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Farnam Street Think Week

Every year Bill Gates takes a think week, where he reads and ponders the future. This is how he reframes his perspective, gains new insights, and recharges his mental batteries.

This sounds like a good idea to me.

Escape the winter blues and join us for a week of reading on the beach in the mornings, afternoons spent thinking, and evenings with long dinners with fellow participants discussing ideas.

Some details:

  • The event runs March 18-23. Jeff and I will be flying in the 17th and leaving the 24th.
  • Anyone can register. After meeting thousands of Farnam Street readers in person over the years I know you're a pretty awesome crew. So, anyone can sign up  … but I only want people who are going to take this seriously.
  • Space is extremely limited. There are only 20 spots.
  • You have a say. Dinners are the only organized events and they will each have a theme. After registration closes, we'll email participants to get ideas on what they want to discuss and what they'll be reading. You'll also get a list of what Jeff and I will be reading that week.
  • Registration closes on February 29, at 11:59pm EST.
  • Discounted rates at the hotel. Things in Hawaii can be expensive. Since we hold a lot of conferences, we managed to lower the room rates by hundreds of dollars. This is subject to hotel availability.

If this sounds like your idea of fun — reading, thinking, and hanging around a bunch of like-minded people drinking wine and discussing ideas — then I'll see you there.

This has the potential to recharge your batteries and change your life.

You can find more information and sign up here.

Farnam Street’s 2015 Annual Letter to Readers

To the readers of Farnam Street:

Most public companies issue an annual letter. These letters offer an opportunity for the people entrusted to run the company to communicate with the people who own the company.

I decided this would be a good year to start a similar tradition at Farnam Street. It’s not that I haven’t written annual letters before. As a board member and advisor, I’ve written a few in the past. However, I’ve never written you an annual letter before. There is no good reason for that. To a large extent, I consider you to be the owners of Farnam Street.

Investors, or owners, traditionally exchange money for shares in a company. I think your investment in Farnam Street is just as important. You trust me with something far more valuable than money: your time.

For all of us, time is finite. That means we need to think about opportunity costs. Reading Farnam Street means you’re not doing something else. My job is to make sure your investment is getting an above average return.

***

2015 was a record year in almost every reader-related metric for Farnam Street.

The number of Farnam Street readers increased dramatically. The time people spent reading a page (a good proxy for how interested people are in the content) increased. The bounce rate (a fancy phrase for the percentage of people who look at one page and then leave the site) decreased dramatically. In short we had more people who read longer and looked at more pages.

We offered three public Re:Think Workshops (Leadership, Innovation, and Decision Making). This took a lot of effort from an amazing team. The quality of people who attend these events continues to blow my mind. One former Harvard Business School professor summed it up nicely by saying you won’t find a better crowd of people at a public event anywhere. The feedback for all of the events was positive with the exception of one person (over 100 positives and 1 negative – we’ll take it). I felt we were at risk of spreading ourselves too thin, so we've decided to pare down to two in 2016 (Decision Making in February, which is already sold out, and Innovation in the fall). We’ve opted to put Re:Think Leadership on hold for now. Additionally, we have 13 people coming to Re:Think Decision Making who have attended Re:Think workshops in the past (including 6 who are attending Re:Think Decision Making for the second time) — I can’t think of a better metric to help gauge success.

The Knowledge Project, a successful podcast, launched. The first few episodes have been downloaded over 100,000 times. The audio quality sucked at first — which is entirely my fault — so we’ve spent a lot of time and money getting that to a decent place. I can tell you firsthand, the quality of conversation doesn’t matter if people can’t hear it. We’re much better now but there is still a lot of room for improvement.

Our first ever online product: How to be Insanely More Productive launched. I remember being on a train coming back from Toronto when I first put this online. I figured this was a good place to start as I’m often asked to talk about productivity. I guessed about 50 people would sign up and I’d get some good feedback on how to deliver an online course that delivered tangible results in people’s lives. I was blown away by the participation levels and extremely positive feedback. I still get emails almost weekly from people saying how it helped them gain control of their lives and spend more time with their family. However, similar to the first episode of The Knowledge Project, this webinar offered first-rate content in third-tier packaging. I had another webinar planned for September on How to Read a Book, but I delayed the launch until I could find the right people to help re-package and re-formulate the material into something much better.

***

Membership program and the economics of running an online media company.

Perceptive readers will note the change of perspective from “I” to “we” in recent posts and newsletters.

Farnam Street had reached the point where I couldn't do the things I wanted to do long-term and still keep the day-to-day going. Despite having a team of people working hard to bring you events like Re:Think Decision Making, it's largely been a one-person endeavor until now.

I had to decide between pursuing my goals short-handed, which limits what can be accomplished, and growing with like-minded people who share my vision for Farnam Street. I chose the latter. And the first such hire started in November.

In late summer I started courting Jeff Annello to work with me at Farnam Street full-time. Not only does Jeff exemplify the Farnam Street ethos but he's a paragon of quality thinking. We've worked together in the past and had been waiting for another opportunity to do so.

Many people don't realize that Farnam Street takes hundreds of hours and thousands of dollars a month to sustain — and that was before bringing Jeff on board.

For years, generous readers like you have supported Farnam Street with donations. Without exception, I've reinvested all of that money back into Farnam Street.

I wish all help came as cheap. Jeff and his new fiancé, as you can imagine, don't fully subscribe to this long-hours, no-salary package.

This was the impetus that led me to Re:Think the donation model. While I haven't done away with donations, you can still contribute that way if you wish, I've opted to focus on a membership program.

Online media properties, as you probably know, are going through a bit of a rough patch as they look for ways to create and capture value. The problem, from a reader's perspective, is that most of these organizations want to capture more value than they create — they focus on the wrong side of the equation. This leads to a short-term engagement between creator and audience, as the latter realizes they've been had.

Farnam Street takes the opposite approach: Add so much value that people want to support it. Our goal is to be so good that having a membership becomes a no-brainer, while at the same time, using some of the proceeds from paid membership to improve the free areas of the site.

The vast majority of content will always be free, and you can expect the free content to increase in quantity and quality as we head into 2016. If you find value in Farnam Street, we hope you'll consider contributing either through an individual or corporate membership.

One thing I want to make clear is that, although I've done a good bit of the work to date by myself, Farnam Street is a team. There is no way we would have gotten where we are without the wonderful support of a few key people who wish to remain behind the scenes. These people play more of a role than you can imagine and we all owe them our thanks.

I also want to thank our lead sponsor for 2015, Greenhaven Road Capital and our two lead sponsors for 2016: Slack and Siebels Asset Management Research. It’s not too early to start thinking about 2017. If you’d like to inquire about sponsoring the blog please get in touch with me.

***

We will continue to work hard every day to offer readers and members more value in 2016. That’s not an empty statement. Allow me to explain. Here is what you can expect and hold us accountable for in 2016:

The quality of all content will be much higher. We will do better at adding context, presenting ideas in compelling ways, adding tools to your mental tool box, making things practical, and exposing you to mental models that will help you be better at what you do. We’ll further our exploration of what it means to live a meaningful life and deepen our understanding of ourselves and the world.

The Re:Think workshops will offer a better experience. While everyone has described their experiences so far as off the charts, I see so much room for improvement that it’s hard to fathom how we’re exceeding expectations. Everything from onboarding and hotel options to the overall experience while at the event will be improved. We have an amazing team in place for the events. They consistently sell out.

The audio quality on the podcast will be much improved. I’ve already taken care of this to a large extent. Where possible, I'll do more in-person interviews as these offer more meaningful and deeper conversations.

The experience of existing readers will not be compromised to add new readers. For a large part of the year there was an annoying little pop-up that appeared on the screen asking for your email address. This was a mistake. While it helped us grow at about 2500 readers a month, it’s annoying to some and degrades the reading experience for all. You deserve better. I fumbled here and hopefully recovered. I was aware of how annoying it was and failed to act. The allure of 100,000 readers is a strong pull — especially when my mother reminds me that her “small town” (my words, not hers) has more people than I have readers. Anyway, the pop-up is off now.

The site will function better. We will be seeking to engage a web designer in 2016 or 2017 to redesign the site to improve navigation, organization, and the overall reading experience. This is more about finding the right person or team to work with us and less about the year in which it happens.

Products will exceed your expectations. We have two new things slated to roll out in 2016 — a mini-course in January on How to Read A Book and a project I’ll reveal when the time is right. To help ensure we’re delivering at the quality and caliber you deserve, we’ve invested in hiring the right people to help design, develop, and deliver these courses. I hope you'll offer your honest feedback.

***

We have no idea what tomorrow will bring so we try to prepare for an uncertain future. I show up to the office every day looking for opportunities to move forward in the best way I can. That’s usually putting one foot in front of the other and trying to make incremental progress without regressing.

Thank you for your time and trust,
Shane

An Extraordinary Birthday Present (Plus a Free Re:Think Innovation Ticket)

So I turn 36 this weekend.

Ask anyone that knows me and they'll tell you I'm difficult — or even impossible — to buy presents for. Which isn't true. I love wine, books, and memberships. But most of all, I love it when people do something nice for someone they'll never meet. 

In the past, we've given to the Ottawa food bank and purchased over $10,000 in books for schools that need them. Together we've done some amazing things.

Now I want to do something I've never done on my birthday.

In lieu of gifts, my birthday wish this year is to raise $1,000 supporting something near and dear to my heart: Education.

Why? Because the best way out of poverty is literacy.

I want to give back to the most in need, most impoverished schools. And I want your help.

What if it were your kids going to these schools? 

I'll sweeten the pot.

Here's how to get it:

  • Spread the word however you can (Twitter, Facebook, Megaphone, …). Send people to this post or the Donorschoose.org page.
  • Leave a comment below telling me how you spread the word  (Measurement of any type gets huge bonus points. Comment must be put up no later than 11:59pm EST on Sunday, July 12th, 2015.)
  • Lastly, answer one question at the very top of your comment: “What does literacy mean to you?” Put “#LiteracyMeans” at the very top, followed by your answer. This is an IQ test in following directions, as I’ll skip entries without #LiteracyMeans at the top.

I'll pick the winner on Monday July 13th. You must be over 18, void where prohibited, no aliens, etc.

The best reason of all is that you'll feel awesome. Even if it's $1 it would mean the world to me.

Again, here is where you can donate $36, $1, $1,000, or whatever you can.

(This unusual birthday present isn't my idea, I stole it from Tim Ferriss. When people have better ideas, don't fight it. Just adopt them.)

John Keats on the Quality That Formed a Man of Achievement: Negative Capability

John Keats coined the term negative capability to describe the willingness to embrace uncertainty, mysteries and doubts.

The first and only time Keats used the phrase was in a letter on 21 December 1817 to his brothers in reference to his disagreement with the English poet and philosopher Coleridge, who Keats believed “sought knowledge over beauty.”

I had not a dispute but a disquisition with Dilke, upon various subjects; several things dove-tailed in my mind, and at once it struck me what quality went to form a Man of Achievement, especially in Literature, and which Shakespeare possessed so enormously – I mean Negative Capability, that is, when a man is capable of being in uncertainties, mysteries, doubts, without any irritable reaching after fact and reason – Coleridge, for instance, would let go by a fine isolated verisimilitude caught from the Penetralium of mystery, from being incapable of remaining content with half-knowledge. This pursued through volumes would perhaps take us no further than this, that with a great poet the sense of Beauty overcomes every other consideration, or rather obliterates all consideration.

From Wikipedia:

Keats understood Coleridge as searching for a single, higher-order truth or solution to the mysteries of the natural world. He went on to find the same fault in Dilke and Wordsworth. All these poets, he claimed, lacked objectivity and universality in their view of the human condition and the natural world. In each case, Keats found a mind which was a narrow private path, not a “thoroughfare for all thoughts.” Lacking for Keats were the central and indispensable qualities requisite for flexibility and openness to the world, or what he referred to as negative capability.

This concept of Negative Capability is precisely a rejection of set philosophies and preconceived systems of nature. He demanded that the poet be receptive rather than searching for fact or reason, and to not seek absolute knowledge of every truth, mystery, or doubt.

The origin of the term is unknown, but some scholars have hypothesized that Keats was influenced in his studies of medicine and chemistry, and that it refers to the negative pole of an electric current which is passive and receptive. In the same way that the negative pole receives the current from the positive pole, the poet receives impulses from a world that is full of mystery and doubt, which cannot be explained but which the poet can translate into art.

Although this was the only time that Keats used the term, this view of aesthetics and rejection of a rationalizing tendency has influenced much commentary on Romanticism and the tenets of human experience.

For the twentieth-century British psychoanalyst Wilfred Bion, negative capability “was the ability to tolerate the pain and confusion of not knowing, rather than imposing ready-made or omnipotent certainties upon an ambiguous situation or emotional challenge.”

If you're still curious, I recommend reading this thesis on Negative Capability and Wise Passiveness.

Lincoln on Leadership

A Lincoln

Fight the Good Fight

The probability that we may fall in the struggle ought not to deter us from the support of a cause we believe to be just.

Try Honey Before Vinegar

If you would win a man to your cause, first convince him that you are his sincere friend. On the contrary … mark him as one to be shunned and despised, and he will retreat within himself, close all avenues to his head and his heart; and tho' your cause be naked truth itself, transformed to the heaviest lance, harder than steel, and sharper than steel can be made, and tho' you throw it with more than Herculean force and precision, you shall no more be able to pierce him than to penetrate the hard shell of a tortoise with a rye straw.

Work Hard, Then Work Harder

The leading rule for the lawyer, as for the man of every other calling, is diligence. Leave nothing for tomorrow which can be done today. Never let your correspondence fall behind. Whatever price of business you have in hand, before stopping, do all the labor pertaining to it which can then be done.

Believe In Yourself

Always bear in mind that your own resolution to succeed is more important than any other one thing.

The Idea of Democracy

As I would not be a slave, so I would not be a master. This expresses my idea of democracy—Whatever differs from this, to the extent of the difference is no democracy.

Stay Committed

I would rather be assassinated on this spot than to surrender it.

Know Your Friends

I distrust the wisdom if not the sincerity of friends who would hold my hands while my enemies stab me.

Heal Their Wounds

On the whole, my impression is that mercy bears richer fruits than any other attribute.

Accept Lessons As They Come

In any future great national trial, compared with the men of this, we shall have as weak, and as strong; as silly and as wise; as bad and good. Let us, therefore, study the incidents of this as philosophy to learn wisdom from, and none of them as wrongs to be avenged.

​​(h/t historynet.com)

What makes Warren Buffett a great investor? Intelligence or Discipline?

I thought this excerpt from Warren Buffett's 2011 interview in India was relevant to not only investing but also decision making. A member of the audience says to Buffett: “As we all know, you are an extremely intelligent person. At the same time, you are very disciplined with your investing approach. What makes Warren Buffett a great investor? Is it the intelligence or the discipline?”

Here is Warren's response.

Warren: The good news I can tell you is that to be a great investor you don't have to have a terrific IQ.

If you've got 160 IQ, sell 30 points to somebody else because you won't need it in investing. What you do need is the right temperament. You need to be able to detach yourself from the views of others or the opinions of others.

You need to be able to look at the facts about a business, about an industry, and evaluate a business unaffected by what other people think. That is very difficult for most people.

Most people have, sometimes, a herd mentality which can, under certain circumstances, develop into delusional behavior. You saw that in the Internet craze and so on. I'm sure everybody in this room has the intelligence to do extremely well in investments.

Moderator: They're all 160 IQs.

Warren: They don't need it. I'm disappointed they haven't sold off some already. The 160s won't beat the 130s at all necessarily. They may, but they do not have a big edge. The ones that have the edge are the ones who really have the temperament to look at a business, look at an industry and not care what the person next to them thinks about it, not care what they read about it in the newspaper, not care what they hear about it on the television, not listen to people who say, “This is going to happen,” or, “That's going to happen.”

You have to come to your own conclusions, and you have to do it based on facts that are available. If you don't have enough facts to reach a conclusion, you forget it. You go on to the next one. You have to also have the willingness to walk away from things that other people think are very simple.

A lot of people don't have that. I don't know why it is. I've been asked a lot of times whether that was something that you're born with or something you learn. I'm not sure I know the answer. Temperament's important.

Moderator: That's very good advice, to be detached from all the noise. You shouldn't go with the herd.

Warren: If you don't know the answer yourself don't expect somebody else to tell you. If you don't know the answer yourself and somebody else says they know the answer, don't let that fact push you into coming to a conclusion about something that you don't know enough to come to a conclusion on.

Stocks go up and down, there is no game where the odds are in your favor. But to win at this game, and most people can't, you need discipline to form your own opinions and the right temperament, which is more important than IQ.

Pascal said it best: “All men's miseries derive from not being able to sit in a quiet room alone.”

Warren: If you look at the typical stock on the New York Stock Exchange, its high will be, perhaps, for the last 12 months will be 150 percent of its low so they're bobbing all over the place. All you have to do is sit there and wait until something is really attractive that you understand.

And you can forget about everything else. That is a wonderful game to play in. There's almost nothing where the game is stacked in your favor like the stock market.

What happens is people start listening to everybody talk on television or whatever it may be or read the paper, and they take what is a fundamental advantage and turn it into a disadvantage. There's no easier game than stocks. You have to be sure you don't play it too often.

You need the discipline to say no.

Ajit: The discipline to say no, if you have that and you're not willing to let people steamroll you into saying yes. If you have that discipline, that's more than 50 percent of the battle.

Warren: Don't do anything in life where, if somebody asks you the reason why you are doing it, the answer is “Everybody else is doing it.” I mean, if you cancel that as a rationale for doing an activity in life, you'll live a better life whether it's in the stock market or any place else.

I've seen more dumb things, and sometimes even illegal things, justified (rationalized) on the basis of “Everybody else is doing it.” You don't need to do what everybody else is doing. It's maddening, during the Internet craze when the bubble was going on.

Here's your neighbor who's got an IQ of 50 points below you, and he's making all this easy money and your wife is telling you “This jerk next door is making money, and you're smarter than he is. Why aren't you making money?”

You have to forget about all those things. You have to do what works, what you understand, and if you don't understand it and somebody else is doing it, don't get envious or anything of the sort. Just go on and wait until you find something you understand.

From this video, a watermarked transcript of which is available for purchase.