Andy Kessler

Mises.org Douglas French review of Eat People

http://mises.org/daily/5047/Commerce-Is-a-Peoples-Revolution-Daily

The big-box book business has begun to crumble with the bankruptcy filing of book-selling behemoth Borders. The Chapter 11 filing indicates the company is looking to restructure its debts and continue on. But as in the case of bankrupt Blockbuster, there may not be anything to restructure, with both of these old-technology companies destined for liquidation and futures of little more than Wikipedia entries chronicling each company's past glories.

Old ideas are continually destroyed by life-changing entrepreneurs who take new ideas and make all of society the better for it. Joseph Schumpeter is smiling while the equity holders of Borders stock are crying.

Once upon a time Borders increased my standard of living; now it's Amazon, shipping books to my front door. No more wasting gas and time while a girl with purple hair and a nose ring swipes my card and bags my books. For others, convenience is loading their ebooks electronically.

In the big picture, the Borders BK is a beautiful thing. As opposed to General Motors and AIG, there will be no government rescue. The fertile minds and energies of the creative class are always busy making our lives better knowing they won't be protected like government's sacred cows.

Andy Kessler has met and knows many of the creators who have shaped our lives for the better. Their successes were not guaranteed by government contracts or sweetheart deals, Kessler explains. "The cool thing about all of these folks is that no one did them any favors," Kessler writes in his new book Eat People: Unapologetic Rules for Game-Changing Entrepreneurs.

Sounding very much like F.A. Hayek, Kessler says that markets make better decisions than managers.

Kessler has produced a few New York Times bestsellers: Wall Street Meat, Running Money, and The End of Medicine. Kessler self-published Wall Street Meat when he was told publishing a book takes a year by the traditional publishing houses. He published his novel Grumby last year, first for theKindle and then in hardcover.

Kessler writes in an engaging and conversational style, thinks outside the box, and draws inspiration from such divergent places as the leftist Rules for Radicals, a dopey 99% conference for creative thinkers, but most of all from the wisdom of the entrepreneurial geniuses he's met from his time in Silicon Valley and on Wall Street: like Mark Zuckerberg and Mark Cuban.

Read the rest of the review here.

 

WSJ: Dave Kansas review of Eat People

Early in "Eat People," a business-advice book for "game-changing entrepreneurs," former hedge-fund manager Andy Kessler casts his mind back to 10th-grade chemistry to muse on the "highly reactive" nature of atoms and molecules called free radicals. Because free radicals have an unpaired electron, he says, "they are always looking for something to do, hungry for some chemical reaction—like combustion."

Mr. Kessler's heroes, he says, are the free radicals of the business world, "someone who not only creates wealth . . . but at the very same time, improves the world, makes life better, and increases everyone else's standard of living." The roster ranges from modern free radicals like Steve Jobs and Sam Walton back to Andrew Carnegie and John D. Rockefeller, though the latter two gents "at some point" stopped being free radicals and "became monopolists." Rockefeller, Mr. Kessler says, was "more likely criminal." 

It's a typically cheeky aside from Mr. Kessler, who likes to incite and amuse while getting his unvarnished free-market views across to readers. After a long and varied career in finance—he was an analyst, banker and venture capitalist in addition to managing a hedge fund—he has become an author. Much of his early writing—"Wall Street Meat" (2004), "Running Money" (2005) and "How We Got Here" (2005)—was grounded in his first-hand experience.

WSJ: Is Your Job an Endangered Species?

Technology is eating jobs—and not just obvious ones like toll takers and phone operators. Lawyers and doctors are at risk as well

So where the heck are all the jobs? Eight-hundred billion in stimulus and $2 trillion in dollar-printing and all we got were a lousy 36,000 jobs last month. That's not even enough to absorb population growth.

You can't blame the fact that 26 million Americans are unemployed or underemployed on lost housing jobs or globalization—those excuses are played out. To understand what's going on, you have to look behind the headlines. That 36,000 is a net number. The Bureau of Labor Statistics shows that in December some 4,184,000 workers (seasonally adjusted) were hired, and 4,162,000 were "separated" (i.e., laid off or quit). This turnover tells the story of our economy—especially if you focus on jobs lost as a clue to future job growth.

With a heavy regulatory burden, payroll taxes and health-care costs, employing people is very expensive. In January, the Golden Gate Bridge announced that it will have zero toll takers next year: They've been replaced by wireless FastTrak payments and license-plate snapshots.

Technology is eating jobs—and not just toll takers.

Tellers, phone operators, stock brokers, stock traders: These jobs are nearly extinct. Since 2007, the New York Stock Exchange has eliminated 1,000 jobs. And when was the last time you spoke to a travel agent? Nearly all of them have been displaced by technology and the Web. Librarians can't find 36,000 results in 0.14 seconds, as Google can. And a snappily dressed postal worker can't instantly deliver a 140-character tweet from a plane at 36,000 feet.

So which jobs will be destroyed next? Figure that out and you'll solve the puzzle of where new jobs will appear.

Investor Insight Outside the Box

This week’s Outside the Box is a little unusual, even for me. But it will be fun, informative, and thought-provoking. My friend Andy Kessler has written another irreverent, gonzo book called Eat People: And Other Unapologetic Rules for Game-Changing Entrepreneurs. He has graciously allowed me to copy his introduction as this week’s missive.

Andy gives us 12 Rules and a Bonus Rule that characterize game-changing companies. They are: Scale, Waste, Horizontal, Edge, Productive, Adaptive, Eat People, Markets, Exceptionalism, Market Entrepreneur, Zero Marginal Cost, Virtual Pipe, and Highest Return. Find a company that embodies these rules early, and you get in on the ground floor of the next Apple or Microsoft.

Fun, informative, and thought-provoking. Another irreverent, gonzo book.

Andy has done that. He turned $100 million into a billion for his investors, then got out more or less at the top. He is the real deal and I take every moment I can get with him. Now he just looks for the Next Big Thing for himself, but in Eat People he shares the rules for finding them, or even creating your own next big thing.

You can get his book at http://www.amazon.com/Eat-People-Unapologetic-Game-Changing-Entrepreneurs/dp/1591843774 for a cheap $13.48 or on your iPad or Kindle. You can read it in a few hours. Make notes. 

And get some of his other books while you are there. I think How We Got Here is one of the best, most readable books on the history of technology and the markets I have seen. His latest fiction work, called Grumby, takes a lopsided look at the whirl of technology as he shows how a product can go from nothing to millions almost overnight.

Read the following and think. And enjoy it.

John Mauldin

American Express Open Forum - Matthew May Guru, Review

Now, a book on entrepreneurial wealth creation written by a Wall Streeter and former hedge fund manager might, at first blush, seem like one the average business reader would easily pass on. After all, wasn't it Wall Street and its various kin that had a great hand in destroying vast quantities of wealth? Wasn't it just a few weeks ago that Wall Street reported a record year of compensation and bonus payouts, while the rest of the employment world still struggles?

 

But on second thought, and taking into account the fact that we learn best from failure, maybe a book by someone with an inside understanding of Wall Street money (in all of its various forms), with a cut-to-the-chase message, take-no-prisoner attitude is exactly the book we need to read. If, that is, if we want to know why and how it is that in good times or bad, superstar entrepreneurs are able to not just start profitable companies, but overturn entire industries.

a cut-to-the-chase message, take-no-prisoner attitude

 

And that is exactly why I wanted to hear what Andy Kessler, author of the new book Eat People: And Other Unapologetic Rules for Game-Changing Entrepreneurs, had to say. I wasn't disappointed. In fact, I loved the book. Not just because Kessler was there when Michael Dell was selling PCs out of his dorm, when Steve Jobs was getting thrown out of Apple, when Rupert Murdoch almost lost News Corporation, and before Mark Zuckerberg was Mark Zuckerberg... but because I'm starting a new venture and I'm a hound for this kind of valuable insight.

Read the rest here.

Washington Post Express: Ready, Set, Start-Up

Don't worry: Andy Kessler's not encouraging cannibalism. In his provocatively titled new book, "Eat People: And Other Unapologetic Rules for Game-Changing Entrepreneurs" ($25.95, Portfolio/Penguin), the one-time stock analyst, investment banker, hedge-fund manager and venture capitalist shares what he's discovered to be the secrets of success for start-up operations. We spoke with Kessler recently about everything from the importance of scale to why Bill Gates deserves our thanks.

So, what exactly do you mean by "eat people"?
The book is about a bunch of different things, but for the most part, it's rules for entrepreneurs on how to find the next big thing. I've got 13 of them, all based on my experience. What "eat people" is, besides being rule number seven, is the observation that most great pieces of technology that create massive amounts of wealth are about getting rid of jobs and getting rid of people in the work force.

But all we hear, from Congress to Main Street, are continuous calls for job creation. 

The good news is those old jobs are replaced by better jobs. Facebook is hiring,Groupon is hiring, Google, Twitter — these are all creators of productivity tools. Pick a sector and you can find a company using that technology that is creating jobs. The history of the U.S. economy is that it's not static. Every cycle, we destroy old jobs and ways of doing things, and wealth and great jobs are created.

Read the rest of the Q&A here.

Response to WNYC Brian Lehrer interview

from the blog Emancipation Propagation:

Andy Kessler points out that to build an iphone in 1972 would have cost 100 billion dollars; one bit of memory in 1972 cost one dollar, and today's iphone comes with 32 gigs or roughly 32 billion bits of memory. He does so to make the point that technology improves the quality of life at the cost of inefficiencies (inefficient companies and processes and technology are displaced and eliminated).  And that only the productive in a market economy will survive. 

Politicians can arbitrarily meddle with market economies so that the productive do not survive.  By imposing regulatory legislation politicians tilt the favor not to the productive but to the politically connected.

Listen below to the contrast in perspective of those that want to reward not the productive but the politically connected.

Andy Kessler: WNYC Brian Lehrer interview

In this radio interview author Andy Kessler discusses the concept of creative destruction--where the quality of life of the consumer is improved as inefficient companies go out of business. The cynical radio host and his listener/caller's comments afford a treasure of insight into the mind of scarcity-based Luddites who want to force everyone to retrogress into lower quality of life and believe this is the first time inefficient jobs have been eliminated by efficiency technologies.

 

Mitchell York entrepreneurs.about.com review and questions

Andy Kessler, former hedge fund manager and Silicon Alley investor, has published a book, Eat People, that every entrepreneur needs to read as a reality check on her business.

In Kessler's book, entrepreneurs will find a yardstick to measure the chance for success of their as-yet undeveloped concept, or more precariously, the one they've already birthed. Will your product reach thousands? Not bad. But not enough. It needs to scale to reach millions or billions to be important in a world in which technology cycles happen faster than even their inventors can keep up with.

Truly groundbreaking. Every entrepreneur needs to read as a reality check on her business

Kessler answered my questions about entrepreneurship in the new century. His responses illuminate his book, which you should buy and read as soon as possible.

Read the Q&A with Mitchell York at entrepreneurs.about.com

How I got my VAX 11/780 (cutting room floor from my book Running Money)

Digital Equipment founder Ken Olsen died this week. I wrote a piece for GigaOm about DEC and mentioned buying VAX 11/780 minicomputers with ratepayer funds while working at Bell Labs. I wrote this story up years ago for my book Running Money, but it ended up on the cutting room floor. No better time than now to find it and put it up for all to read. Enjoy.

Here's a handy PDF.

 

Holmdel, New Jersey – December 1982

“Got a second?”

Uh-oh. I have learned that those dreaded three words usually mean weeks or months of hassle. It was back in the early ‘80’s and I had been working at Bell Labs for a couple of years, and almost no one ever told me what to do. Bell Labs was about research. I suppose they figured that if they didn’t tell you what to do, you would invent new and interesting things. Which was often true. You just kinda show up and figure out what to do. But every once in a while, someone pokes their head in your door and asks if you’ve “got a second.”

“George, what’s up?”

George Kutska was my boss, and probably one of the smartest guys I had ever met. He was big, not beer bellied, just rotund, and had some sort of medical problem, in that he always smelled. The kind of smell that deodorant or antiperspirant couldn’t hide for very long. Oddly, that never bothered me, I enjoyed his company because I was always laughing. He had a wicked cynical personality, which one gets, I suppose, from working inside the world’s largest monopoly for too many years.

“Well, it’s almost the end of the year,” George started.

“George, isn’t that always true when December rolls around?”

 “Yes, I realize that, Mr. Wisenheimer. Just listen for a change.”

WNYC Brian Lehrer interview

 

New York City NPR affiliate. The comments are priceless.