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4 posts tagged BR

May
10

Apr
21

I just wrapped up The Innovator’s Dilemma by Clayton Christensen.  If you’re interested in business or startups, this book is mandatory reading.  It will change the way you think. No hyperbole, no exaggeration - this book will literally force you to think about business differently.  It’s absolutely brilliant. The book focuses on disruptive innovation and what companies, both new and old, can do to stay in business and ahead of the curve.  Here’s a brief rundown of disruptive innovation: Disruptive innovation describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves ‘up market’, eventually displacing established competitors.  An innovation that is disruptive allows a whole new population of consumers access to a product or service that was historically only accessible to consumers with a lot of money or a lot of skill.  Characteristics of disruptive businesses, at least in their initial stages, can include:  lower gross margins, smaller target markets, and simpler products and services that may not appear as attractive as existing solutions when compared against traditional performance metrics.  Because companies tend to innovate faster than their customers’ lives change, most organizations eventually end up producing products or services that are too good, too expensive, and too inconvenient for many customers.  By only pursuing “sustaining innovations” that perpetuate what has historically helped them succeed, companies unwittingly open the door to “disruptive innovations”. It’s a bit to wrap your head around, but Clayton makes it all crystal clear and uses historical examples to prove his point.  The book reads like a series of B-School case studies filled with numerous charts and graphs.  It takes some serious concentration (and a lot of rereading) to get through, but it’s well worth it.  (If you’re not a case study fan, don’t worry, most of them are skippable.  Clayton summarizes all the main points at the beginning and end of every chapter.)    Along with disruptive innovation, Clayton espouses the notion that businesses need to act like startups in order to stay relevant and sustain relevant product development.  The best way to do this, he claims, is for incumbents to create a small autonomous unit dedicated to pursuing new and iterative products in new markets.  Essentially, incumbents need to create startups, as startups are the drivers behind disruptive innovation. I can’t get too detailed here because this book says a lot.  It’s truly enlightening.  Go read it if you plan on doing anything business or technology-related in your life.

I just wrapped up The Innovator’s Dilemma by Clayton Christensen.  If you’re interested in business or startups, this book is mandatory reading.  It will change the way you think. No hyperbole, no exaggeration - this book will literally force you to think about business differently.  It’s absolutely brilliant.

The book focuses on disruptive innovation and what companies, both new and old, can do to stay in business and ahead of the curve.  Here’s a brief rundown of disruptive innovation:

Disruptive innovation describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves ‘up market’, eventually displacing established competitors. 
An innovation that is disruptive allows a whole new population of consumers access to a product or service that was historically only accessible to consumers with a lot of money or a lot of skill.  Characteristics of disruptive businesses, at least in their initial stages, can include:  lower gross margins, smaller target markets, and simpler products and services that may not appear as attractive as existing solutions when compared against traditional performance metrics. 
Because companies tend to innovate faster than their customers’ lives change, most organizations eventually end up producing products or services that are too good, too expensive, and too inconvenient for many customers.  By only pursuing “sustaining innovations” that perpetuate what has historically helped them succeed, companies unwittingly open the door to “disruptive innovations”.

It’s a bit to wrap your head around, but Clayton makes it all crystal clear and uses historical examples to prove his point.  The book reads like a series of B-School case studies filled with numerous charts and graphs.  It takes some serious concentration (and a lot of rereading) to get through, but it’s well worth it.  (If you’re not a case study fan, don’t worry, most of them are skippable.  Clayton summarizes all the main points at the beginning and end of every chapter.)   

Along with disruptive innovation, Clayton espouses the notion that businesses need to act like startups in order to stay relevant and sustain relevant product development.  The best way to do this, he claims, is for incumbents to create a small autonomous unit dedicated to pursuing new and iterative products in new markets.  Essentially, incumbents need to create startups, as startups are the drivers behind disruptive innovation.

I can’t get too detailed here because this book says a lot.  It’s truly enlightening.  Go read it if you plan on doing anything business or technology-related in your life.

Feb
16

Too Big To Fail

Andrew Ross Sorkin’s Too Big To Fail is a fantastic read for anyone with an interest in better understanding what happened to the financial industry and economy in 2008-2009. The book is not intended to vilify Wall Street or the government, and it doesn’t try to explain the complexities of crazy financial instruments like CDS and CDOs. What it does is synthesize thousands of hours of interviews and millions of pages of documents to create a 500 page chronological account of exactly what happened amongst the key players in the financial world from the time Bear Stearns collapsed to the initiation of TARP.

The average person feels far removed from Wall Street. Only a small group of individuals know what really happens there on any given day.  Too Big To Fail gives the average American an insider’s perspective into Wall Street. It humanizes banks and their leaders. It portrays them in their darkest and most intimate moments - in their offices, in the Fed, and even in their homes - and provides a glimpse into the smoke-filled rooms where billion dollar deals were orchestrated. We see interactions amongst the CEOs of the biggest financial institutions in the world from their most dire and desperate of situations to trivial brick breaker tournaments (no joke).

The most intriguing aspect of TBTF is that we really get to know the most influential people running the US financial system: Hank Paulson, Tim Geithner, Jamie Dimon, Lloyd Blankfein, Dick Fuld, John Mack, John Thain, and Ken Lewis. The attention paid to these personalities helps us understand the egos and forces at play behind the major decisions in the 2008-2009 crisis. We see bold moments like Mack literally telling Geithner and Paulson to “get fucked” as his firm’s (Morgan Stanley) survival was on the line. We also see sad and sympathetic moments when Lehman Brothers’ Dick Fuld breaks down crying in his office when he realizes no one - no bank, government, or individual - will help save his firm. It’s glimpses like these that make the events of the financial crisis, which have always seemed to take place behind closed doors, so relatable and understandable to everyone.

In TBTF, we interestingly see the financial crisis through different perspectives: that of the government (ie Paulson and Geithner), and that of the banks and their leaders. It’s a dynamic juxtaposition. Sometimes we see everyone’s interests aligned, other times we see blatantly forced and unwanted government intervention, and many times we see instances of complete chaos and confusion.

Given its recency, there aren’t many pieces of literature about the financial crisis so comprehensive or informative.  The access Sorkin had to the country’s top CEOs and government officials is unprecedented.  This is a rare glimpse into the inner happenings of Wall Street.  For the first time, Main Street is given complete access to the back channels of the nation’s most powerful financial institutions and government, and that alone makes TBTF worth the read.