Friday, July 26, 2013

The 4-hour workweek summary

This is a Summary of Tim Ferris' 4 Hour Work Week Book

There is a new subculture of people in the world who have figured out that the 9-5 grindstone doesn’t really fire up their imaginations to any great degree. Instead, they organize their lives and follow a set of uncommon rules which typically allows them to work less than four hours a week but earn more in a month than most people do in a year. These people are the “New Rich”(NR). They abandon the conventional deferred-life plan (work now and retire later) and instead develop their own signature lifestyles which utilize the currencies of the New Rich: time and mobility.

There are four steps in the art and science of lifestyle design which will take you from being deferred-life oriented to becoming part of the New Rich:

D. Definition

Before you can attempt to become part of the NR, you need to understand what the rules and objectives of this new game are. In practice, this means you need to replace the conventional self-defeating assumptions with concepts which are aligned with the overall NR lifestyle design.

“People don’t want to be millionaires – they want to experience what they believe only millions can buy. Ski chalets, butlers and exotic travel often enter the picture. $1,000,000 in the bank isn’t the fantasy. The fantasy is the lifestyle of complete freedom it supposedly allows. The question is then, ‘How can one achieve the millionaire lifestyle of complete freedom without first having $1,000,000’?.

– Timothy Ferriss

The New Rich think differently from Deferred Lifers. If you aspire to join the ranks of the NR, you’ll need to be prepared to abandon your old assumptions about work and career and strike out in a different direction. To be more specific about these differences:

Deferred Lifers	New Rich
To work for yourself.	To have others work for you.
To work when you want to.	To put in minimum effort for maximum results.
To retire early and then do nothing.	To have regular breaks where you do what you love.
To buy anything you want.	To do all the things you want to do and be what you want.
To be the boss.	To own your business.
To make lots of money.	To have as much money as you need to chase your dreams.
To have more.	To have more quality and less clutter in your life.
To get a big pay off through an IPO or some other means.	To think big and focus on getting a big payday everyday, not at some time in the future.
To have freedom from doing what you dislike.	To have the freedom and resolve to pursue your dreams rather than working for the sake of working. Not only do you want to eliminate the bad but you also want to experience the best the world has to offer.

The 10 basic rules of pursuing a NR lifestyle are:

Think of retirement as a worst-case scenario – and not the goal of your entire career. By all means plan for your retirement as a fall-back position but plan on living life to the full in the meantime. Take advantage of 401(k)s and IRA for tax purposes rather than as the sum total of your financial preparation for retirement.

Remember interest and energy are cyclical – so you should break periods of intense commercial activity with “mini-retirements” where you go off and recharge your batteries. Work only when you’ll be most effective, not when you’re jaded and washed out.

It’s not lazy to do less work – if you’re focusing on doing the most productive things. Find workable ways to spend less time in the office but actually achieve more. Focus more effort on being productive and less on being busy.

The timing is never right to quit your job and start working for yourself – so plunge into it now rather than waiting until the planets are aligned. Replace “someday” with “today”.

It’s always much more fun to ask for forgiveness rather than asking for permission – so plunge into things with enthusiasm. Get good at being a troublemaker but be prepared to say sorry if you really screw things up.

Find ways to emphasize your strengths – rather than trying to fix your weaknesses. Focus on using your best tools wisely rather than attempting to repair what doesn’t work.

Remember it’s possible to have too much of a good thing –so plan on using your free time wisely rather than sitting around and doing nothing. Do what you want to do as opposed to doing what you feel obligated to do.

Remember money alone is rarely the solution – so never use it as a scapegoat. Instead of saying “I’d do that if I had more money”, create a life of enjoyment right now. Pursuing more and more money just for the sake of having more becomes a pointless illusion at some stage. Live the life you want.

Learn how to differentiate between “absolute” and “relative” income – and focus on making more money for each hour you choose to work. Absolute income is the number of dollars involved. Relative income combines how much you earn with how long it takes you to earn that money. As long as you have enough absolute income to cover your expenses, always think in terms of increasing your relative income. The only wayto achieve that is to make more for each hour you choose to work rather than working more hours.

Take advantage of “positive stress” or eustress – the kind of stress which acts as a stimulus for worthwhile growth. While negative stress can be destructive and cause health problems, positive stress to realize your dreams can be helpful and beneficial. Since you won’t make progress without it, the more eustress you create, the better. One way to do this is to focus on emulating role models who epitomize what you’re trying to achieve yourself.

These rules challenge the status quo and help the NR define problems in different ways from the thinking everyone else uses. More than anything else, the NR crave excitement. The idea of doing the same thing day-after-day and year-after-year is pure boredom. Instead, the NR are intent on doing the kinds of things reasonable people dismiss as being unrealistically hard. The NR know that doing something bold and completely unrealistic is often easier than settling for the reasonable goals everyone else has.

To become part of the NR, it’s essential you learn how to apply timelines to your dreams and then to get to work doing the things today which will lead to your dreams being actualized. A good way to do that is by planning in this way:

Note that when using this kind of dream achievement outline, it’s helpful to think of your income and expenses from a monthly cash flow perspective – dollars in and dollars out. Most things cost less than you might otherwise expect when they are financed on commercial payment plans or through installments. Sure, you’ll pay some interest, but paying $2,953 a month to drive a Ferrari sounds much more manageable than having to come up with $200,000 to purchase it outright.

E. Elimination

Kill the idea of managing your time better. That’s for those who are satisfied with a deferred life. Instead, you need to increase your per-hour results at least ten-fold so you can achieve more in two-hourdays than you ever did in your prior 12-hour workdays.

To achieve this, you need to:

Cultivate selective ignorance.

Have a low-information diet.

Learn how to completely ignore the unimportant.

Find workable ways to eliminate more and you end up with the first component of a NR lifestyle: time.

At some point in your adult life, you will probably come to the realization that working every hour from 9-5 isn’t actually the goal you should be striving for. It’s simply a structure most people tend to use, regardless of whether it’s necessary or not. In fact, if you sit down and really analyze where your best results are coming from, you will find two laws are usually in play:

Pareto’s Law: 80% of your outputs will result from 20% of your inputs.

Parkinson’s Law: A task will swell in importance and complexity in relation to the time allotted for its completion.

With these two laws in mind, you should forget completely the concept of time management. You really don’t need to try and fit more activities into your average work day. Instead, it’s time to get serious about becoming more effective (doing what moves you closer to your goals) rather than more efficient (performing your assigned tasks as quickly as possible).

To increase your personal effectiveness:

This is actually a good example of selective or perhaps elective ignorance as a way to become more effective. When you identify clearly your most important activities and create deadlines, you force yourself to focus. If you don’t do this:

Minor tasks will swell to consume all your available time.

You will mistake activity for productivity.

You’ll end up jumping from one interruption to the next without getting anything done.

You’ll end up feeling like you’re being run by your business instead of the other way around.

You’ll end up wasting time either through the force of habit or by imitating what you see others doing.

To supplement your attempts to identify critical tasks and get them done as fast as possible, there are three things you can and should do:

Cultivate some selective ignorance – feel good about the fact you don’t fill your mind with trivial and worthless information. Deliberately ignore anything which is irrelevant, unimportant or unactionable on your part. Live by the creed: “Less is more”. If you completely ignore any piece of information which is time-consuming, negative, irrelevant to your goals or outside your area of professional competence, just imagine how much time you’ll save.

Go on a low-information diet – which means:
- No reading newspapers.
- No surfing the Internet for news.
- No television except one hour pleasure viewing per day.
- No reading books except for a bit of fiction before bed.
While this may sound a bit draconian, the objective is to show you that all that time spent staying up with news and current affairs is really productive time down the drain. Instead of wasting time following the media, you should speak with your spouse, do things with your children and focus on your goals. You can stay up with what’s happening in the world by asking your colleagues about what’s new or by glancing at the headlines when you pass a newspaper vending machine. After you’ve been on a low information diet for a few weeks, you’ll be amazed at how much time you previously wasted without ever giving it a second thought.
- Learn how to completely ignore the unimportant –by following a few very simple guidelines:
  - Ignore any and all time wasters – and become a deliberate ignoramus. If something can be ignored with no negative consequences, do so enthusiastically. Check your e-mail no more than twice a day and delete as much as possible. Have two office phone numbers, one for standard calls which automatically go to voicemail and the other number which is given out selectively to those who will have urgent needs. When you return calls, get to the point immediately and move on. Respond to voicemails by e-mail if you can. The same with meetings. If at all possible, ask to be excused and promise you’ll talk with a colleague to catch up on what was covered. If that doesn’t work, define in advance a time when the meeting will end. Don’t let people drop by your office to chat.
  - Always batch your time consumers which you have to do – because it will usually take the same amount of time to do a number of similar tasks. By batching, you share preparation time or execution time out over a larger number of tasks, creating better efficiencies.
  - Empower your colleagues – to do anything which keeps your customers happy without feeling the need to check with you. For example, you might establish a policy which says for any problems which cost less than $100 to fix, they should go ahead and do whatever it takes to fix that without checking with you. That way,you have outsourced a large proportion of your e-mail and phone calls. Even better, doing this sends the signal you trust your colleagues to use their own good judgement. This indication of trust allows these people to prove they have what it takes to excel. You end up with a win-win situation where customers are better served and your coworkers are happier.

A. Automation

If you can generate a decent lifestyle cashflow on autopilot rather than putting in the personal hours, then you can do more of what you want. The key components to master here are:

Geographic arbitrage – be able to run your business from anywhere.

Learn how to outsource the majority of your work day assignments.

Learn and then apply the rules of nondecision.

Establish good cashflows which don’t require your hands-oninvolvement and you have in place the second NR lifestyle component: income.

If you genuinely aspire to design your own NR lifestyle, you’ll need a steady source of income. The conventional approach to this challenge is to find a good job that pays well, even if it requires working more hours than you would like. The NR don’t think that way at all. Instead, they try and build a revenue generating system which is completely automated – which can generate income without any hands-on involvement.

To achieve an automated income, there are really only four things you need to do:

To take each of these points in turn:

1. Learn how to use virtual personal assistants

If you apply Pareto’s Law to your own personal life, you’ll probably realize you spend an awful lot of time fiddling around with things which have little or no added value. Instead of blindly accepting the status quo, you should consider hiring a top-notch personal assistant who will take care of at least some of these activities for you. The best way to achieve this in practice is to hire a virtual assistant who works on demand.

The value of this is relatively straightforward to calculate:

If you earn $50,000 a year, your time is worth $25/hour. (50 weeks of work each year working 9-5).

If you can hire a top-notch assistant at $30/hour for 8-hours and his or her work saves you from having to work day a week, then all it is actually costing you is $40. Would you be prepared to pay $40 a week to have a three-day weekend every week of the year? If you can hire a virtual personal assistant for less than $30 a hour, the equation becomes even better.

Through the Internet, it is now feasible and practical for you to build an army of assistants who can take care of all the stuff you need to get done. The more assistants you get working for you, the more efficient your life will become and the more time you will have to focus on bigger and better things.

Some good places to look for virtual personal assistants:

U.S. and Canada – expect to pay $20+ / hour
- assistu.com
- www.yourvirtualresource.com
- www.ivaa.org

International – you’ll pay anything from $4+ /hour

- www.elance.com
- www.b2kcorp.com
- www.yourmaninindia.com

To learn how to make best use of these virtual assistants:

Start small even as you think big – perhaps by getting a virtual assistant (VA) to do whatever has been sitting on your to-do list for the longest time. Once you get some experience under your belt, you can then start handing more and more jobs off to your VA.

Keep asking yourself: “Could a VA do this?” – and you’ll be surprised how many tasks you could get done quicker if you outsource them to someone else. Good VAs can schedule interviews, do Web-based research, create legal documents, carry out routine Web site maintenance, do proofreading and editing, prepare voicemail transcriptions – and much more. The possibilities are endless.

Look at your pain points – and consider whether you can avoid frustration, pain or boredom by hiring a VA to do what you don’t like doing anyway.

Always make sure you define the task in enough detail –so your VA will be crystal clear about what you’re trying to achieve. If you don’t do this right at the outset, all that will happen is a lot of wheel spinning. Make it easy for your VA to succeed and hopefully surprise you.

Make sure you eliminate unnecessary tasks before you delegate them – because its pointless to get a VA to do something which is a complete waste of time. That’s just a drain on cash flow you don’t need.

You’ll generally be better off hiring a VA firm rather than an individual VA – so there is a pool of talent you can use rather than needing to find a new VA every time you get a different task. If you’re working on confidential projects, you’ll need to get your VA to sign a nondisclosure agreement, or else change the names of the companies in correspondence to maintain confidentiality.

Always get your VA to outline his or her plan of attack for doing what you ask – and set a time limit on how long the VA should spend. Otherwise things can get disjointed and complicated. It’s generally best to give your VA one task at a time, pay for that and then move on to the next. That way you avoid any nasty surprises such as having your VA send you a bill for 70 or 80 hours work.

Have reasonable expectations – don’t expect your VA to perform miracles on your behalf but at the same time have your VA do something worthwhile. Try to identify the top five work tasks which consume the majority of your time and consider having a VA do them for you. Just for a bit of fun, also look at five personal tasks which soak up your free time and see if you can get a VA to do those for you as well.

2. Find a viable and profitale niche product

Once you know how to use a VA efficiently, the next step in setting up an automated system to generate cash without requiring your time is to find a good niche product. To do that:

Pick a niche market which you can affordably reach – and then look for a product those people will likely buy. It’s much easier to fill demand than it is to try and create demand. Define your customers, figure out what gives them pain and then look for a product they will be willing to buy.

Brainstorm a few different product ideas – something you can describe in one sentence or less. The mass market is for products priced between $50 and $200 so try and hit that price point if you can. Keep your product simple – you should be able to explain it on a Web site without any problems. Your options will generally be to:
- Resell something – purchase at wholesale, sell at retail.
- License something – if you have the capital.
- Create something of your own design from scratch.

Note that if you are from a service industry background, you may be inclined to offer a service. That’s fine, but it does set limits on how much you can sell. A superior approach is to embed your know-how into a tangible product which can then be replicated and sold in large numbers, thus automating your income.

3. Test market to prove commercial viability

Now you need to micro-test your product to see whether people will actually buy before you invest in manufacturing or inventory. The best way to do this:

Look at your best competitor – and create a more compelling offer than they have at present. Put your offer onto a very basic one-to three-page Web site. Figure out exactly what you need to do to differentiate yourself and then go out and do precisely that.

Test actual customer response to your offer – so you can have confidence the market exists. There are several waysto do this intelligently:
- Run a 48-hour eBay auction for your item and see how high the bidding goes. If you don’t actually have a product to ship, cancel the auction at the last minute.
- Set up a simple Google Adwords campaign to drive people to your Web site. Set a daily budget limit of $50 and run the campaign for at least two days minimum and up to five days maximum.

Tally your results – and drop any obvious losers. If you have established the demand is there, you can then proceed to an automated rollout of your product by setting up a small Yahoo store for about $99 per month plus a small transaction fee. Usesomeonelikewww.paypal.comso youcanacceptcredit cards online. You will also need to continue using Google Adwords or Overture to do further pay-per-clickadvertising to continue to drive more traffic to your product Web site. You can also experiment with some other print ads to see what works and what does not.

A good model of this basic three-step approach is www.pxmethod.com.This provides a template whichis a simple and effective model which can be copied and adapted to your own product.

4. Apply MBA - Management By Absence

Remember your goal right from the outset has been to create a business which can run itself and make money whileyou do something else. To achieve this, you need to have some kind of business architecture in place which effectively removes the need for you to have any hands-on involvement. You want to be the absentee CEO who also happens to own the business.

The key to management by absence is to have processes in place which will allow everything to happen without your involvement. To achieve this in practice:

Outsource every step of your business model – to specialist companies who can scale up their involvement as your level of sales increases. There are lots of end-to-end fulfillment companies to choose from. Visit www.mfsanet.org to find someone or talk to your local printer who will know who is active in this commercial field.

Allow the different groups of outsourcers to communicate among themselves – and solve problems without your being in the loop. At first, you might give them written permission to solve only the least inexpensive problems without any need to consult you but as you become more confident with how they work, you will naturally drop any limits and get them to solve every problem that crops up.

There are also a few other things you can do to reduce your growingbusiness’s service overheads and keep it working well:

Keep things simple by offering just one or two purchase options – “basic” and “premium” for example.

Don’t offer multiple shipping options. Offer one fast method for everyone and charge a premium for it.

Don’t offer overnight shipping – that will generate a host of panicky customers and anxious phone calls.

Don’t offer phone orders. Direct everyone to your Web site for online ordering. If it’s good enough for Amazon.com, it should be good enough for you.

Don’t offer international shipments – they are always a hassle you can do without.

Instead of having to deal with problem customers, make it difficult for them to do business with you. There are lots of subtle ways to achieve this:
- Do not accept paymentby Western Union or money orders.
- Require a tax ID number from wholesale resellers.
- Refuse to offer lower pricing for bulk orders.

Instead of offering a free product to capture a visitor’s contact details, offer them a very low priced starter product. That will weed out those who will never buy anything from you later on and save you time and money.

Offer win-lose guarantees – something that completely removes the risk for the consumer. Your guarantee might be along the lines of: “110% guaranteed – it doesn’t work, not only will we completely refund your purchase investment but we will also add another 10% to the refund check.”

L. Liberation

Liberation means being mobile and able to run your business from anywhere in the world. Once you master this, you can then explore the world at will and become much more globally inclined. The key liberation components are:

Escape the boss mentality and break any bonds which confine you to a single location.

Learn how to take multiple mini-retirements rather than one at the end of your career.

Find something meaningful to devote your life to.

Become skilled at liberation and you have the third and final component of the NR lifestyle: mobility.

The three components of a NR lifestyle are time, income and mobility. Once you’ve established an independent source of income or two, it’s then natural to decide to liberate yourself from the 9 -5 grind and proactively explore everything the world has to offer. This is where the NR creed comes to the fore. While everyone else keep their noses to the grindstone building their careers in the hopes of having a prosperous and happy retirement, you give yourself permission to start enjoying the journey sooner rather than later.

Liberation of this kind involves three distinct phases:

To take each of these phases in turn:

1. Disappear and escape your boss

You can’t have a NR lifestyle while you work for a boss who demands you’re there in the office 9 -5 every day. If your new source of automated income is sufficiently established, you may well feel comfortable quitting your job now and plunging into your new lifestyle. If that is too big a step for now, perhaps you could set a goal of staying awayfrom the office two days a week without losing your job. Here’s how you can pull that off:

Start by talking with your boss about what kind of training programs would increase your value to your firm. Propose that you attend a four-week training course paid by the company and do just that. This will increase the company’s sense of loss if you were to quit altogether.

After you’ve finished the course, call in sick on a Tuesday and Wednesday. Then work at home on those two days and keep an audit trail of what you have accomplished. Develop a bullet list which summarizes those benefits.

Casually mention to your boss that you were surprised how much you accomplished while working at home. Propose that you try doing so again for two days a week for the next two weeks. Mention this can be vetoed by the boss at any time. Then go to work and make sure your business productivity shows an improvement as you work at home.

Set a follow-up meeting with your boss where you compare the results of what you achieved when working at home and what you normally get done in the office. Propose that you work at home four days each week on a trial basis to see whether these increases can be maintained. Mention your boss has the absolute right to change the arrangement at any time if he or she is unhappy with any aspect.

Keeponhavingfollow-upmeetingswhereyourproductivityis looked at closely by your boss. Propose making your work at home arrangement more permanent.

By building a solid business case for what you’re suggesting based on enhanced output, your boss really has no reason to refuse. If, however, he or she does refuse, then you’ll probably have to take the plunge and resign. If this becomes necessary, you’ll have some obvious concerns:

“Isn’t this a little too permanent?” Actually, if you’re good at what you do, you can always find similar work somewhere else in the future.

“How will I pay the bills?” If you’ve established some automated streams of income before you quit, this won’t be a problem. If you haven’t, eliminate all your discretionary expenses and get busy making some cash in other ways. There are always options.

“What about my health insurance and retirement accounts?” Find your own medical and dental coverage with anyone you like. It will only cost you $300 to $500 a month. You can transfer your 401(k) to someone like Fidelity Investments in 30-minutes or less.

“Quitting will ruin my resume!” In what way? Having a one-or two-year break on your resume where you traveled the world and experienced new things is a positive not a negative if you choose to reenter the workforce at some point in the future.

The point is tens of thousands of people leave their jobs every day and the world doesn’t end. If you’re forced to join their ranks at some stage, you’ll still have many options based on your marketable skills and experience. Changing jobs is not as difficult as it might appear. You might actually end up doing quite well out of it. If you need some help here, use the resources at www.iworkwithfools.com or www.i-resign.com.

2. Start taking ongoing mini-retirements

Why wait until you retire for good to find out whether you like it or not? Instead of taking vacations, start taking some mini-retirements where you head off overseas for extended periods and experience different life styles. In effect what you’re doing is taking your usual 20-30 year retirement period and redistributing it throughout your working career instead of saving it all for the end.

The advantages of mini-retirements:

You can relax staying in one place for months at a time rather than spending all your time in airplanes or at airports.

You will experience different lifestyles as opposed to viewing life from the windows of a hotel.

Living abroad for extended periods is often cheaper than your normal monthly living expenses, especially when you consider all of the things you won’t have to pay for – memberships, subscriptions, rent, insurance, dining out, etc.

The currency exchange rate often works in your favor.

One other big advantage of going on months long mini-retirements is this is a great opportunity to declutter your own personal and professional life. The fact you’ll be putting your personal possessions into storage you have to pay for while you’re away causes you to evaluate seriously whether each item is really necessary. You’ll get rid of loads of things that you have just accumulated by accident.

To prepare for a months long mini-retirement adventure:

About three months before you leave, eliminate. Go through your belongings and financial commitments. Decide which 20% of your belongings you use 80% of the time and sell the rest. You can alwaysrepurchase things you find you can’t live without, including cars and homes. Clean up all your financial affairs and simplify.

Two months out from your trip, automate everything. Set up payment by credit card for all the expenses you will keep paying while away. Arrange automatic debits from your bank accounts to pay your credit card bills. Give someone you trust a signed power of attorney they can exercise when instructed to do so by you.

One month out, start getting your mail forwarded to a friend who you pay a small fee to open each piece of mail and e-mail you a brief description once a week. Get your remote access software working allowing you to log on to your computers without any glitches. Ensure all deposits from your businesses are being banked automatically.

Two weeks out, scan all your credit cards, identification and health insurance details into a computer you and your friends or family can access. Set up a voice-over-IP phone number (using Skype or similar service) which forward calls to your GSM-compatible cell phone which you have checked will work in the country you’re going to. That will allow people to call a local phone number and talk with you wherever you are in the world. Downgrade your normal cell phone to the cheapest plan and set up a message that tells callers you’re currently overseas on business and they can contact you by e-mail at ______@____.com if they have an urgent matter to discuss. Also mention you won’t be checking your voicemail while overseas.

One week out, move all your belongings to the storage facility and stay with a family member or friend. Check all of your arrangements are working smoothly without any intervention on your part.

Two days out put your cars into storage. Disconnect the battery, put the vehicles on jack stands and change your auto insurance to theft coverage only. Check everything is in order and make any last-minute adjustments. By this stage, all of your life should be running on remote control so you really should have a few days to sit back and do nothing much at all. This period does, however, provide reassurance everything will go smoothly without your hands-on involvement while you are away.

By working through all of the issues involved well in advance, you and your family members can now head off for a mini-retirement adventure with peace of mind. By all means be smart when you get wherever you’re going and purchase health coverage and whatever else you should have in place, but most of all enjoy the experience.

3. Find something meaningful to do

Sooner or later, when you’ve built a life around a 4-hour workweek, you’ll have some vague sense of guilt you just can’t put your finger on. It might arise from the fact you now have enough money and enough time to do whatever you want while everyone else around you is still in the 9-5 rut. Or you may find you have so much idle time it feels like you’re running out of interesting things to do and you feel a little isolated.

If this happens to you:

First of all, relax – because this is a good problem to have when compared to the challenges lots of other people face each day.

Find something new to learn – the local language or culture where you are, how to play a local sport, or anything else which is readily available.

Find some meaningful way to serve and help others – either by finding a cause you relate to and volunteering some of your time or make some anonymous donations to the service organization of your choice.

Take the opportunity to revisit and reset your dreamlines – look at what you have accomplished thus far in life and figure out where you want to head from here.

Learn to forget whatever you cannot define or act upon– and focus on the things you can influence rather than abstract philosophical distractions.

The Cover Image is courtesy of Cody McKibeen, Location Independent Expert

Friday, July 19, 2013

Innovation Secrets of Steve Jobs Summary

This is a Summary of The Innovation Secrets of Steve Jobs by Carmine Gallo

Steve Jobs, cofounder and CEO of Apple, the electronic powerhouse, is widely regarded as one of the most successful innovators in history. How does he pull that off? Well, for one thing, he doesn't believe a rigid step-by-step method exists for innovation. Nor do Apple employees attend classes or seminars on "Howto innovate". Instead, Steve Jobs has achieved genuine breakthrough success by applying seven general principles:

Key Points

Do what you love

Aspire to change the world

Kick-strat your brain

Sell dreams, not products

Say no to the unnecessary

Create insanely great experiences

Master delivering the message

1. Do what you love

Follow your heart and do things you feel passionate about deep down inside your soul. Steve Jobs has spent his entire adult life trusting his curiosity and figuring out answers to questions he personally found challenging. Doing that has made him a billionaire many times over and given the world some impressive innovations like the iPod, iPhone, iMac, Apple Store and iPad.

Steve Jobs lasted for one semester at college before he dropped out – disappointing his adoptive parents who were prepared to spend their life savings paying for his tuition. “After six months, I couldn’t see the value in it. I had no idea what I wanted to do with my life and no idea how college was going to help me figure it out. And here I was spending all the money my parents have saved their entire life. So I decided to drop out and trust it would all work out OK,” said Jobs.

For the next eighteen months, Jobs slept on the floor of his friends’ dorm rooms and attended classes that looked interesting. He finally decided to take a course in calligraphy which he found fascinating. He noticed the dots never connected when you looked forward, only when you looked backwards. Years later, when he was assisting with the development of the Macintosh computer, that calligraphy class would come into its own as the Mac was the first computer which could generate impressive typography. By following his curiosity, Jobs had made a connection nobody else had ever imagined would be of any practical use.

Jobs had met and became friends with Steve Wozniak who lived about a mile from his parents when Jobs was in high school. They decided to start a company and the end result was Apple Computer. At thirty years of age, however, Jobs was fired by the CEO he had recruited to run Apple. He was publicly humiliated and then it dawned on Jobs he loved what he did, so he started over building NeXT, a new company from the ground up. He also acquired Pixar – a struggling startup which was just learning how to make movies using computers rather than real actors. Eventually, Jobs was able to move back to becoming CEO of Apple again.

Interestingly, the decade after he was fired from Apple was the most creative period of his life and the innovations have kept on flowing since Jobs was reunited with Apple. The company has brought out a number of electronic devices which have almost single-handedly revolutionized one industry after another – all because Steve Jobs found a subject which consumes him and energizes his everyday actions. He’s completely focused on creating insanely great products and the markets have responded in impressive fashion.

When Steve Jobs would later reflect on his “wilderness years” when he was away from Apple, he would note the only thing which kept him going was that he loved what he did. He continued to innovate at NeXT and Pixar and worked hard to grow both companies. Ultimately, his drive and passion made it possible for him to get back to being CEO of Apple where he has presided over one of the greatest second acts the world of business has ever seen. It would have been easy for Jobs to give up and throw in the towel but he persevered and came out on top in the end. That’s a great illustration of the staying power of following your passions.

“Passion is the emotional fuel that drives your vision. It’s what you hold on to when your ideas are challenged and people turn you down, when you are rejected by experts and the people closest to you. It’s the fuel that keeps you going when there is no outside validation for your dream. Passion won’t protect you against setbacks, but it will ensure that no failure is ever final.”

– Bill Strickland, author

“Have the courage to follow your heart and intuition. They somehow already know what you truly want to become.”

– Steve Jobs

“I hope you’ll be as lucky as I am. The world needs inventors – great ones. You can be one. If you love what you do and are willing to do what it takes, it’s within your reach. And it’ll be worth every minute you spend alone at night, thinking and thinking about what it is you want to design or build. It’ll be worth it, I promise.”

– Steve Wozniak, Apple cofounder

“Follow your bliss and the Universe will open doors for you where there were only walls.”

– Joseph Campbell, author

“I was lucky to get into computers when it was a very young and idealistic industry. There weren’t many degrees offered in computer science, so people in computers were brilliant people from mathematics, physics, music, zoology, whatever. They loved it, and no one was really in it for the money.”

– Steve Jobs

“Passion is the genesis of genius.”

– Anthony Robbins, author and motivational speaker

“Passions are irresistible. If you’re paying attention to your life at all, the things you’re passionate about won’t leave you alone. They’re the ideas, hopes, and possibilities your mind naturally gravitates to, the things you would focus your time and attention on for no other reason than doing them feels right.”

– Bill Strickland, author

“I never did it for the money. Being the richest man in the cemetery doesn’t matter to me. Going to bed at night saying we’ve done something wonderful – that’s what matters to me.”

– Steve Jobs

“I’m convinced about half of what separates the successful entrepreneurs from the nonsuccessful ones is pure perseverance. It is so hard. You put so much of your life into this thing. There are such rough moments in time that I think most people give up. I don’t blame them. It’s really tough and it consumes your life. If you’ve got a family and you’re in the early days of a company, I can’t imagine how one could do it. It’s pretty much an eighteen hour per day job, seven days a week for a while. Unless you have a lot of passion about this, you’re not going to survive. You’re going to give it up. So you’ve got to have an idea, or a problem or a wrong that you want to right that you’re passionate about, otherwise you’re not going to have the perseverance to stick it through. I think that’s half the battle right there.”

– Steve Jobs

“Your time is limited, so don’t waste it living someone else’s life. Stay hungry. Stay foolish.”

– Steve Jobs

2. Aspire to change the world

Steve Jobs wants to “put a dent in the universe” – he wants to do things and make products which will make a difference for lots of people. By making that his preeminent goal, he attracts other people who want to be involved in projects which become the stuff of legend in the technical world. Steve Jobs has sweeping visions and that appeals to and attracts other A-players.

Apple has always excelled at inspiring evangelists and brand enthusiasts. Part of the reason for that is that Steve Jobs has the ability to see over the horizon and to inspire people. His track record in taking technologies other people have pioneered and subsequently turning them into successful consumer products is highly impressive:

Steve Jobs did not invent the personal computer but Apple with its Mac line of machines has managed to retain a sizable chunk of this industry against all odds.

Nor did Steve Jobs invent the MP3 player yet Apple innovated and put together the ecosystem which ultimately grew into the iPod product line.

Steve Jobs did not invent the smart phone or the tablet computer either but under his guidance, Apple has been successful selling iPhones and iPads.

One good character trait Steve Jobs has is he openly acknowledges he doesn’t know everything and therefore Jobs is willing to hire the best people he can find to help make his dreams become realities. Despite Jobs being the most visible Apple employee, Apple is not a one man show by any stretch of the imagination. Jobs does supply the bold and intoxicating vision which inspires team members and turns them into evangelists for the various Apple projects but then he steps back and lets people do their stuff.

Steve Jobs has always inspired Apple employees to see themselves as revolutionaries – to take computers to the masses, to unlock the potential of smart phones for everyone – basically and fundamentally to make the world a better place. By putting that overriding vision out there, Jobs attracts others who want to do meaningful things and who will walk through fire to make it happen.

It would be easy to say Steve Jobs has been lucky with Apple and that the company just happened to be in the right place at the right time if it were not for the fact Jobs is also the driving force behind movie animation powerhouse Pixar. In 1986, Jobs invested $5 million of his own money to purchase what was then the Graphics Group from LucasFilm of StarWars fame. Within ten years, the company, renamed as Pixar, released Toy Story, the first 100 percent computer-generated animated film in history. By 2010, Pixar has won more than twenty-two Academy Awards and released movies which have generated more than $5.5 billion in revenues worldwide. Nobody would claim Pixar’s success was down to good luck but it was Steve Jobs who funded Pixar when all everybody else saw was problems.

The vision Steve Jobs had for Pixar was sweeping: “Over time we want Pixar to grow into a brand that embodies the same level of trust as the Disney brand.” That vision came to vivid fruition when Toy Story was included in the list of the one hundred greatest American films by the American Film Institute. Pixar would later be acquired by Disney.

“We’re gambling on our vision, and we would rather do that than make ‘me-too’ products. For us, it’s always the next dream.”

– Steve Jobs

“You can dream, create, design, and build the most wonderful place in the world, but it takes people to make the dream a reality.”

– Walt Disney

“Let’s make a dent in the universe. We’ll make it so important that it will make a dent in the universe.”

– Steve Jobs

“Make no little plans; they have no magic to stir men’s blood.”

– Daniel Hudson Burnham, American architect

“When you’re putting people on the moon, you’re inspiring all of us to achieve the maximum of human potential, which is how our greatest problems will eventually be solved. Give yourself permission to dream. Fuel your kids’ dreams too.”

– Randy Pausch, The Last Lecture

“There’s an old Wayne Gretzky quote that I love. ‘I skate to where the puck is going to be, not where it has been.’ We’ve always tried to do that at Apple since the very beginning. And we always will.”

– Steve Jobs

“When you sell your product, people use it. When you evangelize people, they get infected, carry the torch for you, share your heartbeat, and defend you against your enemies. When you look in their eyes you see your logo. Without the successful evangelism of third-party developers, Macintosh would have failed.”

– Guy Kawasaki, former Apple executive

“Here’s what you find at a lot of companies. You know how when you see a show car, and it’s really cool, and then four years later you see the production car, and it sucks? And you go, what happened? They had it! They had it in the palm of their hands! They grabbed defeat from the jaws of victory! What happened was, the designers came up with this really great idea. They then take it to the engineers, and the engineers go, ‘Nah, we can’t do that. That’s impossible.’ And so it gets a lot worse. Then they take it to the manufacturing people, and they go, ‘ We can’t build that!’ And it gets a lot worse.”

– Steve Jobs

“A noble purpose inspires sacrifice, stimulates innovation and encourages perseverance. In doing so, it transforms great talent into exceptional accomplishment.”

– Gary Hamel, author

“Companies, as they grow to become multibillion-dollar entities, somehow lose their vision. They insert layers of middle management between the people running the company and the people doing the work. They no longer have an inherent feel or passion about the products. The creative people, the ones who care passionately, have to persuade five layers of management to do what they know is the right thing. The great people leave, and you end up with mediocrity. The way we will not become a vanilla corporation is to put together small teams of great people and set them to build their dreams. We are artists, not engineers.”

– Steve Jobs

3. Kick-strat your brain

Steve Jobs has suggested creativity is usually nothing more than taking what is already working in one field and applying it somewhere else. To create the most fertile conditions for those connections to happen, you have to kick-start your thinking by getting fresh input all the time. The more diverse the experiences you have, the more creative you can become.

Steve Jobs and Steve Wozniak went into business together in July 1976 when they released the Apple I which was sold as a kit to hobbyists. About a year later, they released the Apple II which had a color screen, an integrated keyboard, eight internal expansion slots and a unique plastic case. The Apple II looked much more like a complete ready-to-use computer and it was designed by an industrial designer who took his instructions from Steve Jobs. Tellingly, Jobs found his inspiration for what he wanted the Apple II to look like in the kitchen section of Macy’s where he looked at food processors. He went to the designer and said: “Here’s what we need for the Apple II: a nice molded plastic case with smooth edges, muted colors, and a lightly textured surface.” Wozniak might have invented the Apple II but it was Jobs’s insistence on turning it into an appliance everyday people would use and enjoy that made the two partners millionaires many times over.

Jobs has always sought out novel physical and intellectual experiences. This is the basic feedstock for his creative thinking processes. He takes ideas which are in use elsewhere and reapplies them in different settings. When he was younger, he studied calligraphy while everyone else was at university. He spent time meditating in an apple orchard, which led indirectly to the name of his company. He visited India in the 1970s to experience a different lifestyle. Similarly, Apple hires musicians, artists, poets and historians because they have different ways of looking at problems.

Steve Jobs also uses lots of analogies and comparisons when thinking about potential solutions to problems. By seeing something novel in a familiar light or something familiar in a novel light, he can make creative connections nobody else has previously made. Analogies show the similarities between two completely different things and can help people buy-in to unfamiliar solutions. A good example of this was contained in the Macintosh business plan which Steve Jobs wrote in late-1981. To illustrate what would make the Macintosh different, Jobs wrote: “Since 1979 Apple has invested millions of dollars and thousands of man-hours in the development of a consistent user interface that will take the crank out of the personal computer. The philosophy behind the Macintosh is very simple: in order for a personal computer to become a truly mass-market commodity, it will have to be functional, inexpensive, very friendly and easy to use. Macintosh represents a significant step in the evolution of the mass-market personal computer. Macintosh is Apple’s crankless Volkswagen, affordable to the quality conscious.”

Jobs also described the Macintosh as a “telephone sized” computer. He spent hours studying phones and one day realized many telephones in offices sat on top of a telephone directory. He decided that was the maximum space a computer should take on a desk and went to work designing the Macintosh so it would fit in that footprint – three times smaller than most other computers then on the market. It turned out to be a distinctive feature which was very popular with consumers.

“Creativity is just connecting things.”

– Steve Jobs

“Imagination is more important than knowledge”

– Albert Einstein

“It comes down to trying to expose yourself to the best things that humans have done and then try to bring those things in to what you’re doing. Picasso had a saying. He said: ‘Good artists copy, great artists steal.’ We’ve always been shameless about stealing great ideas. Part of what made Macintosh great was that the people working on it were musicians, and poets, and artists, and zoologists, and historians who also happened to be the best computer scientists in the world.”

– Steve Jobs

“Contrary to conventional wisdom, innovation isn’t about a genetic endowment magically given to some and not to others; it’s a set of skills that can be developed with practice. If you want to be one of the really successful people that make a mark in business, you want to be the person that comes up with the idea, not just the person who carries out others’ ideas.”

– Dr. Jeffrey Dyer, management professor

“The only way to come up with something new – something world changing – is to think outside of the constraints everyone else has. You have to think outside of the artificial limits everyone else has already set.”

– Steve Wozniak

“Sometimes a simple change of environment is enough to jog the perceptual system out of familiar categories. This may be one reason why restaurants figure so prominently as sites of perceptual breakthroughs. A more drastic change of environment – traveling to another country, for example – is even more effective. When confronted with places never seen before, the brain must create new categories. It is this process that the brain jumbles around old ideas with new images to create syntheses.”

– Gregory Berns, author

“The human brain is intensely interactive. You use multiple parts of it in every task you perform. It is, in fact in the dynamic use of the brain – finding new connections between things – that true breakthroughs occur. Albert Einstein, for instance, took great advantage of the dynamics of intelligence. Einstein’s prowess as a scientist and mathematician is legend. However, Einstein was a student of all forms of expression, believing he could put anything that challenged the mind to use in a variety of ways. For instance, he interviewed poets to learn more about the role of intuition and imagination. His success came not from the brute strength of his mental processing power but from his imagination and creativity.”

– Ken Robinson, author

“You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in the future. You have to trust in something – your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.”

– Steve Jobs

“Innovation distinguishes between a leader and a follower.”

– Steve Jobs

4. Sell dreams, not products

Instead of selling products, sell tools people can use to realize their dreams. Make it clear you believe they can change the world for the better and want to be part of their ongoing success and people will respond with enthusiasm. View your customers as real people with aspirations rather than merely as eyeballs for what you pitch.

If you give your customers completely new and better ways to think about their problems and resolve those problems, they will love it – particularly if you tell them what they need before they realize it for themselves. A great example of this principle is the way Apple developed and then launched the iPod.

Before the launch of the iPod in October 2001, people were struggling to organize their digital music collections:

The early MP3 players used small memory chips so they could only store about a dozen songs at a time.

Downloading a song from a computer using a USB connection took about five minutes for an entire CD.

The music industry had just been through the Napster debacle before it was shut down for good.

To solve these problems, Jobs put together an entire product ecosystem based around the iPod which was revolutionary in its scope:

First, the iPod was developed using a 2.5-inch hard drive rather than memory chips. That meant when the iPod was launched, Jobs could make the startling headline claim: “1,000 songs in your pocket.”

The iPod incorporated Apple’s FireWire which meant consumers could download an entire CD onto an iPod in five to ten seconds. In less than ten minutes, an iPod can download 1,000 songs as against the five hours it would take a conventional MP3 player.

The real masterstroke for the iPod came in 2003 when iTunes Music Store launched. For ninety-nine cents a song, consumers had a legal digital version of the songs they wanted, all delivered in a seamless user experience managed by Apple itself. As of 2010, more than ten billion songs have been downloaded from iTunes accounting for over 70 percent of all legal digital music online sales worldwide.

By helping people take their music with them wherever they went and offering a legal, feel-good way to buy music at a reasonable price, Apple became the world’s most successful music company. It was the entire system Apple created – the iPod player with software, the iTunes Store and the flat fee business model for selling music – which people loved. iPod’s initial sales weren’t all that spectacular until the iTunes Store was available and then iPod sales took off.

In just the same way, Apple has made an art form of filling other gaps customers didn’t even know they had. The iPhone, the iPad and Apple Stores have all followed a similar blueprint – to create happy people by offering cool technology wrapped up in complete user ecosystems that work smoothly and easily. Steve Jobs has excelled in recent times because of his commitment to product excellence matched with an equal commitment to obsessing over making the overall customer experience excellent as well.

“We, too, are going to think differently and serve the people who have been buying our products since the beginning. Because a lot of times people think they’re crazy, but in that craziness we see genius.”

– Steve Jobs

“It’s not about pop culture and it’s not about fooling people, and it’s not about convincing people that they want something they don’t want. We figure out what we want. And I think we’re pretty good at having the right discipline to think through whether a lot of people are going to want it too. That’s what we get paid to do. So you can’t go out and ask people, you know, what’s the next big thing? There’s a great quote by Henry Ford, right? He said, ‘If I’d asked my customers what they wanted, they would have told me ‘A faster horse.‘”

– Steve Jobs

“Let’s go invent tomorrow instead of wondering about what happened yesterday.”

– Steve Jobs

“Nobody cares about your products but you.”

– David Meerman Scott, author

“We don’t do focus groups. They just ensure that you don’t offend anyone, and produce bland, inoffensive products.”

– Jonathan Ive, Apple VP

“We’re drowning in a sea of technological crap. Because every product that is released to the market is a result of multiple compromises based on decisions by the product manager, the engineering manager, the marketing manager, the sales manager and everyone else who has skin in the game as they prepare the offering to meet what they think are the target customer’s needs. The reason Jobs and Ive get it right is because they design sexy products with elegant and simple interfaces – for themselves. Then they count on their hip gaggle of early adopters to see it the same way. Once the snowball starts rolling, it’s all momentum from there.”

– Alain Breillatt, director of product management

“Some people aren’t used to an environment where excellence is expected. Part of my responsibility is to be a yardstick.”

– Steve Jobs

“It was a great challenge. Let’s make a great phone that we fall in love with. And we’ve got the technology. We’ve got the miniaturization from the iPod. We’ve got the sophisticated operating system from the Mac. Nobody had thought about putting operating systems as sophisticated as OS X inside a phone, so that was a real question. We had a big debate inside the company whether we could do that or not. And that was one where I had to adjudicate and say, ‘We’re going to do it.’ The smartest software guys were saying they could do it, so let’s give them a shot. And they did.”

– Steve Jobs

“When you’re in a situation where you’ve really got to be judicious, to do more with less, that really drives a need for innovation and a level of creativity that you might not otherwise have in normal times. Increased innovation doesn’t always have to be about more dollars. It’s about how you use those dollars.”

– Adalio Sanchez, general manager, IBM

5. Say no to the unnecessary

Apple is an excellent example of the principle simplicity is the ultimate form of elegance and sophistication. The company has done exceptionally well by reducing its product line and doing a few things well rather than trying to be in every product niche. Do everything you can to reduce and ideally eliminate complexity in your business and in your products.

When Steve Jobs returned to Apple in 1996 after an eleven year absence, he found Apple had fifteen product platforms each of which offered all kinds of variants. Jobs responded by asking: “What do people want?” He decided Apple needed two kinds of computer products – consumer and professional. Within each category, a desktop and a portable model was needed – and that was it. By the end of 1998, Jobs had reduced Apple’s product offerings from 350 to 10 and the company started to move ahead because everyone was focused.

In a similar vein, Steve Jobs also says no to anything he believes will compromise the elegant solutions Apple is trying to offer its customers with all its products. That means he says “no” to lots of things which could distract, even if that answer angers some customers and partners. The design ethic at Apple is to figure out what’s important, simplify how that is delivered and get rid of everything else.

A good example of this approach in action is the iPod. The MP3 players of that era were fiddly with lots of buttons and dials. Technophobes who enjoyed that kind of thing invested time figuring out how everything worked as if it was some kind of initiation ceremony into an exclusive brotherhood. Then along came the iPod which had a scroll wheel allowing users to load and then access at least a thousand songs with just a couple of clicks of the navigational wheel. This was a major breakthrough in design which would go on to revolutionize the entire product category.

Every suggested component for any Apple product is considered carefully, explored and then either eliminated or designed to be as easy and uncluttered as possible. A deliberate and conscious effort is made to get rid of as much stuff as possible. Apple products are designed to be used without user manuals. Many designers try to make their products stand out by integrating more and more features but Apple moves in the opposite direction. The iPod is designed to help people listen to music and anything which detracts from that goal is aggressively eliminated. Great companies like Apple typically focus on the one thing the product is made to do and design a simple solution to perform that task which ends up being elegant because of its simplicity.

In essence, Apple works long and hard to make its products so simple that a two-year-old could use them. This is what the company has learned to do very well under the guidance and encouragement of Steve Jobs. It’s one of the underlying reasons why the iPod, the iPad, the iPhone and Apple’s stores have been a success. The company actively eliminates the unimportant and concentrates its efforts on doing a few things well. In terms of business strategy as well as product design, that subtraction often adds value – by eliminating inconsistency, staff overload or waste. To do the same, you must have enough guts and courage of your convictions to eliminate everything but the essential.

“I am as proud of what we don’t do as I am of what we do.”

– Steve Jobs

“The way we approach design is by trying to achieve the most with the very least. We are absolutely consumed by trying to develop a solution that is very simple, because as human beings we understand clarity.”

– Jonathan Ives, Apple design guru

“When you start looking at a problem and it seems really simple with all these simple solutions, you don’t really understand the complexity of the problem. And your solutions are way too over-simplified and they don’t work. Then you get into the problem and see that it’s really complicated. And you come up with all these convoluted solutions. That’s sort of the middle and that’s where most people stop, and the solutions tend to work for a while. But the really great person will keep on going and find, sort of, the key, underlying principle of the problem. And come up with a beautiful elegant solution that works.”

– Steve Jobs

“In my experience, users react positively when things are clear and understandable. What bothers me today is the arbitrariness and thoughtlessness with which many things are produced and brought to market, not only in the sector of consumer goods, but also in architecture and advertising. We have too many unnecessary things everywhere.”

– Dieter Rams, industrial designer

“We are the most focused company that I know of or have any knowledge of. We say no to good ideas every day. We say no to great ideas in order to keep the amount of things we focus on very small in number, so that we can put enormous energy behind the ones we choose. The table each of you are sitting at today, you could probably put every product on it that Apple makes, yet Apple’s revenue last year was $40 billion. I think any other company that could say that is an oil company. That’s not just saying yes to the right products, it’s saying no to many products that are good ideas, but just not nearly as good as the other ones.”

– Tim Cook, chief operating officer, Apple

“Think digital, act analog. Use every thing including every tool at your disposal to create great products and services. But never lose sight of the fact that the purpose of innovation is not cool products and cool technologies but happy people. Happy people is a decidedly analog goal.”

– Guy Kawasaki, former Apple executive

“What makes Steve’s methodology different from everybody else’s is that he always believed that the most important decisions you make are not the things that you do, but the things you decide not to do.”

– John Sculley, former Apple CEO

“A designer knows he has achieved perfection not when there is nothing more to add, but when there is nothing left to take away.”

– Antione de Saint-Exupery, aviator

“There is wide agreement that innovation is the best way to sustain economic prosperity. Innovation increases productivity, and productivity increases the possibility of higher income, higher profits, new jobs, new products, and a prosperous economy. We need to transform smart ideas that tackle and address real problems into products and services everybody wants.”

– Tapan Munroe, economist

6. Create insanely great experiences

The only true purpose for building any product or offering any kind of service is to create memorable experiences for customers. Never forget that or lose sight of this goal. To succeed, you have to enrich the lives of your customers in tangible and real ways that they will value. Let your imagination run wild on the ways you can create great experiences.

About the year 2000, Apple had a problem. It was dependant on giant electronic retailers (like Sears and CompUSA) who just wanted to push more and more products, Apple or otherwise. Purchasing a computer had become a dreaded consumer experience, so Apple decided to do something about it. Apple opened its first retail store in 2001 and less than five years later, it reached $1 billion in annual sales – faster than any other retailer in history. Circa 2010, Apple has 287 stores worldwide which generate in excess of $ 1 billion a quarter.

So what does Apple do differently when it comes to retail? It all flows from Steve Jobs’s conviction people don’t want to buy a personal computer per se. Instead, they want to know what they can do with them and Apple Stores are designed to show them precisely that.

Apple Stores are certainly distinctive:

They are uncluttered because they sell nothing but what Apple makes.

Apple Stores are located in malls or shopping districts rather than remote locations.

Customers are allowed, encouraged even, to test-drive all the products on offer. Everything is connected to the Internet and ready to go for hands-on use.

There are no salespeople or cashiers. There are concierges, consultants and experts who can talk about a particular solution but that’s about it. There is also a “Genius Bar” where customers can talk to experts and get advice.

Apple Stores are designed with 25 percent of the space showingproducts and 75 percent being devoted to solutions.

It’s simple to buy something in an Apple Store. There are no cash registers but every specialist has an EasyPay wireless credit card reader. Receipts are sent out by e-mail. You can’t pay cash so everyone can buy and then get out quickly.

Apple Stores offer free one-to-one training with all purchases.

All Apple Store employees are on salary and not commission. Because of this, staff approach potential customers differently. They are prepared to spend more time than those who don’t get paid if they don’t sell something.

In all, Apple has innovated and completely reengineered the retail experience. All the experts predicted Apple’s move into retail would be a short-lived and expensive disaster but this conclusion was based on the assumption Apple was entering the business of building stores. It never was. Apple was trying to enter the business of creating great customer experiences – the kind of thing which isn’t easy to quantify or fit into a spreadsheet. Apple has managed to create a retail environment where a distinctive customer experience is delivered and the ongoing growth of Apple Stores illustrates they are on the right track in that regard.

“People don’t want to just buy personal computers anymore. They want to know what they can do with them, and we’re going to show people exactly that.”

– Steve Jobs

“To succeed in any business, you need an exceptionally clear vision. And to me, a vision is something you can say in a single sentence. The fewer words the better. When we started, the commonly accepted thing that retailers did was to sell stuff. So if you put Gateway’s vision into words, it was to ‘sell boxes.’ When we envisioned Apple’s model we said it’s got to connect with Apple. It was easy. Enrich lives. Enriching lives. That’s what Apple has been doing for thirty plus years.”

– Ron Johnson, senior VP of retail operations, Apple

“We do not do market research. We don’t hire consultants. The only consultants I’ve ever hired in my 10 years is one firm to analyze Gateway’s retail strategy so I would not make some of the same mistakes they made. But we never hire consultants, per se. We just want to make great products.”

– Steve Jobs

“Innovation is this amazing intersection between someone’s imagination and the reality in which they live. The problem is, many companies don’t have great imagination, but their view of reality tells them that it’s impossible to do what they imagine. We let imagination win. If you ask customers what they love about our stores, they love the things we imagined.”

– Ron Johnson, senior VP of retail operations, Apple

“If you just think about what makes customers and employees happy, in today’s world that ends up being good for business.”

– Tony Hsieh, founder, Zappos.Com

“It’s OK to ‘steal’ ideas from customer service experts in other industries and to adapt those ideas to your business. Stealing ideas from your competitors may work for the short term, but it’s unlikely to turn you into an innovation leader. You’re simply copying the leader. That’s not innovation. Innovation is seeing what exists in another industry and applying what you learn to improve the customer experience.”

– Carmine Gallo

“People haven’t been willing to invest this much time and money or engineering in a store before. It’s not important if the customer knows that. They just feel it. They feel something’s a little different.”

– Steve Jobs

“The greatest danger for most of us lies not in setting our aim too high and falling short, but in setting our aim too low, and achieving our mark.”

– Michelangelo

“These seven insanely different principles for breakthrough success will work only if, regardless of your title or job function, you see yourself as a brand. How you talk, walk, and act reflects on that brand. Most important, how you think about yourself and your business will have the greatest impact on the creating of new ideas that will grow your business and improve the life of your customers. Steve Jobs is CEO of two legendary brands – Apple and Pixar. Thirty-five years ago, he was assembling computers in his parents’ house. Nobody viewed Jobs as a ‘brand’ in 1976, but he did. Michelangelo looked at a marble block and saw David; Steve Jobs looked at a computer and saw a tool to unleash human potential.”

– Carmine Gallo

7. Master delivering the message

It’s all well and good to have a great message but you also have to convince others that your great idea really is a great idea. This is where Steve Jobs shines. He is the world’s greatest corporate storyteller. You might not be able to do as well as he does at this but you should try and get better at thinking differently about how you present your message to the world.

When it comes to delivering superior messages for a corporation, Steve Jobs is the gold standard. He is a standout presenter and people have been known to queue overnight just for the opportunity to attend one of his product launches in the flesh.

When you deconstruct the magic behind his presentation skills, you will find Steve Jobs uses the same key presentation elements again and again:

Come up with a twitter-friendly headline –which encapsulates the message you’re trying to get across. When launching the iPad, Jobs said: “Our most advanced technology in a magical and revolutionary device at an unbelievable price.” When launching the iPod, it was: “One thousand songs in your pocket.” Always provide a concise one-sentence description which sizzles.

Introduce an antagonist – someone who wants to maintain the status quo despite all its obvious inadequacies. That way you can set up a David-and-Goliath battle. In the 1980s, IBM was the villain. Today it might be net-books or smart phones that are boring. There must be a villain. More often than not, Steve Jobs and Apple position themselves as the people’s champions, heroically fighting the big enshrined entities for the rights of creative people everywhere. People like that kind of storyline and respond to it.

Live by the rule of three – focus on three key points and no more. This is the maximum amount of information people can retain in their short-term memories so always use the rule of three.

Keep your slides and visual aids simple – lots of pictures, a few words and no bullet points.

Use emotive, zippy words – like “gorgeous”, “advanced”, “a dream” and “awesome.”

Practice, practice, practice – so your presentation is so smooth it comes across like a casual chat. People love that presentation style and will respond with enthusiasm.

Quite simply Steve Jobs is one of the corporate world’s premier storytellers. He is in a class of his own in this area but by incorporating the elements he uses into your own presentations, you can similarly generate lots of buzz around your products and services. That positive buzz will be great because it will inspire evangelists to sign on for what you’re saying.

Learn how to tell great stories. Position yourself as a revolutionary out to beat the entrenched enemy which is seeking to oppress right-thinking people everywhere. Be consistent and get everyone aligned with the same unified message and you’ll go places.

“Steve Jobs is the ultimate showman who keeps the audience excited the whole way leading up to the reveal.”

– David Blaine, magician

“Self-confidence is the surest way of obtaining what you want. If you know in your own heart you are going to be something, you will be it. Do not permit your mind to think otherwise. It is fatal.”

– General George S. Patton

“Personal computers are now at the stage where cars were when they needed to be cranked by hand to get started. Personal computers are simply not complete, as cars were not at the crank stage. The crank for personal computers is the awkward human interface. Users need to learn a host of unnatural commands and operations in order to make the computer do what they want it to do. The turn of this decade saw a lot of manufacturers, some very big ones, jump on the personal computer bandwagon. Some personal computers have more memory than others, some have more mass storage, some have color, others have more columns, but they all need to be hand cranked.”

– Apple business plan written by Steve Jobs in 1981

“Ideas are not really alive if they are confined only to a person’s mind.”

– Nancy Duarte, author

“How do you set about changing the world? First, you need to believe in yourself. Don’t waver. There will be people – and I’m talking about the vast majority of people, practically everybody you’ll ever meet – who just think in black-and-white terms. Maybe they don’t get it because they can’t imagine it, or maybe they don’t get it because someone else has already told them what’s useful or good, and what they heard doesn’t include your idea. Don’t let these people bring you down. Remember that they’re just taking the point of view that matches whatever the popular cultural view of the moment is. They only know what they’re exposed to. It’s a type of prejudice, actually, a type of prejudice that is absolutely against the spirit of innovation.”

– Steve Wozniak

“What we’re about is not making boxes for people to get their jobs done. We believe that people with passion can change the world for the better.”

– Steve Jobs

“If we want to bring down unemployment in a sustainable way, neither rescuing General Motors nor funding more road construction will do it. We need to create a big bushel of new companies – fast. But you cannot say this enough: Good-paying jobs don’t come from bailouts. They come from startups. And where do startups come from? They come from smart, creative, inspired risk-takers.”

– Thomas Friedman, columnist, New York Times

“Perhaps the ultimate lesson that Steve Jobs has taught us is that risk taking requires courage and a bit of craziness. See genius in your craziness. Believe in yourself and your vision, and be prepared to constantly defend those beliefs. Only then will innovation be allowed to flourish, and only then will you be able to lead an ‘insanely great’ life.”

– Carmine Gallo

Friday, July 12, 2013

Naked Conversations Summary

How Blogs are Changing the Way Businesses Talk with Customers

[caption id="attachment_3344" align="alignright" width="156"] Naked Conversations[/caption]

Robert Scoble and Shel Israel push people in business to get involved with blogging as a means of communication and of staying on top of conversations that affect their companies. They summarize blogging’s history and provide examples of how companies have benefited from it, including interviews with high-ranking corporate bloggers. Their easy-to-read and easy-to-understand writing style ensures that even those who know little about blogging can grasp it. A must read for businesses who blogs or are thinking about it, and to executives who want to know why blogging is important and how it can build their companies’ bottom line.

Naked Conversations in one Minute

About 70,000 new blogs start every day, says a Technorati survey.

About 50 million Internet users regularly read blogs, a Pew study finds.

Blogs are not considered a fad.

Blogging gives customers human contact, input and responses to their concerns. Blogging has six abilities that distinguish it from other kinds of communication: it is "publishable," "findable," "social," "viral," "syndicatable" and "linkable."

Ignoring a product alert from the world of blogs cost one company $10 million. Follow relevant blog conversations even if your company doesn’t need a blog. Blogging, the ultimate word-of-mouth marketing machine, has helped some companies lower their ad budgets.

No longer limited to text, blogging now includes such offshoots as audio podcasting and video blogging.

Blogs are an international phenomenon. As of 2005, France had more than 3.5 million bloggers, including 10,000 business blogs.

Naked Conversations in 5 Minutes

Microsoft's Story

Customers distrust large companies, a syndrome that has especially affected Microsoft. Some people see Microsoft as a software monopoly or an unfeeling giant, rather than as a company where thousands of people make a living. Microsoft employee Joshua Allen started blogging in 2000 without getting permission from the company. He wanted to reach out and let the public know they could talk to him and, thus, to Microsoft. Lawyers worried about the risks and his boss got e-mails from other employees saying Allen should be fired. But, what mattered most is that customers were happy to be communicating with a Microsoft insider.
Technology evangelist Lenn Pryor joined Microsoft in 1998. When he met people, he got the same message: simply because he worked at Microsoft, they were surprised that he was nice. Pryor realized that Microsoft needed to bring humanity into its public equation. His brainstorm turned into Channel 9, an official Microsoft blog. Author Robert Scoble became Channel 9's online interviewer. He led discussions on the video blog about the company's internal workings. Within six months of the blog's launch, about 2.5 million people had logged on to it.

Mike Torres, a lead programmer for MSN Spaces, followed blog conversations through various Web sites. He responded to positive and negative comments about his blog. His presence took bloggers by surprise and they responded with respect. Torres took a risk when he posted an explanation of five things he didn't like about MSN Spaces, but he showed customers that Microsoft employees pay attention to their programs, even after distribution. These experiences taught Microsoft that blogging could be good for business.

What Blogging Is About

With blogging, businesspeople are "naked," that is, they talk directly to the public about their companies. Lawyers, executives and public relations departments ordinarily do not filter blog contents as they are posted. A blog is "a personal Web site with content displayed in reverse-chronological order." When a blogger posts a new entry, it appears at the top of the page so regular readers see the latest content without having to scroll through old postings. Blogs often link to other blogs as references or suggestions. A blogger who is writing about the latest technology may link to a relevant Web page, or might counter another blogger's opinions. As you click links from blog to blog, you're traveling through the "blogosphere," the world of blogs. The blogosphere is a large social network with many conversations and sub-networks. Bloggers often post a "blogroll," a list of other blogs they read and recommend.

Blogs differ from other corporate communications in six distinct ways, referred to as "Blogging's Six Pillars." Blogs are uniquely:

"Publishable" – Publishing a blog is easy and cheap. New content appears in an instant. A blog reaches many people at once, but setting it up costs very little.

"Findable" – Readers find blogs through blog-tracking Web sites and search engines. To increase your blog's likelihood of being found on a search, add new posts frequently.

"Social" – Bloggers connect through posts, responses, links and comments.

"Viral" – Blogs spread word-of-mouth quickly; new posts often get noticed in minutes. Yossi Vardi, developer of the ICQ instant message application, describes it more colorfully: "Blogging is word-of-mouth on steroids."

"Syndicatable" – You don't have to click from blog to blog to find new content. Instead, use syndication software that shows you which blogs have updated their content. You can download free "RSS" software, "a data distribution protocol that lets you subscribe to almost any blog."

"Linkable" – Every link leads readers to more blogs and resources.

Search engines, especially Google, value regularly updated Web sites. Fast updates are easy to insert and increase your site's search engine exposure. Customers dislike "interruption marketing," those ads that appear repeatedly and disrupt reading. Blogs provide an alternative that builds conversations between companies and readers. Over time, readers learn that the company cares about their opinions and works to improve its products and services. If it doesn't, the repercussions are harsh. Just ask Kryptonite, which manufactures bicycle locks. Someone figured out how to pick Kryptonite's lock with a Bic pen. The person alerted the firm to the lock's vulnerability and posted a warning on a biking bulletin board. The blogosphere picked up the tale, but Kryptonite ignored it – and is estimated to have lost millions.

Executive Blogging

Blogging lets businesspeople – whether their firms have blogs or not – easily find and participate in online discussions of their merchandise, services or industries. Companies use blogging to "feed the network," that is, to release information. Soon after GM vice chairman Bob Lutz blogged about a prototype car, more than 100 bloggers began discussing it. Lutz's initial goal was to "engage the public regarding our products and services." Now, he says, "The blog has become an important, unfiltered voice...a direct line of communication." His staff reviews the comments sent to his blog, so he can stay on top of feedback from consumers.

Sun Microsystems president Jonathan Schwartz says blogging "moved the whole damned compass." A year after he started blogging, 1,000 of his employees started blogs. He credits blogging with improving developer relations. One Sun competitor believes that Sun was losing its power, but made a comeback thanks to its blogs. Mark Cuban, owner of the Dallas Mavericks professional basketball team, believes content on "BlogMaverick" spurred referees to behave more professionally and to treat basketball like a business. Tech expert Buzz Bruggeman, who is CEO of ActiveWords, a software utility company, says blogging helped generate about half of his company's "100,000 downloads...on a six-year marketing budget of less than $15,000." Though he spends little time posting, blogging boosted the firm's
public profile and press coverage.

Not all blogs are public. Employees at Disney, IBM and other companies collaborate and share information on internal blogs. And, there are pitfalls: Intel CEO Paul Otellini uses his intranet blog to talk with Intel's 86,000 employees, although an entry was leaked to the press the first year he was blogging – fortunately, a one-time problem.

Blogging has even united competitors. Three patent attorneys with a passion for intellectual property concerns found each other through their blogs and started conversing by e-mail and phone. Soon they became friends. Now they collaborate through podcasting, a blog and a wiki ("a form of social software...that allows groups to collaborate" on a site).

Good Blogging

A blog doesn't get traffic overnight. The blogger has to join conversations by reading other blogs, leaving comments and linking to their entries. For blogging success, use these five tips:

"Talk, don't sell" – Entries that sound like press releases have a negative effect.

"Post often and be interesting" – Regular blog postings bring in more readers and

boost your search engine rankings.

"Write on issues you know and care about" – When you share information that benefits readers, they'll eventually trust you and buy from you.

"Blogging saves money, but costs time" – A blog can help cut your marketing and ad budgets, but not without taking up the blogger's time. However, in the long run, blogging time is cheaper than a marketing budget and has a better pay-off.

"You get smarter by listening to what people tell you" – Negative comments from readers provide valuable insights into why your customers might be frustrated.

Launching Your Blog

Common wisdom and general rules about starting a blog are useful, but not strict, since blogging is still new and continues to change rapidly. Many blogs have succeeded without following these suggestions, but these ideas may help get your new blog off on the right foot. First, get an idea of what is already on the blogosphere by reading other blogs, especially those related to your planned blog's topic. You'll also find a few blogs that will make good resources for links, conversations and mutual entries. Carefully select a great name for your blog. Many blogs are already out there, and a name like "Joe's Blog" doesn't tell readers what your blog covers. Pick a clear name and add a tagline that alludes to the blog's subject matter.

When you write an entry, cover just one topic. People who want to link to your entry are most likely to be interested in a specific topic. A long entry with several different topics is difficult to refer to, so keep your entries simple and focused. Make your writing passionate and authoritative, so your blog is interesting. Provide links. Show that you have the knowledge and expertise to keep the blog from being dull or useless. Stories are the best way to share what you know and are more likely to draw people to you and your company.

Always be honest. A business blogger can almost do no wrong by telling the truth. Bloggers have a talent for finding out the real story when they're suspicious. Allow your readers to comment, so you establish relationships and build trust. A blog that does not allow comments sends a negative message. Make it easy for users to contact you; the busiest bloggers are reachable because providing access can lead to great opportunities.
Attend conferences, meetings and other events because they are great resources for material for your blog. Finally, review your "referrer" log to see where people are coming from to visit your site. This tells you who has mentioned you on their Web site or blog. To expand the conversation, respond to these sites. Bloggers love it when other bloggers notice them.

The Blog Job

What can you do to ensure you don't get "Dooced" (fired for blogging)? Rely on common sense and "do nothing stupid." If you run your company's blog, review your contract to see how that task fits your job description. Find out if the firm has a blogging policy and follow it carefully. Avoid any legal issues and stay in touch with your manager. Blogging does require time, so some companies contract out the job of running their blogs. This is a small cost, considering that more than one billion business-related blogs have been posted.

Blogging's Dark Side

For valid reasons, managers worry about blogs' openness, security, profitability and content, while business owners also tend to fret that a blog will draw negative comments (although such comments can appear anywhere on the Internet). Readers who post their comments on your blog are an advantage, because they give you a chance to address their issues. When GM's Bob Lutz received a negative comment on his blog, 30 readers responded showing support. Even complimenting a competitor can pay off for a blogger. Author Scoble, a Microsoft employee, earned readers' trust by praising Firefox and Apple's iPod on his blog. Of course, this attitude reflects positively on Microsoft.

One drawback to blogging is that managers prefer messages they can control, but bloggers tend to write what they want. However, business blogs can filter incoming comments, deleting those with expletives or irrelevant responses. Another concern is that corporate bloggers could reveal confidential information, although intellectual property attorney Stephen M. Nipper says that employees are more likely to leak closely held data through casual e-mails than through carefully thought-out blog entries.

How do you measure a blog's return on investment? One example: Web browser Firefox got more downloads from its blog than from a two-page ad in The New York Times. Measuring goodwill isn't easy, but blogging's open door for responses offers good public relations. Word-of-mouth marketing is also hard to quantify, but a blog generates continuing circles of word-of-mouth contact. Blogging gives businesses the opportunity to connect and listen to customers. It is a low-cost tool that serves as "a crisis firefighter, a superior research aggregator, a tool for recruiting, a product builder, and a customer service and support enhancement