My new book "Eat People" is out this week

My next book is finally done and out in the wild.

Eat People: and Other Unapologetic Rules for Game-Changing Entrepreneurs

http://bit.ly/ggTcnS

Besides fun stories, the book is a set of rules or criteria to help entrepreneurs (or investors or job seekers) find the next big thing.

Rich Karlgaard, publisher of Forbes, was nice enough to say:

"American wealth happens when start-ups grow and get big. Andy Kessler takes us inside and reveals the secret of scale. Every entrepreneur should read this book. So should America's policy makers."

Pretty cool.

The Rules are here, but you have to read the book to figure out what they mean!

1. Scale
2. Waste Abundance
3. Horizontal
4. Intelligence at the Edge
5. Productive
6. Adaptive
7. Eat People
8. Markets
9. Exceptionalism
10. Market Entrepreneur
11. Zero Marginal Cost
12. Virtual Pipe

and a bonus Rule: Be the Highest Return

Below is a short excerpt. Please let me know what you think.

Thanks, and if you find it worthy, help spread the word.

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
http://bit.ly/ggTcnS

Comments

[Scott Daniels]

So...why is it that a hard-cover version is $12.99 and the kindle version is $12.99? Shipping? Ok. I see that savings but there have been a lot of inputs reduced or eliminated with the electronic version.
-Scott

[Chan Chi Sang]

yeh Andy why is the kindle price so damn high?
This is your blog so please RESPOND!!

[Ryan]

Any chance for an audiobook version for this title as well as the previous one as I like to maximize the effectiveness of the daily commute? I realize Kindle can do this via a computer generated voice and while I haven't actually tried it on Kindle I have in the past listened to text transcribed via this method and it is almost unlistenable in my opinion. Thanks.

[Nix Winter]

I read this book at the BN today! Fantastic book :)

[FM]

Kindle is $5 more expensive as I see it at amazon (hardcover costs $13.76 and kindle costs $18.71), only reason why I haven't bought the book (I'm assuming this diferential will be corrected at some point).

[bumblebee]

So, hedge fund managers are Sloppers? Who knew?

[Derek Schwartz]

I'm listening to the audio book on Amazon's Audible player right now. Very good, so far (1:30 into it). I also downloaded the Android version on my phone so that I can listen at lunch. They also just came out with a version of the Audible player for the Kindle, so now I'm suddenly confronted with the "need" to buy one. Sounds like an example right out of your book!

[Roberto Vela]

Mr. Kessler,

Phenomenal book. My only criticism is that, unless I misinterpreted you, you seem to promote completely unregulated capitalist economies without accounting for the consequences of the self-interested, myopic choices of individual actors in those economies in a world of ubiquitous access to limited resources. In theory market forces should halt depletion of a resource as it becomes scarcer, but it is also possible that unfettered use could deplete some resources before we can fully realize and allocate their value. Thus your own (very compelling) analysis of Jean-Baptise Say's notion that "supply constitutes demand," for example, undermines your contempt for environmental advocacy and, at least to me, it made your argument appear reactionary. I submit that you would have achieved even greater credibility by adopting a more moderate stance, maybe even addressing the issue of whether ANY regulation (especially if narrowly-tailored) can have social value. From a purely utilitarian, individual perspective, however, this was an insightful read, and effectively articulates many of the reasons why public distrust of corporations is irrational and unfair. Touché on your aversion to perpetuating ideas by dead economists for the sake of nostalgia.

[monster beats studio]

Euro-zone finance ministers plan to meet again this Sunday to address the Greek tragedy. But so far the only plan on the table is a doomed one by the French for the voluntary restructuring of sovereign Greek debt. Private buyers are increasingly skeptical of government guarantees and will demand real collateral. Credit default swap derivatives, which merely spread the risk, will no longer do. Some other sweetener will be needed. The solution? Bonds backed by real Greek assets.

[Adidas Original Shoes]

Banks rely on taxes to make a lot of money