Andy Kessler: Wall Street Meat : My Narrow Escape from the Stock Market Grinder
My first book. Stories of working as a Wall Street analyst with Jack Grubman, Frank Quattrone, Mary Meeker, and Henry Blodget
Andy Kessler: Running Money : Hedge Fund Honchos, Monster Markets and My Hunt for the Big Score
New York Times Bestseller Barron's Best Business Books 2004
Andy Kessler: How We Got Here : A Slightly Irreverent History of Technology and Markets
Connect the dots from the Industrial Revolution to the Computer and Communications business of today.
Andy Kessler: The End of Medicine: How Silicon Valley (and Naked Mice) Will Reboot Your Doctor
Can we get medicine on the same ever-lowering price curves as technology. Funny stories of my quest to figure out where silicon will change medicine.
Now, after more than a decade into the new millennium, it is time to start seeing, acting, and doing things from a 21st century perspective. The rate of progress over the last century was more than ever recorded in the history of the human race, and with digital technology, progress will not stop. If anything, change will come faster. In order to face these changes, the willingness to look to the future is necessary, and understanding the need to eat people is one required tool to make it possible.
a worthy read for those willing to move ahead in business and into the future.
Andy Kessler provides a baker’s dozen of rules that provide much food for thought in Eat People: Unapologetic Rules for Game-Changing Entrepreneurs. But, foodie clichés aside, Kessler’s message is a wake-up call to those budding or wannabe entrepreneurs as much as it is to the slumbering moguls and managers.
If the concept of eating people is unsettling—and that’s just the title—the rest of the book is bound to rile complacency. Embrace the exceptional. Don’t be scared to “eat people” and eliminate jobs that are counterproductive. In the end, the new jobs created will require more skills. Those people who have been “eaten” may well come out ahead (if they choose) recycled and fit for some other purpose through retraining or by simply moving on and getting out of the way.
Andy Kessler is coming out with a new book today, called Eat People: And Other Unapologetic Rules for Game-Changing Entrepreneurs, which I wholeheartedly recommend. It's billed as "rules for entrepreneurs," but it's more than your typical "rules" book, in that it really discusses many of the key underlying themes we talk about here on Techdirt all the time: things about abundance and scarcity, value vs. price, why zero marginal cost matters, the importance of "free," the nature of disruptive innovation and how value is often created in the tearing down of old monopolistic business models.
If you haven't read Andy's previous books, well, you should. But, this latest is typical Andy: packed full of thought-provoking insights, but done in a nice, easy (and quick) to read conversational manner. Like all of his books, this one made me stop and say "huh, I never quite thought of it that way... but that's exactly right" many times..
The Week in Geek is a terrific blog and newsletter from Prof. John Gallaugher of the Carroll School of Management at Boston College. He runs an annual Tech Trek for students through Silicon Valley and I'm often a stop in the tour. Sign up for his weekly newsletter at https://www.gallaugher.com.
From this Week's Geek: "TechTrek friend and class speaker Andy Kessler has another new book out – “Eat People: And Other Unapologetic Rules for Game-Changing Entrepreneurs“. Kessler is a frequent contributor to the Wall Street Journal and is the author of several other books, including “Wall Street Meat” which covers his time as an award-winning tech stock analyst, and “Running Money”, a primer on how he turned $11 million into $1 billion as a co-head of Velocity Capital. Disclosure, I blurbed the back cover of “Eat People” – the pre-release I reviewed last summer was hugely fun! Unapologetic is the watch-word. Don’t expect any “kumbaya” moments in a Kessler book. But like all of Andy’s work, it’s a rollicking read that’s chock full of interesting examples and provocative analysis. I remain a big Kessler fan."
But like all of Andy’s work, it’s a rollicking read that’s chock full of interesting examples and provocative analysis.
Professor Gallaugher's blurb is here: "Check your ego at the door! Eat People is a no-holds barred primer on what separates winners from losers in today's economy. Written by an insider with a killer track record spanning Wall Street to Silicon Valley, the book is a must-read for managers and investors."
Eat People: and Other Unapologetic Rules for Game-Changing Entrepreneurs
My Rule #7 is Eat People.
No, not like the 1973 Charlton Heston sci-fi cult classic Soylent Green about overpopulation in the year 2022 (“Soylent Green is people!”). Instead, we need to eat worthless jobs. The best way to leverage abundance and scale, and to create productivity, is to get rid of people. Truly, the road to wealth passes through the graveyard of today’s jobs.
But who? Well…
There are two types of people in the world—Creators and Servers.
Creators are at the top of the food chain—those who create productivity.
The Makes versus the Takes. The Vital Few. I don’t care if they are doing it themselves or work at a company that does. Productivity is precious—we need to take it wherever we can get it. Someone is creating tools from what is abundant to make up for what is scarce.
A Creator might be someone writing a piece of code to automatically lay out magazines, getting rid of expensive graphic designers. Or designing a robot to pick and place a product into an Amazon box for shipping, getting rid of workers in a warehouse. Or writing algorithms for trading stocks in milliseconds, something humans couldn’t do even if you threw a thousand of them at the problem.
Figure out who to get rid of and you have found yourself a huge opportunity. (Hint: It’s Servers!)
Generically, Servers are the next tier down—those who provide service to the Creators. Creators have to eat, put their money somewhere, get haircuts, get their teeth fixed, forge contracts, and on and on. This requires legions of Servers setting up shop all over the place to take care of others. Society has built an entire service sector just to service the Creators, and, well, all the other Servers.
Often, Servers make decent money, enough to be part of the middle class. They are doing their part. Not knocking the ball out of the park, but not flipping burgers either. Servers earn all levels of pay, more or less in line with the value of the service they provide. Cashiers and baggers at the low end, followed by receptionists and furniture movers and painters, then plumbers and carpenters, then graphic artists and marketers, all the way to lawyers and doctors.
Shoeshine boy, paper delivery, I can go on and on. None of these create any wealth, because they aren’t creating any productivity, that is, more output per worker hour. If a clever shoeshine boy tied shoe brushes to a broomstick handle so he could shine six pairs of shoes at once, I’d happily bump him up to the rank of Creator.
The same is true of home builders. Homes are consumptive, not productive. A Take versus a Make. If you create better building materials or can build a neighborhood in an assembly line, then maybe you’ve got something productive. If not, you’re just milking Creators.
The vast majority of workers are Servers. They don’t know it, probably wouldn’t like being called that, but they are. Thank them for existing, as they do buy Creators’ stuff, but they are not Creators.
I label everyone who is not a Creator a Server. But even that is too broad a definition.
Sloppers are one mutation of Servers. There are legions that do nothing but move stuff from one side of things to another—across a factory floor, a warehouse, across town, or across the economy. They’re not Creators—just middlemen or brokers, marking up the price for slopping stuff around—milking someone else’s inventions and adding cost. And not just physical goods, Sloppers can even move information from one side of, say, a DMV counter to another.
I call them Sloppers because they’re just slopping stuff around without adding any real value. You can argue, perhaps, that by getting the right goods to the right place at the right time to make a sale, they are adding value. Maybe. Especially as more and more of output is services that can move at the speed of light down fiber strands. But they are still middlemen. Value? Not much.
A friend who works at a large multinational Japanese consumer electronics firm was pushing to increase productivity by putting in new systems that would make entire departments of people obsolete. “Before we invest in that automation you’re asking for,” the higher-ups said, “we’ll need the employee IDs of the people and jobs we’d be eliminating.” Can you imagine the politics once that list of employees appeared at a staff meeting?
Longshoremen are the ultimate Sloppers, moving things from ship to shore and back again. San Francisco used to be a vibrant port, with piers built on the Embarcadero along the edge of the city. But in 1971, the International Longshoremen’s and Warehousemen’s Union (ILWU) went on strike for 106 days to fight against container ships. Containerization had become all the rage in shipping. With huge cranes, you load a ship up with containers, which can be unloaded at the other end and hooked to tractor trailer trucks and driven to their final destination. No need for dock workers to unload ships box by box, by hand, with a few boxes inevitably ending up damaged, up to some threshold of “breakage,” pushed to the side as “bonuses” for the workers. The ILWU didn’t like the idea of unloading a ship in fifteen hours instead of over several days, and without a huge army of union-wage workers. The ILWU fought against “steady men,” crane operators hired directly rather than through the union. The ILWU eventually lost the strike and all the shipping business moved from San Francisco to Oakland across the Bay.
You’d think lessons would have been learned.
In 2002, I attended a baseball game in San Francisco’s Pac Bell Park, now AT&T Park. Looking out over the Bay, it was hard not to notice dozens and dozens of huge container ships, piled high and sitting low in the water. This time, the ILWU had gone on strike to protect the jobs of marine clerks, union workers at every gate who, armed with pen and clipboard, tracked container ships coming and going and handed out orders on paper slips to truckers telling them which container they were to pick up. What was the ILWU so worried about this time? Bar code readers and wireless technology and computers to track the containers as well as an ATM-like machine to provide truckers with their orders. Classic people-eating technology.
Technology eats people. Someone inevitably complains, but progress cannot be fought for long. Creating wealth means finding those jobs to eat.
Add to the mix of people all the overhead in getting something to market. All the government workers at the Department of Commerce, the Department of Energy, Department of Education, the Federal Trade Commission, and on and on. Buildings full of people who don’t add much if any real value or help create productive wealth; they often just burden the system with costs. Don’t mistake them for plain old Servers as they don’t provide any useful service, just a cost. Sure, you gotta have them up to a point, but in no way are they increasing output or adding anything to the productivity stock of society.
Government employees are a unique bunch and almost all are Sloppers. I was fortunate to have a conversation with author P. J. O’Rourke. And not just author (I’ve read all his books, Holidays in Hell and Eat the Rich, they’re all terrific), no, P.J. always get the additional modifier of “satirist.” How cool is that? O’Rourke has an eagle eye for how society really works and calls it like he sees it, with humor. It’s not really satire at all; it’s telling the truth, which can be even funnier. P.J. and I chatted about his book on cars, Driving Like Crazy, when I asked him about all the rules and regulations and government workers that bog down the automakers.
“You mean the Fun Suckers?” he asked.
“I guess . . .”
“Think about the kid-has-to-put-a-hockey-helmet-on-to-answer-the-phone society we live in now,” he said. “These Fun Suckers are very interesting and they have been around forever and they are certainly not limited to any one political party or one political point of view. But they do gravitate towards politics and they are the people who come and tell you that everything you do is bad for you, bad for other people, insensitive, divisive, harms the climate, is unsustainable, it leaves too large a carbon footprint, it tangles things in the tuna nets that shouldn’t be tangled in them. Everything you do, wrong colored bathing suit destroys the manta ray population. Whatever. They’ve always got some reason to tell you what to do.”
“Again and again.” I added.
“Of course,” P.J. continued, “and if you really think about it, it’s just a form of bullying for weaklings. These are not the kind of people that got to do a lot of bullying on the school yard. In fact, they probably got beat up a lot. But now that they’ve reached the fullness of age and maturity, they’ve figured out a way to bully us ordinary people. And it’s always something to be analyzed.”
“But why?” I wanted to know.
“Politics is the art of achieving power and prestige without merit.”
Government employees are classic Sloppers. Necessary? Sure, to some extent, but for the most part, these Sloppers are wealth destroyers, not Creators or adding much value to anything.
But there are plenty of other types of Servers: Sponges, Supersloppers, Slimers, Slackers and Thieves come to mind. We’ll get rid of most of them too.
Eat People: and Other Unapologetic Rules for Game-Changing Entrepreneurs