the week, even during off season. Learn to outsmart yourself. There is a problem with first times. First times should be the worst experience. Every time you start a new job, the skills you learn in your previous job are not useless. For every repetition you make, you should lay another brick in your foundation. You work best when skills become second nature to you. This will free up brain space for other things. If you discipline your life, it creates freedom in another. For instance, you could buy many sets of the same clothing. This will help you pare down your decision making. Your career is not shampoo. Nowadays, videos are big part of blogging. You must step into the tension of skills. Some skills cannot be simply put on autopilot, but should be on fighter pilot.

The more you can turn an important skill into a repeatable habit, the more you can trust the power of autopilot. – Jon Acuff

When you refuse to practice a skill today, it makes it harder to practice it tomorrow. Weeds of fear grow stronger the longer we wait to hustle. Get in the garden today. – Jon Acuff

Grab the Right Kind of Hammer for Your Career Ceiling. Do not build your cage. When you are stuck, you can choose to accept it or change it. Your skills will help you break ceilings. The ceiling is challenging you to break through it.

The father of every good work is discontent, and its mother is diligence. – Lajos Kassak

Should you ever stay at a bad job just because other people in your field don’t have a job? What are you really saying? That until everyone in your field is employed you can’t apply somewhere else? You can’t have another job until everyone else does? That doesn’t make any sense. – Jon Acuff

We build elaborate internal campaigns justifying where we are. We trick ourselves into thinking it’s someone else’s fault or that maybe it’s not so bad. It’s not a horrible job, it’s a good-enough job. If we stay there long enough, we eventually forget that we are even allowed to change. – Jon Acuff

I can’t tell you if in ten years I will have written five more books. But I can tell you that this year I will write one. I can’t tell you if in 10 years my blog will have 5 million readers, but I can write a new post today. – Jon Acuff

Investment 3: Character. Character is who you are. Character is the reason why people will give you another opportunity if you fail the first one. It is a pre-requisite for many things to come. Everything is personal in work. Character is impossible to ignore. Character will also determine your resilience to move things forward. Start planting your orchard and be generous and empathetic. People with bad character might win, but they may not last.

A talent is formed in stillness, a character in the world’s torrent. – Johann Wolfgang Von Goethe

Plant an Orchard. Character is a slow process and takes time to build. Character is like an orchard. The trees are the character traits and the weeds threaten to destroy your orchard. Which is one character trait that you want to develop? Ask a friend if you are clueless. Trust could be something you want to work on. Take a look at your whole orchard. I was addicted to chaos and busyness. However, if you like chaos, your character falls on the wayside. Write down the jobs you’ve had. Give a brief description of your job performance. List the way you left each job. Describe the strength of the relationships you left behind. Pull the weeds as fast as you can. Narcissism is a problem. Dishonesty is a horrible weed too. Pessimism is an issue too. Pessimism can grow and it can become a problem. Apathy is a big issue as well. Apathy cripples your ability to launch a career jump.

The future is purchased by the present. – Dr. Samuel Johnson

The best time to plant a tree was 20 years ago. The second best time is now. – Old Saying

Most destructive of all is that apathy cripples your ability to launch a career jump. No one who is apathetic has the energy or heart to try a positive, voluntary career transition. That entire quadrant is off the table when weeds like this have grown in your orchard. – Jon Acuff

Generosity is a Game Changer. We need to be generous as it can help us greatly in our careers. It helps to breed loyalty. People will support you if you have helped them before. Do not hesitate or hold back. Greed will cost you more than you think. Generosity is always cheaper than greed. Your generosity will pay dividends. It is for long term benefits. If you find that people are exploiting you, make sure you don’t have an itchy trigger finger. Learn to draw some boundaries. You can let the person learn from a painful experience. The worst case is to avoid them. Make your definition of generosity bigger. You can be generous with your time and skills. Ideally, you should be able to do something you are good at.

Service is renewing. When we serve, our work itself will sustain us. – Rachel Naomi Remen

Before you make a Career Jump give generously of your time, talent and resources without keeping score. If you keep a record of who you’ve been generous to with the expectation that they’ll return the favor, you’ll build transactions not relationships. – Jon Acuff

Empathy, No Longer Just for People Who Like to Cry with Friends. You need to navigate with empathy. It means understanding someone else’s needs and acting on them. Most people are the same and they all have hopes, fears, dreams, frustrations. Having empathy allows to work with just about anyone. If you have empathy, you can do sales and sell stuff. Take time to know someone’s real story. You will understand that they might have undergone to get to where they are. Compassion is important. Fear is an amazing storyteller. Care about what the people you care about care about. Character is an orchard, it changes over time. You don’t have to quit your job to engage in a career jump, but you can do something positive and voluntary. Read less minds, ask more questions. Instead of guessing, learn to ask them directly. Simply showing up shows empathy. It doesn’t have to be big actions. Make people bigger. Ask questions to your colleagues like ‘What can I do to make you look like a rock star to your manager?’ Put someone’s needs ahead of your own. What to do when empathy is broken. Be honest and admit you were wrong sometimes.

Everybody has a story. When we don’t take the time to know someone’s story or worse, create our own version of it, we lose the chance to understand what they need, which is the first step to empathy. – Jon Acuff

Be Present. Showing up at your job is important. You have to deal with your phone, your computer, and your meetings. We use our phones way too often. If you are not present, your relationships might be threatened. When you use your phone, you are putting other people on pause. Be present with your computer. People might surf the Internet at work in their free time. We are all guilty of it. Do work while you’re at work. Be present in meetings. Learn to take notes. It is easier to hide behind a laptop by being old fashioned and taking down notes is easier. Ask at least one question during the meeting will help you to stay engaged. Turn your phone upside down. You could just not bring your phone to the meeting or something.

Never Jump without Character. You need character when you decide to chase a dream. Character helps you navigate through chaos of change. You can always rely on your character. You can’t completely eliminate chaos from your life. Over time, you get used to living with chaos. It’s time to hustle.

Investment: Hustle. We are more capable than we think. Hustle means hard work. It helps you to build on relationships, skills and your character. You don’t get anywhere without hard work. There is a thin line between hustle and hassle. Use grit, awareness and flexibility.

‘Music is in the piano only when it is played.’ Jack Gilbert

Grit is a Choice, Not a Feeling. You will feel a sense of apathy if you have given up on your dream. Grit is not fun or easy. You might have to stay up late to work hard etc. It can be ugly and messy. However, grit is a choice. You might ask, what if I don’t have what it takes? You don’t need some ultimate goal to work on Do Over. Fear will always discourage you from working hard and acting on your goal. Tell yourself that you have what it takes to try. We all get to try. What if I pick the wrong thing to hustle on and miss my opportunity? The thing about life is that you will have many opportunities that will come your way. Therefore, do not apply the once-in-a-lifetime label to things you face. Regret is much worse than fear. Which would you rather choose, fear or regret? Make grit decisions. Give your hustle some time to succeed. Counsel and lean on your relationships. Ask for awesome opportunities. Give yourself permission to be kind. Be honest to yourself. Build a grit list. It’s like running, I don’t like it but I put in on my Grid List due to the benefits I derive from it. Go with grit, don’t be most people. Don’t wait until you feel brave to hustle, choose to hustle until you feel brave.

I didn’t want to be selling insurance at 40, wondering what it would have been like to do stand-up. – Steven Wright, Comedian

If you’re going to make new relationships, you need to have grit. If you’re going to learn new skills, you need to have grit. If you’re going to have strong character, you need to have grit. If you’re going to hustle, you need to have grit. – Jon Acuff

There’s no such thing as a perfect job. There’s no job where you get to do only the things you love doing. Those don’t exist. – Jon Acuff

There will be tasks, projects and activities you have to do in your career that you hate. No matter which stage you’re in, you’ll have to do some things you don’t love. That’s why we all need a Grid List, a short list of the skills we grit our teeth and do regardless of how we feel. – Jon Acuff

Hustle Has Seasons: Use Awareness to Recognize Them. Do not try to hustle at wrong points of your life. For instance, do not hustle on a holiday as you will not feel rested or recharged. You need to ask ‘what season am I in?’ Learn to focus. Hustle is a scalpel. Doing more action might not be the solution all the time. Do not hustle too much that you neglect your family etc. Instead of blaming your boss or colleagues, ask yourself ‘Did I expect this job to be something it never would be?’ It does not mean you are a failure. It just meets that you just took a wrong path and need to find a new one. Keep your head down and hustle on your work.

Be proactive about doing that in your own life. Work on your sense of awareness. Don’t wait for someone you love to call you out. – Jon Acuff

You don’t have to know the exact path, because nobody does, but are you roughly headed in the right direction? If you want to be a musician and you’re a pharmaceutical rep working 70 hours a week, not playing any music, stop kidding yourself. That path doesn’t lead to music. – Jon Acuff

Career Yoga. You need to spend time planning your day. Things rarely go according to plan. Hustling with flexibility is the best, as it leads to less disappointment. Be flexible with your dream. The work you end up loving might not even exist yet. You have to flexible about what you study as well. Your dream will change over your lifetime. Be flexible with your definition of success. Let new be different, not old. Humans love to idealize your past when our present doesn’t meet our expectations. Have fun storming the castle. Having fun is important as it helps you to get going and to push on. Having fun helps you to prevent burnout.

Always Use This to Multiply the Moment. Hustle offers you unexpected opportunities. Overcome your fear and learn to speak to a crowd. Say yes to small opportunities and learn to build from there.

Let no one be deluded that a knowledge of the path can substitute for putting one foot in front of the other. – Mary Caroline Richards

Hustle works those two ways. You hustle hard to stir up more opportunities. And then when you have one, you hustle hard to blow it up as large as it can possibly be. – Jon Acuff

Three Final Words You’ll Tell Me Someday Soon. Work can be more meaningful than we think. We have to change ourselves. We don’t get to pick a transition permanently. Your work is a lifestyle. Anyone can have a Career Do Over.

O you who sit over your full cup and do not drink, tell me, for whom are you still waiting? – Hermann Hesse